WEBVTT - Bloomberg Wall Street Week: Romer, Tarullo, Finucane 0:00:00.160 --> 0:00:03.360 This is Bloomberg Wall Street Week. What's the state of 0:00:03.400 --> 0:00:06.360 corporate governance? The deficit is a real issue. The US 0:00:06.400 --> 0:00:09.920 economy continues to send mixed signals. The financial stories that 0:00:10.000 --> 0:00:13.000 cheap our world fed action to con concerns over dollar 0:00:13.039 --> 0:00:16.520 liquidity and encouraging China data. The five hundred wealthiest people 0:00:16.520 --> 0:00:19.160 in the world. Through the eyes of the most influential 0:00:19.239 --> 0:00:22.880 voices Larry Summers, the former Treasury Secretary, Star CEO, Kevin 0:00:22.960 --> 0:00:26.640 Johnson sec Chairman j Clayton. Bloomberg wool Street Week with 0:00:26.760 --> 0:00:31.320 David Weston from Bloomberg Radio. A glass half full with 0:00:31.440 --> 0:00:34.559 the new president and a vaccine on the horizon. This 0:00:34.640 --> 0:00:38.280 is Bloomberg Wall Street Week. I'm David Weston. Four years ago, 0:00:38.479 --> 0:00:41.600 President Trump committed his administration to undoing much of what 0:00:41.720 --> 0:00:44.760 came before him, whether it was trade policy, or financial 0:00:44.800 --> 0:00:49.519 regulation or international agreements. President elect Biden has promised to 0:00:49.560 --> 0:00:52.560 reverse much of that course, but to grow the economy, 0:00:52.680 --> 0:00:56.320 even as he pursues his goals on climate change, racial justice, 0:00:56.480 --> 0:01:00.240 and inequality. Can you do both? We asked Dan't rule 0:01:00.240 --> 0:01:03.880 of former Federal Reserve governor who held senior economic policy 0:01:03.960 --> 0:01:07.520 roles in the Obama and Clinton administrations. I mean, in 0:01:07.560 --> 0:01:10.880 the short term, as as we've all been saying for 0:01:11.240 --> 0:01:15.400 nine months now, uh, getting ahold of the virus, getting 0:01:15.440 --> 0:01:18.679 a vaccine out is the single most important thing to 0:01:18.720 --> 0:01:22.560 continue a cyclical recovery, and that in and of itself 0:01:22.880 --> 0:01:27.440 will provide a substantial boost hopefully through all and into 0:01:28.280 --> 0:01:31.280 two So there, I think, as again as we've all 0:01:31.360 --> 0:01:34.560 been saying, the public health issue is the most important 0:01:34.600 --> 0:01:38.480 economic issue. In the short term, there is stimulus. I 0:01:38.680 --> 0:01:42.280 think there's a crying need for stimulus to carry us 0:01:42.280 --> 0:01:45.760 into the period where the whether the vaccine is going 0:01:45.760 --> 0:01:49.080 to take effect. But after that you are going to 0:01:49.200 --> 0:01:54.080 get some tail winds basically from from their recovery. Longer term, 0:01:54.120 --> 0:01:58.120 I think it's it's a question of whether the now 0:01:58.200 --> 0:02:02.640 president elect is going to be able to manage to 0:02:02.680 --> 0:02:06.400 get Congress to go along with some of the spending 0:02:06.440 --> 0:02:09.160 priorities that he has as an enormous amount he can 0:02:09.200 --> 0:02:11.920 do just by having control of the executive branch, but 0:02:12.040 --> 0:02:14.480 it is going to be important for Congress to at 0:02:14.520 --> 0:02:17.320 least be somewhat cooperative. Well, and when you talk Congress 0:02:17.440 --> 0:02:19.959 as a practical we're probably talking the Senate right because 0:02:20.200 --> 0:02:23.240 as we sit here we're not gonna until late in January, 0:02:23.320 --> 0:02:25.640 where the Republicans or Democrats have the majority. Right now, 0:02:26.080 --> 0:02:28.679 I think you'd probably say it's likely that the Republicans will. 0:02:29.000 --> 0:02:32.640 Is it possible for a president buying to do business 0:02:32.760 --> 0:02:35.200 with Mitch McConnell and get some things done that certainly 0:02:35.200 --> 0:02:37.959 knows we hadn't gotten done last time? Well, I think 0:02:37.960 --> 0:02:40.440 I would say, David, if it's possible for any Democrat 0:02:40.560 --> 0:02:43.080 to do it, it's probably Joe Biden who can do it. 0:02:43.440 --> 0:02:45.760 He has he's not only a veteran of the Senate, 0:02:46.520 --> 0:02:52.440 but obviously has a longstanding relationship with the Senator McConnell. Um. 0:02:52.440 --> 0:02:55.600 But if we step back from personalities a bit, I 0:02:55.639 --> 0:02:59.760 think there may also be some motivation that at least 0:03:00.440 --> 0:03:03.360 Republican a handful of Republican members of the Senate may have. 0:03:03.880 --> 0:03:07.640 So consider, for example, in infrastructure investment, I mean that 0:03:07.639 --> 0:03:11.000 that elicits raised eyebrows now in Washington, New York, and 0:03:11.040 --> 0:03:14.120 just about everywhere else. People have been talking about it 0:03:14.160 --> 0:03:19.079 as a potential bipartisan um project and it hasn't happened. 0:03:19.400 --> 0:03:22.200 But I think you've gotten an administration, as we will, 0:03:22.720 --> 0:03:26.400 that has competence, that coordinates its policies, and that has 0:03:26.400 --> 0:03:30.240 a consistent set of policy, there are chances of working 0:03:30.280 --> 0:03:34.359 something out become much greater. And consider, for example, if 0:03:34.720 --> 0:03:39.480 the EPA administrator and other heads of agencies in the 0:03:39.480 --> 0:03:44.960 federal government begin to implement regulations directed towards climate change. 0:03:45.320 --> 0:03:48.640 So you dealt with ecademy policies, certainly when you remember 0:03:48.720 --> 0:03:52.840 the Federal Reserve, but also before that in the administration, 0:03:52.920 --> 0:03:55.400 in the Clint administration, you really dealt with econdic policy. 0:03:55.640 --> 0:03:57.560 As you look at the economy today, we still have 0:03:57.640 --> 0:03:59.400 ways to come back. We've come back some, we still 0:03:59.400 --> 0:04:01.440 always to come com particularly it comes to jobs. We've 0:04:01.440 --> 0:04:03.720 still got over ten million people who don't have jobs 0:04:03.720 --> 0:04:07.680 today who did before the pandemic. Is infrastructure the best, quickest, 0:04:07.680 --> 0:04:10.480 more sure way to restore some of that in the 0:04:10.480 --> 0:04:15.000 economy now. Coronavirus vaccine is the quickest, insurest way to 0:04:15.040 --> 0:04:17.160 do it, because that's what's going to get the service 0:04:17.200 --> 0:04:20.480 sectors back up. And environment, I would say, David, the 0:04:20.520 --> 0:04:25.080 infrastructure investment is the medium to longer term project. It's 0:04:25.120 --> 0:04:29.320 one that would both improve productivity and create good jobs 0:04:29.360 --> 0:04:32.640 along the way. But as we've seen it again and again, 0:04:32.680 --> 0:04:34.920 no matter how many times people say that projects are 0:04:34.920 --> 0:04:38.200 shovel ready. Yeah, they're they're ready enough that you can 0:04:38.200 --> 0:04:40.240 start walking to the truck to get the shovel, But 0:04:40.279 --> 0:04:43.280 they never seem to be ready to have as much 0:04:43.320 --> 0:04:46.200 impact as quickly as you'd like them too. So you 0:04:46.240 --> 0:04:48.480 mentioned earlier, Dan that there are some things that the 0:04:48.520 --> 0:04:51.120 executive branch can do on its own, pretty much without 0:04:51.160 --> 0:04:53.880 support through a divided Congress. Give us a sense in 0:04:53.880 --> 0:04:56.599 the economic sphere, one are the things that this president, 0:04:56.640 --> 0:04:59.640 President Biden could get done in a reasonably short period 0:04:59.680 --> 0:05:04.120 of time. Well, within the labor department, for example, where 0:05:04.240 --> 0:05:09.280 you've got the uh Fair Labor Standards Act, he can 0:05:09.560 --> 0:05:14.360 his appointees and make different determinations as to who's covered 0:05:14.440 --> 0:05:18.200 by minimum wage laws when you have to pay over time, 0:05:18.240 --> 0:05:20.239 that sort of thing which could have a big effect. 0:05:20.680 --> 0:05:24.160 Within the gig economy. Um, he can do things on 0:05:24.240 --> 0:05:28.280 student debt relief as well. Uh. There there are any 0:05:28.440 --> 0:05:31.719 number of regulatory actions that he can take, and of 0:05:31.760 --> 0:05:35.440 course he can also use such spending powers as he 0:05:35.520 --> 0:05:38.919 has with already appropriated or soon to be appropriated funds 0:05:39.200 --> 0:05:43.880 to redirect them. So in terms of economic priorities, there's 0:05:44.000 --> 0:05:47.200 quite a bit that he can do where he needs 0:05:47.480 --> 0:05:53.240 the cooperation of Congress is obviously in increasing total spending 0:05:53.480 --> 0:05:57.000 or total tax reforms. Should we be concerned all about 0:05:57.000 --> 0:06:01.520 the effect of regulation more regulation on the economic growth? 0:06:01.600 --> 0:06:05.560 That's always a question, right UM, in any administration, no 0:06:05.600 --> 0:06:09.400 matter what its ideological leanings. But I think in the 0:06:09.480 --> 0:06:16.160 areas where the President elect has emphasized most the regulatory agenda, 0:06:16.200 --> 0:06:18.760 which would be on climate change, which would be on 0:06:19.000 --> 0:06:24.160 worker protection UH, and to a lesser extent, financial regulation UH. 0:06:24.240 --> 0:06:27.359 In each of those areas, I think that it's quite 0:06:27.440 --> 0:06:31.880 possible to get a set of regulations to achieve your 0:06:31.880 --> 0:06:36.000 regulatory end, but do so in a sensible way that 0:06:36.200 --> 0:06:40.760 doesn't create unnecessary disruption. That was Dan Trullo of Harvard 0:06:40.839 --> 0:06:44.239 Law School. Coming up, we'll talk with Tom Monte, chief 0:06:44.320 --> 0:06:47.000 operating officer of Bank of America, and and finukin the 0:06:47.040 --> 0:06:50.320 Bank's co vice chairman about why they're taking the lead 0:06:50.560 --> 0:06:54.080 in issuing sustainability bonds. That's coming up on Wall Street 0:06:54.120 --> 0:07:03.560 Week on Bloomberg. This is Bloomberg Wall Street Week with 0:07:03.720 --> 0:07:08.480 David Weston from Bloomberg Radio. E s G. Environmental, social 0:07:08.480 --> 0:07:11.560 and governance investing is all the rage, But how far 0:07:11.680 --> 0:07:14.280 can it go. Bank of America has been a leader 0:07:14.360 --> 0:07:17.600 in sustainable investing, and it's not limited to the environment 0:07:17.720 --> 0:07:20.240 or to governance. Last month, b of A issued a 0:07:20.280 --> 0:07:24.720 two billion dollar sustainability bond tied to equality, with proceeds 0:07:24.760 --> 0:07:27.960 going not just a clean transportation and energy, but also 0:07:28.000 --> 0:07:32.880 to alleviating inequalities in Black and Hispanic Latino communities. Tom Monteg, 0:07:32.960 --> 0:07:35.760 chief operating officer of Bank of America, and and Fanuken, 0:07:35.960 --> 0:07:39.640 the bank's co vice chairman, explained the how and the why. 0:07:39.760 --> 0:07:42.280 You know, we had made our billion dollar pledge for 0:07:42.440 --> 0:07:45.600 racial equality, and after that, because we've been a leader 0:07:45.720 --> 0:07:48.119 in the green and social bonds, we decided it would 0:07:48.120 --> 0:07:51.520 be good to prod a blueprint for everyone else to 0:07:51.520 --> 0:07:53.880 be able to access this market, and so we put 0:07:53.960 --> 0:07:56.760 together the two billion dollar sustainability bond, and it was 0:07:56.800 --> 0:07:59.760 green and social. As you say, the difference for this 0:07:59.880 --> 0:08:03.280 was the social aspect of it was all for financial 0:08:03.320 --> 0:08:07.880 empowerment for Black African American Hispanic Latino communities, and so 0:08:08.120 --> 0:08:12.120 the entire social aspect is there. And then this is 0:08:12.200 --> 0:08:14.120 hard work because once you do that, you have to 0:08:14.200 --> 0:08:16.480 track the things that you're doing and make sure you're 0:08:16.480 --> 0:08:18.200 doing them, and so there was a lot of work 0:08:18.240 --> 0:08:20.800 internally and with finance to be able to have the 0:08:20.840 --> 0:08:22.680 tracking elements and know what we were gonna do. So 0:08:22.720 --> 0:08:24.840 we track how much we do in affordable housing, we 0:08:24.880 --> 0:08:28.840 track how much we do for health practices. We tracked 0:08:29.160 --> 0:08:32.320 supply change for minorities, and so all those things are 0:08:32.360 --> 0:08:34.920 part of the social aspect, David. So this was two billion. 0:08:35.400 --> 0:08:40.760 We had incredible demand across from corporate, corporate treasurers and 0:08:40.960 --> 0:08:43.439 from investors, and so we were very pleased with it. 0:08:43.440 --> 0:08:46.920 It's interesting, I think you'd like this that five years ago, 0:08:46.920 --> 0:08:49.520 in two thousand fifteen, there was thirty eight billion dollars 0:08:49.559 --> 0:08:53.320 of green social sustainable bonds. This year they'll be almost 0:08:53.360 --> 0:08:57.400 fo so and we've been so ten times in five years, 0:08:57.400 --> 0:08:59.800 and so we're really pleased with the bond and what's happened. 0:08:59.840 --> 0:09:01.760 And alway, it's part of how we work here. I 0:09:01.800 --> 0:09:05.400 was looking yesterday at just at affordable housing. Last year 0:09:05.440 --> 0:09:08.760 we had over eight thousand affordable housing units that we 0:09:09.280 --> 0:09:12.320 helped finance, and of those eight thousand, over half of 0:09:12.360 --> 0:09:15.800 them almost half of them, excuse me, we're green themselves. 0:09:16.120 --> 0:09:18.160 And so we've tried to take green and social and 0:09:18.160 --> 0:09:19.480 a lot of the things we do. So we we 0:09:19.840 --> 0:09:22.920 were so excited about this, this bond and what represented 0:09:22.920 --> 0:09:26.719 in the blueprint it's set for America. So an as 0:09:26.760 --> 0:09:29.400 Tom just suggested, this is part of a larger plan, 0:09:29.480 --> 0:09:31.920 a strategy for Bank of America. Put it in context, 0:09:31.920 --> 0:09:33.480 how does this fit with the other things that Bank 0:09:33.520 --> 0:09:35.960 of America is doing. E s G is sort of 0:09:36.000 --> 0:09:40.079 a good reflection of our strategy of responsible growth. Uh, 0:09:40.200 --> 0:09:42.760 how could you be responsible if you're not thinking about 0:09:42.800 --> 0:09:46.440 sustainability in the long term. It's also, as as Tom 0:09:46.559 --> 0:09:49.400 is laying out, a very good business opportunity for us. 0:09:49.720 --> 0:09:53.640 We probably represent about a quarter one fourth of the 0:09:53.679 --> 0:09:56.679 social or E s G bonds that have been issued 0:09:56.679 --> 0:10:01.640 and underwritten in the last eight or nine year. Also, 0:10:01.920 --> 0:10:04.560 it's just been and we meet with maybe the top 0:10:04.640 --> 0:10:08.120 fifty institutional investors. All of them are asking about this. 0:10:08.520 --> 0:10:12.120 All of them expect for you to uh be be 0:10:12.360 --> 0:10:15.280 progressive in this regard and to do more. And our 0:10:15.320 --> 0:10:17.920 employees care about it too. And I might add that 0:10:17.960 --> 0:10:20.320 we see a lot of regulation that will be coming 0:10:20.320 --> 0:10:22.440 out of Europe and the next year or so, so 0:10:22.880 --> 0:10:24.840 we think that this is the place to be. There's 0:10:24.840 --> 0:10:27.200 a big business opportunity, and we're going to have to 0:10:27.200 --> 0:10:30.239 do it anyway. So Tom pick upout the business opportunity. 0:10:30.320 --> 0:10:32.440 How do you make money on this bond? How does 0:10:32.480 --> 0:10:34.960 an investor make money? How do the proceeds come back? 0:10:35.000 --> 0:10:38.120 Who's making the money can pay off the bond? Well, 0:10:38.120 --> 0:10:41.440 it's the bonds proceeds to whoever issues the bond. On 0:10:41.440 --> 0:10:44.040 one hand, the bonds proceeds are used by us on 0:10:44.200 --> 0:10:47.200 funding the things that we have written down that we're 0:10:47.200 --> 0:10:49.640 going to trap, be it green or be at the 0:10:49.720 --> 0:10:54.280 social aspect. So for that, that's how we invest our money, 0:10:54.480 --> 0:10:56.480 and that's why it's called a green or social bond. 0:10:56.760 --> 0:10:59.080 As far as the investor, they like these bonds because 0:10:59.080 --> 0:11:00.880 there's lots of E s G funds out there are 0:11:00.880 --> 0:11:02.960 people that want to invest in E s G product. 0:11:03.520 --> 0:11:06.040 Uh At times the s G product will trade better 0:11:06.440 --> 0:11:09.280 than the non E s G product, and so they 0:11:09.280 --> 0:11:11.680 can make money in that way. And in general, I 0:11:11.679 --> 0:11:14.600 think there's more and more money that's being used by 0:11:14.640 --> 0:11:18.079 people to support this and this kind of effort, and 0:11:18.160 --> 0:11:20.440 that's why so much is being issued this way. And 0:11:20.480 --> 0:11:22.600 talk about that pricing issue. When you price the bond, 0:11:22.640 --> 0:11:24.559 do you have to put a premium in to encourage 0:11:24.559 --> 0:11:27.120 investors come in. And how is it traded SITUATIONE. It's 0:11:27.120 --> 0:11:28.719 traded well. I mean the market has been you know, 0:11:28.920 --> 0:11:30.080 it's been a month and a lot as you know, 0:11:30.160 --> 0:11:31.520 a lot of things have happened in the month. So 0:11:31.559 --> 0:11:34.199 it's it's it's traded well. You know. You usually it 0:11:34.520 --> 0:11:37.480 will come at or slightly tighter than than a normal 0:11:37.520 --> 0:11:40.480 than a normal bond would at the time. Um, but 0:11:40.520 --> 0:11:41.880 you can't see it all the time. And by the way, 0:11:41.880 --> 0:11:44.120 people are issuing different kinds of bonds too in this 0:11:44.280 --> 0:11:47.760 in this area in green where things are coupons can 0:11:47.800 --> 0:11:50.040 go up and down based on how you meet the 0:11:50.080 --> 0:11:52.640 different hurdles that you put for yourself, for a manufacturer 0:11:52.880 --> 0:11:56.160 or someone on the paper industry, for example. So there's 0:11:56.200 --> 0:11:59.880 all sorts of bonds being done in the market right now. 0:12:00.440 --> 0:12:02.360 So and as you say, thank you, America has been 0:12:02.400 --> 0:12:06.640 dressing directly investing equity as well as loans into areas 0:12:06.679 --> 0:12:09.440 that need the help goodness nokes in this country. How 0:12:09.480 --> 0:12:11.160 do you coordinate if you coordinate at all, with the 0:12:11.160 --> 0:12:13.480 proceeds of this bond, the sustainability bond that we've been 0:12:13.520 --> 0:12:15.920 talking about, with the other efforts do you do it 0:12:15.960 --> 0:12:17.880 with the same sorts of entities in some of the 0:12:17.920 --> 0:12:20.959 Hispanic and the Black communities. Yeah, the two are coordinated, 0:12:21.040 --> 0:12:23.240 but but I think there's even a bigger effort here. 0:12:23.760 --> 0:12:26.640 This one is a jump start to the other. The 0:12:26.720 --> 0:12:29.280 one billion dollars is intended to do things that we 0:12:29.360 --> 0:12:32.920 might ordinarily not have been able to do. So perhaps 0:12:33.000 --> 0:12:39.480 concessionary capital, maybe it's philanthropy. It's investigating and investing where 0:12:39.520 --> 0:12:43.520 we might not have before. So for instance, we've put 0:12:44.000 --> 0:12:47.480 We've got a program with minority deposit institutions where we 0:12:47.520 --> 0:12:51.360 will put money, and we have always put deposits into 0:12:51.400 --> 0:12:53.800 these institutions, but now we're going to put equity, and 0:12:53.840 --> 0:12:56.920 we've already done twelve of them. And the idea here 0:12:57.080 --> 0:12:59.800 is that when we put money into those institutions, they 0:13:00.160 --> 0:13:02.600 give more, they can lend more at a community level, 0:13:02.960 --> 0:13:06.160 so one begets the next, and it it just increases 0:13:06.160 --> 0:13:10.080 the opportunity. The two billion dollar bond just means there's 0:13:10.120 --> 0:13:13.320 that much more opportunity to land and invest than we 0:13:13.400 --> 0:13:17.000 might have had otherwise. Tom, what about the accountability for 0:13:17.040 --> 0:13:19.240 all this. I'm not even necessarily talking about Bank of America, 0:13:19.240 --> 0:13:20.920 but in general, there's a lot of people saying they're 0:13:20.920 --> 0:13:25.920 doing environmental sustainable things, things good for social the social compact. 0:13:26.320 --> 0:13:28.440 How do we know that that's true because we don't 0:13:28.480 --> 0:13:31.760 really have standards yet, do we? Well? We well, we 0:13:31.840 --> 0:13:34.160 have standards and the standards that we we literally have 0:13:34.360 --> 0:13:36.719 our our auditors come in and make sure we are 0:13:36.800 --> 0:13:39.360 doing the things that we list that we're going to do. 0:13:39.440 --> 0:13:42.480 And so it is a it is a well trapped process. 0:13:42.480 --> 0:13:44.320 We you know, did we have as I said, ten 0:13:44.360 --> 0:13:47.720 billion dollars of these type of bonds outstanding, five green 0:13:47.760 --> 0:13:51.200 bonds to social We did a COVID bond also this 0:13:51.280 --> 0:13:54.160 year which was one billion, and this two billion sustainable bonds. 0:13:54.200 --> 0:13:57.120 So all of those bonds, I have a list of 0:13:57.160 --> 0:13:59.720 things that the proceeds can be used for and that 0:14:00.280 --> 0:14:04.440 list is tracked and maintain an audited UH to make 0:14:04.480 --> 0:14:07.600 sure we're doing that in success. In success, does this 0:14:07.679 --> 0:14:11.240 create more customers for Bank of America as well? Sure, 0:14:11.280 --> 0:14:15.080 there's plenty of research to indicate that those companies that 0:14:15.120 --> 0:14:18.599 are good in E s G also have higher satisfaction 0:14:18.679 --> 0:14:22.680 levels with their employees, with their customers, with their clients. 0:14:22.720 --> 0:14:26.080 They're less volatile. Uh. There are any number of reasons 0:14:26.120 --> 0:14:28.360 why you might do this. I also think, as I 0:14:28.440 --> 0:14:33.000 mentioned earlier, that we will see legislation and regulation first 0:14:33.040 --> 0:14:37.360 out of Europe and potentially with the Biden administration here 0:14:37.480 --> 0:14:41.000 United States. That was Antonucn, co vice chairman of Bank 0:14:41.040 --> 0:14:44.400 of America and Tom Monteg, the Bank's chief operating officer 0:14:44.680 --> 0:14:47.200 coming up. The election may not have gotten us past 0:14:47.240 --> 0:14:51.040 our partisan disagreements, but economist Paul Wimer says the coronavirus 0:14:51.080 --> 0:14:53.440 may force us to do just that, because in the 0:14:53.440 --> 0:14:56.600 world of the pandemic, there are no blue or red states. 0:14:57.120 --> 0:15:05.240 That's next on Wall Street Week on Bloomberg. This is 0:15:05.280 --> 0:15:09.640 Bloomberg Wall Street Week with David Weston from Bloomberg Radio. 0:15:09.960 --> 0:15:12.040 President like Joe Biden will come to office with a 0:15:12.120 --> 0:15:15.440 series of policy goals, but may well face a divided Congress. 0:15:15.640 --> 0:15:17.640 And so we begin to look at the next four 0:15:17.760 --> 0:15:20.440 years of a Biden administration and what it might hold. 0:15:20.720 --> 0:15:23.840 We asked n y U economist and Nobel Laureate Paul Romer, 0:15:23.880 --> 0:15:26.600 what will determine the course of the next four years 0:15:26.680 --> 0:15:30.040 under a President Biden? And he began with the pandemic. 0:15:30.360 --> 0:15:33.960 I'm afraid that this might turn into an exercise where 0:15:34.240 --> 0:15:36.840 people say, well, the Blue States had it right. The 0:15:36.880 --> 0:15:39.000 Red States had it wrong. They've got to behave more 0:15:39.040 --> 0:15:41.880 like the Blue States. Neither of them did that that well. 0:15:41.960 --> 0:15:45.640 The Blue States had a lower death rate, but they've 0:15:45.680 --> 0:15:48.840 also had slower recoveries of employment back to where we 0:15:48.840 --> 0:15:52.560 were in January. So we need a new measure. Uh. 0:15:52.720 --> 0:15:56.000 That's different from what either side was doing, uh in 0:15:56.040 --> 0:15:58.240 the last three or four months. And I think it's 0:15:58.240 --> 0:16:01.080 clear what that measure is. Do what the NBA did, 0:16:01.160 --> 0:16:04.280 Do what Harvard and Cornell and NYU were doing. Test 0:16:04.320 --> 0:16:07.880 people frequently, isolate them, and then let's get back to business. 0:16:07.960 --> 0:16:10.120 By the way, do what Taiwan did, as I understand, 0:16:10.120 --> 0:16:12.360 to do what South Korea did as well. So it's 0:16:12.360 --> 0:16:15.000 pretty basic. We gotta test, we gotta do contact tracing, 0:16:15.200 --> 0:16:17.520 where a mask, whatever you do. And he said specifically, 0:16:17.520 --> 0:16:19.760 it doesn't matter who you voted for. Now, that seems 0:16:19.800 --> 0:16:23.040 pretty simple, but the simple can sometimes be hard because 0:16:23.040 --> 0:16:25.200 it's not clear people are going to comply with that. Yeah, well, 0:16:25.240 --> 0:16:27.920 you know. There was an interesting comparison of how New 0:16:28.000 --> 0:16:31.280 Jersey responded to an outbreak in the Orthodox Jewish community 0:16:31.520 --> 0:16:34.440 as opposed to how New York responded. New York responded 0:16:34.440 --> 0:16:38.120 with the more traditional public health measures mandates, don't group 0:16:38.160 --> 0:16:40.440 together in big groups, don't do this, don't do that, 0:16:40.520 --> 0:16:43.480 wear masks. In New Jersey, they just started testing people 0:16:43.480 --> 0:16:46.760 and gave people the information and this produced less of 0:16:46.800 --> 0:16:49.840 a backlash in New Jersey and more compliance because once 0:16:49.840 --> 0:16:52.400 people started to see how many of them were infected, 0:16:52.560 --> 0:16:55.120 they they took this much more seriously. So, as you say, 0:16:55.160 --> 0:16:56.760 we've got to figure out a way to do both 0:16:56.800 --> 0:16:58.680 walk and chew gum as it were, which is to say, 0:16:59.320 --> 0:17:01.000 keep the kind as open as we can at the 0:17:01.000 --> 0:17:03.640 same time protect people. But beyond that, there are larger 0:17:03.680 --> 0:17:06.200 issues over the next four years, eight years, twelve years 0:17:06.280 --> 0:17:08.439 we need to address with the economy, and we have 0:17:08.480 --> 0:17:10.480 some people saying, look in order to really get growth 0:17:10.480 --> 0:17:13.440 going again, because as you know well, professor Roma, we've 0:17:13.520 --> 0:17:16.320 not had really growth rates with the developed countries for 0:17:16.400 --> 0:17:18.800 some time the way we did before. We need some 0:17:19.000 --> 0:17:22.359 massive things, something like a martial plan effectively to really 0:17:22.400 --> 0:17:24.240 invest in the economy by the way we could use 0:17:24.240 --> 0:17:26.720 the infrastructure, and we need to move to green technology. 0:17:26.720 --> 0:17:28.880 At the same time, You're absolutely right if you look 0:17:28.920 --> 0:17:32.639 at the growth over this entire recovery up until the pandemic, 0:17:32.880 --> 0:17:35.880 both like the second Obama term and the Trump turn. 0:17:36.280 --> 0:17:38.720 This had the lowest rate of GDP growth of any 0:17:38.800 --> 0:17:41.840 recovery since uh the end of World War two. So 0:17:42.080 --> 0:17:45.360 there is something deeper structural that we have to address. 0:17:45.880 --> 0:17:50.080 And you know, this is the time when borrowing is inexpensive. 0:17:50.160 --> 0:17:53.280 This is the time to go big on borrow and build. 0:17:53.400 --> 0:17:56.879 So I hope we can reach a consensus on the 0:17:56.960 --> 0:17:59.399 kinds of things we could borrow and then build to 0:17:59.560 --> 0:18:02.879 make the country better and profess as I say, you 0:18:02.960 --> 0:18:05.399 received the Nobel Prize where you're working economics, and in 0:18:05.440 --> 0:18:08.040 part I understand that was a growth theory that had 0:18:08.080 --> 0:18:11.320 to do with information and particularly government investing. We have 0:18:11.440 --> 0:18:14.320 Arvin Krishna, who's the CEO of IBM, just provided me 0:18:14.359 --> 0:18:17.640 with a letter that he's written to President elect Biden saying, 0:18:17.640 --> 0:18:19.719 look at we need to leverage science technology, We can 0:18:19.840 --> 0:18:23.159 to close the skills gap, We need to modernize digital infrastructure. 0:18:23.160 --> 0:18:26.200 It sounds like the sorts of things you talk about. Yeah, 0:18:26.359 --> 0:18:28.680 although you know, you know the joke about economists, there's 0:18:28.680 --> 0:18:31.640 always this other hand. I worry just a little bit 0:18:31.800 --> 0:18:34.439 that this is gonna sound like the scientists saying we 0:18:34.560 --> 0:18:36.960 told you so like we told you so, we were right. 0:18:37.000 --> 0:18:39.880 Give us more money, give us more power, and everything 0:18:39.880 --> 0:18:44.120 will be fine. I think the scientific community, the academic community, 0:18:44.280 --> 0:18:47.280 has to take ownership of the fact that expertise is 0:18:47.400 --> 0:18:50.360 not respected in the same way it once was. So 0:18:50.640 --> 0:18:53.000 we need to figure out what it will take to 0:18:53.160 --> 0:18:57.639 rebuild the confidence and trust amongst most members of the public. 0:18:58.040 --> 0:18:59.919 And we're not going to get there by just rooteful 0:19:00.320 --> 0:19:03.280 or scolding people. Well, when you talk about expertise, it 0:19:03.320 --> 0:19:05.600 makes me think a bit about the government itself, the 0:19:05.640 --> 0:19:08.679 federal government itself, because various experts have written saying that 0:19:08.800 --> 0:19:11.560 under the Trump administration, there has been a d emphasis 0:19:11.560 --> 0:19:13.520 if I can put it that way, on expertise, and 0:19:13.560 --> 0:19:17.000 that perhaps we don't have the same intellectual firepower, the 0:19:17.040 --> 0:19:19.920 inectual capital that we had before within the government. Yeah, 0:19:19.960 --> 0:19:23.600 we we not only haven't promoted people, we've left positions unfilled, 0:19:23.800 --> 0:19:27.159 but we've also frozen people. We've paralyzed them so that 0:19:27.200 --> 0:19:30.119 they're afraid to make decisions. I think this poor woman 0:19:30.320 --> 0:19:32.800 whose job it is at the g O to decide 0:19:32.800 --> 0:19:36.600 whether there's a consensus that the election is over and 0:19:36.600 --> 0:19:41.800 then triggers the transition process. This woman is like frozen 0:19:41.840 --> 0:19:44.760 in place, afraid to make a decision because she's afraid 0:19:44.800 --> 0:19:47.200 she'll get yelled at if she does. What's the obvious 0:19:47.200 --> 0:19:50.399 thing is to recognize the the election is over, and 0:19:50.640 --> 0:19:52.520 there were people in the f d A, people in 0:19:52.560 --> 0:19:55.199 the CDC in the same way, they were frozen. They 0:19:55.240 --> 0:19:58.240 wouldn't take leadership, they wouldn't act, they wouldn't take the 0:19:58.320 --> 0:20:00.560 kind of bold steps we needed to take. So we 0:20:00.600 --> 0:20:04.200 need an administration that gives people the confidence to rely 0:20:04.320 --> 0:20:08.320 on their professional expertise and do their jobs. Do we 0:20:08.440 --> 0:20:10.359 know whether that's something the president could do with his 0:20:10.440 --> 0:20:13.320 administration without the support of the Congress, because it looks 0:20:13.359 --> 0:20:15.760 like right now it's more likely than that that the 0:20:15.800 --> 0:20:18.520 Senate will have a majority of Republicans. Yeah. I think 0:20:18.520 --> 0:20:21.199 that the person who's at the very top of the 0:20:21.240 --> 0:20:25.960 executive branch exerts an enormous influence over all of the 0:20:26.040 --> 0:20:29.359 decisions made by all of the people under the executive branch. 0:20:29.880 --> 0:20:32.359 And I think the signal from the top that you 0:20:32.440 --> 0:20:35.399 will be trusted, you will be respected, even if you 0:20:35.520 --> 0:20:38.960 disagree with some of your peers or some other UH 0:20:39.000 --> 0:20:43.160 policy statement from within this this um UH this administration 0:20:43.480 --> 0:20:47.560 that that respect I think can enable the people all 0:20:47.640 --> 0:20:50.160 up and down the bureaucracy to to do their jobs. 0:20:50.400 --> 0:20:53.240 That was Professor of economics Paul Rohmer of n y U. 0:20:53.880 --> 0:20:56.160 Coming up, we wrap up the week with our special 0:20:56.200 --> 0:21:01.040 contributor Larry Summers. This is Wall Street Week on Bloomberg. 0:21:06.480 --> 0:21:10.440 This is Bloomberg Wall Street Week with David Weston from 0:21:10.600 --> 0:21:13.800 Bloomberg Radio. It felt like we took a turn this 0:21:13.880 --> 0:21:17.360 week toward a new president elect who called for unity. 0:21:18.080 --> 0:21:21.080 The selection is over. It's trying to put aside the 0:21:21.119 --> 0:21:25.359 partners of the partisanship and the rhetoric that designed to 0:21:25.520 --> 0:21:28.720 demonize one another, toward a new Congress that looks like 0:21:28.760 --> 0:21:31.520 it won't go too far out on the progressive wing, 0:21:31.720 --> 0:21:35.040 and toward a promising vaccine candidate from Fiser and beyond 0:21:35.040 --> 0:21:38.560 Tech that initial data suggested could be much more effective 0:21:38.720 --> 0:21:41.760 than we thought. And so the markets were pretty much 0:21:41.800 --> 0:21:44.960