1 00:00:00,160 --> 00:00:03,360 Speaker 1: This is Bloomberg Wall Street Week. What's the state of 2 00:00:03,400 --> 00:00:06,360 Speaker 1: corporate governance? The deficit is a real issue. The US 3 00:00:06,400 --> 00:00:09,920 Speaker 1: economy continues to send mixed signals, the financial stories that 4 00:00:10,039 --> 00:00:13,560 Speaker 1: keep our world fed, action to con concerns over dollar liquidity, 5 00:00:13,600 --> 00:00:16,599 Speaker 1: and encouraging China data. The five hundred wealthiest people in 6 00:00:16,640 --> 00:00:19,560 Speaker 1: the world. Through the eyes of the most influential voices, 7 00:00:19,880 --> 00:00:22,880 Speaker 1: Larry Summers, the former Treasury Secretary, star Ward CEO, Kevin 8 00:00:22,960 --> 00:00:26,640 Speaker 1: Johnson sec Chairman J Clayton. Bloomberg Wall Street Week with 9 00:00:26,760 --> 00:00:30,520 Speaker 1: David Weston from Bloomberg Radio. This week, for the first 10 00:00:30,680 --> 00:00:33,320 Speaker 1: time in history, a U S president was impeached for 11 00:00:33,360 --> 00:00:37,640 Speaker 1: a second time, a measure supported by ten House Republicans. 12 00:00:37,800 --> 00:00:42,600 Speaker 1: Today in a five cards way, the House demonstrated that 13 00:00:42,760 --> 00:00:46,440 Speaker 1: no one is above the law, not even the President 14 00:00:46,560 --> 00:00:49,440 Speaker 1: of the United States. This is Bloomberg Wall Street Week. 15 00:00:49,680 --> 00:00:53,479 Speaker 1: I'm David Weston. Let me say this. It's no secret 16 00:00:53,479 --> 00:00:57,560 Speaker 1: to anybody that I hope that this relationship would never 17 00:00:57,600 --> 00:01:02,840 Speaker 1: become public. When I was alone with miss Lewinsky on 18 00:01:02,880 --> 00:01:11,840 Speaker 1: certain occasions in early nine and once in early I 19 00:01:12,000 --> 00:01:15,520 Speaker 1: engaged in conduct that was wrong. That was President Bill 20 00:01:15,560 --> 00:01:18,400 Speaker 1: Clinton testifying before a grand jury about the events leading 21 00:01:18,480 --> 00:01:22,360 Speaker 1: up to his impeachment back but despite the history being 22 00:01:22,400 --> 00:01:26,000 Speaker 1: made back then, the SMP rose almost twelve from then 23 00:01:26,360 --> 00:01:29,920 Speaker 1: until he left office in early two thousand one. Markets 24 00:01:30,080 --> 00:01:33,800 Speaker 1: similarly looked past President Trump's second impeachment this week, focusing 25 00:01:33,880 --> 00:01:37,320 Speaker 1: instead on things like interest rates and proposed fiscal stimulus, 26 00:01:37,480 --> 00:01:40,640 Speaker 1: things that Jillian Ted, chair of the Financial Times editor board, 27 00:01:40,720 --> 00:01:44,520 Speaker 1: says investors should be considering that is the possibility of 28 00:01:44,560 --> 00:01:47,480 Speaker 1: a return of inflation. It's important to realize that there 29 00:01:47,640 --> 00:01:51,160 Speaker 1: is quite a big zeitgeide shift under way right now. 30 00:01:51,840 --> 00:01:54,920 Speaker 1: You can see that, perhaps most clearly, not just in 31 00:01:55,080 --> 00:01:58,960 Speaker 1: terms of the behavior of bond yields nominal bond deals, 32 00:01:59,200 --> 00:02:02,160 Speaker 1: but if you look at inflation linked bonds in particular, 33 00:02:02,600 --> 00:02:05,960 Speaker 1: they have been performing very well because investors having buying 34 00:02:06,000 --> 00:02:09,920 Speaker 1: them to hedge their portfolio. Now on the phase of 35 00:02:09,919 --> 00:02:12,840 Speaker 1: it that might seem absolutely peculiar, because we've just had 36 00:02:12,880 --> 00:02:16,560 Speaker 1: the consumer price in data come out this week, which 37 00:02:16,560 --> 00:02:20,480 Speaker 1: shows an inflation pression in December were incredibly muted, and 38 00:02:20,520 --> 00:02:23,960 Speaker 1: there's very little wage growth. The level of economic growth 39 00:02:24,000 --> 00:02:27,360 Speaker 1: is pretty weak two because of their pandemic. But there 40 00:02:27,360 --> 00:02:31,040 Speaker 1: are really three key factors which are causing investors right 41 00:02:31,080 --> 00:02:35,000 Speaker 1: now to think about inflation. The first is a chance 42 00:02:35,080 --> 00:02:37,919 Speaker 1: that if you do have a big fiscal stimulus package 43 00:02:37,960 --> 00:02:42,639 Speaker 1: from Joe Biden's incoming administration, and if that coincides with 44 00:02:43,040 --> 00:02:47,119 Speaker 1: the pandemic vaccine gradually spreading across the country and reducing 45 00:02:47,120 --> 00:02:50,480 Speaker 1: the pandemic fears, you could have those two factors coming 46 00:02:50,520 --> 00:02:54,560 Speaker 1: together and create quite a big up searching growth later 47 00:02:54,600 --> 00:02:59,560 Speaker 1: this year, which could coincide with supply chain bottlenecks because 48 00:02:59,600 --> 00:03:01,880 Speaker 1: so much paracy to be knocked out by the pandemic. 49 00:03:02,320 --> 00:03:04,640 Speaker 1: So what you could see is that prices, say to 50 00:03:04,639 --> 00:03:08,280 Speaker 1: the hotels or travel or leisure, suddenly jump up in 51 00:03:08,320 --> 00:03:11,800 Speaker 1: a way that will exkew the inflation data. Esther George, 52 00:03:11,800 --> 00:03:14,840 Speaker 1: head of the Kansas Fed, spoke about this Justice Week. 53 00:03:15,440 --> 00:03:19,000 Speaker 1: The second issue, which is equally important, is that many 54 00:03:19,120 --> 00:03:22,280 Speaker 1: of the structural factors we should kept prices low in 55 00:03:22,320 --> 00:03:28,640 Speaker 1: recent decades, most notably globalization and digitization, might just might be, 56 00:03:29,280 --> 00:03:33,440 Speaker 1: if not reversed, but become less forceful in the decades ahead, 57 00:03:34,000 --> 00:03:37,880 Speaker 1: because say the demographics and China are changing. That's a 58 00:03:37,960 --> 00:03:40,400 Speaker 1: much bigger debate, but it's very important to take note 59 00:03:40,440 --> 00:03:44,080 Speaker 1: of that. The third issue, though the really important issue 60 00:03:44,200 --> 00:03:48,120 Speaker 1: is a FED and inverted as. Assumptions of ultra low 61 00:03:48,160 --> 00:03:52,760 Speaker 1: inflation in recent years have been partly based around this 62 00:03:52,840 --> 00:03:56,720 Speaker 1: idea that the Third's two percent price target meant that 63 00:03:56,760 --> 00:03:59,600 Speaker 1: it would jump in and nip inflation and precious in 64 00:03:59,600 --> 00:04:03,440 Speaker 1: the bar if they start to emerge. What's changed, though, 65 00:04:03,480 --> 00:04:07,680 Speaker 1: are two things. Firstly, beneficials are saying that two percent 66 00:04:07,920 --> 00:04:10,960 Speaker 1: is now an average target, not a ceiling, which means 67 00:04:10,960 --> 00:04:13,600 Speaker 1: that they might be willing to let inflation rise above 68 00:04:13,680 --> 00:04:17,400 Speaker 1: to perse for quite a long time. Secondly, there's an 69 00:04:17,400 --> 00:04:21,520 Speaker 1: appreciation that the political economy pressures in the years ahead 70 00:04:21,880 --> 00:04:25,600 Speaker 1: could make it incredibly hard for the EFFECT act preemptively. 71 00:04:26,000 --> 00:04:29,840 Speaker 1: In particular, as the depth burden explodes, it's going to 72 00:04:29,920 --> 00:04:33,160 Speaker 1: be so hard for the FED to do something which 73 00:04:33,200 --> 00:04:35,680 Speaker 1: is going to raise the depth service in costs in 74 00:04:35,720 --> 00:04:39,480 Speaker 1: the future, so that, in plain English, means the FED 75 00:04:39,600 --> 00:04:43,480 Speaker 1: may sit on its hands, which also means inflation could 76 00:04:43,520 --> 00:04:46,760 Speaker 1: well be more of a risk and investors realized, and 77 00:04:46,800 --> 00:04:48,880 Speaker 1: in part it could have been that the FED wants 78 00:04:48,920 --> 00:04:51,040 Speaker 1: to certain ends. In this sense, inflation, as you say, 79 00:04:51,080 --> 00:04:53,640 Speaker 1: it's still is rollatory minus. At the same time, negative 80 00:04:53,680 --> 00:04:56,440 Speaker 1: real yields that is to say, the difference between the 81 00:04:56,480 --> 00:04:59,880 Speaker 1: inflation rate and the zero effectively zero industrates really have 82 00:05:00,200 --> 00:05:04,720 Speaker 1: record negative real yield. Make that be actually a strategy 83 00:05:04,760 --> 00:05:07,200 Speaker 1: to actually inflate our way in part out of that 84 00:05:07,320 --> 00:05:10,919 Speaker 1: debt problem you just talked about. There's certainly a temptation 85 00:05:11,360 --> 00:05:14,720 Speaker 1: um for the FED to sit on its hands in 86 00:05:14,839 --> 00:05:19,480 Speaker 1: terms of running the economy hot and helping growth, Helping 87 00:05:19,520 --> 00:05:21,359 Speaker 1: it should also be said, in the eyes of some 88 00:05:21,560 --> 00:05:26,000 Speaker 1: FED officials lower income communities as well. You know, the 89 00:05:26,080 --> 00:05:28,880 Speaker 1: ideas that you have a large amount of growth, then 90 00:05:28,920 --> 00:05:31,800 Speaker 1: that will gently trickle down to poor people for what 91 00:05:31,839 --> 00:05:34,960 Speaker 1: it's worth. I personally think that's a huge mistake, because 92 00:05:35,040 --> 00:05:37,640 Speaker 1: I think what the FED is doing is raising inflating 93 00:05:37,680 --> 00:05:40,599 Speaker 1: the value of the assets that the rich hold and 94 00:05:40,800 --> 00:05:44,760 Speaker 1: increasing income inequality. But in terms of trying to inflict 95 00:05:44,800 --> 00:05:47,640 Speaker 1: yourself way out of a debt burden, yes, absolutely, then 96 00:05:47,640 --> 00:05:50,080 Speaker 1: the school of thinking in the investment community and the 97 00:05:50,160 --> 00:05:53,279 Speaker 1: economics community that says that's probably the only way they're 98 00:05:53,279 --> 00:05:55,159 Speaker 1: going to get out of that debt burden. If you 99 00:05:55,160 --> 00:05:57,800 Speaker 1: look go back to the years after World War Two, 100 00:05:58,200 --> 00:06:00,320 Speaker 1: you can see that some mild version of this was 101 00:06:00,320 --> 00:06:03,000 Speaker 1: one of the reasons that the US and UK was 102 00:06:03,120 --> 00:06:06,880 Speaker 1: able to exit from their massive debt burdens after World 103 00:06:06,920 --> 00:06:09,960 Speaker 1: War Two. The danger though, is that if you do 104 00:06:10,120 --> 00:06:13,560 Speaker 1: have inflation starting to come back as a significant threat 105 00:06:13,640 --> 00:06:16,320 Speaker 1: and a perception, but the FED is not willing to act, 106 00:06:16,800 --> 00:06:20,720 Speaker 1: you may then also see overseas investors start to become 107 00:06:20,800 --> 00:06:25,400 Speaker 1: more nervous about holding US treasuries. And the problem with 108 00:06:25,600 --> 00:06:28,080 Speaker 1: America is that at the end of the day, it 109 00:06:28,279 --> 00:06:31,800 Speaker 1: is dependent on the kindness of strangers or the willingness 110 00:06:31,839 --> 00:06:36,720 Speaker 1: of foreign investors to keep funding this exploding debt burden 111 00:06:37,120 --> 00:06:40,320 Speaker 1: that the incoming administration is going to face. That was 112 00:06:40,320 --> 00:06:43,440 Speaker 1: Wall Street Week contributor Jillian Tet of The Financial Times 113 00:06:44,000 --> 00:06:46,600 Speaker 1: coming up the role of social media in the attack 114 00:06:46,640 --> 00:06:49,080 Speaker 1: on the Capitol and what could be done about it 115 00:06:49,400 --> 00:06:52,960 Speaker 1: from former head of Homeland Security j Johnson. That's next 116 00:06:52,960 --> 00:07:02,039 Speaker 1: on Wall Street Week on Bloomberg. This is Bloomberg Wall 117 00:07:02,080 --> 00:07:06,440 Speaker 1: Street Week with David Weston from Bloomberg Radio. The Capital 118 00:07:06,440 --> 00:07:09,040 Speaker 1: may have been the target of the mob's attack last week, 119 00:07:09,240 --> 00:07:13,520 Speaker 1: but Silicon Valley suffered its own collateral damage. Attention quickly 120 00:07:13,560 --> 00:07:16,320 Speaker 1: focused on the role of social media in foemening and 121 00:07:16,400 --> 00:07:20,760 Speaker 1: even helping organize the insurrection, leading Facebook and Instagram to 122 00:07:20,840 --> 00:07:25,400 Speaker 1: suspend President Trump's account at least until Inauguration day. YouTube 123 00:07:25,480 --> 00:07:28,280 Speaker 1: suspended his channel for at least one week. But the 124 00:07:28,320 --> 00:07:32,800 Speaker 1: most severe action came from President Trump's platform of choice Twitter. 125 00:07:33,200 --> 00:07:36,800 Speaker 1: It permanently suspended his account, severing an instant line of 126 00:07:36,840 --> 00:07:41,200 Speaker 1: communication to his eighty nine million followers. The events raised 127 00:07:41,280 --> 00:07:44,560 Speaker 1: pressure to regulate content on tech platforms and adds to 128 00:07:44,560 --> 00:07:49,040 Speaker 1: the debate over shielding social media companies from liability. Senator 129 00:07:49,120 --> 00:07:52,400 Speaker 1: Lindsey Graham said in a tweet, I'm more determined than 130 00:07:52,440 --> 00:07:55,480 Speaker 1: ever to strip section to thirty protections from big tech 131 00:07:55,720 --> 00:08:00,000 Speaker 1: Twitter that let them be immune from lawsuits. The issue 132 00:08:00,080 --> 00:08:04,600 Speaker 1: of false and even incendiary social media posts poses serious 133 00:08:04,680 --> 00:08:08,000 Speaker 1: issues for our politics and for our security. According to 134 00:08:08,080 --> 00:08:11,960 Speaker 1: j Johnson, He's former head of Homeland Security, I don't 135 00:08:11,960 --> 00:08:15,880 Speaker 1: want to take any particular company to task UM, but 136 00:08:16,840 --> 00:08:23,320 Speaker 1: social media. The ability to UM to publish, push out 137 00:08:23,480 --> 00:08:28,160 Speaker 1: fake news, extremist views is frankly a large reason for 138 00:08:28,240 --> 00:08:30,680 Speaker 1: why we are where we are today in our politics, 139 00:08:31,200 --> 00:08:36,880 Speaker 1: in our domestic security situation. Something like se of Republicans, 140 00:08:36,920 --> 00:08:40,000 Speaker 1: according to polls, believed that the election was stolen and 141 00:08:40,040 --> 00:08:44,120 Speaker 1: that there was fraud in the election. I'm waiting to 142 00:08:44,160 --> 00:08:48,040 Speaker 1: see the poll that a certain percentage of Americans believe 143 00:08:48,200 --> 00:08:51,480 Speaker 1: that last week's attack on the Capitol was the fault 144 00:08:51,520 --> 00:08:54,800 Speaker 1: of Antifa, and there is absolutely no evidence of that. 145 00:08:55,360 --> 00:08:57,240 Speaker 1: And so, you know, when you and I grew up, 146 00:08:57,880 --> 00:09:00,920 Speaker 1: there were conventional news sources from which we got all 147 00:09:00,960 --> 00:09:03,679 Speaker 1: the same set effects out of which we form our 148 00:09:03,679 --> 00:09:07,360 Speaker 1: own opinions about the Vietnam War and the civil rights 149 00:09:07,400 --> 00:09:12,280 Speaker 1: movement and the like. Now, because of social media, because 150 00:09:12,280 --> 00:09:16,160 Speaker 1: of this, this this information highway, people can go to 151 00:09:16,480 --> 00:09:19,920 Speaker 1: sources of so called news that do no more than 152 00:09:20,000 --> 00:09:24,440 Speaker 1: reaffirm their own paranoias, their own biases, their own prejudices, 153 00:09:24,960 --> 00:09:29,240 Speaker 1: and their own suspicions. And that has been a big 154 00:09:29,360 --> 00:09:33,319 Speaker 1: driver of the divisiveness and the ugliness in our politics 155 00:09:33,360 --> 00:09:37,280 Speaker 1: for the last several years. At the same time, is 156 00:09:37,320 --> 00:09:40,520 Speaker 1: there a danger of overreacting? I mean, we've seen this 157 00:09:40,640 --> 00:09:43,480 Speaker 1: sometimes in crises in this country, where we react to 158 00:09:43,559 --> 00:09:45,880 Speaker 1: the last problem. We overreact. Let me give you a 159 00:09:45,920 --> 00:09:51,000 Speaker 1: stark example. One person's extreme expression might be another person's 160 00:09:51,040 --> 00:09:53,640 Speaker 1: Arab spring. I mean, social media is very important in 161 00:09:53,600 --> 00:09:56,760 Speaker 1: the Arab spring. How do we protect our own homeland 162 00:09:57,520 --> 00:09:59,839 Speaker 1: from the ills that could have come from social media 163 00:10:00,120 --> 00:10:05,280 Speaker 1: without shutting down an Arab spring. Excellent question, David. Very 164 00:10:05,280 --> 00:10:09,360 Speaker 1: often a crisis atmosphere is a poor atmosphere in which 165 00:10:09,400 --> 00:10:12,719 Speaker 1: to make policy. I have been saying now for for 166 00:10:12,760 --> 00:10:18,120 Speaker 1: several years that government agencies, national security agencies, need to 167 00:10:18,320 --> 00:10:23,480 Speaker 1: resist the political push show the impulse to dive into 168 00:10:23,600 --> 00:10:27,520 Speaker 1: trying to regulate social media, political debate on the on 169 00:10:27,559 --> 00:10:31,040 Speaker 1: the internet. Think about what certain people in office today 170 00:10:31,040 --> 00:10:34,080 Speaker 1: would do if they could deem something fake news and 171 00:10:34,120 --> 00:10:39,040 Speaker 1: therefore impose government restrictions on the ability of the Internet 172 00:10:39,040 --> 00:10:42,800 Speaker 1: to repeat it. And so I've got to be careful 173 00:10:42,840 --> 00:10:48,800 Speaker 1: when it comes to government restrictions on political debate political speech, 174 00:10:49,240 --> 00:10:53,599 Speaker 1: which is why the action on President Trump's accounts was 175 00:10:53,920 --> 00:10:57,960 Speaker 1: extraordinary but probably overdue. Frankly, At the same time, I 176 00:10:57,960 --> 00:11:01,160 Speaker 1: wonder if there's actually a positive good for law enforcement 177 00:11:01,400 --> 00:11:04,640 Speaker 1: national security authorities of having an open web. That is 178 00:11:04,640 --> 00:11:07,000 Speaker 1: to say, if really we do drive these people off 179 00:11:07,040 --> 00:11:10,280 Speaker 1: of Twitter and Facebook and maybe even parlor, they may 180 00:11:10,320 --> 00:11:12,080 Speaker 1: go to the dark web and it might be harder 181 00:11:12,240 --> 00:11:15,040 Speaker 1: for our national security forces to really monitor what they're 182 00:11:15,120 --> 00:11:21,120 Speaker 1: up to. There is that offsetting concern. Very definitely, um 183 00:11:21,280 --> 00:11:28,920 Speaker 1: the ability to monitor extremist views, communications, plotting terrorists. Plotting 184 00:11:29,920 --> 00:11:33,880 Speaker 1: is a valuable, valuable law enforcement tool and and you're correct. 185 00:11:34,000 --> 00:11:37,360 Speaker 1: Very often when you prohibit something, you make it more difficult. 186 00:11:38,000 --> 00:11:40,600 Speaker 1: You just drive it to another corner, and law enforcement 187 00:11:40,600 --> 00:11:43,400 Speaker 1: struggles to keep up going beyond social media. We have 188 00:11:43,440 --> 00:11:46,640 Speaker 1: an inauguration coming up next week. Now, how do we 189 00:11:46,679 --> 00:11:48,959 Speaker 1: make sure we don't have some sort of problem the 190 00:11:49,000 --> 00:11:51,440 Speaker 1: way we did last week? I mean, what went wrong 191 00:11:51,480 --> 00:11:53,960 Speaker 1: and what steps should be taken to really make sure 192 00:11:54,000 --> 00:11:58,520 Speaker 1: we're secure on the capitol, David. When I was Secretary 193 00:11:58,559 --> 00:12:01,720 Speaker 1: of Homeland Security, I had the responsibility for the inauguration 194 00:12:02,000 --> 00:12:04,400 Speaker 1: four years ago. For the security of the inauguration four 195 00:12:04,440 --> 00:12:07,360 Speaker 1: years ago. UH. In my time as secretary, I also 196 00:12:07,400 --> 00:12:10,960 Speaker 1: had the responsibility for the security of three State of 197 00:12:10,960 --> 00:12:14,840 Speaker 1: the Union addresses in the US capital to presidential political 198 00:12:14,880 --> 00:12:20,480 Speaker 1: conventions UH, three U N General Assembly sessions, one paper visit. UH. 199 00:12:20,600 --> 00:12:23,520 Speaker 1: It can be done. There is something called an n 200 00:12:23,800 --> 00:12:28,760 Speaker 1: s S E National Special security event. UH. The inauguration 201 00:12:28,880 --> 00:12:32,440 Speaker 1: is an n s S. Political conventions are n s 202 00:12:32,440 --> 00:12:35,000 Speaker 1: s S. And when you declare something an n s 203 00:12:35,000 --> 00:12:38,360 Speaker 1: S UH, there's a certain level of security preparation that 204 00:12:38,520 --> 00:12:41,400 Speaker 1: kicks in, and there's literally a checklist of things you 205 00:12:41,520 --> 00:12:45,360 Speaker 1: go through to prevent any sort of penetration of the 206 00:12:45,400 --> 00:12:49,880 Speaker 1: event from land, sea, air, and cyberspace. That failed to 207 00:12:49,920 --> 00:12:52,839 Speaker 1: happen last week for reasons that we will learn at 208 00:12:52,840 --> 00:12:56,200 Speaker 1: some point. Uh, those responsible for the security of last 209 00:12:56,240 --> 00:13:00,920 Speaker 1: week's event in the Congress did not anticipate the security 210 00:13:01,360 --> 00:13:05,120 Speaker 1: challenges that they ended up facing. This could have been prohibited. 211 00:13:05,160 --> 00:13:08,960 Speaker 1: We know how to protect the perimeter of the U. S. Capital. 212 00:13:10,520 --> 00:13:12,880 Speaker 1: Not to be flip about this at all, Mr Secretary, 213 00:13:12,920 --> 00:13:14,800 Speaker 1: but do we know how to protect the security of 214 00:13:14,840 --> 00:13:17,000 Speaker 1: the country from the President of States himself? And there's 215 00:13:17,000 --> 00:13:19,120 Speaker 1: a raging debate right now, as you know, in Washington 216 00:13:19,400 --> 00:13:21,959 Speaker 1: about whether this man should remain in office. How concerned 217 00:13:21,960 --> 00:13:25,600 Speaker 1: are you about that possibility. I am very concerned. Our 218 00:13:25,679 --> 00:13:30,600 Speaker 1: domestic security situation right now is very tense. It should 219 00:13:30,640 --> 00:13:35,439 Speaker 1: be on high alert, David. The the very very sad 220 00:13:35,520 --> 00:13:40,880 Speaker 1: fact is that there exists in this country a strand 221 00:13:41,040 --> 00:13:48,880 Speaker 1: of racism, intolerance, bigotry, anti semitism that has for years 222 00:13:48,880 --> 00:13:53,280 Speaker 1: existed under a rock. Uh. Frankly, our our political leaders, 223 00:13:53,320 --> 00:13:56,959 Speaker 1: President Trump has enabled that group, has emboldened that group 224 00:13:57,000 --> 00:14:01,160 Speaker 1: by saying your special people, you're good people, uh, and 225 00:14:01,240 --> 00:14:03,920 Speaker 1: basically allowed them to come out from under their rock. 226 00:14:04,320 --> 00:14:07,080 Speaker 1: One of the things that I think is important now 227 00:14:07,240 --> 00:14:09,560 Speaker 1: and I'm glad to have this opportunity to talk to 228 00:14:09,559 --> 00:14:13,360 Speaker 1: the business community, David, is that there are others involved 229 00:14:13,360 --> 00:14:15,960 Speaker 1: in this who frankly aided and embedded this. There are 230 00:14:16,040 --> 00:14:20,600 Speaker 1: people now who believe that by pandering to Trump's base, 231 00:14:21,360 --> 00:14:24,920 Speaker 1: got pandering to this aspect of his base, it works 232 00:14:24,920 --> 00:14:28,400 Speaker 1: to their own political benefit. And I think the rest 233 00:14:28,400 --> 00:14:30,720 Speaker 1: of us in this country need to push back on 234 00:14:30,840 --> 00:14:33,600 Speaker 1: that and say no, you don't, don't try that. In 235 00:14:33,640 --> 00:14:37,000 Speaker 1: the business community in particular, I believe has a large 236 00:14:37,080 --> 00:14:40,280 Speaker 1: voice in that. That was j Johnson of Paul Weiss 237 00:14:40,280 --> 00:14:43,120 Speaker 1: coming up whether or not markets cared about the effisiment. 238 00:14:43,160 --> 00:14:46,400 Speaker 1: A lot of big corporations did, distancing themselves from the 239 00:14:46,400 --> 00:14:50,120 Speaker 1: Trump brand and reigning in their political contributions as fast 240 00:14:50,160 --> 00:14:53,600 Speaker 1: as they could, something David Rubinstein and the Carloge Group says, 241 00:14:53,800 --> 00:14:57,080 Speaker 1: maybe here to stay. That's next on Wall Street Week 242 00:14:57,240 --> 00:15:06,360 Speaker 1: on Bloomberg. This is Bloomberg Wall Street Week with David 243 00:15:06,360 --> 00:15:10,120 Speaker 1: weston Trump Bloomberg Radio. The Trump brand was at the 244 00:15:10,200 --> 00:15:12,960 Speaker 1: heart of the president's business empire, long before he turned 245 00:15:12,960 --> 00:15:16,320 Speaker 1: to politics, and that brand is in crisis after the 246 00:15:16,440 --> 00:15:19,080 Speaker 1: riot at the US Capital. He is being shunned by 247 00:15:19,120 --> 00:15:22,600 Speaker 1: political donors, by tech companies, banks handling his finances, and 248 00:15:22,640 --> 00:15:26,880 Speaker 1: even by Shopify, the company behind his online stores. Deutsche 249 00:15:26,880 --> 00:15:30,040 Speaker 1: Bank reportedly decided not to conduct more business with President 250 00:15:30,040 --> 00:15:33,760 Speaker 1: Trump or his family company, and Signature Bank announced its 251 00:15:33,840 --> 00:15:37,840 Speaker 1: closing two personal Trump accounts holding about five million dollars. 252 00:15:38,400 --> 00:15:41,440 Speaker 1: Even the game of Golf so dear to President Trump, 253 00:15:41,720 --> 00:15:44,360 Speaker 1: has turned its back on him, with the p g 254 00:15:44,520 --> 00:15:48,080 Speaker 1: A canceling plans to have its championship at his Bedminster 255 00:15:48,160 --> 00:15:54,160 Speaker 1: club and two, something Mr Trump had long coveted. The 256 00:15:54,240 --> 00:15:57,480 Speaker 1: follow up goes beyond President Trump and his company. Other 257 00:15:57,520 --> 00:16:02,240 Speaker 1: companies like Amazon, American Express, Disney, and Walmart are withholding 258 00:16:02,240 --> 00:16:06,040 Speaker 1: political contributions to lawmakers who voted last week to oppose 259 00:16:06,160 --> 00:16:09,760 Speaker 1: the electoral College results. In a recent Yale survey of 260 00:16:09,840 --> 00:16:13,920 Speaker 1: forty c e ost of them said businesses should halt 261 00:16:14,000 --> 00:16:18,200 Speaker 1: all political donations, and several corporations have said they'll suspend 262 00:16:18,280 --> 00:16:22,120 Speaker 1: all political contributions at least for the time being. David 263 00:16:22,160 --> 00:16:24,960 Speaker 1: Rubinstein has worked at the highest levels of corporate America 264 00:16:25,040 --> 00:16:28,560 Speaker 1: for years now. As co founder and now co executive 265 00:16:28,600 --> 00:16:32,640 Speaker 1: chairman of the Carlisle Group. He explains what motivates corporations 266 00:16:32,680 --> 00:16:36,840 Speaker 1: when it comes to politics and why things might change. Well, 267 00:16:36,840 --> 00:16:39,120 Speaker 1: business leaders by and large want to run their companies. 268 00:16:39,120 --> 00:16:42,080 Speaker 1: They're not looking for controversy, so they don't don't tend 269 00:16:42,160 --> 00:16:44,400 Speaker 1: to be profiles and courage and I would include myself 270 00:16:44,440 --> 00:16:46,960 Speaker 1: in that category. We generally are not trying to make 271 00:16:47,000 --> 00:16:49,760 Speaker 1: waves when we're running companies. That's for political people to 272 00:16:49,760 --> 00:16:51,760 Speaker 1: do and not for business leaders. But I think the 273 00:16:51,800 --> 00:16:54,960 Speaker 1: business community has been um scared a bit about where 274 00:16:54,960 --> 00:16:57,200 Speaker 1: the country is going, and I think they're now trying 275 00:16:57,200 --> 00:16:59,280 Speaker 1: to say, well, we want to be on the side 276 00:16:59,280 --> 00:17:01,000 Speaker 1: of what's right of the country and we want to 277 00:17:01,040 --> 00:17:03,680 Speaker 1: honor the Constitution and so forth. Whether that's going to 278 00:17:03,760 --> 00:17:05,680 Speaker 1: make a big difference or not in terms of whether 279 00:17:05,760 --> 00:17:07,840 Speaker 1: the country comes together or not, I'm not sure. But 280 00:17:07,880 --> 00:17:10,520 Speaker 1: there's no doubt that people are running away from President Trump, 281 00:17:10,680 --> 00:17:13,040 Speaker 1: who were people who work pretty close to them up 282 00:17:13,080 --> 00:17:16,280 Speaker 1: until just recently. But interesting, is it running away from 283 00:17:16,320 --> 00:17:19,080 Speaker 1: President Trump the person, which of course I'm sure is 284 00:17:19,080 --> 00:17:21,160 Speaker 1: going on, or might there be a fund and more 285 00:17:21,200 --> 00:17:24,040 Speaker 1: fundamental reform saying we need to think closely before we 286 00:17:24,080 --> 00:17:27,960 Speaker 1: really get too close to any administration. Clearly they're running 287 00:17:27,960 --> 00:17:30,960 Speaker 1: away from what President Trump UH did in the last 288 00:17:31,119 --> 00:17:33,480 Speaker 1: week or two or three or so in a post election. 289 00:17:33,760 --> 00:17:36,040 Speaker 1: But I do think that they're all weren't worried now 290 00:17:36,080 --> 00:17:38,800 Speaker 1: that getting too close to politicians is a problem, And 291 00:17:38,800 --> 00:17:40,119 Speaker 1: I think many of them are gonna re look at 292 00:17:40,119 --> 00:17:43,440 Speaker 1: their political donations and they want to avoid being criticized 293 00:17:43,480 --> 00:17:45,800 Speaker 1: for things that they can't control. They can't control what 294 00:17:45,840 --> 00:17:50,439 Speaker 1: politicians do, so UH people make political contributions for various reasons. 295 00:17:50,520 --> 00:17:52,600 Speaker 1: I think businesses are going to be more careful about 296 00:17:52,640 --> 00:17:54,560 Speaker 1: what they do in the future, and they don't really 297 00:17:54,560 --> 00:17:57,680 Speaker 1: want controversy. One of the things that's striking to me, 298 00:17:57,800 --> 00:17:59,439 Speaker 1: maybe not to you, is the extent to which the 299 00:17:59,440 --> 00:18:01,119 Speaker 1: markets that any much attention to any of this, At 300 00:18:01,160 --> 00:18:02,959 Speaker 1: least far as I can tell, I can't discern it. 301 00:18:03,160 --> 00:18:05,359 Speaker 1: We have a really history being made, first time in 302 00:18:05,400 --> 00:18:07,480 Speaker 1: history of president will be impeached for the second time. 303 00:18:08,080 --> 00:18:10,160 Speaker 1: What do you make of that as a practical letter? 304 00:18:10,240 --> 00:18:12,399 Speaker 1: Is that right? Is that healthy? Is the way it 305 00:18:12,400 --> 00:18:17,280 Speaker 1: should be? Well? Businesses like to see predictability, and markets 306 00:18:17,320 --> 00:18:19,480 Speaker 1: want predictability, and I think the markets are pretty quick 307 00:18:19,520 --> 00:18:21,480 Speaker 1: to figure out what's going to happen. They know that 308 00:18:21,560 --> 00:18:24,040 Speaker 1: President Trump is gonna be leaving office, uh, they know 309 00:18:24,119 --> 00:18:26,640 Speaker 1: that the companies are gonna do their business, and ultimately 310 00:18:26,640 --> 00:18:29,080 Speaker 1: the key thing to the economy is getting COVID under control. 311 00:18:29,440 --> 00:18:31,200 Speaker 1: And I think from the Business Committee's point of view, 312 00:18:31,440 --> 00:18:34,720 Speaker 1: not having too many disruptive policies from the new administration. 313 00:18:34,960 --> 00:18:36,560 Speaker 1: And I don't think they feel there's gonna be many 314 00:18:36,560 --> 00:18:40,760 Speaker 1: disruptive economic policies, so the administration um it comes in 315 00:18:40,880 --> 00:18:42,320 Speaker 1: is not gonna be one that's gonna be as favorable 316 00:18:42,280 --> 00:18:44,680 Speaker 1: to business as the previous one. I think the business 317 00:18:44,720 --> 00:18:47,680 Speaker 1: community recognizing the markets recognized that there's not gonna be 318 00:18:47,680 --> 00:18:50,439 Speaker 1: a lot of disruptive changes as we saw through COVID 319 00:18:50,520 --> 00:18:52,840 Speaker 1: and as we're seeing right now, the markets operate on 320 00:18:52,880 --> 00:18:55,919 Speaker 1: their own, uh kind of wavelength, and they're not They 321 00:18:55,920 --> 00:18:58,600 Speaker 1: didn't weren't as affected by by the by COVID as 322 00:18:58,640 --> 00:19:00,320 Speaker 1: I thought they would have been, and then not gonna 323 00:19:00,320 --> 00:19:02,200 Speaker 1: be as affected by what's going on today in Washington. 324 00:19:02,320 --> 00:19:04,080 Speaker 1: I think they just shrug it off and look at 325 00:19:04,080 --> 00:19:05,760 Speaker 1: what the your earnings for share is going to be. 326 00:19:05,760 --> 00:19:08,680 Speaker 1: A Various companies that care about You're a veteran of Washington. 327 00:19:08,800 --> 00:19:10,879 Speaker 1: You've been around Washington for quite a while, as if I, 328 00:19:11,000 --> 00:19:13,439 Speaker 1: for that matter, give us your perspective overall on what 329 00:19:13,520 --> 00:19:16,600 Speaker 1: you're seeing happen right now. Unimprecedented is an overused term, 330 00:19:16,800 --> 00:19:20,119 Speaker 1: certainly applies here. What do you make of it? The 331 00:19:20,160 --> 00:19:24,560 Speaker 1: country's greatest stress ever was the Civil War, and I 332 00:19:24,560 --> 00:19:27,720 Speaker 1: think the Great Depression was the second greatest stress we've 333 00:19:27,760 --> 00:19:31,000 Speaker 1: ever had. I think we have two great stresses going 334 00:19:31,040 --> 00:19:33,880 Speaker 1: on right now, not quite the Civil War, not quite 335 00:19:33,880 --> 00:19:37,240 Speaker 1: the Depression. One is the COVID situation, which now seems 336 00:19:37,240 --> 00:19:39,159 Speaker 1: to be getting worse rather than better, even though we 337 00:19:39,200 --> 00:19:43,560 Speaker 1: have vaccines that are available. And second, the impeachment process 338 00:19:43,600 --> 00:19:46,000 Speaker 1: now going on, and that things related to January six, 339 00:19:46,480 --> 00:19:49,720 Speaker 1: that's gonna scar our democracy for quite some time. The 340 00:19:49,760 --> 00:19:52,040 Speaker 1: country has been through a real stress test the last 341 00:19:52,040 --> 00:19:55,199 Speaker 1: few weeks, and I think we'll survive, for sure, but 342 00:19:55,280 --> 00:19:58,480 Speaker 1: there's no doubt that the political repercussions are gonna be great. 343 00:19:58,520 --> 00:20:00,480 Speaker 1: I think the Democrats and Republicans are to be further 344 00:20:00,480 --> 00:20:03,560 Speaker 1: divided than they've ever been. And whether President Trump is 345 00:20:03,720 --> 00:20:06,840 Speaker 1: impeached or whether he's convicted, you're gonna have big divisions 346 00:20:06,880 --> 00:20:10,520 Speaker 1: between Democrats Republicans for quite some time, so it's it's 347 00:20:10,520 --> 00:20:12,880 Speaker 1: gonna take a while for President elect Biden to really 348 00:20:12,880 --> 00:20:15,240 Speaker 1: be able to bring this both sides together in my view. 349 00:20:15,560 --> 00:20:18,880 Speaker 1: That was David Rubinstein, Co executive chairman of the Carlisle 350 00:20:18,920 --> 00:20:22,879 Speaker 1: Group and host of Peer to Peer on Bloomberg. Coming up, 351 00:20:23,000 --> 00:20:25,440 Speaker 1: we wrap up the week with our special contributor Larry 352 00:20:25,480 --> 00:20:29,320 Speaker 1: Summers of Harvard. That's next on Wall Street Week on Bloomberg. 353 00:20:34,320 --> 00:20:38,240 Speaker 1: This is Bloomberg Wall Street Week with David Weston from 354 00:20:38,400 --> 00:20:41,199 Speaker 1: Bloomberg Radio. To conclude the week, as we always do, 355 00:20:41,320 --> 00:20:44,520 Speaker 1: with our special contributor to Larry Summers of Harvard. So, Larry, 356 00:20:44,760 --> 00:20:46,960 Speaker 1: I guess the really big issue this week for the 357 00:20:46,960 --> 00:20:50,400 Speaker 1: economy was this one point nine trillion dollars students package 358 00:20:50,480 --> 00:20:52,800 Speaker 1: that was announced by President Like Biden. You've been the 359 00:20:52,800 --> 00:20:54,840 Speaker 1: Secretary of Treasure. You've been there when there was a 360 00:20:54,920 --> 00:20:57,080 Speaker 1: huge package that you had to get out of Capitol Hill. 361 00:20:57,320 --> 00:20:59,639 Speaker 1: Let me start with the most obvious question, perhaps where's 362 00:20:59,680 --> 00:21:01,960 Speaker 1: the most bang for the buck? What is really going 363 00:21:02,040 --> 00:21:05,679 Speaker 1: to make the most difference in the economy. This is 364 00:21:05,720 --> 00:21:10,840 Speaker 1: probably the boldest economic proposal since the Great Society, and 365 00:21:11,080 --> 00:21:16,480 Speaker 1: perhaps the boldest economic proposal since UH the New Deal. 366 00:21:17,280 --> 00:21:20,719 Speaker 1: One way to look at it is UH this In 367 00:21:20,920 --> 00:21:26,320 Speaker 1: two thousand and nine, the incoming Obama administration proposed a 368 00:21:26,359 --> 00:21:33,560 Speaker 1: fiscal plan that represented filled perhaps of the output gap. 369 00:21:34,640 --> 00:21:39,520 Speaker 1: This plan would be perhaps three times as large as 370 00:21:39,560 --> 00:21:43,040 Speaker 1: the output gap, So relative to the size of the 371 00:21:43,119 --> 00:21:48,280 Speaker 1: economic problem, we're talking about something more than five times 372 00:21:49,080 --> 00:21:55,720 Speaker 1: as large. And that reflects a conviction that's surely right 373 00:21:56,119 --> 00:21:59,720 Speaker 1: that too little was done in two thousand and eight, 374 00:22:00,280 --> 00:22:04,399 Speaker 1: but two thousand nine, But five times is a lot. 375 00:22:05,040 --> 00:22:11,240 Speaker 1: It also reflects a interesting and I think important desire 376 00:22:11,359 --> 00:22:17,920 Speaker 1: to combine the macro economic element with the structural fairness element, 377 00:22:18,359 --> 00:22:23,440 Speaker 1: and so these would be historic reductions in child poverty 378 00:22:23,480 --> 00:22:28,440 Speaker 1: if achieved through the child care credit. UM. I think 379 00:22:28,480 --> 00:22:32,000 Speaker 1: that the most important pieces of this package are the 380 00:22:32,080 --> 00:22:37,720 Speaker 1: reinforcements of the vaccination effort and the support for state 381 00:22:37,760 --> 00:22:43,560 Speaker 1: and local governments. I think the question about this package 382 00:22:43,840 --> 00:22:47,640 Speaker 1: is going to be how the macro economics add up. 383 00:22:48,280 --> 00:22:51,320 Speaker 1: And here I think it's important to understand that this 384 00:22:51,440 --> 00:22:54,840 Speaker 1: was probably as much an attempt to frame a debate 385 00:22:55,000 --> 00:22:59,000 Speaker 1: that's going to come as it was a proposal to 386 00:22:59,080 --> 00:23:03,560 Speaker 1: be implemented to in its literal form, and so I 387 00:23:03,600 --> 00:23:06,639 Speaker 1: don't think the right question is whether this package would 388 00:23:06,720 --> 00:23:10,120 Speaker 1: overheat the economy. I think if it were past as written, 389 00:23:10,400 --> 00:23:15,399 Speaker 1: it would overheat the economy. But will this shift the 390 00:23:15,480 --> 00:23:22,000 Speaker 1: debate towards our doing more? Will this shift the debate, uh, 391 00:23:22,160 --> 00:23:25,159 Speaker 1: towards doing more for those who have been left behind? 392 00:23:25,280 --> 00:23:29,520 Speaker 1: And I think they're uh. The answers yes, But we 393 00:23:29,600 --> 00:23:32,760 Speaker 1: are going to have to watch this economy very carefully, 394 00:23:32,800 --> 00:23:39,320 Speaker 1: and I do think the conventional wisdom is underestimating the 395 00:23:39,520 --> 00:23:46,760 Speaker 1: risks of hitting capacity. And if we do anything approaching this, 396 00:23:47,720 --> 00:23:50,199 Speaker 1: we are going to be managing the economy with the 397 00:23:50,280 --> 00:23:54,399 Speaker 1: accelerator more on the floor than at any time in 398 00:23:54,520 --> 00:23:58,760 Speaker 1: peacetime history. So where are you say it frames the debate? 399 00:23:58,880 --> 00:24:00,920 Speaker 1: Do we have time for that debate? Does the economy 400 00:24:00,960 --> 00:24:03,080 Speaker 1: of time for that debate? Because there's going to be 401 00:24:03,119 --> 00:24:05,399 Speaker 1: an all likely to back end forth. It doesn't look like, 402 00:24:05,440 --> 00:24:08,000 Speaker 1: as you suggest, the Republicans are just gonna say yes. 403 00:24:08,240 --> 00:24:10,640 Speaker 1: Some modern Democrats might, and I say yes. If this 404 00:24:10,720 --> 00:24:14,200 Speaker 1: takes three months or more, could there be longer term 405 00:24:14,240 --> 00:24:16,359 Speaker 1: structural damage to the the economy? Do we need some things 406 00:24:16,359 --> 00:24:20,640 Speaker 1: done right now? I think the three three or four 407 00:24:20,720 --> 00:24:23,640 Speaker 1: months would be a long time, But I think that's 408 00:24:23,640 --> 00:24:29,680 Speaker 1: why it's so important that UH, the incoming administration worked 409 00:24:29,760 --> 00:24:35,040 Speaker 1: with UH, the all the actors to get a nine 410 00:24:35,080 --> 00:24:40,119 Speaker 1: hundred billion dollar package passed just a month ago. That 411 00:24:40,240 --> 00:24:44,800 Speaker 1: nine billion dollar package, in and of itself, given that 412 00:24:44,880 --> 00:24:47,560 Speaker 1: it was all going to run over three to six months, 413 00:24:48,119 --> 00:24:52,159 Speaker 1: is far larger than the fiscal stimulus we had in 414 00:24:52,240 --> 00:24:55,080 Speaker 1: two thousand and eight, and so I think this does 415 00:24:55,160 --> 00:24:59,480 Speaker 1: give us a little bit of time to work this out. 416 00:25:00,119 --> 00:25:05,000 Speaker 1: The other concern I have is that I think the 417 00:25:05,119 --> 00:25:09,520 Speaker 1: Vice president was right. Vice President President elect was right 418 00:25:09,760 --> 00:25:13,840 Speaker 1: in his campaign to put so much emphasis on build 419 00:25:13,880 --> 00:25:20,000 Speaker 1: back better, and I'm worried that all the emphasis that's 420 00:25:20,000 --> 00:25:25,719 Speaker 1: gonna flow to this is gonna take energy, both political 421 00:25:26,440 --> 00:25:34,520 Speaker 1: and economic and fiscal space away from the fundamental investments 422 00:25:34,640 --> 00:25:41,639 Speaker 1: in UH infrastructure, in the caring economy that we're gonna 423 00:25:41,680 --> 00:25:48,359 Speaker 1: need to really produce a durable solution UH to UH 424 00:25:48,680 --> 00:25:55,160 Speaker 1: the problems. So this is a bet that people are 425 00:25:55,160 --> 00:25:59,400 Speaker 1: going to roll their own stimulus over multiple years by 426 00:25:59,640 --> 00:26:02,119 Speaker 1: say being a significant part of the money that are 427 00:26:02,119 --> 00:26:04,920 Speaker 1: going to be given, and then being in a stronger 428 00:26:05,000 --> 00:26:10,360 Speaker 1: economic position that drives demand for years to come and 429 00:26:10,600 --> 00:26:13,640 Speaker 1: it may be a bet that works out, it may 430 00:26:13,640 --> 00:26:17,959 Speaker 1: be a bet that we only partially take. But I 431 00:26:18,000 --> 00:26:22,120 Speaker 1: think what anyone has to recognize is the breath taking 432 00:26:22,240 --> 00:26:27,960 Speaker 1: macro economic ambition UM that goes frankly beyond anything that's 433 00:26:28,000 --> 00:26:32,560 Speaker 1: been contemplated since the Second World War in terms of 434 00:26:33,160 --> 00:26:37,680 Speaker 1: uh degree of fiscal stimulus. Larry, you mentioned the money 435 00:26:37,680 --> 00:26:39,359 Speaker 1: you're going to be given to people. Part of this 436 00:26:39,440 --> 00:26:43,560 Speaker 1: package is dollars more to individuals. That takes up that 437 00:26:43,600 --> 00:26:46,200 Speaker 1: two thousand dollar magic number. We have talked about that before. 438 00:26:46,240 --> 00:26:48,719 Speaker 1: You've expressed some skepticism whether it makes sense. We have 439 00:26:48,800 --> 00:26:51,600 Speaker 1: various anecdotes. But some people do need that money. Some 440 00:26:51,640 --> 00:26:55,120 Speaker 1: people frankly don't. They've kept their jobs, They've kept their employment. Uh. 441 00:26:55,400 --> 00:26:57,520 Speaker 1: Do you believe that this may be a risk to 442 00:26:57,560 --> 00:27:01,320 Speaker 1: this package, ironically, one that may be more politically palatl, 443 00:27:01,359 --> 00:27:08,600 Speaker 1: including to some Republicans. Look, by my lights, dollars that 444 00:27:08,680 --> 00:27:13,800 Speaker 1: would go to my children, Um is not an attractive 445 00:27:13,960 --> 00:27:19,840 Speaker 1: use of public money. On the other hand, it's universality 446 00:27:20,440 --> 00:27:24,560 Speaker 1: serves to make it more attractive. And the authors of 447 00:27:24,600 --> 00:27:27,439 Speaker 1: this package have put in a variety of other things 448 00:27:27,520 --> 00:27:31,560 Speaker 1: that are tilted very much towards support the refundable child 449 00:27:32,440 --> 00:27:36,560 Speaker 1: tax credit, for example. But I think we're saying the 450 00:27:36,640 --> 00:27:40,720 Speaker 1: same thing, David, which is the risks here are on 451 00:27:40,760 --> 00:27:46,639 Speaker 1: the side of we're just doing so much on such 452 00:27:46,680 --> 00:27:50,760 Speaker 1: a scale to give money to people in a way 453 00:27:50,800 --> 00:27:55,800 Speaker 1: that isn't completely targeted, that that may use up space 454 00:27:55,960 --> 00:27:59,560 Speaker 1: that could have been used for much more fundamental and 455 00:27:59,600 --> 00:28:02,840 Speaker 1: import into investments. Larry, we'll be talking about this for 456 00:28:02,880 --> 00:28:04,640 Speaker 1: some time to come, and no doubt about it. Let's 457 00:28:04,640 --> 00:28:06,320 Speaker 1: move on to another subject very much in the news 458 00:28:06,320 --> 00:28:09,240 Speaker 1: this week, which is social media. A lot of strutinities 459 00:28:09,280 --> 00:28:12,280 Speaker 1: to social media, particularly light of that that attack, the 460 00:28:12,359 --> 00:28:15,600 Speaker 1: insurrection really on Capitol Hill. What do you make of 461 00:28:15,680 --> 00:28:19,800 Speaker 1: the various calls on social media to regulate itself and 462 00:28:19,840 --> 00:28:23,160 Speaker 1: to exclude some of the entities that actually we're communicating 463 00:28:23,240 --> 00:28:26,760 Speaker 1: leading up to that attack. We're gonna have to work 464 00:28:26,800 --> 00:28:29,760 Speaker 1: this through as a society, just as they had to 465 00:28:29,800 --> 00:28:32,240 Speaker 1: work it through when the printing press was invented, just 466 00:28:32,359 --> 00:28:35,480 Speaker 1: as at the eve of television there were a whole 467 00:28:35,480 --> 00:28:41,960 Speaker 1: set of fairness UH, doctrines UH and the like. My 468 00:28:42,240 --> 00:28:49,560 Speaker 1: sense is that the standards of what can be communicated 469 00:28:50,280 --> 00:28:53,040 Speaker 1: is not a question that can be left only to 470 00:28:53,240 --> 00:28:57,480 Speaker 1: corporate leaders, and that corporate leaders are going to have 471 00:28:57,560 --> 00:29:00,440 Speaker 1: to implement policies, but there's gonna need to be a 472 00:29:00,560 --> 00:29:08,040 Speaker 1: much clearer framework uh provided in law. And from my perspective, 473 00:29:08,280 --> 00:29:13,080 Speaker 1: the more important questions are these questions and the questions 474 00:29:13,120 --> 00:29:18,160 Speaker 1: about privacy relative to the anti trust and anti monopoly 475 00:29:18,320 --> 00:29:22,040 Speaker 1: questions that have gotten so much attention. And indeed, I'd 476 00:29:22,080 --> 00:29:26,120 Speaker 1: worry that if you multiply the number of networks, and 477 00:29:26,200 --> 00:29:29,760 Speaker 1: you multiply the number of social media outlets, it might 478 00:29:29,840 --> 00:29:36,000 Speaker 1: even make it harder to interfere with the organization of insurrections. 479 00:29:36,440 --> 00:29:39,480 Speaker 1: So I think that issue is right there and focus, 480 00:29:39,520 --> 00:29:43,240 Speaker 1: and it's an issue more for constitutional scholars than it 481 00:29:43,360 --> 00:29:46,680 Speaker 1: is for economists, that law of unintended concise gudtions. Let's 482 00:29:46,680 --> 00:29:49,360 Speaker 1: conclude this week with a quick round of Summer says 483 00:29:49,640 --> 00:29:53,120 Speaker 1: three quick questions. Number one, we have an increasingly divided 484 00:29:53,160 --> 00:29:56,720 Speaker 1: Republican party. Is a divided Republican party ultimately good or 485 00:29:56,800 --> 00:30:01,280 Speaker 1: bad for the economy? Probably bad. I think that in general, 486 00:30:01,320 --> 00:30:04,520 Speaker 1: when parties are able to cohere better, deals can be 487 00:30:04,600 --> 00:30:08,600 Speaker 1: struck better and we can address problems more effectively. We 488 00:30:08,640 --> 00:30:11,000 Speaker 1: also have an impeached president now that first time in 489 00:30:11,120 --> 00:30:14,280 Speaker 1: history one president has been impeached a second time. The 490 00:30:14,360 --> 00:30:16,880 Speaker 1: question is what happened in the Senate. Is a conviction 491 00:30:16,960 --> 00:30:19,080 Speaker 1: of Donald J. Trump in the Senate even after his 492 00:30:19,200 --> 00:30:21,880 Speaker 1: left office. Is that good or bad for the economy? 493 00:30:23,880 --> 00:30:26,160 Speaker 1: I think it's probably good. It's probably good for the 494 00:30:26,240 --> 00:30:32,680 Speaker 1: country because it will accelerate his uh leaving our national 495 00:30:32,800 --> 00:30:37,360 Speaker 1: life as a highly visible figure. But whether it's good 496 00:30:37,440 --> 00:30:40,680 Speaker 1: enough to be worth the various costs of the process 497 00:30:41,280 --> 00:30:44,360 Speaker 1: is something I'll leave to politicians to judge. And finally, 498 00:30:44,400 --> 00:30:47,120 Speaker 1: Bitcoin very much in the news now back up pushing 499 00:30:47,160 --> 00:30:51,520 Speaker 1: against Is it a bubble or not. I'm not going 500 00:30:51,560 --> 00:30:56,240 Speaker 1: to predict its uh fluctuations over the next six months, 501 00:30:56,240 --> 00:31:02,320 Speaker 1: but I think some institution like it is here to stay. 502 00:31:02,160 --> 00:31:05,080 Speaker 1: I don't think that the whole thing is going to 503 00:31:05,760 --> 00:31:10,880 Speaker 1: UH collapse. I think that having run up and then 504 00:31:11,000 --> 00:31:15,719 Speaker 1: run way down and then moved moved back, it looks 505 00:31:15,800 --> 00:31:20,680 Speaker 1: much more resilient, and therefore I think people are gonna 506 00:31:20,800 --> 00:31:24,320 Speaker 1: move towards it. And as people move towards it, given 507 00:31:24,360 --> 00:31:27,400 Speaker 1: the finiteness of its supply, that's going to be a 508 00:31:27,400 --> 00:31:31,160 Speaker 1: factor working to raise prices. Okay, Larry, thank you so 509 00:31:31,280 --> 00:31:34,360 Speaker 1: very much. That's special Wall Street Creek contributor Larry Summer's 510 00:31:34,360 --> 00:31:38,280 Speaker 1: former treasure secretary, and of course of Harbor. That does 511 00:31:38,280 --> 00:31:40,880 Speaker 1: it for this episode of Wall Street Week. I'm David Weston. 512 00:31:41,200 --> 00:31:43,080 Speaker 1: This is Bloomberg. See you next week.