Speaker 1: This is Bloomberg Wall Street Week. What's the state of
Speaker 1: corporate governance? The deficit is a real issue. The US
Speaker 1: economy continues to send mixed signals, the financial stories that
Speaker 1: keep our world fed, action to con concerns over dollar liquidity,
Speaker 1: and encouraging China data. The five hundred wealthiest people in
Speaker 1: the world. Through the eyes of the most influential voices,
Speaker 1: Larry Summers, the former Treasury Secretary, star Ward CEO, Kevin
Speaker 1: Johnson sec Chairman J Clayton. Bloomberg Wall Street Week with
Speaker 1: David Weston from Bloomberg Radio. This week, for the first
Speaker 1: time in history, a U S president was impeached for
Speaker 1: a second time, a measure supported by ten House Republicans.
Speaker 1: Today in a five cards way, the House demonstrated that
Speaker 1: no one is above the law, not even the President
Speaker 1: of the United States. This is Bloomberg Wall Street Week.
Speaker 1: I'm David Weston. Let me say this. It's no secret
Speaker 1: to anybody that I hope that this relationship would never
Speaker 1: become public. When I was alone with miss Lewinsky on
Speaker 1: certain occasions in early nine and once in early I
Speaker 1: engaged in conduct that was wrong. That was President Bill
Speaker 1: Clinton testifying before a grand jury about the events leading
Speaker 1: up to his impeachment back but despite the history being
Speaker 1: made back then, the SMP rose almost twelve from then
Speaker 1: until he left office in early two thousand one. Markets
Speaker 1: similarly looked past President Trump's second impeachment this week, focusing
Speaker 1: instead on things like interest rates and proposed fiscal stimulus,
Speaker 1: things that Jillian Ted, chair of the Financial Times editor board,
Speaker 1: says investors should be considering that is the possibility of
Speaker 1: a return of inflation. It's important to realize that there
Speaker 1: is quite a big zeitgeide shift under way right now.
Speaker 1: You can see that, perhaps most clearly, not just in
Speaker 1: terms of the behavior of bond yields nominal bond deals,
Speaker 1: but if you look at inflation linked bonds in particular,
Speaker 1: they have been performing very well because investors having buying
Speaker 1: them to hedge their portfolio. Now on the phase of
Speaker 1: it that might seem absolutely peculiar, because we've just had
Speaker 1: the consumer price in data come out this week, which
Speaker 1: shows an inflation pression in December were incredibly muted, and
Speaker 1: there's very little wage growth. The level of economic growth
Speaker 1: is pretty weak two because of their pandemic. But there
Speaker 1: are really three key factors which are causing investors right
Speaker 1: now to think about inflation. The first is a chance
Speaker 1: that if you do have a big fiscal stimulus package
Speaker 1: from Joe Biden's incoming administration, and if that coincides with
Speaker 1: the pandemic vaccine gradually spreading across the country and reducing
Speaker 1: the pandemic fears, you could have those two factors coming
Speaker 1: together and create quite a big up searching growth later
Speaker 1: this year, which could coincide with supply chain bottlenecks because
Speaker 1: so much paracy to be knocked out by the pandemic.
Speaker 1: So what you could see is that prices, say to
Speaker 1: the hotels or travel or leisure, suddenly jump up in
Speaker 1: a way that will exkew the inflation data. Esther George,
Speaker 1: head of the Kansas Fed, spoke about this Justice Week.
Speaker 1: The second issue, which is equally important, is that many
Speaker 1: of the structural factors we should kept prices low in
Speaker 1: recent decades, most notably globalization and digitization, might just might be,
Speaker 1: if not reversed, but become less forceful in the decades ahead,
Speaker 1: because say the demographics and China are changing. That's a
Speaker 1: much bigger debate, but it's very important to take note
Speaker 1: of that. The third issue, though the really important issue
Speaker 1: is a FED and inverted as. Assumptions of ultra low
Speaker 1: inflation in recent years have been partly based around this
Speaker 1: idea that the Third's two percent price target meant that
Speaker 1: it would jump in and nip inflation and precious in
Speaker 1: the bar if they start to emerge. What's changed, though,
Speaker 1: are two things. Firstly, beneficials are saying that two percent
Speaker 1: is now an average target, not a ceiling, which means
Speaker 1: that they might be willing to let inflation rise above
Speaker 1: to perse for quite a long time. Secondly, there's an
Speaker 1: appreciation that the political economy pressures in the years ahead
Speaker 1: could make it incredibly hard for the EFFECT act preemptively.
Speaker 1: In particular, as the depth burden explodes, it's going to
Speaker 1: be so hard for the FED to do something which
Speaker 1: is going to raise the depth service in costs in
Speaker 1: the future, so that, in plain English, means the FED
Speaker 1: may sit on its hands, which also means inflation could
Speaker 1: well be more of a risk and investors realized, and
Speaker 1: in part it could have been that the FED wants
Speaker 1: to certain ends. In this sense, inflation, as you say,
Speaker 1: it's still is rollatory minus. At the same time, negative
Speaker 1: real yields that is to say, the difference between the
Speaker 1: inflation rate and the zero effectively zero industrates really have
Speaker 1: record negative real yield. Make that be actually a strategy
Speaker 1: to actually inflate our way in part out of that
Speaker 1: debt problem you just talked about. There's certainly a temptation
Speaker 1: um for the FED to sit on its hands in
Speaker 1: terms of running the economy hot and helping growth, Helping
Speaker 1: it should also be said, in the eyes of some
Speaker 1: FED officials lower income communities as well. You know, the
Speaker 1: ideas that you have a large amount of growth, then
Speaker 1: that will gently trickle down to poor people for what
Speaker 1: it's worth. I personally think that's a huge mistake, because
Speaker 1: I think what the FED is doing is raising inflating
Speaker 1: the value of the assets that the rich hold and
Speaker 1: increasing income inequality. But in terms of trying to inflict
Speaker 1: yourself way out of a debt burden, yes, absolutely, then
Speaker 1: the school of thinking in the investment community and the
Speaker 1: economics community that says that's probably the only way they're
Speaker 1: going to get out of that debt burden. If you
Speaker 1: look go back to the years after World War Two,
Speaker 1: you can see that some mild version of this was
Speaker 1: one of the reasons that the US and UK was
Speaker 1: able to exit from their massive debt burdens after World
Speaker 1: War Two. The danger though, is that if you do
Speaker 1: have inflation starting to come back as a significant threat
Speaker 1: and a perception, but the FED is not willing to act,
Speaker 1: you may then also see overseas investors start to become
Speaker 1: more nervous about holding US treasuries. And the problem with
Speaker 1: America is that at the end of the day, it
Speaker 1: is dependent on the kindness of strangers or the willingness
Speaker 1: of foreign investors to keep funding this exploding debt burden
Speaker 1: that the incoming administration is going to face. That was
Speaker 1: Wall Street Week contributor Jillian Tet of The Financial Times
Speaker 1: coming up the role of social media in the attack
Speaker 1: on the Capitol and what could be done about it
Speaker 1: from former head of Homeland Security j Johnson. That's next
Speaker 1: on Wall Street Week on Bloomberg. This is Bloomberg Wall
Speaker 1: Street Week with David Weston from Bloomberg Radio. The Capital
Speaker 1: may have been the target of the mob's attack last week,
Speaker 1: but Silicon Valley suffered its own collateral damage. Attention quickly
Speaker 1: focused on the role of social media in foemening and
Speaker 1: even helping organize the insurrection, leading Facebook and Instagram to
Speaker 1: suspend President Trump's account at least until Inauguration day. YouTube
Speaker 1: suspended his channel for at least one week. But the
Speaker 1: most severe action came from President Trump's platform of choice Twitter.
Speaker 1: It permanently suspended his account, severing an instant line of
Speaker 1: communication to his eighty nine million followers. The events raised
Speaker 1: pressure to regulate content on tech platforms and adds to
Speaker 1: the debate over shielding social media companies from liability. Senator
Speaker 1: Lindsey Graham said in a tweet, I'm more determined than
Speaker 1: ever to strip section to thirty protections from big tech
Speaker 1: Twitter that let them be immune from lawsuits. The issue
Speaker 1: of false and even incendiary social media posts poses serious
Speaker 1: issues for our politics and for our security. According to
Speaker 1: j Johnson, He's former head of Homeland Security, I don't
Speaker 1: want to take any particular company to task UM, but
Speaker 1: social media. The ability to UM to publish, push out
Speaker 1: fake news, extremist views is frankly a large reason for
Speaker 1: why we are where we are today in our politics,
Speaker 1: in our domestic security situation. Something like se of Republicans,
Speaker 1: according to polls, believed that the election was stolen and
Speaker 1: that there was fraud in the election. I'm waiting to
Speaker 1: see the poll that a certain percentage of Americans believe
Speaker 1: that last week's attack on the Capitol was the fault
Speaker 1: of Antifa, and there is absolutely no evidence of that.
Speaker 1: And so, you know, when you and I grew up,
Speaker 1: there were conventional news sources from which we got all
Speaker 1: the same set effects out of which we form our
Speaker 1: own opinions about the Vietnam War and the civil rights
Speaker 1: movement and the like. Now, because of social media, because
Speaker 1: of this, this this information highway, people can go to
Speaker 1: sources of so called news that do no more than
Speaker 1: reaffirm their own paranoias, their own biases, their own prejudices,
Speaker 1: and their own suspicions. And that has been a big
Speaker 1: driver of the divisiveness and the ugliness in our politics
Speaker 1: for the last several years. At the same time, is
Speaker 1: there a danger of overreacting? I mean, we've seen this
Speaker 1: sometimes in crises in this country, where we react to
Speaker 1: the last problem. We overreact. Let me give you a
Speaker 1: stark example. One person's extreme expression might be another person's
Speaker 1: Arab spring. I mean, social media is very important in
Speaker 1: the Arab spring. How do we protect our own homeland
Speaker 1: from the ills that could have come from social media
Speaker 1: without shutting down an Arab spring. Excellent question, David. Very
Speaker 1: often a crisis atmosphere is a poor atmosphere in which
Speaker 1: to make policy. I have been saying now for for
Speaker 1: several years that government agencies, national security agencies, need to
Speaker 1: resist the political push show the impulse to dive into
Speaker 1: trying to regulate social media, political debate on the on
Speaker 1: the internet. Think about what certain people in office today
Speaker 1: would do if they could deem something fake news and
Speaker 1: therefore impose government restrictions on the ability of the Internet
Speaker 1: to repeat it. And so I've got to be careful
Speaker 1: when it comes to government restrictions on political debate political speech,
Speaker 1: which is why the action on President Trump's accounts was
Speaker 1: extraordinary but probably overdue. Frankly, At the same time, I
Speaker 1: wonder if there's actually a positive good for law enforcement
Speaker 1: national security authorities of having an open web. That is
Speaker 1: to say, if really we do drive these people off
Speaker 1: of Twitter and Facebook and maybe even parlor, they may
Speaker 1: go to the dark web and it might be harder
Speaker 1: for our national security forces to really monitor what they're
Speaker 1: up to. There is that offsetting concern. Very definitely, um
Speaker 1: the ability to monitor extremist views, communications, plotting terrorists. Plotting
Speaker 1: is a valuable, valuable law enforcement tool and and you're correct.
Speaker 1: Very often when you prohibit something, you make it more difficult.
Speaker 1: You just drive it to another corner, and law enforcement
Speaker 1: struggles to keep up going beyond social media. We have
Speaker 1: an inauguration coming up next week. Now, how do we
Speaker 1: make sure we don't have some sort of problem the
Speaker 1: way we did last week? I mean, what went wrong
Speaker 1: and what steps should be taken to really make sure
Speaker 1: we're secure on the capitol, David. When I was Secretary
Speaker 1: of Homeland Security, I had the responsibility for the inauguration
Speaker 1: four years ago. For the security of the inauguration four
Speaker 1: years ago. UH. In my time as secretary, I also
Speaker 1: had the responsibility for the security of three State of
Speaker 1: the Union addresses in the US capital to presidential political
Speaker 1: conventions UH, three U N General Assembly sessions, one paper visit. UH.
Speaker 1: It can be done. There is something called an n
Speaker 1: s S E National Special security event. UH. The inauguration
Speaker 1: is an n s S. Political conventions are n s
Speaker 1: s S. And when you declare something an n s
Speaker 1: S UH, there's a certain level of security preparation that
Speaker 1: kicks in, and there's literally a checklist of things you
Speaker 1: go through to prevent any sort of penetration of the
Speaker 1: event from land, sea, air, and cyberspace. That failed to
Speaker 1: happen last week for reasons that we will learn at
Speaker 1: some point. Uh, those responsible for the security of last
Speaker 1: week's event in the Congress did not anticipate the security
Speaker 1: challenges that they ended up facing. This could have been prohibited.
Speaker 1: We know how to protect the perimeter of the U. S. Capital.
Speaker 1: Not to be flip about this at all, Mr Secretary,
Speaker 1: but do we know how to protect the security of
Speaker 1: the country from the President of States himself? And there's
Speaker 1: a raging debate right now, as you know, in Washington
Speaker 1: about whether this man should remain in office. How concerned
Speaker 1: are you about that possibility. I am very concerned. Our
Speaker 1: domestic security situation right now is very tense. It should
Speaker 1: be on high alert, David. The the very very sad
Speaker 1: fact is that there exists in this country a strand
Speaker 1: of racism, intolerance, bigotry, anti semitism that has for years
Speaker 1: existed under a rock. Uh. Frankly, our our political leaders,
Speaker 1: President Trump has enabled that group, has emboldened that group
Speaker 1: by saying your special people, you're good people, uh, and
Speaker 1: basically allowed them to come out from under their rock.
Speaker 1: One of the things that I think is important now
Speaker 1: and I'm glad to have this opportunity to talk to
Speaker 1: the business community, David, is that there are others involved
Speaker 1: in this who frankly aided and embedded this. There are
Speaker 1: people now who believe that by pandering to Trump's base,
Speaker 1: got pandering to this aspect of his base, it works
Speaker 1: to their own political benefit. And I think the rest
Speaker 1: of us in this country need to push back on
Speaker 1: that and say no, you don't, don't try that. In
Speaker 1: the business community in particular, I believe has a large
Speaker 1: voice in that. That was j Johnson of Paul Weiss
Speaker 1: coming up whether or not markets cared about the effisiment.
Speaker 1: A lot of big corporations did, distancing themselves from the
Speaker 1: Trump brand and reigning in their political contributions as fast
Speaker 1: as they could, something David Rubinstein and the Carloge Group says,
Speaker 1: maybe here to stay. That's next on Wall Street Week
Speaker 1: on Bloomberg. This is Bloomberg Wall Street Week with David
Speaker 1: weston Trump Bloomberg Radio. The Trump brand was at the
Speaker 1: heart of the president's business empire, long before he turned
Speaker 1: to politics, and that brand is in crisis after the
Speaker 1: riot at the US Capital. He is being shunned by
Speaker 1: political donors, by tech companies, banks handling his finances, and
Speaker 1: even by Shopify, the company behind his online stores. Deutsche
Speaker 1: Bank reportedly decided not to conduct more business with President
Speaker 1: Trump or his family company, and Signature Bank announced its
Speaker 1: closing two personal Trump accounts holding about five million dollars.
Speaker 1: Even the game of Golf so dear to President Trump,
Speaker 1: has turned its back on him, with the p g
Speaker 1: A canceling plans to have its championship at his Bedminster
Speaker 1: club and two, something Mr Trump had long coveted. The
Speaker 1: follow up goes beyond President Trump and his company. Other
Speaker 1: companies like Amazon, American Express, Disney, and Walmart are withholding
Speaker 1: political contributions to lawmakers who voted last week to oppose
Speaker 1: the electoral College results. In a recent Yale survey of
Speaker 1: forty c e ost of them said businesses should halt
Speaker 1: all political donations, and several corporations have said they'll suspend
Speaker 1: all political contributions at least for the time being. David
Speaker 1: Rubinstein has worked at the highest levels of corporate America
Speaker 1: for years now. As co founder and now co executive
Speaker 1: chairman of the Carlisle Group. He explains what motivates corporations
Speaker 1: when it comes to politics and why things might change. Well,
Speaker 1: business leaders by and large want to run their companies.
Speaker 1: They're not looking for controversy, so they don't don't tend
Speaker 1: to be profiles and courage and I would include myself
Speaker 1: in that category. We generally are not trying to make
Speaker 1: waves when we're running companies. That's for political people to
Speaker 1: do and not for business leaders. But I think the
Speaker 1: business community has been um scared a bit about where
Speaker 1: the country is going, and I think they're now trying
Speaker 1: to say, well, we want to be on the side
Speaker 1: of what's right of the country and we want to
Speaker 1: honor the Constitution and so forth. Whether that's going to
Speaker 1: make a big difference or not in terms of whether
Speaker 1: the country comes together or not, I'm not sure. But
Speaker 1: there's no doubt that people are running away from President Trump,
Speaker 1: who were people who work pretty close to them up
Speaker 1: until just recently. But interesting, is it running away from
Speaker 1: President Trump the person, which of course I'm sure is
Speaker 1: going on, or might there be a fund and more
Speaker 1: fundamental reform saying we need to think closely before we
Speaker 1: really get too close to any administration. Clearly they're running
Speaker 1: away from what President Trump UH did in the last
Speaker 1: week or two or three or so in a post election.
Speaker 1: But I do think that they're all weren't worried now
Speaker 1: that getting too close to politicians is a problem, And
Speaker 1: I think many of them are gonna re look at
Speaker 1: their political donations and they want to avoid being criticized
Speaker 1: for things that they can't control. They can't control what
Speaker 1: politicians do, so UH people make political contributions for various reasons.
Speaker 1: I think businesses are going to be more careful about
Speaker 1: what they do in the future, and they don't really
Speaker 1: want controversy. One of the things that's striking to me,
Speaker 1: maybe not to you, is the extent to which the
Speaker 1: markets that any much attention to any of this, At
Speaker 1: least far as I can tell, I can't discern it.
Speaker 1: We have a really history being made, first time in
Speaker 1: history of president will be impeached for the second time.
Speaker 1: What do you make of that as a practical letter?
Speaker 1: Is that right? Is that healthy? Is the way it
Speaker 1: should be? Well? Businesses like to see predictability, and markets
Speaker 1: want predictability, and I think the markets are pretty quick
Speaker 1: to figure out what's going to happen. They know that
Speaker 1: President Trump is gonna be leaving office, uh, they know
Speaker 1: that the companies are gonna do their business, and ultimately
Speaker 1: the key thing to the economy is getting COVID under control.
Speaker 1: And I think from the Business Committee's point of view,
Speaker 1: not having too many disruptive policies from the new administration.
Speaker 1: And I don't think they feel there's gonna be many
Speaker 1: disruptive economic policies, so the administration um it comes in
Speaker 1: is not gonna be one that's gonna be as favorable
Speaker 1: to business as the previous one. I think the business
Speaker 1: community recognizing the markets recognized that there's not gonna be
Speaker 1: a lot of disruptive changes as we saw through COVID
Speaker 1: and as we're seeing right now, the markets operate on
Speaker 1: their own, uh kind of wavelength, and they're not They
Speaker 1: didn't weren't as affected by by the by COVID as
Speaker 1: I thought they would have been, and then not gonna
Speaker 1: be as affected by what's going on today in Washington.
Speaker 1: I think they just shrug it off and look at
Speaker 1: what the your earnings for share is going to be.
Speaker 1: A Various companies that care about You're a veteran of Washington.
Speaker 1: You've been around Washington for quite a while, as if I,
Speaker 1: for that matter, give us your perspective overall on what
Speaker 1: you're seeing happen right now. Unimprecedented is an overused term,
Speaker 1: certainly applies here. What do you make of it? The
Speaker 1: country's greatest stress ever was the Civil War, and I
Speaker 1: think the Great Depression was the second greatest stress we've
Speaker 1: ever had. I think we have two great stresses going
Speaker 1: on right now, not quite the Civil War, not quite
Speaker 1: the Depression. One is the COVID situation, which now seems
Speaker 1: to be getting worse rather than better, even though we
Speaker 1: have vaccines that are available. And second, the impeachment process
Speaker 1: now going on, and that things related to January six,
Speaker 1: that's gonna scar our democracy for quite some time. The
Speaker 1: country has been through a real stress test the last
Speaker 1: few weeks, and I think we'll survive, for sure, but
Speaker 1: there's no doubt that the political repercussions are gonna be great.
Speaker 1: I think the Democrats and Republicans are to be further
Speaker 1: divided than they've ever been. And whether President Trump is
Speaker 1: impeached or whether he's convicted, you're gonna have big divisions
Speaker 1: between Democrats Republicans for quite some time, so it's it's
Speaker 1: gonna take a while for President elect Biden to really
Speaker 1: be able to bring this both sides together in my view.
Speaker 1: That was David Rubinstein, Co executive chairman of the Carlisle
Speaker 1: Group and host of Peer to Peer on Bloomberg. Coming up,
Speaker 1: we wrap up the week with our special contributor Larry
Speaker 1: Summers of Harvard. That's next on Wall Street Week on Bloomberg.
Speaker 1: This is Bloomberg Wall Street Week with David Weston from
Speaker 1: Bloomberg Radio. To conclude the week, as we always do,
Speaker 1: with our special contributor to Larry Summers of Harvard. So, Larry,
Speaker 1: I guess the really big issue this week for the
Speaker 1: economy was this one point nine trillion dollars students package
Speaker 1: that was announced by President Like Biden. You've been the
Speaker 1: Secretary of Treasure. You've been there when there was a
Speaker 1: huge package that you had to get out of Capitol Hill.
Speaker 1: Let me start with the most obvious question, perhaps where's
Speaker 1: the most bang for the buck? What is really going
Speaker 1: to make the most difference in the economy. This is
Speaker 1: probably the boldest economic proposal since the Great Society, and
Speaker 1: perhaps the boldest economic proposal since UH the New Deal.
Speaker 1: One way to look at it is UH this In
Speaker 1: two thousand and nine, the incoming Obama administration proposed a
Speaker 1: fiscal plan that represented filled perhaps of the output gap.
Speaker 1: This plan would be perhaps three times as large as
Speaker 1: the output gap, So relative to the size of the
Speaker 1: economic problem, we're talking about something more than five times
Speaker 1: as large. And that reflects a conviction that's surely right
Speaker 1: that too little was done in two thousand and eight,
Speaker 1: but two thousand nine, But five times is a lot.
Speaker 1: It also reflects a interesting and I think important desire
Speaker 1: to combine the macro economic element with the structural fairness element,
Speaker 1: and so these would be historic reductions in child poverty
Speaker 1: if achieved through the child care credit. UM. I think
Speaker 1: that the most important pieces of this package are the
Speaker 1: reinforcements of the vaccination effort and the support for state
Speaker 1: and local governments. I think the question about this package
Speaker 1: is going to be how the macro economics add up.
Speaker 1: And here I think it's important to understand that this
Speaker 1: was probably as much an attempt to frame a debate
Speaker 1: that's going to come as it was a proposal to
Speaker 1: be implemented to in its literal form, and so I
Speaker 1: don't think the right question is whether this package would
Speaker 1: overheat the economy. I think if it were past as written,
Speaker 1: it would overheat the economy. But will this shift the
Speaker 1: debate towards our doing more? Will this shift the debate, uh,
Speaker 1: towards doing more for those who have been left behind?
Speaker 1: And I think they're uh. The answers yes, But we
Speaker 1: are going to have to watch this economy very carefully,
Speaker 1: and I do think the conventional wisdom is underestimating the
Speaker 1: risks of hitting capacity. And if we do anything approaching this,
Speaker 1: we are going to be managing the economy with the
Speaker 1: accelerator more on the floor than at any time in
Speaker 1: peacetime history. So where are you say it frames the debate?
Speaker 1: Do we have time for that debate? Does the economy
Speaker 1: of time for that debate? Because there's going to be
Speaker 1: an all likely to back end forth. It doesn't look like,
Speaker 1: as you suggest, the Republicans are just gonna say yes.
Speaker 1: Some modern Democrats might, and I say yes. If this
Speaker 1: takes three months or more, could there be longer term
Speaker 1: structural damage to the the economy? Do we need some things
Speaker 1: done right now? I think the three three or four
Speaker 1: months would be a long time, But I think that's
Speaker 1: why it's so important that UH, the incoming administration worked
Speaker 1: with UH, the all the actors to get a nine
Speaker 1: hundred billion dollar package passed just a month ago. That
Speaker 1: nine billion dollar package, in and of itself, given that
Speaker 1: it was all going to run over three to six months,
Speaker 1: is far larger than the fiscal stimulus we had in
Speaker 1: two thousand and eight, and so I think this does
Speaker 1: give us a little bit of time to work this out.
Speaker 1: The other concern I have is that I think the
Speaker 1: Vice president was right. Vice President President elect was right
Speaker 1: in his campaign to put so much emphasis on build
Speaker 1: back better, and I'm worried that all the emphasis that's
Speaker 1: gonna flow to this is gonna take energy, both political
Speaker 1: and economic and fiscal space away from the fundamental investments
Speaker 1: in UH infrastructure, in the caring economy that we're gonna
Speaker 1: need to really produce a durable solution UH to UH
Speaker 1: the problems. So this is a bet that people are
Speaker 1: going to roll their own stimulus over multiple years by
Speaker 1: say being a significant part of the money that are
Speaker 1: going to be given, and then being in a stronger
Speaker 1: economic position that drives demand for years to come and
Speaker 1: it may be a bet that works out, it may
Speaker 1: be a bet that we only partially take. But I
Speaker 1: think what anyone has to recognize is the breath taking
Speaker 1: macro economic ambition UM that goes frankly beyond anything that's
Speaker 1: been contemplated since the Second World War in terms of
Speaker 1: uh degree of fiscal stimulus. Larry, you mentioned the money
Speaker 1: you're going to be given to people. Part of this
Speaker 1: package is dollars more to individuals. That takes up that
Speaker 1: two thousand dollar magic number. We have talked about that before.
Speaker 1: You've expressed some skepticism whether it makes sense. We have
Speaker 1: various anecdotes. But some people do need that money. Some
Speaker 1: people frankly don't. They've kept their jobs, They've kept their employment. Uh.
Speaker 1: Do you believe that this may be a risk to
Speaker 1: this package, ironically, one that may be more politically palatl,
Speaker 1: including to some Republicans. Look, by my lights, dollars that
Speaker 1: would go to my children, Um is not an attractive
Speaker 1: use of public money. On the other hand, it's universality
Speaker 1: serves to make it more attractive. And the authors of
Speaker 1: this package have put in a variety of other things
Speaker 1: that are tilted very much towards support the refundable child
Speaker 1: tax credit, for example. But I think we're saying the
Speaker 1: same thing, David, which is the risks here are on
Speaker 1: the side of we're just doing so much on such
Speaker 1: a scale to give money to people in a way
Speaker 1: that isn't completely targeted, that that may use up space
Speaker 1: that could have been used for much more fundamental and
Speaker 1: import into investments. Larry, we'll be talking about this for
Speaker 1: some time to come, and no doubt about it. Let's
Speaker 1: move on to another subject very much in the news
Speaker 1: this week, which is social media. A lot of strutinities
Speaker 1: to social media, particularly light of that that attack, the
Speaker 1: insurrection really on Capitol Hill. What do you make of
Speaker 1: the various calls on social media to regulate itself and
Speaker 1: to exclude some of the entities that actually we're communicating
Speaker 1: leading up to that attack. We're gonna have to work
Speaker 1: this through as a society, just as they had to
Speaker 1: work it through when the printing press was invented, just
Speaker 1: as at the eve of television there were a whole
Speaker 1: set of fairness UH, doctrines UH and the like. My
Speaker 1: sense is that the standards of what can be communicated
Speaker 1: is not a question that can be left only to
Speaker 1: corporate leaders, and that corporate leaders are going to have
Speaker 1: to implement policies, but there's gonna need to be a
Speaker 1: much clearer framework uh provided in law. And from my perspective,
Speaker 1: the more important questions are these questions and the questions
Speaker 1: about privacy relative to the anti trust and anti monopoly
Speaker 1: questions that have gotten so much attention. And indeed, I'd
Speaker 1: worry that if you multiply the number of networks, and
Speaker 1: you multiply the number of social media outlets, it might
Speaker 1: even make it harder to interfere with the organization of insurrections.
Speaker 1: So I think that issue is right there and focus,
Speaker 1: and it's an issue more for constitutional scholars than it
Speaker 1: is for economists, that law of unintended concise gudtions. Let's
Speaker 1: conclude this week with a quick round of Summer says
Speaker 1: three quick questions. Number one, we have an increasingly divided
Speaker 1: Republican party. Is a divided Republican party ultimately good or
Speaker 1: bad for the economy? Probably bad. I think that in general,
Speaker 1: when parties are able to cohere better, deals can be
Speaker 1: struck better and we can address problems more effectively. We
Speaker 1: also have an impeached president now that first time in
Speaker 1: history one president has been impeached a second time. The
Speaker 1: question is what happened in the Senate. Is a conviction
Speaker 1: of Donald J. Trump in the Senate even after his
Speaker 1: left office. Is that good or bad for the economy?
Speaker 1: I think it's probably good. It's probably good for the
Speaker 1: country because it will accelerate his uh leaving our national
Speaker 1: life as a highly visible figure. But whether it's good
Speaker 1: enough to be worth the various costs of the process
Speaker 1: is something I'll leave to politicians to judge. And finally,
Speaker 1: Bitcoin very much in the news now back up pushing
Speaker 1: against Is it a bubble or not. I'm not going
Speaker 1: to predict its uh fluctuations over the next six months,
Speaker 1: but I think some institution like it is here to stay.
Speaker 1: I don't think that the whole thing is going to
Speaker 1: UH collapse. I think that having run up and then
Speaker 1: run way down and then moved moved back, it looks
Speaker 1: much more resilient, and therefore I think people are gonna
Speaker 1: move towards it. And as people move towards it, given
Speaker 1: the finiteness of its supply, that's going to be a
Speaker 1: factor working to raise prices. Okay, Larry, thank you so
Speaker 1: very much. That's special Wall Street Creek contributor Larry Summer's
Speaker 1: former treasure secretary, and of course of Harbor. That does
Speaker 1: it for this episode of Wall Street Week. I'm David Weston.
Speaker 1: This is Bloomberg. See you next week.