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 --> 00:00:09,880 Speaker 1: economy continues to send mixed signals. The financial stories that 4 00:00:10,039 --> 00:00:13,000 Speaker 1: cheap our world fed action to con concerns over dollar 5 00:00:13,039 --> 00:00:16,520 Speaker 1: liquidity and encouraging China data. The five hundred wealthiest people 6 00:00:16,520 --> 00:00:19,160 Speaker 1: in the world. Through the eyes of the most influential 7 00:00:19,239 --> 00:00:22,520 Speaker 1: voices Larry Summers, the former Treasury Secretary, star Ward CEO, 8 00:00:22,640 --> 00:00:26,360 Speaker 1: Kevin Johnson sec Chairman J Clayton. Bloomberg wool Street Week 9 00:00:26,480 --> 00:00:30,560 Speaker 1: with David Weston from Bloomberg Radio. Will they or won't they? 10 00:00:31,000 --> 00:00:33,839 Speaker 1: Stocks fluctuate with the chances of more stimulus while the 11 00:00:33,960 --> 00:00:38,440 Speaker 1: virus continues. It's relentless comeback. Welcome to Bloomberg Wall Street Week. 12 00:00:38,560 --> 00:00:41,440 Speaker 1: I'm David Weston. The Justice Department this week did what 13 00:00:41,600 --> 00:00:45,600 Speaker 1: everyone expected. It brought a massive antitrust suit against Google, 14 00:00:45,800 --> 00:00:49,239 Speaker 1: claiming it has monopolized the market for Internet search, in 15 00:00:49,360 --> 00:00:52,080 Speaker 1: part by getting Apple and others to make it the 16 00:00:52,120 --> 00:00:56,400 Speaker 1: default search engine on smartphones. Well, if that sounds vaguely familiar, 17 00:00:56,640 --> 00:00:59,960 Speaker 1: it should. Over twenty years ago, Justice brought a similar 18 00:01:00,000 --> 00:01:04,200 Speaker 1: action against Microsoft for requiring computer makers to set its 19 00:01:04,280 --> 00:01:08,319 Speaker 1: web browser as the default on their machines. Microsoft lost 20 00:01:08,360 --> 00:01:10,760 Speaker 1: its case at the trial level, but it appealed and 21 00:01:10,800 --> 00:01:14,160 Speaker 1: eventually settled, agreeing to change some of its behavior but 22 00:01:14,280 --> 00:01:18,120 Speaker 1: not coming close to breaking up the company. Sam Paulmisano, 23 00:01:18,280 --> 00:01:21,679 Speaker 1: former CEO of IBM, knows firsthand what an antitrust case 24 00:01:21,720 --> 00:01:24,520 Speaker 1: can do to a tech company. I asked him whether 25 00:01:24,640 --> 00:01:27,559 Speaker 1: this case could change the face of tech. I don't 26 00:01:27,560 --> 00:01:31,679 Speaker 1: think it will. Which changes the landscape is the technologies itself, 27 00:01:31,760 --> 00:01:34,880 Speaker 1: the evolution of the technologies, and go back to IBM, 28 00:01:34,920 --> 00:01:37,360 Speaker 1: which was many computers and client servers. Let's go back 29 00:01:37,360 --> 00:01:39,959 Speaker 1: to Microsoft, which was the OS and the PC versus 30 00:01:40,040 --> 00:01:43,240 Speaker 1: the Internet and the phone. That that's what drives the 31 00:01:43,319 --> 00:01:45,960 Speaker 1: technology cycles. Now, it doesn't mean it won't impact a 32 00:01:46,080 --> 00:01:49,120 Speaker 1: company specifically. I mean, certainly IBM was impacted for a 33 00:01:49,160 --> 00:01:52,200 Speaker 1: period of time. Microsoft was impacted for a period of time. 34 00:01:52,240 --> 00:01:55,720 Speaker 1: They've all recovered, But so it's not a company specific 35 00:01:55,800 --> 00:01:58,400 Speaker 1: is different than an industry. There are so many smart 36 00:01:58,480 --> 00:02:02,040 Speaker 1: kids out there today inventing so much technology every day 37 00:02:02,200 --> 00:02:05,400 Speaker 1: across the United States and across the world. I hardly 38 00:02:05,480 --> 00:02:07,840 Speaker 1: think that will be the driver in this particular case. 39 00:02:08,760 --> 00:02:10,880 Speaker 1: At the same time, Google has a very very strong 40 00:02:10,919 --> 00:02:14,160 Speaker 1: position in search and Internet search. It seems almost undeniable 41 00:02:14,200 --> 00:02:17,639 Speaker 1: that they have monopoly power in the area. Do they 42 00:02:17,720 --> 00:02:19,800 Speaker 1: need to maintain them? And a poople are by paying 43 00:02:19,800 --> 00:02:22,639 Speaker 1: people like Apple eight billion dollars were told a year 44 00:02:22,960 --> 00:02:26,240 Speaker 1: to be the default search engine on their iPhones. That's 45 00:02:26,240 --> 00:02:29,560 Speaker 1: a fascinating question. I've thought a lot about it, quite honestly, 46 00:02:30,040 --> 00:02:31,600 Speaker 1: and I guess the way to think about if you 47 00:02:31,639 --> 00:02:34,000 Speaker 1: think of the phone as landscape, or say a media 48 00:02:34,520 --> 00:02:37,240 Speaker 1: and you're an advertiser. I mean Google is an advertiser, right. 49 00:02:37,760 --> 00:02:40,680 Speaker 1: They need to be on the super Bowl because ten 50 00:02:40,760 --> 00:02:42,960 Speaker 1: million people around the world of view the super Bowl 51 00:02:43,120 --> 00:02:46,160 Speaker 1: and they're gonna pay whatever fifteen seconds cost. So you 52 00:02:46,200 --> 00:02:48,720 Speaker 1: have the phones, there's the Android phones, is the iOS 53 00:02:48,760 --> 00:02:52,320 Speaker 1: of the Apple phone. That's basically the market of smartphones, right, 54 00:02:52,360 --> 00:02:55,120 Speaker 1: and so therefore they need to be on that landscape. 55 00:02:55,360 --> 00:02:57,960 Speaker 1: Now there are there are large of alternatives, as I 56 00:02:58,000 --> 00:03:01,079 Speaker 1: read the press, so that Microsoft and baying or vying 57 00:03:01,200 --> 00:03:03,960 Speaker 1: for it. But my view is that from a competitive perspective, 58 00:03:04,520 --> 00:03:07,559 Speaker 1: you had Google, you have Apple, and you have Microsoft. 59 00:03:08,000 --> 00:03:10,560 Speaker 1: Certainly very thought very few small businesses are could be 60 00:03:10,600 --> 00:03:13,480 Speaker 1: impacted by this, and one of those parties decided to 61 00:03:13,560 --> 00:03:15,640 Speaker 1: write a bigger check than the other. That's called, you know, 62 00:03:15,680 --> 00:03:19,200 Speaker 1: a deal. It's economics for whatever sets of reasons. Now, 63 00:03:19,200 --> 00:03:21,880 Speaker 1: the fact that Google got it and maybe not Microsoft, 64 00:03:22,080 --> 00:03:24,880 Speaker 1: I mean, Microsoft is a chillion dollar market cap company, 65 00:03:24,919 --> 00:03:28,239 Speaker 1: it certainly hasn't hurt them because Google got the real 66 00:03:28,360 --> 00:03:31,040 Speaker 1: estate of the phone. Real estate that the phone is important, 67 00:03:31,080 --> 00:03:34,320 Speaker 1: but mostly from the view of an advertiser, also from 68 00:03:34,320 --> 00:03:36,480 Speaker 1: the view of the data, which is a different subject, 69 00:03:36,520 --> 00:03:39,040 Speaker 1: but both both the advertiser and the data it's very, 70 00:03:39,120 --> 00:03:42,520 Speaker 1: very important. So as you say, some paining you have 71 00:03:42,560 --> 00:03:44,920 Speaker 1: an exclusive deal with someone who is not unheard of 72 00:03:44,960 --> 00:03:47,880 Speaker 1: in business, it happens all the time. At the same time, 73 00:03:47,920 --> 00:03:50,200 Speaker 1: if you have a really dominant position, or monopolies of position, 74 00:03:50,240 --> 00:03:52,080 Speaker 1: it gets a little trickier. And one of the things 75 00:03:52,080 --> 00:03:55,000 Speaker 1: that I wonder about is that we now have Google 76 00:03:55,080 --> 00:03:57,520 Speaker 1: saying the reason people use our search engines in which 77 00:03:57,560 --> 00:03:59,600 Speaker 1: is because it's better than anybody else's. If it really 78 00:03:59,640 --> 00:04:01,400 Speaker 1: is better, why did they need to pay that money 79 00:04:01,440 --> 00:04:03,800 Speaker 1: that was sort of money wasted eight billion dollars a year, 80 00:04:04,080 --> 00:04:06,880 Speaker 1: unless it was to get a leg up on the competition. Well, 81 00:04:06,920 --> 00:04:10,000 Speaker 1: I think fundamentally they wanted to be. They want to distribution, 82 00:04:10,120 --> 00:04:12,160 Speaker 1: They wanted to be the eyeballs, right, So that I 83 00:04:12,200 --> 00:04:15,120 Speaker 1: think they're thinking about it as they have good technology, 84 00:04:15,120 --> 00:04:17,080 Speaker 1: but they also need to get it out there, and 85 00:04:17,080 --> 00:04:19,960 Speaker 1: the phone is a way to get that technology out there. Now, 86 00:04:20,000 --> 00:04:23,640 Speaker 1: to your point, the issue around that is really what 87 00:04:23,680 --> 00:04:26,200 Speaker 1: I would call the tie in sale. Tie in sale 88 00:04:26,520 --> 00:04:29,159 Speaker 1: has been an issue for IBM in our case and 89 00:04:29,200 --> 00:04:32,880 Speaker 1: Microsoft embedding stuff in the operating system, also detaching stuff 90 00:04:32,920 --> 00:04:35,039 Speaker 1: to the main frame. So when you look at this 91 00:04:35,080 --> 00:04:37,919 Speaker 1: as a tie in sale, if that search algorithm is 92 00:04:38,000 --> 00:04:40,920 Speaker 1: bias seeing the result to their offerings of their products, 93 00:04:41,000 --> 00:04:44,200 Speaker 1: or Apple's offerings and their products, that is an issue, right. 94 00:04:44,279 --> 00:04:46,840 Speaker 1: And then you've seen this happen in financial services, You've 95 00:04:46,839 --> 00:04:50,640 Speaker 1: seen it happen elsewhere where. Tie in sales are a problem, 96 00:04:50,680 --> 00:04:52,640 Speaker 1: but it doesn't seem to be the highlight of the case, 97 00:04:52,680 --> 00:04:55,000 Speaker 1: at least at this point in time. It also raises 98 00:04:55,040 --> 00:04:57,280 Speaker 1: the question of remedy. Even if that were found to 99 00:04:57,320 --> 00:05:00,160 Speaker 1: be illegal, don't you just stop the Talian sale rather 100 00:05:00,200 --> 00:05:01,920 Speaker 1: than breaking up the company? I mean that's also been 101 00:05:01,920 --> 00:05:05,240 Speaker 1: going on over in European Commission actually with their competition 102 00:05:05,480 --> 00:05:08,800 Speaker 1: proceedings against Google. You're absolutely right. I mean, basically, what 103 00:05:08,839 --> 00:05:11,480 Speaker 1: happened to IBM, we had to open up the interfaces 104 00:05:11,520 --> 00:05:13,560 Speaker 1: to the main frame and given to the competition. The 105 00:05:13,560 --> 00:05:16,320 Speaker 1: same day we announced what happened to Microsoft, they had 106 00:05:16,320 --> 00:05:18,839 Speaker 1: to open up the iOS iOS they I'm sorry, the 107 00:05:18,839 --> 00:05:23,000 Speaker 1: operating system iOS is Apple Windows that had opened up 108 00:05:23,000 --> 00:05:26,200 Speaker 1: and let other people in bed functionality into that operating system. 109 00:05:26,279 --> 00:05:29,839 Speaker 1: So that's been that's been how it's been settled in 110 00:05:29,880 --> 00:05:33,000 Speaker 1: the past. Uh in all those cases, this fact of 111 00:05:33,040 --> 00:05:37,440 Speaker 1: a structural uh remedy is such breaking the company up 112 00:05:37,920 --> 00:05:41,880 Speaker 1: has been really has not happened historically. The only time 113 00:05:41,880 --> 00:05:43,560 Speaker 1: it did happen is a T and T are they 114 00:05:43,560 --> 00:05:46,360 Speaker 1: tell communications industry where they did break up A T 115 00:05:46,520 --> 00:05:49,039 Speaker 1: D informed all the baby bells. But if you look 116 00:05:49,040 --> 00:05:53,240 Speaker 1: at history again, they've reconsolidated down to two or three players. Sam, 117 00:05:53,279 --> 00:05:55,719 Speaker 1: you mentioned the data, the importance of the data. I 118 00:05:55,760 --> 00:05:58,000 Speaker 1: wonder if we're overlooking that a little bit here, because 119 00:05:58,040 --> 00:06:01,480 Speaker 1: besides their down position in search, through that searche, Google 120 00:06:01,560 --> 00:06:03,680 Speaker 1: is having access to an enormous amount of data that 121 00:06:03,760 --> 00:06:06,440 Speaker 1: builds a big motor around their business, doesn't it. Yes, 122 00:06:06,520 --> 00:06:08,680 Speaker 1: it Thus, I mean this is really the issue to 123 00:06:08,760 --> 00:06:11,440 Speaker 1: me long term, the issue is the amassing of the 124 00:06:11,520 --> 00:06:14,039 Speaker 1: data and the uses of the data. UH, and there 125 00:06:14,040 --> 00:06:17,040 Speaker 1: are two elements of that. These massive data set's give 126 00:06:17,120 --> 00:06:20,279 Speaker 1: them an advantage as far as applying intelligence to the data. 127 00:06:20,320 --> 00:06:23,480 Speaker 1: I would call that artificial intelligence. Are augmented intelligence. So 128 00:06:23,880 --> 00:06:26,799 Speaker 1: it knows when you're talking to Siri or you're browsing, 129 00:06:27,200 --> 00:06:29,000 Speaker 1: where you when you have dinner, or where you want 130 00:06:29,000 --> 00:06:31,479 Speaker 1: to plan for an event, and it'll pain you with 131 00:06:31,520 --> 00:06:35,400 Speaker 1: ads as you know. That's an simple Lehman's example of that, 132 00:06:35,480 --> 00:06:37,800 Speaker 1: and there's much more sophisticated things that can be done. 133 00:06:37,920 --> 00:06:42,080 Speaker 1: That was Sam Paulisano, former chairman and CEO of IBM. 134 00:06:42,080 --> 00:06:45,320 Speaker 1: Coming up, Former Attorney General Eric Holder tells us why 135 00:06:45,360 --> 00:06:48,160 Speaker 1: the stakes are even higher for this year's election than 136 00:06:48,200 --> 00:06:51,560 Speaker 1: we thought. That's next down Wall Street Week on Bloomberg. 137 00:06:57,160 --> 00:07:01,120 Speaker 1: This is Bloomberg Wall Street Week with Vid Weston from 138 00:07:01,279 --> 00:07:04,480 Speaker 1: Bloomberg Radio. Under our constitution, the United States takes a 139 00:07:04,640 --> 00:07:08,000 Speaker 1: census every ten years and that is used to allocate 140 00:07:08,040 --> 00:07:10,800 Speaker 1: seats in the Congress among the states, which makes not 141 00:07:10,960 --> 00:07:14,000 Speaker 1: only who's elected President and Senator, but who's elected to 142 00:07:14,080 --> 00:07:17,480 Speaker 1: state houses really critical this year as they will do 143 00:07:17,560 --> 00:07:22,520 Speaker 1: the redistricting based on census. Former Attorney General Eric Holder, 144 00:07:22,560 --> 00:07:26,000 Speaker 1: who is now the head of the National Democratic Redistricting Committee, 145 00:07:26,200 --> 00:07:28,680 Speaker 1: says there's a lot on the line when people head 146 00:07:28,680 --> 00:07:31,520 Speaker 1: to the polls this year. Yeah, I mean, I understand, 147 00:07:31,520 --> 00:07:33,880 Speaker 1: I get it. You know, this is an existential election. 148 00:07:33,880 --> 00:07:35,920 Speaker 1: However you decide that you know you want to vote. 149 00:07:35,920 --> 00:07:38,960 Speaker 1: This is obviously a very president very important presidential election, 150 00:07:39,440 --> 00:07:42,520 Speaker 1: but we really have to focus on these down ballot races. 151 00:07:42,520 --> 00:07:46,440 Speaker 1: We're going to go through a redistricting process in and 152 00:07:46,480 --> 00:07:49,080 Speaker 1: the people elected this year will be the ones will 153 00:07:49,120 --> 00:07:51,360 Speaker 1: help draw those lines. On the head of the National 154 00:07:51,360 --> 00:07:54,120 Speaker 1: Democratic Redistricting Committee, and we're trying to make sure that 155 00:07:54,120 --> 00:07:58,080 Speaker 1: the process in UM is a is a fair one 156 00:07:58,240 --> 00:08:01,680 Speaker 1: and that the lines are drawn not to detect incumbents, 157 00:08:01,720 --> 00:08:04,440 Speaker 1: but to make sure that elections are competitive. And then 158 00:08:04,440 --> 00:08:06,760 Speaker 1: we end up with representatives at the at the state 159 00:08:06,840 --> 00:08:09,520 Speaker 1: level UM who will represent the interests of the people 160 00:08:09,560 --> 00:08:11,760 Speaker 1: and not the special interests. And people need to understand, 161 00:08:11,760 --> 00:08:13,520 Speaker 1: but on on a day to day basis, you're probably 162 00:08:13,600 --> 00:08:16,760 Speaker 1: more impacted by who serves in your state legislature than 163 00:08:16,800 --> 00:08:18,600 Speaker 1: you are by the President of the United States. When 164 00:08:18,600 --> 00:08:25,360 Speaker 1: you're concerned about criminal justice reform, protecting a woman's reproductive rights, UM, 165 00:08:25,400 --> 00:08:29,200 Speaker 1: protecting the right to vote, a lot of healthcare decisions. 166 00:08:29,200 --> 00:08:31,440 Speaker 1: These are decided, as I said, more in the state 167 00:08:31,480 --> 00:08:34,679 Speaker 1: legislature than they are in Washington, d C. So this 168 00:08:34,720 --> 00:08:37,000 Speaker 1: comes up because the census, according to the Constitution, has 169 00:08:37,040 --> 00:08:38,880 Speaker 1: to happen every ten years, and this is one of 170 00:08:38,880 --> 00:08:41,439 Speaker 1: the ten years. And ironically this time it's worth the 171 00:08:41,440 --> 00:08:44,000 Speaker 1: presidential which doesn't happen that often. I guess every twenty years. 172 00:08:44,040 --> 00:08:47,960 Speaker 1: That happens more or less. What happened ten years ago, well, 173 00:08:47,960 --> 00:08:50,520 Speaker 1: ten years ago, we ended up with a process that 174 00:08:50,640 --> 00:08:56,320 Speaker 1: Princeton University UM said was the most gerrymandered redistricting effort 175 00:08:56,320 --> 00:08:59,280 Speaker 1: of the last half century. Republicans use the power that 176 00:08:59,320 --> 00:09:02,240 Speaker 1: they got in the only ten mid terms to really 177 00:09:02,320 --> 00:09:04,560 Speaker 1: draw the lines in a way that favored them, and 178 00:09:04,600 --> 00:09:06,280 Speaker 1: we had to deal with that over the course of 179 00:09:06,280 --> 00:09:09,480 Speaker 1: the last UM ten years. What my organization is trying 180 00:09:09,480 --> 00:09:11,440 Speaker 1: to do is to make sure that we just have 181 00:09:11,520 --> 00:09:13,880 Speaker 1: a fair process, one that doesn't favored Democrats, one that 182 00:09:13,920 --> 00:09:17,280 Speaker 1: doesn't favor Republicans, one that doesn't jerrymander for either party, 183 00:09:17,480 --> 00:09:19,520 Speaker 1: but just for us the lines in a fair way. 184 00:09:19,800 --> 00:09:23,520 Speaker 1: I worked with Arnold Swartzen Ator on this effort. Uh. 185 00:09:23,559 --> 00:09:25,400 Speaker 1: He and I have a piece that's out in UH 186 00:09:25,640 --> 00:09:28,760 Speaker 1: in Missouri trying to protect something that we helped put 187 00:09:28,800 --> 00:09:33,280 Speaker 1: in place there, which was a nonpartisan redistricting commission that 188 00:09:33,360 --> 00:09:36,040 Speaker 1: will draw the lines, take the power away from self 189 00:09:36,080 --> 00:09:38,679 Speaker 1: interested politicians and put it in the hands of a 190 00:09:38,840 --> 00:09:43,560 Speaker 1: neutral body passed by the citizens of Missouri. Politicians there 191 00:09:43,720 --> 00:09:46,040 Speaker 1: are now trying to weaken it. He did an opted 192 00:09:46,240 --> 00:09:49,079 Speaker 1: They said, don't do that. Uh, push back against these 193 00:09:49,080 --> 00:09:52,199 Speaker 1: politicians and preserve that that neutral body. So er Q 194 00:09:52,360 --> 00:09:54,200 Speaker 1: took us just where I wanted to go, which was 195 00:09:54,240 --> 00:09:56,520 Speaker 1: to say, now you're representing the Democrats on this, would 196 00:09:56,520 --> 00:09:58,199 Speaker 1: you be willing to take it out of the political 197 00:09:58,200 --> 00:10:00,560 Speaker 1: sphere and give it to a bipartisan commission or is 198 00:10:00,559 --> 00:10:01,839 Speaker 1: it more a matter if we want to make sure 199 00:10:01,920 --> 00:10:04,480 Speaker 1: our Democrats control the state houses so that we get 200 00:10:04,480 --> 00:10:07,760 Speaker 1: to Gerrymander. Now, I actually think that the best way, 201 00:10:07,800 --> 00:10:11,320 Speaker 1: the gold standard is to create these nonpartisan commissions. They 202 00:10:11,360 --> 00:10:14,320 Speaker 1: already exist, UH for some have existed for sometime in 203 00:10:14,360 --> 00:10:18,880 Speaker 1: Arizona and in California. We were UH instrumental in getting 204 00:10:18,880 --> 00:10:22,280 Speaker 1: them put into Michigan, Missouri Colorado and Utah, and they 205 00:10:22,320 --> 00:10:24,719 Speaker 1: will be doing the redistrict thing UM next year. I 206 00:10:24,800 --> 00:10:27,000 Speaker 1: think that's the goal standard, that is the best way 207 00:10:27,040 --> 00:10:31,239 Speaker 1: to do it. Politicians, whether a Democrat or you're a Republican, 208 00:10:31,800 --> 00:10:34,480 Speaker 1: are gonna try to you know, protect their districts, protect 209 00:10:34,600 --> 00:10:38,959 Speaker 1: their party. Put it in the hands of these nonpartisan UM, 210 00:10:39,000 --> 00:10:42,079 Speaker 1: these nonpartisan bodies. That way, you will end up with UM, 211 00:10:42,120 --> 00:10:44,720 Speaker 1: I think, the fairest line drawing, and you will end 212 00:10:44,800 --> 00:10:48,040 Speaker 1: up with legislatures that are more UM beholden to the 213 00:10:48,080 --> 00:10:50,520 Speaker 1: people as opposed to this special interest. And I think 214 00:10:50,559 --> 00:10:52,840 Speaker 1: if we have a fair process would be very clear. 215 00:10:52,920 --> 00:10:55,800 Speaker 1: I think democrats, UM and progressives will do will do 216 00:10:55,880 --> 00:10:58,599 Speaker 1: just fine. But I don't I don't want a jurymander 217 00:10:58,720 --> 00:11:02,880 Speaker 1: for Democrats. Let's to let independent commissions do all the lines. Erica. 218 00:11:02,960 --> 00:11:04,440 Speaker 1: The Supreme Court is very much on all of our 219 00:11:04,440 --> 00:11:07,760 Speaker 1: minds right now. We have Judge Amy Coney Barrett being 220 00:11:07,800 --> 00:11:09,719 Speaker 1: referred to the Full Senate for what looks like it 221 00:11:09,760 --> 00:11:12,400 Speaker 1: will be a confirmation next week to what extent does 222 00:11:12,440 --> 00:11:15,439 Speaker 1: the does the Constitution limit or the Supreme Court limit 223 00:11:15,520 --> 00:11:18,080 Speaker 1: the degree of jerrymandering. I know that for some reasons 224 00:11:18,120 --> 00:11:21,040 Speaker 1: you cannot jerrymander for example, for race. But what about 225 00:11:21,040 --> 00:11:23,480 Speaker 1: when it comes to politics. Could that be a limiting 226 00:11:23,480 --> 00:11:25,760 Speaker 1: factor or could it be actually the reverse of that 227 00:11:25,920 --> 00:11:28,400 Speaker 1: if we have a six three conservative majority, which is 228 00:11:28,400 --> 00:11:31,440 Speaker 1: what some people call it. Yeah, I mean, the Supreme Court, 229 00:11:31,440 --> 00:11:33,679 Speaker 1: in a decision just this past year, and which I 230 00:11:33,720 --> 00:11:36,280 Speaker 1: think was wrongly decided, said that the federal courts cannot 231 00:11:36,320 --> 00:11:40,480 Speaker 1: here partisan jerrymandering cases. The court is still federal courts 232 00:11:40,520 --> 00:11:43,839 Speaker 1: are still open to hear racial u jurymandering cases, and still, 233 00:11:43,880 --> 00:11:46,840 Speaker 1: as a result, we've had to bring lawsuits in the 234 00:11:46,880 --> 00:11:49,960 Speaker 1: state courts using the state constitutions when we wanted to 235 00:11:49,960 --> 00:11:54,959 Speaker 1: attack um partisan jerrymandering schemes. I think that decision was wrong. 236 00:11:55,480 --> 00:11:58,520 Speaker 1: I think federal courts are uniquely situated to deal with 237 00:11:59,280 --> 00:12:02,680 Speaker 1: questions of of jerrymanding, whether they be partisan or racial 238 00:12:02,800 --> 00:12:06,280 Speaker 1: in nature. So the courts clearly have an important role 239 00:12:06,360 --> 00:12:08,679 Speaker 1: to play here. My hope would be that the courts 240 00:12:08,679 --> 00:12:13,000 Speaker 1: will will stay open to hearing racial jury mannering cases. Uh. 241 00:12:13,160 --> 00:12:15,920 Speaker 1: My hope also will be that ultimately the Court would 242 00:12:15,920 --> 00:12:19,440 Speaker 1: reverse itself and recognize that the decision that they made 243 00:12:19,640 --> 00:12:22,360 Speaker 1: in the Roots Code case was a wrong one. Uh. 244 00:12:22,440 --> 00:12:24,719 Speaker 1: And open the courts, the federal courts up um to 245 00:12:25,320 --> 00:12:29,400 Speaker 1: partisan jury mandaring cases as well. Eric Moore generally, how 246 00:12:29,440 --> 00:12:32,920 Speaker 1: concerned are you, as formerly our foremost lawyer in the 247 00:12:32,960 --> 00:12:36,480 Speaker 1: country about legal challenges and disputes coming out of this election? 248 00:12:36,520 --> 00:12:39,199 Speaker 1: Are we going to have a clean election? Yeah? I 249 00:12:39,280 --> 00:12:40,559 Speaker 1: think we are. I mean, I think we've got to 250 00:12:40,559 --> 00:12:44,959 Speaker 1: be prepared, Um, you know, for cases being the election, 251 00:12:45,520 --> 00:12:48,640 Speaker 1: parts of the election being decided in the courts, and 252 00:12:48,679 --> 00:12:51,000 Speaker 1: I think you might see a lot of litigation leading 253 00:12:51,080 --> 00:12:54,040 Speaker 1: up to the election when decisions are being made about 254 00:12:54,440 --> 00:12:59,640 Speaker 1: you know, signature matches, on on on votes by mail, 255 00:13:00,160 --> 00:13:03,080 Speaker 1: how long polling places should stay open, all those kinds 256 00:13:03,080 --> 00:13:05,480 Speaker 1: of things. Um. But I actually think that the turnout 257 00:13:05,559 --> 00:13:08,880 Speaker 1: is going to be sufficiently large, and I suspect the 258 00:13:08,920 --> 00:13:11,200 Speaker 1: decision of the American people is gonna be pretty decisive. 259 00:13:11,240 --> 00:13:13,480 Speaker 1: So I don't really anticipate that the courts will play 260 00:13:13,520 --> 00:13:17,840 Speaker 1: a significant role post election. But it's clear that both 261 00:13:17,880 --> 00:13:21,920 Speaker 1: campaigns are getting ready have lawyers all around the country 262 00:13:22,360 --> 00:13:26,480 Speaker 1: and prepared to to litigate whatever might might surface. Yeah. 263 00:13:26,760 --> 00:13:28,920 Speaker 1: Awfully nice to let the voters decide rather than the courts. 264 00:13:28,920 --> 00:13:31,160 Speaker 1: I think we both could agree that would be a 265 00:13:31,160 --> 00:13:33,440 Speaker 1: good thing. Does it surprise you that Iran and perhaps 266 00:13:33,559 --> 00:13:36,920 Speaker 1: Russia would be trying to send disinformation to really tamper 267 00:13:37,000 --> 00:13:39,240 Speaker 1: with our elections? Now, it doesn't surprise me at all. 268 00:13:39,440 --> 00:13:41,240 Speaker 1: And I think that you know, we had, we need 269 00:13:41,280 --> 00:13:44,960 Speaker 1: to be prepared for these kinds of intrusions, these kinds 270 00:13:44,960 --> 00:13:49,280 Speaker 1: of attempts to uh, you know, interfere with our electoral system. Uh. 271 00:13:49,440 --> 00:13:51,400 Speaker 1: What struck me as a little strange was just the 272 00:13:51,760 --> 00:13:55,000 Speaker 1: press conference that was held. Um. The information that was 273 00:13:55,040 --> 00:13:59,160 Speaker 1: sharing was not particularly um, something that was unanticipated, But 274 00:13:59,200 --> 00:14:01,520 Speaker 1: to try to spend it as a way as an 275 00:14:01,559 --> 00:14:05,520 Speaker 1: attack on the Trump administration uh and the Trump campaign 276 00:14:06,120 --> 00:14:09,320 Speaker 1: as opposed to an attack on the American electoral system, 277 00:14:09,520 --> 00:14:11,400 Speaker 1: I thought it was just a little a little a 278 00:14:11,400 --> 00:14:14,640 Speaker 1: little different and unexpected. That was former Attorney General Eric 279 00:14:14,640 --> 00:14:17,320 Speaker 1: Holder coming up and going beyond the damage to the 280 00:14:17,320 --> 00:14:21,640 Speaker 1: economy from COVID nineteen, former FED Chairman Alan Greenspan says, 281 00:14:21,760 --> 00:14:25,440 Speaker 1: we have even bigger problems coming from the lack of investment. 282 00:14:25,800 --> 00:14:33,960 Speaker 1: That's next down Wall Street Week on Bloomberg. This is 283 00:14:34,040 --> 00:14:38,360 Speaker 1: Bloomberg Wall Street Week with David Weston from Bloomberg Radio. 284 00:14:38,440 --> 00:14:40,840 Speaker 1: When we begin to look at the world of the 285 00:14:40,920 --> 00:14:44,720 Speaker 1: nineteen nineties, I think the United States comes down and 286 00:14:44,800 --> 00:14:47,560 Speaker 1: not your two Well, we live worse. I just live 287 00:14:47,720 --> 00:14:50,880 Speaker 1: not as relatively better. I think not as relatively better. Look, 288 00:14:51,280 --> 00:14:52,920 Speaker 1: you know, there's a lot of talk about the United 289 00:14:52,960 --> 00:14:59,640 Speaker 1: States losing it's sort of per capita income leadership in 290 00:14:59,640 --> 00:15:02,720 Speaker 1: the world. But the real issue is that the average 291 00:15:02,720 --> 00:15:05,560 Speaker 1: American household that's got the best homes in the world, 292 00:15:05,680 --> 00:15:08,800 Speaker 1: that's got the best sets of appliance, the best telecommunications, 293 00:15:09,480 --> 00:15:13,880 Speaker 1: the average American still lives far better than the average 294 00:15:14,120 --> 00:15:17,600 Speaker 1: anything else. Trouble is is that the gap, which we 295 00:15:17,680 --> 00:15:20,000 Speaker 1: used to be huge, is now beginning to narrow. What's 296 00:15:20,000 --> 00:15:23,200 Speaker 1: going to narrow further? That was Federal Reserve Chairman Alan 297 00:15:23,240 --> 00:15:26,520 Speaker 1: Greenspan appearing on Wall Street Week thirty three years ago. 298 00:15:27,040 --> 00:15:29,320 Speaker 1: A lot has happened in the three decades since, and 299 00:15:29,400 --> 00:15:32,480 Speaker 1: Chairman Greenspan thinks he's seen the US advantage over the 300 00:15:32,480 --> 00:15:35,840 Speaker 1: rest of the world grow even smaller, but even worse. 301 00:15:36,200 --> 00:15:39,400 Speaker 1: He believes our failure to save and invest has meant 302 00:15:39,400 --> 00:15:41,560 Speaker 1: that much of the developed world is putting at risk 303 00:15:41,800 --> 00:15:50,360 Speaker 1: future GDP growth virus is creating a major element of uncertainty, 304 00:15:50,560 --> 00:15:54,240 Speaker 1: and so we have to deal with it. Forecasting it 305 00:15:54,320 --> 00:15:58,320 Speaker 1: is very precarious. All we can forecast is that it 306 00:15:58,520 --> 00:16:03,320 Speaker 1: ultimately wills disappear. It has over the generations. And I 307 00:16:03,400 --> 00:16:09,320 Speaker 1: say generations because this type of problem, one way or 308 00:16:09,320 --> 00:16:15,120 Speaker 1: another of the virus has confronted us periodically and there 309 00:16:15,160 --> 00:16:19,880 Speaker 1: are always a little bit different but I think the 310 00:16:19,960 --> 00:16:25,000 Speaker 1: later edges of that. But behind that is a more 311 00:16:25,160 --> 00:16:30,400 Speaker 1: fundamental issue which is likely to really take hold over 312 00:16:30,440 --> 00:16:34,720 Speaker 1: the period add and that is the aging of the population. 313 00:16:35,080 --> 00:16:37,520 Speaker 1: Put some numbers around that if you can. What are 314 00:16:37,520 --> 00:16:41,560 Speaker 1: you looking at that's telling you about that aging of population? Well, 315 00:16:41,560 --> 00:16:45,880 Speaker 1: first of all, I have a whole series of data, 316 00:16:46,600 --> 00:16:53,400 Speaker 1: but the fact that the population is urging aging is 317 00:16:53,720 --> 00:16:57,200 Speaker 1: very obvious from all of the data that are really 318 00:16:57,680 --> 00:17:02,240 Speaker 1: available posts for the United States and for the rest 319 00:17:02,280 --> 00:17:09,119 Speaker 1: of the world. Because it has a fantastically important impact 320 00:17:10,080 --> 00:17:15,680 Speaker 1: on economic behavior. And the reason essentially is that when 321 00:17:15,720 --> 00:17:21,679 Speaker 1: the aging in the population is aging, something fundamental happens. 322 00:17:21,720 --> 00:17:25,960 Speaker 1: And the major issue is that people start to retire. 323 00:17:27,440 --> 00:17:35,000 Speaker 1: People don't retire until they basically can no longer function. 324 00:17:35,880 --> 00:17:40,480 Speaker 1: If you go back, historically, people would work until they 325 00:17:40,480 --> 00:17:46,920 Speaker 1: would until I died. The issue of pensions, the issue 326 00:17:47,840 --> 00:17:54,119 Speaker 1: of various different social security benefits didn't exist in those days, 327 00:17:54,960 --> 00:17:58,800 Speaker 1: and what we're finding now is that has been a 328 00:17:58,920 --> 00:18:08,679 Speaker 1: very significant expansion specifically and in social security benefits that 329 00:18:08,880 --> 00:18:15,199 Speaker 1: in turn is creating a major decline or slowing in 330 00:18:15,240 --> 00:18:20,040 Speaker 1: the rate of growth and gross domestic savings. Allen explain 331 00:18:20,119 --> 00:18:22,480 Speaker 1: how that works exactly, because spending more money on old 332 00:18:22,480 --> 00:18:25,200 Speaker 1: people in itself doesn't sound evil. They spend that money. 333 00:18:25,280 --> 00:18:27,240 Speaker 1: It can help the economy. But the money has to 334 00:18:27,280 --> 00:18:30,960 Speaker 1: come from somewhere. Where is it coming from? Well, it's 335 00:18:31,080 --> 00:18:37,760 Speaker 1: basically the issue of when when. When we're dealing with 336 00:18:39,000 --> 00:18:43,520 Speaker 1: gross domestic savings, which is a fundamentally what's coming out 337 00:18:43,520 --> 00:18:49,960 Speaker 1: of the private sector, we're finding that uh. But the 338 00:18:50,040 --> 00:18:54,120 Speaker 1: data show actually is that when you've get a very 339 00:18:54,160 --> 00:19:00,399 Speaker 1: significant increase in social benefits, they crowd out the current 340 00:19:00,880 --> 00:19:07,720 Speaker 1: demand current supplier should say of gross domestic savings. If 341 00:19:07,720 --> 00:19:14,400 Speaker 1: you curtailed gross domestic savings, you will also curtail gross 342 00:19:14,480 --> 00:19:21,320 Speaker 1: domestic investment, which is the key to to economic growth 343 00:19:21,600 --> 00:19:30,679 Speaker 1: because fundamentally it generates uh, all of the economic anectivity 344 00:19:30,720 --> 00:19:33,600 Speaker 1: and every other in the capital goods markets. And when 345 00:19:33,600 --> 00:19:36,679 Speaker 1: we talk about investment, capital investment and normally the thing 346 00:19:36,720 --> 00:19:39,320 Speaker 1: we think about is productivity and growth and productivity. Are 347 00:19:39,400 --> 00:19:42,320 Speaker 1: we seeing productivity flatten out in the United States because 348 00:19:42,320 --> 00:19:45,920 Speaker 1: of the phenomenon you describe what it is is it's 349 00:19:45,920 --> 00:19:50,600 Speaker 1: a pattern of productivity growth which is growing up and 350 00:19:50,640 --> 00:19:55,480 Speaker 1: then flattening out. And the basic reasons for its flattening 351 00:19:55,480 --> 00:20:01,880 Speaker 1: out is that the a gentleman significant increase in entitlements 352 00:20:02,000 --> 00:20:06,119 Speaker 1: crowding out first domestic savings, which is the core of 353 00:20:06,240 --> 00:20:12,560 Speaker 1: gross business saving business investment, I should say, and that's 354 00:20:12,760 --> 00:20:18,120 Speaker 1: where economic prose it's coming from. That was Alan Green's band, 355 00:20:18,200 --> 00:20:21,800 Speaker 1: former Chairman of the Federal Reserve. Coming up, we wrap 356 00:20:21,880 --> 00:20:24,080 Speaker 1: things up as we do every week with our special 357 00:20:24,160 --> 00:20:27,560 Speaker 1: contributor Larry Summers of Harvard. That's next on Wall Street 358 00:20:27,600 --> 00:20:36,560 Speaker 1: Week on Bloomberg. This is Bloomberg Wall Street Week with 359 00:20:36,640 --> 00:20:40,280 Speaker 1: David Weston from Bloomberg Radio to pull together a rather 360 00:20:40,320 --> 00:20:43,040 Speaker 1: diffuse week. We welcome now the one person could do it. 361 00:20:43,040 --> 00:20:45,960 Speaker 1: He's our special contributor. He's Larry Summers of Harvard, So Larry. 362 00:20:45,960 --> 00:20:47,800 Speaker 1: We always look at the week and there's ups and downs, 363 00:20:47,840 --> 00:20:50,879 Speaker 1: choppy equity markets. We also look at the longer term trends. 364 00:20:50,960 --> 00:20:53,439 Speaker 1: We just heard from Alan Greenspan the former chairman of 365 00:20:53,480 --> 00:20:56,119 Speaker 1: the Reserve, someone you know well, saying the problem we 366 00:20:56,200 --> 00:20:59,160 Speaker 1: have actually is too little investment. Now you've talked about 367 00:20:59,160 --> 00:21:02,080 Speaker 1: secular stagnation. We had Janet Yellen on earlier this week 368 00:21:02,320 --> 00:21:05,600 Speaker 1: saying there's secular stagnician, there's too much savings. Is there 369 00:21:05,640 --> 00:21:09,280 Speaker 1: a conflict here? Well, I think Alan would agree, and 370 00:21:09,320 --> 00:21:12,399 Speaker 1: I would agree, and Janet would agree that we've got 371 00:21:12,440 --> 00:21:15,600 Speaker 1: too little capital investments and that if we want to 372 00:21:15,600 --> 00:21:19,040 Speaker 1: grow faster, we're gonna need to find ways UH to 373 00:21:19,200 --> 00:21:26,480 Speaker 1: promote investment. I think where there'd be some disagreement is 374 00:21:26,600 --> 00:21:31,280 Speaker 1: that Janet, from what I understand, has really endorsed the 375 00:21:31,400 --> 00:21:34,439 Speaker 1: doctor and of secular stagnation that I've been arguing for 376 00:21:34,480 --> 00:21:38,160 Speaker 1: a number of years. She's expressed a concern about an 377 00:21:38,160 --> 00:21:43,399 Speaker 1: excessive level of savings, and I think that is a 378 00:21:43,520 --> 00:21:51,160 Speaker 1: very serious UH concern. Alan's concern, which also has UH merit, 379 00:21:51,760 --> 00:21:57,480 Speaker 1: is with the excessive growth of entitlements. But I think 380 00:21:57,600 --> 00:22:02,360 Speaker 1: right now our priority us to be to support adequate 381 00:22:02,880 --> 00:22:08,000 Speaker 1: UH spending, and so I would not support cutbacks and 382 00:22:08,240 --> 00:22:12,840 Speaker 1: entitlement programs. If anything. It seems to me what COVID 383 00:22:12,960 --> 00:22:18,120 Speaker 1: points up is the importance of expanding UH social insurance 384 00:22:18,200 --> 00:22:23,480 Speaker 1: so that people UH feel UH safer. And Alan always 385 00:22:23,480 --> 00:22:26,160 Speaker 1: had his finger on the pulse of the economy when 386 00:22:26,200 --> 00:22:29,919 Speaker 1: he was chairman and detected new trends very quickly. And 387 00:22:30,320 --> 00:22:34,080 Speaker 1: I think if he was there now, he'd be recognizing 388 00:22:34,119 --> 00:22:39,320 Speaker 1: that there was a sluggishness with respect to UH inflation 389 00:22:39,960 --> 00:22:44,120 Speaker 1: that pointed to a need to do things to propel 390 00:22:44,840 --> 00:22:49,880 Speaker 1: UH the right kinds of UH spending. And he would 391 00:22:49,880 --> 00:22:53,879 Speaker 1: be cautioning us, as he always does, that it's not 392 00:22:54,000 --> 00:22:56,960 Speaker 1: just a matter of more spending, but it's having the 393 00:22:57,080 --> 00:23:00,960 Speaker 1: right kinds of spending. And I think that's got to 394 00:23:01,040 --> 00:23:05,320 Speaker 1: be a preoccupation as well from the new administration. Let's 395 00:23:05,359 --> 00:23:08,520 Speaker 1: talk about one specific form of investment, that's investment in corporations. 396 00:23:08,560 --> 00:23:10,880 Speaker 1: We had Tesla earnings out this we need Tesla beat 397 00:23:10,920 --> 00:23:14,000 Speaker 1: all the expectations, fifth straight quarter of profitability. But one 398 00:23:14,040 --> 00:23:15,919 Speaker 1: thing that really jumps out at you is the market 399 00:23:15,960 --> 00:23:17,880 Speaker 1: cap of this company. I actually looked up the price 400 00:23:17,920 --> 00:23:21,080 Speaker 1: earnings ratio comparing it to General Motors. For example, their 401 00:23:21,160 --> 00:23:24,560 Speaker 1: forward price earnings ratio is one fourteen compared to seven 402 00:23:24,640 --> 00:23:26,440 Speaker 1: for General Motors. There's been a lot of concerner about 403 00:23:26,440 --> 00:23:29,159 Speaker 1: short termism in terms of investment, but I guess when 404 00:23:29,200 --> 00:23:31,640 Speaker 1: it comes to a Tesla, it's a long term investment. 405 00:23:31,640 --> 00:23:34,439 Speaker 1: People are being very patient. Look, I think there's a 406 00:23:34,520 --> 00:23:38,760 Speaker 1: nonsense idea out there that somehow our stock market is 407 00:23:38,880 --> 00:23:43,560 Speaker 1: driving all kinds of short termism. I see just uh 408 00:23:43,960 --> 00:23:47,960 Speaker 1: the opposite. I see what Tesla is worth, and what 409 00:23:48,080 --> 00:23:51,400 Speaker 1: the rest of the automobile industry is worth. I see 410 00:23:51,400 --> 00:23:54,000 Speaker 1: what PayPal is worth, and I see what many of 411 00:23:54,040 --> 00:23:58,919 Speaker 1: the major banks are are worth. I see what Palatier 412 00:23:59,080 --> 00:24:03,640 Speaker 1: is worth, and I see what various consulting firms are worth. 413 00:24:04,040 --> 00:24:06,919 Speaker 1: I see what biotech companies are worth, and then what 414 00:24:07,520 --> 00:24:13,880 Speaker 1: standard pharmaceutical companies are worth. I think it is really 415 00:24:14,720 --> 00:24:21,640 Speaker 1: very very clear that for companies that have real, credible, 416 00:24:21,720 --> 00:24:27,920 Speaker 1: visionary growth strategies, the market swoons and puts an enormous 417 00:24:28,000 --> 00:24:31,840 Speaker 1: multiple on their earnings. And so there is an incredibly 418 00:24:32,040 --> 00:24:37,720 Speaker 1: strong incentive for anybody who can point to a credible 419 00:24:37,760 --> 00:24:43,640 Speaker 1: growth strategy to do just UH that some people can't. 420 00:24:44,280 --> 00:24:48,040 Speaker 1: That's why General Motors has a price earnings ratio of 421 00:24:48,640 --> 00:24:52,879 Speaker 1: UH seven. General Motors had a price earnings ratio that 422 00:24:53,040 --> 00:24:58,080 Speaker 1: was low for the whole decade of UH. The knots 423 00:24:58,119 --> 00:25:01,959 Speaker 1: at the beginning of this censuring. We're always jabbering about 424 00:25:02,040 --> 00:25:05,160 Speaker 1: how the market didn't give them space for the long run, 425 00:25:05,680 --> 00:25:10,240 Speaker 1: but in fact they had to be saved from bankruptcy 426 00:25:10,400 --> 00:25:15,560 Speaker 1: because they invested uh too much, not too little, and 427 00:25:15,600 --> 00:25:20,680 Speaker 1: they invested too much, too uh wastefully. So I think 428 00:25:20,760 --> 00:25:23,560 Speaker 1: the great one of the great strengths of the American 429 00:25:23,920 --> 00:25:28,080 Speaker 1: UH system is our venture capital industry, where people can 430 00:25:28,160 --> 00:25:31,440 Speaker 1: raise half a billion dollars before they buy their first 431 00:25:31,480 --> 00:25:35,240 Speaker 1: suit or even their first uh tie. I didn't One 432 00:25:35,240 --> 00:25:37,800 Speaker 1: of the great strengths of our system is that we've 433 00:25:37,840 --> 00:25:42,800 Speaker 1: got a market that is willing to go heavily with 434 00:25:42,920 --> 00:25:48,280 Speaker 1: people who have the chance to create the really, really 435 00:25:48,440 --> 00:25:51,760 Speaker 1: big thing. And I think it would be a terrible mistake, 436 00:25:52,280 --> 00:25:57,200 Speaker 1: whether frankly it was Larry Fink, or it was political leaders, 437 00:25:57,480 --> 00:26:00,560 Speaker 1: or it was the business roundtable, if we were to 438 00:26:00,720 --> 00:26:05,040 Speaker 1: push our system to be one where anyone who said 439 00:26:05,080 --> 00:26:08,720 Speaker 1: the word long term was able to invest a lot 440 00:26:09,160 --> 00:26:15,240 Speaker 1: without being subject to uh discipline of from the market. Yes, 441 00:26:15,280 --> 00:26:18,639 Speaker 1: there can be UH pressures for the short term, but 442 00:26:18,760 --> 00:26:22,040 Speaker 1: some of that is just pressures for accountability. And I 443 00:26:22,080 --> 00:26:26,480 Speaker 1: have to say, when I hear somebody complain about pressure 444 00:26:26,560 --> 00:26:31,360 Speaker 1: for short termism. I hear somebody who's not passing tests 445 00:26:31,400 --> 00:26:36,440 Speaker 1: of accountability and is facing pressures from UH the market, 446 00:26:36,520 --> 00:26:40,959 Speaker 1: and those pressures are often valid pressures to take the 447 00:26:41,000 --> 00:26:44,080 Speaker 1: capital out of the company and let it go somewhere 448 00:26:44,080 --> 00:26:47,880 Speaker 1: where somebody can put much much better. UH use to it. 449 00:26:48,160 --> 00:26:53,119 Speaker 1: Not always. We certainly have excesses coming from activists corporate 450 00:26:53,359 --> 00:26:57,359 Speaker 1: UH raiders, but I think we need to recognize and 451 00:26:57,440 --> 00:27:00,840 Speaker 1: the testless story that you tell is a rate example 452 00:27:01,280 --> 00:27:04,640 Speaker 1: that a big strength of our country is that we've 453 00:27:04,640 --> 00:27:10,080 Speaker 1: got capital markets that can really bet big on growth prospects, 454 00:27:10,359 --> 00:27:13,880 Speaker 1: which means betting big on the long term. We always 455 00:27:14,000 --> 00:27:16,879 Speaker 1: end our week with la as Summer says, the rapid 456 00:27:17,200 --> 00:27:19,119 Speaker 1: fire around here. So let's go through a few because 457 00:27:19,280 --> 00:27:22,160 Speaker 1: we heard this debate this week between the two candidates 458 00:27:22,200 --> 00:27:24,760 Speaker 1: for president a lot of talk about COVID nineteen. One 459 00:27:24,800 --> 00:27:26,600 Speaker 1: of the things we heard was President Trump saying that 460 00:27:26,640 --> 00:27:29,160 Speaker 1: we are about to turn the corner on COVID, even 461 00:27:29,200 --> 00:27:31,040 Speaker 1: as during this week we set a new record of 462 00:27:31,119 --> 00:27:33,600 Speaker 1: eight new cases in the United States. When do you 463 00:27:33,680 --> 00:27:37,040 Speaker 1: think we're gonna turn that corner on COVID? From here, 464 00:27:37,600 --> 00:27:41,760 Speaker 1: this speedway has got a long straight away. My guess 465 00:27:41,800 --> 00:27:44,160 Speaker 1: is when winter ends in March will be about when 466 00:27:44,160 --> 00:27:47,960 Speaker 1: the when the corner comes, will likely have a new, 467 00:27:48,000 --> 00:27:51,760 Speaker 1: more competent administration. By then, a vaccine might be starting 468 00:27:51,800 --> 00:27:54,840 Speaker 1: to come on stream. By then we might start having 469 00:27:55,160 --> 00:28:00,640 Speaker 1: more appropriate um uh face face masking and more appropriate 470 00:28:00,720 --> 00:28:04,159 Speaker 1: and large scale uh testing. So, my guests, is we 471 00:28:04,200 --> 00:28:07,600 Speaker 1: turn we make a real decisive turn of the corner 472 00:28:07,960 --> 00:28:10,640 Speaker 1: in about March. So, still on the subject of COVID 473 00:28:10,640 --> 00:28:11,919 Speaker 1: more or less, one of the other things we've heard 474 00:28:11,960 --> 00:28:14,040 Speaker 1: a lot about in the debate is reopening the economy. 475 00:28:14,160 --> 00:28:16,760 Speaker 1: How we do that safely? We've got a big jobs problem. 476 00:28:16,840 --> 00:28:19,480 Speaker 1: We still have eleven million more or less people unemployed 477 00:28:19,480 --> 00:28:21,880 Speaker 1: that we're employed before the pandemic. What is the best 478 00:28:21,880 --> 00:28:23,480 Speaker 1: way to get those people where I employed? Is it 479 00:28:23,520 --> 00:28:27,320 Speaker 1: to open up the economy? Now? Wrong question. We need 480 00:28:27,359 --> 00:28:32,680 Speaker 1: to test, we need to mask, We need to disseminate 481 00:28:33,400 --> 00:28:38,280 Speaker 1: um the cures as uh best we can. We need 482 00:28:38,320 --> 00:28:41,520 Speaker 1: to be ready to get the vaccine out there as 483 00:28:41,560 --> 00:28:46,600 Speaker 1: fast as possible. If we can test, mask and trace, 484 00:28:47,600 --> 00:28:50,920 Speaker 1: we can let the kids come back to school. We 485 00:28:50,960 --> 00:28:53,480 Speaker 1: can let the students come back to the campus. We 486 00:28:53,520 --> 00:28:57,360 Speaker 1: can let the people go back to work, and we 487 00:28:57,400 --> 00:29:01,160 Speaker 1: can have COVID in decline as long as we frame 488 00:29:01,200 --> 00:29:05,000 Speaker 1: it as a choice between having an economy and having 489 00:29:05,080 --> 00:29:08,520 Speaker 1: our health, we're losers. That's what we need to do. 490 00:29:09,000 --> 00:29:10,640 Speaker 1: And the last one, Larry, I'm not sure you can 491 00:29:10,640 --> 00:29:12,560 Speaker 1: grade in a curve when it comes to a global pandemic. 492 00:29:12,600 --> 00:29:14,680 Speaker 1: But if you were grading, what grade do we give 493 00:29:14,680 --> 00:29:16,640 Speaker 1: the United States versus the rest of the world, And 494 00:29:16,680 --> 00:29:19,280 Speaker 1: how we're handling COVID nineteen Right now, there's all you 495 00:29:19,320 --> 00:29:22,880 Speaker 1: need to know. The mortality rate per million people in 496 00:29:22,920 --> 00:29:28,480 Speaker 1: the United States is about twenty times as high as 497 00:29:28,520 --> 00:29:34,200 Speaker 1: it is in Pakistan. If we can't respond to a 498 00:29:34,320 --> 00:29:41,760 Speaker 1: problem better than uh Pakistan can better than most of 499 00:29:41,840 --> 00:29:48,000 Speaker 1: the country's in the developing world, that's got to give 500 00:29:48,080 --> 00:29:52,840 Speaker 1: us some real pause about our government, and frankly, also 501 00:29:53,080 --> 00:29:59,480 Speaker 1: some pause about our institutions. I think this is the 502 00:29:59,480 --> 00:30:07,040 Speaker 1: biggest failure of American government, quite possibly uh, in my lifetime. 503 00:30:07,120 --> 00:30:08,960 Speaker 1: And that's gonna be the last word. Thank you so 504 00:30:09,080 --> 00:30:11,560 Speaker 1: very much to our very special contributor on Wall Street Week. 505 00:30:11,800 --> 00:30:18,440 Speaker 1: He is Larry Summers of Harvard. Of course. Finally, one 506 00:30:18,480 --> 00:30:22,080 Speaker 1: more thought. You get what you pay for, or do you? 507 00:30:22,880 --> 00:30:25,600 Speaker 1: This week we've watched a different sort of World Series. 508 00:30:25,960 --> 00:30:28,240 Speaker 1: It took us only sixty games to get here instead 509 00:30:28,280 --> 00:30:31,360 Speaker 1: of the usual one sixty two. We've had none of 510 00:30:31,360 --> 00:30:34,320 Speaker 1: the traveling back and forth between the two teams home field. 511 00:30:34,720 --> 00:30:37,000 Speaker 1: All the games have been played at the Texas Rangers 512 00:30:37,000 --> 00:30:42,160 Speaker 1: Stadium in Arlington, nowhere near either Los Angeles or Tampa Bay. 513 00:30:42,400 --> 00:30:44,960 Speaker 1: And beyond the drama on the diamond, we got to 514 00:30:44,960 --> 00:30:48,480 Speaker 1: see another sort of contest, a contest of business models 515 00:30:49,040 --> 00:30:52,640 Speaker 1: between a consortium led by some Goggenheim Financial wizards and 516 00:30:52,720 --> 00:30:56,720 Speaker 1: a former managing director of Golden Sacks, between a club, 517 00:30:56,760 --> 00:30:59,200 Speaker 1: the l A Dodgers, with the second highest payroll in 518 00:30:59,240 --> 00:31:02,120 Speaker 1: Major League based ball, and the Tampa Bay Raised with 519 00:31:02,200 --> 00:31:05,360 Speaker 1: one of the lowest payrolls. In a normal season, l 520 00:31:05,440 --> 00:31:09,080 Speaker 1: A will pay its top three players, Clayton Kershaw, Mookie 521 00:31:09,080 --> 00:31:13,960 Speaker 1: Betts and Kenley Jensen, seventy million dollars as much or 522 00:31:14,000 --> 00:31:17,520 Speaker 1: more than Tampa Bay pays all of its team. So 523 00:31:17,640 --> 00:31:20,560 Speaker 1: at a time when so many businesses, so many households, 524 00:31:20,560 --> 00:31:22,200 Speaker 1: are looking at where they can cut back in the 525 00:31:22,240 --> 00:31:25,320 Speaker 1: time of the coronavirus, maybe baseball can help us all 526 00:31:25,360 --> 00:31:28,600 Speaker 1: focus once again on what we truly need instead of 527 00:31:28,640 --> 00:31:32,000 Speaker 1: simply what would be nice to have That does it. 528 00:31:32,120 --> 00:31:34,840 Speaker 1: For this episode of Wall Street Week, I'm David Weston. 529 00:31:35,040 --> 00:31:37,240 Speaker 1: This is Bloomberg. See you next week.