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 use 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 --> 00:00:13,000 Speaker 1: keep our world fed. Action to con concerns over dollar 5 00:00:13,080 --> 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 00:00:22,680 --> 00:00:26,360 Speaker 1: Kevin Johnson sec Chairman j Clayton. Bloomberg wool Street Week 9 00:00:26,480 --> 00:00:30,520 Speaker 1: with David Weston from Bloomberg Radio. Fingers in the Dike 10 00:00:31,120 --> 00:00:34,080 Speaker 1: markets keep fears of a surging virus at bay with 11 00:00:34,120 --> 00:00:38,040 Speaker 1: hopes of war government help. This is Bloomberg Wall Street Week. 12 00:00:38,280 --> 00:00:41,800 Speaker 1: I'm David Weston. During times like these, with a slowing 13 00:00:41,840 --> 00:00:46,560 Speaker 1: economy and some deterioration and credit conditions, even the healthiest 14 00:00:46,560 --> 00:00:49,920 Speaker 1: banks tend to become more risk adverse and restrain lending, 15 00:00:50,320 --> 00:00:55,480 Speaker 1: and regulators actions have reinforced this lending restraint in the past. 16 00:00:55,680 --> 00:00:58,520 Speaker 1: That was then Secretary of the Treasury, Hank Paulson back 17 00:00:58,520 --> 00:01:01,760 Speaker 1: in two thousand eight during the last economic crisis. Now 18 00:01:01,800 --> 00:01:03,920 Speaker 1: we're in another one, and this week we've got a 19 00:01:03,920 --> 00:01:06,880 Speaker 1: glimpse of how the major US banks are handling this one, 20 00:01:07,319 --> 00:01:10,440 Speaker 1: something that we asked the dean of the US Banking Regulation, 21 00:01:10,560 --> 00:01:13,600 Speaker 1: Roger Cohen of Sullivan and Cromwell about. I would say 22 00:01:13,640 --> 00:01:18,640 Speaker 1: there is a definite contrast as opposed to a comparison, 23 00:01:19,280 --> 00:01:26,360 Speaker 1: because banks have come into this economic turmoil with far 24 00:01:26,520 --> 00:01:33,399 Speaker 1: stronger capital ratios, far more liquidity, and they are not 25 00:01:33,640 --> 00:01:39,120 Speaker 1: a part of the problem in terms of having caused 26 00:01:39,120 --> 00:01:43,640 Speaker 1: the problem. It's obviously a health crisis which is enveloping 27 00:01:43,800 --> 00:01:47,920 Speaker 1: the economy and the banks, but this is not a 28 00:01:47,960 --> 00:01:53,600 Speaker 1: problem that is attributable to the banks. So the banks 29 00:01:53,600 --> 00:01:55,360 Speaker 1: are in much better shape, it appears, than they were 30 00:01:55,440 --> 00:01:58,120 Speaker 1: back in two nine. At the same time, their stock 31 00:01:58,160 --> 00:02:01,360 Speaker 1: price might not necessarily reflect that. Why isn't the marketing 32 00:02:01,400 --> 00:02:04,280 Speaker 1: market giving them full credit for the strong shape they're in? 33 00:02:05,120 --> 00:02:08,880 Speaker 1: You know, that's a fascinating question, David, And one uh 34 00:02:08,919 --> 00:02:12,120 Speaker 1: that I think a number of people in most importantly 35 00:02:12,160 --> 00:02:16,160 Speaker 1: perhaps of which bank CEOs are struggling. I think it 36 00:02:16,400 --> 00:02:22,919 Speaker 1: is a combination of three factors. The first is the 37 00:02:23,200 --> 00:02:29,800 Speaker 1: uh inevitable that when the economy suffers, banks suffer because 38 00:02:30,200 --> 00:02:35,800 Speaker 1: they are lending to the economy, so that is a 39 00:02:35,919 --> 00:02:41,639 Speaker 1: really key factor. A second factor, which may be as 40 00:02:41,680 --> 00:02:45,440 Speaker 1: important but perhaps has not been as much focused on, 41 00:02:46,520 --> 00:02:52,080 Speaker 1: is that banks are the losers in in a very 42 00:02:52,160 --> 00:02:56,920 Speaker 1: real sense in view of the Federal reserves monetary policy. 43 00:02:57,480 --> 00:03:04,240 Speaker 1: Low interest rates are clearly a major drag on bank earnings, 44 00:03:04,320 --> 00:03:10,839 Speaker 1: and particularly with banks being asked to hold substantial liquidity 45 00:03:11,160 --> 00:03:15,720 Speaker 1: UH treasuries and other very short term interests, they are 46 00:03:15,800 --> 00:03:21,320 Speaker 1: affected even more. And I think the third is uncertainty 47 00:03:21,639 --> 00:03:26,920 Speaker 1: about dividends. So far, banks have maintained their dividends, but 48 00:03:27,040 --> 00:03:30,959 Speaker 1: the Fed has announced that it's going to do new 49 00:03:31,080 --> 00:03:36,640 Speaker 1: UH supervisory stress tests with new scenarios, which will undoubtedly 50 00:03:37,280 --> 00:03:41,440 Speaker 1: be more severe. The FED announced it was going to 51 00:03:41,480 --> 00:03:46,200 Speaker 1: impose a new rule on maximum dividends that could be 52 00:03:46,240 --> 00:03:50,560 Speaker 1: paid based on trailing UM twelvemonth earnings. And I think 53 00:03:51,120 --> 00:03:56,880 Speaker 1: the market is uncertain as to whether the Federal Reserve 54 00:03:57,560 --> 00:04:02,000 Speaker 1: will continue to prove to enable banks to pay dividends. 55 00:04:02,040 --> 00:04:07,120 Speaker 1: Even though um dividends have represented over the last few 56 00:04:07,240 --> 00:04:11,960 Speaker 1: years a very small proportion of banks total return of capital, 57 00:04:12,000 --> 00:04:17,960 Speaker 1: most has been through repurchases. Roger, we are in the middle, 58 00:04:18,000 --> 00:04:21,600 Speaker 1: obviously of a true crisis prompted by the coronavirus itself 59 00:04:21,600 --> 00:04:24,279 Speaker 1: and then the aftermath the shutting down the economy. It's 60 00:04:24,320 --> 00:04:27,279 Speaker 1: not the bank's fault, not the regulator's faults, nobody's fault. 61 00:04:27,640 --> 00:04:31,520 Speaker 1: But the question is should regulators be taking into account 62 00:04:31,560 --> 00:04:34,120 Speaker 1: as they impose regulation right now? Should we be making 63 00:04:34,120 --> 00:04:39,120 Speaker 1: some adjustments or are we making adjustments already? I personally 64 00:04:39,440 --> 00:04:45,400 Speaker 1: think we should. Regulation should never be static and absolute. UH. 65 00:04:45,760 --> 00:04:51,320 Speaker 1: Some of the adjustments that have been made include, either 66 00:04:51,680 --> 00:04:58,920 Speaker 1: already or under consideration, dealing with the supplementary leverage ratio. UH. 67 00:04:59,360 --> 00:05:02,840 Speaker 1: Leverage has turned out in this environment to be the 68 00:05:02,920 --> 00:05:07,960 Speaker 1: binding capital restraint for a number of institutions, and the 69 00:05:08,080 --> 00:05:13,760 Speaker 1: concept is to recognize that again, monetary policy and the 70 00:05:13,839 --> 00:05:20,280 Speaker 1: economy have led to major holdings of UM what are 71 00:05:20,560 --> 00:05:25,800 Speaker 1: risk free assets, such as treasuries. So there are actions 72 00:05:25,920 --> 00:05:32,280 Speaker 1: which the regulators are taking, but it's it's a difficult 73 00:05:32,760 --> 00:05:38,400 Speaker 1: road to hope because you want to be sure that 74 00:05:39,040 --> 00:05:43,400 Speaker 1: banks are not dissipating capital, but at the same time 75 00:05:43,520 --> 00:05:47,760 Speaker 1: you do not want to discourage them from lending, and 76 00:05:48,240 --> 00:05:54,000 Speaker 1: UH overly aggressive regulatory actions will actually prove to be 77 00:05:54,839 --> 00:06:00,400 Speaker 1: procyclical in that sense of creating further economic problems that 78 00:06:00,480 --> 00:06:04,760 Speaker 1: was Roger Cohen, Senior chairman of Sullivan and Cromwell. Coming up, 79 00:06:05,080 --> 00:06:08,080 Speaker 1: Can we keep people safe and keep the economy going? 80 00:06:08,520 --> 00:06:11,080 Speaker 1: We hear from the Speaker of the House, Nancy Pelosi. 81 00:06:11,720 --> 00:06:17,200 Speaker 1: That's next on Wall Street Week on Bloomberg. This is 82 00:06:17,240 --> 00:06:21,599 Speaker 1: Bloomberg Wall Street Week with David Weston from Bloomberg Radio. 83 00:06:21,839 --> 00:06:24,800 Speaker 1: The government has already spent more than two trillion dollars 84 00:06:24,800 --> 00:06:27,120 Speaker 1: in shoring up the U. S economy, with quite possibly 85 00:06:27,120 --> 00:06:30,120 Speaker 1: trillions more on the way. But if we keep having 86 00:06:30,120 --> 00:06:32,800 Speaker 1: to shut down large parts of the economy because of 87 00:06:32,800 --> 00:06:36,280 Speaker 1: the coronavirus, can the government ever do enough? That's the 88 00:06:36,360 --> 00:06:38,960 Speaker 1: question we posed a Speak of the House, Nancy Pelosi. 89 00:06:39,480 --> 00:06:43,920 Speaker 1: You have to address the coronavirus issue, as we have 90 00:06:44,040 --> 00:06:50,200 Speaker 1: been saying all along, open our economy. Do so by testing, testing, testing. 91 00:06:50,520 --> 00:06:53,800 Speaker 1: If you test and you trace, and you treat, and 92 00:06:53,880 --> 00:06:58,039 Speaker 1: you isolate, you can contain the virus. You can open 93 00:06:58,080 --> 00:07:02,320 Speaker 1: the economy. The same whole true for our children going 94 00:07:02,360 --> 00:07:04,640 Speaker 1: to school. They want to go to school, We want 95 00:07:04,680 --> 00:07:07,320 Speaker 1: them to go to school, their parents to do. Teachers 96 00:07:07,360 --> 00:07:10,880 Speaker 1: want to teach, but you can't risk their health in 97 00:07:10,960 --> 00:07:13,760 Speaker 1: doing so. And in order to open the schools, and 98 00:07:13,800 --> 00:07:18,400 Speaker 1: the economy as a simple solution. Testing. It's worked in 99 00:07:18,440 --> 00:07:22,320 Speaker 1: all their countries until God willing, we have a vaccine 100 00:07:22,440 --> 00:07:26,720 Speaker 1: or cure testing testing. Now, what I'm calling upon the 101 00:07:26,760 --> 00:07:31,040 Speaker 1: President to do is to use his authority to execute 102 00:07:31,080 --> 00:07:36,000 Speaker 1: the Defense Production Act. People are not getting tested enough 103 00:07:36,080 --> 00:07:39,760 Speaker 1: because there isn't enough equipment. Those tests are not analyzed 104 00:07:39,800 --> 00:07:42,640 Speaker 1: to find out if you're positive or negative because there 105 00:07:42,680 --> 00:07:45,960 Speaker 1: isn't enough equipment. The schools are not prepared to open 106 00:07:46,080 --> 00:07:48,680 Speaker 1: up in hospitals caring for people because they don't have 107 00:07:48,800 --> 00:07:53,720 Speaker 1: enough personal protective equipment. And so we're saying, just face 108 00:07:53,800 --> 00:07:56,360 Speaker 1: the fact I said about the President that he's like 109 00:07:56,400 --> 00:07:59,800 Speaker 1: a man who refused to ask for direction. There is direction. 110 00:08:00,040 --> 00:08:03,840 Speaker 1: Scientists are giving it to us. But we can't safely 111 00:08:03,920 --> 00:08:08,440 Speaker 1: open up unless we address the coronavirus. And it is 112 00:08:08,480 --> 00:08:11,240 Speaker 1: doable where America, we can get anything done. We set 113 00:08:11,240 --> 00:08:13,880 Speaker 1: our minds to do, but we have to follow the 114 00:08:13,960 --> 00:08:17,280 Speaker 1: science and we have to do good governance as we 115 00:08:17,360 --> 00:08:20,560 Speaker 1: follow the science. All the experts, as you say aboutam speakers, 116 00:08:20,560 --> 00:08:21,960 Speaker 1: say we have to have testing, and then we have 117 00:08:22,000 --> 00:08:24,200 Speaker 1: to have the contact tracing the follows on after the 118 00:08:24,240 --> 00:08:26,720 Speaker 1: tasting testing. At the same time, in some places like Florida. 119 00:08:26,840 --> 00:08:28,680 Speaker 1: Right now, some of the experts are saying, it's so 120 00:08:28,720 --> 00:08:30,640 Speaker 1: far out of control, you've got to shut it down 121 00:08:30,680 --> 00:08:32,800 Speaker 1: before you can really even test because there's just too 122 00:08:32,880 --> 00:08:36,280 Speaker 1: much going on. What can the federal government, what can Congress? 123 00:08:36,320 --> 00:08:38,720 Speaker 1: What can the president do to try to get people 124 00:08:38,760 --> 00:08:40,400 Speaker 1: to stay home in some of these places where they 125 00:08:40,440 --> 00:08:42,319 Speaker 1: need to stay home. You and I both know that 126 00:08:42,440 --> 00:08:46,200 Speaker 1: well it is. It has worked in other countries. The 127 00:08:46,240 --> 00:08:50,840 Speaker 1: shelter in place, the lockdown makes a big, big difference. 128 00:08:51,440 --> 00:08:53,959 Speaker 1: But the president it's even hard to get him to 129 00:08:54,000 --> 00:08:56,880 Speaker 1: wear a mask as a good example, but it would 130 00:08:56,920 --> 00:08:59,760 Speaker 1: make all the difference in the world and really in 131 00:09:00,120 --> 00:09:04,920 Speaker 1: a very long time, if the President would suggest and 132 00:09:05,040 --> 00:09:09,480 Speaker 1: not stand in the way of sheltering in place. The 133 00:09:09,600 --> 00:09:14,760 Speaker 1: lockdown is very important. In California, we lockdown, have great improvement, 134 00:09:14,920 --> 00:09:20,240 Speaker 1: everything good. Our governor just uh an excellent governor, Gavin Newsom, 135 00:09:20,280 --> 00:09:22,640 Speaker 1: and then some of the regions of the state. It's 136 00:09:22,679 --> 00:09:25,520 Speaker 1: a big state where we're objecting, saying we don't have 137 00:09:25,559 --> 00:09:27,800 Speaker 1: so much here, let us open up. And so there 138 00:09:27,880 --> 00:09:32,439 Speaker 1: was some local discretion which now has demonstrated that that 139 00:09:32,520 --> 00:09:36,400 Speaker 1: discretion has led to more cases. Unfortunately, that speaker, you 140 00:09:36,520 --> 00:09:38,080 Speaker 1: raised the question of the schools, which I think is 141 00:09:38,120 --> 00:09:40,839 Speaker 1: on so many Americans minds across the country right now 142 00:09:40,880 --> 00:09:43,760 Speaker 1: as we approached September once again, how we can get 143 00:09:43,800 --> 00:09:45,920 Speaker 1: our kids back to school in some form, maybe a 144 00:09:46,000 --> 00:09:48,760 Speaker 1: hybrid form safely. At the same time, that's going to 145 00:09:48,880 --> 00:09:51,400 Speaker 1: take a lot of money. As a practical matter, we're 146 00:09:51,400 --> 00:09:54,000 Speaker 1: gonna have to reconfigure a lot of schools. Where is 147 00:09:54,040 --> 00:09:56,040 Speaker 1: that money going to come from. Mitch McConnell says he 148 00:09:56,080 --> 00:09:58,560 Speaker 1: actually might be willing to put up some money for that. 149 00:09:58,640 --> 00:10:01,040 Speaker 1: Can you come to terms on that? At East Well? 150 00:10:01,080 --> 00:10:04,760 Speaker 1: In the the Heroes Act, we have a hundred billion dollars 151 00:10:05,040 --> 00:10:10,240 Speaker 1: education stabilization funds specifically for the coronavirus, much of it 152 00:10:10,320 --> 00:10:13,640 Speaker 1: for elementary for K through twelve, and then some of 153 00:10:13,640 --> 00:10:16,680 Speaker 1: it for higher education. Because if you're going to go 154 00:10:16,760 --> 00:10:20,720 Speaker 1: to school again, we want people all the testing, tracing, etcetera. 155 00:10:20,960 --> 00:10:23,760 Speaker 1: But you have to have the the distancing and if 156 00:10:23,760 --> 00:10:26,360 Speaker 1: you're going to be distant six ft apart, which you must, 157 00:10:26,760 --> 00:10:28,800 Speaker 1: then you need more teaching, You need more space, You 158 00:10:28,840 --> 00:10:32,720 Speaker 1: need more teachers. Then you need attention to the ventilation system. 159 00:10:33,200 --> 00:10:36,320 Speaker 1: Uh in the in the schools as well. As Uh 160 00:10:36,440 --> 00:10:41,120 Speaker 1: testing for not only teachers, but custodians and others. And 161 00:10:41,200 --> 00:10:44,559 Speaker 1: so instead of the President threatening to withhold money from 162 00:10:45,000 --> 00:10:47,960 Speaker 1: schools that are open, he should be granting money to 163 00:10:48,040 --> 00:10:51,960 Speaker 1: schools so that they can open. Our federal shaffs of 164 00:10:52,200 --> 00:10:55,920 Speaker 1: education is very small, less than ten eight points something percent, 165 00:10:56,040 --> 00:10:59,000 Speaker 1: less than ten percent. Most of that money is funded 166 00:10:59,000 --> 00:11:01,800 Speaker 1: by state and local government, and that's why we have 167 00:11:01,920 --> 00:11:04,960 Speaker 1: in the Heroes Act, the state and local government under 168 00:11:05,040 --> 00:11:08,880 Speaker 1: our Heroes almost a trillion dollars so that state and 169 00:11:08,880 --> 00:11:13,199 Speaker 1: local government can recover from the the outlays that they 170 00:11:13,240 --> 00:11:16,520 Speaker 1: have made for the coronavirus to address it, as well 171 00:11:16,559 --> 00:11:20,240 Speaker 1: as the revenue lost because of the coronavirus. So all 172 00:11:20,280 --> 00:11:25,280 Speaker 1: of that state and locals were of our education funds 173 00:11:25,600 --> 00:11:28,240 Speaker 1: come from. So again it's a lot of money, but 174 00:11:28,320 --> 00:11:31,040 Speaker 1: it's it's a small price to pay for the lives 175 00:11:31,040 --> 00:11:35,319 Speaker 1: and livelihood of our children and the need for them 176 00:11:35,360 --> 00:11:37,600 Speaker 1: to go back to school in a very safe way. 177 00:11:38,080 --> 00:11:42,120 Speaker 1: There is a path. As for directions, Mr President Uh, 178 00:11:42,320 --> 00:11:45,600 Speaker 1: the scientists can give you some good guidance in this regard. 179 00:11:45,840 --> 00:11:48,920 Speaker 1: But in the Heroes that we anticipated this was two 180 00:11:48,960 --> 00:11:51,800 Speaker 1: months ago. Two months ago we passed the heroes at 181 00:11:52,040 --> 00:11:56,360 Speaker 1: with all of those provisions in it, about testing, about 182 00:11:56,480 --> 00:12:01,400 Speaker 1: supporting state and local government, about the state the Education 183 00:12:01,520 --> 00:12:05,319 Speaker 1: Stabilization Fund, and other provisions as well. Uh and and 184 00:12:05,480 --> 00:12:09,360 Speaker 1: since that time, fifty thousand more people have died, many 185 00:12:09,400 --> 00:12:13,160 Speaker 1: many more people have become infected, so many more people 186 00:12:13,200 --> 00:12:16,040 Speaker 1: have become unemployed. As you say, Madam Speaker, has been 187 00:12:16,040 --> 00:12:19,040 Speaker 1: two months now since the House passed the Hero's Bill, 188 00:12:19,160 --> 00:12:21,960 Speaker 1: and that is sort of the fourth wave of the stimulus. 189 00:12:22,400 --> 00:12:25,280 Speaker 1: We haven't had any response out of the Senate really effectively. 190 00:12:25,640 --> 00:12:27,400 Speaker 1: We hear Mr McConell say he's going to come up 191 00:12:27,440 --> 00:12:29,520 Speaker 1: forward with something next week. What is it gonna take 192 00:12:29,880 --> 00:12:32,959 Speaker 1: to get the two sides together to get something done? 193 00:12:33,000 --> 00:12:35,240 Speaker 1: Because you have the school situation coming up soon. You 194 00:12:35,280 --> 00:12:37,560 Speaker 1: also have unemployment insurance, which we're really coming up with 195 00:12:37,720 --> 00:12:40,520 Speaker 1: in another couple of weeks, another couple of weeks that 196 00:12:40,559 --> 00:12:43,360 Speaker 1: will expire. I have no doubt that they will come around. 197 00:12:43,400 --> 00:12:45,800 Speaker 1: At the beginning, he said, no, we spent enough money. 198 00:12:46,200 --> 00:12:49,360 Speaker 1: Now they're at one point three trillion. That's not enough. 199 00:12:50,160 --> 00:12:53,440 Speaker 1: We have three point four trillion. As you know, the 200 00:12:53,520 --> 00:12:56,360 Speaker 1: Fed has spent a good deal of money making sure 201 00:12:56,400 --> 00:13:00,600 Speaker 1: the stock market is Okay, one way or another, trillions 202 00:13:00,600 --> 00:13:03,520 Speaker 1: of dollars actually, and we think if we can bolster 203 00:13:03,600 --> 00:13:06,040 Speaker 1: the stock market that way, we can, and it's a 204 00:13:06,080 --> 00:13:08,880 Speaker 1: good thing. It's a good thing that we should be 205 00:13:08,920 --> 00:13:14,120 Speaker 1: able to bolster. Uh, the middle class are working families again, 206 00:13:14,320 --> 00:13:17,080 Speaker 1: especially when it comes to spending money on education. You know, 207 00:13:17,520 --> 00:13:21,040 Speaker 1: education brings more money to the treasury than any other 208 00:13:21,160 --> 00:13:24,040 Speaker 1: dollar that you can spend. And a great deal of 209 00:13:24,080 --> 00:13:27,160 Speaker 1: what we have in the Hero's Act is absolutely essential, 210 00:13:27,240 --> 00:13:30,240 Speaker 1: like direct payments to people, unemployment insurance, and the rest, 211 00:13:30,400 --> 00:13:33,360 Speaker 1: because if we don't do that, the recession will only 212 00:13:33,400 --> 00:13:38,120 Speaker 1: get worse, the virus will even spread further, and the 213 00:13:38,800 --> 00:13:43,520 Speaker 1: just the happiness, the suffering of the American people will intensify. 214 00:13:43,640 --> 00:13:45,839 Speaker 1: We can get this done. The scientists have shown us 215 00:13:45,840 --> 00:13:48,720 Speaker 1: the way. We need the equipment to do it. That 216 00:13:48,840 --> 00:13:52,000 Speaker 1: was Speaker of the House Nancy Pelosi coming up. He 217 00:13:52,160 --> 00:13:55,079 Speaker 1: set the standard for running a major industrial company through 218 00:13:55,080 --> 00:13:58,240 Speaker 1: the last economic downturn, and Honeywell came out the other 219 00:13:58,280 --> 00:14:01,640 Speaker 1: side stronger than it went in. And the CEO who 220 00:14:01,679 --> 00:14:04,480 Speaker 1: got it there, Dave Cody, is here with his leadership 221 00:14:04,480 --> 00:14:08,080 Speaker 1: playbook through good times and bad That's next down Wall 222 00:14:08,080 --> 00:14:15,680 Speaker 1: Street Week on Bloomberg. This is Bloomberg Wall Street Week 223 00:14:15,880 --> 00:14:20,120 Speaker 1: with David Weston from Bloomberg Radio. Major industrial companies face 224 00:14:20,160 --> 00:14:23,000 Speaker 1: a set of challenges in this COVID nineteen world. But 225 00:14:23,160 --> 00:14:25,440 Speaker 1: Dave Cody had his own set of problems after he 226 00:14:25,440 --> 00:14:28,320 Speaker 1: took over Honeywell and then faced the Great financial Crisis 227 00:14:28,360 --> 00:14:30,800 Speaker 1: of two eight two thousand nine, and he showed how 228 00:14:30,840 --> 00:14:33,560 Speaker 1: you overcome those problems, and he's written about it in 229 00:14:33,600 --> 00:14:37,440 Speaker 1: his new book Wing Now, Winning Later. This recession is 230 00:14:37,480 --> 00:14:40,920 Speaker 1: a little different than say, others in the past because 231 00:14:40,960 --> 00:14:43,640 Speaker 1: of the health issue, so that of course has to 232 00:14:43,680 --> 00:14:47,480 Speaker 1: come first. That being said, all recessions are the same 233 00:14:47,880 --> 00:14:52,000 Speaker 1: in that they're all painful and unpleasant. They just are. 234 00:14:52,120 --> 00:14:54,600 Speaker 1: And that's why I used to say, that's why they 235 00:14:54,600 --> 00:14:56,960 Speaker 1: call it a recession, and they don't call it a pie. 236 00:14:57,680 --> 00:15:00,840 Speaker 1: That being said, there's things that I think are important 237 00:15:00,880 --> 00:15:03,240 Speaker 1: to think about in any recession. If you're a leader. 238 00:15:03,760 --> 00:15:07,480 Speaker 1: The first one is not to panic. And it's a 239 00:15:07,600 --> 00:15:10,400 Speaker 1: very easy thing to do when everybody around you no offense, 240 00:15:10,440 --> 00:15:13,800 Speaker 1: but the media, the people that you work with are 241 00:15:13,800 --> 00:15:17,480 Speaker 1: all panicking over it talking about it. Don't panic yourself. 242 00:15:17,600 --> 00:15:21,480 Speaker 1: Try to keep a levelhead. Second one be able to 243 00:15:21,560 --> 00:15:25,160 Speaker 1: still think independently, And I'm fond of saying that the 244 00:15:25,160 --> 00:15:28,760 Speaker 1: ability to think independently is a lot more rare than 245 00:15:28,800 --> 00:15:31,600 Speaker 1: being smart. And there's a lot of smart people who 246 00:15:31,600 --> 00:15:33,240 Speaker 1: can tell you why things are the way they are, 247 00:15:33,360 --> 00:15:37,040 Speaker 1: but focus on looking at it and making an independent decision. 248 00:15:37,360 --> 00:15:41,520 Speaker 1: The third one, don't forget about your customer, because when 249 00:15:41,560 --> 00:15:43,840 Speaker 1: it comes to both surviving the short term and the 250 00:15:43,840 --> 00:15:47,080 Speaker 1: long term, customers will remember, so make sure you stay 251 00:15:47,080 --> 00:15:50,920 Speaker 1: focused on them. The fourth one would be, even in 252 00:15:50,960 --> 00:15:55,560 Speaker 1: the middle of a recession, be thinking about planning for recovery, 253 00:15:55,840 --> 00:15:59,360 Speaker 1: including all those long term projects that you had going 254 00:15:59,360 --> 00:16:03,640 Speaker 1: that we're gonna support, uh support customers. Now. It's easier 255 00:16:03,680 --> 00:16:06,000 Speaker 1: said than done, is I'm fond of saying, when you're 256 00:16:06,080 --> 00:16:08,520 Speaker 1: up to your button alligators, it's tough to remember the 257 00:16:08,520 --> 00:16:12,080 Speaker 1: original goal was to drain the swamp. That being said, 258 00:16:12,640 --> 00:16:14,760 Speaker 1: the swamp is still there and it's still gonna be 259 00:16:14,800 --> 00:16:17,960 Speaker 1: there when you go into the recovery. So as a leader, 260 00:16:18,280 --> 00:16:20,120 Speaker 1: even if you've got a hundred twenty hours worth of 261 00:16:20,160 --> 00:16:23,000 Speaker 1: work and eighty hours to do it, you have to 262 00:16:23,080 --> 00:16:24,840 Speaker 1: find a way to take an hour or two to 263 00:16:24,880 --> 00:16:27,880 Speaker 1: get your head above the fray, look around and make 264 00:16:27,920 --> 00:16:30,840 Speaker 1: sure you're still doing the right things to position yourself 265 00:16:30,840 --> 00:16:33,560 Speaker 1: for recover. So Dave, let me pick up on one 266 00:16:33,600 --> 00:16:36,600 Speaker 1: of those particularly uh, and that is remember your customer. 267 00:16:36,600 --> 00:16:39,240 Speaker 1: Focus on your customer, because even as big industrial companies 268 00:16:39,320 --> 00:16:41,520 Speaker 1: right now are having their own problems, their customers are 269 00:16:41,560 --> 00:16:43,920 Speaker 1: having problems as well. You tell a great story in 270 00:16:44,000 --> 00:16:45,840 Speaker 1: your book about having been told that you were in 271 00:16:45,880 --> 00:16:47,840 Speaker 1: good terms with one of the Honeywell customers and then 272 00:16:47,840 --> 00:16:49,800 Speaker 1: when you actually asked them, you found out they were 273 00:16:49,800 --> 00:16:53,480 Speaker 1: about to sue you. Yeah, that was quite a shock. 274 00:16:54,440 --> 00:16:56,840 Speaker 1: I was very big on doing a great job on 275 00:16:56,920 --> 00:17:00,480 Speaker 1: customer service, and we improved a lot, and we still 276 00:17:00,520 --> 00:17:02,600 Speaker 1: have ways to go. It's it's one of those things 277 00:17:02,600 --> 00:17:05,600 Speaker 1: you're never done with. But I've been assured by all 278 00:17:05,640 --> 00:17:08,560 Speaker 1: the businesses that we were doing better and everything was fine. 279 00:17:08,600 --> 00:17:11,320 Speaker 1: And we were at the one of the air shows 280 00:17:11,359 --> 00:17:14,119 Speaker 1: and we went to visit a customer because I always 281 00:17:14,119 --> 00:17:16,520 Speaker 1: like to hear it directly, and it was me, the 282 00:17:16,560 --> 00:17:20,399 Speaker 1: business president, the sales manager, and the product manager. And 283 00:17:20,440 --> 00:17:22,720 Speaker 1: the question that I always would start with any customer 284 00:17:22,960 --> 00:17:25,560 Speaker 1: was and I was there to talk about some new stuff, 285 00:17:25,840 --> 00:17:28,479 Speaker 1: but I always start with so how are we doing 286 00:17:28,720 --> 00:17:32,640 Speaker 1: with what you've already given us? And the customer looked 287 00:17:32,680 --> 00:17:34,880 Speaker 1: at me and said, well, I'm glad you stopped buying 288 00:17:34,920 --> 00:17:38,240 Speaker 1: because we've just about finalized the lawsuit that we're planning 289 00:17:38,240 --> 00:17:39,960 Speaker 1: on filing against you, and it should be done in 290 00:17:40,000 --> 00:17:41,879 Speaker 1: about two weeks, and we just wanted you to know. 291 00:17:43,119 --> 00:17:46,880 Speaker 1: And I was incredulous. I looked at the business president, 292 00:17:46,960 --> 00:17:50,640 Speaker 1: the product manager, the sales manager. None of them were 293 00:17:50,680 --> 00:17:53,800 Speaker 1: aware of this. And then I just started to do 294 00:17:53,880 --> 00:17:57,360 Speaker 1: the the the kind of thing with the customers, say 295 00:17:57,440 --> 00:18:00,959 Speaker 1: please give me some time and let me figure this 296 00:18:01,040 --> 00:18:04,560 Speaker 1: thing out so that I make sure we perform. Well, 297 00:18:04,920 --> 00:18:07,399 Speaker 1: thank god we were able to perform hold on to 298 00:18:07,480 --> 00:18:10,840 Speaker 1: the customer, avoid the lawsuit. But A sure pointed out 299 00:18:10,880 --> 00:18:14,040 Speaker 1: how important it is, whether it's good times or tough times, 300 00:18:14,480 --> 00:18:17,640 Speaker 1: stay close to your customer, make sure they're happy. So, Dave, 301 00:18:17,760 --> 00:18:20,200 Speaker 1: one of the questions right now, that's really prevalent given 302 00:18:20,240 --> 00:18:22,240 Speaker 1: what's going on, not just with the pandemic, what with 303 00:18:22,400 --> 00:18:25,480 Speaker 1: China and trade of China. Our supply lines, supply line 304 00:18:25,520 --> 00:18:28,480 Speaker 1: soon to be getting reconfigured. You had an awful lot 305 00:18:28,480 --> 00:18:31,280 Speaker 1: of business, for example, in China. You really developed over 306 00:18:31,320 --> 00:18:33,720 Speaker 1: there in China at Honeywell, what do you think about 307 00:18:33,720 --> 00:18:35,640 Speaker 1: the situation with supply lines right now? Are we gonna 308 00:18:35,680 --> 00:18:38,680 Speaker 1: fundamentally change those are gonna be much less dependent, for example, 309 00:18:38,680 --> 00:18:42,399 Speaker 1: on China going forward. Well, I'd say there's an important 310 00:18:42,440 --> 00:18:45,320 Speaker 1: issue that needs to be addressed, and we have to 311 00:18:45,359 --> 00:18:50,320 Speaker 1: be careful that this doesn't turn into this xenophobic impulse 312 00:18:50,960 --> 00:18:54,120 Speaker 1: in every country everywhere, and that will be extremely damaging. 313 00:18:54,960 --> 00:18:57,959 Speaker 1: What we have learned about supply change is that they 314 00:18:57,960 --> 00:19:02,320 Speaker 1: were more fragile than we ever expected, totally independent of China, 315 00:19:02,680 --> 00:19:06,879 Speaker 1: just overall more fragile. If you have a single source 316 00:19:06,960 --> 00:19:10,680 Speaker 1: of supply, whether it's an internal or external component, there's 317 00:19:10,760 --> 00:19:13,680 Speaker 1: only one country it comes out of, and that country 318 00:19:13,760 --> 00:19:16,919 Speaker 1: has an issue, you have a fragile supply line. So 319 00:19:17,040 --> 00:19:20,639 Speaker 1: there's a revisit that's gonna have to go for everybody's 320 00:19:20,640 --> 00:19:23,239 Speaker 1: supply chain to say, is it can I make it 321 00:19:23,280 --> 00:19:26,240 Speaker 1: more robust so in the event of any kind of disaster, 322 00:19:26,400 --> 00:19:29,800 Speaker 1: pandemic or otherwise, I have an alternate source of supply 323 00:19:29,920 --> 00:19:33,719 Speaker 1: and I can recover. The thing that worries me is 324 00:19:33,800 --> 00:19:38,640 Speaker 1: that that legitimate issue can be pushed into Everything has 325 00:19:38,720 --> 00:19:41,840 Speaker 1: to be done domestically, whatever country you're in you have 326 00:19:41,960 --> 00:19:44,159 Speaker 1: to be able to do it there. That would be 327 00:19:44,200 --> 00:19:47,800 Speaker 1: a mistake because we don't then take advantage of each 328 00:19:47,800 --> 00:19:52,560 Speaker 1: other's countries strengths and uh and weaknesses. That was Dave Cody, 329 00:19:52,640 --> 00:19:56,879 Speaker 1: executive chairman of Vertive Holdings and former CEO of Honeywell. 330 00:19:57,160 --> 00:20:01,159 Speaker 1: Coming up our virtual roundtable with special country Larry Summers 331 00:20:01,200 --> 00:20:04,280 Speaker 1: and Katherine Baker of the University of Chicago as we 332 00:20:04,320 --> 00:20:06,960 Speaker 1: sort out how to manage a public health crisis and 333 00:20:07,080 --> 00:20:10,560 Speaker 1: an economic crisis at the same time. That's next on 334 00:20:10,600 --> 00:20:18,760 Speaker 1: Wall Street Week on Bloomberg. This is Bloomberg Wall Street 335 00:20:18,800 --> 00:20:22,800 Speaker 1: Week with David Weston from Bloomberg Radio. It's time now 336 00:20:22,920 --> 00:20:26,200 Speaker 1: for our virtual roundtable. This new Coronavirus World, and we 337 00:20:26,320 --> 00:20:29,359 Speaker 1: welcome today both Larry Summers are very special contributor for 338 00:20:29,359 --> 00:20:32,200 Speaker 1: Wall Street Week of Harvard of course, and also Katherine Baker, 339 00:20:32,240 --> 00:20:33,800 Speaker 1: who is the Dean of the Harris School of Public 340 00:20:33,840 --> 00:20:36,560 Speaker 1: Policy at the University of Chicago. So Katherine, thank you 341 00:20:36,600 --> 00:20:38,320 Speaker 1: for joining us here on Wall Street Week. I want 342 00:20:38,320 --> 00:20:40,840 Speaker 1: to take advantage of your expertise in healthcare. It's such 343 00:20:40,840 --> 00:20:43,119 Speaker 1: a big issue right now as we look at places 344 00:20:43,160 --> 00:20:46,600 Speaker 1: like southern Florida as Texas, even California. Is this thing 345 00:20:46,600 --> 00:20:48,760 Speaker 1: out of control? I worry that it is, and the 346 00:20:48,800 --> 00:20:51,800 Speaker 1: spike that we're seeing in cases really interferes with our 347 00:20:51,800 --> 00:20:55,280 Speaker 1: ability to resume economic activity as well as posing a 348 00:20:55,320 --> 00:20:59,280 Speaker 1: potentially tragic health consequence. So, Larry, and fairness to you, 349 00:20:59,280 --> 00:21:01,320 Speaker 1: you've been worn about this since the very beginning of 350 00:21:01,320 --> 00:21:03,640 Speaker 1: Wall Street Week, pretty much saying this is worse than 351 00:21:03,680 --> 00:21:06,119 Speaker 1: we think, and we gotta really clamp down, and is 352 00:21:06,119 --> 00:21:07,600 Speaker 1: there anything at this point we can do to get 353 00:21:07,640 --> 00:21:14,159 Speaker 1: control of it? Again? Look, David, this was predictable and predicted. 354 00:21:14,960 --> 00:21:19,760 Speaker 1: We were running with our zero a contagion factor of 355 00:21:19,800 --> 00:21:23,399 Speaker 1: two and a half in normal times. When we did lockdown, 356 00:21:23,520 --> 00:21:27,200 Speaker 1: we brought it down to perhaps point eight. That meant 357 00:21:27,280 --> 00:21:29,960 Speaker 1: we could only bring it a very small part of 358 00:21:29,960 --> 00:21:36,199 Speaker 1: the way back without having the virus explode unless we 359 00:21:36,320 --> 00:21:42,879 Speaker 1: had a comprehensive testing, contact tracing, and masking regime. We 360 00:21:42,920 --> 00:21:47,280 Speaker 1: had none of those things because of a generalized abdication 361 00:21:47,400 --> 00:21:52,680 Speaker 1: of public responsibility. And this is not actually rocket science. 362 00:21:53,359 --> 00:21:57,560 Speaker 1: If we test enough people, if if people are careful 363 00:21:57,680 --> 00:22:02,439 Speaker 1: enough about masking, if we contact trace after we test, 364 00:22:02,720 --> 00:22:05,840 Speaker 1: after we brought the thing down to a small scale, 365 00:22:06,600 --> 00:22:10,400 Speaker 1: small scale whack them all works large scale whack them 366 00:22:10,440 --> 00:22:15,119 Speaker 1: all doesn't. It's not a question of science, it's a 367 00:22:15,200 --> 00:22:19,160 Speaker 1: question of political will. But I'd be interested in getting 368 00:22:19,240 --> 00:22:22,480 Speaker 1: Catherine's view on something that I haven't quite been able 369 00:22:22,520 --> 00:22:27,680 Speaker 1: to figure out. Looking at the press, which is out 370 00:22:27,720 --> 00:22:31,280 Speaker 1: of control is a kind of general set of words. 371 00:22:32,040 --> 00:22:35,280 Speaker 1: But if you had to say, Catherine, if a place 372 00:22:35,359 --> 00:22:39,000 Speaker 1: like Germany things are under control, called out a one, 373 00:22:39,920 --> 00:22:44,640 Speaker 1: and New York City in April um where the whole 374 00:22:44,640 --> 00:22:49,760 Speaker 1: thing was completely exploding, call out a hundred. Where is 375 00:22:49,840 --> 00:22:55,080 Speaker 1: it you think Texas, Florida, and California are And where 376 00:22:55,119 --> 00:22:58,280 Speaker 1: do you think it will peak there? Are we looking 377 00:22:58,320 --> 00:23:01,080 Speaker 1: at a reprise of New York? Or are we looking 378 00:23:01,200 --> 00:23:05,760 Speaker 1: at something terrible but not that terrible? I certainly hope 379 00:23:05,800 --> 00:23:07,600 Speaker 1: that it won't be that terrible, And there are a 380 00:23:07,600 --> 00:23:11,119 Speaker 1: few things that way potentially on the side of it 381 00:23:11,160 --> 00:23:13,520 Speaker 1: being a little less out of control. And that's that 382 00:23:13,560 --> 00:23:16,480 Speaker 1: we know a bit better about how the disease spreads. 383 00:23:16,640 --> 00:23:20,080 Speaker 1: We have some treatment options available that have been developed 384 00:23:20,080 --> 00:23:22,800 Speaker 1: through understanding what's worked in the past and what hasn't. 385 00:23:22,880 --> 00:23:25,480 Speaker 1: We don't have the magic bullet that we're hoping for yet, 386 00:23:25,760 --> 00:23:28,200 Speaker 1: we don't have a vaccine, but I think that the 387 00:23:28,200 --> 00:23:31,560 Speaker 1: physician and healthcare provider workforce knows a bit better how 388 00:23:31,560 --> 00:23:33,879 Speaker 1: to manage the conditions to keep people out of I 389 00:23:34,040 --> 00:23:36,719 Speaker 1: s U S. And we know how important it is 390 00:23:36,760 --> 00:23:39,960 Speaker 1: to be wearing masks, to be keeping physical distance, to 391 00:23:40,080 --> 00:23:43,040 Speaker 1: be lowering density. So it does not need to be 392 00:23:43,240 --> 00:23:46,000 Speaker 1: as bad as New York. The question of whether it 393 00:23:46,040 --> 00:23:48,359 Speaker 1: will be or not depends on the political will that 394 00:23:48,400 --> 00:23:52,280 Speaker 1: you've identified, and that the public's ability to comply with 395 00:23:52,359 --> 00:23:55,879 Speaker 1: best practices consistently. And you raised a really key point 396 00:23:55,960 --> 00:23:59,600 Speaker 1: that keeping the levels lower is really important, not just 397 00:23:59,760 --> 00:24:03,359 Speaker 1: to prevent unnecessary deaths and sickness, but also because it 398 00:24:03,359 --> 00:24:05,880 Speaker 1: opens up tools we wouldn't otherwise have. You can't do 399 00:24:06,040 --> 00:24:10,280 Speaker 1: contact tracing when diseases spreading like wildfire, but when the 400 00:24:10,359 --> 00:24:13,480 Speaker 1: numbers are lower, then you can actually do an even 401 00:24:13,520 --> 00:24:19,440 Speaker 1: better job at isolating cases, tracing contacts, enforcing quarantines, and isolation. 402 00:24:19,800 --> 00:24:22,840 Speaker 1: So there's a compounding effects when things start to get 403 00:24:22,840 --> 00:24:27,119 Speaker 1: out of control that you lose valuable tools gathering some 404 00:24:27,359 --> 00:24:30,399 Speaker 1: I've wandered. You and I are both in uh the 405 00:24:30,600 --> 00:24:36,960 Speaker 1: university sector. A college dorm or a set of college 406 00:24:37,000 --> 00:24:40,840 Speaker 1: dorms are a lot like a cruise ship. People are 407 00:24:40,920 --> 00:24:46,560 Speaker 1: engaged in intense social activity, they're close together, they sometimes 408 00:24:46,720 --> 00:24:50,080 Speaker 1: end up in places they weren't planning to end up. 409 00:24:50,560 --> 00:24:55,639 Speaker 1: Everybody's trying to have a very good time. I worry 410 00:24:55,680 --> 00:25:02,240 Speaker 1: that we are thousands of cruise ships in September, and 411 00:25:02,760 --> 00:25:05,560 Speaker 1: people on cruise ships probably aren't that great at obeying 412 00:25:05,600 --> 00:25:08,760 Speaker 1: the rules and doing what they should, And my experience 413 00:25:08,840 --> 00:25:11,400 Speaker 1: with nineteen year old suggests they're not so great at 414 00:25:11,440 --> 00:25:17,439 Speaker 1: it either. Are you comfortable with the consequences of the 415 00:25:17,720 --> 00:25:21,520 Speaker 1: degree of resumption of college that we're going to have. 416 00:25:22,040 --> 00:25:24,760 Speaker 1: Certainly there's a lot of variations school to school. I 417 00:25:24,800 --> 00:25:28,040 Speaker 1: know both of our universities are taking very seriously the 418 00:25:28,119 --> 00:25:32,119 Speaker 1: protection of our students, staff faculty communities, and that means 419 00:25:32,280 --> 00:25:36,320 Speaker 1: much less dense population than you would ordinarily have. The 420 00:25:36,400 --> 00:25:40,080 Speaker 1: real question, I think is making sure that any outbreaks 421 00:25:40,119 --> 00:25:45,719 Speaker 1: among the student body don't propagate to the staff, faculty community, 422 00:25:45,800 --> 00:25:49,320 Speaker 1: neighborhood where they're going to be higher vulnerabilities in the population. 423 00:25:49,800 --> 00:25:54,560 Speaker 1: People in that prime age college age group are less vulnerable, 424 00:25:54,600 --> 00:25:57,760 Speaker 1: although not invulnerable as though as many of them may think, 425 00:25:58,080 --> 00:26:01,600 Speaker 1: but they have much lower mortality and morbidity rates and 426 00:26:01,680 --> 00:26:06,040 Speaker 1: making sure that any outbreaks there are caught, early, traced, 427 00:26:06,200 --> 00:26:09,920 Speaker 1: contained will protect the surrounding communities, and that's what I 428 00:26:09,920 --> 00:26:13,280 Speaker 1: would worry about the most in terms of things like mortality, 429 00:26:13,280 --> 00:26:15,439 Speaker 1: although of course we're very worried about the health of 430 00:26:15,520 --> 00:26:18,560 Speaker 1: everyone in our community. So I think there's good cause 431 00:26:18,640 --> 00:26:22,119 Speaker 1: to be nervous and to be doing an aggressive job 432 00:26:22,200 --> 00:26:26,520 Speaker 1: of tracking, tracing and isolating. My view for what it's 433 00:26:26,560 --> 00:26:32,080 Speaker 1: worth is that college administrators can dedensify all they want, 434 00:26:32,720 --> 00:26:35,240 Speaker 1: but nineteen and twenty year olds will be prone to 435 00:26:35,320 --> 00:26:40,480 Speaker 1: densify themselves, um, whatever the rules, whatever the rules are, 436 00:26:40,560 --> 00:26:43,800 Speaker 1: and the rules won't be followed. I think the question is, 437 00:26:43,920 --> 00:26:48,600 Speaker 1: that's why you can make every sorry. That's why the 438 00:26:48,640 --> 00:26:53,840 Speaker 1: tracking and tracing is very important, exactly. I don't believe 439 00:26:53,920 --> 00:26:58,000 Speaker 1: they're going to keep things safe by dedentsifying. It may 440 00:26:58,040 --> 00:27:01,640 Speaker 1: be that by test thing everybody every three or four 441 00:27:01,720 --> 00:27:08,000 Speaker 1: days um and then isolating people who test positive, it 442 00:27:08,119 --> 00:27:11,120 Speaker 1: may be that that will work to keep things under control. 443 00:27:11,160 --> 00:27:14,440 Speaker 1: And I think that's a real possibility, and I think 444 00:27:14,600 --> 00:27:17,840 Speaker 1: I hope that that's what they're banking on, really, rather 445 00:27:17,960 --> 00:27:23,000 Speaker 1: than banking on the ability to maintain discipline about people 446 00:27:23,080 --> 00:27:26,280 Speaker 1: visiting other suits, people visiting students visiting other students in 447 00:27:26,320 --> 00:27:30,480 Speaker 1: their rooms, and students not getting into crowded spaces to 448 00:27:30,560 --> 00:27:35,280 Speaker 1: have parties, or students reliably wearing masks, because I don't 449 00:27:35,280 --> 00:27:37,600 Speaker 1: think any of that is very likely to happen. Larry. 450 00:27:37,600 --> 00:27:39,040 Speaker 1: One of the things that struck me this week is 451 00:27:39,080 --> 00:27:42,320 Speaker 1: that the HHS Department of Health and Human Services order 452 00:27:42,400 --> 00:27:44,280 Speaker 1: the CDC not to be collecting the data from the 453 00:27:44,320 --> 00:27:46,920 Speaker 1: hospitals anymore. That data has to go directly to HHS, 454 00:27:46,960 --> 00:27:49,280 Speaker 1: and as a result, at least thus far, some websites 455 00:27:49,280 --> 00:27:51,720 Speaker 1: have shut down. What does that tell us, even beyond 456 00:27:51,720 --> 00:27:54,919 Speaker 1: the coronavirus more generally about the government response to this pandemic. 457 00:27:55,280 --> 00:28:01,480 Speaker 1: We're seeing the kind of state failure basic breakdown of 458 00:28:01,560 --> 00:28:07,760 Speaker 1: public functioning that scholars used to use in analyzing developing 459 00:28:07,840 --> 00:28:11,520 Speaker 1: countries and explaining why they were poor and why they 460 00:28:11,560 --> 00:28:14,920 Speaker 1: stayed poor, and why they weren't able to push their 461 00:28:14,920 --> 00:28:19,080 Speaker 1: economies forward and raise the life expectancy of their people. 462 00:28:19,920 --> 00:28:26,600 Speaker 1: Analyzes that people thought of as relevant to understanding failed 463 00:28:26,680 --> 00:28:30,639 Speaker 1: governance in some of the poorest countries in the world 464 00:28:31,240 --> 00:28:39,600 Speaker 1: now look relevant in uh the United States. A government 465 00:28:40,400 --> 00:28:46,960 Speaker 1: that is legitimate is central to a healthy society, and 466 00:28:47,040 --> 00:28:50,600 Speaker 1: for a government to be perceived as legitimate, it has 467 00:28:50,640 --> 00:28:55,600 Speaker 1: to be minimally competent in dealing with threats to its citizenry, 468 00:28:55,840 --> 00:29:01,320 Speaker 1: and hours of late has not been a shutting down. 469 00:29:01,480 --> 00:29:05,440 Speaker 1: The flow of information to an institution like the Center 470 00:29:05,480 --> 00:29:10,600 Speaker 1: for Disease Control is of a piece, with withdrawing from 471 00:29:10,680 --> 00:29:15,680 Speaker 1: the who of a piece, with saying that masks are 472 00:29:15,720 --> 00:29:20,040 Speaker 1: a terrible thing, of a piece, with recommending that people 473 00:29:20,080 --> 00:29:26,760 Speaker 1: inject themselves with this infectant. It is the stuff that 474 00:29:26,840 --> 00:29:31,479 Speaker 1: one associates with the poorest and least functional societies in 475 00:29:31,880 --> 00:29:40,040 Speaker 1: the world, not the world's reigning UH superpower. And more 476 00:29:40,080 --> 00:29:46,640 Speaker 1: than any specific tactical UH decision, this breakdown in the 477 00:29:46,680 --> 00:29:51,959 Speaker 1: functioning of federal governance UM is I think what is 478 00:29:52,200 --> 00:29:56,560 Speaker 1: most troubling to me as I think about the country's future. 479 00:29:57,160 --> 00:30:00,800 Speaker 1: The president has been beyond bad, and many of the 480 00:30:00,880 --> 00:30:04,239 Speaker 1: people he is appointed have been beyond bad. But this 481 00:30:04,320 --> 00:30:09,440 Speaker 1: has been coming for a long time, in the unwillingness 482 00:30:09,640 --> 00:30:17,440 Speaker 1: of our political leaders to adequately fund UH basic functions 483 00:30:17,600 --> 00:30:23,200 Speaker 1: of government. Why should it be that we're only able 484 00:30:23,200 --> 00:30:26,200 Speaker 1: to audit half as many tax returns of wealthy people 485 00:30:26,640 --> 00:30:31,280 Speaker 1: as we were UM a decade ago. Why should it 486 00:30:31,360 --> 00:30:34,080 Speaker 1: be that in the United States there are any bridges 487 00:30:34,600 --> 00:30:40,680 Speaker 1: that uh collapse. Why should it be that American children 488 00:30:41,640 --> 00:30:46,160 Speaker 1: lost i Q because they drank uh lead water with 489 00:30:47,240 --> 00:30:50,720 Speaker 1: lead in it, because that's what their government told them 490 00:30:51,120 --> 00:30:56,480 Speaker 1: uh to do. I think that beyond the ideological debates 491 00:30:56,520 --> 00:31:02,600 Speaker 1: about policy, central to the American project has to be 492 00:31:02,720 --> 00:31:06,600 Speaker 1: reviving the basic competence of our government. So many thanks 493 00:31:06,600 --> 00:31:08,240 Speaker 1: now that Katherine Baker. She is the dean of the 494 00:31:08,240 --> 00:31:10,800 Speaker 1: Harris School of Public Policy at the University of Chicago, 495 00:31:10,920 --> 00:31:12,959 Speaker 1: and Larry Summers for Harvard. He is our very special 496 00:31:12,960 --> 00:31:16,400 Speaker 1: contributor for Wall Street Week. And that does it for 497 00:31:16,480 --> 00:31:19,320 Speaker 1: this edition of Wall Street Week. I'm David Weston. This 498 00:31:19,640 --> 00:31:22,240 Speaker 1: is Bloomberg. See you next week.