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Speaker 1: This is Bloomberg Wall st Week. What's the state of

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Speaker 1: corporate governance? The deficit is a real issue. The US

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Speaker 1: economy continues to send mixed signals. The financial stories that

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Speaker 1: cheap our world fed action to con concerns over dollar

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Speaker 1: liquidity and encouraging China data. The five hundred wealthiest people

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Speaker 1: in the world. Through the eyes of the most influential

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Speaker 1: voices Larry Summers, the former Treasury Secretary, Starr CEO, Kevin

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Speaker 1: Johnson sec Chairman J Clayton. Bloomberg wool Street Week with

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Speaker 1: David Weston from Bloomberg Radio Markets struggled a price, political

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Speaker 1: risk of an election, a sick president, and stimulus that

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Speaker 1: never seems to come. Welcome to Bloomberg Wall Street Week.

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Speaker 1: I'm David Weston. It all began in with a backrob

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Speaker 1: That was the name of the original algorithm the Google founders,

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Speaker 1: Larry Page and Sergey Brin, developed first as PhD students

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Speaker 1: at Stanford University. Page had a vision to rank links

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Speaker 1: resulting from an Internet search by how often they were

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Speaker 1: linked by other pages. In paper, Page Brind made a

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Speaker 1: case against ad supported search engine, saying, in general it

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Speaker 1: could be argued from the consumer point of view that

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Speaker 1: the better the search engine is, the fewer advertisements will

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Speaker 1: be needed for the consumer to find what they want.

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Speaker 1: Google went public in two thousand four with evaluation of

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Speaker 1: twenty seven billion dollars and a perspectives that included the

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Speaker 1: company's declared code of conduct, don't be evil. By that time,

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Speaker 1: Eric Schmidt had been brought in as CEO, but Larry

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Speaker 1: Page and Sergey Brin still charted the company's course as

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Speaker 1: a tech giant. In two thousand five and two thousand

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Speaker 1: and six, the pair expanded Google's reach by acquiring Android

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Speaker 1: and YouTube. Larry Page officially took over a CEO once

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Speaker 1: again in two thousand eleven, but stepped aside just a

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Speaker 1: few years ago in two thousand fifteen, when the company

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Speaker 1: restructured itself as Alphabet. Alphabet is now an Internet search giant,

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Speaker 1: serving as the parent company of many businesses touching on

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Speaker 1: many parts of consumers daily lives. In a report targeting Alphabet, Apple, Amazon,

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Speaker 1: and Facebook, house panel seeks sweeping reforms to curb the

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Speaker 1: tech giant's power. Carlie Fiorina, former CEO Hewlett Packard, says

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Speaker 1: that the regulatory scrutiny is the new normal for Silicon Valley.

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Speaker 1: I think if you look at where innovation traditionally has

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Speaker 1: come from, it has come from the smaller startups. After all,

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Speaker 1: that's what Google wants was, That's what Amazon once was,

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Speaker 1: That's what Apple wants was, that's what all these companies

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Speaker 1: Facebook wants were. And it's also true that these huge

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Speaker 1: technology companies now have a great interest in leveraging others innovation,

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Speaker 1: but they do so by buying them up. That's what

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Speaker 1: they have done. And finally, I would say it is

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Speaker 1: undoubtedly true that these companies have a market power and

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Speaker 1: a power over consumers, not to mention consumer information. That's

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Speaker 1: really all the unprecedented, and so I think they can

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Speaker 1: Technology companies can no longer make a credible argument that

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Speaker 1: somehow they are in a different category, that if you

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Speaker 1: do anything to Internet based companies in terms of regulation

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Speaker 1: or oversight, that somehow you are going to curtail their growth.

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Speaker 1: I just don't think that argument rings true anymore. And

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Speaker 1: that's why I think strategically they need to think about

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Speaker 1: how to be a part of this conversation instead of

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Speaker 1: just saying no, no, there's nothing to see here, there's

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Speaker 1: nothing to do here. That's not going to fly Carlie.

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Speaker 1: You mentioned earlier the leadership of some of these companies.

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Speaker 1: Let's talk about leadership right now. How do you lead

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Speaker 1: a company that arguably is winning by too much. You

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Speaker 1: had a phenomenon with IBM, You could say that happened

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Speaker 1: with you could say it happened with Microsoft. What can

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Speaker 1: a leader do in that situation? Well, first, I think

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Speaker 1: I don't want to be too critical here, but I

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Speaker 1: do think that some of the leaders of some of

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Speaker 1: these companies have um damaged their case a bit by

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Speaker 1: being we now know less than forthcoming about what was

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Speaker 1: really going on. And so we've seen I think too

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Speaker 1: many instances where leaders have come before Capitol Hill, and

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Speaker 1: let's face it, that's not a pleasant experience for any CEO,

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Speaker 1: and CEOs get very outraged about the hypocrisy, all of

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Speaker 1: which is deserved. Nevertheless, when a CEO is found to

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Speaker 1: be less than forthcoming, that's not helpful to their cause.

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Speaker 1: So I think the most important thing for these tech

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Speaker 1: ceo s to do is to decide strategically that the

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Speaker 1: best course is not resistance at all costs, but instead

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Speaker 1: to try and be part of the solution here. You know,

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Speaker 1: I started my career out in telecommunications, and there was

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Speaker 1: a long period of time where A T and T

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Speaker 1: as the big power, resisted at all costs being part

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Speaker 1: of solution. That resistance cost them in the end. And

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Speaker 1: so I think these CEOs need to think through what

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Speaker 1: are they willing to live with? How can they influence

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Speaker 1: the legislative process here on both sides of the aisle

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Speaker 1: to come up with something that's gonna work. But just

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Speaker 1: leave us alone isn't politically feasible anymore, and I think

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Speaker 1: the economic arguments for just leave it alone, honestly, are

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Speaker 1: no longer completely credible. Just briefly here the conclusion, Carlie,

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Speaker 1: is it a plausible defense to say we've got to

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Speaker 1: re about China? Well, yes and no. I mean yes,

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Speaker 1: of course we do need to worry about China, and

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Speaker 1: that is why our approach to China must be consistent

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Speaker 1: and persistent and strategic. And that requires collaboration between government

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Speaker 1: and business, which hasn't always been in evidence over the

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Speaker 1: last twenty years. It also means that we need to

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Speaker 1: be consistent across administrations when we deal with China and

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Speaker 1: between parties, which we haven't always been. However, these tech

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Speaker 1: companies are winning globally. It's why the European Union has

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Speaker 1: taken some of them on, and so that argument is important,

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Speaker 1: but I don't think it will be successful in saying

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Speaker 1: just leave us along. That was Carly Fiorina, founder and

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Speaker 1: chair of Carly Fiorina Enterprises, coming up. The tech company

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Speaker 1: that's constantly evolving, IBM is taking another step forward becoming

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Speaker 1: a major cloud services provider. CEO Arvid Krishna says this

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Speaker 1: is just the beginning that's next on Wall Street Week

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Speaker 1: on Bloomberg. This is Bloomberg Wall Street Week with David

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Speaker 1: Weston from Bloomberg Radio. It's one hundred one year history.

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Speaker 1: IBM has reinvented itself to stay at the top of

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Speaker 1: its game. This week, the company did it again with

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Speaker 1: its announcement that it would be spinning off its infrastructure

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Speaker 1: services unit to focus more on cloud computing and artificial intelligence.

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Speaker 1: Arvin Krishna, who took over as CEO in April, has

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Speaker 1: said he will pursue growth relentlessly, and his services business

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Speaker 1: has been struggling during the pandemic. I asked him how

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Speaker 1: this shift fits in with his vision for IBM's future.

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Speaker 1: When I first became CEO, I talked about our commitment

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Speaker 1: to growth, and I talked about a maniacal focus on

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Speaker 1: hybrid cloud and AI. As we look at that market,

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Speaker 1: that's a trillion dollar addressable opportunity, and as we look

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Speaker 1: at our client buying behaviors, they are changing. How to

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Speaker 1: do application modernization and how to buy infrastructure modernization is separating.

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Speaker 1: So that says it behooves us to unlock growth by

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Speaker 1: creating two companies. One company focused on hybrid cloud and

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Speaker 1: AI and the other company focused unmanaged infrastructure services. So,

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Speaker 1: in the first company, the platform, the open hybrid cloud

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Speaker 1: platform that's based on red Hat technology, all of the

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Speaker 1: software that gives clients the capability to leverage that platform.

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Speaker 1: Then going from there into all the services they can

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Speaker 1: use to do their journey to cloud. You put all

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Speaker 1: that together, that's going to be IBM, together with the

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Speaker 1: infrastructure that they run their most mission critical services on,

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Speaker 1: and that company we believe will deliver mid single digit

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Speaker 1: growth in a sustainable way in the medium term. The

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Speaker 1: other company, we're calling it new code because we don't

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Speaker 1: have a name for it yet, is the managed infrastructure company.

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Speaker 1: On day one, twice the size of its nearest competitor

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Speaker 1: over four thousand clients in a hundred and fifteen countries

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Speaker 1: and counting really enables it with a investment grade balance

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Speaker 1: sheet to go out and take share and be on

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Speaker 1: an improved growth tragic tree. So David, really exciting to

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Speaker 1: be able to do this and yet again reinvent our

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Speaker 1: company for the future. So are when you talk about growth,

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Speaker 1: and you have consistently said that is the question of

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Speaker 1: growth for IBM. Compare those two companies. You said mid

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Speaker 1: single digits for the one. Are you expecting much higher

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Speaker 1: for the hybrid cloud and AI company to do? My

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Speaker 1: aspiration and my goals for the company will always be higher.

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Speaker 1: We're going to invest to be able to unlock even

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Speaker 1: more growth. But I think it's prudent, given where you've

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Speaker 1: been for the last few years, to be able to

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Speaker 1: put a target out there. So I say in the

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Speaker 1: medium term, So think uh, in the in the medium term,

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Speaker 1: not the short term, because we've got to execute the

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Speaker 1: spin and then do all the work ready to be

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Speaker 1: able to generate that And so I would say that

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Speaker 1: that's a milestone. Maybe go for higher, that's certainly possible,

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Speaker 1: but I think it's prudent to be able to commit

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Speaker 1: things that we have high confidence in I be. I'm

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Speaker 1: sure it immediately. It took a step up on an

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Speaker 1: announcement of this news. How am I? This is a

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Speaker 1: question of valuation. How differently are cloud companies valued by

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Speaker 1: the marketplace right now as opposed to information services companies.

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Speaker 1: So if I look at it UM previous announcement, we

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Speaker 1: have a majority services company. Post this announcement, um IBM

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Speaker 1: will become over half as a software and solutions company

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Speaker 1: and even a larger number in terms of overall product.

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Speaker 1: And if I look at the annuity based on the

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Speaker 1: new company, it's about a little over So if you

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Speaker 1: look at that, that's a very attractive company that promises

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Speaker 1: a different valuation than the current structure. So that is

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Speaker 1: a piece of it. But I think it's actually more

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Speaker 1: the growth and the addressable market opportunity of a trillion

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Speaker 1: dollars that I think is driving it. But David, you're

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Speaker 1: closer to that audience than probably I am in terms

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Speaker 1: of how they think and how they react. Son, what

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Speaker 1: will be the relationship continues two companies? Will they be

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Speaker 1: contracting with one another? Will they be free to contract

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Speaker 1: with other people that might be a competitor of their

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Speaker 1: sister company vote. So absolutely you unlocked growth for both

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Speaker 1: companies by being allowed to partner with those that maybe competitors.

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Speaker 1: Certainly for NUKO they may today not so much to

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Speaker 1: be restricted, but others who are competitors of the aggregate

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Speaker 1: may feel reluctant to partner deeply with them. That gets unlocked, No,

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Speaker 1: no constraints, no restrictions on that side. That said, I

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Speaker 1: think it's likely that each other's biggest customers on day one,

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Speaker 1: day one post spin, they certainly purchase a lot of

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Speaker 1: hardware and software from IBM. IBM certainly purchased the services

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Speaker 1: from NUKO in terms of how we run I T

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Speaker 1: infrastructure and so on. So the two companies are going

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Speaker 1: to have a deep strategic relationship, but that is not

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Speaker 1: going to constrain them both from pottering with whoever they

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Speaker 1: want to. Arvin, what can you tell us about the

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Speaker 1: leadership of the two companies going forward? Who do you

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Speaker 1: expect to be the leaders that to assume you're one

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Speaker 1: of them? And what about Jim Whitehurst from Red Hat

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Speaker 1: what role will we he have going forward? So both

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Speaker 1: Jim and myself remained with ib AM and a lot

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Speaker 1: of the leadership. Who runs the businesses at IBM is

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Speaker 1: going to stay at IBM. The leadership who runs managed

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Speaker 1: infrastructure services goes with MUCO. Now, as you know, in

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Speaker 1: these spins, the board, the government structure of IBM stays

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Speaker 1: in place because the company is staying in place. In

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Speaker 1: the new coal we have to create a new board.

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Speaker 1: Once the new board is formed, they'll be able to

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Speaker 1: select a stop management team. We certainly expect that they

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Speaker 1: will select many people from the current management team. But

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Speaker 1: as that goes forward, the new board of the company

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Speaker 1: will select the overall leadership. But in terms of the

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Speaker 1: day to day operations, a lot of the people are

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Speaker 1: in place. They run infrastructure services today and they will

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Speaker 1: continue to do that RF and you clearly want to

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Speaker 1: gain some growth by freeing up the hybrid services and

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Speaker 1: and the AI part of the company. Do you also

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Speaker 1: run the risk of losing some of such a cross

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Speaker 1: selling have customers you can cross sell both sides of

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Speaker 1: your business. I think that that's a risk that can

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Speaker 1: be managed, David. So the word I would use is

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Speaker 1: I don't have any concerns about it. And then I

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Speaker 1: was gonna say, of course I'm going to be parted

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Speaker 1: out about it, and I've gotta have lots of work

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Speaker 1: around it, and so I'm going to mitigate any of

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Speaker 1: that risk in terms of how we work um. There

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Speaker 1: are certainly common clients across both sides of the business,

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Speaker 1: but the clients tend to contract separately for the different

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Speaker 1: parts of the business already, so we have to go

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Speaker 1: manage that risk. But as I said, also the two

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Speaker 1: businesses that will have deep in strategic relationships with each other,

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Speaker 1: and that will also help mitigate that part of the risk.

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Speaker 1: So I think we'll unlock growth and I think that

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Speaker 1: the risk on the aspect you mention can be mitigated.

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Speaker 1: This is obviously a very big initiative of IBM. It

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Speaker 1: will take a while, I'm sure to put it all

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Speaker 1: together to digest it. When do you expect the spinoff

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Speaker 1: to be effective effectuated? We believe based on history and

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Speaker 1: looking at others who have done similar spinoffs, they seem

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Speaker 1: to take about a year to get done, So I'll

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Speaker 1: say a year plus minus a few months. So that

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Speaker 1: takes us into the latter part of We have to

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Speaker 1: get through all of the structure of the new company.

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Speaker 1: We have to file to the SEC. There stands we

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Speaker 1: expect that will happen somewhere early to mid part of

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Speaker 1: next year. You get to get through all of those approvals.

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Speaker 1: You've got to get to a final board approval, and

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Speaker 1: that then allows us to to impact all this. But

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Speaker 1: I think twelve months plus minus some number of months

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Speaker 1: is probably a good timeline to expect. That was Arvin Krishna,

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Speaker 1: CEO of IBM coming up. Energy policy is one of

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Speaker 1: the major issues that separates President Trump and former Vice

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Speaker 1: President by Dan Jurgen, vice chairman of I H S Market,

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Speaker 1: says the future of energy might be out of either

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Speaker 1: of their hands. That's next on Wall Street Week on Bloomboard.

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Speaker 1: This is Bloomberg Wall Street Week with David Weston from

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Speaker 1: Bloomberg Radio. President Trump and former Vice President Joe Biden

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Speaker 1: have very different ideas is about energy policy in the

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Speaker 1: United States. President Trump wants to solidify America's position as

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Speaker 1: a top oil and gas producer and democratic now and

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Speaker 1: new Biden is setting his sights on reducing the company's

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Speaker 1: reliance on fossil fuels with a two trillion dollar climate plan.

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Speaker 1: Dan Jurgen, chairman of I H S Market and author

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Speaker 1: of the new book The New Map Energy, Climate and

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Speaker 1: the Clash of Nations says that there is an inevitable

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Speaker 1: energy shift underway. The Trump administration has been focused on

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Speaker 1: this new position the United States has as the world's

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Speaker 1: number one producer of oil and gas and what that

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Speaker 1: does for the economy and what it does for the

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Speaker 1: position in the world. Joe Biden has a two trillion

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Speaker 1: dollar Climate Action Plan which is very focused on addressing

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Speaker 1: climate things, and I think in terms of oil and gas,

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Speaker 1: it's a little unclear where where he is. He made

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Speaker 1: a point to say when he was in Pennsylvania, where

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Speaker 1: there are a lot of jobs related to uh fracking

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Speaker 1: as it's called, that he's I'm not going to ban fracking,

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Speaker 1: but clearly it's it's a pivot towards climate and I

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Speaker 1: think certainly more regulation around oil and gas from what

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Speaker 1: you know of the technology and the development and the markets,

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Speaker 1: because the market drives it as well with the prices.

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Speaker 1: Is this sooner or later that we're gonna have a

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Speaker 1: fundamental shift away from fossil fuels. I think it's an

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Speaker 1: evolution that's going on. I think you mentioned electric power,

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Speaker 1: and I was recently with a bunch of the leaders

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Speaker 1: of the electric power industry. They do look to be

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Speaker 1: net zero carbon by or many of them are moving

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Speaker 1: that direction other parts of it. I think it evolves

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Speaker 1: over time. There are two eight million cars in the

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Speaker 1: United States and about two hundred seventy nine million run

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Speaker 1: on gasoline, and I don't think people are gonna throw

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Speaker 1: away their cars. So I think it's this is the

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Speaker 1: longer evolution. And I think there's what's happens in the US,

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Speaker 1: But the US remembers only fifteen percent of CEO two emissions,

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Speaker 1: China's twice that. India other emerging markets are looking towards

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Speaker 1: commercial energy to get away from burning wood and waste

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Speaker 1: in people's houses with the health consequences. So I think

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Speaker 1: this is something that unfolds time directionally. Where it's going,

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Speaker 1: that's clear directionally, the timing really matters, and the bets

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Speaker 1: can be rather substantial. In your book, you point out

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Speaker 1: how many jobs you know, I think there's ten million

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Speaker 1: are tied to the energy industry. We also have trillions

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Speaker 1: of dollars globally who's putting bets on which side of this?

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Speaker 1: And we saw a report that Exon, basically internal documents

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Speaker 1: leaked suggests that EXON is not moving as quickly as

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Speaker 1: maybe some others away from fossil fuel emissions. China certainly

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Speaker 1: might benefit. You point out in your book Russia, maybe not.

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Speaker 1: Who's betting on which side of Well, let me say

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Speaker 1: I think the X and thing. Of course that's still

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Speaker 1: unfolding story. But I think what's happening is all major

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Speaker 1: companies now are looking at their at their at their

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Speaker 1: emissions and saying what are they going to be? And

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Speaker 1: then the question becomes how do you mitigate them? And

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Speaker 1: in the in the new Map, you know, there's this

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Speaker 1: whole chapter called Breakthrough Technologies, based upon the work that

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Speaker 1: Ernie more Needs, a former Energy Secretary, and I did

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Speaker 1: for lead for Bill Gates Foundation and Breakthrough Energy Coalition

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Speaker 1: about the technologies we need. And one of them that's

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Speaker 1: really very major is what's called carbon capture carbon mitigation.

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Speaker 1: Simply when you look at the numbers, and I think

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Speaker 1: that's where you know we're going to see increased UH

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Speaker 1: investment going in terms of research on that to meet it.

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Speaker 1: In terms of countries, China is a significant winner here

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Speaker 1: because it, unlike the US, it imports its oil and

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Speaker 1: it regards that as a major strategic problem, particularly in

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Speaker 1: the geopolitical issues that are now developing, and it has

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Speaker 1: a dominant position in many of what might call that

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Speaker 1: they call the new energies. For instance, about sevent the

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Speaker 1: solar panels of the world are made in China, another

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Speaker 1: ten percent by Chinese companies, and it's Chinese manufacturing that's

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Speaker 1: partly responsible for this revolution as solar costs which have

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Speaker 1: come way down, so you know, they would be a

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Speaker 1: big beneficiary of this. One of the things that I

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Speaker 1: was surprised I learned from your book is the Department

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Speaker 1: Energy under President Trump is investing an awful lot of

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Speaker 1: money in research, science and research, some of which actually

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Speaker 1: has to go to renewables, right, uh six and a

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Speaker 1: half billion dollars in UM in basic science research. And

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Speaker 1: that's the foundation, really the true foundation of an energy transition,

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Speaker 1: and that's been pretty consistent. That has been one area

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Speaker 1: of bipartisan cooperation in seeing the importance of maintaining that commitment.

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Speaker 1: And this is where the u S strength really comes from,

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Speaker 1: which is we have this incredible ecosystem that goes from

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Speaker 1: seventeen national labs that kind of expenditure, universities, companies, startups.

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Speaker 1: No other country has that advantage in new technologies, take

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Speaker 1: wind and solar there. Those are fifty years old industries,

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Speaker 1: but it's only in the last ten years that they've

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Speaker 1: really become so competitive. So it takes time, and so

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Speaker 1: the investment you make now really pays off, but it

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Speaker 1: can take ten or twenty years from now. Dan draw

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Speaker 1: one other contrast that again I got from your book,

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Speaker 1: the New Map, and that is between Russia, which is

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Speaker 1: very dependent on fossil fuel's goodness knows, and Saudi Arabia,

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Speaker 1: which is also very matter but they have that vision

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Speaker 1: campaign going on. Does Russia have anything similar to that

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Speaker 1: about what ms after fossil fuels? No, I don't think so.

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Speaker 1: I mean, the other day Vladimir Putin said, it's great,

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Speaker 1: O our budget is only now thirty percent to oil

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Speaker 1: instead of being oil that money coming from it. But

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Speaker 1: I think Russia has been talking about diversification for UH

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Speaker 1: for twenty years since Pootin came to power, and it's

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Speaker 1: really not happening. In fact, I was at a conference

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Speaker 1: where I asked Putin that question. He and Chancellor Merkel

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Speaker 1: were on the platform about diversification, but we got sidetracked

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Speaker 1: whose I mentioned shale, and he really doesn't like US shale,

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Speaker 1: so he gave me his, uh, his his opinions on that,

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Speaker 1: which were pretty strong. That was Dan Jurgen, chairman of

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Speaker 1: I h S Market. Coming up. We wrap up the

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Speaker 1: week with our special contributor Larry Summers. This is Wall

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Speaker 1: Street Week on Bloomberg. This is Bloomberg Wall Street Week

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Speaker 1: with David Weston from Bloomberg Radio. As we do every week,

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Speaker 1: we welcome now our special contributor, Larry Summers or Treasure

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Speaker 1: Secretary talbut makes sense out of this week, And I

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Speaker 1: have to say, let me start Larry with the drama

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Speaker 1: maybe soap opera of the of the Simulus bill on again,

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Speaker 1: off again sometimes. In the same day, we had President

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Speaker 1: Trump saying I'm walking away from the table and I

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Speaker 1: want to talk about it. We had Nancy Plosi tell

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Speaker 1: us here at Bloomberg, I'm not doing this. It's a

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Speaker 1: big deal. And at the very end of the week,

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Speaker 1: President Trump came back and said, no, I want to

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Speaker 1: do more stimuless than anybody. I want to do more

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Speaker 1: than Nancy Pelosi. But in the end, do we need it, David,

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Speaker 1: We do need it. It's very clear that it's the

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Speaker 1: right thing to do. Look doing without stimulus at a

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Speaker 1: moment like this is kind of like waiting into a

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Speaker 1: crowd not wearing a mask. In the era of COVID,

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Speaker 1: it might turn out just to have been a mistake

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Speaker 1: for which you didn't pay a price, but very likely

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Speaker 1: it will be a mistake for which you will pay

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Speaker 1: a very big price. They are all kinds of lines

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Speaker 1: that the fast bounce back that the economy was enjoying

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Speaker 1: isn't going to continue. Of its own devices. COVID's getting

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Speaker 1: further out of control as we moved to winter. Financial

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Speaker 1: strains are increasing and interfering with the flow of credit layoffs,

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Speaker 1: which people hope to avoid their bowing to necessity and

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Speaker 1: uh laying people off. The situation globally is complex at best.

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Speaker 1: Stimulus is recovery insurance, and nothing is more important than

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Speaker 1: maximizing the prospect that the recovery continues and so learning.

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Speaker 1: Given that, and the markets were up. The SMP was

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Speaker 1: up the most since July this past week, and it's

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Speaker 1: had two weeks up in a row. The markets basically

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Speaker 1: saying we're gonna get the stimulus sooner or later, no

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Speaker 1: matter what, because we think maybe Joe Biden is gonna

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Speaker 1: end up being president. If you look at the internals

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Speaker 1: of the mark that there are signs in UH that direction.

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Speaker 1: The companies UH, for example, those involved in green technology

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Speaker 1: that are thought most likely to benefit from the kind

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Speaker 1: of recovery program he would propose, are up disproportionately relative

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Speaker 1: to other companies, such as those in very brown industries,

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Speaker 1: where there's the sense that the company depends more on

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Speaker 1: the Trump administration. So I think the expectation of Biden

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Speaker 1: stimulus is an important part of it. The expectation that

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Speaker 1: if the economy starts to melt down, the FED will

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Speaker 1: have to go into more rescue, and the feds rescue

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Speaker 1: tricks are basically about credit, and that benefits stocks much

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Speaker 1: more than it benefits workers. And so some of it's

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Speaker 1: a bet that we're gonna have to rely on that.

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Speaker 1: But anyone who said the stock more markets up, therefore

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Speaker 1: everything's okay is a fool. And you saw that this

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Speaker 1: week when when there were moments when it looked like

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Speaker 1: we weren't going to get stimulus now and we weren't

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Speaker 1: going to get stimulus soon. Um, those were the moments

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Speaker 1: when the market was weakest. And learn I have to

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Speaker 1: give you credit here on this program. Earlier, some time ago,

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Speaker 1: you said the chances were larger there be a blue wave,

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Speaker 1: that is, say, the Senate would go Democrat as well

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Speaker 1: as the president. Those were a larger atset of odds

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Speaker 1: than actually the possibility of Donald Trump getting reelected. But

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Speaker 1: let's go to the other big risk out there, which

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Speaker 1: is COVID nineteen, which we see rising once again in

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Speaker 1: the United States. You say, we need stimulus for the economy.

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Speaker 1: What do we need to battle COVID nineteen. We need

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Speaker 1: to do the things that the rest of the world

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Speaker 1: has figured out to do. You know, it's amazing. I

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Speaker 1: had occasion to see the statistics on Pakistan. Pakistan is

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Speaker 1: not a country that's known for its competence and aptitude

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Speaker 1: in getting things done effectively, but they are doing much

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Speaker 1: better than we are in terms of containing uh COVID.

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Speaker 1: Some of this is a broad cultural thing that in

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Speaker 1: America we focus more on private health, and we be

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Speaker 1: well advised to focus much more on public health in

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Speaker 1: all of its various dimensions, like preventive medicine, like investing

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00:25:27,280 --> 00:25:33,040
Speaker 1: in socioeconomic the depressed populations. That's a part of it.

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00:25:33,480 --> 00:25:37,760
Speaker 1: But the other part of it is raw, unadulterated in

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Speaker 1: competence in rolling out tests in encouraging people to do

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00:25:43,840 --> 00:25:52,000
Speaker 1: dangerous things in leaders role modeling uh cataclysmically bad uh habits.

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Speaker 1: I mean, let's be clear, in the same way that

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00:25:56,520 --> 00:26:01,960
Speaker 1: everyone knows that you tell your kid not to drive

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00:26:02,640 --> 00:26:09,520
Speaker 1: when they're inebriated, you don't go looking for COVID by

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00:26:09,520 --> 00:26:14,679
Speaker 1: waiting into crowds. Were at potential super spreading events with

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00:26:14,840 --> 00:26:20,040
Speaker 1: no masks, And we are reaping what the President of

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00:26:20,119 --> 00:26:26,800
Speaker 1: the United States has suwn uh here, and it is inexcused.

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00:26:26,880 --> 00:26:31,719
Speaker 1: It is inexcusable. And there's more people that you know,

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00:26:31,800 --> 00:26:35,280
Speaker 1: there are more people than died in the Vietnam War

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00:26:35,760 --> 00:26:40,240
Speaker 1: and every war since who would not have died if

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Speaker 1: we had managed to function at an average level of competence,

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Speaker 1: not not a high level of competence, an average level

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Speaker 1: of incompetence for industrialized countries. So, Larry, we always want

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Speaker 1: to conclude with a lightning round here of a few things.

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00:26:55,040 --> 00:26:57,920
Speaker 1: Let let's figure out who got who got too much?

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00:26:58,000 --> 00:27:05,480
Speaker 1: This week, we're pointing towards the airlines getting too much.

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00:27:06,200 --> 00:27:09,040
Speaker 1: We do need to keep the planes flying, but there's

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00:27:09,040 --> 00:27:11,360
Speaker 1: no reason why we need to keep the stock prices

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00:27:11,400 --> 00:27:14,240
Speaker 1: and the airline's up, and there's no reason why people

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00:27:14,280 --> 00:27:20,640
Speaker 1: who bet on airline bonds uh an airline credit earning

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00:27:20,680 --> 00:27:27,000
Speaker 1: a seven percent spread, Because it might be risky, they

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00:27:27,080 --> 00:27:29,840
Speaker 1: should take the consequences and not get paid back in

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00:27:29,960 --> 00:27:32,920
Speaker 1: full as part of any bail out. And there's a

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00:27:32,960 --> 00:27:36,000
Speaker 1: bipartisan error being made on that. Okay, so the airlines

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00:27:36,000 --> 00:27:38,200
Speaker 1: are getting too much, who's in risk of getting too little?

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00:27:38,280 --> 00:27:44,119
Speaker 1: Right now? Who's getting short change in the economy? Women? Uh, This,

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00:27:44,760 --> 00:27:52,479
Speaker 1: everything about the COVID recession is particularly burdensome for UH women.

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00:27:52,560 --> 00:27:55,480
Speaker 1: You've seen the female unemployment rate go above the male

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00:27:55,560 --> 00:27:58,280
Speaker 1: unemployment rate for the first time in a very long time.

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Speaker 1: You see it in what people with careers are experiencing,

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00:28:03,960 --> 00:28:06,760
Speaker 1: because it's women who are just proportionately bearing the burden

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00:28:07,280 --> 00:28:12,439
Speaker 1: of kids who are still at home, and that's a

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00:28:12,640 --> 00:28:18,959
Speaker 1: very costly thing for our country's future. The successful assimilation

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00:28:19,560 --> 00:28:23,879
Speaker 1: of women into the labor force over the last decades

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00:28:24,240 --> 00:28:28,000
Speaker 1: has been an important thing that has driven our economy forwards.

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00:28:28,080 --> 00:28:33,199
Speaker 1: And if that stops, that's gonna matter long after we

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00:28:33,359 --> 00:28:36,720
Speaker 1: somehow put COVID behind us. We're seeing a lot of contests,

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00:28:36,720 --> 00:28:38,760
Speaker 1: certainly in the United States of American around the world.

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00:28:38,960 --> 00:28:41,880
Speaker 1: We have presidential contest going on. We saw that vice

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00:28:41,880 --> 00:28:45,400
Speaker 1: presidential debate earlier this week. So in all these contests,

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Speaker 1: who's winning at this point authoritarians perhaps Ji Jin King.

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00:28:55,000 --> 00:29:02,880
Speaker 1: Look American democracy, democracy in the youth, k um democracy

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00:29:02,960 --> 00:29:09,120
Speaker 1: in Brazil, democracy just isn't looking like it can keep

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00:29:09,200 --> 00:29:15,840
Speaker 1: people secure. The central challenge going forward is making sure

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00:29:15,920 --> 00:29:21,080
Speaker 1: the government by the people also actually is government for

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00:29:21,880 --> 00:29:25,360
Speaker 1: UH the people. And when you see things like our

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00:29:25,440 --> 00:29:30,640
Speaker 1: incompetence in dealing with UH COVID, when you see the

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00:29:30,720 --> 00:29:35,920
Speaker 1: magnitude of the way leaders in the United States and

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00:29:35,960 --> 00:29:38,840
Speaker 1: not only in the United States are pitting one group

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Speaker 1: in the population against another UH group in the population.

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00:29:45,280 --> 00:29:48,120
Speaker 1: When you see the magnitude of the differentials that are

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Speaker 1: arising between rich and poor, ten years of life expectancy,

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00:29:52,880 --> 00:29:56,000
Speaker 1: the equivalent of three times the total burden of cancer.

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00:29:56,480 --> 00:29:59,680
Speaker 1: When you see all of that, it's got to be

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Speaker 1: thing that makes our adversaries who believe in authoritarian systems

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00:30:05,880 --> 00:30:11,320
Speaker 1: feel like their example is managing to win out over ours.

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00:30:11,480 --> 00:30:15,440
Speaker 1: And going back to John Quincy Adams, to George Kennon's

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00:30:15,480 --> 00:30:18,960
Speaker 1: strategy for winning the Cold War, to the most thoughtful

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00:30:19,000 --> 00:30:22,760
Speaker 1: diagnoses of why the Berlin Wall came down. It has

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00:30:22,800 --> 00:30:26,040
Speaker 1: come down much less to the power of our arms

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00:30:26,720 --> 00:30:31,360
Speaker 1: than the power of our example, and our example is

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00:30:31,440 --> 00:30:37,040
Speaker 1: in more tawdry disarray than certainly any time in my lifetime. Well,

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00:30:37,040 --> 00:30:40,760
Speaker 1: that's pretty sobering but very valuable at the same time. Arms.

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Speaker 1: You can see what we turned to Larry at the

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Speaker 1: end of the week, because he really has wrap it

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Speaker 1: all up, goes around the world and explains it all

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00:30:45,880 --> 00:30:47,880
Speaker 1: to us. It makes some sense of it. We hope,

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00:30:47,880 --> 00:30:49,480
Speaker 1: in fact, that things get a little bit better and

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Speaker 1: the fact that authoritarians don't end up winning the Larry

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00:30:52,360 --> 00:30:55,800
Speaker 1: Summer's former treasure secretary predicts. So that's going to do

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Speaker 1: it for Wall Street Week for right now at an

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Speaker 1: eventful week in which an awful lot happens, only good

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00:31:00,560 --> 00:31:02,320
Speaker 1: some of them but not so good, but all of

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Speaker 1: it affecting the markets. And that does it for this

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Speaker 1: edition of Wall Street Week. I'm David Weston, This is Bloomberg.

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Speaker 1: See you next week. Adopt