Speaker 1: This is Bloomberg Wall st Week. What's the state of
Speaker 1: corporate governance? The deficit is a real issue. The US
Speaker 1: economy continues to send mixed signals. The financial stories that
Speaker 1: cheap our world fed action to con concerns over dollar
Speaker 1: liquidity and encouraging China data. The five hundred wealthiest people
Speaker 1: in the world. Through the eyes of the most influential
Speaker 1: voices Larry Summers, the former Treasury Secretary, Starr CEO, Kevin
Speaker 1: Johnson sec Chairman J Clayton. Bloomberg wool Street Week with
Speaker 1: David Weston from Bloomberg Radio Markets struggled a price, political
Speaker 1: risk of an election, a sick president, and stimulus that
Speaker 1: never seems to come. Welcome to Bloomberg Wall Street Week.
Speaker 1: I'm David Weston. It all began in with a backrob
Speaker 1: That was the name of the original algorithm the Google founders,
Speaker 1: Larry Page and Sergey Brin, developed first as PhD students
Speaker 1: at Stanford University. Page had a vision to rank links
Speaker 1: resulting from an Internet search by how often they were
Speaker 1: linked by other pages. In paper, Page Brind made a
Speaker 1: case against ad supported search engine, saying, in general it
Speaker 1: could be argued from the consumer point of view that
Speaker 1: the better the search engine is, the fewer advertisements will
Speaker 1: be needed for the consumer to find what they want.
Speaker 1: Google went public in two thousand four with evaluation of
Speaker 1: twenty seven billion dollars and a perspectives that included the
Speaker 1: company's declared code of conduct, don't be evil. By that time,
Speaker 1: Eric Schmidt had been brought in as CEO, but Larry
Speaker 1: Page and Sergey Brin still charted the company's course as
Speaker 1: a tech giant. In two thousand five and two thousand
Speaker 1: and six, the pair expanded Google's reach by acquiring Android
Speaker 1: and YouTube. Larry Page officially took over a CEO once
Speaker 1: again in two thousand eleven, but stepped aside just a
Speaker 1: few years ago in two thousand fifteen, when the company
Speaker 1: restructured itself as Alphabet. Alphabet is now an Internet search giant,
Speaker 1: serving as the parent company of many businesses touching on
Speaker 1: many parts of consumers daily lives. In a report targeting Alphabet, Apple, Amazon,
Speaker 1: and Facebook, house panel seeks sweeping reforms to curb the
Speaker 1: tech giant's power. Carlie Fiorina, former CEO Hewlett Packard, says
Speaker 1: that the regulatory scrutiny is the new normal for Silicon Valley.
Speaker 1: I think if you look at where innovation traditionally has
Speaker 1: come from, it has come from the smaller startups. After all,
Speaker 1: that's what Google wants was, That's what Amazon once was,
Speaker 1: That's what Apple wants was, that's what all these companies
Speaker 1: Facebook wants were. And it's also true that these huge
Speaker 1: technology companies now have a great interest in leveraging others innovation,
Speaker 1: but they do so by buying them up. That's what
Speaker 1: they have done. And finally, I would say it is
Speaker 1: undoubtedly true that these companies have a market power and
Speaker 1: a power over consumers, not to mention consumer information. That's
Speaker 1: really all the unprecedented, and so I think they can
Speaker 1: Technology companies can no longer make a credible argument that
Speaker 1: somehow they are in a different category, that if you
Speaker 1: do anything to Internet based companies in terms of regulation
Speaker 1: or oversight, that somehow you are going to curtail their growth.
Speaker 1: I just don't think that argument rings true anymore. And
Speaker 1: that's why I think strategically they need to think about
Speaker 1: how to be a part of this conversation instead of
Speaker 1: just saying no, no, there's nothing to see here, there's
Speaker 1: nothing to do here. That's not going to fly Carlie.
Speaker 1: You mentioned earlier the leadership of some of these companies.
Speaker 1: Let's talk about leadership right now. How do you lead
Speaker 1: a company that arguably is winning by too much. You
Speaker 1: had a phenomenon with IBM, You could say that happened
Speaker 1: with you could say it happened with Microsoft. What can
Speaker 1: a leader do in that situation? Well, first, I think
Speaker 1: I don't want to be too critical here, but I
Speaker 1: do think that some of the leaders of some of
Speaker 1: these companies have um damaged their case a bit by
Speaker 1: being we now know less than forthcoming about what was
Speaker 1: really going on. And so we've seen I think too
Speaker 1: many instances where leaders have come before Capitol Hill, and
Speaker 1: let's face it, that's not a pleasant experience for any CEO,
Speaker 1: and CEOs get very outraged about the hypocrisy, all of
Speaker 1: which is deserved. Nevertheless, when a CEO is found to
Speaker 1: be less than forthcoming, that's not helpful to their cause.
Speaker 1: So I think the most important thing for these tech
Speaker 1: ceo s to do is to decide strategically that the
Speaker 1: best course is not resistance at all costs, but instead
Speaker 1: to try and be part of the solution here. You know,
Speaker 1: I started my career out in telecommunications, and there was
Speaker 1: a long period of time where A T and T
Speaker 1: as the big power, resisted at all costs being part
Speaker 1: of solution. That resistance cost them in the end. And
Speaker 1: so I think these CEOs need to think through what
Speaker 1: are they willing to live with? How can they influence
Speaker 1: the legislative process here on both sides of the aisle
Speaker 1: to come up with something that's gonna work. But just
Speaker 1: leave us alone isn't politically feasible anymore, and I think
Speaker 1: the economic arguments for just leave it alone, honestly, are
Speaker 1: no longer completely credible. Just briefly here the conclusion, Carlie,
Speaker 1: is it a plausible defense to say we've got to
Speaker 1: re about China? Well, yes and no. I mean yes,
Speaker 1: of course we do need to worry about China, and
Speaker 1: that is why our approach to China must be consistent
Speaker 1: and persistent and strategic. And that requires collaboration between government
Speaker 1: and business, which hasn't always been in evidence over the
Speaker 1: last twenty years. It also means that we need to
Speaker 1: be consistent across administrations when we deal with China and
Speaker 1: between parties, which we haven't always been. However, these tech
Speaker 1: companies are winning globally. It's why the European Union has
Speaker 1: taken some of them on, and so that argument is important,
Speaker 1: but I don't think it will be successful in saying
Speaker 1: just leave us along. That was Carly Fiorina, founder and
Speaker 1: chair of Carly Fiorina Enterprises, coming up. The tech company
Speaker 1: that's constantly evolving, IBM is taking another step forward becoming
Speaker 1: a major cloud services provider. CEO Arvid Krishna says this
Speaker 1: is just the beginning that's next on Wall Street Week
Speaker 1: on Bloomberg. This is Bloomberg Wall Street Week with David
Speaker 1: Weston from Bloomberg Radio. It's one hundred one year history.
Speaker 1: IBM has reinvented itself to stay at the top of
Speaker 1: its game. This week, the company did it again with
Speaker 1: its announcement that it would be spinning off its infrastructure
Speaker 1: services unit to focus more on cloud computing and artificial intelligence.
Speaker 1: Arvin Krishna, who took over as CEO in April, has
Speaker 1: said he will pursue growth relentlessly, and his services business
Speaker 1: has been struggling during the pandemic. I asked him how
Speaker 1: this shift fits in with his vision for IBM's future.
Speaker 1: When I first became CEO, I talked about our commitment
Speaker 1: to growth, and I talked about a maniacal focus on
Speaker 1: hybrid cloud and AI. As we look at that market,
Speaker 1: that's a trillion dollar addressable opportunity, and as we look
Speaker 1: at our client buying behaviors, they are changing. How to
Speaker 1: do application modernization and how to buy infrastructure modernization is separating.
Speaker 1: So that says it behooves us to unlock growth by
Speaker 1: creating two companies. One company focused on hybrid cloud and
Speaker 1: AI and the other company focused unmanaged infrastructure services. So,
Speaker 1: in the first company, the platform, the open hybrid cloud
Speaker 1: platform that's based on red Hat technology, all of the
Speaker 1: software that gives clients the capability to leverage that platform.
Speaker 1: Then going from there into all the services they can
Speaker 1: use to do their journey to cloud. You put all
Speaker 1: that together, that's going to be IBM, together with the
Speaker 1: infrastructure that they run their most mission critical services on,
Speaker 1: and that company we believe will deliver mid single digit
Speaker 1: growth in a sustainable way in the medium term. The
Speaker 1: other company, we're calling it new code because we don't
Speaker 1: have a name for it yet, is the managed infrastructure company.
Speaker 1: On day one, twice the size of its nearest competitor
Speaker 1: over four thousand clients in a hundred and fifteen countries
Speaker 1: and counting really enables it with a investment grade balance
Speaker 1: sheet to go out and take share and be on
Speaker 1: an improved growth tragic tree. So David, really exciting to
Speaker 1: be able to do this and yet again reinvent our
Speaker 1: company for the future. So are when you talk about growth,
Speaker 1: and you have consistently said that is the question of
Speaker 1: growth for IBM. Compare those two companies. You said mid
Speaker 1: single digits for the one. Are you expecting much higher
Speaker 1: for the hybrid cloud and AI company to do? My
Speaker 1: aspiration and my goals for the company will always be higher.
Speaker 1: We're going to invest to be able to unlock even
Speaker 1: more growth. But I think it's prudent, given where you've
Speaker 1: been for the last few years, to be able to
Speaker 1: put a target out there. So I say in the
Speaker 1: medium term, So think uh, in the in the medium term,
Speaker 1: not the short term, because we've got to execute the
Speaker 1: spin and then do all the work ready to be
Speaker 1: able to generate that And so I would say that
Speaker 1: that's a milestone. Maybe go for higher, that's certainly possible,
Speaker 1: but I think it's prudent to be able to commit
Speaker 1: things that we have high confidence in I be. I'm
Speaker 1: sure it immediately. It took a step up on an
Speaker 1: announcement of this news. How am I? This is a
Speaker 1: question of valuation. How differently are cloud companies valued by
Speaker 1: the marketplace right now as opposed to information services companies.
Speaker 1: So if I look at it UM previous announcement, we
Speaker 1: have a majority services company. Post this announcement, um IBM
Speaker 1: will become over half as a software and solutions company
Speaker 1: and even a larger number in terms of overall product.
Speaker 1: And if I look at the annuity based on the
Speaker 1: new company, it's about a little over So if you
Speaker 1: look at that, that's a very attractive company that promises
Speaker 1: a different valuation than the current structure. So that is
Speaker 1: a piece of it. But I think it's actually more
Speaker 1: the growth and the addressable market opportunity of a trillion
Speaker 1: dollars that I think is driving it. But David, you're
Speaker 1: closer to that audience than probably I am in terms
Speaker 1: of how they think and how they react. Son, what
Speaker 1: will be the relationship continues two companies? Will they be
Speaker 1: contracting with one another? Will they be free to contract
Speaker 1: with other people that might be a competitor of their
Speaker 1: sister company vote. So absolutely you unlocked growth for both
Speaker 1: companies by being allowed to partner with those that maybe competitors.
Speaker 1: Certainly for NUKO they may today not so much to
Speaker 1: be restricted, but others who are competitors of the aggregate
Speaker 1: may feel reluctant to partner deeply with them. That gets unlocked, No,
Speaker 1: no constraints, no restrictions on that side. That said, I
Speaker 1: think it's likely that each other's biggest customers on day one,
Speaker 1: day one post spin, they certainly purchase a lot of
Speaker 1: hardware and software from IBM. IBM certainly purchased the services
Speaker 1: from NUKO in terms of how we run I T
Speaker 1: infrastructure and so on. So the two companies are going
Speaker 1: to have a deep strategic relationship, but that is not
Speaker 1: going to constrain them both from pottering with whoever they
Speaker 1: want to. Arvin, what can you tell us about the
Speaker 1: leadership of the two companies going forward? Who do you
Speaker 1: expect to be the leaders that to assume you're one
Speaker 1: of them? And what about Jim Whitehurst from Red Hat
Speaker 1: what role will we he have going forward? So both
Speaker 1: Jim and myself remained with ib AM and a lot
Speaker 1: of the leadership. Who runs the businesses at IBM is
Speaker 1: going to stay at IBM. The leadership who runs managed
Speaker 1: infrastructure services goes with MUCO. Now, as you know, in
Speaker 1: these spins, the board, the government structure of IBM stays
Speaker 1: in place because the company is staying in place. In
Speaker 1: the new coal we have to create a new board.
Speaker 1: Once the new board is formed, they'll be able to
Speaker 1: select a stop management team. We certainly expect that they
Speaker 1: will select many people from the current management team. But
Speaker 1: as that goes forward, the new board of the company
Speaker 1: will select the overall leadership. But in terms of the
Speaker 1: day to day operations, a lot of the people are
Speaker 1: in place. They run infrastructure services today and they will
Speaker 1: continue to do that RF and you clearly want to
Speaker 1: gain some growth by freeing up the hybrid services and
Speaker 1: and the AI part of the company. Do you also
Speaker 1: run the risk of losing some of such a cross
Speaker 1: selling have customers you can cross sell both sides of
Speaker 1: your business. I think that that's a risk that can
Speaker 1: be managed, David. So the word I would use is
Speaker 1: I don't have any concerns about it. And then I
Speaker 1: was gonna say, of course I'm going to be parted
Speaker 1: out about it, and I've gotta have lots of work
Speaker 1: around it, and so I'm going to mitigate any of
Speaker 1: that risk in terms of how we work um. There
Speaker 1: are certainly common clients across both sides of the business,
Speaker 1: but the clients tend to contract separately for the different
Speaker 1: parts of the business already, so we have to go
Speaker 1: manage that risk. But as I said, also the two
Speaker 1: businesses that will have deep in strategic relationships with each other,
Speaker 1: and that will also help mitigate that part of the risk.
Speaker 1: So I think we'll unlock growth and I think that
Speaker 1: the risk on the aspect you mention can be mitigated.
Speaker 1: This is obviously a very big initiative of IBM. It
Speaker 1: will take a while, I'm sure to put it all
Speaker 1: together to digest it. When do you expect the spinoff
Speaker 1: to be effective effectuated? We believe based on history and
Speaker 1: looking at others who have done similar spinoffs, they seem
Speaker 1: to take about a year to get done, So I'll
Speaker 1: say a year plus minus a few months. So that
Speaker 1: takes us into the latter part of We have to
Speaker 1: get through all of the structure of the new company.
Speaker 1: We have to file to the SEC. There stands we
Speaker 1: expect that will happen somewhere early to mid part of
Speaker 1: next year. You get to get through all of those approvals.
Speaker 1: You've got to get to a final board approval, and
Speaker 1: that then allows us to to impact all this. But
Speaker 1: I think twelve months plus minus some number of months
Speaker 1: is probably a good timeline to expect. That was Arvin Krishna,
Speaker 1: CEO of IBM coming up. Energy policy is one of
Speaker 1: the major issues that separates President Trump and former Vice
Speaker 1: President by Dan Jurgen, vice chairman of I H S Market,
Speaker 1: says the future of energy might be out of either
Speaker 1: of their hands. That's next on Wall Street Week on Bloomboard.
Speaker 1: This is Bloomberg Wall Street Week with David Weston from
Speaker 1: Bloomberg Radio. President Trump and former Vice President Joe Biden
Speaker 1: have very different ideas is about energy policy in the
Speaker 1: United States. President Trump wants to solidify America's position as
Speaker 1: a top oil and gas producer and democratic now and
Speaker 1: new Biden is setting his sights on reducing the company's
Speaker 1: reliance on fossil fuels with a two trillion dollar climate plan.
Speaker 1: Dan Jurgen, chairman of I H S Market and author
Speaker 1: of the new book The New Map Energy, Climate and
Speaker 1: the Clash of Nations says that there is an inevitable
Speaker 1: energy shift underway. The Trump administration has been focused on
Speaker 1: this new position the United States has as the world's
Speaker 1: number one producer of oil and gas and what that
Speaker 1: does for the economy and what it does for the
Speaker 1: position in the world. Joe Biden has a two trillion
Speaker 1: dollar Climate Action Plan which is very focused on addressing
Speaker 1: climate things, and I think in terms of oil and gas,
Speaker 1: it's a little unclear where where he is. He made
Speaker 1: a point to say when he was in Pennsylvania, where
Speaker 1: there are a lot of jobs related to uh fracking
Speaker 1: as it's called, that he's I'm not going to ban fracking,
Speaker 1: but clearly it's it's a pivot towards climate and I
Speaker 1: think certainly more regulation around oil and gas from what
Speaker 1: you know of the technology and the development and the markets,
Speaker 1: because the market drives it as well with the prices.
Speaker 1: Is this sooner or later that we're gonna have a
Speaker 1: fundamental shift away from fossil fuels. I think it's an
Speaker 1: evolution that's going on. I think you mentioned electric power,
Speaker 1: and I was recently with a bunch of the leaders
Speaker 1: of the electric power industry. They do look to be
Speaker 1: net zero carbon by or many of them are moving
Speaker 1: that direction other parts of it. I think it evolves
Speaker 1: over time. There are two eight million cars in the
Speaker 1: United States and about two hundred seventy nine million run
Speaker 1: on gasoline, and I don't think people are gonna throw
Speaker 1: away their cars. So I think it's this is the
Speaker 1: longer evolution. And I think there's what's happens in the US,
Speaker 1: But the US remembers only fifteen percent of CEO two emissions,
Speaker 1: China's twice that. India other emerging markets are looking towards
Speaker 1: commercial energy to get away from burning wood and waste
Speaker 1: in people's houses with the health consequences. So I think
Speaker 1: this is something that unfolds time directionally. Where it's going,
Speaker 1: that's clear directionally, the timing really matters, and the bets
Speaker 1: can be rather substantial. In your book, you point out
Speaker 1: how many jobs you know, I think there's ten million
Speaker 1: are tied to the energy industry. We also have trillions
Speaker 1: of dollars globally who's putting bets on which side of this?
Speaker 1: And we saw a report that Exon, basically internal documents
Speaker 1: leaked suggests that EXON is not moving as quickly as
Speaker 1: maybe some others away from fossil fuel emissions. China certainly
Speaker 1: might benefit. You point out in your book Russia, maybe not.
Speaker 1: Who's betting on which side of Well, let me say
Speaker 1: I think the X and thing. Of course that's still
Speaker 1: unfolding story. But I think what's happening is all major
Speaker 1: companies now are looking at their at their at their
Speaker 1: emissions and saying what are they going to be? And
Speaker 1: then the question becomes how do you mitigate them? And
Speaker 1: in the in the new Map, you know, there's this
Speaker 1: whole chapter called Breakthrough Technologies, based upon the work that
Speaker 1: Ernie more Needs, a former Energy Secretary, and I did
Speaker 1: for lead for Bill Gates Foundation and Breakthrough Energy Coalition
Speaker 1: about the technologies we need. And one of them that's
Speaker 1: really very major is what's called carbon capture carbon mitigation.
Speaker 1: Simply when you look at the numbers, and I think
Speaker 1: that's where you know we're going to see increased UH
Speaker 1: investment going in terms of research on that to meet it.
Speaker 1: In terms of countries, China is a significant winner here
Speaker 1: because it, unlike the US, it imports its oil and
Speaker 1: it regards that as a major strategic problem, particularly in
Speaker 1: the geopolitical issues that are now developing, and it has
Speaker 1: a dominant position in many of what might call that
Speaker 1: they call the new energies. For instance, about sevent the
Speaker 1: solar panels of the world are made in China, another
Speaker 1: ten percent by Chinese companies, and it's Chinese manufacturing that's
Speaker 1: partly responsible for this revolution as solar costs which have
Speaker 1: come way down, so you know, they would be a
Speaker 1: big beneficiary of this. One of the things that I
Speaker 1: was surprised I learned from your book is the Department
Speaker 1: Energy under President Trump is investing an awful lot of
Speaker 1: money in research, science and research, some of which actually
Speaker 1: has to go to renewables, right, uh six and a
Speaker 1: half billion dollars in UM in basic science research. And
Speaker 1: that's the foundation, really the true foundation of an energy transition,
Speaker 1: and that's been pretty consistent. That has been one area
Speaker 1: of bipartisan cooperation in seeing the importance of maintaining that commitment.
Speaker 1: And this is where the u S strength really comes from,
Speaker 1: which is we have this incredible ecosystem that goes from
Speaker 1: seventeen national labs that kind of expenditure, universities, companies, startups.
Speaker 1: No other country has that advantage in new technologies, take
Speaker 1: wind and solar there. Those are fifty years old industries,
Speaker 1: but it's only in the last ten years that they've
Speaker 1: really become so competitive. So it takes time, and so
Speaker 1: the investment you make now really pays off, but it
Speaker 1: can take ten or twenty years from now. Dan draw
Speaker 1: one other contrast that again I got from your book,
Speaker 1: the New Map, and that is between Russia, which is
Speaker 1: very dependent on fossil fuel's goodness knows, and Saudi Arabia,
Speaker 1: which is also very matter but they have that vision
Speaker 1: campaign going on. Does Russia have anything similar to that
Speaker 1: about what ms after fossil fuels? No, I don't think so.
Speaker 1: I mean, the other day Vladimir Putin said, it's great,
Speaker 1: O our budget is only now thirty percent to oil
Speaker 1: instead of being oil that money coming from it. But
Speaker 1: I think Russia has been talking about diversification for UH
Speaker 1: for twenty years since Pootin came to power, and it's
Speaker 1: really not happening. In fact, I was at a conference
Speaker 1: where I asked Putin that question. He and Chancellor Merkel
Speaker 1: were on the platform about diversification, but we got sidetracked
Speaker 1: whose I mentioned shale, and he really doesn't like US shale,
Speaker 1: so he gave me his, uh, his his opinions on that,
Speaker 1: which were pretty strong. That was Dan Jurgen, chairman of
Speaker 1: I h S Market. Coming up. We wrap up the
Speaker 1: week with our special contributor Larry Summers. This is Wall
Speaker 1: Street Week on Bloomberg. This is Bloomberg Wall Street Week
Speaker 1: with David Weston from Bloomberg Radio. As we do every week,
Speaker 1: we welcome now our special contributor, Larry Summers or Treasure
Speaker 1: Secretary talbut makes sense out of this week, And I
Speaker 1: have to say, let me start Larry with the drama
Speaker 1: maybe soap opera of the of the Simulus bill on again,
Speaker 1: off again sometimes. In the same day, we had President
Speaker 1: Trump saying I'm walking away from the table and I
Speaker 1: want to talk about it. We had Nancy Plosi tell
Speaker 1: us here at Bloomberg, I'm not doing this. It's a
Speaker 1: big deal. And at the very end of the week,
Speaker 1: President Trump came back and said, no, I want to
Speaker 1: do more stimuless than anybody. I want to do more
Speaker 1: than Nancy Pelosi. But in the end, do we need it, David,
Speaker 1: We do need it. It's very clear that it's the
Speaker 1: right thing to do. Look doing without stimulus at a
Speaker 1: moment like this is kind of like waiting into a
Speaker 1: crowd not wearing a mask. In the era of COVID,
Speaker 1: it might turn out just to have been a mistake
Speaker 1: for which you didn't pay a price, but very likely
Speaker 1: it will be a mistake for which you will pay
Speaker 1: a very big price. They are all kinds of lines
Speaker 1: that the fast bounce back that the economy was enjoying
Speaker 1: isn't going to continue. Of its own devices. COVID's getting
Speaker 1: further out of control as we moved to winter. Financial
Speaker 1: strains are increasing and interfering with the flow of credit layoffs,
Speaker 1: which people hope to avoid their bowing to necessity and
Speaker 1: uh laying people off. The situation globally is complex at best.
Speaker 1: Stimulus is recovery insurance, and nothing is more important than
Speaker 1: maximizing the prospect that the recovery continues and so learning.
Speaker 1: Given that, and the markets were up. The SMP was
Speaker 1: up the most since July this past week, and it's
Speaker 1: had two weeks up in a row. The markets basically
Speaker 1: saying we're gonna get the stimulus sooner or later, no
Speaker 1: matter what, because we think maybe Joe Biden is gonna
Speaker 1: end up being president. If you look at the internals
Speaker 1: of the mark that there are signs in UH that direction.
Speaker 1: The companies UH, for example, those involved in green technology
Speaker 1: that are thought most likely to benefit from the kind
Speaker 1: of recovery program he would propose, are up disproportionately relative
Speaker 1: to other companies, such as those in very brown industries,
Speaker 1: where there's the sense that the company depends more on
Speaker 1: the Trump administration. So I think the expectation of Biden
Speaker 1: stimulus is an important part of it. The expectation that
Speaker 1: if the economy starts to melt down, the FED will
Speaker 1: have to go into more rescue, and the feds rescue
Speaker 1: tricks are basically about credit, and that benefits stocks much
Speaker 1: more than it benefits workers. And so some of it's
Speaker 1: a bet that we're gonna have to rely on that.
Speaker 1: But anyone who said the stock more markets up, therefore
Speaker 1: everything's okay is a fool. And you saw that this
Speaker 1: week when when there were moments when it looked like
Speaker 1: we weren't going to get stimulus now and we weren't
Speaker 1: going to get stimulus soon. Um, those were the moments
Speaker 1: when the market was weakest. And learn I have to
Speaker 1: give you credit here on this program. Earlier, some time ago,
Speaker 1: you said the chances were larger there be a blue wave,
Speaker 1: that is, say, the Senate would go Democrat as well
Speaker 1: as the president. Those were a larger atset of odds
Speaker 1: than actually the possibility of Donald Trump getting reelected. But
Speaker 1: let's go to the other big risk out there, which
Speaker 1: is COVID nineteen, which we see rising once again in
Speaker 1: the United States. You say, we need stimulus for the economy.
Speaker 1: What do we need to battle COVID nineteen. We need
Speaker 1: to do the things that the rest of the world
Speaker 1: has figured out to do. You know, it's amazing. I
Speaker 1: had occasion to see the statistics on Pakistan. Pakistan is
Speaker 1: not a country that's known for its competence and aptitude
Speaker 1: in getting things done effectively, but they are doing much
Speaker 1: better than we are in terms of containing uh COVID.
Speaker 1: Some of this is a broad cultural thing that in
Speaker 1: America we focus more on private health, and we be
Speaker 1: well advised to focus much more on public health in
Speaker 1: all of its various dimensions, like preventive medicine, like investing
Speaker 1: in socioeconomic the depressed populations. That's a part of it.
Speaker 1: But the other part of it is raw, unadulterated in
Speaker 1: competence in rolling out tests in encouraging people to do
Speaker 1: dangerous things in leaders role modeling uh cataclysmically bad uh habits.
Speaker 1: I mean, let's be clear, in the same way that
Speaker 1: everyone knows that you tell your kid not to drive
Speaker 1: when they're inebriated, you don't go looking for COVID by
Speaker 1: waiting into crowds. Were at potential super spreading events with
Speaker 1: no masks, And we are reaping what the President of
Speaker 1: the United States has suwn uh here, and it is inexcused.
Speaker 1: It is inexcusable. And there's more people that you know,
Speaker 1: there are more people than died in the Vietnam War
Speaker 1: and every war since who would not have died if
Speaker 1: we had managed to function at an average level of competence,
Speaker 1: not not a high level of competence, an average level
Speaker 1: of incompetence for industrialized countries. So, Larry, we always want
Speaker 1: to conclude with a lightning round here of a few things.
Speaker 1: Let let's figure out who got who got too much?
Speaker 1: This week, we're pointing towards the airlines getting too much.
Speaker 1: We do need to keep the planes flying, but there's
Speaker 1: no reason why we need to keep the stock prices
Speaker 1: and the airline's up, and there's no reason why people
Speaker 1: who bet on airline bonds uh an airline credit earning
Speaker 1: a seven percent spread, Because it might be risky, they
Speaker 1: should take the consequences and not get paid back in
Speaker 1: full as part of any bail out. And there's a
Speaker 1: bipartisan error being made on that. Okay, so the airlines
Speaker 1: are getting too much, who's in risk of getting too little?
Speaker 1: Right now? Who's getting short change in the economy? Women? Uh, This,
Speaker 1: everything about the COVID recession is particularly burdensome for UH women.
Speaker 1: You've seen the female unemployment rate go above the male
Speaker 1: unemployment rate for the first time in a very long time.
Speaker 1: You see it in what people with careers are experiencing,
Speaker 1: because it's women who are just proportionately bearing the burden
Speaker 1: of kids who are still at home, and that's a
Speaker 1: very costly thing for our country's future. The successful assimilation
Speaker 1: of women into the labor force over the last decades
Speaker 1: has been an important thing that has driven our economy forwards.
Speaker 1: And if that stops, that's gonna matter long after we
Speaker 1: somehow put COVID behind us. We're seeing a lot of contests,
Speaker 1: certainly in the United States of American around the world.
Speaker 1: We have presidential contest going on. We saw that vice
Speaker 1: presidential debate earlier this week. So in all these contests,
Speaker 1: who's winning at this point authoritarians perhaps Ji Jin King.
Speaker 1: Look American democracy, democracy in the youth, k um democracy
Speaker 1: in Brazil, democracy just isn't looking like it can keep
Speaker 1: people secure. The central challenge going forward is making sure
Speaker 1: the government by the people also actually is government for
Speaker 1: UH the people. And when you see things like our
Speaker 1: incompetence in dealing with UH COVID, when you see the
Speaker 1: magnitude of the way leaders in the United States and
Speaker 1: not only in the United States are pitting one group
Speaker 1: in the population against another UH group in the population.
Speaker 1: When you see the magnitude of the differentials that are
Speaker 1: arising between rich and poor, ten years of life expectancy,
Speaker 1: the equivalent of three times the total burden of cancer.
Speaker 1: When you see all of that, it's got to be
Speaker 1: thing that makes our adversaries who believe in authoritarian systems
Speaker 1: feel like their example is managing to win out over ours.
Speaker 1: And going back to John Quincy Adams, to George Kennon's
Speaker 1: strategy for winning the Cold War, to the most thoughtful
Speaker 1: diagnoses of why the Berlin Wall came down. It has
Speaker 1: come down much less to the power of our arms
Speaker 1: than the power of our example, and our example is
Speaker 1: in more tawdry disarray than certainly any time in my lifetime. Well,
Speaker 1: that's pretty sobering but very valuable at the same time. Arms.
Speaker 1: You can see what we turned to Larry at the
Speaker 1: end of the week, because he really has wrap it
Speaker 1: all up, goes around the world and explains it all
Speaker 1: to us. It makes some sense of it. We hope,
Speaker 1: in fact, that things get a little bit better and
Speaker 1: the fact that authoritarians don't end up winning the Larry
Speaker 1: Summer's former treasure secretary predicts. So that's going to do
Speaker 1: it for Wall Street Week for right now at an
Speaker 1: eventful week in which an awful lot happens, only good
Speaker 1: some of them but not so good, but all of
Speaker 1: it affecting the markets. And that does it for this
Speaker 1: edition of Wall Street Week. I'm David Weston, This is Bloomberg.
Speaker 1: See you next week. Adopt