WEBVTT - Bloomberg Wall Street Week: Rieder, Davis, Palmisano 0:00:00.160 --> 0:00:03.360 This is Bloomberg Wall Street Week. What's the state of 0:00:03.400 --> 0:00:06.360 corporate governance? A defresent is a real issue to use. 0:00:06.400 --> 0:00:09.920 Economy continues to send mixed signals, the financial stories that 0:00:10.039 --> 0:00:13.000 cheap our world fed action to con concerns over dollar 0:00:13.080 --> 0:00:16.520 liquidity and encouraging China data. The five hundred wealthiest people 0:00:16.520 --> 0:00:19.160 in the world. Through the eyes of the most influential 0:00:19.239 --> 0:00:22.880 voices Larry Summers, the former Treasury Secretary, Starbard, CEO, Kevin 0:00:22.960 --> 0:00:26.640 Johnson sec Chairman j Clayton, Bloomberg Wall Street Week with 0:00:26.760 --> 0:00:32.520 David Weston from Bloomberg Radio. Finally almost US stimulus steal 0:00:32.640 --> 0:00:35.280 is all but done, and at Brexit deal appears to 0:00:35.320 --> 0:00:37.920 be within reach. But the one thing we know for 0:00:38.000 --> 0:00:41.360 sure is that we have a vaccine. This is Bloomberg 0:00:41.360 --> 0:00:44.200 Wall Street Week. I'm David Weston. Well, the Federal Reserve 0:00:44.240 --> 0:00:46.680 is going to try and lower interest rates. That will help. 0:00:47.080 --> 0:00:49.600 That will bring some figger back to the economy, but 0:00:49.760 --> 0:00:53.840 it can only be mended by an increasing willingness on 0:00:53.880 --> 0:00:57.880 the part of the public to buy goods, general confidence 0:00:57.920 --> 0:00:59.800 in the system itself, and much of that has been 0:01:00.040 --> 0:01:03.319 voted over a number of years. That was Pimco's bill 0:01:03.400 --> 0:01:07.119 gross back in the Federal Reserve met again this week, 0:01:07.240 --> 0:01:09.560 but gone in the days when it can restore vigors 0:01:09.600 --> 0:01:13.080 the economy by cutting interest rates. Instead, FED chair j 0:01:13.280 --> 0:01:15.960 pal tried to restore that vigor by assuring the markets 0:01:16.280 --> 0:01:18.840 that the FED will continue to buy bonds until the 0:01:18.840 --> 0:01:22.399 economy is substantially better than it is today. We asked 0:01:22.400 --> 0:01:25.560 black Rocks rick reader whether those words were likely to 0:01:25.600 --> 0:01:28.440 do the trick. I mean, I mean, they're they're on 0:01:28.480 --> 0:01:31.880 a persistent movement to support the economy. I think there 0:01:31.959 --> 0:01:34.319 was there was a lot of analysis that had said 0:01:34.360 --> 0:01:37.319 that the FED was hawkish because they didn't increase the 0:01:37.319 --> 0:01:41.680 weighted average maturity or they didn't actually increase YESID purchase program. 0:01:41.920 --> 0:01:45.600 Anybody who describes this vet as hawkish is so misguided. 0:01:46.120 --> 0:01:48.200 This is a fan that is just going to continue 0:01:48.640 --> 0:01:51.320 to be there and be as accommodative. They know. They 0:01:51.320 --> 0:01:53.160 said they're going to continue to ask a purchase program 0:01:53.200 --> 0:01:56.200 at least as large, both in treasuries and mortgages. By 0:01:56.200 --> 0:01:57.600 the way, I don't even think they need to increase 0:01:57.640 --> 0:02:00.200 mortgages out all. I think they can shrink them. But 0:02:00.240 --> 0:02:02.120 they're gonna They're gonna keep going, and they're going to 0:02:02.200 --> 0:02:05.840 be incredibly supportive of the new administration and the fiscal stimulus. 0:02:05.880 --> 0:02:07.800 From here, well, let's pick up on that exactly where 0:02:07.920 --> 0:02:10.880 why are they sticking with this allocation for mortgages? You know? 0:02:11.120 --> 0:02:13.320 I mean, I actually, well, I think the Fed is 0:02:13.360 --> 0:02:15.280 doing a brilliant job this. I don't think they need 0:02:15.320 --> 0:02:17.320 to do that. I mean, if you think about more, 0:02:17.440 --> 0:02:19.720 there aren't enough mortgagees to purchase from what they're what 0:02:19.800 --> 0:02:23.359 they're doing, the banks are dying for those assets and uh, 0:02:23.440 --> 0:02:26.520 and the levels are incredibly low. And even if they 0:02:26.600 --> 0:02:29.000 slowed down, the purchase program rates aren't mortgage rates aren't 0:02:29.000 --> 0:02:32.040 moving higher. The demand for mortgage product is incredible. And 0:02:32.080 --> 0:02:33.960 then you take the other side of it. The housing 0:02:34.000 --> 0:02:36.639 market is an incredibly good shape. And if you think 0:02:36.680 --> 0:02:38.639 about it, you know, one of the things that is 0:02:38.680 --> 0:02:40.880 a risk for a particularly lower and middle income is 0:02:40.919 --> 0:02:44.000 the housing market is doing so well that you'll continuously 0:02:44.160 --> 0:02:46.520 increased home prices, which I would argue that is the 0:02:46.520 --> 0:02:48.760 one part of inflation that I actually think is real. 0:02:49.240 --> 0:02:51.480 And then quite frankly, it's burdensome to a lot of 0:02:51.480 --> 0:02:54.800 the economy, a lot of particularly lower middle income. So anyway, 0:02:54.840 --> 0:02:57.560 that part I don't other than signaling we're just not 0:02:57.560 --> 0:03:01.240 gonna we're not gonna pull any accommodation. Um. I don't 0:03:01.280 --> 0:03:04.880 think they need to do that. So, as I say, 0:03:05.240 --> 0:03:06.960 the message out of the FED I thought was we 0:03:06.960 --> 0:03:09.959 think it's going to start getting better, presumably large but 0:03:10.120 --> 0:03:12.880 because of the vaccine, which we're hoping for so much. 0:03:13.240 --> 0:03:15.560 At the same time, there's a real divergence, maybe even 0:03:15.560 --> 0:03:19.080 a bifurcation in the marketplace, but whether it's individuals or 0:03:19.080 --> 0:03:21.520 its companies between some people who are doing very very 0:03:21.520 --> 0:03:24.959 well and some people are doing very very badly. Yeah. 0:03:25.000 --> 0:03:27.560 I mean, David, you hit the nail on the head. Listen. 0:03:27.560 --> 0:03:29.280 But I think this is you know what the central 0:03:29.320 --> 0:03:32.440 bank does is you know, it's tools are blunt and 0:03:32.480 --> 0:03:35.240 a lot of what happens is it lifts financial assets 0:03:35.600 --> 0:03:38.800 and it creates a this bifurcation as you describe, and 0:03:38.840 --> 0:03:40.920 it doesn't you know what the FED can do is 0:03:40.960 --> 0:03:45.120 it sort of paves the runway for for other policy 0:03:45.200 --> 0:03:48.160 to come in. Now you really need the fiscal and 0:03:48.200 --> 0:03:50.800 the fiscal is where you can direct tax policy, where 0:03:50.800 --> 0:03:53.400 you can direct where the stimulus gets to things like 0:03:53.480 --> 0:03:58.880 state and local things like healthcare, spending, education, spending, etcetera. 0:03:59.040 --> 0:04:01.360 Things that can actually a close that gap. I mean, 0:04:01.400 --> 0:04:03.680 you know, now we actually are going to get what 0:04:03.760 --> 0:04:06.600 I think, particularly when you think about chair yelling, I 0:04:06.640 --> 0:04:10.960 still call it chair yelling the Treasury secretary. And now 0:04:11.000 --> 0:04:14.040 you've got functionally two FED chairs that are going to 0:04:14.120 --> 0:04:16.159 operate in concert with one another. And that's where you 0:04:16.160 --> 0:04:19.000 get really effective policy when when fiscal monetary work hand 0:04:19.040 --> 0:04:21.680 to glo up with one another. So is that constructive 0:04:21.800 --> 0:04:24.080 or does that undermine the independence of the FED? I mean, 0:04:24.120 --> 0:04:26.000 how closely do you want the two of them to 0:04:26.040 --> 0:04:30.880 operate together You've called a sort of pilot and copilot. Yeah, 0:04:30.920 --> 0:04:32.800 it's a great question. I do believe in the in 0:04:32.839 --> 0:04:35.680 the independence and I certainly know that people at the 0:04:35.680 --> 0:04:38.440 FED really believe in the independence of the FED. However, 0:04:39.279 --> 0:04:42.280 you know, you do create some coordination. By the way, 0:04:42.440 --> 0:04:44.600 having where they're where they're not talking that is that 0:04:44.880 --> 0:04:48.960 is a problem, um, but having some coordination coordination makes sense, 0:04:48.960 --> 0:04:52.640 particularly as you described earlier, we've got a problem in 0:04:52.680 --> 0:04:54.640 the country that we need to put more people to work. 0:04:54.760 --> 0:04:58.000 You know, until vaccine starts to really get implemented, we 0:04:58.040 --> 0:04:59.880 need to put more people to work, and we need 0:05:00.080 --> 0:05:03.760 stabilize and account of employment dynamic that is real. And 0:05:03.839 --> 0:05:06.360 so you know that that idea that the FED is 0:05:06.360 --> 0:05:09.520 going to neutralize the debt, that the that the that 0:05:09.560 --> 0:05:11.560 the fiscal is going to put on. And by the way, 0:05:11.880 --> 0:05:13.240 you know, I think I think of Larry Summer is 0:05:13.240 --> 0:05:15.200 gonna talk about this, their paper that they wrote on 0:05:15.200 --> 0:05:18.200 the system can actually withstand more debt is a hundred 0:05:18.240 --> 0:05:21.400 percent right and as long as and a big part 0:05:21.440 --> 0:05:23.240 of it is the FED is keeping rates low, so 0:05:23.320 --> 0:05:26.320 the interest burden on the economy is not onerous. Yeah, 0:05:26.400 --> 0:05:28.920 no question. And this goes to Larry Summer's secular stagnation 0:05:28.960 --> 0:05:30.680 that the problem we have is too much savings, not 0:05:30.720 --> 0:05:33.080 too little, that we need to actually be investing in 0:05:33.120 --> 0:05:35.680 spending some money. The question always is, isn't it how 0:05:35.680 --> 0:05:37.800 do you spend that money? Okay, you can borrow really cheap, 0:05:37.920 --> 0:05:39.680 but it depends on how you how you spend it 0:05:39.760 --> 0:05:43.720 or invest it. It's definitely right. By the way, I 0:05:43.760 --> 0:05:45.839 think we're at a point in time today. What Larry 0:05:45.880 --> 0:05:48.840 says is dead right is the amount of savings. I mean, 0:05:48.880 --> 0:05:52.080 you think about the liquidity in the system, what's been created, 0:05:52.120 --> 0:05:55.000 the aging demographic. I know we've talked about for years pensions, 0:05:55.000 --> 0:05:57.599 life insurance companies that need the ability to fund is 0:05:57.640 --> 0:06:01.279 extraordinary savings do outweigh the sets by a lot, and 0:06:01.320 --> 0:06:03.839 that's why you're seeing appreciation and so many assets across 0:06:04.000 --> 0:06:06.839 across different markets. But you're right, I mean there's different 0:06:06.839 --> 0:06:10.760 return on equities as it were, uh return on equity 0:06:10.800 --> 0:06:13.440 possibility spending on how the government spends the money. I 0:06:13.480 --> 0:06:15.680 actually think we're at a point in time today that 0:06:15.800 --> 0:06:19.279 the velocity of tax dollars working their way through that 0:06:19.320 --> 0:06:22.760 comes on the backside of fiscal um quite tranquility, lowers 0:06:22.839 --> 0:06:25.120 the bar for what those returns need to be for 0:06:25.240 --> 0:06:28.160 those government programs. But like you say, some are obviously 0:06:28.640 --> 0:06:31.880 much more efficacious than others. And but I truly think 0:06:31.920 --> 0:06:34.440 that that quite frankly, most of the fiscal stimas you 0:06:34.440 --> 0:06:37.279 put in today, is gonna It's gonna create a velocity 0:06:37.440 --> 0:06:40.599 and which impacts the monetary base that the FED is 0:06:40.640 --> 0:06:43.599 created in a very positive way. That was Rick Reader's 0:06:43.600 --> 0:06:46.520 CIO for Global fixed Income and head of the Global 0:06:46.640 --> 0:06:50.320 Allocation Investment team at black Rock, coming up a major 0:06:50.440 --> 0:06:53.520 cyber attack on the U. S. Government, pointing out again 0:06:53.720 --> 0:06:57.360 how vulnerable we are, something that Sam Paulisano, the former 0:06:57.400 --> 0:07:00.640 head of IBM, knows about that's next on Wall Street 0:07:00.680 --> 0:07:09.520 Week on Bloomberg. This is Bloomberg Wall Street Week with 0:07:09.680 --> 0:07:13.280 David Weston from Bloomberg Radio. We learned this week about 0:07:13.280 --> 0:07:17.160 a massive hack of government computers, and we still don't know, frankly, 0:07:17.160 --> 0:07:19.440 how many were hacked or how much data was taken. 0:07:19.600 --> 0:07:21.920 It was bad enough that the National Security Advisor had 0:07:21.960 --> 0:07:23.880 to come back from his trip overseas to try to 0:07:23.920 --> 0:07:26.720 assess the situation. To help us assess the situation, we 0:07:26.760 --> 0:07:29.960 now have the former chairman and CEO of IBM, Sam Paulisano. 0:07:30.360 --> 0:07:33.000 Sam also served as the vice chair at Prison Obama's 0:07:33.000 --> 0:07:35.560 Commission trying to deal with cybersecurity, knows just a little 0:07:35.560 --> 0:07:37.440 bit about it, and now as an institute to try 0:07:37.440 --> 0:07:40.160 to address the issues. So when you heard this this week, 0:07:40.400 --> 0:07:42.520 what did you make of it? My first reaction when 0:07:42.560 --> 0:07:44.840 I heard about it, quite honestly, I thought it was 0:07:44.880 --> 0:07:47.800 the Chinese. And I'll tell you why. I say that, 0:07:47.840 --> 0:07:50.680 because if you look at his stark, stark pattern of 0:07:50.720 --> 0:07:53.160 the various types of attacks have occurred in the past, 0:07:53.880 --> 0:07:56.040 that this is more like the Chinese trying to get 0:07:56.080 --> 0:07:58.480 access to information and data, and then the Russians had 0:07:58.480 --> 0:08:01.600 their own strategies and we can talk about you know, uh, 0:08:02.200 --> 0:08:04.280 election interference and the like, as well as in the 0:08:04.320 --> 0:08:08.559 financial side of transactions. So however, obviously that's not the case. 0:08:08.600 --> 0:08:10.640 I mean, this time it was the Russians and whatever 0:08:10.680 --> 0:08:14.400 they call themselves, Cozy Bear Apt. Twenty nine, whatever it 0:08:14.440 --> 0:08:17.200 happens to be. I think that from what I've read 0:08:17.240 --> 0:08:19.520 and what I hear from my friends in the government, 0:08:19.760 --> 0:08:23.240 that they're pretty confident that's who it was this time. Now, 0:08:23.280 --> 0:08:25.480 having said all that, I mean, I think it does 0:08:25.760 --> 0:08:28.840 wake the nation up to the risk we faced if 0:08:28.880 --> 0:08:32.280 we don't do something better cybersecurity and our infrastructures. So 0:08:32.640 --> 0:08:34.760 how does this happen? Sam? And for those of us 0:08:34.760 --> 0:08:37.240 who don't understand this world the way you do, this 0:08:37.280 --> 0:08:39.080 is not the first hack we've told we've heard about, 0:08:39.160 --> 0:08:42.400 either of government computers or often of private sector computers, 0:08:42.640 --> 0:08:45.000 and yet it seems it was quite vulnerable. This organization, 0:08:45.080 --> 0:08:47.800 solar Wins, a private company, has something like two or 0:08:47.920 --> 0:08:51.000 seventy five or three hundred thousand different customers, about eighteen 0:08:51.000 --> 0:08:52.920 thousands they say might have been affected here, but it 0:08:52.960 --> 0:08:56.400 included things like the Treasury Department and the State Department, 0:08:56.400 --> 0:08:58.800 and that the Department of Homeland Security. The I R s, 0:08:59.160 --> 0:09:02.240 how how can we need that vulnerable at this point? Well, 0:09:02.280 --> 0:09:04.400 I mean, actually, David, if you if you kind of 0:09:04.640 --> 0:09:07.760 stand back from this hack, uh, And there's a pattern 0:09:07.800 --> 0:09:09.880 of this. In fact, we study this in the Obama 0:09:10.000 --> 0:09:12.920 Commission and my my as you mentioned, my faint Tank 0:09:13.040 --> 0:09:15.319 is focused on this as well. I think about it 0:09:15.360 --> 0:09:19.360 as your supply chain. In this particular case. Solar Wind 0:09:19.480 --> 0:09:23.400 is a provider of services, network services, but services to 0:09:23.440 --> 0:09:27.160 all these various entities, and that's the nature of their business. However, 0:09:27.360 --> 0:09:30.000 there's they're very innovative, they're very good, they're growing very 0:09:30.080 --> 0:09:33.240 very quickly. But but perhaps they weren't as thorough as 0:09:33.240 --> 0:09:35.719 they needed to be as far as securing their particular 0:09:35.800 --> 0:09:39.280 platform itself. I don't know that. But the suspicion is 0:09:39.320 --> 0:09:42.080 that they were able to get in. Uh. The hackers 0:09:42.080 --> 0:09:44.240 were able to get in and to what they would 0:09:44.280 --> 0:09:48.079 call a backdoor or vulnerability, and then through that vulnerability 0:09:48.559 --> 0:09:50.920 they were in there for a long time. And that's 0:09:50.920 --> 0:09:53.400 where they go on detected. Which is the complexity of 0:09:53.400 --> 0:09:56.560 trying to figure out how this happened and who they 0:09:56.600 --> 0:09:58.760 are and what the impact is because they've been kind 0:09:58.760 --> 0:10:01.280 of invisible, the all of a sudden something happens with 0:10:01.440 --> 0:10:04.520 they become apparent. Uh neither a big data sets start 0:10:04.559 --> 0:10:06.840 to disappear or wherever that happens to be, or the 0:10:06.920 --> 0:10:10.320 government sees what's going on and they have to begin 0:10:10.360 --> 0:10:12.480 to react. But the point of it is is the 0:10:12.880 --> 0:10:15.920 key is the vulnerability of people's supply chains. I mean, 0:10:15.960 --> 0:10:18.800 if you were going to go hack the US government, 0:10:18.840 --> 0:10:20.920 you wouldn't go hack the military or n s A 0:10:21.080 --> 0:10:23.920 or c i A. You would hack the civilion side 0:10:23.920 --> 0:10:26.440 of government, which is not nearly as secure coming through 0:10:26.520 --> 0:10:30.160 one of their providers, their service providers. No different than 0:10:30.200 --> 0:10:32.719 if you're going to attack hack a bank. I mean, 0:10:32.760 --> 0:10:35.320 to go after a bank that's spending billions of dollars 0:10:35.360 --> 0:10:38.040 or hundreds of millions of dollars to protect their infrastructure 0:10:38.320 --> 0:10:41.120 is very challenging. However, if you go through someone within 0:10:41.120 --> 0:10:44.120 their supply chains, from small innovative company that they're using 0:10:44.480 --> 0:10:47.160 to either help with technology or just sell their products 0:10:47.200 --> 0:10:49.640 and those sorts of things, they're the ones that are 0:10:49.679 --> 0:10:52.400 the most vulnerable, and then therefore you your entity is 0:10:52.440 --> 0:10:55.200 vulnerable because they're part of your operations. Well, that was 0:10:55.240 --> 0:10:58.000 the question. How dependent are we in the government on 0:10:58.040 --> 0:11:01.200 those independent contractors, and not just the contractors, but the 0:11:01.200 --> 0:11:05.360 subcontractors and the subcontracts to the subcontractors. We're very dependent 0:11:05.440 --> 0:11:07.400 on them. And you saw that not just in cyber 0:11:07.480 --> 0:11:09.360 go back to the pandemic when all of a sudden 0:11:09.400 --> 0:11:11.920 we couldn't get PPE and those sorts of things. So 0:11:11.960 --> 0:11:14.480 there's a total dependency on the supply chain and those 0:11:14.520 --> 0:11:17.760 suppliers within the government. That's not a bad thing, I mean, 0:11:17.840 --> 0:11:20.400 quite honestly. But what it what it requires is the 0:11:20.440 --> 0:11:24.160 government established standards, just like a company would establish standards 0:11:24.200 --> 0:11:26.400 that if you're going to be a provider of services 0:11:26.400 --> 0:11:30.080 to us, whether that's software, people, whatever it happens to be, 0:11:30.200 --> 0:11:32.720 you have to comply with these cyber standards. Now, there's 0:11:32.720 --> 0:11:35.880 a standard that was established called NISTS by in the 0:11:35.920 --> 0:11:38.800 Commerce Department that we worked on years ago. That's a 0:11:38.920 --> 0:11:42.080 very good standard by the way to secure the infrastructure, 0:11:42.120 --> 0:11:44.480 and a lot of the privact sector companies are complying 0:11:44.559 --> 0:11:46.760 with that. What we did in my little think tank 0:11:46.960 --> 0:11:49.720 would think of the cyber readiest incident. We felt that 0:11:49.760 --> 0:11:52.160 people were going to focus on these very small businesses 0:11:52.400 --> 0:11:54.400 so we created a whole set of tools that we 0:11:54.520 --> 0:11:57.280 distribute for free. I mean they're actually for freeworred nonprofits. 0:11:57.280 --> 0:11:59.120 So we can do these sorts of things, and we 0:11:59.200 --> 0:12:02.559 probably have hundreds of thousands of subscribers now, even small 0:12:02.600 --> 0:12:05.480 spots with three or four employees, not just companies or 0:12:05.520 --> 0:12:08.520 government agencies, to give them a basic level of protection 0:12:08.880 --> 0:12:11.120 when it comes to cyber threats. Now, the point of 0:12:11.160 --> 0:12:13.680 it again is why are we doing this? Is because 0:12:13.679 --> 0:12:17.400 if your General Motors or Exonmobile or some large entity, 0:12:17.640 --> 0:12:20.400 you have all these small little partners involved in your infrastructure, 0:12:20.480 --> 0:12:23.439 drilling operation, card dealerships, etcetera, etcetera. So you want to 0:12:23.440 --> 0:12:27.560 be able to protect yourself from their vulnerabilities, not just 0:12:27.679 --> 0:12:31.079 your own. From a cyber perspective, we have a president 0:12:31.080 --> 0:12:34.560 like Biden coming to office January twenty. Who does he 0:12:34.679 --> 0:12:37.000 have responsible for this? Or who does the current president, 0:12:37.040 --> 0:12:38.920 President Trump have response to this? Who does he call 0:12:39.000 --> 0:12:41.080 up when he hears about something like this? Well, that's 0:12:41.080 --> 0:12:43.679 a great thing. That is a great question, my friend, 0:12:43.880 --> 0:12:46.720 that is unbelievably a great question. I would say they 0:12:46.720 --> 0:12:48.920 should start with somebody within the White House staff. But 0:12:49.000 --> 0:12:51.800 let's talk about it as it is. Today versus as 0:12:51.800 --> 0:12:54.680 maybe a point of view, as it should be. As 0:12:54.720 --> 0:12:58.480 it is today, there is an agency UH called the 0:12:58.520 --> 0:13:02.680 Cybersecurity and infash Structure Security Agency. It's part of the 0:13:02.720 --> 0:13:05.960 Department of Homeland Security that it's responsible for these kinds 0:13:06.000 --> 0:13:09.560 of hacks, for agency protection, pandemics, all sorts of things. 0:13:09.559 --> 0:13:12.240 But they are the responsible agency that does these things. 0:13:12.600 --> 0:13:15.520 As you might recall, there's nobody leading that agency at 0:13:15.520 --> 0:13:17.720 this point in time because they were all fired. So 0:13:17.800 --> 0:13:21.040 there's no one in the agency at the agency level 0:13:21.160 --> 0:13:25.000 who is in charge of leading these operations. There's also 0:13:25.120 --> 0:13:27.440 no one in the White House staff either, by the way, 0:13:27.720 --> 0:13:31.360 because as UH it was part of the focus in 0:13:31.360 --> 0:13:35.240 the National Security Council of all administration. We are proposed 0:13:35.360 --> 0:13:37.640 in the Executive Order that they elevate it to give 0:13:37.679 --> 0:13:40.160 it established a higher set of priorities. That would be 0:13:40.200 --> 0:13:42.880 a visible way to create priority within the government is 0:13:43.000 --> 0:13:47.280 elevate that person or that individual. Since then, that actually 0:13:47.280 --> 0:13:50.400 has been kind of lessen. Their responsibilities have been lessened, 0:13:50.440 --> 0:13:53.079 and therefore obviously their focused and their impact has been lesson. 0:13:53.120 --> 0:13:56.040 So I'm the President of the United States, sitting President 0:13:56.080 --> 0:13:58.880 United States, and I wanted to call somebody from my 0:13:58.960 --> 0:14:00.920 staff in my office. Is that tell me, hey, what's 0:14:00.920 --> 0:14:03.640 going on? What should we be doing? There's no one there. 0:14:04.840 --> 0:14:07.040 Do we have the people in the United States government 0:14:07.120 --> 0:14:10.760 somewhere working somewhere who have the technical expertise to deal 0:14:10.800 --> 0:14:12.760 with this? I mean, this is very special stuff. Certainly 0:14:12.800 --> 0:14:15.320 I wouldn't know how to go about dealing with it. 0:14:15.400 --> 0:14:17.880 But do we have the level of sophistication in the 0:14:17.960 --> 0:14:20.680 people we have employed in the government. Yes, we do, 0:14:20.800 --> 0:14:22.920 but it's it's it's more and I'll call it the 0:14:23.000 --> 0:14:27.200 National Security and the Defense establishment. They really are excellent skills. 0:14:27.320 --> 0:14:30.680 If you look at what they referred to as dot mill, 0:14:30.960 --> 0:14:33.680 you know, uh U S Government, Dot Mill, Brouss, dot gov, 0:14:33.760 --> 0:14:37.640 which is the civilian side, they're very very good at this. 0:14:37.720 --> 0:14:40.680 They have good infrastructure. They actually do a pretty good 0:14:40.720 --> 0:14:43.920 job in defending their own infrastructure as well as our country. 0:14:44.280 --> 0:14:46.320 It's when you get to the civilian side of government. 0:14:46.400 --> 0:14:50.520 You know, you mentioned Treasury. The previous acts were hacks, 0:14:50.520 --> 0:14:53.480 were OPI, the Office of Personnel and Management O p M, 0:14:54.000 --> 0:14:56.800 I R S, etcetera, etcetera. They don't have the same 0:14:56.880 --> 0:15:00.120 level as skill and their infrastructure is very antiquated. That 0:15:00.200 --> 0:15:04.640 was Sam Paulisano, former chairman and CEO of IBM coming up. 0:15:04.800 --> 0:15:07.840 The vaccine is good news, but how good is it? 0:15:08.000 --> 0:15:10.840 And what do we need to do until everybody gets it? 0:15:11.400 --> 0:15:19.600 This is Wall Street Week on Bloomberg. This is Bloomberg 0:15:19.640 --> 0:15:23.640 Wall Street Week with David Weston from Bloomberg Radio. Well, 0:15:23.680 --> 0:15:26.400 every single day seems to bring new news about vaccines, 0:15:26.440 --> 0:15:31.080 but also new instances of COVID nineteen infections and hospitalizations 0:15:31.120 --> 0:15:33.640 and yes, deaths. The question then, is how do we 0:15:33.640 --> 0:15:35.680 get from the current crisis to the time when we 0:15:35.680 --> 0:15:38.120 can start to get our lives back together again. Well, 0:15:38.160 --> 0:15:40.160 partners in Health is leading the way in that with 0:15:40.240 --> 0:15:43.800 its pioneering and the in testing and in tracing across 0:15:43.880 --> 0:15:46.440 the country. Welcome to the CEO of Partner's Health. She 0:15:46.560 --> 0:15:48.720 is Dr Sheila Davis. So, Dr Davis, thank you so 0:15:48.760 --> 0:15:50.320 much for being with us. Give us a sense of 0:15:50.360 --> 0:15:52.480 what you were doing at partners in Health. Yeah, in 0:15:52.520 --> 0:15:55.760 the US, we've been working closely, certainly through the in 0:15:55.800 --> 0:15:58.640 the state of Massachusetts at the invitation of Governor Baker, 0:15:58.880 --> 0:16:01.920 and then in eleven other jurisdictions in the US who 0:16:01.920 --> 0:16:04.240 have asked us to come in and help, and we've 0:16:04.320 --> 0:16:07.840 taken lessons learned from our work around the world in 0:16:07.960 --> 0:16:10.800 Haiti and Sierra Leone in other places on how to 0:16:10.840 --> 0:16:14.880 actually do contact tracing as one piece of a comprehensive plan. 0:16:15.480 --> 0:16:18.360 We really need a strong public health system, and this 0:16:18.760 --> 0:16:21.680 COVID nineteen has illuminated I think that in the U 0:16:21.880 --> 0:16:25.440 s we're really lacking a robust public health response. Well, 0:16:25.440 --> 0:16:27.520 that's one of the interesting things here. I heard someone say, 0:16:27.560 --> 0:16:29.640 I think Larry Summers actually said we've over invested in 0:16:29.640 --> 0:16:32.360 private health, under investment in public health, as you say, 0:16:32.680 --> 0:16:34.920 partners in health. Originally really in Haiti, but you've done 0:16:34.960 --> 0:16:37.840 an extensive word in other countries, including Rwanda, elsewhere around 0:16:37.840 --> 0:16:39.840 the world. What can we learn from some of the 0:16:39.920 --> 0:16:42.760 less developed countries that can really be applied and we 0:16:42.840 --> 0:16:45.560 need here in the United States of America. Yeah, I 0:16:45.600 --> 0:16:47.360 think it's a great question. You know, there's a lot 0:16:47.440 --> 0:16:50.360 we can learn. We know that other countries that do 0:16:50.400 --> 0:16:52.680 not have the same investment in health have done much 0:16:52.720 --> 0:16:55.840 better through this pandemic. And I think a lot of 0:16:55.880 --> 0:16:59.680 it is because there is a comprehensive healthcare system that 0:17:00.160 --> 0:17:03.440 have a public health model that includes contact tracing, that 0:17:03.520 --> 0:17:07.359 includes much more of people embedded in the community like 0:17:07.520 --> 0:17:11.119 community health workers. We still need high tech i c 0:17:11.359 --> 0:17:14.199 u s in all the places that we work, but 0:17:14.320 --> 0:17:17.359 we definitely can have lessons learned from Rwanda, which has 0:17:17.400 --> 0:17:21.200 done a fantastic pantemic control and other places, and how 0:17:21.200 --> 0:17:24.560 do we infuse those into the US health system and 0:17:24.600 --> 0:17:28.480 really build a system that's not reliant just on hospitals 0:17:29.080 --> 0:17:32.320 as the pinnacle of all of the healthcare. We've seen 0:17:32.400 --> 0:17:35.399 the testing ramp up from very very modest origins, and 0:17:35.440 --> 0:17:37.840 now it seems to be moving along in most of 0:17:37.840 --> 0:17:39.920 the United States. At the same time, I wonder about 0:17:39.920 --> 0:17:42.120 the tracing part of it, because I know you're very 0:17:42.200 --> 0:17:44.919 involved in that. We have reports, for example out of 0:17:45.320 --> 0:17:49.000 New Jersey, for example, where we had reports from Governor 0:17:49.160 --> 0:17:52.400 Murphy that maybe sev the people contacted don't comply, don't 0:17:52.400 --> 0:17:55.440 cooperate in helping with the tracing, you know. I think 0:17:55.440 --> 0:17:58.600 what we've found is that when people are when we're 0:17:58.640 --> 0:18:01.800 able to also assess up their needs are a lot 0:18:01.800 --> 0:18:04.720 of people are not able to isolate a quarantine safely 0:18:04.840 --> 0:18:08.560 if they don't have the social support that's needed. People 0:18:08.640 --> 0:18:12.040 need diapers, people need formula, people need food. So a 0:18:12.040 --> 0:18:15.320 core component of what we embedded in the Massachusetts program 0:18:15.359 --> 0:18:18.800 as well as um with other places we're working, is 0:18:18.840 --> 0:18:23.040 that there's a direct connection to when our contact tracers 0:18:23.080 --> 0:18:25.840 reach out, which is the advantage of versus a text 0:18:25.960 --> 0:18:29.720 or some other type of of tech option, and assessing 0:18:29.760 --> 0:18:31.720 do people need help, that they need a place to 0:18:31.800 --> 0:18:35.320 say where they can safely isolate from their family members. 0:18:35.359 --> 0:18:38.720 So it really is has to be a more of 0:18:38.760 --> 0:18:41.760 a safety net model. So I think most people do 0:18:41.880 --> 0:18:44.800 want to comply, but many people don't have the ability 0:18:44.840 --> 0:18:47.000 to have a separate wing in their home or a 0:18:47.000 --> 0:18:49.520 separate way to have food brought in. Now that sounds 0:18:49.520 --> 0:18:51.840 like a pretty labor intensive effort. As you say, it's 0:18:51.880 --> 0:18:54.280 not just a technological fix to figure out who's got 0:18:54.280 --> 0:18:55.880 it and who might give it to somebody, But how 0:18:55.880 --> 0:18:57.679 do we support you in fact you have and you 0:18:57.720 --> 0:19:00.400 have to isolate or you have to quarantine somehow. How 0:19:00.480 --> 0:19:02.320 labor intensive is this? How many people do have working 0:19:02.320 --> 0:19:06.400 on this, you know in Massachusetts in collaboration with other 0:19:06.480 --> 0:19:09.119 members of the state agencies, which has been a phenomenal 0:19:09.119 --> 0:19:11.600 experience for us, and we've learned a lot. We have 0:19:12.280 --> 0:19:15.240 now over two thousand people who are working on this effort, 0:19:15.520 --> 0:19:17.800 But really there are people who are picking up the 0:19:17.840 --> 0:19:20.920 phone talking to people um, you know, assessing what their 0:19:20.960 --> 0:19:24.480 needs are and connecting them to existing resources in the state. 0:19:24.920 --> 0:19:27.560 So a lot of it was not Certainly some new 0:19:27.600 --> 0:19:30.880 money was infused for the social support efforts, but part 0:19:30.880 --> 0:19:33.639 of it was also making sure that we're connecting the dots. 0:19:34.040 --> 0:19:37.240 And if we look at the overall cost of what 0:19:37.359 --> 0:19:40.480 it costs to have robots public health programs, it's much 0:19:40.560 --> 0:19:43.960 cheaper in the long run than a few days, weeks 0:19:44.040 --> 0:19:46.520 or months in a hospital, which is the most expensive 0:19:46.560 --> 0:19:49.960 place certainly to have care. How widely distributed is this 0:19:50.000 --> 0:19:52.360 the United States? I mean you've mentioned Massachusetts. I remember 0:19:52.440 --> 0:19:55.240