1 00:00:00,160 --> 00:00:03,360 Speaker 1: This is Bloomberg Wall Street Week. What's the state of 2 00:00:03,400 --> 00:00:06,360 Speaker 1: corporate governance? The deficent is a real issue. The US 3 00:00:06,400 --> 00:00:09,960 Speaker 1: economy continues to send mixed signals, the financial stories that 4 00:00:10,039 --> 00:00:13,560 Speaker 1: keep our world fed, action to con concerns over dollar liquidity, 5 00:00:13,600 --> 00:00:16,599 Speaker 1: and encouraging China data. The five hundred wealthiest people in 6 00:00:16,640 --> 00:00:19,560 Speaker 1: the world. Through the eyes of the most influential voices 7 00:00:19,880 --> 00:00:22,880 Speaker 1: Larry Summers, the former Treasury Secretary, star Ward, CEO, Kevin 8 00:00:22,960 --> 00:00:26,640 Speaker 1: Johnson sec Chairman j Clayton. Bloomberg wool Street Week with 9 00:00:26,760 --> 00:00:30,639 Speaker 1: David Weston from Bloomberg Radio. The check is in the 10 00:00:30,680 --> 00:00:34,400 Speaker 1: mail for schools, for states, for restaurants, and oh yes, 11 00:00:34,800 --> 00:00:39,400 Speaker 1: for of American households. This is a special Stimulus edition 12 00:00:39,640 --> 00:00:43,440 Speaker 1: of Bloomberg Wall Street Week. I'm David Weston. President Biden 13 00:00:43,479 --> 00:00:46,640 Speaker 1: pledged to get the virus under control and get Americans vaccinated, 14 00:00:46,640 --> 00:00:50,000 Speaker 1: a priority that is reflected in the stimulus package. Everything 15 00:00:50,040 --> 00:00:53,760 Speaker 1: in the American Rescue Plan addresses a real need, including 16 00:00:53,800 --> 00:00:58,760 Speaker 1: investments to fund our entire vaccination effort, more vaccines, more 17 00:00:58,880 --> 00:01:04,000 Speaker 1: vaccinate tours, and more vaccination sites. About seven percent of 18 00:01:04,040 --> 00:01:06,360 Speaker 1: the one point nine trillion dollars will go towards the 19 00:01:06,360 --> 00:01:11,800 Speaker 1: country's pandemic response, including testing, contact tracing, and vaccine distribution. 20 00:01:12,319 --> 00:01:14,840 Speaker 1: The government is not alone in its efforts to get 21 00:01:14,840 --> 00:01:18,960 Speaker 1: people vaccinated. In North Carolina, Honeywell has been partnering with Atrium, 22 00:01:19,000 --> 00:01:21,320 Speaker 1: one of the largest health care systems in the country. 23 00:01:21,560 --> 00:01:24,600 Speaker 1: We have CEO Eugene Woods. How the campaign to get 24 00:01:24,680 --> 00:01:27,800 Speaker 1: shots in arms is going. Yeah, the challenge has been 25 00:01:27,800 --> 00:01:30,319 Speaker 1: from the beginning is getting enough vaccines. I think you 26 00:01:30,400 --> 00:01:33,040 Speaker 1: see things ramping up and so we're excited about that now. 27 00:01:33,160 --> 00:01:36,160 Speaker 1: Really it's just a distribution issue. I do have concerns 28 00:01:36,200 --> 00:01:39,800 Speaker 1: that we need to to take a state like North Carolina. 29 00:01:39,800 --> 00:01:42,200 Speaker 1: We're about ten million people in North Carolina. If you 30 00:01:42,240 --> 00:01:44,280 Speaker 1: take out the two million that or sixteen and under 31 00:01:44,480 --> 00:01:48,640 Speaker 1: we've got to vaccinate about, you know, to get her 32 00:01:48,960 --> 00:01:51,680 Speaker 1: her immunity. So that's eight millions. That's about seven million 33 00:01:51,760 --> 00:01:53,800 Speaker 1: or so that we need to get vaccinated. And we've 34 00:01:53,840 --> 00:01:56,840 Speaker 1: gotten one point five shots and arms one point five 35 00:01:56,840 --> 00:01:58,600 Speaker 1: million shots and I'm so far, so we still got 36 00:01:58,640 --> 00:02:01,200 Speaker 1: a ways to go. That's aid. We went from about 37 00:02:01,200 --> 00:02:03,560 Speaker 1: the bottom fifteen in terms of states to number one, 38 00:02:03,800 --> 00:02:06,920 Speaker 1: uh last week in terms of over sixty five getting 39 00:02:06,920 --> 00:02:09,280 Speaker 1: shots and arms. So we're gonna continue this path, and 40 00:02:09,320 --> 00:02:12,480 Speaker 1: as as supply becomes more plentiful, I think we're gonna 41 00:02:12,520 --> 00:02:16,440 Speaker 1: be able to continue to use mass mass vaccination sites 42 00:02:16,680 --> 00:02:20,760 Speaker 1: to get shots. Before this this variant comes into play, 43 00:02:20,800 --> 00:02:24,200 Speaker 1: which is what concerns me. Are you getting any resistance 44 00:02:24,240 --> 00:02:26,320 Speaker 1: at all? Because we hear some descriptions that could be 45 00:02:27,919 --> 00:02:30,840 Speaker 1: of the population that just isn't really interested in getting vaccinated. Yeah, 46 00:02:30,880 --> 00:02:33,600 Speaker 1: that's the challenge, right, So if you think about her community, 47 00:02:33,840 --> 00:02:35,560 Speaker 1: depending on what scientists you talked about, we need to 48 00:02:35,560 --> 00:02:41,320 Speaker 1: get about the population vaccinated. Right now, there's about hesitancy 49 00:02:41,360 --> 00:02:45,519 Speaker 1: about about thirty percent that I'm hearing the latest statistics, 50 00:02:45,520 --> 00:02:49,040 Speaker 1: So to get we have to eat into that about right, 51 00:02:49,040 --> 00:02:50,919 Speaker 1: And so that's the work that we're doing right now. 52 00:02:51,080 --> 00:02:54,560 Speaker 1: There are some glimmers of hope um African Americans, for example, 53 00:02:55,040 --> 00:02:58,200 Speaker 1: who have had for all very good reasons and mistrust 54 00:02:58,280 --> 00:03:01,720 Speaker 1: of the health care system. Back in the number said 55 00:03:01,720 --> 00:03:04,519 Speaker 1: they we're going to get the vaccine vaccine. The most 56 00:03:04,520 --> 00:03:07,000 Speaker 1: recent numbers I saw us at six. So we're beginning 57 00:03:07,000 --> 00:03:09,520 Speaker 1: to make some progress, but they're still work to be done. 58 00:03:09,639 --> 00:03:12,280 Speaker 1: So address that question very specifically, because I know in 59 00:03:12,320 --> 00:03:15,400 Speaker 1: New York, for example, that there's a disproportionate number of 60 00:03:15,480 --> 00:03:19,239 Speaker 1: African Americans and Latin X individuals who are more at risk, 61 00:03:19,440 --> 00:03:21,880 Speaker 1: disproportion number who haven't gotten the vaccine yet there they 62 00:03:21,880 --> 00:03:24,400 Speaker 1: are under indexing. Is that true in North Carolina at 63 00:03:24,400 --> 00:03:26,800 Speaker 1: this point? It's true all over the country unfortunately. And 64 00:03:26,800 --> 00:03:29,000 Speaker 1: that's why you've got to be really really intentional about 65 00:03:29,000 --> 00:03:32,680 Speaker 1: your strategies to reach those communities of color. So, for example, 66 00:03:32,720 --> 00:03:35,920 Speaker 1: we have roving bands that we're working with this coalition 67 00:03:35,960 --> 00:03:39,560 Speaker 1: of churches, about sixty churches. They're African American and Latin X. 68 00:03:39,720 --> 00:03:41,720 Speaker 1: And so we're going through the parking lots and and 69 00:03:41,760 --> 00:03:44,800 Speaker 1: we're really saying tell us where we need to go, 70 00:03:44,920 --> 00:03:47,640 Speaker 1: and in the roving bands and think about a physician 71 00:03:47,640 --> 00:03:50,080 Speaker 1: office basically on wheels, and we go to where where 72 00:03:50,080 --> 00:03:53,640 Speaker 1: we're needed sev of the people that were vaccinating or 73 00:03:53,640 --> 00:03:55,720 Speaker 1: people of color. And then when we've done the mass 74 00:03:55,800 --> 00:03:59,520 Speaker 1: vaccination events at Bank of America Stadium, we preferentially opened 75 00:03:59,520 --> 00:04:03,080 Speaker 1: the schedule to those churches another other vulnerable community. So 76 00:04:03,200 --> 00:04:05,320 Speaker 1: you've got to be really intentional about the strategy. The 77 00:04:05,360 --> 00:04:08,360 Speaker 1: one thing that I'm proud working together with Honeywell, the 78 00:04:08,360 --> 00:04:12,400 Speaker 1: Panthers and Motor Speedway. We put together a playbook. Andy Slavitt, 79 00:04:12,440 --> 00:04:16,520 Speaker 1: who's on the President Biden's Corner Virus task for US, 80 00:04:16,680 --> 00:04:19,200 Speaker 1: asked for sort of what have the key lessons learned, 81 00:04:19,400 --> 00:04:20,960 Speaker 1: and so we shared that a couple of weeks ago. 82 00:04:21,040 --> 00:04:24,000 Speaker 1: He shared that with the governors and we're hoping that 83 00:04:24,120 --> 00:04:27,039 Speaker 1: that there's some insights there that could help the country 84 00:04:27,080 --> 00:04:28,960 Speaker 1: do this well. So, Jeanne, if you would take it 85 00:04:29,120 --> 00:04:31,520 Speaker 1: a half step back here from the specifics of the 86 00:04:31,600 --> 00:04:34,400 Speaker 1: vaccination and talking about healthcare provision more generally in this 87 00:04:34,480 --> 00:04:36,080 Speaker 1: time of the pandemic and beyond. We now have a 88 00:04:36,120 --> 00:04:38,400 Speaker 1: new stimulus bill one point nine trillion dollars has a 89 00:04:38,400 --> 00:04:42,840 Speaker 1: fair amounty money in there actually subsidize some uh the exchanges. 90 00:04:42,880 --> 00:04:44,960 Speaker 1: So the people in Ford Healthcare, do you see a 91 00:04:45,120 --> 00:04:48,480 Speaker 1: shift going on because of the stimulus bill in your business? Yeah, 92 00:04:48,520 --> 00:04:50,719 Speaker 1: I mean, I think we're really excited that the stimulus 93 00:04:50,760 --> 00:04:53,960 Speaker 1: bill has a number of important provisions, including, you know, 94 00:04:54,040 --> 00:04:58,000 Speaker 1: additional dollars for for for distribution of the vaccine, and 95 00:04:58,040 --> 00:05:01,320 Speaker 1: there's some other uh part of that that includes helping 96 00:05:01,320 --> 00:05:03,840 Speaker 1: some of these community based centers that are really been 97 00:05:03,880 --> 00:05:06,760 Speaker 1: struggling and also rural care. So we're we're excited about 98 00:05:06,760 --> 00:05:09,080 Speaker 1: that that what we didn't see in that is additional 99 00:05:09,560 --> 00:05:12,640 Speaker 1: relief for providers. Uh and to the extent that we 100 00:05:12,680 --> 00:05:14,680 Speaker 1: would hope. We've been on the front line of this 101 00:05:14,760 --> 00:05:17,240 Speaker 1: health systems and so we're still not out of the woods. 102 00:05:17,400 --> 00:05:19,680 Speaker 1: So we're we're hoping to work with the administration to 103 00:05:19,760 --> 00:05:24,080 Speaker 1: have other opportunities for providing additional support to the health 104 00:05:24,120 --> 00:05:26,600 Speaker 1: systems like ours, because we're still very much in the battle. 105 00:05:26,800 --> 00:05:29,440 Speaker 1: What about the cost of healthcare? We hear from some 106 00:05:29,480 --> 00:05:32,000 Speaker 1: people that with the move to telehealth, which seems to 107 00:05:32,000 --> 00:05:34,280 Speaker 1: have really ramped up during the pandemic, that we may 108 00:05:34,320 --> 00:05:36,440 Speaker 1: actually finally be able to bend that cost curve a 109 00:05:36,480 --> 00:05:38,599 Speaker 1: little bit. Are you finding that in North Carolina? Yeah? 110 00:05:38,600 --> 00:05:40,159 Speaker 1: I mean, I think we could spend the next hour 111 00:05:40,200 --> 00:05:42,400 Speaker 1: talking about the cost of health care and affordability. We 112 00:05:42,400 --> 00:05:45,240 Speaker 1: we do know that it's a multi factorial issue that 113 00:05:45,279 --> 00:05:48,479 Speaker 1: includes pharma, that includes insurance companies, providers, We all own 114 00:05:48,480 --> 00:05:50,359 Speaker 1: a piece of that. But I think that what we 115 00:05:50,440 --> 00:05:52,440 Speaker 1: learned in the pandemic is that we can provide care 116 00:05:52,520 --> 00:05:56,440 Speaker 1: in vastly different ways. For example, we started UM when 117 00:05:56,440 --> 00:06:00,000 Speaker 1: we when we had some challenges with occupancy bed occupancy. 118 00:06:00,200 --> 00:06:03,560 Speaker 1: We started this hospital come program. We've seen fifty thousand 119 00:06:03,560 --> 00:06:06,200 Speaker 1: patients in their home during this COVID UH and that's 120 00:06:06,200 --> 00:06:08,920 Speaker 1: just a different sort of way to deliver care. So 121 00:06:09,160 --> 00:06:11,640 Speaker 1: we really think the learnings that we've had through this 122 00:06:11,760 --> 00:06:14,680 Speaker 1: through this past year will carry forward and among other things, 123 00:06:14,640 --> 00:06:17,560 Speaker 1: will will help with affordability of healthcare. That was Atrium 124 00:06:17,560 --> 00:06:21,200 Speaker 1: Health CEO Eugene Woods coming up. What the stimulus package 125 00:06:21,200 --> 00:06:23,479 Speaker 1: would mean for the states and what the three hundred 126 00:06:23,520 --> 00:06:26,680 Speaker 1: and sixty billion dollars they get will pay for from 127 00:06:26,720 --> 00:06:30,040 Speaker 1: Ned Lamont, governor of the state of Connecticut. That's next 128 00:06:30,120 --> 00:06:42,719 Speaker 1: on Wall Street Week on Bloomberg. This is Bloomberg Wall 129 00:06:42,800 --> 00:06:46,560 Speaker 1: Street Week with David Weston from Bloomberg Radio. One of 130 00:06:46,600 --> 00:06:49,360 Speaker 1: the most controversial parts of the one point nine trillion 131 00:06:49,400 --> 00:06:52,599 Speaker 1: dollar packages the aid for state and local governments, with 132 00:06:52,760 --> 00:06:55,920 Speaker 1: Democrats insisting it's badly needed to make up for lost 133 00:06:55,960 --> 00:06:59,440 Speaker 1: revenues and for increased costs they've incurred because of the 134 00:06:59,440 --> 00:07:02,239 Speaker 1: pandemic that has led to more than a million state 135 00:07:02,279 --> 00:07:06,400 Speaker 1: and municipal employees losing their jobs. About one fifth of 136 00:07:06,480 --> 00:07:09,240 Speaker 1: the one point nine trillion dollars stimulus package will go 137 00:07:09,400 --> 00:07:12,760 Speaker 1: to states and local governments. The Care's Act, signed into 138 00:07:12,840 --> 00:07:15,679 Speaker 1: law a year ago, included one hundred and fifty billion 139 00:07:15,720 --> 00:07:19,360 Speaker 1: dollars in aid to states and localities. This time they're 140 00:07:19,360 --> 00:07:22,880 Speaker 1: getting three hundred fifty billion dollars and an additional ten 141 00:07:22,920 --> 00:07:26,840 Speaker 1: billion dollars to put toward critical infrastructure projects. Here's New 142 00:07:26,880 --> 00:07:29,560 Speaker 1: Jersey Governor Phil Murphy. We need a big chuck of 143 00:07:29,600 --> 00:07:31,600 Speaker 1: state local aid. And we're not alone. This is every 144 00:07:31,600 --> 00:07:35,280 Speaker 1: American state. That sounds abstract, but what that means is 145 00:07:35,400 --> 00:07:41,280 Speaker 1: keeping the frontline workers, police, fire educators, healthcare workers employed 146 00:07:41,440 --> 00:07:44,600 Speaker 1: in their position, delivering the services that our residents so 147 00:07:44,760 --> 00:07:48,480 Speaker 1: desperately need. But Republicans take a very different view, saying 148 00:07:48,520 --> 00:07:51,120 Speaker 1: the state assistance amounts to a bailout of states that 149 00:07:51,160 --> 00:07:54,480 Speaker 1: have run up their bills under Democratic leadership. Those at 150 00:07:54,480 --> 00:07:57,080 Speaker 1: a focused bill of targeted bill. We need to help 151 00:07:57,120 --> 00:07:58,920 Speaker 1: the people have lost their jobs. We need to help 152 00:07:58,920 --> 00:08:01,360 Speaker 1: our small business. No, it was a payback to New 153 00:08:01,480 --> 00:08:04,400 Speaker 1: York and California. I mean, think about what they've done 154 00:08:04,400 --> 00:08:07,520 Speaker 1: with the state bailoffs that Senator Rick Scott of Florida, 155 00:08:07,880 --> 00:08:10,200 Speaker 1: and it does appear that at least when it comes 156 00:08:10,200 --> 00:08:13,920 Speaker 1: to revenue losses, different states have had very different experiences. 157 00:08:14,200 --> 00:08:17,880 Speaker 1: Here's Jamie Diamond from JP Morgan Chase. Half the states 158 00:08:18,240 --> 00:08:20,960 Speaker 1: revenues went up, they didn't go down. Do they need help? 159 00:08:21,040 --> 00:08:23,400 Speaker 1: So they should be cautious about overdoing it. Get us 160 00:08:23,400 --> 00:08:26,000 Speaker 1: through the problem. Keept the country growing, but you know, 161 00:08:26,040 --> 00:08:28,120 Speaker 1: don't try not to overdo it too much. According to 162 00:08:28,120 --> 00:08:32,000 Speaker 1: the Committee for a Responsible Federal Budget, states and localities 163 00:08:32,080 --> 00:08:35,320 Speaker 1: have received three hundred sixty billion dollars from the federal 164 00:08:35,320 --> 00:08:38,440 Speaker 1: government since the beginning of the pandemic, but states say 165 00:08:38,480 --> 00:08:41,560 Speaker 1: they need more assistance because much of the funding provided 166 00:08:41,600 --> 00:08:46,160 Speaker 1: to them has been limited to specific programs like Medicaid. Again, 167 00:08:46,320 --> 00:08:50,520 Speaker 1: Senator Rick Scott, our state revenues are equal to what 168 00:08:50,520 --> 00:08:53,199 Speaker 1: they year the year before, and they gave more to 169 00:08:53,280 --> 00:08:55,560 Speaker 1: states like New York and California than state. It's like 170 00:08:55,600 --> 00:08:58,600 Speaker 1: my home state of Florida. But I mean, it makes 171 00:08:58,600 --> 00:09:01,400 Speaker 1: no sense how unfair this is to the American public. 172 00:09:01,480 --> 00:09:04,120 Speaker 1: Whatever the merits. In the end, about one fifth of 173 00:09:04,200 --> 00:09:06,960 Speaker 1: the one point nine trillion dollar stimulus package will go 174 00:09:07,080 --> 00:09:10,320 Speaker 1: to states and local governments. We asked Connecticut Governor Ned 175 00:09:10,440 --> 00:09:14,079 Speaker 1: Lamont why his state needed the money. Look, we know 176 00:09:14,160 --> 00:09:17,600 Speaker 1: that we've got our budget set for the next couple 177 00:09:17,640 --> 00:09:19,480 Speaker 1: of years. We know that we don't have to raise 178 00:09:19,520 --> 00:09:22,319 Speaker 1: any taxes. We know that there won't be any broad layoffs, 179 00:09:22,720 --> 00:09:25,120 Speaker 1: and that's all thanks to the state and local aid. 180 00:09:25,600 --> 00:09:28,079 Speaker 1: But more importantly, I love what we're doing on education. 181 00:09:28,200 --> 00:09:30,960 Speaker 1: We have our schools have been open su September, but 182 00:09:31,000 --> 00:09:34,160 Speaker 1: we still have our kids who haven't been in the 183 00:09:34,200 --> 00:09:37,560 Speaker 1: classroom for um nine months. We've got a lot of 184 00:09:37,600 --> 00:09:39,600 Speaker 1: catching up to do, and it's a chance to make 185 00:09:39,600 --> 00:09:42,000 Speaker 1: sure that wasn't a last year. We can build off 186 00:09:42,040 --> 00:09:43,840 Speaker 1: of it. So what are you gonna do with the 187 00:09:43,880 --> 00:09:45,800 Speaker 1: money that you get? I mean, as a practica money. 188 00:09:45,840 --> 00:09:49,680 Speaker 1: You just mentioned employment issues, your budget and taxes, but 189 00:09:49,720 --> 00:09:52,280 Speaker 1: where's the money really gonna go. We're gonna spend it. Well, 190 00:09:52,320 --> 00:09:54,199 Speaker 1: first of all, on education. I can tell you the 191 00:09:54,240 --> 00:09:58,520 Speaker 1: school year doesn't end on June. It restarts again on 192 00:09:59,400 --> 00:10:01,480 Speaker 1: you know, July six, and we're going to have a 193 00:10:01,520 --> 00:10:05,760 Speaker 1: lot of activities in and around camps and learning experiential 194 00:10:06,320 --> 00:10:08,120 Speaker 1: a lot of kids who really haven't been with their 195 00:10:08,200 --> 00:10:10,760 Speaker 1: peers in a long time. Do I everything you can 196 00:10:10,840 --> 00:10:14,160 Speaker 1: to help them catch up. Maybe bring some college kids 197 00:10:14,160 --> 00:10:16,600 Speaker 1: in as apprentice teachers to help them learn and have 198 00:10:16,760 --> 00:10:19,679 Speaker 1: role models there and then come to fall, we'd have 199 00:10:20,000 --> 00:10:23,679 Speaker 1: after school activities, social workers and help these kids hit 200 00:10:23,720 --> 00:10:26,920 Speaker 1: the ground running. Is there any consideration at all of 201 00:10:26,960 --> 00:10:30,080 Speaker 1: extending the school year? Absolutely, I mean whether I legally 202 00:10:30,120 --> 00:10:33,000 Speaker 1: extend the school year or just say, starting July tenth, 203 00:10:33,000 --> 00:10:36,040 Speaker 1: we're going to have a two months of summer programs. 204 00:10:36,040 --> 00:10:39,079 Speaker 1: We'll figure out how to phrase that. So if it's 205 00:10:39,080 --> 00:10:41,200 Speaker 1: in facts the case that the schools are open but 206 00:10:41,280 --> 00:10:43,320 Speaker 1: you don't have all the students back in the classroom, 207 00:10:43,520 --> 00:10:45,840 Speaker 1: what is the barrier? Why aren't they back in the classroom. 208 00:10:46,160 --> 00:10:48,000 Speaker 1: It's it's sort of tragic, Davi. But I mean in 209 00:10:48,080 --> 00:10:54,000 Speaker 1: our suburban towns are more rural towns, predominantly white towns, 210 00:10:54,000 --> 00:10:56,040 Speaker 1: of the kids are back. But a lot of the 211 00:10:56,120 --> 00:10:59,240 Speaker 1: kids in our urban centers, small as they may be, 212 00:11:00,000 --> 00:11:02,319 Speaker 1: were likely to be a children of color. They were 213 00:11:02,400 --> 00:11:05,880 Speaker 1: hit particularly harder, their families were by COVID, and they've 214 00:11:05,920 --> 00:11:08,200 Speaker 1: been a lot more reluctant to get back. But now 215 00:11:08,240 --> 00:11:12,240 Speaker 1: we got our teachers vaccinated, our healthcare um frontline, and 216 00:11:12,280 --> 00:11:15,760 Speaker 1: the schools are vaccinated. They're calling up the kids saying 217 00:11:15,800 --> 00:11:17,920 Speaker 1: come back for the final two months. It's worth it. 218 00:11:18,240 --> 00:11:21,200 Speaker 1: Are all your teachers back are essentially all your teachers back. 219 00:11:21,640 --> 00:11:24,520 Speaker 1: Essentially they're all back. And what other effects we have. 220 00:11:24,559 --> 00:11:26,680 Speaker 1: I'm talking about employment because we saw in the last 221 00:11:26,679 --> 00:11:29,160 Speaker 1: employment numbers for the country the place where we really 222 00:11:29,200 --> 00:11:31,520 Speaker 1: lost a lot was actually in state and local employees. 223 00:11:31,559 --> 00:11:33,920 Speaker 1: What's happened in employment situation in Connecticut? Where are you 224 00:11:33,960 --> 00:11:36,120 Speaker 1: compared to a year ago? Where are you going in 225 00:11:36,240 --> 00:11:39,440 Speaker 1: terms of you know, actual state employees. That number has 226 00:11:39,480 --> 00:11:43,680 Speaker 1: been trending down for quite some time, and frankly, I 227 00:11:43,679 --> 00:11:46,480 Speaker 1: don't see us ramping up a lot. It's not COVID related, 228 00:11:46,520 --> 00:11:49,760 Speaker 1: but we're making more investments in a computer technology so 229 00:11:49,840 --> 00:11:52,600 Speaker 1: we can be a lot more efficient and less cost 230 00:11:52,640 --> 00:11:54,600 Speaker 1: I'll tell you the other thing I'm really excited about, 231 00:11:54,720 --> 00:11:58,240 Speaker 1: David as uh the money for daycare and childcare. We 232 00:11:58,720 --> 00:12:03,360 Speaker 1: lost a lot of employees and the service industry, overwhelmingly women, 233 00:12:03,880 --> 00:12:07,040 Speaker 1: often women of color. And the fact that we're going 234 00:12:07,080 --> 00:12:11,240 Speaker 1: to have heavily subsidize are even free daycare and childcare, uh, 235 00:12:11,320 --> 00:12:12,920 Speaker 1: you know, for the rest of this year, can make 236 00:12:12,960 --> 00:12:17,000 Speaker 1: a big difference in helping them get back into the workforce. Governor, 237 00:12:17,320 --> 00:12:19,680 Speaker 1: what about infrastructure, Because one of the things we've heard 238 00:12:19,720 --> 00:12:22,400 Speaker 1: about is not only a promise perhaps infrastructure coming down 239 00:12:22,440 --> 00:12:24,480 Speaker 1: the pike, but also that some of the money going 240 00:12:24,520 --> 00:12:27,199 Speaker 1: to state and local government could be used for infrastructure. 241 00:12:27,400 --> 00:12:30,160 Speaker 1: Is that true in Connecticut? Uh? That is it's it's 242 00:12:30,160 --> 00:12:33,400 Speaker 1: not big dollars for infrastructure. We need that infrastructure bill 243 00:12:33,480 --> 00:12:36,439 Speaker 1: going through. And we've got old infrastructure here in the Northeast. 244 00:12:36,480 --> 00:12:39,360 Speaker 1: As you know, this stuff was all built, uh you know, 245 00:12:39,480 --> 00:12:43,200 Speaker 1: sixty eight years ago. So what I've got our Department 246 00:12:43,200 --> 00:12:47,319 Speaker 1: of Transportation doing right now is doing the design, build, engineering, 247 00:12:47,440 --> 00:12:50,640 Speaker 1: ready to go. So when the federal government says, here's 248 00:12:50,679 --> 00:12:54,840 Speaker 1: our infrastructure plan, will be funded, Connecticut and get in 249 00:12:54,840 --> 00:12:56,160 Speaker 1: the front of the line and get some of that, 250 00:12:56,920 --> 00:12:58,760 Speaker 1: give us an update. If you could governor on where 251 00:12:58,800 --> 00:13:00,640 Speaker 1: COVID is in the state, it can etiquette. I've been 252 00:13:00,679 --> 00:13:03,000 Speaker 1: sort of watching the positivity rates and they've been coming down. 253 00:13:03,040 --> 00:13:06,120 Speaker 1: For you. Where are you in terms of the extended 254 00:13:06,160 --> 00:13:09,120 Speaker 1: the disease in the state and restrictions. So when it 255 00:13:09,160 --> 00:13:12,560 Speaker 1: comes to um you know, infection rate like the rest 256 00:13:12,559 --> 00:13:15,400 Speaker 1: of the country, we've come down. It's not down to 257 00:13:15,800 --> 00:13:19,560 Speaker 1: you know, one percent, it's hovering around three percent. But 258 00:13:19,679 --> 00:13:21,760 Speaker 1: the good news, David, which people want to pay more 259 00:13:21,760 --> 00:13:24,880 Speaker 1: attention to is Uh, they tend to be younger people 260 00:13:24,920 --> 00:13:26,720 Speaker 1: who are a little more likely to be the ones 261 00:13:26,760 --> 00:13:30,960 Speaker 1: who are infected. Now, Folks fifty five and over overwhelmingly 262 00:13:31,080 --> 00:13:34,120 Speaker 1: vaccinated or will be in the next ten days or so. 263 00:13:34,120 --> 00:13:36,280 Speaker 1: So we have a lot less infection, a lot less 264 00:13:36,320 --> 00:13:39,800 Speaker 1: complications with the most at risk group. So I think 265 00:13:39,880 --> 00:13:42,240 Speaker 1: even though we have sort of a three percent two 266 00:13:42,240 --> 00:13:45,679 Speaker 1: to three percent infection rate, um, it's not really impacting 267 00:13:45,679 --> 00:13:49,600 Speaker 1: our hospitals, emergency rooms. I see us fatalities that those 268 00:13:49,679 --> 00:13:52,040 Speaker 1: numbers continue to get better. Where are you on the 269 00:13:52,040 --> 00:13:54,480 Speaker 1: restrictions Texas? Of course, in Mississippi have just taking them 270 00:13:54,520 --> 00:13:57,760 Speaker 1: all off. It's only voluntary. Where is Connecticut? I think 271 00:13:57,800 --> 00:13:59,559 Speaker 1: I heard on the radio that you're going back to 272 00:13:59,600 --> 00:14:01,840 Speaker 1: a hundred sent in the restaurants. Is that right? Yeah, 273 00:14:01,840 --> 00:14:06,040 Speaker 1: that is true. We're doing uh, you know, restaurants retail 274 00:14:06,280 --> 00:14:10,480 Speaker 1: houses of worship at a hundred percent occupancy. But we're 275 00:14:10,520 --> 00:14:13,840 Speaker 1: maintaining the mask requirement and we're maintaining the six foot 276 00:14:13,880 --> 00:14:17,760 Speaker 1: of distancing. That was Democratic Governor Ned Lamont of Connecticut 277 00:14:17,960 --> 00:14:20,920 Speaker 1: coming up. Everyone agrees that it's important to get children 278 00:14:20,960 --> 00:14:23,520 Speaker 1: back to school, but what does it take to do 279 00:14:23,600 --> 00:14:27,640 Speaker 1: that safely? Randy Weingarten, president of the American Federation of Teachers, 280 00:14:27,640 --> 00:14:31,920 Speaker 1: says the Sinner's Package is the lifeline the education system needed. 281 00:14:32,520 --> 00:14:40,880 Speaker 1: That's next on Wall Street Week on Bloomberg. This is 282 00:14:40,920 --> 00:14:45,280 Speaker 1: Bloomberg Wall Street Week with David Weston from Bloomberg Radio. 283 00:14:45,800 --> 00:14:48,480 Speaker 1: Education in the time of the pandemic has been hard 284 00:14:48,560 --> 00:14:52,600 Speaker 1: on teachers and students. Schools across the country would try 285 00:14:52,600 --> 00:14:55,280 Speaker 1: to reopen, only to be forced to close again when 286 00:14:55,320 --> 00:14:59,480 Speaker 1: COVID nineteen cases spiked. Here. Senator Ben Cardon of Maryland, 287 00:14:59,680 --> 00:15:02,400 Speaker 1: are schools need to open safely and be able to 288 00:15:02,440 --> 00:15:06,120 Speaker 1: remain on open safely. The American Rescue Plans sets aside 289 00:15:06,160 --> 00:15:10,120 Speaker 1: about one billion dollars to help K through twelve schools 290 00:15:10,160 --> 00:15:14,080 Speaker 1: reopened by funding improvements the ventilation systems and buying personal 291 00:15:14,080 --> 00:15:17,600 Speaker 1: protective equipment. There's a lot of resources and energy focused 292 00:15:17,600 --> 00:15:20,640 Speaker 1: on making sure that we contain the pandemic and importantly 293 00:15:20,680 --> 00:15:23,280 Speaker 1: that schools can open safely so that all of those 294 00:15:23,320 --> 00:15:25,680 Speaker 1: parents can get back to work knowing that their children 295 00:15:25,720 --> 00:15:28,080 Speaker 1: are are learning what they need to learn in school. 296 00:15:28,240 --> 00:15:31,160 Speaker 1: That's Heather Bouchet, member of the White House Council of 297 00:15:31,200 --> 00:15:34,480 Speaker 1: Economic Advisors. While parents are eager to get children back 298 00:15:34,480 --> 00:15:37,680 Speaker 1: to school. Some teachers unions have resisted a return to 299 00:15:37,760 --> 00:15:41,160 Speaker 1: in person classes for fear of new waves of COVID cases. 300 00:15:41,400 --> 00:15:46,960 Speaker 1: Here's Wall Street Week special contributor Larry Summers entrenched. I'll 301 00:15:46,960 --> 00:15:53,040 Speaker 1: say it, uh, teacher union interests that have resisted going 302 00:15:53,120 --> 00:15:58,840 Speaker 1: back to school have really been putting their own material 303 00:15:59,000 --> 00:16:04,840 Speaker 1: benefit I had of uh, the interests of their kids, 304 00:16:05,600 --> 00:16:09,080 Speaker 1: and that is not the best tradition of the teaching profession. 305 00:16:09,320 --> 00:16:13,400 Speaker 1: Teachers were forced to shift their lesson plans online abruptly 306 00:16:13,720 --> 00:16:17,120 Speaker 1: when lockdowns were imposed last year. According to the Economic 307 00:16:17,120 --> 00:16:20,520 Speaker 1: Policy Institute, a third of surveyed educators felt that the 308 00:16:20,560 --> 00:16:24,480 Speaker 1: training they received for online learning was not useful. We 309 00:16:24,520 --> 00:16:27,880 Speaker 1: can understand and help our teachers use technology in in 310 00:16:28,080 --> 00:16:32,120 Speaker 1: more fulsome ways and more effective ways, and we can 311 00:16:32,160 --> 00:16:36,400 Speaker 1: take leadership at the federal level around broadband and device ubiquity. 312 00:16:36,520 --> 00:16:40,880 Speaker 1: That's former Education Secretary Margaret Spellings. Access to devices and 313 00:16:40,920 --> 00:16:46,080 Speaker 1: consistent internet also deepened longstanding racial and economic disparities in students. 314 00:16:46,480 --> 00:16:50,400 Speaker 1: Here's Robin Hood Foundation CEO Westmore. You know when when 315 00:16:50,520 --> 00:16:53,520 Speaker 1: when schools closed? And in New York City alone, you 316 00:16:53,560 --> 00:16:56,520 Speaker 1: know three hundred thou school children lacked access to devices. 317 00:16:56,840 --> 00:16:59,680 Speaker 1: Under the one point nine trillion dollar stiments, planned colleges 318 00:16:59,720 --> 00:17:03,720 Speaker 1: and higher education institutions would get almost forty billion dollars 319 00:17:03,880 --> 00:17:08,639 Speaker 1: towards financial aid grants for students. Again, Margaret Spellings, we 320 00:17:08,720 --> 00:17:12,639 Speaker 1: have just wide variety from gigantic little cities in our 321 00:17:12,680 --> 00:17:17,080 Speaker 1: flagship universities to you know, very customized learning at smaller 322 00:17:17,160 --> 00:17:20,639 Speaker 1: liberal arts colleges or hbc U S or m s 323 00:17:20,640 --> 00:17:24,320 Speaker 1: I S, etcetera. And so yes, they're all under strain, 324 00:17:24,400 --> 00:17:27,960 Speaker 1: they're all under financial challenge. Randy Weingarten has become the 325 00:17:28,000 --> 00:17:30,760 Speaker 1: face of teachers unions in the United States, having served 326 00:17:30,760 --> 00:17:33,720 Speaker 1: as president of the American Federation of Teachers for over 327 00:17:33,800 --> 00:17:36,879 Speaker 1: twenty years. So we asked her straight up, is it 328 00:17:36,960 --> 00:17:40,320 Speaker 1: the unions who are keeping our school children out of classrooms? 329 00:17:40,640 --> 00:17:45,120 Speaker 1: You know, we did a poll in February early February 330 00:17:45,359 --> 00:17:49,359 Speaker 1: UM and asked our members if we got what the 331 00:17:49,480 --> 00:17:52,119 Speaker 1: a f T had been proposing for a long time 332 00:17:52,480 --> 00:17:55,880 Speaker 1: and then layered on with with vaccines, meaning if we 333 00:17:55,880 --> 00:17:59,720 Speaker 1: were able to have the mitigation strategies that CDC says 334 00:17:59,800 --> 00:18:03,320 Speaker 1: is important. That is also important in all of these 335 00:18:03,320 --> 00:18:06,280 Speaker 1: new studies that show that kids can go back, if 336 00:18:06,320 --> 00:18:09,520 Speaker 1: we had the testing like the NFL had, so that 337 00:18:09,560 --> 00:18:12,199 Speaker 1: you can not only reopen, but stay open because you 338 00:18:12,240 --> 00:18:16,000 Speaker 1: were managing and seeing a symptomatic spread, which is what 339 00:18:16,160 --> 00:18:18,280 Speaker 1: is most of the spread here. And if we have 340 00:18:18,440 --> 00:18:24,520 Speaker 1: vaccine access, so mitigation testing and vaccines. A d eight 341 00:18:24,560 --> 00:18:29,320 Speaker 1: percent of my members said that they were willing to 342 00:18:29,400 --> 00:18:32,600 Speaker 1: be in school with a plan like that because they 343 00:18:32,640 --> 00:18:35,879 Speaker 1: know how important it is for kids to be in 344 00:18:35,960 --> 00:18:39,600 Speaker 1: school and do in school learning. So it's always been 345 00:18:39,800 --> 00:18:43,600 Speaker 1: not an either or for us. It's always a both, 346 00:18:43,680 --> 00:18:47,119 Speaker 1: and how do we make school shore that in school 347 00:18:47,200 --> 00:18:50,840 Speaker 1: learning is safe so that we can make it safe 348 00:18:51,080 --> 00:18:53,840 Speaker 1: for everyone. It's a lot safer than it was, though, 349 00:18:53,920 --> 00:18:55,960 Speaker 1: isn't it. I mean, for example, in Cleveland, there's a 350 00:18:55,960 --> 00:18:59,199 Speaker 1: priority given to vaccinations for teachers as it moved a 351 00:18:59,240 --> 00:19:02,080 Speaker 1: long way the direction you get too, because those parents 352 00:19:02,119 --> 00:19:03,880 Speaker 1: are saying, when do we get our kids back into 353 00:19:03,880 --> 00:19:06,880 Speaker 1: the classroom. Yes, it's moved. I mean, I think what 354 00:19:06,960 --> 00:19:11,680 Speaker 1: you've seen is we've learned a lot last September and October. 355 00:19:11,920 --> 00:19:16,399 Speaker 1: I mean, the difficulty, David, was that Trump refused to 356 00:19:16,480 --> 00:19:19,000 Speaker 1: do any of the things that we asked him to do. 357 00:19:19,440 --> 00:19:22,800 Speaker 1: That the doctors and the experts told us we needed. 358 00:19:23,080 --> 00:19:25,440 Speaker 1: You know, I tease a lot that I'm so studies 359 00:19:25,440 --> 00:19:27,960 Speaker 1: teacher and a lawyer. I don't even play a scientist 360 00:19:28,040 --> 00:19:31,000 Speaker 1: on TV. I have to listen to the scientists in 361 00:19:31,119 --> 00:19:34,320 Speaker 1: terms of what they tell us we need. And what 362 00:19:34,520 --> 00:19:37,440 Speaker 1: happened was we asked Trump and Divorce, would you get 363 00:19:37,520 --> 00:19:39,800 Speaker 1: us data, would you get us the guidance in a 364 00:19:39,920 --> 00:19:42,000 Speaker 1: in a real and transparent way, and would you get 365 00:19:42,040 --> 00:19:44,720 Speaker 1: us the resources. They basically said no to all of 366 00:19:44,760 --> 00:19:48,639 Speaker 1: it and just created the polarization. But you had districts 367 00:19:48,880 --> 00:19:51,399 Speaker 1: and you now have some of the CDC reports that 368 00:19:51,560 --> 00:19:55,119 Speaker 1: kept on trying different things in the fall. We learned 369 00:19:55,160 --> 00:19:58,560 Speaker 1: a lot from them. Biden, the new president is getting 370 00:19:58,640 --> 00:20:02,440 Speaker 1: us the things we need. This, that the mitigation strategies, 371 00:20:02,480 --> 00:20:06,240 Speaker 1: that resources for them, and that's why you're seeing so 372 00:20:06,480 --> 00:20:10,720 Speaker 1: many districts now reopening, and we now have less than 373 00:20:11,760 --> 00:20:16,760 Speaker 1: less than of districts that are still all virtual. So 374 00:20:16,840 --> 00:20:20,080 Speaker 1: there's been a sea change in the last I would 375 00:20:20,080 --> 00:20:22,880 Speaker 1: say two or three months, led by New York City 376 00:20:23,119 --> 00:20:27,239 Speaker 1: now Chicago pretty soon l A and and lots of 377 00:20:27,280 --> 00:20:30,840 Speaker 1: small cities in between. That was Randy Weingarten, President of 378 00:20:30,880 --> 00:20:33,560 Speaker 1: the American Federation of Teachers. Coming up, we take a 379 00:20:33,560 --> 00:20:36,520 Speaker 1: look at just how historic this stimulus package really is, 380 00:20:36,920 --> 00:20:40,280 Speaker 1: with special contributor Larry Summers at Harvard and Neil Ferguson 381 00:20:40,480 --> 00:20:43,440 Speaker 1: of the Hoover Institution. That's next on Wall Street Week 382 00:20:43,560 --> 00:20:50,680 Speaker 1: on Bloomberg. This is Bloomberg Wall Street Week with David 383 00:20:50,720 --> 00:20:54,760 Speaker 1: Weston from Bloomberg Radio. The idea that it's prosperity that 384 00:20:54,840 --> 00:20:59,080 Speaker 1: causes inflation may not have any factual support in history, 385 00:20:59,800 --> 00:21:03,680 Speaker 1: But since when did fact every interfere with Washington policy making? 386 00:21:04,240 --> 00:21:07,240 Speaker 1: That was Lewis Ruckeiser back in January of two thousand one. 387 00:21:07,680 --> 00:21:10,960 Speaker 1: Twenty years later, that debate over what causes inflation is 388 00:21:11,000 --> 00:21:14,159 Speaker 1: dividing economists and policymakers once again in a time of 389 00:21:14,200 --> 00:21:17,080 Speaker 1: easy money and at one point nine trillion dollar infusion 390 00:21:17,080 --> 00:21:20,280 Speaker 1: of support into the economy. We asked economists in Wall 391 00:21:20,280 --> 00:21:24,520 Speaker 1: Street Week special contributor Larry Summers and historian Hoover Institutions 392 00:21:24,760 --> 00:21:28,000 Speaker 1: Neil Ferguson about what we can learn from the history 393 00:21:28,000 --> 00:21:32,480 Speaker 1: of inflation. Well, I think it's pass of a continuum 394 00:21:32,720 --> 00:21:38,879 Speaker 1: of uh acts by democratic administrations that have expanded the 395 00:21:39,000 --> 00:21:46,159 Speaker 1: role of government in alleviating poverty and economic hardships. So 396 00:21:46,800 --> 00:21:49,880 Speaker 1: you can trace a continuous line if you want, from 397 00:21:50,680 --> 00:21:53,639 Speaker 1: the New Deal through Lyndon Johnson's Great Society to this. 398 00:21:53,920 --> 00:21:58,120 Speaker 1: But there's a difference. This is a very very large 399 00:21:58,520 --> 00:22:05,040 Speaker 1: amounts of money relative to the US economy, and it 400 00:22:05,160 --> 00:22:09,320 Speaker 1: implies very large deficits by the standards of of peacetime. 401 00:22:09,840 --> 00:22:15,040 Speaker 1: Remember the CBO pot last year's deficit close to of 402 00:22:15,080 --> 00:22:19,240 Speaker 1: g d P, and its latest projection for this year's 403 00:22:19,359 --> 00:22:23,240 Speaker 1: is around ten percent. These are very large deficits in 404 00:22:23,320 --> 00:22:25,560 Speaker 1: peace time, and they come at a time when the 405 00:22:25,600 --> 00:22:29,120 Speaker 1: federal debt has reached its highest level since the end 406 00:22:29,119 --> 00:22:31,840 Speaker 1: of World War Two. So I think there is a 407 00:22:31,960 --> 00:22:35,159 Speaker 1: kind of key question here which really has to do 408 00:22:35,240 --> 00:22:39,840 Speaker 1: with the macroeconomic implications of pouring quite a lot of 409 00:22:39,880 --> 00:22:43,240 Speaker 1: fiscal fuel on the fire of an economy that is 410 00:22:43,280 --> 00:22:47,800 Speaker 1: already coming back rapidly from the pandemic thanks to vaccination 411 00:22:48,000 --> 00:22:51,240 Speaker 1: and our our rapid approach of herd immunity. Now I'm 412 00:22:51,280 --> 00:22:55,560 Speaker 1: treading into Larry's mind field of of macro here, so 413 00:22:55,600 --> 00:22:57,720 Speaker 1: I'm going to step back and let him comment. But 414 00:22:58,000 --> 00:23:01,040 Speaker 1: I do think that the historical significance is is really 415 00:23:01,119 --> 00:23:04,879 Speaker 1: in terms of scale and the timing of such a 416 00:23:04,960 --> 00:23:08,360 Speaker 1: large fiscal stimulus to the economy. So so, Larry, we've 417 00:23:08,359 --> 00:23:11,240 Speaker 1: heard something similar from you in the past. Now that 418 00:23:11,320 --> 00:23:15,120 Speaker 1: we have the bill I really enacted into law, what's 419 00:23:15,160 --> 00:23:16,800 Speaker 1: the best thing that can happen because of this and 420 00:23:16,840 --> 00:23:18,919 Speaker 1: the worst? From an economics point of view, let me 421 00:23:19,000 --> 00:23:24,560 Speaker 1: just say, on the Democratic tradition, there's a thing here. 422 00:23:25,240 --> 00:23:29,800 Speaker 1: The refundable child Credit, which is less than five percent 423 00:23:29,960 --> 00:23:34,040 Speaker 1: of the total stimulus that we're providing this year, will 424 00:23:34,080 --> 00:23:38,760 Speaker 1: almost certainly be continued, and we'll make an immense contribution 425 00:23:38,840 --> 00:23:42,520 Speaker 1: to reducing child poverty in America. And it's a very 426 00:23:42,680 --> 00:23:48,480 Speaker 1: very positive thing and a huge historic achievement. But it's 427 00:23:48,560 --> 00:23:53,520 Speaker 1: five or less of the total stimulus this year, and 428 00:23:53,600 --> 00:23:58,840 Speaker 1: it's something that will continue. I think the decision to 429 00:24:00,080 --> 00:24:04,000 Speaker 1: put one point nine trillion dollars of stimulus on top 430 00:24:04,080 --> 00:24:09,400 Speaker 1: of nine hundred and fifty billion dollars of stimulus will 431 00:24:09,520 --> 00:24:14,119 Speaker 1: set the economy on fire, with growth at seven or 432 00:24:14,280 --> 00:24:19,800 Speaker 1: more UH this year, assuming we progress against COVID, and 433 00:24:19,880 --> 00:24:24,399 Speaker 1: I think is playing with fire. A simple view would 434 00:24:24,400 --> 00:24:27,000 Speaker 1: be that I think there's a one third chance that 435 00:24:27,440 --> 00:24:33,600 Speaker 1: the Fed will stay behind UH. The curve, inflation expectations 436 00:24:33,720 --> 00:24:39,399 Speaker 1: will ratchet upwards and will become a inflationary country for 437 00:24:39,480 --> 00:24:45,000 Speaker 1: at least a time above the two UH target. UM. 438 00:24:45,040 --> 00:24:49,680 Speaker 1: A second risk is that the Fed will respond. They've 439 00:24:49,720 --> 00:24:53,439 Speaker 1: given all the things they've been saying, their sharp response 440 00:24:53,560 --> 00:24:57,199 Speaker 1: will be unexpected by markets, and as has been the 441 00:24:57,240 --> 00:24:59,800 Speaker 1: case in the past when the Fed has had to 442 00:25:00,000 --> 00:25:04,439 Speaker 1: step in to stop an incipient inflation or incipient bubble, 443 00:25:04,880 --> 00:25:09,720 Speaker 1: it will be a chaotic process with very substantial instability 444 00:25:09,840 --> 00:25:13,399 Speaker 1: and possible recession. And I think there's a one third 445 00:25:13,520 --> 00:25:17,520 Speaker 1: chance that somehow the needle will be threaded and that 446 00:25:17,600 --> 00:25:23,120 Speaker 1: we will UM enjoy a period of very rapid growth 447 00:25:23,520 --> 00:25:28,479 Speaker 1: and there will be a smooth exit back to reasonably rapid, 448 00:25:29,000 --> 00:25:33,600 Speaker 1: reasonable okay UH growth. But I think that we are 449 00:25:33,680 --> 00:25:40,679 Speaker 1: taking very substantial risks, both on the inflation side and 450 00:25:40,960 --> 00:25:46,120 Speaker 1: on the fiscal monetary collision side. That's why, if things 451 00:25:46,240 --> 00:25:50,320 Speaker 1: continue on trend, the interest rate in the first quarter 452 00:25:50,440 --> 00:25:53,800 Speaker 1: of this year will have gone up faster than in 453 00:25:53,960 --> 00:26:00,639 Speaker 1: any year in the last century except for UH nineteen eight. 454 00:26:01,400 --> 00:26:08,719 Speaker 1: That's why you see increasing numbers of indicators pointing UH 455 00:26:08,760 --> 00:26:16,119 Speaker 1: to more rapid inflation, pointing to the development of possible 456 00:26:16,240 --> 00:26:20,920 Speaker 1: UH labor labor shortage. Uh so, I think there are 457 00:26:21,560 --> 00:26:26,640 Speaker 1: very substantial risks on the path that we are on. Neil, 458 00:26:26,680 --> 00:26:29,080 Speaker 1: you wrote a piece, a terrific piece for Bluebird Opinion 459 00:26:29,080 --> 00:26:31,919 Speaker 1: actually on the subject of the history of inflation, going 460 00:26:31,960 --> 00:26:34,680 Speaker 1: back to Milton Friedman, what happened the sixties and the seventies. 461 00:26:34,920 --> 00:26:38,000 Speaker 1: I must say, I have youngsters in the newsroom who 462 00:26:38,040 --> 00:26:39,720 Speaker 1: come up to me and say, I wasn't around for 463 00:26:39,720 --> 00:26:42,200 Speaker 1: inflation last time. How does it work? Are we in danger? 464 00:26:42,560 --> 00:26:44,639 Speaker 1: What do you say to those people? Is this in 465 00:26:44,680 --> 00:26:47,200 Speaker 1: any way parallel to what we saw in the sixties 466 00:26:47,200 --> 00:26:49,679 Speaker 1: and the seventies. Well, I think it's worth looking at 467 00:26:49,680 --> 00:26:53,439 Speaker 1: the nine sixties because I suspect younger people have a 468 00:26:53,480 --> 00:26:57,840 Speaker 1: pretty hazy idea of what happened with inflation before they 469 00:26:57,880 --> 00:27:02,240 Speaker 1: were born, and the bit coal view in my experiences, well, 470 00:27:02,240 --> 00:27:04,720 Speaker 1: that was something that happened in the nineteen seventies because 471 00:27:04,720 --> 00:27:07,679 Speaker 1: of the oil shock. That's not quite right, actually, because 472 00:27:07,760 --> 00:27:10,800 Speaker 1: what happened in the sixties was in the first half 473 00:27:10,840 --> 00:27:15,320 Speaker 1: of the decade inflation was low, stayed well below two percent, 474 00:27:16,160 --> 00:27:18,680 Speaker 1: and then in the mid sixties it took two big jumps, 475 00:27:19,280 --> 00:27:21,600 Speaker 1: first up to three percent, then up to six percent. 476 00:27:21,680 --> 00:27:26,400 Speaker 1: And that that was the moment that inflation expectations became unanchored, 477 00:27:26,400 --> 00:27:29,200 Speaker 1: as we would now say. And I think the key 478 00:27:29,240 --> 00:27:31,760 Speaker 1: here is what can we learn from that experience. So 479 00:27:31,840 --> 00:27:35,600 Speaker 1: that was an increase in inflation that predated the seventy 480 00:27:35,680 --> 00:27:39,119 Speaker 1: three events that caused the oil shock, and it's often 481 00:27:39,200 --> 00:27:41,760 Speaker 1: blamed on the stakes by the Federal Reserve. That was 482 00:27:41,800 --> 00:27:44,400 Speaker 1: the view of the late Alan Meltzer in his history 483 00:27:44,440 --> 00:27:47,119 Speaker 1: of the period, and indeed people at the FED at 484 00:27:47,119 --> 00:27:52,000 Speaker 1: the time acknowledged by ninety eight that they got it wrong. Now, 485 00:27:52,080 --> 00:27:55,320 Speaker 1: the monitor's view was that monetary aggregates had been growing 486 00:27:55,359 --> 00:27:58,080 Speaker 1: too fast and that was the reason things went wrong. 487 00:27:58,880 --> 00:28:00,960 Speaker 1: My view as an historian is that that's kind of 488 00:28:01,000 --> 00:28:05,120 Speaker 1: a simplistic view. It's almost tautological to say that inflation 489 00:28:05,200 --> 00:28:08,200 Speaker 1: is always and everywhere a monetary phenomenon, which was Freedman's view. 490 00:28:09,160 --> 00:28:11,440 Speaker 1: It's partly a fiscal phenomenon. And this is of course 491 00:28:11,440 --> 00:28:14,399 Speaker 1: what Larry has been arguing in his recent commentary that 492 00:28:14,440 --> 00:28:19,280 Speaker 1: if you do really large fiscal deficits that has potentially 493 00:28:19,280 --> 00:28:23,560 Speaker 1: inflationary consequences. But the key is expectations. The FED today 494 00:28:23,600 --> 00:28:27,040 Speaker 1: seems to have a theory that inflation expectations will not 495 00:28:27,200 --> 00:28:30,399 Speaker 1: be affected if there is a temporary bumping inflation in 496 00:28:30,440 --> 00:28:32,280 Speaker 1: the second half of this year or the beginning of 497 00:28:32,359 --> 00:28:35,440 Speaker 1: next year. I don't think that's historically very well founded. 498 00:28:35,800 --> 00:28:37,920 Speaker 1: The lesson of the sixties is that if you do 499 00:28:38,360 --> 00:28:40,760 Speaker 1: the great society, if you do butter, and then you 500 00:28:40,800 --> 00:28:43,960 Speaker 1: do guns as well, which was Vietnam, then you can 501 00:28:44,000 --> 00:28:48,120 Speaker 1: get inflation expectations unanchored. And I tried to make the 502 00:28:48,120 --> 00:28:49,680 Speaker 1: point in this piece because I don't want to be 503 00:28:49,680 --> 00:28:52,400 Speaker 1: called in inflation is to a second time. I plead 504 00:28:52,440 --> 00:28:54,560 Speaker 1: guilty to having been more worried than I should have 505 00:28:54,600 --> 00:28:57,920 Speaker 1: been a bad inflation back in twenty I think what 506 00:28:58,080 --> 00:29:00,320 Speaker 1: made the sixties different is that they were using a 507 00:29:00,360 --> 00:29:03,600 Speaker 1: war in Vietnam, and we're really not in any comparable 508 00:29:03,600 --> 00:29:06,920 Speaker 1: military engagement, you know, Afghanistan. Yeah, we're still there, but 509 00:29:06,960 --> 00:29:09,760 Speaker 1: the presence is is tiny. I think what would change 510 00:29:09,800 --> 00:29:12,680 Speaker 1: the game today, and I want to emphasize this point, 511 00:29:13,080 --> 00:29:15,400 Speaker 1: would be if the U. S. And China suddenly got 512 00:29:15,440 --> 00:29:19,160 Speaker 1: into a serious foreign policy crisis over say Taiwan or 513 00:29:19,160 --> 00:29:22,440 Speaker 1: the South China Sea. That historically is the kind of 514 00:29:22,520 --> 00:29:26,480 Speaker 1: thing that time and again has caused inflation expectations to jump, 515 00:29:26,480 --> 00:29:28,520 Speaker 1: and I have a chart in the piece which goes 516 00:29:28,560 --> 00:29:31,560 Speaker 1: all the way back to for the UK trying that 517 00:29:31,680 --> 00:29:35,480 Speaker 1: nearly every time inflation expectations in the UK surged it 518 00:29:35,520 --> 00:29:37,680 Speaker 1: was because of a war, and usually a war that 519 00:29:37,760 --> 00:29:40,960 Speaker 1: was going wrong. Sorry, as I recall your one third 520 00:29:40,960 --> 00:29:43,440 Speaker 1: one third one third, you had two thirds with inflation 521 00:29:43,480 --> 00:29:45,400 Speaker 1: that something needed to be done about, whether it was 522 00:29:45,520 --> 00:29:47,800 Speaker 1: or not. The first one was it gets out of control. 523 00:29:48,160 --> 00:29:50,480 Speaker 1: The second one was the FED has to act too sharply. 524 00:29:50,920 --> 00:29:53,000 Speaker 1: Is there a way? What is the proper way for 525 00:29:53,040 --> 00:29:56,080 Speaker 1: the FED to manage that? Right now? To avoid those 526 00:29:56,080 --> 00:30:00,400 Speaker 1: two alternatives, I think they need to become much more 527 00:30:00,440 --> 00:30:06,480 Speaker 1: attentive in their rhetoric to the risks of UH inflation 528 00:30:06,800 --> 00:30:11,280 Speaker 1: and the need for action. The FED traditionally makes clear 529 00:30:11,800 --> 00:30:17,560 Speaker 1: that it's going to be preemptive with respect to assuring 530 00:30:18,560 --> 00:30:23,160 Speaker 1: price stability limited inflation. Now the FED is mostly concerned 531 00:30:23,200 --> 00:30:26,400 Speaker 1: with preempting the possibility that it would have to raise 532 00:30:26,520 --> 00:30:29,960 Speaker 1: rates by explaining how if there is inflation, it will 533 00:30:30,000 --> 00:30:35,120 Speaker 1: just be transient UH and so forth, by directing attention 534 00:30:35,600 --> 00:30:38,760 Speaker 1: not just to employment goals, but to employment goals for 535 00:30:38,880 --> 00:30:44,240 Speaker 1: specific UH demographic groups. Thanks to former Treasury secretary in 536 00:30:44,280 --> 00:30:47,720 Speaker 1: Wall Street Week special contributor Larry Summers and Hoover Institution 537 00:30:47,920 --> 00:30:53,080 Speaker 1: senior fellow Neil Ferguson Finally, one more thought, what difference 538 00:30:53,120 --> 00:30:56,680 Speaker 1: does the day make here or there? On Wednesday, White 539 00:30:56,680 --> 00:30:59,320 Speaker 1: House Press Secretary Jen Saki insisted that it was the 540 00:30:59,360 --> 00:31:03,880 Speaker 1: forty nine day of the Biden presidency that conveniently made 541 00:31:03,880 --> 00:31:06,880 Speaker 1: the president's prime time address the next day fall exactly 542 00:31:07,000 --> 00:31:09,960 Speaker 1: halfway into his first one hundred days, a time that 543 00:31:10,040 --> 00:31:12,080 Speaker 1: he said as a milestone for getting a lot done, 544 00:31:12,160 --> 00:31:17,080 Speaker 1: including getting one hundred million Americans vaccinated. Axios actually has 545 00:31:17,080 --> 00:31:18,920 Speaker 1: picked up on it. They noted that whether it was 546 00:31:18,960 --> 00:31:22,120 Speaker 1: really forty nine or fifty days, depending on whether you 547 00:31:22,200 --> 00:31:25,080 Speaker 1: counted his inauguration day as his first day in office, 548 00:31:25,560 --> 00:31:28,520 Speaker 1: a dimly echoed that early dispute, remember it, between the 549 00:31:28,560 --> 00:31:31,240 Speaker 1: Trump White House and the Press Corps over how many 550 00:31:31,240 --> 00:31:35,400 Speaker 1: people really attended President Trump's two thousand sixteen inauguration. But 551 00:31:35,480 --> 00:31:38,840 Speaker 1: whether it was forty nine or fifty or even fifty 552 00:31:38,880 --> 00:31:41,920 Speaker 1: one days, no one can deny that the Biden administration 553 00:31:41,920 --> 00:31:45,000 Speaker 1: has done something bigger and faster than just about anybody 554 00:31:45,040 --> 00:31:48,000 Speaker 1: could have predicted. Something on the order of President Obama's 555 00:31:48,000 --> 00:31:50,560 Speaker 1: stimulus plan to pull us out of the Great Financial Crisis, 556 00:31:50,680 --> 00:31:54,240 Speaker 1: or even even President Roosevelt's New Deal package to pull 557 00:31:54,280 --> 00:31:57,720 Speaker 1: us out of the Great Depression. History will judge the consequences, 558 00:31:58,040 --> 00:32:01,600 Speaker 1: but will likely forget the exact timeline, just as it's 559 00:32:01,600 --> 00:32:05,600 Speaker 1: a long forgotten that FDR's first one hundred days radio address, 560 00:32:05,640 --> 00:32:09,200 Speaker 1: well it actually happened on day one forty three of 561 00:32:09,280 --> 00:32:12,000 Speaker 1: his administration. That does it for this episode of Wall 562 00:32:12,040 --> 00:32:14,800 Speaker 1: Street Week, I'm David Weston. This is Bloomberg. See you 563 00:32:14,840 --> 00:32:16,080 Speaker 1: next week.