Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene with
Speaker 1: David Gura. Daily we bring you insight from the best
Speaker 1: of economics, finance, investment, and international relations. Find Bloomberg Surveillance
Speaker 1: on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course
Speaker 1: on the Bloomberg David Gura and Tom Keene here in
Speaker 1: New York in our Bloomberg eleven for studios. This is
Speaker 1: Bloomberg Surveillance on Bloomberg Radio. As you've mentioned, it's you
Speaker 1: and General Assembly week here in New York and making
Speaker 1: fun of the traffic, but a big deal here is
Speaker 1: more than a hundred heads of state, world leaders descend
Speaker 1: on New York for meetings and dinners and the like,
Speaker 1: and of course President Trump in town schedule to address
Speaker 1: the UN General Assembly tomorrow for the first time. Converressman
Speaker 1: j Flober, Congressman Jan Harmon with us here now in
Speaker 1: our Bloomberg studios. Former Congressman now at President of the
Speaker 1: Woodrow Wilson Center in Washington and DC. Great to have
Speaker 1: you with us. What are you gonna be listening for tomorrow?
Speaker 1: This is a big deal, suffice to say, to have
Speaker 1: this audience to be in that space. What are you
Speaker 1: gonna be listening for from the President tomorrow? Well, this
Speaker 1: is a chance for him to recalibrate his foreign policy.
Speaker 1: I uh, I think his inaugural speech was disappointing, and
Speaker 1: here's a chance on a world stage with world leaders
Speaker 1: for him to sound much more visionary and hopeful, and
Speaker 1: he should take a chance to take the opportunity. In
Speaker 1: my view, he's also having side meetings with all kinds
Speaker 1: of folks Europeans, Africans, and he's having lunch with the
Speaker 1: heads of South Korea and Japan on Thursday. North Korea
Speaker 1: will be the top of his agenda. And again, North
Speaker 1: Korea is an international problem, It's not just an American problem,
Speaker 1: and he needs to make the sale to the whole
Speaker 1: world about why we should work together to contain North
Speaker 1: Korea's missiles and nukes. What's your your sense of how
Speaker 1: he regards the United Nations at this point? Important it
Speaker 1: is to him and his foreign policy portfolio. I do
Speaker 1: note that NICKI Haley u s ambassador to the U
Speaker 1: n Front and center, perhaps even more so than than
Speaker 1: his secretary stay talking about global issues, including the North
Speaker 1: Korea crisis as well. Have you seen an evolution in
Speaker 1: his thinking about this multi, multi ladder institution. At least well,
Speaker 1: he made a terrific choice in Nicki Haley. Um. Who
Speaker 1: knew that the governor of South Carolina would be such
Speaker 1: a star on the U N stage? But she is. However, Um,
Speaker 1: my understanding is he's cutting her staff in half and
Speaker 1: this will be a place where he announces rolling back
Speaker 1: US foreign aid. As a member of Congress, I always
Speaker 1: was amazed when my constituents would say fifty percent of
Speaker 1: the budget goes to foreign aid. Well, excuse me, it's
Speaker 1: less than one percent of the budget, and it is
Speaker 1: probably our best foreign policy tool. You were on the
Speaker 1: Intelligence Committee, the Homeland Security Committee, the Armed Services Committee.
Speaker 1: I really have a great sense of the way that
Speaker 1: security apparatus works in Washington, d C. You talk about
Speaker 1: staffing being cut back, security aid funding being cut back
Speaker 1: as well. How problematic is that to your mind? Um?
Speaker 1: This president talks about reform of the UN, talks about
Speaker 1: reform of all of these institutions, has even joked about
Speaker 1: to Russia sending back a bunch of diplomats that's helping
Speaker 1: the bottom line. From from from a perspective of actionable policy,
Speaker 1: how affected. Are these institutions as a result of the
Speaker 1: cuts that we've seen thus far or the positions that
Speaker 1: have gone unfilmed. Well, let's understand that I don't think
Speaker 1: Congress will stand for this, and I think many in
Speaker 1: Congress Lindsey Graham comes to mind, many in the President's
Speaker 1: party will restore the funding. So let's go there. But
Speaker 1: if the seventh floor, which is the main UH floor
Speaker 1: of senior people at the State Department, is empty, how
Speaker 1: can Rex to listen succeed. So that's the beginning of
Speaker 1: the of the problem. But in addition to that, UM
Speaker 1: Jim Mattis are are very capable. Secretary Defense says that
Speaker 1: UH military policy has to be lashed up to diplomatic
Speaker 1: policy or whatever you want to call it for UH
Speaker 1: non non non military policy, and without people, you can't
Speaker 1: do it. Madam arro Space, that's what my father called you.
Speaker 1: You you were the congresswoman of the aerospace industry. Anyone
Speaker 1: would always say that you had a wonderful understanding of aerospace.
Speaker 1: Are you taken back by the merger frenzy among defense
Speaker 1: contractors and in this highly technological expertise that we have
Speaker 1: U t X. Rockwell Collins of cedar rapids, and now
Speaker 1: we've got Orbital Sciences being crow bought out by north Room.
Speaker 1: Come on, it's all gonna be one big company, isn't it.
Speaker 1: Is that what you want? Not so much. Perry, who
Speaker 1: was an extraordinarily good Secretary of Defense back and you
Speaker 1: know another century when Bill Clinton was president, had what
Speaker 1: was famously called the Last Supper, and that was with
Speaker 1: heads of defense firms. This is not a yes. And
Speaker 1: his point was that the UH defense procurement budget is
Speaker 1: getting smaller. We all thought there would be a piece
Speaker 1: dividend after the end of the Cold War, but at
Speaker 1: any rate, UH, and that these firms should consider merging UH.
Speaker 1: And they also did consider. This was something I'm proud
Speaker 1: of going into UH many non military activities, dual use
Speaker 1: activities which made them stronger. So I'm not surprised to
Speaker 1: see continued mergers. The advantages that many of these very
Speaker 1: good firms, and Northrop is one of them, UH will
Speaker 1: be UH good stewards of this new acquisition. The disadvantages
Speaker 1: you lose the nimbleness and the flexibility of the smaller firms.
Speaker 1: So I think it's a mixed bag. I'm strongly for
Speaker 1: a strong defense, as you know, and Madam Mary's space
Speaker 1: ain't bad. I used to call myself Boeing's mother was
Speaker 1: out of Boulder, Colorado. They played dead like nobody. Jane
Speaker 1: harmon with us the thirty six district, of course, at
Speaker 1: the Woodrow Wilson Center. Now we continue, Jane, there was
Speaker 1: that couch scene the other day, speak your Pelosi majority
Speaker 1: leader Schumer and some other guy from the other party.
Speaker 1: Can the Democratic Party migrate over to Jane Harman's Democratic
Speaker 1: Party or is it going to be Clinton Pelosi forever? Well?
Speaker 1: How's this? What's the What are the young kids gonna do?
Speaker 1: Are they going to refine you in Scoop Jackson? Yeah? Well,
Speaker 1: I yes, I have called myself a Scoop Jackson Democrat
Speaker 1: for years. I actually knew him when I was a
Speaker 1: Senate aid in the early seventies and he was he
Speaker 1: was Boeing Senator. So from from Washington State. But yesterday
Speaker 1: in this town there was a meeting of something called
Speaker 1: the New Center. The New Center is an idea factory
Speaker 1: co chaired by Bill Crystal and Bill Galston. Uh, imagine that.
Speaker 1: And it has produced a set of ideas and I
Speaker 1: think are very attractive to both parties. So that's out there.
Speaker 1: Maybe it'll get traction, Maybe people will move to the
Speaker 1: center in both parties. Okay, Secretary Clinton's out in a
Speaker 1: book tour taking a victory lap. I guess, And we
Speaker 1: had all the uproar last week. David gurg covered it
Speaker 1: really well in politics. Congresswoman Harman, how do you win minute?
Speaker 1: How do you win Michigan? How do you win Wisconsin?
Speaker 1: How do you win the rectangle that looks like Tennessee?
Speaker 1: That was your district east of l A. Well, I
Speaker 1: won in a lean Republican district. Now, how did I
Speaker 1: in my first story terms? How did I do that?
Speaker 1: I had a vision of where we were going that
Speaker 1: uh people bought. You got to have a vision. It's
Speaker 1: not just that the other guy's bad. It's why you're
Speaker 1: good when you left it. When you left the Congress,
Speaker 1: things were i'll say, getting bad in terms of partisanship,
Speaker 1: in terms of the ability for Congress to get things.
Speaker 1: Then we saw another continuing resolution here kicking the can
Speaker 1: for three months. Now, what do you say to those
Speaker 1: who are just completely skeptical of Congress's ability to get anything?
Speaker 1: And what's it gonna? What's it gonna bring what's gonna
Speaker 1: bring you back to regular order in the US Congress?
Speaker 1: Do you think, well, I believe in Congress. I did
Speaker 1: leave because of the toxic partisanship, and I got a
Speaker 1: better offer to be in a bipartisan, nonpartisan intellect fund. Yeah,
Speaker 1: but not for me. It's not invest in me. It's
Speaker 1: invested in in amazing, brilliant ideas. So which is an
Speaker 1: easier sell, got to say. But at any rate, I
Speaker 1: still think Congress can work. There's so many people there
Speaker 1: who want to do the right thing in both parties
Speaker 1: as they define it. What's wrong is the is the
Speaker 1: business models broken U. The game is to blame the
Speaker 1: other side for not solving the problem. If you work
Speaker 1: with the other side, you get primaried. California has figured
Speaker 1: out a better answer. We have UH citizen commissions to
Speaker 1: draw lines. We have what's called a jungle primary where
Speaker 1: everyone runs against everyone, and that way you have to
Speaker 1: listen to other people and be open to other ideas.
Speaker 1: There's been a tendency to fix Congress by trying to
Speaker 1: blow it up. UH, And I wonder what you make
Speaker 1: of the way that many elected representatives have pursued that
Speaker 1: who has the institutional knowledge the memory, uh, to figure
Speaker 1: out the way that the Congress works, and to to
Speaker 1: find solutions that will actually improve the way things working. Right. Actually,
Speaker 1: I like the last part of that question about improve
Speaker 1: Congress has a nineteen entry committee structure. I mean, why
Speaker 1: do we need an agriculture committee when we don't really
Speaker 1: have a Homeland Security committee with with ample jurisdiction, uh, etcetera.
Speaker 1: So I do think Congress has to change, and being
Speaker 1: disruptive is not a bad thing, but being disruptive with
Speaker 1: respect for the institution is the way it needs to happen.
Speaker 1: We do a huge thing on STEM here. Thank you,
Speaker 1: New Jersey Institute Technology. You're Smithy, that's the ultimate liberal
Speaker 1: arts Massachusetts school. Tell me how if it's science in
Speaker 1: the new curriculum, A woman of the liberal arts, how
Speaker 1: do you fit science and math into the new liberal
Speaker 1: arts curriculum? Boy? Was that a softball? First of all,
Speaker 1: I applied early decision to Smith having never seen it
Speaker 1: from public school in Los Angeles. So very cool. Uh,
Speaker 1: it was very cool. And Smith was the first women's
Speaker 1: college to have an engineering program and it's had it
Speaker 1: for years, So just so you know, so it's not so,
Speaker 1: how do we get quickly here. How do we get
Speaker 1: women to stay in math, stay in science and do
Speaker 1: it like the women that made Cassini I by making
Speaker 1: it more easily available and making it cool. And you
Speaker 1: ask about it on your program every single day, and
Speaker 1: more women will tune in and and put mentors on
Speaker 1: your program and they'll do it. We try to do it.
Speaker 1: I know you're still congresswomen keep funding jp L Jane
Speaker 1: Harmon Madam Merrow Space from California has something to do
Speaker 1: with the school in New Jersey now as well. This
Speaker 1: is Bloomberg Ratter joining us now in our Bloomic eleventh
Speaker 1: three US too is the chairman of will It Advisors.
Speaker 1: UH great to have you with us here. Let me
Speaker 1: start just by asking you about the week ahead. Yes,
Speaker 1: we have the FED. We also have a lot of
Speaker 1: traffic here on the upper east side of Manhattan's the
Speaker 1: UN General As simply gets underway. The President scheduled to
Speaker 1: speak tomorrow before that that international body. What are you
Speaker 1: gonna be listening for? We had a list of what
Speaker 1: this administration is prioritizing from UH, the U S Ambassador
Speaker 1: to the U N and from the National City. Your
Speaker 1: advisor on Friday reform high up on the list. The
Speaker 1: President attending a meeting about UN reform today in particularly,
Speaker 1: what are you gonna be listening for tomorrow? Well, as
Speaker 1: you know, there are really two Trumps. There's the there's
Speaker 1: the more congenial, more broad, broad looking Trump, and then
Speaker 1: there's the more of the the ugly Trump. And it
Speaker 1: will be interesting, especially with Steve Batton gone from the
Speaker 1: White House, to see if we get more of the
Speaker 1: good Trump. Now, even some of of Trump's more experienced
Speaker 1: people do favor reforming the UN, cutting what we pay
Speaker 1: to the U and things like that. So I think
Speaker 1: in the speech is obviously going to be presumably a
Speaker 1: hunk about North Korea, UH, and there's going to be
Speaker 1: a piece about how he sees the UN going forward.
Speaker 1: He does not like multilateral institutions. I think we've learned
Speaker 1: that about his personality, So it'll it'll be interesting. It
Speaker 1: could be a pretty tough speech. It could be a
Speaker 1: pretty tough speech, but I suspect he'll stay within the fairway.
Speaker 1: How do you assess the efficacy of sanctions? We saw
Speaker 1: the U. N Security Council apply another round of them
Speaker 1: last week on North Korea. There's talk perhaps of Moore.
Speaker 1: We've had them in North Korea, on Venezuela, on Russia,
Speaker 1: on a number of other countries. How do you know
Speaker 1: if they're working? They I think sanctions at best take
Speaker 1: a long time to work. You can go further back
Speaker 1: in history and you look at Rhodija, you can look
Speaker 1: at Cuba, you can look at Iran. Uh You're talking
Speaker 1: about things that take decades and may then even have
Speaker 1: no effect, and then at some point you just decide
Speaker 1: unwind them. But look, we have a limited toolbox of
Speaker 1: things we can do about North Korea short of military activity,
Speaker 1: which I don't think anybody thinks is a good idea,
Speaker 1: And sanctions are simply are simply one part of it.
Speaker 1: And I think I would give the President and Nicky
Speaker 1: Heilly in particular high marks for getting a fifteen to
Speaker 1: nothing vote on a set of sanctions. And I think
Speaker 1: I think if you take out Trump or Trump has said,
Speaker 1: somewhat Trump has said and most of his tweets, the
Speaker 1: actual things that are being said by Rex Tillison and
Speaker 1: Nikki Hilly yesterday on the Sunday shows the way. It's
Speaker 1: the way the professionals are handling this is actually I
Speaker 1: think about as good as it gets. But there is
Speaker 1: the green marble of the u N. There is something
Speaker 1: about walking into that time warp of middle sixties architecture
Speaker 1: and walking into that Assembly hall. I'm assuming he's never
Speaker 1: done that. He's going to go up there against that
Speaker 1: green marble and act at what ecumenical? Is that the
Speaker 1: right word? I mean, what if somebody pops off and
Speaker 1: says something, What if like somebody who's kind of somebody
Speaker 1: puts some you know, do you think he's gonna stay
Speaker 1: on message? I think he is going to stay on message.
Speaker 1: I just don't know what the message is, right. And
Speaker 1: the Secretary Tillison's showing up, I assume. So every Secretary
Speaker 1: of State in history has been at the UN General
Speaker 1: Assembly week as far as I know, I assume. So Look,
Speaker 1: my my guess is that you will get. My guess
Speaker 1: is that he will get a measure Trump who will
Speaker 1: be tough about the u N and say that there
Speaker 1: should be changes and it's not as effective as it
Speaker 1: should be, etcetera, etcetera. And I think he'll be tough
Speaker 1: on North Korea, but I think he will stay inside
Speaker 1: the fairway in terms of talk. And I'm not even
Speaker 1: a Golfer. But I think it will stay in the
Speaker 1: fairway in terms of the kinds of things. He says,
Speaker 1: I believe President She's not going to be here play
Speaker 1: President Putin is not going to be here as well.
Speaker 1: How much a vacuum does that leave? I mean, I
Speaker 1: think of of of the two countries on this globe
Speaker 1: that have the largest impact on a number of these
Speaker 1: big issues, be that North Korea or Syria. Uh, is
Speaker 1: it going to be a hindrance to actual things getting
Speaker 1: done by them not being here in New York? Yes?
Speaker 1: And no. I think obviously in the modern world there's
Speaker 1: certainly communications back and forth with their people that will
Speaker 1: allow things to happen. But but I think it does.
Speaker 1: I think we do lose something because I think I
Speaker 1: think having our president have a chance to bilaterals with
Speaker 1: Putin with g is an important part of trying to
Speaker 1: diplomatically move the world forward. God, twelve seconds left left?
Speaker 1: Long time? Can you own an Apple? Here? We've had
Speaker 1: really different a different set of opinions over the list,
Speaker 1: that's what. Yeah. I have never owned Apple, not because
Speaker 1: I don't like the company and obviously been wrong. I
Speaker 1: think I think they've done a great job I think
Speaker 1: that I think the existential question for Apple is what
Speaker 1: is the next act? And as Tim Cook able to
Speaker 1: produce it? You know, Steve Jobs, if you just think
Speaker 1: back to when Steve when this thing made, When when
Speaker 1: Apple made some computers and that was kind of it,
Speaker 1: and Steve Jobs said well, We're gonna make a phone,
Speaker 1: and every said what And the phone is now over
Speaker 1: half the business, as you know, and the iPad and
Speaker 1: the Apple TV and the I Watch and all of
Speaker 1: the others now and now all the media stuff. The
Speaker 1: question really is, can Tim Cook produced an innovation on
Speaker 1: the scale of the kinds of things Steve Jobs did
Speaker 1: that really transform the company? Steve Wrotner, thank you so
Speaker 1: much for you in perspective. How do you get around town?
Speaker 1: I do a lot of walking guy a helicopter. I
Speaker 1: I try not to go a little sixtieth Street and
Speaker 1: I do a lot of walking. You would be at
Speaker 1: Steve Wrenner, thank you so much. As Willow Advisors should
Speaker 1: point out an investment advisor to Michael Bloomberg, the principal
Speaker 1: owner of the company and also of course owner of
Speaker 1: Bloomberg Radio as well, Alan Krueger here in Bloomberg eleven
Speaker 1: three US to the professor of Economics and Public Policy
Speaker 1: at Princeton, former chairman of the Council of Economic Advisors
Speaker 1: under President Obama. This this week, the President has proclaimed
Speaker 1: this week to be Prescription Opioid and Heroin Epidemic Awareness Week.
Speaker 1: He's talked about opio addiction the problem of it in
Speaker 1: this country a few times. I don't think he's gone
Speaker 1: so for US to declared a national emergency yet, but
Speaker 1: it is certainly indicated that might be that might be coming.
Speaker 1: We talked about it in a social context, help us
Speaker 1: frame it in an economic context. How big an issue
Speaker 1: is this for the US at this point? Well, I
Speaker 1: give the President credit for talking about the issue. I
Speaker 1: think it's important that we also take some concrete actions,
Speaker 1: and I was hoping that the commission that he set
Speaker 1: up would make proposals to try to reduce the crisis.
Speaker 1: I've been doing research on how the spread of opioid
Speaker 1: use has been affecting labor force participation, and as you know, David,
Speaker 1: we have a problem of low labor force participation in
Speaker 1: the US that's run into the opioid crisis. And I
Speaker 1: think those two problems are now intertwined. When I look
Speaker 1: at prime age men, UM, I find that almost half
Speaker 1: for taking pain medication every day. Two thirds of those
Speaker 1: people are taking prescription medication. And a new study I
Speaker 1: have that I just presented at the Brookings Institution last week,
Speaker 1: I found that areas of the country where more opioid
Speaker 1: medication is being prescribed have seen bigger decline in labor
Speaker 1: force participation. Of course, there could be other factors behind that,
Speaker 1: but from what I can tell, this is possibly depressed
Speaker 1: UM the participation rate by more than half a percentage
Speaker 1: point for prime age men. Again, we're talking about the
Speaker 1: through the economic factors here. When you look at the
Speaker 1: conversation about this issue in particular, how much dialogue has
Speaker 1: there been among economists and social scientists and addiction specialists
Speaker 1: and medical doctors. You mentioned the commission that the President established.
Speaker 1: I don't think that there was a medical doctor on
Speaker 1: that committee of four or five individuals. Are you satisfied
Speaker 1: as you look into this that the kind of dialogue
Speaker 1: we need to have is taking place, incorporating your economics
Speaker 1: with the medical side of this issue as well. There's
Speaker 1: a lot of fascinating research that's being done. UM. Some
Speaker 1: of the results quite depressing. I'll tell you an example.
Speaker 1: I have a colleague, Janet Curry, who has a study
Speaker 1: which finds that doctors who attended lower ranked medical schools
Speaker 1: are more likely to prescribe opioid medication, looking within the
Speaker 1: same county, looking within the same field as specialty. Um.
Speaker 1: So I think there's fascinating research that's being done. I
Speaker 1: haven't seen much interest from policymakers yet. Alan Krueger were
Speaker 1: this folks, And again, as we like to do from
Speaker 1: time to time, particularly with someone with a reach of professor,
Speaker 1: Krueger has moved away from the usual, which is jobs
Speaker 1: in the economy, to his important work of Brooking's paper
Speaker 1: Run Opioid and and such. Um, there's some wonderful first
Speaker 1: order difference equations within your report, and maybe even so
Speaker 1: an oiler function because we're not quite sure. There's lambda's
Speaker 1: and other Greek letters. What the public wants to know
Speaker 1: is Horse and Kurt, which is almost economics one oh one.
Speaker 1: Do the drugs cause the unemployment or does the unemployment
Speaker 1: cause the drugs? Well, that's an excellent question. And I
Speaker 1: appreciate Ton that you have a copy of my study
Speaker 1: right next to you. I really appreciate that. And you
Speaker 1: cut right to the heart of the matter. So I
Speaker 1: appreciate that. You know, I think the arrows point in
Speaker 1: both directions, and in certain level, the initial causality is
Speaker 1: less important than the reality that this is a problem
Speaker 1: that needs to be addressed. This is so important. You nailed,
Speaker 1: You go right. It goes in both directions, But political
Speaker 1: discourse is no, it goes in this direction, and the
Speaker 1: other side says no, it goes in that direction. Can
Speaker 1: we get compromise on the couch in the Oval Office
Speaker 1: on opioids and drug addiction? This heroin epidemic that we
Speaker 1: have no I think there is widespread agreement that this
Speaker 1: is a significant problem, and I think that came out
Speaker 1: in the presidential election. Um, there's been very little discussion
Speaker 1: about what to do it about it. I mean, let
Speaker 1: me give you another example time. And one of the
Speaker 1: findings in that in that Brooking study is that three
Speaker 1: quarters of the prescription pain medication that man a rather
Speaker 1: the labor force are taking is being paid for by Medicaid,
Speaker 1: Medicare or Veterans Administration program. So the government does have
Speaker 1: levers to try to influence the initial prescription, and that
Speaker 1: does seem to be a source of a lot of
Speaker 1: the addiction. Even if people move to illegal drugs, it
Speaker 1: seems that they're addiction is starting with prescription medication. That's
Speaker 1: such a good point. And on the subject of a
Speaker 1: legal us, I mean there's another economics issue here as well,
Speaker 1: which is just the relative cheapness of a lot of
Speaker 1: these drugs. They're easier to get, and they're they're less
Speaker 1: expensive as well. Well. That's part of the problem. The
Speaker 1: New York Times had an article today about insurance companies
Speaker 1: being reluctant to prescribe more expensive but less addictive pain medication. Uh.
Speaker 1: And that comes down to economics, and I don't think
Speaker 1: the insurance companies are taking full account of the cost
Speaker 1: of the externalities of having over thirty thousand people a
Speaker 1: year or die from opioid abuse. We are our parents
Speaker 1: lectured us on heroin. It's what they were afraid of,
Speaker 1: and it was all you know within the culture and
Speaker 1: the music. This is completely removed from the drug culture
Speaker 1: of twenty or fifty or a hundred years ago. And
Speaker 1: it's almost an economic discussion, isn't it about fenl or
Speaker 1: whatever it is. It's they're cheap and it's am I right,
Speaker 1: It's just there, it's they're cheap, it's highly addictive, and
Speaker 1: it's very powerful, and it's there and it's available. It's available.
Speaker 1: Isn't that fixable? You know, this problem is almost unique
Speaker 1: to the US. You look at the rest of the world,
Speaker 1: They're not going through this type of how do you
Speaker 1: fix it? Give me the gimme after the first order
Speaker 1: difference equations. What's the Kruger solution? Well, I think there's
Speaker 1: some obvious solutions. In some states have started with this
Speaker 1: limit the number of pills that compete, that people get
Speaker 1: the initial prescription, make them come back and see medical profession,
Speaker 1: professional doctors. I think the medical profession bears a lot
Speaker 1: of responsibility. And you go to Manchester, New Hampshire, which
Speaker 1: I guess its ground zero in New Hampshire. Do you
Speaker 1: blame the doctors? Do you blame the hospital? Do you
Speaker 1: blame Raytheon for pulling their business out forty years ago?
Speaker 1: I mean, where's the Kruger blame here? Well, you know, Tom,
Speaker 1: I'm focused on solutions, not on blames. So I think
Speaker 1: what we should do is say, how do we solve
Speaker 1: this problem? Figuring out an assigning blame when there's plenty
Speaker 1: of blame to go around is not terribly helpful. Is
Speaker 1: this something? When you were cheering the Council of Economic Advisor,
Speaker 1: you would have these the access to somebody at DHS.
Speaker 1: In other words, how hard is it to get all
Speaker 1: of the parties within public policy to the table, to
Speaker 1: get folks heading up different agencies to meet with the
Speaker 1: White House to to work on these kinds of solutions.
Speaker 1: That's not hard at all. What the government is great
Speaker 1: at his meetings? Uh? What I found when I worked
Speaker 1: for President Obama at the Treasury Department at the White House.
Speaker 1: Government is great at meetings, good at talking, good at listening.
Speaker 1: Action is more difficult, and particularly the action requires Congress.
Speaker 1: We've been talking around this a little bit here, but
Speaker 1: tell us just what data you looked at. How difficult
Speaker 1: is it to come by data on this subject of
Speaker 1: opioid addiction in particular? I started using a survey called
Speaker 1: the American Time Youth Survey, which is a real gem.
Speaker 1: It's collected by the Bureau of Labor Statistics, and it
Speaker 1: had a supplement which I helped frankly to design, which
Speaker 1: asked people about their experience with pain and whether they
Speaker 1: took pain medication on the previous day, and when I
Speaker 1: started the study, I didn't expect to find what I found.
Speaker 1: You know, that survey found that in two thousand and third,
Speaker 1: teen of prime age men to fifty four who were
Speaker 1: not working, not looking for a job, took pain medication
Speaker 1: on the day of the survey. And I didn't know
Speaker 1: maybe it was aspirin. You know, you feel differently if
Speaker 1: it's aspirin. So I did a survey myself where we
Speaker 1: identified about six men who were not in the labor force,
Speaker 1: same age group. We found that of them had taken
Speaker 1: pain medication. Two thirds of that group took prescription pain medication.
Speaker 1: And then I dug deeper in that survey. The c
Speaker 1: d C does a survey on people's experience with pain
Speaker 1: over time. It's a very big sample, uh Amazingly. One
Speaker 1: of the things that data shows is that pain has
Speaker 1: not been declining. In spite of the fact that we've
Speaker 1: almost quadrupled the amount of opioids that are being prescribed.
Speaker 1: Pain for men or out of the labor force has
Speaker 1: actually been gradually rising over time. And I think there's
Speaker 1: a lot of other evidence that suggests that this treatment
Speaker 1: is not working. Um. So I used a variety of
Speaker 1: data but those are the main sources. I ask you
Speaker 1: just about the role economics can play in solving or
Speaker 1: leading to a solution for social crises like these. As
Speaker 1: Tom was saying before we went to break um, this
Speaker 1: is something I think more people are talking about. Unfortunately,
Speaker 1: I think more people have experience with looking back at
Speaker 1: the history of of of economics and the way that
Speaker 1: it can influence discourse and conversation about issues like these.
Speaker 1: What's the role of economics in a conversation about hope
Speaker 1: we had addiction in this country? Well, I think economics
Speaker 1: has an important role to playing, frankly, in all policy issues.
Speaker 1: I don't think it should be the only voice at
Speaker 1: the table, but I think it's an important vote, important voice.
Speaker 1: And in economics, we tend to think about incentives. You know,
Speaker 1: we we were pretty good at at at calculating costs,
Speaker 1: and we're pretty good at considering incentives. People don't always
Speaker 1: respond the way we think they should respond, but we
Speaker 1: can think about what the economic incentives are. And I
Speaker 1: think this crisis is in part a result of economic incentives.
Speaker 1: It's in part a result of uh economic weakness and
Speaker 1: for three decades having a hollowing out of the middle class,
Speaker 1: and I think it's in part a result of incentives
Speaker 1: in the health field. Tom mentioned Manchester, New Hampshire is
Speaker 1: certently affecting some local communities more acutely than others. Although
Speaker 1: I would say with it with a broad brush, it's
Speaker 1: it's happening across the country. When you look at this
Speaker 1: on a regional basis, are there places who have it
Speaker 1: worse than others? Absolutely? You know, if you look at
Speaker 1: prescription UH opioid medication and you compare the top temper
Speaker 1: cent and the bottom temper cent across America, it's a
Speaker 1: factor of thirty to one. So uh, I don't think
Speaker 1: there's any way that pain varies by thirty to one
Speaker 1: across counties. Um as best I could tell, it doesn't
Speaker 1: vary by anything like that. So I think the medical
Speaker 1: profession practices, and we find this across medicine in many
Speaker 1: different fields. If you look at herne operations, if you
Speaker 1: look at cines arian sections, they're big variability. There's very
Speaker 1: big variability across regions. The Krueger style is rigid, rigorous
Speaker 1: economics and Matthew nous and then you will have a
Speaker 1: paragraph that you parachute in with and here you quote
Speaker 1: Hillbilly elogy all the rage right now. J D. Vance,
Speaker 1: you quote Rick and Jackson, Kentucky, and you Crow's case.
Speaker 1: You quote Case Dton Angustaton the laureate. Uh and in
Speaker 1: case doing better than good on the depth of the
Speaker 1: deaths of despair. Okay, So there's a medical community and
Speaker 1: there's a fancy pants medical community. Is this about second
Speaker 1: rate doctors are the doctor's victim of the incentives? How
Speaker 1: do you blame the physicians um prescribing the medicines for
Speaker 1: the deaths of despair? Well, I think some of it's
Speaker 1: seen scentives for the doctors think they don't have enough
Speaker 1: time to properly treat many of their patients. Sometimes there
Speaker 1: and so come on there and it's like sixty minutes
Speaker 1: last night. Basically it's a drug commercial with Steve Croft
Speaker 1: wrapped around it. Come on, these guys are are incentivized
Speaker 1: to move drugs, right am? I right? That was gonna
Speaker 1: be my next sentence. Uh, they're incentives pushed them in
Speaker 1: this direction. Um. So I don't think they're necessarily bad people,
Speaker 1: but I think many are responding to the incentives. They
Speaker 1: phase pivot here and just ask a few questions about
Speaker 1: and leading up to this meeting, that's FED meeting this week.
Speaker 1: Earlier in the show, I was saying, real economics, we
Speaker 1: could just to close things up. But uh, we were
Speaker 1: talking earlier in the show just about the focus that
Speaker 1: we've had on inflation in this country in particular, it
Speaker 1: seems like we've talked less about the labor market as
Speaker 1: a result of that. Certainly the FED is grappling with
Speaker 1: with both, although it seems like increasingly the part we're
Speaker 1: focused on on its inflation. How does the labor market
Speaker 1: look to you at this point? How concerned are you
Speaker 1: about slack? How concerned do you think this feed is
Speaker 1: about where the labor market is at this point? Well,
Speaker 1: what I say is there's a lot of slack, but
Speaker 1: it's not effective slack. So eleven and a half percent
Speaker 1: of prime age men are not in the labor force.
Speaker 1: That's certainly slack. It's not effective in the sense that
Speaker 1: they're not all that likely to come back to the
Speaker 1: labor force even if the economy picks up. And I
Speaker 1: think it is related to the opioid crisis that we've
Speaker 1: been discussing. Um So I think the problems are connected. Obviously,
Speaker 1: given that the surprise on the low side and inflation
Speaker 1: the last six months has taken a lot of people
Speaker 1: by surprise. UM. I think that does deserve a trend,
Speaker 1: this amount of attention. The last cp I picked up
Speaker 1: a bit. I think that will give give analysts a
Speaker 1: lot to chew over um and there'll be more a
Speaker 1: lot more information coming in December on the opioid issue.
Speaker 1: And and that percent of the workforce, that second of
Speaker 1: the workforce you're talking about. This FED must be as
Speaker 1: flummixed as everyone from a policy perspective about this issue.
Speaker 1: How tighter its hands, how tighter FED policy makers hands
Speaker 1: when it comes to dealing with this, this crisis in particular. Well,
Speaker 1: I think this is beyond the FEDS, UM, But it's
Speaker 1: a crisis that they're focused on. Janet Yellenside in the
Speaker 1: opioid crisis and testimony a couple of months. Have they
Speaker 1: acknowledged it enough? Do you think? Um? I think it's
Speaker 1: something they're aware of. I haven't seen research from the
Speaker 1: FED staff on the issue yet, but maybe that's something
Speaker 1: they happen the works in time. We got left two ideas.
Speaker 1: The first one is my long read of the weekend
Speaker 1: was Allen blind to the former vice chairman of the FED,
Speaker 1: writing about his magnificent co author of a classic economics textbook,
Speaker 1: William Baubo. How does that process go if Princeton, where
Speaker 1: you honor a giant as you did with the death
Speaker 1: of William Boma. Well, Bomble, as I've said on your show,
Speaker 1: was a real giant in economics, and in many different ways,
Speaker 1: unaccountable contributions were extraordinary. I mean in his eighties and
Speaker 1: early nineties, he was more productive than most economists are
Speaker 1: throughout their career. Uh. Bombl's cost disease is something I
Speaker 1: teach to my my freshman class. Uh. We we have
Speaker 1: a process when we have a university wide faculty meeting
Speaker 1: early in the fall to recognize colleagues who have passed
Speaker 1: away in the past year. Uh. The factory member rights
Speaker 1: a statement. It's supposed to be a joint statement, but
Speaker 1: Alan blinders such a beautiful writer. Alan Alan roaded himself
Speaker 1: and Bert Malkill and I signed onto it asked him
Speaker 1: not to change a word. It was such a beautiful
Speaker 1: statement about Will's contributions. And the final thing is it
Speaker 1: is a travel Monday here at Bloomberg Surveillance where we
Speaker 1: ask all our guests about how tough was a trip.
Speaker 1: To tell us about traveling to last talk to Dr
Speaker 1: Krueger from from the Canals. First of all, I'm obliged
Speaker 1: to point out that I was in Europe because I
Speaker 1: went to an economic conference that was in Croatia, and
Speaker 1: the easiest way to get there was to fly. Then
Speaker 1: it's rent a car and drive a King's landing and
Speaker 1: abrupt that was further north. It was umag beautiful, beautiful
Speaker 1: part of Europe. I had never been to Croatia before
Speaker 1: and it was a very very fine conference that I attended.
Speaker 1: You didn't answer the question. Venni Venice was lovely as
Speaker 1: as I've I've only been to Venice a few times.
Speaker 1: It's lovely as it's been each time I visited. Very good.
Speaker 1: Alan Krueger will have him a joint interview with Luigi's
Speaker 1: The Constance. Yes, trips to like come O in the like,
Speaker 1: but yes, well I'm not I don't read o Keeper
Speaker 1: of the MX as No. Thanks for listening to the
Speaker 1: Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud,
Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at
Speaker 1: Tom Keene David Gura, Is that David Gura before the podcast?
Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio.