Bloomberg Businessweek Weekend-March 27, 2021

edition of Bloomberg Business Week. Week fifty four. Working home Still for so many, It's week tim where more U s States open vaccines to anyone's sixteen and older, where Wall Street was maybe finally finally seen a path back to the office. Hey, this is our backdrop the Biden administration, of course, saying weeks ago that by May one, Biden wants to see this happen in all fifty states, vaccine

eligibility being available to all adults. We did have some big macro conversations though this week, on everything from E S, G and E VS. To white wealth and our own well being right, including conversation with Nobel Laurie economist Joe Stiglitz on the developed world remembering the developing one, especially if we want to end to COVID. Plus Jimmy Ethridge, CEO of Accenter in North America on being okay to say that you're not okay during the pandemic. It is

okay to not be okay. And we've also got a former NFL pro bowler on being a force for good and tapping into the sanitizing craze. All of that to come. We begin with the cover story this week, a business takeover of the magazine that's all about vaccine passports. Companies and governments from Beijing to Brussels that depend on travel

or large gatherings. They're counting on the unproven concept of vaccine passports to get the wheels of the economy going Againberg Business Week Assistant managing editor Jim Ellis oversaw the coverage. So we've we've heard so much about, you know, the pain that businesses have had and the countries have had, you know, particularly tourist dependent countries since the pandemic has pretty much stopped the ability that sort of easily moved

between places or even the congregating groups. So I thought it would be a great idea to sort of take a long look, deep dive at, you know, a the problem and also the range of solutions that are coming out now and whether this vaccine passport, this sort of mythical savior that so many people have been talking about, is really going to be as effective and is easy to put together as a lot of people seem to think.

I mean, this is one of those things that this is a solution that people came up with quite so quickly before actually understanding what it means. It's like, look at that, really, will it be the golden ticket? And you guys take us to Israel, you take us to uh Europe or I feel like this is where we're starting to see kind of moves in that direction, at

least more ahead than some other parts of the world. Yeah, they've been very, very much more interested in in in getting things reopened in a coordinated way than here in the US for for a lot of reasons. I mean, it's in some ways it's simpler because their health systems sort of centralize a lot of data, and so therefore here in the US we've got a health system where you know, millions of different systems in every state, and so it's sort of hard to be able to track people.

That's easier in it when in countries that have their own health systems, But more importantly, UM certain parts of the world are so impacted by the drop and travel that they have an interesting getting this back together, particularly Europe. Europe has a lot of countries, particularly in Southern Europe, like a Greece or Spain or in Italy, that desperately

need tourism to come back. It's a big piece of their GDP and they want some reason to say that it's safe to travel, whether it's truly safe or whether that's just the big lead. It seems more and more businesses, whether it's an airline, whether it's in the hospitality business, but increasingly whether it's in things like sporting events, um um, you know, gyms, all those are looking to a vaccine passport as a way to say, hey, it's safe, here's your get out of jail car. You have this. Now

let's get back to business as usual. All right. So let's talk about some of the things that are out there. There's the International Air Transport Association. They've got a travel pass app. You've got the EU with their Digital Green Pass proposal, you've got the a Okay Pass. Any of this really working well, or at least maybe some tests

of it, Well, yeah, the things are in test. The issue is that there's right now no coherent standard about what these things should, um you know, sort of what kind of data they should capture, and how they should be able to sort of share that data, and what do you have to do to make sure that that data is sort of private because it's often tied to other data, other health data on you and other sort of just personal information on you, which is a really

big issue in parts of the world, particularly in Europe, where privacy is a major concern amount over everything. And so you've got a lot of competing systems as opposed to a standard, whether it's you know, right now, Air France is trialing something called an a Oka pay s um you know, IATA you know has its travel pass, the Common Pass, which is something that's backed by the

World Economic Forum. All of these are basically competing systems that in various ways take your vaccination and and and COVID testing history and put it uh into a form that can somehow be displayed on a screen. Uh. The problem is that, um, you know, how that happens can really affect how private the data is. So increasingly what we're seeing is people are you know, coalescing around sort of an open standard that's tied in with the way that we look at security on the Worldwide Web, which

is pretty well adopted around the world. And the key here is rather than having a central database that has everyone in the world's health data, which is something that most people would not want, I'm just gonna say, you made me really nervous. Like I think about it's like similar to what we're trying to do with, you know, medical history. Every time I go to the doctor's office,

I'm frustrated that I file something out. But will I be ultimately comfortable if there is some universal database that knows everything medically on me, particularly since that database is you know, some people would say that's cool if it's just to transport, to transit borders or something like that where government is involved, but increasingly, you know, this is going to be used in Britain is arguing now about whether this can be whether a vaccine passport can be

used for admissions to pub Look, a lot of thorny issues can arise when you're thinking about this type of thing, Carol. That was, of course, Bloomberg Business Week Assistant managing editor Jim Ellis. Check out the full cover story and coverage including more on the uncertain science of vaccine passports. It's all in the magazine, on newsstands, online, and on the Bloomberg. With everything with COVID, it's never a straight line forward,

all right. Coming up more on the virus with Nobel lauread economist Joseph Stiglets, who talks how we can free the world from COVID nineteen. He weighs into on taxes as well as Jamie Diamond. You're listening to Bloomberg Business Week. This is Bloomberg. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovik from Bloomberg Radio. So Tim safe to say, we had so much to talk about when Nobel Laureate economist and Columbia University professor

of economics Joe stick Let's joined us. Yeah. He's also a co chair of the Commission on Global Economic Transformation at the Institute for New Economic Thinking. The organization recently publishing a report on how dealing with the pandemic needs to be a global effort and one that takes care

of the developing world. The key point is that that uh the developing countries, particularly in emerging markets are not on tracked to have the kind of UH light at the end of the tunnel that we're beginning to see in the United States into distinct areas. UH, we're getting vaccinated. President Biden talked about July four being I heard day of independence from the from the COVID nineteen And there are many many countries, as we document around the world

that have not had a single vaccine. They just can't get access, UH, they can't afford it. UH. And one of the points we make is that that supply constraint is in part artificial. UH. The second thing is the noting States has spent approximately seventeen thousand dollars UH per capita GDP on UH the Economic Recovery, the Rescue Act UH combined with the Cares Act that was last last

spring and the December bill UM. The developing countries are spending a fraction of that because they just don't have the money. UH. They're spending on average somewhere between two dollars and seventeen dollars per capita. Compare that with seventeen thousand dollars in the United States. Professor, let's start with the recovery. When it comes to vaccinations around the world. Then get to economics in just a few minutes here,

but obviously the two are intertwined. I gotta ask, you know, when it comes to this virus, the way that we're looking at it, I think so many Americans look at it from a perspective of where they live, right in their neighborhood, who who they're around in their city, and those are the statistics that they're looking at, how easy it is to get them a vaccine. Make the case as to why we should take a global approach and why we're not out of the pandemic until the world

is vaccinated. The real reason, one of the real reasons we ought to be concerned is this virus seems particularly successful in mutating. And as long as it's mutating, as long as it's flourishing in any part of the world, and the longer it flourishes, the more mutation, some of those mutations are going to come back, and to put it, you know, bite us. We don't know when, and we don't know how bad it will be will be Will those mutations be more um contagious, more deadly? Uh? With

a uh, We just don't know. So we are at a very big risk letting this UH virus just basically flourish in some parts of the world. And listen, not apples to apples, but professor stickles, you know, coming off of the financial crisis, I think we learned hopefully a lot in terms of we thought this was going to be developed you know, the developed world thing. We thought it really spread around the globe. In terms of the crisis.

Is there something that we can or should have learned from that crisis that we can carry over to this crisis in terms of its impact globally? What you remember in that particular crisis, Uh. The G twenty was founded on the basis of the recognition that we needed to have a global economic recovery. Gordon Brown, who was the Prime Minister of the UK at the time, was particularly forceful. He pointed out that if one country is doing well, it helps its neighbors, and if it's doing poorly, it

hurts its neighbors. UH. We've lost enormous number of jobs in the export area because of the global slowdown. So just in our own self interest that there will be a strong global recovery UH and certain sectors, of course, if we don't have a slow strong recovery, they just won't be able to get back on their feet. So that's UH on the economic side, why it's so important for this to be a global recovery. Back in two thousand and eight nine, China played a very big role

in that global economic recovery. UH. It grew really very very strongly. Uh. This year China is the only major

country growing, but it's only growing about three UH. Next year is expected somewhat stronger, but uh uh with Europe as weak as it is um a decline of something like twice that of the United States eight percent, and having a hard time getting the vaccines and getting the disease under control, it's really important that developing countries and emerging markets have a stronger recovery as we can engineer. What do we need to put in place in order

for this to happen at this point? Is this just a case of developed government saying, listen, we've got to spend a help these developing economies get the vaccine? There is it that the first big step that we have to do health is obviously UH the first order of business, getting vaccines, therapeutics, protective gear to the UH. Developing countries and emerging markets is absolutely necessary. There's a policy for

amework though that can help facilitate that. And the next a temporary suspension on some of the intellectual property rights that pertain particularly to COVID nineteen, meaning allow companies to reproduce vaccine and other technology so it can quickly be distributed. Absolutely, and you know that they can pay uh license fee. It's not like you're uh not compensating those who did the basic research. But remember much of that research was funded by the public in the United States and in Europe.

So uh, the and the returns that have all the vaccine companies have already obtained or scheduled to obtain this year, are you look like they will be a enormous return on their private investments. Let's talk about your plan and the Institute for New Economic Thinking, this three pronged strategy of helping the world in terms of getting beyond COVID and it's impact. We've already talked about vaccines, that vaccines

need to be made available for the developing world. You also, though the other two prongs economic recovery policies in debt management. Tuck briefly about those I've mentioned earlier that the disco space in the United States. It's just so much larger than they used to. Developing countries and merchy markets, they

just don't have much much much they can do. So if there's the usual stanks of two little depth restructuring done too late, these countries growth gets so inhibited they aren't able to pay as much as they would be able to pay if you gave them more space. Right now. That was Nobelt Lauria Economists Joseph Stiglitz, also co chair of the Commission on Global Economic Transformation at the Institute

for New Economic Thinking. I canna say we're just getting started with the weekend, so but that was one of my favorite conversations this week. Yeah, that was one of my favorites as well. We could have gone cold on the entire show with them, hours and hours and hours all right still ahead. There are many worries out there when it comes to dealing with the coronavirus, right, we know that, and Toll in particular, is that on our

collective mental well being. The CEO of X Center in North America, Jimmy Afridge, walks the talk that conversation next on Bloomberg Business Week. This is Bloomberg broadcasting from the financial capital of the world Bloomberg eleven Frio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one oh six one to San Francisco, Bloomberg nine sixty to the country Sirius XM Chado one nineteen and around the globe the Bloomberg Business app and Bloomberg Radio dot Com.

This is Bloomberg Business Week News this week about black Stone leading a one hundred million dollar funding round in the on demand mental health company Ginger Right. And then we also had tim City Group CEO Jane Fraser. She banned Friday internal zoom calls and encourage vacations for her staff. It's all about an effort to combat workplace malaise that's been brought down by the pandemic. I mean, everybody's feeling

kind of wiped out. Yeah, I'd be okay with no video call Friday's which ever, seriously well our mental well being Carol has been one of the other crises over the past year, exposing mental health struggles as never before, also increasing corporate awareness big time. Think about all the conversations we've had with CEOs and leaders about the mental well being of their their teams. With that in mind, I did catch up with Jimmy Ethridge. He's the CEO

of Accenter North America. This happened at the Bloomberg Live Mental Health in the Economy Virtual event. I began though, by asking him about the economic and market outlook. I had to do this, especially since Accentia works with global clients in all industries. We survey the C suites of our clients a couple of times a year, and the

outlook right now is as optimistic as it's been. The survey that we did in December, which is over fifteen hundred C suite executives, the vast majority are anticipating this case shaped recovery, consistent really around the globe and a

pretty optimistic outlook. A little more optimistic in North America, where about half of these executives feel build their growth goals by the end of a little more pessimistic when you look at Europe and um, you know, I think, not surprisingly a lot of this is tied to success

with the vaccine and vaccine deployment. What's happened with COVID has really created a little bit of a technology time machine and are and clients are moving much more quickly around technology investments, looking to achieve in ten months what normally would have taken them, uh five plus years to do. And that's good news for our business because we're exactly

where our clients needs to be. But you know, as you were saying with some of the survey results, the fact is a lot of the productivity that the clients have experienced over the past year, it has really been through adrenaline as much as anything. Well, let's talk about those pressures. I've seen them firsthand. I've seen them with colleagues, I've seen them with family members. Jimmy, what have you seen with your employee base, with your leadership team over

the past year. First of all, I'm really proud of what our employees have been able to accomplish. The creativity, the compassion, and the resiliency. We shifted what has been a long traditional client service model of being on site at clients with with a lot of our services, to completely working remotely and for most of our employees working from home. And the fact that we were able to do that without skipping a beat with the client service. Um, the fact that we've had to shift so many key

processes to being virtual. It's still blows my mind that with the thousands of people that Accenture has hired in the last year, none of them have ever stepped foot in an Accenture office. Probably none of them have met in person with Accenture leadership or colleagues. But the compassion and grace that I've seen our people try to take care of each other, uh in dealing with you know what's a combination help crisis, economic crisis, and social crisis.

It makes me very proud. However, while the SEMs to have been incredible, they are clearly feeling the stress, anxiety, depression. Like a lot of corporations, we do internal surveys and it was very clear that everyone is feeling that. And I think it kind of goes back to the point I made earlier that the adrenaline can only take you so far, and the things that are happening to people that they're having to deal with are really putting a

lot of pressure on mental health. Well. And you know it's interesting is I feel like we all will say how you doing, I'm doing okay, or I'm having a bad day, and then we just kind of brush it off. But when you start to drill down. And we actually took a poll of our audience here and ask the question have you experienced any of the following since COVID nineteen lockdown and almost said they have experienced anxiety? UM, almost said they felt lonely, depression, and then in terms

of thoughts of self harm about four percent. Tell me, like those results, how do they speak to you? I s we can relate to them, and I can relate to them personally. I mean, my life is a lot different than it was before. Um, I've been I haven't been on a plane and over a year and you're talking about someone who lives lives in airplane and airports. Um. My dogs have gotten to know me better than the

guy that just leets us on the weekend. Um. And of course I've got the cliche COVID puppy that has become a key part of my stress therapy and kind of coping mechanisms. But I will say about to your point about how are you doing? UM, I'm speaking more frequently with the c suites of our clients in part because video just enables It's a lot easier than getting

on a plane and going to meet with someone. I gotta say, it's a hard thing for most of us, Tim to admit, and maybe maybe just look soon for a chief empathy officer coming to a company near you. It would be nice, right, wouldn't it part of the C suite that was the centure in North America CEO Jimmy Ethridge. You can watch the full interview on Bloomberg Lives YouTube page, so be sure to check that out. You're listening to Bloomberg Business Week coming up next, speaking

of empathy. A former NFL pro bowler on athletes being agents of change. You're listening to Bloomberg Business Week. This is Bloomberg. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovik from Bloomberg Radio. So, Tim, it's over a years since I caught up with former NFL pro bowler and fullback for the Atlanta Falcons. I'm talking about Ovie Muhailey. We caught up at the Bloomberg Power Players Summit. Like I said, about a year ago

in Miami. Obe's president and founder of the foundation that bears his name, and Carol, A lot has happened since you two last talk. The pandemic. Of course, the Black Lives Matter movement gaining so much momentum over the summer and more. There was so much I wanted to talk with him about, and we really got to it. And I gotta say, though, like so many of our conversations to him that we do on our daily radio show, we had to begin with what his life has been like.

Been been crazy, but um, we're definitely blessed and realizing now more than ever that wire blessed to be a blessing. Well, and it's interesting it's been a year um that you know, we talked about the dual crisis, whether it's racism, inequities obviously the health pandemic, and I just wonder, you know, we've had some great leaders in all communities, including the sports community, kind of step up and help us get

through this. What do you see as kind of the roles of of athletes and other leaders in the sports industry when it's times of crisis. Well, really, it's using your voice, using your platform for good, and it's wherever

you feel like you can make the most impact. I think a lot of people have pivoted whatever their nonprofit does to provide COVID solutions, you know, with the work that I do with um you know the way I blessed it on their board and my nonprofit in the environmental space, we have to just trying to pivot to how can we help these kids. Uh So it's everything from trying to get the resource so they can work at school, uh, mental health resources, trying to make sure

food is available, and of course testing. Being a doctor son, I've had my medical consulting firm for the last eight years. Since I'm retired, I've been really just trying to use my love with the medical field to health doctors and their patients. So everything from PPE to testing to try and just you know, finding resources for those who even

the most. What are you hearing too in terms of the black community in the Atlanta area and other minorities in terms of stepping up and being comfortable with taking the vaccine. That's an interesting one because I'll be honest with you, even me personally, I've been on defense for a long time, but I'm definitely leaning towards getting the vaccine. Uh just because having a face to face conversation with people who have had COVID and have totally like dear

friends of mine, uh, their experiences going through it. It's to the point where as as much of a fortunate hesitation, there is an after the community, and that I have as well. Whatever symptoms I could have from the vaccine is worse than death that could come because of COVID. So I'm moving that way. But it's really just using the voices that African Americans listen to and that they trust. Try let them understand that the vaccine is, uh, you know,

the best way to move forward safe. Yeah, no, exactly. UM. Hey, one thing I want to ask you, because you listen. You know, you were great when you caught up with us at the Power Players summit and you guys, you know you're out there. You've got causes, you're helping out theirs, but you've also got some interesting investments. Tell me, um about an investment and business that you've been involved in, you know, in a business that's very appropriate to this time.

Sanitizer the foundation we partnered with an eco friendly company called Austria, and they use hemp bidegradable plastic for their refield and rather than using batteries, they have u a put pedal sanitizer. And so the model that we were using is you know, really unique and I'm surprised that

more people haven't used it. We have a high end European device that's more to waste, high stainless steel, laser edge powder coded, fully customizable, and it allows our partners, our clients to make their customers feel comfortable going to stand.

And I won't name any any names, but some of the leaders in the Santis of market, you look at their stands and they look kind of jankie and you know, kind of a rundown and full all ours has a sensor to where anyone can see which one of their dispensers is full, needs to be refilled, and so on

so forth. But we took us to the next level and have added a sponsorship model where with some of our clients like St Regis or Google or Penn State, uh, you know, or some of the other wonderful class working with, we'll find a sponsor that can go there and actually pay to be have their logo in their insignia and even though a QR code that could be on there to get the information out there quick. Example, Penn State has Target as a sponsor and rather than Penn State

having their sametimes to being expensed. Now Target gets more than enough. I think uh beverage being on the dispenser as a QR code that gives percentages off to get some of their students to go to Target. They're making money, Penn State's making money, and we're doing well because part of the four proceeds goes to our nonprofit. That's really terrific. And I know you're doing stuff with b of A

Cox Communications. You mentioned Penn State Delta US Bank, Um, you know, and you said the money goes to your your foundation. I mean talk to us about where that money the ultimately goes. Yeah. So, um, we've been really on the forefront. Uh. Very proud to say have the first NFL player to have a fully environmental foundation back in two thousand and eight, and it wasn't even uh

you know, gets in to talk about the environment. And my biggest thing was just trying to use my platform to educate and inspire the next generation of violence leaders. I wanted to bring more diversity and inclusion into the green space because that's the only way we're going to solve this problem. And so the money is going for our comic books. Our second edition of grid Iron Green is coming out, and we have a curriculum that goes

along with that. We call it a sustainability STEM curriculum where you focus on the science, technology, engining, and math in the sustainability space. Because there there are so many green jobs out there, but very few people in you know, urban areas or black and brown people are vibe or not enough are buying for these green jobs because they don't know about it. They don't know about the opportunity

to do good, to do well. They're not exposed to it on a daily basis like other parts of the country. Is so we want to use my influence ethn athlete and also entertainment and just fun to really expose people with some of the great ways that you can uh be part of a solution. Right, it's not just about opening doors, you're actually providing doors. You know what I loved about when we talked over a year ago, but

I'm even thinking about as we're talking now. You know, you're someone who's accomplished a lot and and succeeded um and done very well. But you know, this past year has exposed that not everybody has the same opportunities, and in particular if you're black in America. It's very difficult, and you have a different set of doors that are opened or not open to you than a lot of other individuals and a lot of white Americans here. What's

the smart conversations that we need to be having. What are the what are the conversations you've been having with you know, um, people that you know, black, white, or other that you think will help move this all forward into a better place. Absolutely, because you can't have any conversations about moving for other people until we discussed you know, racism, because it's it's always there and that hasn't gone away.

It's just become more prevalent the last couple of years against all races, but especially you know, with African Americans. And so what we're doing is trying to just to educate people because it's it's hard to do better, you know better, It's really hard. It's just like you know, we always said of football, if you know better, do better,

same thing applies in life and towards racism. I had a really interesting conversation with h a high school friend of mine Scott, where we hadn't spoken in a long time, and he went out of his way to ask me, you know, how are you doing? He's a Caucasian white gentleman, uh, and he was like, you know, how are you dealing with everything that's going on in the last year with with race? You know? And I shouldn't. Wow. No one's asked me that. No one my friends have just said like,

how are you doing? Are you okay? How you know? What? What can I do to help? And it was very It took me a back, but I was really impressed and appreciative that he asked that I gave him some really simple answers. I was like, those who want to be an allied to people of color, uh, and especially African Americans, they just have to speak up and you

have to do everything. No one could solve this in a staff of the thing here with one act, But it's the accumulation of more people who aren't as oppressed and who aren't don't have some of these up hill um hills the client and can easily call somebody out or make a point to uplift someone who should be in a certain position because they know that, hey, my job is safe, I can speak out. You know, some of people will be able to speak out or say

their truth because their color. They have to just keep quiet and do what they're doing. So to answer your question, it's really about getting more uh white people to to help really enforced where we're going with this and how we're trying to move forward. Because I've been very blessed pass with great friends and UM and when they've reached out and asked how they can help, and I gave them the solutions, they've actually taken advantage of it and

if on it, so that that helps out a lot. Well, And you know, it's interesting of you too, and I'm thinking, UM, what you just said, it's just kind of really staying with me. And I do wonder though, you know, you're experiencing the NFL, and I'm not looking for you to be critical or anything like that, but I do wonder I feel like the NFL itself, you know, there's been some enlightenment perhaps, you know, or some better understanding. You know. I think of Colin Kaepernick and how much criticism he

came under, you know, initially, uh, and how that has evolved. UM, what are your thoughts on that? My thoughts are that it's it's interesting and my wife always uh has cast me not to be too too honest, but I'll be flatly honest. They messed up. They messed up in a big way. They messed up, and I think they are trying to just say whatever people want, they thought people

wanted to hear. And the truth of the matter, or the matter of the fact, is that you know, he was absolutely right, and there is inequality and there uh, there's a lot of racism that needs to be rooted out. Yes, a lot more work needs to be done, and I'm glad we were able to talk about what the NFL has done in the past and what they're doing now in the future. That was former NFL pro bowler and

fullback for the Atlanta Falcons, Ovie Haley. That wraps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio. I'm Tim Stinabeck and I'm Carol Masser. Morehead in our next hour, including our interview with Emory law professor Dorothy Brown on her book The Whiteness of Wealth, How the tax system impoverishes Black Americans and how we can fix it, Plus the end of Tesla's dominance maybe closer than it appears to the dramatic music, dn't Danta.

This is Bloomberg. This is Bloomberg Business Week inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news As it happened. It's Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stenovin on Bloomberg Radio. Hi'm Carol

Masser on Tim Stanovic wlenty. Coming up ahead in our second hour of the weekend edition of Bloomberg Business Week, including a front row seat to what exactly has been going on in the housing market with the CEO of KB Home. What is going on? Homes are getting expensive, they are indeed, speaking of housing, there's a new book out that looks at how racism and tax policy is impacting black home ownership and wealth creation. It's called The

Whiteness of Wealth. And we're gonna wrap up with a voice very familiar to many, the grandson of Jacques Cristau, Philippe Custo, along with the CEO of New Day Impact on teaching kids about sustainability and impact investing. Come on, everybody, let's get into the zodiac. I love that you go first, alright,

deal first up this hour, though the battle. It is funnily on or at least it feels that way tim when it comes to dominance in the EV market, which begs the question is the era of elon coming to an end? And one that Bloomberg Europe Auto's team leader Craig Trudell explored as he joined us along with Bloomberg business Week editor Joel Webber. Craig did a great job

of the story. And you know, I just want to totally be clear that, you know, for for more than a decade now, I think Tesla has just dominated what a bunch of naysayers said would never be a viable space, and by by being such a leader in the space, it has absolutely transformed the future of the auto industry um. And the question now is like are there is there

going to be meaningful competition? And the head start that Tesla has had like leads us to to now and Volkswagen is going to basically be of, you know, a

viable competitor in the very near future. They will have almost instant scale from from what we're able to kind of look at with their numbers, and we're gonna basically see a version of the world that starts to look a little bit more like streaming where Netflix also had a huge lead, but it wasn't like other incumbents could enter the space and also have a decent business model. So so, Craig, how do you how do you see this all all setting out? How realistic of a shot

does Volkswagen we have here to take on Tesla's market power? Yeah, I think it's really interesting that the comparison we made to streaming absolutely makes sense. And I think, you know, the company that we raise in this story that you know, is a great example of what v W might be like is Disney, where you know they have uh, you know, all the hits. They have an ability to you know, bring out some new ones you think about, you know,

Disney Plus and what a hit the Mandalorian has been. Uh, you know, Volkswagen is a company that has a lot of flaws and uh they still have a lot to overcome in that regard. But Erbert des really is dead set on on you know, really taking on Musk and he's not, uh, you know, sort of dismissive of of Ellen. I think that's one of the most interesting things about him. He really, I think takes Ellen seriously, has thought highly

of him and and has said so. He's been very public about the idea that they are sort of a artstick for VW, which is really something considering this as a company that sells, you know, in normal years, more than ten million cars worldwide. Yeah, that's a lot of cars. Hey, Craig, I want to home in on something that I really focused on in your story, and it reminded me of what Volkswagen has gone through over the last year. Skeptics you write could be forgiven for raising their eyebrows at

the idea of going electric. And I'm paraphrasing you here, coming as it was from the same car maker that spent years gaslighting the world about quote clean diesel. Where is where is Volkswagen in getting over that scandal? Because it is, you know, a tough message I think for

the company given its recent history. Yeah, it's it's still something that is playing out in the courts and it's still haunting them, you know, things, things that that they're going to have to deal with in terms of more settlements, uh and uh, you know, dealing with even questions about you know, disclosure. A lot of those sorts of issues continue to linger. I think, you know, largely the world has you know, kind of uh more less moved on.

I'm sure there are consumers who you know, did buy into this the quote unquote clean diesel, uh you know, messaging who really felt betrayed and when will never buy

a VW again. But I think we have been surprised to see that, you know, especially in America, where you know, VW has never been uh you know, really big in the US, but we have seen you know, this is a company that while they're still small there, you know, they really have come all the way back in terms of the hits that they took in the immediate aftermath

of that scandal. Uh. You know, they remain a sort of bit player, but they're back to where they were or were back to where they were before COVID hit. And you know, I think the thing that there's mentioning there, Tim and Craig, Uh, we can turn it back to you on this again, is is the fact that as to to make good on basically epic deception, they had to agree to Electrify America. That has been a huge

infrastructure undertaking. They it was a massive settlement that they agreed to with the US and California and Electrify America is this affiliate that you know, is part of two billion. Uh. Was was a portion of that settlement that needed to go to setting up charging infrastructure and uh sort of you know, building up sort of educating consumers in the US about electric vehicles and Electrify America is now the

largest fast charging network in the US. Uh. This is a company that was you know, set up by Volkswagen, funded by Volkswagen, but as sort of a condition of the settlement, it also needs to sort of benefit everybody. It can't just favor Volkswagen or be you know, closed to VW. So this is a network that actually is being used by Ford, Mustang mach Ee drivers. Uh. And it'll it'll be a network that will really come in handy for you know, really the broader efforts of the

industry to go electric and take you on Moscon. As Craig writes, evs are shifting from what seems like a one man show to an extravaganza with an increasingly crowded stage. As Bloomberg News eurob Otto's team leader Craig Trudell and Bloomberg Business Week editor Joel Webber, could Ellen be sharing the stage one day with the VW CEO. Perhaps perhaps stay tuned. Coming up, we'll look at housing from two

different angles. First, the CEO of KB Home on what's really going on in the US housing market, Then how tax policy impacts homeownership and the creation of wealth. You're listening to Bloomberg Business Week. This is Bloomberg. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovik from Bloomberg Radio. We've got to check on the housing market this week thanks to the latest quarterly update from Kaby Home, which posted fiscal first quarter revenues.

It did come in below the lowest analyst estimate. Building stocks have been up just under twenty this year, and shares of KB Home up well just around here to date. We got more on the industry and outlook when kby Home Chairman, president and CEO Jeff Mezger joined us. You guys had a pretty good quarter. We did? We did. I was joking with someone, it's a good time to be a home builder. How good? Tell us walk us through the metrics. Actually, it's as strong and as good

as it's ever been, Carol. Both the demand side, um in particular is very strong, right now. Interest rates are low, We're coming out of a pandemic, and the economy is starting to percolate a little as other than as just by the g d P you just reported. So you have job growth, you have a better economy, people feeling better, strong demographics, low interest rates, and no no inventory out there. So it's uh an incredibly strong combination for us right

now of solid demand and low inventory. Well, you have homes for throughout the United States in eight different states, Arizona, California, Colorado, Florida, Nevada, North Carolina, Texas, and Washington. Which market has the most opportunity? Which state has the most opportunity? Yeah, it's sad to say this, but right now every city is performing very well in the metrics I described of no inventory, strong demand, solid economy right now is very broad based across our footprint.

Any concerns about California though, and I asked this for a couple of reasons. One, I'm a California We've seen so many reports again anecdotal anecdotal reports of people leaving California for among different reasons, but also going to places where you do that. Are that included in your markets right Florida, Texas. So why are you still bullish on California. Well, the demise of California has been predicted for about fifty

years now, I think. And we're headquartered here, so what's our home state, and we enjoy the market here in the economy. What's going on? And if you look at our business, one of our indicators of future revenue is our backlog, and our backlog at the end of the quarter was up basically a hundred percent year over year. Our backlog in California was over well over a billion dollars. There's just a shortage of housing in this state. It's very underserved right now, and demand is good and we're

enjoying a strong market right now. Jeff, what about a shortage of land? I mean, you guys have enough land to meet the demand that you're seeing in terms of order flow what we do, and it's growing right now. Carol, I I used to refer to this as a supply constrained recovery in that coming out of the financial crisis, the issue was the industry didn't have enough approved land to develop because things had had stopped. And now now we're past that. And I shared on our call yesterday.

In the fourth quarter, we increased our spend on land and development by year over year, and in the first quarter again here we were up thirty seven percent, So we're actually increasing pretty significantly the investment we're making in future growth. So, Jeff, I wish you were here because the conversation we were having kind of behind the scenes about you know, maybe how homes change as a result of the pandemic. Are we all going to look at them differently? Are we going to want in every home

maybe a little workout space and office just in case. Um, it's a great topic right now. And in our business, Carol, we believe in personalization of the home. So when we sell a home um to someone, we don't build it and then sell it. We sell it, let them personalize it in our studio, and then we build it for them. And there's a lot of flex space in the homes, and and we rolled out what we called the kby Home office feature where you could convert a bedroom or

a then to an office space. And we're seeing that as a pretty popular option right now, whether it's people work from home, or kids schooling from home, or just you know, a new area for a family to gather and um because you know, how do you know how you know how people like their demands? Like it went from every you know, homes years ago, where like just every everything was its own space, and then we got to kind of open concept and you know, lots of

open space and shared space. And I just wonder if there's something that you think as a result of the pandemic is going to kind of impact housing maybe for years to come or maybe not. Um, I think homes became more valuable and appealing to people because everyone wants our own space and we've all been spending a lot more time in our home, so you you want it to be yours. The trends worth seeing and with the

consumer is still great rooms. They want a lot of open space, but then they want that little dedicated enclave they can go to get away from the world as well. Well. Speaking of the world, I'm interested Jeff to here where where you were a year ago. We talked about it a lot because, as as we could say here on Bloomberg Radio, it's been a year like no other. So so take me back to where you were last March when California was shut down in New York City was

shut down. Did you ever foresee that you would have a in early one like this? Absolutely not. It's been a wild ride. And as we look back on it January, in February last year, our sales were incredibly strong. We were set up on a great trajectory to have a great year, and then the the pandemic was declared and we went in the bunker mode. Um I took some steps to protect the employees and their teams, and we actually shut our business down for about six weeks, totally

totally shut down. And when you're in that mode, it's lower overhead, horde cash, don't plan any lots, it's gonna get worse, and uh, your plan for the worst and hope for the best. And then coming coming out of that in May and June, things started to percolate and by July or August it was an incredible run. And we just had the quarter. We just reported our best quarter of sales in fifteen years for a first quarter. Well, we're on the good side of the swing, though, good

side of the swing. What about its rates start to go up? And listen, you know, we all have to remember perspective because you go back to the early eighties and you know, we had mortgage rates that were off the charts, um so even a few higher points from here, it's still low by historical standards, but nonetheless it can prevent some people from maybe being able to afford a mortgage with a higher rate. So is there a certain rate that you're watching or that you're concerned that if

we start to go higher? Now we're obviously mindful of rates, and it's a math equation. You only make so much money, you can only afford so much, so affrights to go up that it squeezes affordability. Look, it's always great to check in on housing, of course, a good economic indicator. Listen, we talk about it all the time. We are very closely watching what's happening in the New York metro eraic because has been a lot of movement, but really across

the country tells us so much. Constantly asked about it too. Mortgage rates, Yeah, they're going up, still low though historic by historical standards, a way down. That's Jeff Masager, CEO at KB Home will still account more on housing and how tax codes disproportionately impact Black Americans. It was a recent Business Week cover story that profiled the work done by Emory law professor Dorothy Brown. That's story. That cover story really stayed with me. This week she joined us

to talk about her work. It's all in her book, The Whiteness of Well, she's coming up news. This has bloom broadcasting from the financial capital of the world, Bloomberg Eleve in Frio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one oh six one to San Francisco, Bloomberg nine sixty to the country Sirius XM Chado one nineteen and around the globe the Bloomberg Business app and

Bloomberg Radio dot Com. This is Bloomberg Busines this week. Well, we promised you this next guest just a few weeks ago when she was the subject of a Bloomberg Business cover story for her work and career as a law professor who's documented racism and a tax system that's supposedly color blind. Yeah, Tim, we're talking about Dorothy Brown. She's a professor of at Emery University School of Law. What she found out is that tax laws discriminate when it

comes to things such as marriage and home ownership. It's all in this new book she's got out it's called the whiteness of wealth, how the tax system impoverishes black Americans, and how we can fix it. How she got there, Well, it just kind of happened. Yes, So I kind of fell into this. I didn't. I went into tax law thinking it had nothing to do with race. Deliberately went in a tax law I think it had nothing to do with race. And I'm doing my parents tax return

and I'm the numbers are not adding up. They seem to be paying too much in taxes, but I can't figure out why. And I have a graduate degree in tax law. I know what I'm doing, but something didn't add up. Well, fast forward a few years later, I'm an academic. I read an article that said, how do you know there isn't a race and tax problem until you look? And I thought, really, rates and tax So

I went looking. And what I found over my twenty five years of research is that whenever black and white Americans engage in the same activity, tax policy subsidizes how white Americans engage in the activity, but penalize how black Americans gage in the actor. So dig down into that and explain that how is that happening? Yes, so we can start with marriage, which is what got me on this road to begin with. My parents were two equal earner couples. They both worked full time. My mother and

father contributed roughly equal amounts. Contrast that couple with a different married couple that has the same overall income that my parents had, but only earned by one person. One person works in the paid labor market, the other person works at home. Well, tax law gives a tax cut to the couple with the one wage earner, but no tax cut two couples like my parents, and for decades, couples like my parents paid higher taxes when they were married.

So what does race have to do with it? Guess what? When you look at Census Bureau data, you find out that my parents two equal earners were the typical black couple and the single wage earner getting a tax cut couple were white. Well, and I feel like there was many times in I know the story that Ben Stephenman of Bloomberg Business Week wrote and thinking about in your book, that you know tax policy, which you think would be color blind, Right, it's just policy. It's numbers. It's just

you know, you go down and you do it. But disproportionately a lot of that policy. Disproportionate was the word that I was going to go for. You know, used a lot that disproportionately the policy, the ex policy, whether it was for homeownership or whether it was for marriage, it disproportionately impacted Black Americans. Yes, and why is that? It's because Black Americans live in a society with systemic racism.

Why is it that you need to black couples right to black spouses working to be able to bring in income that one spouse could could make. Well, part of it is the labor market, right, Why does the labor market devalue black and white workers? Were whereby they value white workers? So taxpayers bring their racial identities onto their tax return. Who do you blame for this? Is it

the policymakers? Who is it who's responsible for all of this? Well, it has to be the people who write the laws, right, it has to be Congress, because we don't have tax policy without tax laws, and we don't have tax laws without Congress. Do you think any of the tax code that you have found through your research that that is biased? Do you think any of that will ultimately change? Because you've been pulled in by some of the staffers up

on Capitol Hill. You've been consulted when it comes to race and tax and I'm just curious what the momentum is that you're hearing maybe for change, right So, I so we can start with President Biden's first Executive Order where he talked about racial equity across the government and talked about data by race, including the Secretary of the Treasury. Right. So, the President has said racial justice is important across the

government agencies, including Treasury. Now, I think there's a disconnect between that executive order and the discussions to date with the Biden administration because they're talking about these tax policies, but they're not talking about the racial impact of these tax policy, which needs to be part of the Biden administration has to figure out if you're committed, then you have to talk about it when you talk about tax change.

And with tax policy changes in the arrogant we're gonna have to see if there's the political will to actually address any of the biases in the system. That was Dorothy Brown, professor at Emory University School of Law. Her new book, The Whiteness of Wealth, How the tax system impoverishes Black Americans and How we can fix it All right, everybody coming up a familiar name on a mission, just like his grandfather. We hear from the grandson of Jacques Cousteau.

We're listening to Bloomberg Business Week, bloom You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovich from Bloomberg Radio Bloomberg Green. Tim reporting this week that the fossil fuel industry is talking about us like never before. The US fossil fuels industry still turning

out emissions. We know that, but what's happening is we did some analysis of conference calls involving names like ex On Mobile, Chevron, and kinder More, and we found that E s G is coming up a lot in this conversation. Somebody who's having a lot of conversations about the e s G space is Philippe Cousteau, co founder of the nonprofit Earth Echo International. Also Doug Heskey, the CEO of New Day Impact. It's an app in digital investing platform

that lets users target a specific area of impact. The two are teaming up to inspire and teach young people how to take action and invest for sustainable future. I'm delighted to be here and delighted to talk about this partnership. You know, it's it's something environmental UM, social government, you know E s G investing, sustainable investing in something I've been involved in a long time and is someone focused now is a third generation of a family focused on

conservation and education UM it Uh. We're big believers in the power of financial markets to to be forces for good and we're thrilled at this partnership with New Day because it allows us to continue both both drive more funding towards the work that Earth Echo does and reaching young people around the world. We're leading of I'm an education organization with the focus on engaging on people as

leaders solving environmental problems. UM. We've today impacted over two million people in a hundred forty six countries with our programs and UM and this will just supercharge our work and allows to be even more impactful. But then also recognition that as I said, financial markets have an impact UM and they can have a tremendous positive impact, and it's one of the choices we advocate people to to take consistent with their values and sustainability is where they

invest their money. Well, listen, that's huge it. I'm gonna bring Dug into a sect. But I just want to Philip want you know, money talks, and we talk constantly about the boom and E s G investment four billion dollars and counting, and it's expected to growth. I mean the kind of investments that individuals make um or will make in the future that's going to determine really where the money goes going forward. And and that's the connection

that you're making. Well it is and and you know, decade or more, I've been involved in one way, shape or form in in the markets as well and sustainable investing. I was involved in some different exchangiated funds over the years. And and really looking at how, you know, we have a annual charitable given the United States is roughly a private charitable given a hundred billion dollars, very little of that goes to environment and even less to environmental education conservation.

And yet financial markets are in you know, twy and something, an enormous number. And and I thought to myself, you know, fifteen years ago, as I was working in nonprofit and raising money, how do we sit at that table like that's where change really happens. So I started getting involved in that world because looking at what are those catalysts

for change? When you drive funding towards good business, solid business, um, sustainable businesses, progressive businesses from a environmental perspective, we can really affect more change than simply doing the education and you know, conservation work on its own. So I mentioned for that was just governments, corporations and other groups raising a record four undred ninety billion last year, and that

was selling green, social and sustainability bonds. Another seven billion went into E s G focused investment funds and we saw more than seven hundred new funds were launched globally to capture all of these influence influence, and that is shaping up to be as frothy, Doug, come on in your platform, your digital platform for investing, you guys are specifically targeting for those investors who want to go after a specific area of impact and the way you convest

is really novel. Ways. Philips said this so accurately that there is a mind shift that's going on today in a ground swell that's building led by responsibly minded investors. And they're not just people with higher levels of affluence and influence. There is a younger generation that appeared to be more committed in making transformational change than ever before. And so it really was the catalyst and the spiration

for this organization. Here a New Day, and we asked ourselves, what is the impact that we could have if we were able to unleash this younger generation is bigger for deep and lasting change by giving them a mechanism for engagement that ends up being more grassroots oriented, allowing all of them to share their collectivized desire to change the world. And so this is what we do through New Days.

So at our core, we're an institutional asset manager that provides impact investment portfolios, but we want so much more than that. We want these individuals that really care about these fundamental issues to engage and not just put their capital um behind these issues, but to activate, to get involved in causes like earth Echo and to volunteer time to participate in beach cleanups and things like that. We have with us Philippe Cousto, co founder of the nonprofit

Earth Echo internationally. He is still with us on the phone in Los Angeles. Along with Doug Hesky, he is the CEO of New Day Impact, which is a digital platform for in staying. Doug is with us on the phone in San Francisco. So, Doug, let's talk a bit about some of the ways that you can invest. I love it. It's sea turtles, it's coral reeves. As a diver, these are things that are like near and dear to

my heart. Um stopping plastic straws. You can also protect the poles, you can protect wild tigers, keep eaches clean. I mean, these are things that I think a younger population can relate to their saying, Okay, this is what I want to help protect. So let me figure out the way to invest in those areas that actually get to that goal. Yeah, no, no question about this. And you know, it's such an appropriate time to be talking

about water health and ocean health. We spend a lot of time understanding how companies use water in their businesses, whether their businesses are responsible stewarts of water, and what companies are developing truly innovative technologies to protect and conserve the resource as well as provided so many that don't have it. The water is playing this app resolutely critical role in every business in the world, and this is

the data work that we do behind the scenes. So whether it has to do with protection of fish populations or the coral reefs, or reduction of ocean plastics and things like that. We are choosing these subjects and engaging them not just with a lot of a younger audience, but literally any other responsibly minded investor that use a

responsibility to affect change in the world. A great example of that is is that we have a partnership with the Syphima Foundation that runs the National Stock Market Game.

In the CASE through twelve educational system, there are more than six hundred thousand students every year that are taught sustainability as a part of economics classes, as a part of math classes in their K through twelve system, and Philippe is going to be joining us to do a live event with the Syphima Foundation for their six hundred thousand students in the fifteen thousand teachers that teach in

the class from every day the importance of sustainability. All of this is done in an effort to really affect transformational change and get younger people and all people to think differently about how they're making not just investment and financial decisions, but even consumer purchasing decisions as well. Right changing habits We've had guests on that talk specifically about that have been involved in getting rid of straws and other things that you can change habits and make a

significant difference. Fully. One thing I do want to ask you, you guys are reaching six hundred students each year. That is a lot of students. There are though, fifty one million public school students in the United States. There are

a lot of kids out there. And I do wonder um that this is a way to also reach minority populations, less fortunate populations, to teach these kids about how to protect the environment, how to be sustainable, but also create kind of a financial future for themselves and strange the financial history perhaps of their families. Well, you know, it's it's a great point. And because when we're talking about sustainability, we're talking about the environment, we're talking about big issues.

By our diversities decline right in my life, and in forty years, the world's bio diversities declined. And while we care about birds and trees and coral reefs, bio diversity is also what makes the world pick. So it also has an impact on us and our crops, on our health, our food systems, etcetera. We've seen the oceans com you've got climate change in a massive crisis, and so you know, solving these types of problems is going to take all

of us. And historically, um, you know, the environmental movement and environmental education has not included uh, predominantly, you know, communities of color in the way that it should have. And that's that's the that's the thing that needs to

be addressed. And we've been at earth Eco been doing that for several years now looking at how do we broaden the conversation and particularly reach those communities because not only do they need to be engaged, they are also typically the ones on the front lines of environmental degradation.

So there's very much an environmental justice element here that comes to play, and that is that is top of mind for us and has been for several years because we're all in this together, you know, no matter what our politics, no matter economics, we're all in this together.

We need to solve these problems together and education is the best and most important way to do that, and specifically with our partnership with Sithma a New Day, UM, you know, they reach well over two thousand young people, specifically from communities of color UM and that's a big focus for them, and and also girls UM who have often not been enough of a conversation, you know, part of the conversation about UH financial literacy and so UM.

That is a big focus for us and UH. And we're excited about this partnership because it expands and grows our audience of people that we can reach with this matter. Phelippe Gusto, co founder of the nonprofit Earth Echo International, and Doug Hasky, the CEO of the digital impact investing platform New Day Impact. We're done, Tim wow by exactly.

And if you missed any of this podcast listen, just check out our podcast because you can get the conversations and some of the full conversations because we're just giving you a little excerpts. That wraps up the weekend edition of Bloomberg Business Week from Blomberg Radio. Thanks so much for joining us, Carol Master and then Tim Sneek, and be sure to tune into our Bloomberg Business Week daily show. It's Monday through Friday and starts at two pm Wall

Street Time on Bloomberg Radio. We can also watch a daily broadcast on YouTube. You can see us just search Bloomberg Global News and check out to our Bloomberg Business Week podcast. You can find that at Bloomberg dot com, Apple or wherever you get your podcast and tim That's where you're also going to find our extra podcast this week. It's Ted's side Ees. He's found a managing partner of Capital Allocators. He hosts a podcast by the same name.

He's talking to the world's top professional investors. We're talking about those conversations and his new book, How the World's Lead Money Managers Lead and Invest. You can also see me on Bloomberg Quick Take, available at Bloomberg dot com, slash qt, and streaming platforms like Roku, Apple TV, Samsung TV and more. Bloomberg Business Week it's available on newsstands right now, at Bloomberg dot com and on the Bloomberg Terminal. Have a great weekend everyone. This is Bloomberg