Economic Carnage in the Wealthiest Zip Codes

Week on iTunes, SoundCloud, bl Bloomberg dot com. You can also listen to our radio show at two pm Eastern on Bloomberg Radio every weekday, or watch us on YouTube by searching Bloomberg Global News. Well, we've been giving you some updates about the virus. Clearly it is of concern to investors, it's of concern to the people who run colleges and companies and all of us just as human beings.

So let's check in get the latest with Dr Shelley Hearn, director of the Johns Hopkins Center for Public Health Advocacy, part of the Johns Hopkins Bloomberg School of Public Health. Of course, the Johns Hopkins Bloomberg schoo Public Health that's supported by Mike Bloomberg, founder of Bloomberg Philanthropies and founder of Bloomberg LP, the owner of this radio station. She turns on the phone from Charleston, South Carolina. I love

Charles Charleston, South Carolina. So I'm going to start there. Dr Herne, tell us what life is like down there, because anytime we're talking to somebody outside of our little bubble, as it were, we want to know what's going on. Well, you know, we all have our bubbles all around the world, but Charleston, you know, you can always count on good food and lovely people. So it's it's it's not a bad bubble. It's not a bad bubble. But let's talk

about it. I have some family down in South Carolina, just outside Charleston, and I know the numbers have been tough in terms of the virus. Well, the number of South Carolina is still struggling. Um is you are tracking around the country, we are seeing different surges, different uh improvements in places, and it really kind of boils down

to how seriously people are taking public health measures. And unfortunately, just like variations in food from the south to the north, we're also seeing variations in the acceptance of mask wearing, the care with social distancing. And so that's what's going to keep this virus alive and well around the country is if we get complacent, uh and put our guard down, it will return. Well, you know, can I just to follow? I mean you are so involved in time in terms

of you know, understanding health and cities and communities. You know, Jason and I k that there's you know, one thing, you know, wear a mask. That's one thing we still repeat over and over. But there's also that idea of you know, taking care of your community. I mean, this is largely what this virus is about. That's why you

wear a mask, it is. I mean, you know, we're hoping for vaccines, we're looking for other kinds of therapeutics, but the real important element is even if those come on board, the absolute best thing we can do for our families and for our neighbors and our entire kind of economics thrive ability is to really practice these basics in public health. It may not be sexy, but that's

actually what's going to make the biggest, biggest difference. And if we all did this together, uh, and did it you know universally, we could probably really dampen this down, get ready for a tough winter, and do much better. I worried so much about our economy that if we if we focus in on just stemming and suppressing this virus by community measures, it's what's really going to help open up our our ability for strong, healthy commerce down

the road. So Dr Hearn talked to us about the public health system, because you know, Carol and I have talked on this program a lot about this notion that the virus has served to accelerate so many things, for good and bad. It is forced us to deal with some things that maybe we didn't want to deal with

and and now we have to. And especially when you pair it with what we've seen in terms of a real reckoning around systemic racism and some of the deep, deep inequality, some of the great chasms that we've seen, And having spent a lot of time in South Carolina, having grown up in the South, I know that a lot of that is so apparent there um in your state and even uh in Charleston. What do we need to do at this moment where we do have something of an opportunity to start to close that gap when

it comes to public health. Well, it's a it's a brilliant question. Is the the exact one that we need to focus on. So just like uh, you know, a healthy company needs good roads, it needs good education system so that the workforce is ready and prepared for the job, we actually need to have that same kind of capacity in our public health system. These are and and the good thing of the pandemic is bringing alive. You need to have epidemiologists, you need to have labs. This is

every day. It's not just when when a virus is spreading. But we use those tools all the time to keep us healthy and well and actually striving in terms of wellness and long longevity and life. And that comes down to a public health system that can do that disease tracking, laboratories, the strong staff. And we've actually been cutting those very core foundations in the last ten years. This isn't something new. It's been an equal opportunity to neglect over the last

few years. And Jason, just to your point, we never modernized this back you know, from really fifty years ago. And if we're going to throw a bunch of money, which we absolutely need to do into fixing the public health, don't just fix it for COVID, fix it for what is actually killing us and creating one of the least healthy nations in the country. Focus on chronic diseases. Also, it's the same infrastructure, those epidemiologists, the disease tracking, the laboratories.

You design it for the full picture, including your strengthen those agencies like c DC so that they have the authority to deal with what are some of those underlying causes, which in a lot of cases is economic. Uh, it is the financial stresses that um, some of the undergirding of why people are in eating healthy or don't have safe roads to travel on. That's causing us to be

the least healthy wealthy nation. So Dr hearn Um, we were talking about the importance of really reworking, updating, improving, bringing to the twenty one century. You know, our infrastructure, our healthcare infrastructure. Having said that, did our infrastructure fail us? Not just the physical infrastructure, but the political infrastructure in the nation's capital. So what I will say is that

we have failed public health for decades now. It's actually been a relatively nonpartisan issue of equal opportunity to neglect. We put a lot of money into investigating uh, therapeutics for diseases, but we don't put the money into understanding what causes those diseases in the first place, and how we confessed create a healthier nation if public health doing its job right and it is positioned right, we're keeping

people out of the sick care system. We're keeping out of hospitals, out of doctors offices, out of you know, spiraling pharmaceutical costs. It's it's one of the best bangs for the book, But we haven't really done the proper investments, uh, with that kind of mindset the way that other countries have. And that's that's what we've neglected. So Dr Hearn, as we look ahead and we seek to seize this moment. Where as you rightly pointed out earlier in the conversation,

we're going to spend a lot of money. We're we're going to direct a lot of resources towards public health. What's the first place, generally speaking, that a hospital administrator should be looking towards. You talked about those chronic diseases and treatment thereof, But how do we spend the money correctly to start to tackle this. What's what's the low hanging fruit here? If there is any you bet. So

here's what we need to do. We we have health departments which are actually our frontline defense, and we rarely talk about them because if they're doing their job, you don't see them. And those health departments need to be invested in, not just for COVID response, because we've had

these things before. We've had sorrows, we've vanned an tracks, we trailed money at it, We do a little tiny fix and then mother nature or terrorism or someone throws us a curveball and we just fixed that little that little you know, we kind of strapped on a band aid instead of How about a disease surveillance system that tracks the health of respiratory diseases, so whether it's COVID or asthma, which is one of the number one causes of hospitalization law school days, absentee is um but we

actually don't even track that nationally. We don't have the proper basics. What's the health of the community. Where are big problems? When we see a spike, go in and investigate catch it early, whether it's chronic or a short term injectures outbreak. We could do such a better job if we would just do that. Core investment in the public health system, not the health care system. What's your hope that that happens? I do? And actually, here here's

the silver line. And the business community has really gotten it that they have been hurt, they've suffered, they've each had to We've got some of the companies that are creating their own contact tracing forces. That's a government job, that's a government responsibility. But we didn't have enough uh staff in place. We don't have the proper numbers. We've

been cutting year after year after year. And when I think that, you'll see some of the top leaders stepping up and saying, sure, we can do contact tracing, but it's not our core competency. It's just like good roads, just like good school systems. We've gotta have a good public health system that keeps things operating. That's not our job, but we need to be out there advocating that that we build those systems right in the first place so

that we're all healthier and wealthier. And well, all right, we're gonna leave it there. Really enjoyed talking to you. Come back in it with us, please. Dr Shelley Hearn, Director of the Johns Hopkins Center for Public Health, Advocacy and the Johns Hopkins Bloomberg School of Public Health. She joined us on the phone from Charleston, South Carolina, a terrific city. This is Bloomberg Business Week with Carol Masser

and Jason Kelly on Bloomberg Radio. This is one of these stories that people I barely know are emailing and texting me about because it is just that good and really speaks to something that may have been missed or uncovered or undercovered in this whole sort of economic carnage. And that's the term that this writer uses in his story talking about Ben Steve Orman, one of our favorites, a go to guy when it comes to really understanding the personal aspect of economics. He joins us on the phone.

Were also joined, of course, by Bloomberg Business Week editor Joel Weber. Joel set this up for us. I love this story. So we started talking about this one a couple of months ago because we just felt that the character that been right about who's at Harvard his name is Raj Chetty, was one um of all the people that we were wondering what he was going to be

doing during the pandemic. Um he was. He was one name that we just really wanted to know about, and so we talked to Ben because Ben has done some amazing coverage sort of in this space before, and when we put them together, some magic happened and that ended up being this story that's in our equality issue and and I'll let Ben speak to it more more closely, but basically, uh, Mr Chetty and his team of about forty people at Harvard have tried to get a god's

eye view of of data during the pandemic and the tool that they have assembled is basically I think unparalleled and presenting uh, just how real the carnage is. And on that note, I'll turn it over to Ben been how bad is it based on the data that Raj and company are resembling. Yes, so they pulled together all this private data from all these companies, which has never

been done on this scale before. And um, you can really see down to the neighborhood level, and you can see these neighborhoods, especially wealthier neighborhoods where wealthier people live. That is, um, you can see what's happening to small businesses. What's happened to small businesses in March and April is

like they're down seventy in terms of sales. Some some neighborhoods in Midtown Manhattan, you've got got um the sales are down, and the tracker is able to then kind of track that, Okay, the dollars aren't coming into the small businesses. So that's then what's happening to the workers. And you see the employment rate for low income people. Lower income people really fall. So these are the people that do your nails and and uh, you know, pour

you beers and serve you food at restaurants. Um. All these people have been been at at you know, unemployed. But you can also see, and this tracker that moment when those stimulus checks arrives. It's a day by day, week by week, state by state, neighborhood by neighborhood trackers. So you can really see that like the precise moment when those UM checks arrive, and you can see spending

by lower income people really really increase. But the thing is a lot of them we're spending money online, not in person and um and and a lot of wealthy people are wealthier people just the top or so are staying home and they're not they're not spending still, you know, six months into this thing. I gotta say, Ben, one of the things that we talked about on our morning planning call today when we knew we were going to

do this story. And I should point out it's been among the most read on the Bloomberg from the get go on this Thursday. But our producer Paul Brennan pointed out, there's a line in your story the American dream is dead, um, and talking about Cheddy's work as he proved with exhaustive government data showing today's workers can no longer expect to earn more than their parents did. I remember my parents. I'm one of seven kids, you know, nine people, and

it's amazing what my parents did it. They wanted even more for us, you know, and I think we've done that, but it's it's kind of depressing to think that that's not going to be the case potentially for a lot of generations, uh, in our country right now and a lot of people in our country totally. And you know, the reality is is really is really awful. But the way that he's been able to show these things is really interesting to me. Um. This is this is a

big data he's using. He's basically using big data and that's really revolutionized economics in the last ten years or so because he doesn't have to build a theory or a model for for what's happening. He can actually dive into this these huge data sets of tax data, census data and see individual people and see what's happening to them over their lives um as they grow up and have careers and retire. And he's been able to really he's really proving that that that what's happened over the

last day four to years to the American dream. He's also shown the barriers that really this um for Black Americans, even privileged Black Americans in terms of being able to match their parents incomes and so um. You can see racism, you can see education and how great educations can really help people. A great teacher can really have a huge impact on someone's career. So that's that was his background before he went over and dropped everything and started studying

the pandemic. But it's it's one using these giant data sussorily prove the reality out there and really pay attention to the places where, um, we're falling short as a country. And one of the ways that he's able to to build this tool is obviously the I mean, it's all about the inputs, right, and the data that he's able to get, And that's also what you mentioned this earlier band.

That's what makes this tracker so unbelievably effective is that he's got all these sources of data that he can basically aggregate that have never been sort of assembled in this way before. How did he go about getting that and why was anybody willing to give it to him? It's a great question because is this idea of he's basically been using private data, right, he's been using UM

MasterCard is is giving him data UM into it. A bunch of other companies, some of them you maybe haven't heard of, but there are a lot of different companies that have have really interesting proprietary private data. But the challenge is a getting them to hand that over. And you know, they're handing over aggregated, anonymized data, so there's not much of a danger of privacy breach. But UM.

One of the reasons he's able to do this is because he has this background using all this I R. S and tax all this tax and other data government data that's super secret, so he has some credibility from that, but there's also been this moment in the economy where these private businesses they also want to see us UM, you know, recover. They also want to see UM the economy get back on track. So they've been way more willing and open to his approaches. And he's still looking

for more data. He's still reaching out to folks trying to find more data because he sees this as being sort of the next frontier for economic analysis. And and this could really be an awesome tool, not just for for the studying the national economy, but think about a local problem in your neighborhood, or like think about a natural disaster hits a particular state. You could go down and drill in and see what where, where's the places that where are the places that really need help. It's

it's really cool. Now, it's a terrific for any moment, any given moment into Taylor. Yeah. Absolutely, it's a terrific piece of reporting. Thank you so much for bringing it to as Ben Stephen, personal finance editor for Bloomberg, he's back in our Bloomberg Interactive broker's studio. Sorry we're not there to greet him in person. Also joined by Joel Webber, the editor of Bloomberg Business Week. One of the quotes that really jumped out at me Darren Walker from the

Ford Foundation, talking about Chetty. He understands that growing inequality asphyxiates hope and makes it impossible for people to dream and believe that their children will have better lives. This is Bloomberg Business Week with Carol Messer and Jason Kelly on Bloomberg Radio. Well, so much going on in the world of politics, so so much going on. So who

do we need to turn to? Carol? One guy, Rick Davis, partner at Stone Court Capital, former Republican strategists and also a Bloomberg contributor, So I could have him in the family, he joins us on the phone from Virginia. All Right, Rick, forty days out, I can't imagine that anybody would have predicted this is where we were going to be, But I think you probably could have said that every day for the last few years. What do you make of this moment? And let's start with this notion of a

peaceful transfer of power. I can't believe we're talking about this. Yeah, that's the least likely concerned we have for this election. We've had success for two hundred and more years of transfer of power, and we won't have that problem this time. I think one of the suggestions that we was sent by Republican law mayor makers on the Hill today was we're not going to let there be anything other than

a peaceful transition of power. So if, like with Nixon, uh, Senate leaders from your own party have to go to the White House and say it's time to go. But um, the message I got today was they're prepared to do that. So you feel better about what it based on what you heard that the response was strong enough for the Republicans to sort of quiet your mind at least. Sure, Um, it was swift. Uh. They they got out there, leadership McConnell and others within the new cycle that Trump started

this debate. Of course it's not the first time we've ever heard this from Donald Trump, but certainly it was a little more emphatic this time about not counting ballots. So I think that the leadership in the Senate stood up today and said, you know this, this will be an orderly transition. We will not go backwards on our democracy and uh. And I would suspect that, um, that that if there is a win for Biden in the general election. Um, the Senate uniformly will stand up and say,

you know, let's let's enter into a transition. Well, sure, because they've not got potentially control of the Supreme Court. Well, I think that the Supreme Court decision may be decided long before the election. Uh, it may be a de facto confirmation process. Right, They're gonna speed it up as fast as they can in the committee. Uh, And it wouldn't surprise me that they try to have the vote

even before the election. Now, almost all of the major legislation that the Senate has is not going to be active upon until the lame Duck, so certainly this could happen too. But they do run the risk in Arizona and Georgia, where those two seats are, elections for the Senate are are being done to fulfill a vacancy and thus literally could turn over before the end of the month in November. So I don't think they want to

run the risk at either one of those flips. But as a Republican strategist, ric, I mean, that's the power, right that the Republicans Conservatives will largely have potentially control of the Supreme Court by their appointees for decades to come. I mean that's the power, right, Well, arguably they do now is always the intent of the Trump administration. But really the quiet work that McConnell's been doing for a

long time. I mean, you know, he will tell people that his legacy will be a conservative federal bench from the Supreme Court on down. And you've seen the incredible pace with which they've filled vacancies on the federal bench. So really this is going to be the story for the next twenty five years. So setting aside the procedural let's talk about the political side for the Democrats, Rick,

because procedurally they got much, but politically, what's the playbook here? Well, I think for the Democrats it's a little dangerous, right, I mean, arguably there's a case to be made that there was an overreach on Kavanaugh, you know, the last

Supreme Court nominee to be uh put on the court. Um, if you have a majority in the Senate, as Republicans do, and it's pretty clear with the vote count now that they've got the votes for whoever Donald Trump appoints, and of course people matter in this case, so that that still yet to be seen. Uh if it's gonna happen anyway. Um, you've got to gauge what you're gonna get out of it politically. Right now, arguably Biden's making progress on Trump's

base in the suburbs. Don't screw that up with a big fight on a on a essentially right And and look a lot of these uh people who may be considering voting for Biden who voted for Trump in two thousand and sixteen, maybe pro choice or maybe pro life, and and and you're threading the eye of the needle.

Is especially if the nominee to the bench is you know, one of the nominees who has a strong pro life record, would you rather have a president in place or make a case in the next month before the before the hearing. So I think there's very little to gain. I think there's a base element to this where they've got to look like they've the Democrats have to look like they've maintained some semblance of base politics. But they're not going to pick up any votes at this stage by putting

on a show and trying to hold up a nominee. Rick, let's talk about Cindy McCain, obviously, the widow of John McCain. You worked on his presidential campaign. What does it mean that Cindy McCain endorsed Joe Biden. You know, I think it speaks to two big issues. One obviously an advantage for Joe Biden to get such a high profile Republican family, UH to endorse his candidacy. But to Cindy was out of politics. Right since Centator McCain passed away, she has

really stayed out of politics. Obviously, UM with Donald Trump in the White House and and sort of his regular irregular outbursts about Sarah McCain. Even after he passed away, she's kept her thoughts to herself and has not engaged in any kind of political endorsements or responses to President Trump. So she comes at this with no baggage towards the present, but a willingness now to sort of break with the Republican ranks and UH and support Joe Biden, who she's

known personally for forty years. Rick. Before we let you go, just one more quick question for you, which is, and you alluded to this earlier, going slightly down ballot into the Senate. You know, these special elections are in Arizona and Georgia. Specifically, what else should be Are those the key races to watch? What are the key like one or two Senate races that we should be watching given

that so much hangs on the Senate. Now, sure, I would say there are probably seven races right now that are would consider toss ups in the United States Senate. And as you know the math, uh, it's only going to take four to flip the Senate. And assuming that the presidency flips in the the vice president can break whatever ties that they need to break. But four seats flip the Senate no matter who's president. And and so

with seven seats up, it's it's anybody's game. The two seats that we discussed in Arizona and Georgia are actually special elections and uh, and so they're they're new members whoever it is take office as early as the middle of late November. So those are really key ones to watch. And of course Georgia a battleground state in Arizona, a battleground state, are going to be are right now very close and the presidential campaign could weigh heavy on those races.

Absolutely all right, We're gonna be keeping in close touch with you. Forty days to go, Rick Davis, thank you so much for your time. Partner Stone Court Capital, former Republican strategist and of course a Bloomberg contributor. I'm ROC journal. Yeah, but you let me drive. Oh no, no, no, no no home honey please, I'll do the vel I want to drive, Just drive, baby questions trying. This is the drive to

the globe community. Thanks well, un on Bloomberg Radio, it is time for the drive to the close back with us. As Charles Lemonidis, founder and chief investment officer at the investment manager Value Works. They focus on a value discipline um, which for a long time has been a tough way to go in this market, but certainly, as we've seen some pullbacks, maybe makes it a little bit easier. He joins us on the phone in New York City. Um, chous, how are you. We were having a very good time

in the markets lately, Thanks very much. In other words, a pullback happens and you're like, finally, Well, it's not so much that the pullback happens as finally, but there's been um, there's been a lot of discernment and where the pullback is happening, and how it's happening, and that's probably a little bit overdone, and it's probably about time

that that happens. Um And look, we have to expect the markets to be very choppy for the next several months because of where we are in the world, and so where we are in the world, man, I mean, where to begin. Let's start, because we're talking about it

earlier in this hour with the election. You know, this is the sort of thing that normally, sure, we're totally focused on a presidential election with forty days to go, but with all the headlines coming out, whether it is the president's comments last night and having to be essentially be assured by the Republican majority that know there will be a peaceful transfer of power, whether it is this notion that we're not going to know the evening of

November three or even the morning of November four, How much more complicated does it make it? And how does that change your perspective on figuring politics into the equation. Your point is spot on, because my perspective is that there tends to be a very very clear pattern around elections that once you know the winner, doesn't matter if

it's which party is from. Historically, once we've known the winner, the markets have a really strong advance, and look, ultimately, you have to recognize that, whatever your political perspective is, fifty plus percent of the people liked and back to the winner, and so fifty plus percent of the people

are pretty happy with the outcome. You may not be, but once we have an outcome, you know, it creates a tremendous sense of relief for at least half of the population, and the markets tend to go higher once we have a winner. The funny thing about this particular cycle is that there's a greater possibility this time around because of tell in voting, not because of anyone's nefarious intent necessarily um, but just because of where the world

is sort of mechanically. You have to accept that there's a very good chance we won't know the winner, and that that creates an uncertainty and a pressure on this market that you're just not sure it's going to be relieved on November two. So when you look at the market, I mean, our guys, our audience really loves to know where uh people are buying and selling in this market. What are some names that maybe have been all of

a sudden new opportunities for you. I think Goldman Sachs is spot perfect for for the type of name that you want to talk about right now. They have a franchise that is super solid, evaluation that is super solid, and they're in the group of finances that have been just unloved for a long time, and they're large enough as a group that they can carry the next leg of a market advance. They won't necessarily, but they sure

can so. And everything else that the company has intact is like sort of their problems are very much behind them. And then another company in the same vein in terms of large, liquid, well known, well capitalized, solid business that is very attractive. The price that hasn't participated is Comcast. Their business is going in all the right directions despite what's happening um in advertising, which is pretty impressive given

that specific headwind. And again it's the type of company that could provide broad leadership for for the next leg of the market advance. And I think, well, the market is likely to be bumpy over the next couple of months and really really bollatle I think six nine months from now, we're highly likely to be ten to higher than we are today. Wow. So, Charles, how do you figure in the big tech names into this conversation. We talk about them all the time, whether it's Apple, Amazon,

We're hearing about some new devices today, Tesla. We went back and forth on over the past few days with battery Day and predictions of a cheaper e V by Elon Musk. How do you sort of figure all that into this market. Well, it's very very tricky, because it's true that these companies have great market position, great growth potential, really solid um business models. The problem is that they are very, very very fully priced, and the bigger problem is that they may get more fully priced in the

months and years ahead. You know, we lived through the late nineties when companies like this really captured investors attention, and they should capture investors intention attention because they're great companies and great businesses and they've made people a lot of money up until now, and anyone betting against them up until now has been run over. And then they backed up the bus and run them over again. Um, there's no reason to know, there's no clear when, no

way to know when that's going to end. But every month and every quarter that it continues, you're sort of getting closer to Thanksgiving and you're you're the Turkey. You just don't know when it's going to happen. That wasn't a bus, that was a cyber truck. I was just gonna says a little dark about the bus and everything. Um yeah, I just yeah, you know, this is an interesting market time, and it's it's with these big macro issues, whether it's fires, whether it's the election, There's so much

going on. Um do you feel like, I don't know, six months from now, it's a very different game in the market. I think it's very very likely to be very very different six months from now, nine months from now, maybe four months from now. Look, I'm pretty sure the election will be resolved three or four months from now, not before six months from now. And I also think six months from now will be in March coming into April. Um. And it's highly likely that the virus situation is much

much better than it is today. Now. Who knows what happens with second wave. Maybe it happens, maybe it doesn't, but even uh and who knows how bad it gets. But the odds are that we're making huge strides in terms of treating people who get sick, controlling how many people get sick and maybe um having a vaccine at some point. So that huge overhang, that huge uncertainty, it's going to be behind, you know, let's hope it's behind us.

Six months from now, and six months from now, it is like sort of a short time and sort of a very very long time, right well, considering we've all been home more than six months, you know, six months at this point, we getting nervous on the downside, right right. Absolutely really good to catch up with you. Thank you so much. Charles Immondi's founder chief invest from Sir Value Works,

joining us on the phone from New York City. I do want to emphasize that that point that he made though, that I feel like for a long time it's like vaccine, vaccine, vaccine, gotta get to a vaccine. And now we're sort of saying, well, maybe there's a vaccine, and there will be at some point, but really, let's just get a handle on this. Let's figure out, wear a mask, social distance, be smart. We can handle this, so let's get to it. Thanks so

much for listening to Bloomberg Business Week. Download the podcast on iTunes, Southcloud, Bloomberg dot com, or wherever you get your podcasts. And of course you can always listen to our radio show at two pm Eastern on Bloomberg Radio, or watch us on YouTube by searching Bloomberg Global News