Making Voting Easy for Military and Partial Disabilities (Podcast)

with you was because we love talking with you. You You cover healthcare for Bloomberg Opinion, but because Ford is in discussions with its union over the cost the the surging costs of healthcare. And the reason why this was interesting this comes the potential bill is likely going to exceed one billion dollars for the first time next year. So this is this a huge cost. But it's not alone that Ford is dealing with it. This is something that

a lot of companies are dealing with. Can you just first frame the issue of just how big of an issue health care is? Using forward as a lens are Absolutely so. So it's definitely an issue for for just about any large employer. Growing healthcare costs, growing drug costs, you know, prices and spending continue to rise, although at a slightly lower rate than than people forecast in the past.

But it's particularly acute for Ford and other companies that have large union workforces because those unions negotiated, basically having negotiate over time, really incredibly generous health coverage, you know,

basically more generous than than just about anyone else gets anywhere. Um. And then kind of the point of contention this time is that while those union workerss gave up on a lot of other things back over the financial crisis, the other thing that they really held onto, um and kind of used as a justification for sacrificing else score was those incredibly generous healthcare benefits. So now, of course, um, you know, they get things. You know, these things don't

get cheaper, they just get more expective. People age, and as the cost healthcare increases. So you come to another dayton, So Max, maybe you can just give me like a healthcare one on one here, just because the number I see in a Bloomberg News article has really struck me that nationwide health expenditures are expected to grow by five point five percent annually from seven more than twice the

rate of inflation. So just real, simply for all audience and for me, what are the main drivers of that growth? I mean, that's the question that depending on which kind of actor in the system you you ask, you'll you'll get a different answer. But the general kind of the biggest thing is always is that it's it's the prices. Then the United States, just because of the system that we have that's kind of fragmented between employers and the

government with kind of you know, split negotiating power. Depending on what you're talking about, whether it's drugs or hospital services, that no one can kind of push back and aggregate against those, you get prices that rise at a far greater rate of inflation than in everything, not just in ugs where we receive all of the coverage, but really in hospital services as well, um with just very little restraint,

and that's set to continue. Five point five is actually not as bad as what we've seen at points of the past though, which kind of puts the problem in perspective of how much the cost health care has gone up over time. Alright, So in the US, workers with health insurance contribute an average eight of the premium for single coverage of the premium for family coverage. How much has that gone up over time? I mean, essentially, do you foresee a time when companies won't provide health care

at all? Uh? You know, I think because of the tax advantage of providing healthcare. It's basically a way to provide more generous benefits, basically the equivalent of higher wages without paying as much tax. As long as that tax benefit exists and we don't have something like a Medicare overall plan, you're still gonna have pretty generous employer coverage

and incentive to provide it. Okay. So if that's the case, then is it a also argument that the rising cost of healthcare is the reason why we've seen a shift to the gig economy and away from full time employment with benefits. I complicated in the sense that you know, even though that that share of premiums has stayed relatively constant, what has gone up is deductibles. Basically that people have to pay more out of pocket and face less of that premium cost. So just more, you know, the costs

have been going up just much before. It's just been shifted in a different way as opposed to the shift to the gig economy. Um, you know, it would be one thing if if the A, C. A. We're working you know on all cylinders as intended as kind of a fairly priced and and stable alternative for people that want to work for someone other than a large employer, and and to a certain extent, you know, it continues on.

But if you fall into you know, the kind of middle category where you make a fair amount of money and don't qualify for subsidies, then it's basically unaffordable and you're you're kind of out of luck. So it's it's still a system with a lot of compromises, a lot of people to get left out. So just real quickly on board when they sit down A the U, A W. How's that gonna go? Are they going to trade off you know, salary increases for keeping healthcare what a company

is doing these days? I mean, I think both are gonna attempt to give away as little as possible. That's the point of collective bargaining. You know. It's a it's a great success of the unions that they've managed to negotiate these these really generous health benefits over time but you know you always have the argument on the contrary room for that. You know, if we want to stay competitive with other countries, UM, we're gonna have to you know, labor as in terms of labor costs, We're gonna have

to see some sacrifices for both sides. So it's gonna be, obviously, as always, a really difficult negotiation. Um, and they really aren't gonna want to It's I mean, if you want to make that comparison that post Americans pay eighteen percent UH, cost sharing for auto workers is a fraction to that, so very different. Maxson, thank you so much for being with us. Max Newson is a biotech, farm and healthcare

columnist with Bloomberg Opinion. Well, people, when you look around the global economies, you certainly have China slowing, although there maybe some green shoots, and then we got some data last week about how weak things are in Europe and

how the e c B is responding. Of course, we had some data come out today that chose inflation remains muted here in the US amid a relatively decent economy here, but people still persist in talking about a recession risk for the US market at some point over the next twelve day months. I think our next guest can provide some perspective. Joel Stern. Joel is chairman and chief executive officer of Stern Value Management. He joins us live here

in the Bloomberg Interactive Broker studio. Joel, Welcome to Bloomberg. You just raised before we went on the air. Here your thoughts about kind of how the global economic environment looks recession risk, that type of thing. How do you see it from from your perspective? Recession at all? And the people who say they see your recession must have different glasses than I do. The major reason for it is this. Just last week, Krugman Nobel Prize winner said

I see a recession on the horizon. I'd like to know what his indicator is. Let me explain. Even if the number was wrong. Back in December, we had three hundred thousand new jobs created. Let's assume it's off by even a hundred thousand because of all kinds of seasonal things. Do you think businessmen would be hiring people at that pace if a recession was just around the corner. No way. Not only that, take a look at where long term interest rates are thirty year government bonds are yielding three

what's that all about? You know what that tells us? Also, there's no inflation to talk about either. And you know, when people take a look at inflation, they're leaving all kinds of things out that bring the inflation rate not at two percent, down to zero. I'm wondering if we're looking at it through the wrong lens, if people are looking for another recession big are akin to what we saw in two thousand and eight, and if they're looking in the wrong place, because that's not what we're going

to see this time. If instead we're seeing sort of rolling recessions through different industries, the oil, the healthcare, you know, whichever is poised to go next, could be, could be. But you know, one of the interesting things about our economy is not just what we would call high technology. Think about the discoveries that we're learning though from the pharmaceutical industry, industries that we had given up on. People would contract that disease, they were finished, there was no

chance for them at all. I've just been reading about what's going on with regard to cancer technology. I call it cancer technology because when people contract cancer, they're not going anywhere necessarily they're going to get better, okay, and those types of things are creating a tremendous amount of jobs. Well, how concerned are you about when you think about some of the technologies you just mentioned that can out of a situation with China. We have trade negotiations going on

right now. A lot of that, A lot of the real hard sticking points are some of those hard issues about technology and data integrity and all the type espionage, corporate espionage. And it seems like, uh, in order for the US to maintain its current position, maybe we need some tougher trading. Well, first, the the Chinese situation regarding high technology that's been with us for maybe decades. Okay, and look where we are. We're doing very nicely, thank you.

They're not doing well for a different reason. They engaged in what the Japanese did back in the nineteen eighties. They spent money building cities, building buildings, and there was no market for it. In other words, their economy overstated how well they were really doing. They were creating monuments, they were not creating real business there. And what's happened now is they returned to a more normal level for themselves. I still think that the six percent figure is way

too high. I'll make you a if they do revisions properly. Maybe our commerce department is doing the calculations, you'll find their growth rate as close to the four and a

half percent, not six and a half percent. So as you as you think about managing money that in this environment, if you view that the U. S economy is really being quite robust and its fears of of our recession considerably overblown, is it just US equities all the way NASDAC in particular because of Jack advancements, our stock market measured by the DOO fell over four thousand points over

the last year. Remember it dropped down to twenty two thousand from twenty six thousand plus, and people said, oh, my gosh, a recession is coming. That's not what was happening. We are not accustomed to having the kind of negotiations the administration has with China, for example, and the Chinese that's dependent on how we're doing well with the North Koreans.

At the same time, my view on all of this is that we we are accustomed to having it our way, and we have a president who was certainly accustomed to having it his way, and I think his strategy for getting them to relax the restrictions they have on our trade is going to be very successful. Now that's just my guess. Within say, four to five months from now, you wait and see, there'll be a major concession by the Chinese and of course by the North Koreans as

a result of them. So do you think that that will directly lead to a rally in US equities? People are not pricing it right now with our question, Okay, so you think that that will just price it in? And are you worried at all about some of the external factors that FED Chair Powell has been talking about, particularly Brexit, especially today as we see Theresa May on the brink of losing confidence of of of her constituents

and possibly losing office sooner than later. Uh, you know how much does that bow into the U s econi I feel sorry for her, she was sorry for her, but not for the U s econtovating. Well, listen, what's what really happened here was that the British said, what, we're going to have a million refugees coming into our country. Incidentally, in my view, Angela Merkel political career is over and what cost it exactly what's led to this Brexit issue.

The Brexit issue is very simple. If you're going to have these people a million, say two million, coming in like that, what's it gonna do to your job? What would you do? How would you want your politician to vote for this? Okay, and half half the country voted for Brexit, the other half to remain. I agree, they're as polarized as we are in this country. They should take a look at us and say, oh, we don't

want to become like those Americans. But it's too late. Well, how concerned are you about just the whole European Union issue, Brexit as it relates to kind of how you want to position yourself globally investing, because it seems like it really is an issue for the European Union. I've heard money managers say the pe ratios there, their market to book ratios are much lower than ours. There's a good

reason why. Look what it's done to their economy. Look what it's done to the prospect I wouldn't be investing in in the European Union at all. Okay, there are so many other places to invest where other prospects is so much better. One place outside the U s that you like, Israel the Televisive Stock Exchange and Israeli companies where there were over a hundred and fifty Israeli companies that are traded on Nazak. You want to buy those companies.

Joel Stern, thank you so much for being here with us. Joel Stern is chairman, chief executive officer of Stern Value Management, joining us here in the Interactive Brokers studios. He also is an adjunct professor at six business schools, a variety of them including UH Columbia University and University of Chicago Carnegie Melling. I could go on and on. It is so interesting to me all that when we talk about voting, and we talked about how the twenty campaign is heating up.

Certainly a number of candidates Joe Biden is on on the docket to decide whether or not to run for the presidential election in the United States any day now. Question becomes why can people not vote on their phones? Why can they not go online and vote? Why do we have chad's hanging chad's and people waiting in lines to go around the block, and and and you know, are we staffed enough at certain places? This is a perennial question and uh it's really important to address. Luckily,

for us, we have Bradley Tusk here. He's chief executive officer of Tusk Philanthropies, joining us here in our Bloomberg

Interactive Broker's studios. Bradley obviously has had an extensive career on a number of different campaigns as Deputy Governor of Illinois, Chuck Shoomers communications director full disclosure, he did serve as Mike Bloomberg's camp pay manager and Mike Bloomberg what is the founder and majority owner of Bloomberg LP, which owns us So, Bradley, thank you so much for joining here. So let's just start with what is TUSK for lanthropiece and how does it relate to this sort of perennial issue.

Sure so, uh my family foundation. I got really lucky in that. Um when I after I finished working running Mike's campaign, I took a chance on this little known startup called Uber. I've started working on all their political problems. Yeah, and took my fee and equity. Uh so that's done pretty well as a result. Now there's to philanthropies. So

we focus on two things. The kind of easier one is hunger, So we fund and run campaigns and states around the country to create breakfast after the ballots create universal school breakfast. The harder one is mobile voting. Um. What I learned from the twenty years that I spent in the trenches of politics is, with the exception of Mike and I say that, even when I'm not on blue brick radio, UM, I've yet to meet a politician where every single policy decision is not governed solely by

the political inputs. Uh. Most politicians just can't live without the validation that comes with holding office and be like asking us to stop having oxygen right. So, UM, they're never gonna do anything that's not in their political edic. So let's just say, as an example, your Republican can us from for Florida, UM, turn out your primaries twelve percent?

Because if Jerry manderin the primary effectively as the general election and n R A voters make up half that twelve percent, you may know that assault weapon band probably makes sense, but you're never gonna be for it because you're not going to risk alienating half of the people who actually vote in your primary. What if turned out were all of a sudden, everything would flip and then the politics would be that if you didn't vote for it,

you would lose your job. Um. The reason why turn out is so low if we have a system that was built, as you were saying, for an a grarian economy two hundred and fifty years ago, um, and it's never really been updated and so as a result, UM, no one really turns out. And the incentives of politicians get are really disprit and different from what most people actually want. And what I learned we were trying to figure out how to make rides sharing legal all around.

The u S for Uber is when you give people the ability to advocate from their phone, they'll do it. So the millions of people who reached out to regulators and politicians and said let ride sharing exist, you know, they don't vote in primaries, right because they're not going to figure out what random Tuesday is the election and where to go and wait on line and deal all that stuff. But when I was like, oh, I could just press this button from my phone from inside the app,

they did it. And the final pieces blockchain, which now enables you to really move data from point A to point B in a secure fashion. So and putting all those things together occurred to me, hey, maybe there's a way to use all of this to create mobile voting. So kicked it off out of my foundation. UM last year's started working with the state of West Virginia. We did it for deployed military both in their primary and

in their general election. We kind of put everything together and paid for the state's cost so there's no taxpayer expenses. Went really well. So we've been talking to other jurisdictions and last Thursdays, a couple of days ago, we announced that Denver's the next jurisdiction to do this, first sitting in America to do it, and we're excited. So it'll take place in there, may meet a small elections, and then if the run off, will happen again in June.

So what's really been the gating issue to for adoption? I mean, you know, for as long as I've been voting, I walked into this little booth, I put a little you know, uh you know, apron behind kind of put pushing the buttons. It's just it's ridiculous. So what really is the gating issue? Is it the technology wasn't there? Is the technology wasn't there? I think there's sort of two problems. So there's the day to day stuff of people who say, oh, maybe tested enough, maybe it's not safe.

Or you have the incumbents in the election industry just like you know taxi with Uber hotels of their BnB, and they don't want to be disrupted either, so they try to fight it. Um. That stuff we can work through pretty well. The real problem is going to be everyone who has power, it's not gonna want to make it easier for them to then lose power. Right, and this could be whether you're an alloted official, uh, the

n r A, teachers unions, whoever, it is. If you figure it out how to game the system and how you can take these low turnout primaries and use them to your advantage. Of that politicians do what you want. You're not looking to then give away all that power. So then how are you getting this sort of blockchain experiment rolling in different places? Totally? So a couple of things.

One is, you know there are a handful of alected election officials around the U s who are willing to give it a try anyway, So we just have the city clerk in Denver, Secretary State of Wes Virginia before that, and we keep talking to more and were people. But ultimately, what I've got to do is sort of prove that this works and proved that it's safe. What I learned in in my experience in tech is when you let the genie out of the bottle, you can't put it

back in. Right. So if I can spend the next five years commencing jurisdictions to try it, funding their elections, showing the world that it works, I think about my daughter who's twelve, when she's eighteen, she won't accept the

notion that you can't do this. So have you found anything interesting at least with the first experimental run here as far as what turnout is or how the voting actually Yeah, So it's so far been limited just to deployed military, because it's really hard to object to the fact that people who are literally putting their lives on the line to protect the right to vote, right that we don't even use um. Their votes never count. You're mailing your ballot from Canada, harn it shows us like

a month later it just goes right in the trash. Um. So what we have found so far is people are taking advantage of it one. Two, at least in a system where we were able to verify who everyone is because they already have a military idea, it works really well. Three. We ran four step security audits of West Virginia after we finished it, and everything came back clean. So what

that all says is the concept works, keep expanding. My hope is at the next constituency we work with a disability community because a lot of people who are blind or deaf have found that their phones provide a lot of things to make their lives a lot easier. So we've been talking to these different groups, like the National Association for the Blind, who said, yeah, voting is especially

hard if you're blind. You don't even really have secrecy the ballot because you're trusting the person there were flat there do what you said, right. So they were thrilled. Um. So I'm hopeful that in November we can at least get one jurisdiction to expand at both military um and parts of disability and then come really hit the ground running. Well that's fascinating. I mean, this sounds like a technology that we've been waiting for for a long time. It

sounds like technology that should have been available ten years ago. Yes, yeah, and that the implications are just massive. I think Bradley Tusk, CEO Tusk Philanthropies joining us here in Bloomberget I am Active Brokeker Studios, thank you very very much for joining us.

Robert L Has with the U S. Trade representative for President Trump, who has been representing the nation or helping to UH negotiate the trade pact with China, saying now today the getting a trade deal with China is a big if this headline crossing minutes ago, you could see the Dow Jones taking a leg lower near session lows, although only down nearly four tents of one percent on the day, so not a huge decline and largely led vie boing, but still taking a little bit of a

dip lower. My question is who trades off of these and these sort of you know, it's on again off again headlines every single day, with trade giving very conflicting messages. How does an investor invest around that? Joining us now to discuss chat Oviet he's director of investments for Huntington's private bank, joining us here in our Bloomberg Interactive Broker Studios. So Chad, let's start there. I mean what do you

do with these conflicting headlines on trade? First off, we would advise our clients to have a much longer outlook than the next five minutes, ten minutes, even the next headline, whether it comes tomorrow or the next day, go on. We want to make sure that we keep that outlook, focus our clients on long term investing, really investing for what it is that they're trying to achieve. These these intermittent headlines or the news of the day plays into

our thesis a little bit for though. So what we were seeing and what we agree to is that we've we've peaked more than likely it was peak for GDP and earnings, but we haven't stopped growing. So we have a peak, and we're at a point now where we're seeing this consolidation, and we're seeing consolidation from a soft GDP start in lower earnings estimates for the first quarter often, but we ultimately see that kind of troughing this year

and then rebuilding towards the end of the year. So we're constructive for the rest of this year on US equities, even with the headlines that come out from time to time. Obviously, US China trade deal is a big one and could ultimately derail our thesis to a degree or bring some of those assumptions down. But currently we still have the US with the SMP five ending the year at about so I guess in your scenario, no recession risk on

the horizon from your perspective, we don't. In fact, we're only at about risk of recession in our projections, um and that's carrying into okay. So if you don't really think that these headlines are gonna do anything in the long run to affect your thesis, wouldn't you be buying? We are? In fact? Okay? So so so during any of these dips when people say, oh my god, Robert

Leitheizer's isn't getting a trade deal with China? Is a big if sell that you're saying by we're buyers again being situations to the client, and we want to understand a situation, understand what they're looking for. But generally speaking, yes, we're buyers on dips. Pardon me what in particularly, thank you for asking, I was going there. What we would be recommending to clients is still the large cap US equities. Uh. That's been our thesis through the end of eighteen continues

to be in twenty nineteen. We like that space from an asset allocation perspective. We're not completely absent developed markets or emerging market, but we would be at what we would consider neutral in terms of our targets for those. We made some reductions last year in developed markets and e M, so we're still constructive though, with the idea of earnings regathering getting better towards the end of the year. Again that target on the SMP, we like the large

cap US equity names. We would be sensitive to those that have uh more than fifty of the revenue coming from outside of the United States because we recognized there is some global slowdown, but generally speaking US large caps. So that sounds like So how about tech? Like in this studio, we like tech. We like the Fang stocks, and we've noticed obviously that during the market run the Fang stocks really lad the market. Then conversely, on the way down in the fourth quarter last year led the

market down now having a strong rebound in nineteen. Where you guys, in terms of your relative waiting of of of tech for our clients, we're pretty much balanced kind of at target for tech. We're not overweighting technology We do like those big names. Some of the fang stocks are in our portfolios, but we haven't moved to an overweight position with respect to to really any of the major sectors. Here's another way to ask the question, do you think that tech will continue to lead shares up?

Because they've been the real driver? Uh this year on the way up? They were driver last year on the way down. Are they going to continue to be the leader here? Sure? I would agree with that. Yes, so they lead down, they're leading us back out. The interesting thing about technology and generally speaking about technology for us, most of those companies are on the right side of change. The companies may have companies specific issues, but they're not

just leave leading the stock market higher right now. They're leading industries and making changes to industries that we believe are impactful long term. There again getting our clients to think longer term than Yes, absolutely, these technology companies would be something to invest in. Very interesting. There's lots of lots of places. Given that the markets up eleven percent this year, I think people are really trying to figure

out where to go next. That Chat Aviette, director of Investments for Huntington's Private Banking, joining us life here in our Bloomberg Interactor Broker studio. It's sort of interesting to me how many people are saying that recession is coming close to us, and then everybody else saying, what are

you guys talking about? Everything is just fine? I mean the polarization there is really dramatic, and I do have to wonder, uh, you know, is there some sort of bigger risk that people aren't seeing or are some people just so caared of the two and eight financial crisis still that they are still unable to see something that is positive. Yeah. Interesting, I don't think I think that was ten years ago, but yet it's still in people's psyches. It was, it was a painful. It was a painful

event ten years ago. Thanks for listening to the Bloomberg P and L podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. Paul Sweeney, I'm on Twitter at pt Sweeney. I'm Lisa Abram Woyds. I'm on Twitter at Lisa Abram woos One. Before the podcast, you can always catch us worldwide on Bloomberg Radio