Surveillance: Monetary Policy In A Bind, Romer Says

from the Ministry of Commerce spokesperson. All it took to give equity futures a big lift, he said the following China has ample means for retaliation, but thinks the question that should be discussed now it's about removing the new tariffs to prevent escalation of the trade war. Here with us in New York. Andrew Holland Hoorst, City Chief US Economists. Good morning to Andrew. Let's just talk talk about that news at about three am Eastern which give SMP futures

a rather big lift. How important is that approach from the Chinese? So it's certainly begun to be a risk positive development. But we've been down this path before. We've had cycles of escalation and de escalation, so I think you have to be a little bit careful here about have we really changed the long term trajectory in some way. But yeah, marginally good news. It did not look like we would have an off ramp last Friday, Monday at

the G seven. Now this morning, this Thursday, it looks like maybe we have a little bit of an off ramp. Is that what they say is, I think both countries are trying to create some off ramps, some flexibility, some ability to actually get some kind of a deal done.

And on the trade issue especially, there would seem to be a lot of potential for getting to a deal in the sense that you have the US that would like to sell things like soybeans and agricultural goods and liquid natural gas, and China that probably has demand to buy those things. So I think it, you know, cautiously optimistic about the latest development, but again it has a

long term trajectory. The long term outlook really changed. I think you can't say that's changed substantially with this announcement this morning. To be with us this morning, you participate, welcomes a terrible there's a stereop dary gloom and go to cash. What are we three point six percent from a record high? I think it is something like X and yield. I mean what's great, John, Is it less

hysteria than Tuesday or Wednesday. But the levels that were at are just extraordinary to see the optimism confirmed in the bond market this morning, that's for sure. Comes in another biasis point again, have you changed the city group the Excel spreadsheets? I mean, how do you tweak substantial Excel spreadsheets given the yield structure of the world. So, I remember about ten years ago we had a view

that tenure yield should never go below three percent. You just thought, well, there's some potential growth or you know, can't be below one percent, and you get inflation that will be around two percent, So shouldn't the tenure yield be around three person then? And I think what has changed is, you know, some recognition of the idea that global growth may be slow for some time. Core inflation um and inflation broadly is not gotten back to targets.

So that's giving these deals very low but very very low levels. Irving Fisher way back, is this just going to get down to a terminal value on inflation, a terminal value on interest rates, a terminal value on GDP growth. Flip that reciprocal and you get out to a thirty two, multiple market, all all of those things that you mentioned have been revised lower. I think that means exactly like you're saying, you're discount rate is now lower. That means

you're going to support higher valuations for risk assets. So all of that makes sense. So too much math, Too much math for seven I four, But carry off and let's talk about the new sham. Wait a little bit late today we got another look at GDP, the trite dispute, the trite war, however you want to characterize it. When we get that second look at GDP, why do you expect to see it? If that's all so the headline

number can come down a little bit. But I think what's important in that second quarter GDP is that we had very strong consumption, very weak investment. And that's been kind of the story of the U S economy in nineteen as we've gone to a scenario where all of our hopes for strong growth and continued growth at or above potential are are really right on the consumer and not on business fixed investment. UM. Now, I think it's an open question how much have trade concerns weighed into

that weak investment story. UM, there's probably some of that they're Honestly, a lot of that is just the general weakness in manufacturing. You're seeing that globally. UM that probably would have been occurring with or without the trade tension, so not not as clear that it's coming through. This has been building for a long time. In fact, it predates the real ramp up in escalation between China and the United States has started last spring. It's a persistent overhang.

Now it's persistent and the damage is being dump Beyond manufacturing. The story for much of the last year manufacturing radiogly services in the labor market resilient worldwide. In Germany, we're just starting to see some frenches in the labor market. Are we starting to see it spill out from manufacturing worldwide entry So we're not seeing that so much in

the US yet. I think that is concerning that you're seeing it in Germany in the sense that in Europe you would expect to see this very delayed response from the labor market because you have a labor market that's much less fast to it adjust in the In the US you can have very fast adjustments in the labor market. Um, we've had manufacturing that's been weak, like you were saying for some time globally and in the US, we have seen some of the non manufacturing indicators move a bit lower.

So I s M non manufacturing has come down now, Um, it's still at a high level, but the direction of travel is to a lower level. So we're not getting too concerned in the US. And the labor market still looks extremely strong in the US. Will get more information about that with the jobs report next week, but so far very low initial jobless claims and high payroll growth. In your micro analysis, are you seeing service sector inflation in the US come down to to uh goods producing disinflation?

Any indication of that yet? So services inflation has actually been holding up relatively part of that rate. So you can argue whether that's good news or bad news for most people. So the cost of cost of house listeners would argue that exactly. Um, but but that that's right. Yeah, shelter in particular has been supporting the services inflation. I gotta get your thoughts on the Treasury secretary as well. Mr Manutrian speaking to Bloomberg an exclusive interview, talking up

ultra long bomb issuance and talking down currency intervention. Let's just talk about the ultra loong bomb issuance. The first thing I did was going back to seen just a couple of years back, the last time we really discussed this, and the Treasury Borrowing Advisory Committee pushed back and they said the following, While an ultra long bond is most likely to be demanded by those with longer dated liabilities, the committee does not see in some strong or sustainable

demand for maturity's beyond thirty years. Is the advice going to be any different this time around? I would think that that advice would be fairly stable. I really don't think we've changed the landscape significantly over you know, a couple of couple of year period. UM. It doesn't mean that the government can't go ahead and the treasure we can ignore that advice and come ahead. Do you think they will? But I would think that that advice is

the same. Um. My best guess would be that this is something that's discussed and ultimately there takes a very long time, or they don't actually get to that long term issuance. UM. If you remember that, you know, when the Treasury rolled out floating rate notes, when the Treasury rolled out the tips program, um, these took multiple years

before you actually got there. So you know, we're seeing yields move today and maybe that's a reflection of what could happened um sometime from now, but this is probably a long timeline led to some stateness last night, and then we flamed back down again. Did you see our goal, well, you were in makeup for radio. Did you see our gold segment with Andrew Holland? Now I miss that. In honor of his tenure at Berkeley, I should went out where Mr Dudley went as well is tenure at Berkeley.

We killed on Barry ken Green's golden feathers nice twenty five. I'm doing the math twenty five years ago, twenty six years ago. I'm gold wedded. The conversation God the gold is, you know is Andrew correctly said you don't buy gold because it's low yield, but everything else is low yield now because all of a sudden gold is like an equivalent, the opportunity cost of holding gold a shifted. We've told

about that many times on this shock. I know we gave a moment of silence for Edward Morrison City Group, and you know, come out of the analysis and I'm gonna get missed the most back on a problems have been a drag him on as well. He andrew right to call and thank you so much City Chief US economist. When you look at the yield space and you go, what is going on? Mitch Ramen with us with eraisor group to answer questions on this and Midge this is within a broader year. But I know we gotta do

Brexit here in a moment. But as John Ferrell mentioned, the Chinese come out with what jan one sentence, just one hope we go. Midge. My arch question to you is all this China US stuff. Is it of an advantage to Europe? Actually, I think it's a to a to a big disadvantage Tom, because it creates a broader global context with a tremendous amount of uncertainty, which ultimately at the margin I think hurts hurts confidence in the EU. I mean there's also the big risk of the US

EU trade war. In the short term. I think as we moved through the second half of the year, there's been a lot of uncertainty in Italy, although the government does seem to be coming together now. And of course the big, the big risk, which is the Brexit questions. I do think, you know, the economic cycle in Europe is not robust. Broader can turn about the state of the global economy, I think feeds into that in a

negative way. So maybe let's talk about that and what the polity response in a place like Germany might be. Here in the United States, this narrative is building that the German government's about to do fiscal stimulus. What's the reality on the ground at the moment for you, Madge?

I mean, I think, you know, when when we talk about fiscal stimulus in Germany, one has to think contextually about the debate in Germany over fiscal policy, the role of fiscal policy, and then of course think much more seriously about how robust that stimulus would likely to be, even if the government were to open up the spending taps a little bit. I don't think you're looking for you know, we're not. We're not looking to see anything substantializing.

I think that's unlikely. If you think about the political context in Germany, it may be helpful a string of regional elections where there's social Democrats are set to perform extremely badly. The Christine Democrats in crisis to some degree, is the transition between Merkel and her successor a KK doesn't play well. I mean, that's not a context in which it's popular to make an argument about opening the

first strings. And I think one does have to think politically and contextually about how robust any stimulus will be forthcoming out of Germany. I'd also say at the European level, you're not likely to really see any coordinated or aggregate response on the fiscal side. No, I don't mean to interrupt meent. I just think there's so much flow going on between European dynamics, all this distraction of Brexit and such in the real issues of China, US and frankly

China and the rest of the world. How does your Eurasia group in international relations? How do you synthesize in where the bond market is? And John, I haven't even mentioned this this morning continued subtle dours strength as well.

How do you fold that in? As I say, John, I think Tom rather that the international context I think is is certainly on the minds of policymakers in the EU, and it will certainly galvanize those in the euro where you're in particular, that are looking to Germany to move

on the fiscal side. But I just I just think when one thing is contextually and politically about where Germany is at this moment, at this current juncture, meaningful stimulus that's likely to have a big impact on the economic cycle, I think that's still unlikely. So Mitch, let's talk about what happens at the EU level. We get someone new

running the European Union Commission. At the moment, we have a Growth and Stability Pact and ultimately the goals of that for debt to GDP and budget deficits within three percent of GDP. Mitch, do we have to rethink some of those numbers and will they rethink some of those targets? So the vonder Lane Commission, I think will probably have a go up streamlining and simplifying the fiscal the fiscal rules. There's there's a whole set of crazy metrics. You know,

you've talked about the debt and the nominal deficit. There's also a structural target, so accounting to the economic cycle, you know how much how much of government's actually cutting on the fiscal side when you when you can take off the impact of the economic cycle. There's also a debt to GDP reduction target, and it all gets it all gets very complicated. So I think there is a

desire to streamline and simplify again. There will be opposition in Northern Europe, in Berlin, but certainly from other countries, the Netherlands, Finland to any suggestion that the rules should be um you know, should be made should be made easier, more lax, and there will be big opposition to that. But I do think the wonder Lane Commission will try made say to so much about any more questions. But

we're at a time we'll get them out again. Here Jordan Rochester, just before we went to air this morning out of Namural, London, wrote this note and there was shimmer the Brexity thing. It's shimmering, shimmer of the tunnel shimmering. Shall I read you that first line In Jordan Rochester's latest poetry, Dickensian, the pound will inherently remain difficult to trade, but the latest moves by boris as galvanized opposition MP and there is a shimmer of light at the end

of the tunnel. Nomura's Jordan Rochester joins us right now, good morning to Jordan, just explain a little bit more for us, where is the shimmer of light in the Brexit tunnel? Well with hey, you guys, we've been here before. So let's set this thing about Q one we had.

You're stirring the pound at the highs or the pounds at the lows, and when you're at these historical lows, you gotta ask yourself what are the odds of a no deal brexit the high But the answers no, And we're already at fresh historical lows pretty much give will take now. And in Q one, MPs started to legislate, they started to block no deal, They forced Teresa May to extend Article fifty and the show went on and

we know how that went. So I think they're going to try and do the same, and the market is going to try and use the same playbook. The pound's going to likely strengthen if opposition MPs next week legislate for no deal or the nuclear button, they go for a vote of no confidence and seek a temporary unity government and extend Article fifty. And guys, no matter what happens,

at some point, there's going to be an election. And I think the market has priced that in such an extent now that the path of least resistance in the short term is that we have some sterling shorts that were put on over August reduced going forward and the pound goes slightly higher. What's the catalyst for that, the immediate catalyst that galvanizes some sterling short covering. Well, it's

just this. If you're holding short starting positions right now, you'll actually quite fearful of something next week that throws a spanner into the works of the no deal Brexit pricing. So if you look at the bookmakers, they have no deal Brexit this year at fort probability. That's the highest it's basically being during this whole run up to Brexit. And if you have opposition MPs legislates extend narscal fifty or do that vote in a complement, that probability is

going to go down. And the pound, guys, it really does track these odds. You're gonna see the pounds fly high on the back of that just moments ago. And you know it's like in in August day, it's like, so what except right now I think it's actually Germaine. These are all the places John Farrow's visited in Germany. Saxony, Brandenburg has Bavaria Baden Wurtemburg am I pronouncing that correctly, you going through the regional break and going down to

regional breakdown. So they come out with CPI in Germany, and the answer is it came in a little sealthy. Do you assume it Nomura. That's gonna be what we're gonna see through the autumn is is disinflation nation to nation. I mean, we we've had a bit of fex depreciation, which helps you European CPI, but that wasn't enough. And the ECB is go do all of it all it can, but the options it has left really don't add much to inflation. Add to that, you've got globalization still going on.

You've got tech impulse, you've got the sort of delivery's the Amazon economy, the digitalization of inflation. It's all dis inflation ryes. So these central banks are dealing with cyclical which is growth is going lower, which means inflation will be on the back burner and go lower as well. And then you've got this long term structural story about the rise of Asia, the rise of globalization, and in the future we'll be talking about the rise of Africa.

So it's really hard in the Western world to think of high inflation expectations, and essentially we're all becoming like Japan. We just talk about market conditions in Europe right now. So much attention on the Italian tenure dropping below one percent in yesterday's session, and it continues to drive far away conditions with negatives like the investment grade euro denominated debt right now is all in negative. Right, the yield right now is south the twenty five basis points. Just

pause for a moment. Imagine that your an investment grade corporate in Europe and you can borrow a less than twenty five basis points. Well, let's translate that a hundred dollars your interest costs precisely. I do. Okay, you did, fantastic. I could be on the real yield at some point, I mean, Jordan, can you imagine? That's the situation with financial conditions in Europe? Which makes me wonder incrementally. Additional easing is not going to address anything much at all.

I just wonder whether they have to, because if they don't, financial conditions will titan Absolutely it would be things will be a lot harder for them to achieve their mandates. If they were to suddenly give up and throw in the towel. But you're right. We live in a world John, where because of negative yields and sixth income, for you to make money, you have to hope for capital appreciation in what typically is you know you buy You used

to buy bonds for yield. Now it's capital appreciation. On the flip side, you now buy ecutive yield for these dividend yields because at least that's still positive. The real yields negative. It means that these these stories can't go on forever. At some point there has to be a reallocation out of these things. But we are as we're seeing the ECB is going to buy more bonds at some point. The FED in the future might do the

same as well. So just like Japan, yes it seems a bit mad, but you've got these central banks, You've got this one big buyer out there consistently on the bid. It's just law of supply and demand. For Jordan. This is important for the foreign exchange conversation as well. Where's the positive yield? Where's the high yielder in G ten? Right now it's in the United States. How difficult is it to construct an argument that we're about to see

dollar weakness. So the one thing that makes everybody in the long term point for dollar weakness is the double death tim which is the current account for the US and the budget of the government. It's really expanding in the negative world exactly. So over are a five year period, this always tends to work for the direction of the broader dollar. However, for the next year, we're dealing with

global slowdown, recession risks. And in this environment, just like Mark Kearney's mentioned at the Jackson Whole Symposium, it still acts as the reserve currency of the world, and it still has a positive yield versus others. Then how does that play in the year we're hearing an interviews Jordan right, just did a lot of people played off euro what's the number of Europe call? We're currently short, Tom, it's a grind lower. I think we're about one oh nine in euro Why is it a grind? Why isn't it

a bangalover? It's because European investors, with all the qui rounds we've had in over the years, they put a lot of money into emerging markets and with themself, we've we've been seeing and the uncertainty rising. Yes, there's a good argument to sell euroverse the dollar. But European investors have been bringing back their investments back home in size. So the basic balance, which is like it's all these flows combined for Europe, has really shut higher to a

historical high in one regard. So that's why euros so boring. It's just a grind lower, very little. Volve, you're the most important question in the morning. Place Villa on Saturday? What are you looking for? Well, Villa has been doing better than expected. I was at the first game of the season. We were one nil up against Tottenham h and then we lost it and fold in the second half.

Could be I mean what was harder for me? I was sat at the home end with the Tottenham fans, so I had to pretend when Villa got that one nail at the beginning, I had to pretend that I was very angry. Did you were certain? Tie? I mean, I mean, is it? It's the coolest thing to me, this relegation, Jordan's how's it different? You know, being in one league and then going up the next year Premiers? It like the same Sunday or Saturday at noises or is it different. It's really punishing for the club as

a whole. So you get much less revenue from not not ticket sales, but from the TV rights, and you start to lose key players as well. So you'll have some players in their contracts. If they get demoted, they're gone, and we saw that last time around. So it takes a while to come back unless you get big investment from a new champ, which we did have, but it took a Jordan. We played Joe Elliott and def Leppard when Sheffield United steps on the field, would you play

it as Osborne? There you go, Michael Bard. Do you see how encyclopedic they are around this. I'm a local boy the Midlands too, so Jordan and I the brothers of the change there see yeah, Jordan, thank you. We're really interesting with the shimmar of don't watch Peaky Blinders. I have no season coming out in October here, it's already out in the UK. What we are real London, It's brilliant. She is a senior vice president for Hurting Cats at Bloomberg. That means she's managing editor of Economics,

one of our most challenging jobs. Margaret Collins joins US Now, Peggy, Matthew Brockett and Rich Miller writing up the latest jab bowing right now, What are you hearing from your reporters about the delicacies of the comments forward of presidents and governors? I mean, are they hanging on every word or do we just wait for September. We're absolutely hang on every word, Tom. I think the reporters here coming out of Jackson Hole last weekend, and then as you said, we've had a

couple of the regional FED presidents speak this week. They're really trying to determine what the FED will do in September, but not even just September, in terms of how central bankers around the world, how much room do they really have to potentially stave off a recession and as Powell has to kind of keep the economic expansion at a record links in the US going when you have all

of these headwinds and particularly the uncertainty around trade. Robert Kaplan and Mary Daily with Bloomberg here with Matthew Brockett and Rich Miller writing in the last couple of hours, give me a g d P update. I mean, there is the uh, Peggy recession watch, how does your recession meter look this morning in Washington, so we're waiting anxiously for the GDP figures to come in and about ten minutes around eight thirty, and the nuances is essentially what

do we see. Do we see consumers which haven't been basically holding up this economy continue to do so, or do we see more signs that the uncertainty and the impact of the trade war is slowing down manufacturing and potentially dragging down growth. Let's talk about trade, shall we. Peggy in the latest comments from the Treasury Secretary catching up with Bloomberg exclusive interview with you guys in Washington, one line really stood out for me. We've talked about

the ultra long debt. I want to talk about the currency. It's the quote no intention of intervention at this time, no dollar intervention dot dot dot for now. Peggy hardly rules it out, does it. That's right, Jonathan, that question mark is still swirling. You know, our colleagues, as who says lay emotion, had a great exclusive interview with the Treasury Secretary yesterday and she really kind of pinned him down,

or tried to on this issue of currency intervention. Will the Treasury try to do that and basically as you said, left the question. He left the question up in the air and said, we don't have any intention of intervention at this time, but situations could change in this This is critical. I mean, John's question, I think is really apt. Folks. Do we have any sense in our reporting in Washington that the President or the Secretary of Treasury have any

understanding of the history of unilateral intervention. Yes, And that's why this interview was so much more interesting because the quote that follows is the big one. In general, it's more optimal to do these things on a coordinated basis because of the size and scale of these currency markets. Not to do that, Peggy, they need to get other countries, other regions to come along with them, don't they They do,

but they do. But also they need to get the FED support, potentially, because the Treasury holds about nine billion that it could use to try to impact the currency markets. But as you said, this is a giant, multi trillion dollar market. So traditionally in history, the FED has gone along and matched what the Treasury has done in a currency intervention, and that is a big question mark of whether or not they'd get the FEDS for Peggy. Thank

you so much. Peggy Collins managing PEG economic efforts out of Washington. I like to say, this is the interview of the day. Maybe this is the interview of back to school, or even more so, maybe this is the interview of your future, kid's future, your grandchildren's future. Where gonna get to that technology with the Lauria Paul Romer in a moment. But I've got to go back. Everybody listening worldwide didn't check the box in December of last

year like you did. She were Oscar Dela Renta. You got married the day you got the Nobel Prize in Stockholm. That is so cool. It was this was this Mrs Romer's idea or was this Mr Rohmer's idea? Well, she remembers, she's she's miss Webber. She's of course a claimed that this was actually my idea. I surprised her, um and uh, I wanted. I thought she would enjoy and appreciate the idea of a surprise wedding. So we had a wedding

that we invited our family members too. But nobody in the family knew what was going to happen at that little slot that said family photo on on Nobel day, but it was perfect. They had to be dressed up anyway, so they just stopped at the church and then surprise, we're gonna get married. That's great. And there was no open bar. Listen, it was great. We had no toasts, no none of that stuff. That that completely It was just like a ceremony with the you know, the the

priest and the church. And you know, it's a que way to do it. Enhanced productivity, which is of course your claim. We have so many things we could talk about, including some of the more controversial things you've done, But I get so much mail about our mystery of this overlay of technology. Let's start with the data. Are we underestimating the value or harm of technology in our statistics? Yeah?

I think the most important lesson as I've lived through this economy and thought about technology is that every technology brings both good and bad, and we always focus on the good part, but there's always bad as well. So part of the role of government is to react to the new bad that emerges, to stop it from happening, and then we get the good parts of technology. But I think we've been slow to react on signs recently that there's react because it's skewed. The benefits are skewed

to the elite. The elite control things. I mean, saida Warren wants, you know, another she's not alone, want coach to coach internet access. That seems to me almost the American way. Yeah, I think that the what we see are there's some things that are profitable but harmful to the society, and the concentrated interests that are capturing those profits want to continue in that vein. So we need to have a system that's strong enough to say, we don't care if you're making money on it, it's harmful

for people, and we're going to stop it. Michael Mabusian wrote an incredibly important paper for Credit Suez. I'm gonna say pushing fifteen years ago, which is to the victors and the few victors they get all the gains, all the gains go to a few. They go to the Amazons, the apples, And it was plotted on a log y access log acts access for those you driving, don't drive off the road. All that means is straight lines become curve linear. It's it's an ugly shot. Are we getting there?

Where the games go to so few and that has harmful effects. So one of the costs the harms associated with this these new digital technologies is they seem to have strengthened the returns to the biggest firms. They've created this winner take all environment, and that's also induced a more ruthless form of competition. Every firm feels like unless it becomes the winner, it'll just be crushed and disappear. So there's a ruthlessness about this pursuit of markets right now,

did you tea I've taught mathick? Did you inflict micro on people? I did. I wasn't personally responsible for inflicting micro But the dynamics have changed. Is this Federal Reserve system using a micro structure that is dated and outmoded because the increasing in deec reseeing returns to scale now

are so different? Well, I think, uh. I think the FED is the kind of the classic example of an organization that moves cautiously because they understand how close we always are two things starting to unravel, and so they

are cautious. I think the thing they're really cautious about right now is the implications of an environment where lots of interest rates are negative and fear that if we get too close to in the U S at least in the world's reserve currency, we get too close to zero interest rates that we may trigger or set the conditions for another financial crisis, trigger a bubble, which then

leads to crisis. So they're they're moving cautiously. And if we feel like we need some other way to stimulate the economy right now, we should be looking for new approaches on the fiscal side to do that, because monetary policy is really in a bind right now. Paul Roma, where us de laureate folks of New York universities are you literally down a hall from Spence and Sergeant and the rest of them. Yeah, that's a pretty cool we're enjoying Berkeley this morning when de Long and I con

Green and the rest. Paul Romer, if you look at your expertise and our growthiness in our technology, and you dovetailed in to the frustration so many have about FED policy and its gains to the elite, How do we break apart from that given the modern age? Yeah, well, I think we've we've been inattentive and and frankly, it's it's me and my Chicago colleagues, my Chicago mentors. We've been inattentive to UH some trends that have been moving in a negative direction, that the market all by itself

isn't solving everything. We were inattentive in particular to this growing UH gap between the wealthy and the poor. That the inequality has continued to increase, and if you look at surveys like this a puse survey out, people expect this will continue in the few ture. This is something that we could decide to change. There are countries that don't have as much inequality. We could change our policies

to minimize that. It in colleague, but we have to focus on and take responsibility for it and said it as a as a goal. But I don't think I would blame the FED for that inequality. Are your students better because they have the advantage of an HP twelve C on their Apple iPhone? Or were we better when we had a cool ful iness or slide rule where we had to actually feel the logarithm I saw. I saw a news article recently about the abacus competition. Yeah when you can you do an abacus? I cannot? There

you go. The Ebicus article was reverse polish notations that I think the other way Spence doesn't do that, okay, but to help us with abacus and the more visceral mathematics of our childhood versus the fanciness. Now, are we smarter now? I think that, Like my kids went to a Montessori school where you know, they had number rods, where they experienced the physical sense of number. I think physical interaction can be a good way to reinforce basic intuitions.

But I think the main thing I would emphasize right now is we have to learn how to interact with other people. We have to learn how to get mad at them, how to kind of reconcile. So what would Taylor of Chicago say about this? You and Taylor? Did you go to Cubs games with Taylor? No? No, No, you should do that. But what would Taylors say about this? Well, you know, he would say that we're very responsive to

the social cues we're picking up, but we're not. I think kids these days are spending so little time with face to face interaction. They don't understand their own responsiveness to these things. What should are We're running out of time, and I mean it's a great respect. Professor Ruhmer, what is your advice to our listeners worldwide about what to do with their kids and the technology you helped that. The problem here is it's hard to act unilaterally as

as a parent. Jonathan heid Up Callague at an n y U and I've been talking about, is suppose each school system said here's a middle school where you can come to this middle school only if you, the kid and the parents promise that you're going to stay off of social media. So it's not just that your kids off social media, but everybody in the school is on

social media. I think it would be great if there were that kind of option because I think kids need to have more of this face to face interaction before they go into cyber world. Well, never enough time, Paul Rober, thank you so much for being with this Lord of n y U and just so much to talk about. It's not the most. The most male I get is on the idea of of wages and wage growth. The next most I get us on this effective technology on our society. Paul of New York University, thanks for listening

to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer I'm on Twitter at Tom Keane before the podcast US. You can always catch us worldwide. I'm Bloomberg Radio