Surveillance: Reworking Market Power with Stiglitz

Yelling like as a student? She was great. She was one of the best students I had. She was one of my students in the very beginning of my teaching. She looked up to her promise and I'll say the least probably she taught you some things while she was your student as well. She was that acclaimed without questions through all of her work. Joe Stiglets, I wanted dovetail in your the political season or the economics at hand.

Joe Biden is a certain kind of Democrat. If he takes the trophy, can the Democratic Party find a middle ground, a common voice with the rest of America to actually pass legislation and make policy? Oh? Absolutely, I believe actually there's a broadnsensus in America on a whole wide range of issues, and I think Biden is is in a position to create that middle ground, to get that common

agenda adopted. For instincts. Uh, we're concerned. Everybody is concerned about healthcare, at the cost of healthcare, access to healthcare. The proposal of public option is a good way of getting it to everybody. So you're looking at this with your new book, People Power and Profits, Progressive Capitalism for an Age of Discontent, Joe, you brought that where you brought our Steinbeck over to the American economic mind with discontent.

This discontent now is absolutely extraordinary. What can a legitimate Biden policy accomplish? What's the first order condition? You see, the first order is getting the economy going again. And Janet was absolutely right. There is right now a need for fiscal support, especially at the bottom. You know, people talk about a K shaped recovery. It's absolutely true those of the bottom are having a very hard time. Uh. The unemployment rate among uh certain groups of the population

are very elevated. Uh So, Uh, that's one thing, But there are certain sectors of the economy that are badly afflicted and they need assistance brings things. I'm in one of those, the education sector, research sector, and those are sectors that are going to be vital to the country's future. If we let those uh weekend, we're not going to have uh We're gonna have a weak economy now, but we're gonna have an even weaker economy in the future.

One thing we've been talking a lot about Professor Siglat's in the past few months has been g d P and how it's going to go down dramatically on the heels of the pandemic. And you were recently quoted in a Bloomberg article about how this is not a great measure of people's well being. You also said high prices in the stock market are an even worse indicator of societal well being. Focusing on the wrong things can lead to taking the wrong actions. What wrong actions have we

been taking up till now. Well, the focus on the stock market really is perverse because we know underlying the growth in the stock market are a few companies Silicon Valley, the digital giants doing very well, UH as a result of their monopoly power. UH. People going the stock market because interest rates are so low returns, the bonds are so low that they're piling into the stock market, and wages are not doing very well, and that helps the

stock market. But all those are things that are weakening our economy, so it's almost perverse. The strong stock market is almost assigned that things are not going well in other parts of the economy. So precisely, we need to focus on the role of market power in our economy. The low wages, the fact that at the bottom wages are the same as they work sixty five years ago,

adjusted for inflation. Uh, And most importantly, we need the aggregate demand going up so that the economy so that their jobs are there for uh, for all Americans, and that won't happen been uh if we don't have that fiscal stock stimulus that Janet was talking about yesterday. This is an incredibly important point, the idea that the prices on stocks could actually be evidence of something counter to

what may be the healthiest for the underlying economy. Do you think that the response from the Federal Reserve, the US Treasure Department in Congress has actually increased the disparity and access to funding for small and larger companies at a time when we see unprecedented bankruptcies among smaller businesses. Well, actually, actually, uh,

very many aspects of what you just raised. Um. There was a program created at the very beginning called p PP that was intended to get money to small businesses, but it was very badly administered. Uh, and it did work. It got money to the richest of the small businesses, many of whom were owned by very very rich people. Uh. So the intent was perhaps good, but the way it was executed by the Trump administration and by the banks,

quite frankly, uh, was a disaster. Joe. Broadly, the monetary policies that we've conducted since the Great Financial Crisis two thousand and eight of keeping interest rates very low has stimulated the growth and the value of equities. And the equities are overwhelmingly owned by the people in the top ten percent to one percent, top one tenth of one percent. And it's absolutely unambiguous that that monetary policy has increased

wealth inequalities. Joe Stick, let's us talking with our Sally bag Will, who's really really looking at the great divide that we see on the streets of New York or frankly, I think across any of this nation of small business flat on their back. We have financialized the world, there's no question we've done that for the benefits it of the upper x per cent or others. How do we get back to it? How do we escape and definancialize

in a constructive way? Well, I think first of all, we have to uh do two things, uh three things. We have to rewrite the rules of the market economy. There's too much market power at the top. We talked about it in terms of the silk on valley giants, but there's a lot more throughout the economy. We've weakened the market power bargaining power workers, and that has contributed to inequality. We have rules that have led to the

excessive financialization that you talked about before. Secondly, we have a tax system where those are the very top actually pay a smaller percentage of their income than those down below. You know, Warren Buffett actually complained about it, saying, you know, it was wrong that he was paying a lower tax rate than his secretary. You're a lot of wealthy people who recognize that this is actually back for our economy and more. Yeah, Joe, I mean, if you sum up

the taxes that the rich guys are paying. It's a pretty high marginal bracket. It may not be you know, Rockefeller s and all that. But if we some if we sell every tax up, it's there. How do we defense the financialize and deploy capital. Two people starving for capital? Apple computer is not starving for capital. They can get any billions they want. What about the small businessperson on a corner in Tulsa, Oklahoma. Well, that's where we we

have to refocus our banking system. You know, banks were always at the center of providing capital small medium sized businesses. You know, if you're a small business, you go raise money on the capital market. Uh, you go to your bank. And the problem is that the banks over the last thirty years have focused their attention on things like issuing derivatives CDSS UH, trading UH, commodities UH. They found a lot more lucrative ways of making money. Some of it

actually market manipulation. So if we stop some of their bad activities market manipulate manipulation, predatory lending, and encourage them to do what their mandate is, which is lending to small businesses, I think it would actually create much more opportunities. I mean, Lisa, this is the heart of the matter. I'm just old enough, unlike the ancient Stiglets who really really remembers us out of Gary, Indiana. But Lisa, there actually was a time where you did business with your

local bank or maybe the regional bank. And it's a paraded and actually the regional banks anecdotally have been pulling back on credit. Professor Siglets, I'm not going to refer to your tenure or you know, in terms of teaching or anything that Tom was talking about in terms of

ancient history. I will say, though, going forward, how does the economic profession, how do you, as a Nobel laureate, get your voice heard to the degree that it needs to be heard by policymakers who say economists have gotten

it wrong numerous times? Why should we follow a theory when free market economics has led to the power of the United States over the long term, What actually hasn't been free market economics has led to the success If you look at all the innovations that have been the basis of us success, all those innovations have been supported by the government. Uh, you know the Internet, Uh, the

advances in medicine that we're all looking for. Who did the research that led to d NA who did the research that led to all the major advances in biology. Thanks the government. So one of the things I called for in my book People Power and Profits is recognized recognizing the success of the United States has in the past been based on a balance between the market, the government, and civil society. We lost that balance beginning with Reagan.

Uh that said the government was the problem. We now in this pandemic have seen that an ill prepared government is not there when we need it. And I think the strongest argument for UH, what I called for in my book People Power and Profits, for a new social contract with a new balance, has been precisely the failures

that we've just seen in this pandemic. Just because you've got to leave it there, Thank you so much, and particularly thank you for your comments on chariol and early in this good discussion, the lawyer from Columbia out with a new book on people Power and Profits. Julius Now Amy were Silverman obviously capital markets equity derivative strategist. Amy, fantastic to get you with us on the program two weeks away from an election. It's your world. Volatility was

so elevated a number of weeks ago. Then people faded it. Then we came back a little bit more. What's the approach now, I met, Yeah, it's It's been fascinating to watch because, as you said, I think the last time we spoke, uh, the options market was clearly pricing a contested and protracted election with uncertainty very high in December.

That's completely gone away now. And and to be quite honest, the options market is pricing a fairly boring term structure, which always makes me a little bit nervous with you know, two weeks ago until a pretty major event happening. Uh. If I do say, I think at this point we're probably under pricing the likelihood that you get that protracted, contested election, and we're also pricing a tail of it, which is that Trump actually wins the election. Obviously the

poles say that those are less likely. Um, but remember those tales have become fatter in than I would say in other years. Any some of the measurements here. Christopher own was on the Great Technician the other day was trtigous and he was really talking about the breadth of this market improving. Do you see that on a fundamental basis? I do, And you know, I think There's two things that sort of happened. In August. We had unbelievably narrow breadth that was really just all tech. Um. You know,

two things changed coming. The first is people started putting on more macro hedges, just simply because we have a U. S election, but also just because we're coming into your end. So most people who are doing well in their portfolios are putting on overall market hedges. And the second is, you know, as we head into earning season, people are playing names other than obviously they're still paying of playing Facebook, Amazon,

what have you, but they're also playing other names. So we do have improvement in breadth, which obviously helps with some of the correlations we're seeing on the index levels. I want to build on something that you said to Amy. You said that we are currently probably under pricing the risk of a contested election. Just how contested does that election have to be before it royals the market? And how significant could the hell off be? Yeah, two great questions.

So the time frame that the options market was obsessed with was call it November twenty through December eighteenth. So that's the period of time between the two options experts. We saw that you know, three to four volatibility points, fully elevated relative to everything else, and now that's completely come down to the point where it's actually under November UM. So you know, that tells us that people are not focused on that December fourteenth state where the state electors

are supposed to submit their ballots. That's the time frame originally, Lisa, that people were very, very worried about. So call it, you know, after election by you know, four weeks UM. And then look in terms of the downside that the bets we are seeing place has the market down you know, at least five percent, but more down to ten percent. So those are the hedges. Those are the strikes of the hedges that we're seeing places in the market right now.

So let's talk about how you invest around the Samy. I think for a lot of people outside of Wall Street, whenever the Amy wi Silverman's, the Julian Emmanuel is the Mandy Zoo's come on, people get confused by the language the jargon you guys use about this market volatility, you know the story. Can you advise people outside of that world what on earth they're meant to do going into the back end of this year? Sure, you know, I

think it's just to think of this way. The first is I would just think if it is there is there is downside concern that that is building, and we see that in hedges being placed, but not nearly to the extent that we would expect given this environment and given this event. So basically the market is not as well prepared as it normally is for these kind of downside events. And the second is, obviously, if you're looking to place a bet to the downside yourself buying put

options something straightforward where you're protecting against that downside. It's still relatively inexpensive because the option market prices for that type of protection has declined in the last few weeks and has made it cheaper to do that. If I look at soap, Proctor and Gamble is a proxy for boring within blue chip multinationals. It's a wonderful log linear trend for ten years and then like a moonshot P

and G goes straight up. They've got a three to at best four percent dividend growth, yet they're trading at a twenty seven multiple. Is that in the textbooks you studied? Yeah, you know, look the look a lot of things that have happened in this market I have learned are not in the textbooks I studies. One of my professors was

Burton Malkiel, who wrote A random walk. There's pretty good and you know he's really good, but you know, he taught us about the efficient market hypothesis at for incident and then I got into Wall Street and I said, works aren't that efficient unfortunately, So yeah, I mean, John, this is a really important observation by miss Silverman. You're the idea, the idea. We forget John about where these

valuations are. And yes, some have maximum revenue growth or maybe apple profitability, but you know, boring stuff, John, whether in London or in America, is just priced the perfection. Now that we've never seen this, well, there's a reason for that with some of these brands. And later or now you can speak to this. It was always about the brands that you recognize and everyone just rants towards them.

In the pandemic. I caught it with PepsiCo and the CFO about this a number of months ago, and that was really the story brand recognition and a gravitation of the consumers towards the brands they recognize at a time of stress. How sticky that demand is I think we're about to find out. Lisa, Yeah, And I really find it fascinating a social study in terms of how people respond to a pandemic. Lisole sales absolutely on fire, and

the company that makes them Banks Bank is sir. It's sort of a similar story to what we saw with Procter and gamble up. More people want clean homes, and they're going to be obsessive about it. I mean with Silverman of obviously grand to catch up. I mean, thanks for being with us a couple of weeks away from an election. There's any number of ways to go with Isaac Boltanski's a compass point, rights acute, cute notes on

what's going on. I do want to focus Isaac on something that's in every interview, which is the outcome of a blue president but a continued red Senate. What will Gridlock look like under a Biden presidency? So I think there are two main points to make it. That Number one is you would be far more difficult for President Biden in that scenario to actually get his nominees through a republic the concentate, and so a lot of the regulatory agenda that my clients have focused on, whether that's energy,

the environment, healthcare, financial services. A lot of their fears around that would not materialize simply because it would be difficult to get those personnel in the second point is really about what we've all been focused on this morning, which is taxes and stimulus, And in that scenario with a Biden White House and a Republican Senate, investors should expect any stimulus to be smaller than the base case right now, and for the tax increases that the former

Vice president has proposed to not come to pass. So aside from the taxes, there's also this regulatory overhang that was sort of highlighted this morning with this headline that the antitrust suit against Google will go forward, a long anticipated one. Isaac, how much political will is there among Democrats if there is a blue wave to engage in true regulatory scrutiny of big tech that could affect their earnings.

I gotta tell you, the big tech narrative reminds me of infrastructure and that everyone in d C agrees that something should be done, but once you start to drill down, there's very little agreement in what should actually be done. So in big tech, just look at the different issue sets. Are we focusing on content, competition, data, privacy, the numerous different avenues to follow, and then you've got to add on top there are just too many cooks in the kitchen, is at the d J, the FTC, the state, A

g S, Congress in a blue wave scenario. So look, there will be continued headline pressure, but when you actually drill down and you use the benefit of history, whether it's Microsoft, the Bells, or IBM, you see that there really aren't that many tools at the moment to quote unquote break up these companies. So the headlines will persist, but in terms of practical impact, I think very limited,

and in the end, the market addresses the issue. We saw that with Microsoft, Democrats talking about anti trust, Republicans talking about censorship. Let me just talk about the Senate and the composition of ISAAC if it does turn democrats, just how moderate will that Senate be and how much of a radical progressive agenda if it was to go through the House, could actually pass in a democratic lets Senate. So this is something that I've been highlighting the clients.

About fifty or so of Biden supporters say they support Biden because he's not Trump and to me, that suggests that the Democratic Coalition could have some fractures if they end up winning, and we will have a far more progressive House in terms of policy then we will have

in the Senate. And this is important because there are going to be at least three, possibly even five centrist red state Democrats in the Senate from states like Montana, West Virginia, Arizona, and I think that contingent will push back on the most aggressive and progressive policies that come out of the House. And so that's what informs some of my views when it comes to a blue wave in Texas. You mean is I think I happen to think you're you're absolutely dead on here about the power

of the centrist Democrats greatly underrated. And it goes back to Hubert Humphrey and Scoop Jackson from another time and place. How does that set up for two thousand twenty two? Because the race for two thousand twenty two begins that Wednesday in November, doesn't it. In some ways, we're we're

gearing up for it right now. And so look to your point, it's not just going to be the ones that are there, it's also going to be in the fact that their ranks will be bolstered by some of these more purple states, whether that's North Carolina or South Carolina or made so their ranks will grow furthermore when we look out too, they're going to be some open seat races in again purple states like Pennsylvania and like North Carolina, and I think that will inform Schumer's thinking

in terms of policy making and trying to attack more towards the center. It just quickly in the time we have left. Does the debate happen on Thursday? Given the noise around it, still you assume it still happens. Well,

I think we're going to have a debate. I think that the two minute muting function will be interesting, But the remainder of those fifteen minute segments, beyond those two two minute mute periods, it's still going to be the messy, convoluted, just deeply concerning mess that we saw the first time. So yes, I think it happens. Yes, I think it'll be messy, And no, I don't think it's really going to impact the election because most voters have already made

up their minds. And isn't that the point? Isaac Boltanski Compass Point Research, Managing director for Policy Research, Isaac right to catch up, sir, right owver this John Gull and what's wonderful about and galub Is if you were to see his notes in Credit suitees, there's great, great sector specificity. We haven't done that in a while with all the distractions that we have. Let's go there right now, Jonathan Credit Swee, chief US equity strategists. What is the sector

distinction right now? John? What is the research topic of those fancy xcel spreadsheets? You do? Well? If I if I kind of summarize it into four what I like to call super sexuality radio companies. The company is the big the broadly defined tech universe, which would include you know, Google and Facebook, which are really officially part of the

communications sector. But if you include all that together, the real key is that they are delivering better earnings in than they did in seventy five or more of the time. And that is the number one driver of socks. So when everybody is looking at the FED the election as a driver, look at which company is are totally untouched by this down turn and those are the winners. And that's what you're saying, John, I looked at Procter and

Gamble today, three five year dividend growth. That's terrible, folks, And they got a multiple. How is that? Gosh? I mean? And and I can't speak to practicing company. But the real but the real story here, Thomas, is that the

discount rate is really low. Or putting it put it alternatively, the look at whether it's Procter and Gamble or any other companies in the consumer staples space, the yield you're getting on those is so much higher than a treasury yield, which is as a yield under eight basis points, that they're just begging to be bought. And I think that what's going to happen here is that the two categories

took about different sectors. The the non cyclical part of the market, which is like healthcare and staples, or the tech related part of the market are going to trade at really really high multiples because of the interest rate in addition to their own business process. That's right where I wanted to go, Jonathan. How much does this entire call hinge on benchmark rates, tenure treasury yields staying where they are going lower? Um? I don't. First of all,

the tenure treasure yeld. I don't think it's going to go lower, and in the near term, if it picks up, it'll be a sign of some economic health. But but I think with interest rates this low, you're talking about pe multiples on the market that are going to probably average in the mid twenties for the next decade, not for the next six months. And um, and I think

that people aren't really haven't really adjusted. Thinking historically a fifteen multiple first for for a stock is normal, and now we're gonna be trading at much much higher levels for a persistent throughout the time. Okay, right now, tenure treasure yields under eight tents of a percentage point. I'm wondering at what point does the yield rise to high

enough level that it's stymies this call. Um, you know, I you would have to get interest rates back into the mid ones or or you know, if you have an interest rate even below two never mind you that sounds like an incredible number. But we started the year at one point nine and um, we're so much for

you know, so far below that. But if you even got back towards where we were at the beginning of the year, it's still supports super high multiples in UM in areas like staples and healthcare and tech related companies. And so I don't see a near term pick up and interest rates as a threat to valuations or the you know, the sustainability of the returns you've had in

these kind of stocks. What do you say to the idea that the consensus trade right now is the election will be just fine, and you'll get a blue wave and there'll be a great fiscal support bill and everybody will be happy and hold hands and say kumbaya in the economy will get back on track, and stocks will soar. That's the consensus right now. Do you buy it? I don't. I don't not buy I do think that there's a near term risk that that people are are missing here UM.

If we're not, it doesn't look like the chances are we're not going to get a simulus bill which is going to support UM small businesses and people who are unemployed until after the new president is sworn in. And that means that people who are unemployed or have small businesses depend on these government checks are not going to

see that until February, maybe even March. If that happens, I just think that you're going to have a pick up in the number of individuals and small businesses that are are gonna be declaring bankruptcy or not making loan payments. And I think that there's some near term risk in the market. And I'll tell you that that Trump is going to borrow money like crazy and stimulate. Biden is

going to borrow money like crazy and stimulate. UM. So I don't think that the candidates are as big a difference UM as we think, what are the two things that matter making sure that we have currently in the near that we get through this next were months. And the second thing is this pickup in COVID really could um could derail things. But COVID and the stimulus check is the stimulus program in the next four months. It's

far more important than the election. I've got the chart up of sp X center and force and the bottom line is since two thousand sixteen, before the Trump election, but certainly ascribed to the Trump years, is a linear function of a great bull market. There was a pause in the fourth quarter of eighteen. There was a pause in the shock of this natural disaster. But we're in trend. Are we still in a bull market? I think that

we probably are. But but if you look Tom at what's in the market you're talking about, you know, the focus we have on on sectors. The SMP is a living, breathing thing. It's not the same thing over time. Um of the SMP right now is tech related. If you add healthcare as kind of intellectual pretty as well, more than half of the SMP is intellectual property companies. Well

should that be a surprise there? Am I right? That they are displaying the most persistent revenue growth and persistent cash flow and and the highest margins and the lowest levels of debt and the highest return on equity. Now, if you compare that, though, Tom and you talk about the market, but there's not one market. If you compare this to European stocks, or global stocks outside of North America, or small cap stocks or value stocks, you're not seeing

something that looks at all like this. The the SMP, or really more more importantly, the growth stocks within the SMP don't look like the benchmark, but they are what's driving the stock market. And so you really have to find where in the market those opportunities, uh, those opportunities lie, and folks to take it down on this day of the Google lawsuit. I'm gonna sum up Apple, Microsoft, Amazon, Facebook, and the double alphabets through five sixty two three is

those tech stocks above Berkshire Hathaway. And that's extraordinary concentration. John, How do you play that you don't sell out of those? What do you do? You you take fresh cash and position away from those. Well, Tommy, first you have to ask why are they doing well? They're delivering much better Um, they're delivering better profits and so. And while they're a little bit less than twenty of the markets earnings, Um, they're really disproportionately um, you know, strong in terms of

earnings and profits and profit and like. Um. I mean, we looked at we did an interesting analyst of time. We looked at which characteristics are winning in the market. So is there something about these individual stocks or is it like, are they just in the right place? Okay? Sales growth number one. Number two is high profit margins. Number three is low debt. And if you look at each of those five companies, they took all three boxes.

If you took the whole SMP five hundred and say, show me companies that are in the top ten percent on sales growth, high profit margins and low debt would all be doing it. So can you position Russell two thousand for those attributes and sift Russell two thousand forty two John Gallup stocks? You surely can. As a matter of fact, yesterday we took in a universe that doesn't look at what we did this for non US socks.

Yesterday we published a list of thirty companies and we said, I want to go and find global companies with the exact same characteristics that I can give you one name. I know you can't. I'll tell I'll tell you what people. If people email me, I will I will go if they if they send me an email on Bloomberg never again, I'll send up a copy of the report. But you know the problem also, by the way, with the small kept universe, there's a huge number of companies that are

not profitable or have really really weak margins. So can you find those names? Yes, but there's just there's just far fewer of Lisa jump in here, please, Well, there's a theory I like that. Mike Wilson of Morgan Stanley, he's been bull bo bo bo bull and now he's bearished. He actually sees the big potential for a ten percent pullback in the near term. Long term, he remains the bull that he has been. You buy him at Yeah,

I don't know if I would. I mean, first of all, we have at call between now and the end of the year, um because of some of the these near term risks that I was talking about UM around stimulus and COVID like. But if you said to me, am I really bullish looking between you know, through the election towards the end of next year. Absolutely so, I don't know exactly the nuance of his call, but the way

you've described it, I'm on the same page. John Gollubs, thank you so much, greatly appreciate love the sector, work, the acuity. They're really really especial joining us right now. I'm with JOHNS. Hopkins Center for Health Security and really quite expert at the world dynamics of global dynamics of

this pandemic. Yesterday I witnessed I got so upset with my you know, faulty biological background, microbiology background, that I put out photos of Saban and Salk and of people in those polio cans from the nineteen fifties in the forties. Is a president on the campaign Trail once again belittled your world. How do we push back and say that

science matters. I think we just have to keep telling people about how human life has improved because of science and scientists, because of work buying Jonas Salt and Albert Saban, because of work of people like Anthony Fauci. And I think it's obvious to anybody that looks at the reason why we have lifespans of seventies and eighties and then looks back at the work that's science and medicine is done, with vaccination, with public health. I don't think that this

is a disputable type of thing. And to hear the President called Dr Faucier allude to him as being quote unquote an idiot, really just shows that he has complete envy for somebody like Dr Fauci, who has real credentials and has a real track record and has expertise that he will never gain. And I think that's that's that's what we have to think about. This is very neholistic to keep going after science and experts because it is

science that will get us through this pandemic. And it has been the ignoring of science that has led to over two deaths in the United States, So this is really deplorable from the President. When we distribute a vaccine and we know that the first one will not be as efficacious as the second, the third, the fourth tranch, we may need boosters like when we were kids, etcetera. What should be the approach to give confidence on a

successful first vaccine. The approach is to make sure that this whole process has been insulated from political considerations, that this hasn't become hydroxy floricu or this doesn't become convalescent plasma. That we know that the FDA is going through the

exact measures that they would for any other vaccine. And it's going to be important also for professional societies like the American Academy of Pediatrics, the Infectious Disease Society of America, as well as people like Dr Fauci to really be behind this vaccine and tell the American people very transparently what the risks are, what the benefits are, so that they have confidence, because if we don't get enough people vaccinated, we are still going to be dealing with hospitals getting

patients that they can't handle and continue to have this kind of limbo of this pan of pandemic control. So we have to be very clear and do a lot of public health detailing to the American public, because if you go back to two thousand nine in H one n one, during that pandemic, only about of Americans got that vaccine. We can't have a failure like that. We

need to get a confidence in the public. In order to do that, we've got to make sure that these steps have actually been fallen followed, and I do think the pharmaceutical company CEOs as well as months have slowly from operation worst speed, have increase my confidence that this will be something that doesn't get meddled with the way

hydroxy chloroquin did Dr ADULTA. In the meantime, as we wait for a vaccine, any parent out there is juggling whether we're going back to remote school, whether their kids are going to see their friends. What is the appropriate level of SoC social interaction and this matters frankly, especially as an increasing number of kids feel isolated and depressed

and this affects their social development. What is the appropriate level of contact at this point taking into consideration these mental health issues at a time when a lot of science experts are saying, hey, all of these small gatherings, these these groups of plateates, they're not acceptable. Is this is something that's a very hard question to answer, and a lot of it has to do with your risk tolerance and who in the household has risk factors for

severe disease. I do think that there is a real psychosocial toll that this pandemic has been playing on children who are unable to socialize, who are unable to have in personal learning, and we have to prioritize that. Thankfully, children still tend to be spared from the worst consequence of this disease. They're not likely to be hospitalized, not likely to die, and even the younger ones less than sixth grade and below are probably less likely to spread it.

So I do think that children can socialize in small groups with with the caveat that you're making sure that no one there is at least overtly sick, and that you take notice of the fact that you're going to

be at a little bit of a higher risk. But I do think in some situations you have to look at what the value is being pursued, and might in social interaction is a real value and look at the risk and it's gonna be a little bit different for each person in each family, But I think that there are ways to do this safely, and I do think we have to prioritize getting this outbreak under control and having schools open in person, because if we can have fans and stadiums, we need to be able to have

children in schools talk to what we talk about the economy and trying to address one issue often what happens as we cause problems outswhere, And I appreciate before I ask this question how challenging it is to explore with me, But what are we learning about the medical issues we're causing elsewhere as we try and tackle this specific one.

We definitely know that when hospitals were asked to stop with their quote unquote elective procedures, and elective procedures is kind of a bad word because people think cosmetic, but elective means things like scheduled aortic valve surgery. And we know that there's an ink that that all of those other medical conditions did have increased morbidity and mortality. We know vaccinations dropped during the height of the economic shutdowns.

We know that cancer chemotherapies were delayed. We know that psychiatric care also kind of went through the cracks. Felt everything fell through the cracks during that shutdown. So we have to balance not not just balance it, but realize

that we have to think long term. It's just so hard for policy makers in the middle of a crisis to think long term, even though that's what they should have been doing, knowing that we can't trade short term benefits for COVID against long term uh, long term problems

with cancer and other diseases. So I do think that this is something that people recognized, and that's why it's so important that we have hospital capacity and that we expand hospital capacity to make sure hospitals have an of resources, because if they can't do their ordinary care for heart disease, for cancer, for surgeries, for for pediatric and psychiatric care, we're going to suffer long term consequences. And I think that no one wants to make those same mistakes again.

Praise that you're exploring such a difficult issue. Olka, thank you and me sit down to that of Jon's help Kins. 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, you can always catch us worldwide. I'm Bloomberg Radio