Bloomberg Wall Street Week: Micklethwait, Haass

with David Weston from Bloomberg Radio. A year like no other, from the pandemic to race relations to foreign relations, as told through the books we read. Welcome to a special year end edition of Bloomberg Wall Street Week. I'm David Weston this week special contributor to Larry Summers of Harvard, Bloomberg editor in Chief, John Micklethwaite Westmore of the Robin Hood Foundation, and Richard has of the Council on Foreign Relations.

We spent the year glued to our screens, whether it was a terminal or a laptop, or a smartphone, or just to play an old television set, and the headlines came in faster than we could really absorb them, going back and forth among COVID nineteen and a presidential election and gyra, any markets and stark reminders of the very different lives that we lead based on our wraiths and

our ethnicity and our economic status. But even as we struggle to keep up with the day today, it is not too soon to start thinking about the larger themes, the longer arc of history that we are living through. And there is no better way to do that than to read some of the books that were published during

this year. And so we have this special installment of Wall Street Week given over to books that were published this year, seeing his history through the eyes of some of the authors who are making us think and reflect. We begin, as we must, with the pandemic and what it showed us about how we deal with the crisis and whether our governments are up to it. Bloomberg Editor in chief John Mikeltway joined with economist author Adrian Waldrich to bring us the wake up call, a penetrating look

at which countries worked and which did not well. The very short answer is that Britain and America, you know, to the countries that have led the world have done it incredibly badly. Um if just monitored by the number of deaths per million, well over eight hundred deaths per million.

By contrast Germany down round a hundred and fifty, and especially these Asian countries Japan, South Korea, Singapore, Taiwan, you know they're they're in very small numbers three, sometimes as a few as five deaths per million, sometimes twenty thirty deaths per million, and so there has been a real difference, as you put, between good government and bad government. Indeed, government has been the difference between living and dying in

many places. And what accounts for that. There are various theories. I mean, for example, the Asia, particularly Taiwan, Korea, and something that China done well because it's more of a collectivist approach to society rather than individualistic. I think we should come back to China in a second. But on the on the broad terms, I think that's a too

good an excuse for the West, on too several different levels. Firstly, if you look at any measure of other things to do with state efficiency schools, you know who's whose schools are doing well. It's the same set of countries are doing well. Whose whose general health systems lead to long life expectancy. The same thing virtually every barometer of whether a government is working well or not. There's been moving

in Asia's direction over the past twenty thirty years. And it's just that's the reason why it's a wake up called the argument consensus. Yes, there is an advantage there, but it's the kind of advantage which gives you a ten or advantage. It's not the sort of advantage which explains somebody being twenty or thirty times better. I mean, you, David, mostly in our day jobs, when we look at a company and one company is sort of twenty better than another one, you think that other ones in trouble. In

this case, countries were twenty times better. And that brings me on the second thing. If you look at South Korea, look at Soul, London and New York, they're roughly the same size. It souls a little bit bigger, and yet New York has lost over twenty five thousand people, London well over six thousand, Souls lost a few dozen. And this is the place that bought parasite. It's a place with some of the world's largest nightclubs. It's a place that bought K pop, which I know you listened to

all the time. It's a vibrant, chaotic, democratic city with a lot of creativity, crowded subways, huge things. It's got exactly the same kind of dynamic as London or New York. It just happens to be a lot better run, and it's run because people have paid attention to government. How much of it is because of the leadership the particular people involved, That's a really good question. And again I think this is where America particularly has to be a

bit careful. And I think there are a lot of Americans who think that because Donald Trump did a bad job with COVID, and I think by most people standards, he did do a very bad job. Um that, so to speak, the problem is solved. And I think that just isn't true. You look at the fundamental reason why America was bad at this, it's because it has a health care system that's designed to look after the rich

and the old. So any a pandemic hits everybody, hits the poor particularly, so America was always bound to be exposed. And you look at the other things wrong with American government, racist policing, Well, you know, Donald Trump may not have helped that much, but I covered Rodney King in Los Angeles thirty years ago. That has been going on a long time. Look at American schools, okay, the twentieth or thirtieth,

depending how you measure it. In the world when it comes to education, there's education tables that the Asians come top in, but that's been going on for years. To Trump may not have done much to help. It said that the structural problems with the American state go much deeper than just one man. It is to do with the fact that the Republicans don't have any answers to do with government other and to make it smaller, and the Democrats two wedded to the public sector unions to

engage with the reform. And as long as that continues, America is going to have that problem that any big crisis is public sector is not going to be much good. That was John Michels Waite, editor in chief of Bloomberg and author of The wake Up Call Coming Up. America's long struggle with race came to the four again with the killing of George Floyd in Minneapolis, and Westmore of the Robin Hood Foundation took us through the anatomy of a similar incident in Baltimore five years ago, when Freddie

Gray was killed. That's next on Wall Street Week on Bloomberg. This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio. This is Wall Street Week. I'm David Weston. The United States was rocked this year by a series of police killings of unarmed black citizens, including that of George Floyd in Minneapolis and Brianna Taylor in Louisville. And this is just the latest in a long line of such incidents through American history, revealing the deep divisions in

our society. Westmore, the head of the Robin Hood Foundation, had written about one of these. It was the killing of Freddy Gray in Baltimore back in two fifteen, and west lays out what happened, what led to it, and what the aftermath was from a variety of perspectives. I'm a Baltimore native and in many ways Baltimore City helped

to raise me. Uh and I I one of the things that really struck me about Freddy's story was, you know, I I I unfortunately have been to many funerals before my life, but his funeral was the first funeral that I had ever been to, when the person who was laying in the casket I never knew in life, and that haunted me because pretty Rays funeral was a big

deal in Baltimore. But then the thing that really helped to to to trigger wanting to write this book and tell this story was was not just the horror of his death, but in many ways the horror of his life. And that's what I want. I wanted to uncap when I wanted to uncover, and you say, I'll just read

a bit from the prologue here. You say we had come from similar places, you and Freddy Gray, but I had been so fortunate, so blessed, And you're going to talk about your mother and your grandparents and the breaks you got along the way. How does it happen that two people with similar sorts of situations can take such

divergent paths. Well, you know, I think that one of the things I wanted to be able to look at is when you look at the life of Freddy Gray, for for so much of us, particularly for individuals, all of us who feel like we're coming out from the margins right where where this wasn't always destined that we can end up being there. There are a lot of factors that play into it, but one of the big

factors that plays into unfortunately is luck. It's it's had getting getting a break that someone else might not get, an opportunity that someone else might not get, and and the idea that we would have or can have a society that is relying on luck as a prerequisite in order for people to be able to move from one position to another to another position is really hard. And you think about Freddie's life in particular. Uh, you know, Freddie was born premature, under eight, addicted to heroin. His

mother never made it to high school. She couldn't read or write. She has these twins, Freddy and his twin sister, Frederika. By the time they had gained enough weight to actually leave the hospital, they moved into a housing project in West Baltimore that had endemic levels of lead inside of the home. And so Freddy Gray is now underweight, addicted to heroin, lead poisoned, and by this time in his

life he's two years old. And so it gets back to this larger point of did Freddy Gray even have a chance, did he even have a shot, or was that last interaction that he had where where he was, where he died, was killed in police custody for the crime of making eye contact with police which triggered probable cause. Was that a just want the last system to break in the life of Freddy Gray. Well, see, that's what

I found. One of the things I found very powerful in this book is obviously what happened with the police was inexcusable. Police officers were indicted, although I don't think they were convicted, but it was inexcusable what happened in the police fan But the problem with Freddy Gray started away past that. And when you talk about systems, we talk about systemic racism, systemic inequality. It's a series of systems.

There's a lot of systems here that put Freddy Gray in the wrong place and for that matter, put police in the wrong place at the same time. That's exactly right. I mean, when you look at the life of Freddy Gray, every every system failed him. Uh, you know, the education system.

When when the last day of attendance that he had recorded in Baltimore City Public schools was in tenth grade, when he was nineteen years old, he had been in special education developmental coursework his entire academic career because of the lead poisoning. The CDC indicates that five microbes of lead and every decolet of blood is enough to give him a person cognitive damage for the rest of their life.

Freddy Gray had thirty six, and so this was a young man who, from the earliest ages from from room being a toddler, was going to be cognitively damaged for the rest of his life because of something he had absolutely zero to do with. And now is that the fact that the home that he was living in and the water that he was drinking was making him sick.

And so when you're looking at all these various systems that then were in place and just were not in place in the life of Freddy Gray, uh, it forces all of us to understand that this is not just going to be about policing. Performing the police department is

necessary and it is imperative. However, we also have to understand that the amount of systems and the amount of touches that Freddy Gray had in broken systems throughout led to the to the idea that that last interaction with the broken system without one broken system, was just kind of a continuation of a lot of the larger life challenges that he was facing, and I want to take us through some of the concrete steps, because you have

constricrete steps in your book that should be taken. But before that, this is a story about Freddy Gray, but it's also the story about eight other individuals. Uh. It's a it's a really interest in compelling way to tell the story sort of Russiaman from different people's points of view at the time over those critical five days that were really Baltimore was on fire. Gives a sense of

some of those characters that you identify. I tell you, David, it was one of the things that I actually loved about the story because if if Baltimore, Baltimore is one thing, it's full of characters. And I was hearing it from every single strata of our society about what people thought about what happened, and what were the lessons learned, and and so I really wanted to then take some of those conversations that I was having personally with people and share them with the world. And so I broke it

down to these eight characters. You know, Uh, a police major who grew up in West Baltimore, who was having conversations with me where he said he's one of the highest ranking African Americans on the police force, but he was having conversation and it would say, you know, I know that none of my colleagues woke up that morning with homicide in their mind. But I also know for the kids in West Baltimore why they don't believe me.

You know a woman who lost her brother to police violence just eighteen months earlier in Baltimore City, and who was loving the fact that Baltimore was rising up and Baltimore was was was marching and doing something about this, but also was feeling a real sense of frustration because she's basically saying to herself, but where was this when my brother was killed by police and no one had

anything to say. You know a basketball star turn protester, the son of the owner of the Baltimore Orioles, who was the head of baseball operations. So when the Baltimore Orioles played the Chicago White Sox and for the first time in baseball history, they played a game and the official attendance was zero because the city was in the state of emergency. He was one of the final people to make the call and say I want to play the game even if there's no fans in there, because

I want the world to see this. And so by looking at it through these various sets of eyes, by looking at it through people who come up and represent different stratas of our society, you know, we really wanted to show a kaleidoscope of how complex so many of these situations are, but also how it's still fundamentally colms down to two disparate issues, its race and its poverty, and how those two beasts have a way of coinciding to create pretty disastrous results if we are not dealing

with them. That was Westmore, head of the Robin Hood Foundation, an author of Five Days, The Fiery Reckoning of an American city. Coming up in a year full of ups and downs, energy was no exception. Expert Dan Jurgen put it all in a broader context in his book The New Map That's Next. On Wall Street Week on Bloomberg. This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio. This is Wall Street Week. I'm David Weston.

The pandemic hit worldwide, demand for oil hard, leaving OPEC plus scrambling throughout the year to figure out how to respond to that fall in demand. Dan Jurgen of I H S Market kept us abreast of all of the has changes, but also put it in the larger context of how we are shifting the way we get our energy and use our energy, all of which is covered

in his new book, The New Map. I think it's an evolution that's going on, but I was recently with a bunch of the leaders of the electric power industry. They do look to be net zero carbon by or many of them are moving that direction. Other parts of it. I think it evolves over time. There are two eight million cars in the United States and about two hundred seventy nine million run on gasoline, and I don't think

people are going to throw away their cars. So I think it's this is the longer evolution, and I think there's what's happens in the US, but the US remembers only fifteen percent of CEO two emissions, China's twice that. India other emerging markets are looking towards commercial energy to get away from burning wood and waste in people's houses with their health consequences. So I think this is something

that unfolds time directionally, where it's going. That's clear directionally in the timing really matters, and the bets can be rather substantial. In your book, you point out how many obs you know, I think there's ten million are tied to the energy industry. We also have trillions of dollars globally. Who's putting bets on which side of this? And we saw a report today that Xson basically internal documents leaked suggests that Exon is not moving as quickly as maybe

some others away from fossil fuel emissions. China certainly might benefit. You point out in your book, Russia, maybe not. Who's betting on which side of Well, let me say I think the X and thing, of course that's still unfolding story. But I think what's happening is all major companies now are looking at their at their at their emissions and saying what are they going to be? And then the

question becomes how do you mitigate them? And in the in the New Map, you know, there's this whole chapter called Breakthrough Technologies, based upon the work that Ernie more Needs, a former Energy secretary, and I did for lead for Bill Gates Foundation and Breakthrough Energy Coalition about the technologies we need, and one of them that's really very major

is what's called carbon capture carbon mitigation. Simply when you look at the numbers, and I think that's where you know we're going to see increase uh investment going in

terms of research on that to meet it. In terms of countries, China is a significant winner here because it didn't, unlike the US, it imports its oil and it regards that as a major strategic problem, particularly in the geopolitical issues that are now developing, and it has a dominant position in many of what you might call that they

call the new energies. For instance, about sevent the solar panels of the world are made in China, another ten percent by Chinese companies, and it's Chinese manufacturing that's partly responsible for this revolutionist solar costs which have come way down, so you know they would be a big beneficiary of this.

One of the things that I was surprised I learned from your book is the Department Energy under President Trump is investing an awful lot of money in research, science and research, some of which actually has to go to renewables. Right uh. Six and a half billion dollars in UM in basic science research, and that's the foundation, really, the true foundation of an energy transition, and that's been pretty consistent. That has been one area of bipartisan cooperation in seeing

the importance of maintaining that commitment. And this is where the U strength really comes from, which is we have this incredible ecosystem that goes from seventy national labs, that kind of expenditure, universities, companies, startups. No other country has that advantage in new technologies take wind and solar there those are fifty years old industries, but it's only in the last ten years that they've really become so competitive.

So it takes time, and so the investment you make now really pays off, but it can take ten or twenty years from now. Dan draw one other contrast that again I got from your book, the New Map, and that is between Russia, which is very dependent on fossil fuels goodness knows, and Saudi Arabia, which is also very matter but they have that vision campaign going. Do is Russia have anything similar to that about what comes after

fossil fuels? No, I don't think so. I mean a gladim Our Putent said, it's great, O. Our budget is own nowt to oil instead of being oil that money coming from it. But I think Russia has been talking about diversification for UH for twenty years since Putin came to power, and it's really not happening. In fact, I was at a conference where I asked Putin that question. He and Chancellor Merkel were on the platform about diversification, but we got sidetracked because I mentioned shale and he

really doesn't like US shale. So he he gave me his UH, his his opinions on that, which were pretty strong. So I think Saudi Arabia is trying to do it, but you know, it's hard to shift an economy that is so dependent upon oil. It was hard before COVID, it's more difficult right now. And I think one of the things that saudis it's clear to them in order to diversify away from oil, you actually need some oil revenues. That was Dan Jurgen, vice chairman of i h S

Market and author of the New Map. Coming up, we end this special edition of Wall Street Week with Larry Summers and his book Picks for the Year. That's next on Wall Street Week on Bloomberg. This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio. We are back with our special contributor Larry Summers of Harvard for his view on some books this year that really stood out for him. So, Larry, what books really made an impression on you this year? There are three that I'm

going to comment on, David. Uh. The first is my former boss, Barack Obama's UH memoir. Politicians memoirs are usually ghost written exercises in self justification and in rewarding UH the politicians UH friends with compliments. UH. President Obama's UH book is obviously self written. It is much more candid than most such memoirs. Like all of US, President Obama sees himself in a basically favorable light, but with much more admission of uncertainty, of possible regret, and much more

candor in his portraits of events, UH and ideas. And So, if one's looking for a government memoir or a political memoir that gives a feeling of what it's like, UH to be there seeing things as a senior actor does, I can't think of one that's better uh than UH President Obama's. Whatever you think of his skill as a president,

his skill as a memoirst is quite extraordinary. And one thing that struck me about that book, Larry, was that it doesn't feel like it's pulling a lot of punches, but it also doesn't feel like it's a lot of score settling. And there are people clearly has really distrigan differences opinion with people. Actually he really doesn't quite admire,

and yet it doesn't feel like he's settling scores. I think the President Obama's strength, and some would say his limitation, is a kind of extraordinarily mature perspective and capacity for strategic empathy. He has the ability to walk in the shoes of others and therefore to understand where they're coming from, and that limits his capacity for rage or for a desire for revenge. And for many of us that is a great UH strength UM. For others, it bespeaks to

an excessive neutrality UM when merits are clear. But I think that is something that comes through UH you know bulk that is certainly quite revealing of the character of its author. So that's one President Obama's book, Deaths of Despair. Deaths of Despair is written by UM the Princeton professors in case and Anguish UH Dton, and particularly for those like me who are drawn to statistics and quantitative information nation it is a profoundly disturbing evocation of what is

happening to the middle of our country. What's happening to the middle of our country geographically, what's happening to the middle of our country in the sense of the middle of the income UH distribution, what's happening to people who have middle wrong jobs in hierarchies, And what's happening is

that too many of them are dying too young. We've taken it as a hallmark of a progressive society that life expectancy goes up, and for substantial subgroups in our population, that has stopped being true, and that is disturbing in it in its own set sake, And it is also disturbing because of all of the things in terms of fulfillment that are likely to be coinciding UH with that, and so in terms of pointing to what is going to be a huge challenge for our democracy UH going forward.

This book does a superb job of complimenting more individualistic treatments like uhlbility elogy of UH life, and you're can

agree or disagree with some of their policy recommendations. But there's a starkness in decreasing life expectancy and increase in UH death that I think has to command the attention of anyone who cares about our country's future, and and that that increase in death, as I understand it comes from things like OpenD addiction, alcoholism, suicide rates, which may actually be tied a bit into employment, right, because we've seen, particularly in males of prime age, a decline and employment

rate that's attributed to some of those causes. I think it goes both ways. People are more likely to become addicted to substances because they're without work, and they're more likely to be without work because they're addicted to substances, and so uh there's a kind of vicious cycle that's underway.

But it's a profound statement about the way things function in our country that fifty years ago people in their fifties had men and men in their early fifties had a five percent chance of not working, and today, most of the time they have a fifteen percent chance of

not working. And of course, if fift percent of the people overall are not working, that means that the number who will be without work for six months within a year, or the number of those from disadvantage demographic groups who are not working is much greater than and to what say, you use a critical word there men, to what extent is this skew mail? The the increases have been much more substantial among men. Some of that is because something

else has gone on with respect to UH women. We've had a change over the last fifty years in the attitude towards women UH working. But I think there is an increasing body of evidence some of it has to do with the replacement of physical labor, that these trends have disproportionately hurt UH men and hurt the economic prospects of men. And your third selection goes overseas to China.

Kishore Madubani, a longtime Singaporean diplomat and international thinker, has been perhaps the most powerful voice over the last decade making the case that the big transformation in the world is the shift in the center of gravity of just about everything from the West to the east. And he makes this case in many ways and in different forums,

notably in this book as China one. But I have to say that when I looked at non democratic China running its society in a way where, despite early mistakes, UH, the death rate from COVID as a share of the population was in the range of being just one or two per cent of what ours has been. It does have to make you think about the capacity of different

systems to protect their people. And I think that people have to look very carefully at the differences between Asia and the West in terms of the success with which societies have dealt with COVID, and think very carefully about that. I'm not prepared to say what it means or what policy inferences follow uh from it, but it is a very stark kind of observation and one that I think will deserve over time a lot of reflection. Okay, Larry Summers, it's always a light to end the week with you.

That is our special contribute. Larry Summers, former Treasury Secretary of Harvard. Finally, one more thought. It was truly a year for the history books. Was some of that history already written and much more yet to come. But as we start to look forward, take a look at what we read this past year. According to both Amazon and the New York Public Library, it was not the books about the pandemic or about the economy, or about the

presidential election. No, it was the books about race that captured our attention this past year, books like The Vanishing Half and White Fragility, and Where the Crawdad Sing Not to mention not one but two books by the Obama's

speaking personally. The book I read this year that made the most difference to me was Elizabeth Wilkerson's The Warmth of other Sons, the story of the mass migration of the twentieth century of Black Americans from the South to the North, what they endured, and how their experiences have profound and lasting effects to this day. We have a lot to put behind us, a lot to repair in our health care system, to our economy, to the way

we govern ourselves. But if there's one thing that should have taught us is that we cannot really move forward until we fully understand our past, until we fully understand the extent to which we have fallen short of our goal to make sure that all of us have the means to pursue our hopes and our dreams, that all of us can truly exercise our right to life, liberty, and the pursuit of happiness. That does it for this episode of Wall Street Week. I'm David Weston. This is Bloomberg.

See you next week.