This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio.
This is Wall Street Week. I'm David Weston bringing you stories of capitalism. This week, opportunity and why it's getting harder to succeed on our own merits and the companionship of our pets, and how it's led to a multi billion dollar industry. We start with the story about prudence, about getting the balance just right in life, in business, and when it comes to managing money, knowing when to take risks, the right risks to take, and when to avoid risks altogether.
We obviously take credit risk and other risks, but people who operate in a community tend to know the good players and the bad players.
That's Bill Dempschak, who, as CEO of PANC manages risk for a living. P and C is one of the so called regional banks that are at the core of the US banking system. They're not as big as money center banks like JP Morgan, Bank of America, and Wells Fargo, which have assets of just under ten trillion dollars combined, but they can be much larger than the community banks catering to individuals and local businesses, which are less than
ten billion dollars in assets each. PNC, for example, is one of the largest regional banks with assets of over five hundred billion dollars. For a critical segment of American business, Regional banks get the balance just right. They lend to businesses like Perimunt Company, a privately held firm based in P andc's hometown of Pittsburgh. The company has grown to become one of the top five producers of titanium in the world and it's been banking with P and C since the very beginning.
Where what you would call a medium fish or not a big fish, but our track record is unmatchable in our in the metals industry, and we like our position where we're at, you know, very we are very loyal.
Our first meeting with PNC occurred in my parents' basement when we were just starting our company, and you know, it was over a couple of fold out tables where the bank came in and we pitched our plan to them on what we were going to do, and along with our business plan, along with our ideas, our vision or strategy. They said to my father, yes, Jim, we'll back you. And the relationship started there and it's done nothing but grow immensely over the years.
Knowing its customers well over long periods of time helps the bank assess the risks it takes, but it can also make original Bank a true partner for local companies when they face turning points in their businesses, as Perman did when it moved to expand its world class titanium business into melting operations and faced a challenge that might have taken it outside of Pittsburgh.
In two thousand and five, we were at the point we needed to expand significantly in our capabilities. We needed more facilities and more land, which we were at the point of growing out of space in some of our campuses in this region. Well, we were having a very hard time getting additional land for this expansion, and we started looking at the State of Virginia. Well, in the eleventh hour, I came to my executives here at PNC and said, Hey, this is what's happening. We can't get
what we need in the region. Well, they immediately got in touch with the governor who started moving the roadblocks that were in place, and lo and behold that allowed us to grow further in this region, not leave the city not leave Pennsylvania, and PNC was a key.
Part of that bill.
Dempjack Ce's support for companies like perimunt as the core of his business, a basic banking business, serving customers and providing credit for key parts of the economy, knowing when and how to take risk and avoiding growth for growth's sake.
Maybe it's part of our Pittsburgh roots. But what I've come to understand and all the years I've worked, is banking really is three yards in a cloud of dust. There isn't a magic answer. There isn't something that's going to cause you to you know, as we've seen double and triple in size safely. It's hard work, it's sticking to what you know. It's being relevant to clients.
In the spring of twenty twenty three, regional banks were put in the spotlight, but the failure of Silicon Valley, Signature and First Republic banks, with questions raised about whether they were inherently more risky.
What hit the news was than this notion of you know, regional banks as a group are in trouble, and the g sifies the giant money center banks are safe in you know, you saw a market share move to the larger banks during that period of time. Some of that was fair in the sense that people said, look, if I put my money at a JP Morgan, government will never let them fail, my money will be safe. And that's unfortunate because the descriptor of smaller necessarily being more
risky is just fundamentally wrong. But I understood the mentality.
Former Federal Reserve Governor Dan Trulo agrees that it was a mistake to lump in a bank like PNC with smaller versions of regional banks, and Tarula worries that the smaller regionals may get caught in a squeeze.
So I think here's the dilemma, David. On the one hand, the regional banks that I'm talking about, a group between seventy and eighty billion and two hundred and twenty billion, are in a business model squeeze. They cannot compete with the pncs and USBs of the world, much less less with Chase Manhattan and Bank of America. They just don't have the scale to do it. Scale is becoming increasingly important as digitization, tech and eventually artificial intelligence become important
parts of the banking business model. On the other hand, what's left of genuine relationship banking, that is banking in which subjective judgments about a potential borrower's position and ability to repay are of significant importance, where it hasn't mostly been reduced to numbers. That's where the community banks, fourteen eighteen, twenty twenty two billion dollar banks, that's where they have
an advantage. And I think it's that group in the middle, which has neither the scale nor the capacity to be true local relationship lenders that are facing the squeeze. And I don't think it's a coincidence that those are the banks on which people feared runs a year and a half ago.
And Bill Demchek agrees that regional banks like his have a vital role to play, but he's not sure that regulators have figured out what it is.
One of the things I've asked all of the regulatory groups what their vision of banking is, and more often than they'll not they'll say, that's not my problem. Our problem is to keep banks safe. And if you point out to them the change in the banking landscape where you know a JP Morgan or a Bank America have organically grown a PNC every three years, you know they're I don't know what is it six seven times our
size even though we are as an institution. If we just do what we're doing today, I think you'll have three or four banks that'll consolidate the whole country. With the exception of true community banks, which I think everybody up and down agrees as do I, serve a really important purpose in our country.
Whatever the role of regional banks ultimately proves to be. Bankers like Bill Dempcheck doubt that the current approach to bank regulation accomplishes what it's meant to.
In the end. If and I don't think we need this, but if they said, you know what, the banking system just needs more capital because we'll sleep better at night, I'd rather have them just say hold more capital, but then get out of my hair so that they don't tell me how I'm supposed to allocate it. We know
how to allocate it. That's our business. You know. All of the rules they hit you with ultimately cause all the banks to kind of look the same based on whatever the FED models say, which aren't always the right models. It's a problem. I think we're long past a world where bankers are high flyers and are trying to bet on red I think that ended definitively in the financial crisis.
I worry more about by putting everybody under the same microscope with the same models, we're replicating the same problems across the entirety of the system. You know, if the FED says in a stress test that this type of loan is bad, then nobody will do it because regulatory capital is too high. FED says this type of loan is good. What if it isn't everybody does it because the FED said so.
If regulators are looking for systemic risk to address, Bill Demscheck suggests they look at the movement of assets outside the regulated banking system to the non bank banks, in part because of their growing codependency with other financial institutions.
The shift of assets outside of the banking system, leverage lending and mortgage, we miss opportunities. Leverage lending is in our core target. You know, our clients are right there in Pittsburgh or Cleveland or Texas, and they're real companies and they're not necessarily catered to private equity or other buyout funds. But down the road it matters. I think mortgage matters a lot.
Increasingly we see the non banks doing business with the banks. They're banking with the banks. Is there a potential risk in that basically that it could what has been thought to be a non systemic risk could actually get into the system particular, we're not able to see what's going on.
Yeah, it's it's a really good question. You will probably remember, having seen recent comments and f SOOC notes if you read that stuff where the regulators are starting to say, wait, where's the interconnectedness here? And you know, all of the shadow banking system, you know, if it's still called that, from the retail lenders through to the leverage finance lenders, through to hedge funds. They exist because banks provide liquidity to them, so we empower You think about what's happened
to the mortgage business. I think seventy five percent of it it's left banking and gone to not terribly well capitalized or funded institutions, and then banking provided them with liquidity lines for their warehouse. Things get bad, all those liquidity lines go away and they're left hanging. So it's the right conversation to have. And if you look specifically at that outcome, is that a good outcome? I moved it out of the banks. The banks still finance it all.
I don't have line of sight into it anymore. But you know, I feel great about the banks. I just don't necessarily feel great about everything that now is non bank that I pushed out of the system, and we're gonna we'll have a day of reckoning with that at some.
Point, whether you talk with a former regulator like Dan Trulum or a banker like PNC's Bill Demchek. The future of regional banks looks like it will lie with further consolidation, something that raises its own issues with integration and of course pricing, but that could make the system stronger if done right.
I think mergers consolidation has to be a big part of the future of banking. One of the challenges everybody faces in this world of increasing technology spend in cyber and what clients expect in terms of the product delivery makes it hard for two medium size banks to get together and be anything other than larger, but not necessarily
be any any better. You know, it gives them perhaps an expense platform where over multiple years they now have more to invest, but they are at a structural disadvantage.
But whatever further mergers or acquisitions may lie in PNC's future. It's CEO and at least one of its longtime clients. I believe this regional bank will retain deep roots in Pittsburgh. Next, the billions of dollars we spend to keep our pets healthy. Here on Wall Street Week.
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This is a story about companionship, the kind that eighty seven million households enjoying in the United States. It's the kind that can come only from pets, and Americans are willing to pay a good deal of money to make sure they can have it for as long as possible.
Look at some of the incredible studies on this.
Eighty six percent of pet owners would spend whatever it takes to take care of their animal fit was sick. And we said, okay, what if there was a twenty percent reduction in your take home income, would you change what you spend for your pet when it's sick?
And they wouldn't change it at dime.
It's a member of your family, and I think that really does change what you're willing to spend as well as the conditions that you're really going to pay attention to.
That's Kristin Peck, CEO zoetis the largest animal healthcare company in the world, and she knows whereof she speaks. Last year, Americans spent thirty eight billion dollars to keep their pets healthy, up from fourteen billion dollars a decade ago, a jump of one hundred and seventy percent. That's more than people spent on gym memberships, and twice what they spent on
takeout pizza or going to the movies. There's also a big business in the health and welfare of livestock, but it's the pets side of things that's showing the most growth. Pfizer spun off to at US eleven years ago. It's gone from focusing mainly on livestock to dedicating the lion's share of resources to our pets.
It's evolved dramatically since our IPO about eleven years ago. Back then we were sixty five percent livestock, thirty five percent pet care. We've really invested aggressively in science based innovation and.
Now it's actually flopped completely.
We're now about sixty five percent in pet care and thirty five percent in livestock.
The overall animal healthcare business grows between four and six percent a year, but since it's IPO, Zoetis has averaged a compound annual growth rate of eight percent, something Kristen Peck attributes to investment in research and development to create new treatments.
That difference is really the science based innovation that we bring, bringing new treatments to new unmet medical needs. And as I look to the future, there's no reason that should stop. There are significant unmet medical needs across both companion and livestock. Major diseases such as chronic kidney disease and renal disease that right now has no treatment for cats and dogs.
And beating the market as you have done. How much of that is organic? I would say internally generated as opposed to acquisitions.
So almost all of it for us has been organic.
We look very closely to what are the customer needs across the globe and meeting those needs. We have a very large R and D organization, and we spent five billion dollars in R and D. For example, since we iPod and our R and D expense grows double digits. We're really excited to discover the future of what animals need.
Discovering that future and creating it could be the core of Zoetta's success story, and it's the purview of Rob Bohlzer, the man who oversees the firm's R and D efforts from its headquarters in Michigan.
R and D within Zoetis represents about fifteen hundred colleagues across the globe. Nearly a thousand of those colleagues work here in Kalamazoo and in the Richland Farm area, and it's really at the core of the innovation for the company. So we really pride ourselves as a company to develop innovative medicines that are based in science, and you know, the R and D function is really key to bring those new innovations, you know, forward to marketed products for the company.
Like other drug makers, Zoettas has made a business of taking big risks and hope of earning big rewards. Take for example, Zoeta's treatment for hermatitis in dogs historically treated with steroids mantil. Zoetis made a substantial investment in a new way to address the problem.
At its core, R and D did a lot of the basic biology to understand, well, what is causing itch within dogs? Can we intervene safely? And the answer was yes.
So through that research we identified that the jack pathways, it's a janis kindase, it's a group of enzymes were responsible for sending out chemical messagers in the body of the dog that made them mitche And through the work with our chemists, we designed a molecule that blocked that that communication, that messaging pathway, and you know, ensured that we had the right product profile because we wanted to be able to treat seasonal allergies as well as chronic
itch in dogs. And you know, through that process spent about seven eight years developing that product, getting it to the regulatory thought news, and eventually getting on the market. And now after eleven years and twenty eight million dogs treat it, I think we have a lot of happy customers and less toy dogs out there.
All that is good news for twenty eight million dogs, but also for Zoweta's bottom line after it took the risk and invested in Rob Pohlzer's research team to develop a new product based on an assessment of the likelihood of success and the possible payoff. As a CEO, perhaps your most important job is allocational capital. How do you decide how much capital to allocate toward.
R and D.
It's a robust process.
I get this question a lot from investors, like what's the right amount and how do you know?
And as we've talked.
About, we spend a lot over five hundred million dollars a year in R and D and we've been growing that number double digits, and that's because we've had an incredibly successful R and D engine and we have a rigorous process where every project gets prioritized, it has a expected return on investment, and that's based on the probability that technically that program will be successful, and that there's
a regulatory pathway to make it successful. And we prioritize all those and then we come up with an answer. But we don't stop there because there may be some big bets you want to make that you know you're not really sure what that value is going to be. I'll look at, for example, dermatology. Back when we launched the product in twenty fourteen, that's where like you know, steroids, they're fine, they should be fined.
It was one hundred million dollar market. How valuable is that going to be? Maybe it's one hundred million dollars.
So sometimes you've got to make bets because you really believed, even if the market doesn't see it today, that you think that's going to be big.
That was the right bet. One hundred million dollar market in twenty.
Fourteen is now one point five billion dollar market, of which were more than one point two billion dollars of that.
Zoetis and others weighing the costs and benefits of research bets, now have a new partner in the form of artificial intelligence, something that experts like doctor Casey Kaser of Cornell say is one of the most significant additions to the field.
I think there are several new so exciting developments in terms of drugs and treatments available for pets and veterinary medicine in general, and a lot of those are actually using artificial intelligence to help develop them or create them.
For example, there are a lot of new efforts to create diagnostic tests using artificial intelligence that can do things like talith a dog or cat has kidney disease earlier than we currently can, or look at radiographs or X rays and help us diagnose things like hip displaysia in dogs,
which is a degenerative and genetic condition. Other people are using generative AI, which is like chat GPT, So the Cornell University Feline Health Center has created a cat GPT which provides cat owners with helpful information online about their cat's health, so that people have a reliable resource to go to rather than just Google.
As much as we anticipate that artificial intelligence is going to help us around the corner in diagnosing humans, Chris pet says that in animal healthcare it's already being used extensively and with immediate results.
People talk about the future being AI.
The future is here in AI in animal health, and we have multiple applications that we're currently using at the vet and with the pet owner. So the images platform, for example, is really fascinating in that we partnered with a company called tech Site. They had this technology where they believed firmly that they could take a really good picture and then you could use AI to compare it. But we had all the data, right, we have all
the samples where we could train. We could train the AI with blood samples or with fecal samples to help it learn faster. And so it was really the partnership of a sort of AI company with the biology, the chemistry, the science that Zoett has had. And now we have six indications on this one platform. But we're looking at
other applications of AI and using them today. So one of the things we hear from our customers is that it's so hard to get your cat in a carrier and get it to the vet and you don't know that there's a treatment or know your cat has it.
Is it worth it?
Well, you can now upload a video of your cat walking around your house, going up the stairs, and you can upload it to cat pain Iq and we can tell you the likelihood that cat has osteothritis and whether it would be worth it to bring your cat in.
So what's next for animal healthcare? Cornell's doctor Kaser says she's focused on trying to fix a problem that we created ourselves, resistance to antibiotics.
I'm looking at that in both animals and human species. So I'm particularly excited about how we're paying more attention to how antibiotics are used in our pets and our dogs and cats. So I think historically a lot of us have focused on resistant bacteria and people and also in live stock, and we've kind of ignored the animals that are sleeping in our beds, living in our houses, and licking in our faces.
Back at Zoetas, Rob Polzer is turning his research team to focus on cancer and on kidney diseases.
So on a therapeutic area perspective, you know a lot of advances in oncology, so not surprising, I think to many of your viewers, Ammino oncology has really advanced on the human health side to treat cancer. Certainly, that's a space we're interested in. On the animal health side. In canine renal disease is another, you know, critical disease in both dogs and cats. And what we see is that you know, for older cats, you know, typically by the age of thirteen, about eighty percent of cats will have
some form of renal disease. Older dogs have you know, about ten percent of that population face renal disease, and there's no good therapy out there. Most of the approaches today are to try to go and manage the clinical symptoms that are occurring from renal disease, but actually not slowing the progression.
Of the disease.
Poles are and others see a bright future for animal health care. And underlying it all the research and the investment in the large and growing market is the emotional attachment so many of us have to animals in our lives. That drives the business.
I think it's true.
I mean, you know, one of the examples I give is what you're willing to spend on your animal when it's in your backyard versus when it enters your house versus when it sleeps on your bed is just different. And I think you know, maybe twenty thirty years ago, a lot of the animals spent most of their day outside.
They entered your house.
Now that's interacting with your family, and you want to make sure that you're protecting against diseases.
It goes regularly.
Well, now that it's on your bed, you're worried about it's emotional well being. You're paying attention to different things, and the animals are living longer.
And maybe that's why leaders in the industry like zoea Is Kristin Peck have a lifelong attachment of their own to animals.
I love our purpose as a company. I grew up with animals.
My whole life.
My family raised horses and we had four dogs and cats and birds.
My first job actually.
Was for a company called American Equine Products when I was in high school, which is, believe it or not, a legacy Zoetas company and the small world. So I don't know that I thought when I was little and I loved animals, that that would be my career. But what I saw our purpose, which is to nurture the world in humankind by advancing care for animals. I was a business person with a finance background in private equity and consulting.
It really spoke to me.
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This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio.
This is a story about opportunity, the opportunity to succeed in life on your own merits, to do better than your parents by working hard and playing by the rules, something in the United States, the so called land of opportunity, has long embraced, and something that education was supposed to help provide.
You are investing in helping people better their lives when you.
Invest in people's education.
And in turn, that means that they are bettering the lives of the people around them.
Heather Coleman works at Amazon, and she's living the story of upward mobility, thanks in marge part to her employer's career choice program that made it possible for her to complete an associate's degree and earn a BS while working full time and raising three children. But the United States might be less of a land of opportunity than it
used to be. In his book Ours Was a Shining Future, David Lionhardt reports that the likelihood of Americans would make more than their parents went from ninety percent for those born in nineteen forty to eighty percent for the boomers born between nineteen forty six and nineteen sixty four, to just sixty percent for Gen xers. And all the way down to fifty percent for the millennials born between nineteen
eighty and nineteen ninety six. Dan Porterfield helped run Georgetown University, was president of Franklin and Marshall, and now runs the Aspen Institute. He says there are obstacles to opportunity, but changes in higher education are a big fact.
The role of higher education in enabling economic mobility has been threatened over the years. One reason why is because of the rising cost of tuition. Another reason has been that the middle class has found some parts of higher education to be unaffordable. And then finally, one of the issues is that lower income people have not always had confidence that college is there for them, and so really talented students have not been applying as much as they might in earlier years have done.
When lower income students do decide to apply to college and the system they confront does not always welcome them. One man trying to change that Michael Crowe, president of Arizona State University.
So the model for the New American University is built around this premise of can we build a new kind of institution which is simultaneously very very accessible, egalitarian, That is families from every socioeconomic background can come into a modern, high intensity, discovery oriented, creativity oriented university. Those things don't have to be separated. So right now, we have universities that have gone off and become very much measured by
who they exclude and the quality of their research. And there's other universities that have become very much measured by just being the most efficient machine that they can be
in terms of producing students. And so in our case, we're trying to which we have make the point, prove the point, and demonstrate the model that you can build an institution deeply connected to the fullest spectrum of the population possible to move them forward from an educational perspective, while at the same time creating for them an educational opportunity and a learning experience equal to that which any other university can put together.
There was a time when the United States led the world in education innovation with the creation of public land grant colleges in the nineteenth century, by making public high school mandatory in the nineteen twenties, and then passing the gi Bill to allow soldiers coming back from World War Two to get a college degree. But Michael Crowe says that over the decades, the US became too complacent.
We began to become self satisfied with our model as the country continued to grow and the world continued to complexify, and so we didn't build for scale, and we didn't build for complexity in the way that we should have, and so we stopped innovating at the rate that we should have kept innovating. What's happened is that more than half the students that go to a university in the United States never graduate. So that's unparalleled among the industrial countries.
Number one. Number two. It turns out that you've got universities that have become so selective where everybody graduates from those places. Because the students are hand picked, they also get a huge amount of the resources. And then you've got other universities in which most people don't graduate. And so then you create this expectation frustration. I sent my kid to college, they encounter debt, they took on debt, and they didn't graduate. So the debt crisis is, in
my view, not a debt crisis. The debt crisis is a graduation crisis. The debt crisis is a performance crisis.
If students are frustrated about the prospects of making it all the way through college to get a degree. They have good reason. Although the percentage of Americans receiving bachelor's degrees has steadily risen since nineteen sixty, less than two thirds of those starting out managed to get a bachelor's degree within six years, with the numbers for private, for profit schools much worse than public or private nonprofit universities.
To improve the odds, Arizona State has built an educational gateway for students across income ranges that's very different from what most schools provide.
So a few years ago, we had an engineering school of about six thousand students. We weren't doing very well in freshman retention. We were in the old weed out mode of thinking about engineering. We decided to change everything. We graduated about nine hundred engineers a year. This was
about thirteen years ago. We decided to change everything, change culture, change design, change intellectual structure, use technology, move in new directions, and then we began measuring learning outcomes, finding new ways to teach math, new ways to teach each calculus, new ways to teach biology, new ways to teach chemistry. Graduates last year, we graduated seventy two hundred graduates in an engineering school. That's not six thousand students, but thirty two
thousand students. Its level of research activity has accelerated, its level of excellence has accelerated, and the market value of the students coming from the school are greatly altered. And so the measurement is measurement of everything, learning outcomes by student learning outcomes within certain courses. Graduation success is changing everything. So in fact, it is the measurement of everything that is a critical tool in driving one to innovative success.
Here, if graduation success is the ultimate goal, exclusivity in admissions is not necessarily the best way to get there. Izona State has greatly expanded the size of its student body and in the process the path for those coming from lower income households.
The notion of success through exclusion success by who you don't admit, the measurement of success by how many people you turn away. That's not a theme for a public university to be maximally impactful. So what we've done is we found a way to say, you know, if you work hard, if you study hard, if you get prepared, if you're willing to do some things. If you work with our tools, we'll find a way for you to be successful at the university, and we're not going to
turn you away. And it turns out, by the way, that smallness is also a narrowness in thinking, a lower probabilistic set of potential creative outcomes. And so we think that you can have small colleges and small programs. Certainly, but smallness doesn't really mean anything in a country of three hundred and forty five million people.
Smallness is not a problem at ASU. By some counts, it's the largest university in the United States, and since two thousand, it's enrollment has nearly tripled. Much of that growth has come from students outside the campus walls, and the Aspen Institute's Dan Porterfield says that's not a bad thing.
Online education can be a component of learning of all types, from you know, early education through adult learning, and in fact that in the workplaces of today and tomorrow, more and more people are going to lead their own learning through online platforms. I think AI might make online learning more personalized. So I don't fear it, I welcome.
It, certainly. Heather Cooleman, you took advantage of the online opportunities at Southern New Hampshire University when she pursued her two degrees while working at Amazon.
Being able to.
Go to school online and not have set times for my classes where I didn't have to be here at two o'clock. Instead I just had deadlines was much more beneficial for me.
Well, I mean, if you think about it, and you think about your life between you know, let's say teenager to your eighties, nineties, or hundreds or however many years people are going to live in the future, you're going to need access to advanced learning in one way or another across the entirety of your life, and it being delivered to you wherever you are, whenever you need it,
however you need it. What's going to happen with online education as it is improved and enhanced and run by real faculty, like our faculty run all of our online programs, design all of our online programs. As the quality goes up, it's going to become a mainstay. It's going to be you know, you're not just going to watch television when you go home. You're going to be involved in these learning activities. You're going to do this, You're going to
be involved in immersive experiences that are digital. We, for instance, now have nine thousand biology majors at ASU, half online, half on campus. And what we're finding is that the learning outcomes of all these biology majors are about the same, which is a tremendous outcome.
To make sure that those who start out with less can move up the socioeconomic ladder, places like Arizona State are delivering and are keeping track of just how well they're doing.
And so what we found is that the ROI for our degrees range between seven percent per year and twenty three percent per year depending on the degree, all of which are substantial returns. The average ROI for US is fourteen percent ROI per year after you at your degree. That's a substantial return on your investment just looking at it from a simple business investment perspective. We also know that life outcomes are significantly positive. Health outcomes, education of
your children, happiness indicators. We've looked at all of those things, so we measure all those things. Now, the system's far from perfect. I think almost four hundred thousand people have graduated from ASU since I've been the president, and I can't say that all four hundred thousand people are living
in nirvana. But what I can say is that we have created a mechanism by which people from every family background have access, if they want it, to pathway for which they will get substantial return on their time and treasure.