June 12, 2021 • 31 mins
Heather Boushey, a member of President Biden's Council of Economic Advisers, joined to discuss the jobs report and the why payrolls keep falling short of expectations. Ali Wolf, the chief economist at Zonda, a housing data and research firm, came on to talk about whether the housing market fever is finally showing signs of breaking. Nick Carter, the founding partner of Castle Island Ventures, reacted to El Salvador becoming the first country to adopt Bitcoin as legal tender. Then Sen. Elizabeth Warren, Democratic of Massachusetts, joined after the Senate Banking Committee's hearing on digital currencies and blockchain to discuss why she thinks crypto is a "wild west" that needs regulation and consumer protections.
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Episode Transcript
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Speaker 1 (00:08):
Welcome to What You Missed This Week? I'm Joe Wisenthal.
This podcast has some of our favorite interviews from the
Daily Market Clothes Show that I co anchor along with
Romaine Bostick and Caroline Hyde. What Do You miss It's
the perfect way to kick off your weekend. We went
into last weekend with another major job's day. US job
growth picked up last month, along with worker pay payrolls
(00:30):
increasing by five fifty nine thousand in May, coming in
below economist estimates yet again. A solid labor market recovery
is clearly continuing, but the headline numbers continued to fall
short of expectations. So we got some reaction from the
White House about how they were thinking about the labor
market data and if it would impact their agenda. Heather Boucher,
(00:50):
a member of President Biden's Council of Economic Advisors who
formerly served as the president and CEO of the Washington
Center for Equitable Growth, joined us. We started by asking
her what the number one reason is for the gap
between a little lot of people thought the labor market
recovery was going to look like? First, is what is
looking like right now? Well, here's the thing, Joe, I
(01:11):
mean the numbers that we saw coming out today, I
mean that we are on an upward trend. Right. We've
seen over five jobs created each month for the past
four months. That's way better than the last three months
of when we saw jobs created about sixty a month. So,
you know, this is certainly an indication of a labor
market that's moving in the right direction, especially when combined
(01:33):
with the drop and the unemployment rate to five and
certainly in line with what many folks were expecting. But
you know, I think, given you know, the need to
recover from COVID getting shots and arms and all the things,
we always knew this would be a bit of a
bumpy ride. But this seems right in line with, you know,
a strong economic recovery. It does appear to be a
strong economic recovery. And yes, there is some asymmetry out there, Heather,
(01:56):
there's also a lot of questions here right now about
some of the policy prescriptions coming out of the White House,
whether more stimulus is needed, whether there should be some
pullback and existing programs here. How do you respond to
the general idea here that if we do add more
stimulus to the fire so to speak, here, that it
could potentially create a situation where we maybe overheat the economy. Well,
(02:19):
I think at this point, you know, the American Rescue
Plan is it's out. You know, we've been sending checks
out to families. The child tax credit benefits will start
going out in July. And certainly all of the work
that the administration has done to get money out there
to make sure that those vaccines are being distributed, and
the work that we're doing to to make sure that
child care centers can stay running and get up and running,
(02:41):
and schools can reopen, all of that is certainly helping.
I think moving forward, we need to make sure that
the kinds of fragilities that we saw across our economy
and across our society that were there long before COVID,
that we started addressing some of those fundamental issues. But
in terms of this recovery for the next few months, um,
you know, we've got a lot of support going out
through the economy and I think that that's gonna do
(03:03):
a lot of good. So walking it forward, though you
have the job's plan, you have the family plan, how
does that wind up creating jobs? When we saw the
labor force participation rate fault, So now you have to
create more jobs and then get those people back in
the workforce. How do those plans do that? Well, here's
the thing. One of the things that became so crystal
clear to all of us in the United States over
(03:25):
the past year and a half was that if you
don't have access to care, people can't get to work.
Millions of workers are struggling with kids not in school
and lack of childcare options. And so that's one of
the core features of the American Families Plan is let's
make sure that families have what they need so they
can be successful and so that parents can fully engage
in the labor force. And the Jobs Plan is going
to make these historic investments in infrastructure all across the country, um,
(03:49):
you know, making sure that we're shoring up the basic
foundations that in too many communities are just crumbling. So
those are both going to create jobs, are going to
improve labor supply, and they're gonna help sustain a long
um along economic recovery that's going to see the kind
of growth that's going to be um you know, drive
American innovation and investment over the long haul. So there's
sort of two pieces of the puzzle there seems to
(04:12):
be some debate still, obviously about whether the expanded unemployment
insurance is contributing to culty of them um employers hiring workers.
Why not lean into it and say, yes, we've set
this new baseline for what you can make when you're
not able to find a job. This is creating wage
increases we saw today, This is a good model going
forward to start boosting wages at the bottom end and
(04:35):
permanently give workers more bargaining power. Well, you know, those
are such important issues. We do need to make sure
that workers have more bargaining power, and we do need
to make sure that we're unemployed for not fault of
your own, that those benefits are available and if they
are consistent with you know what the you know, making
sure that families have what they need during those times
of unemployment. So these additional benefits were so critical because
(04:58):
so many folks couldn't have access to work. You know,
there's over seven million jobs still missing from our economy.
So these benefits remain important. And of course, you know,
the President has made clear that you know, thinking about
a fixing of the unemployment entrance a system for the
long haul is a part of the plans that he
laid out, you know, in the last couple of months.
But you know, I want to be really clear that
(05:20):
you know, we are really down a lot of jobs still,
and so getting people back to work. Um, you know,
we've always known it's going to be a little bit bumpy,
but we're moving in the right direction. Okay, we're moving
in the right direction. Let's talk about the labor force
participation rate, which a lot of people are pointing to
and saying it still remains stagnant. It's still sort of
hearkens back to some of the issues we dealt with
coming out of the last financial crisis, the global financial crisis,
(05:43):
and some of the challenges that then Obama administration had
and trying to really not only generate job growth, more
importantly generate economic growth. Well, we are seeing economic growth
being generated, so that's that's a plus. But you know,
one of the things I'll say is that when you
look at the trajectory of job gains, this is much
sharper um than the recovery from the Great Recession. So
(06:03):
we're already on a much faster path and that's excellent.
We need to make sure those supports for families are
there so they can get to work and stay employed.
And again that's a key part of what the Rescue
Plan is doing, and that's those are key goals of
the Family's Plan and the Jobs Plan moving forward to
make sure that for the next time, all of those
supports are there. For the Jobs Plan, Um, how do
(06:24):
what does it do to help sustain the growth and
wages that we saw this month. Well, there's a few
things in the Jobs Plan that do that. I mean, first,
the Job's Plan includes what's called the Proact, which would
help make it easier for workers to organize and collectively
bargain so unions. That's one thing that's in there. But
there's a lot of really critical investments, investments in infrastructure
(06:48):
all across our economy. Those investments are gonna create jobs
over the next few years for workers in those sectors,
and they're going to create the foundation of economic activity
in community ease all across the country, those communities that
need those bridges that are falling down, those communities that
need broadband. This is the core of economic vitality is
that infrastructure. And then don't forget core parts of the
(07:11):
Job's Plan are about making sure that our economy is
prepared to be competitive for the decades to come. So
helping the transition to electric vehicles that's gonna boast, sustain jobs,
and create jobs. These are core pieces of our economic
future that we need to be investing in. Have there
one area that surprisingly some jobs that climate is actually
in construction? I think, and you know, it's interesting. We
(07:34):
hear a lot about these bottlenecks in the economy and
shortages of lumber and shortages of windows and areas, and
it stands to reason perhaps that perhaps some employers may
not be hiring simply because look, if they can't get
lumber or windows, then why get workers on the job? Set?
Job site are the things the White House is doing
or thinking about to ease those aspects of the economy
(07:54):
so that employer, you know, potential employers have reasons to
bring people back on the job. Certainly, you know, supply
chains is something that the President has been concerned about,
you know, for for many years now, and certainly was
something you talked about a lot on the campaign. We
saw this during COVID. We didn't have enough protective gear
because we hadn't paid enough attention to our supply chains.
And now we're seeing it at the other end. So
(08:17):
this has been an ongoing challenge. You know. The President
has set out you know, examining American supply chains, looking
at this as a as a longer term issue, and
it is also committed to, you know, thinking about what
is it that we need to do right now. Um,
you know, many of these are likely to work themselves out,
you know, in the near term, because again it's we're
trying to turn in e comedy back on after a
pandemic and getting everything running at the same pace as
(08:39):
a little bit challenging. It's going to take us a
few months, you know, to get things all moving at
the same level. But certainly the President is committed to
looking at that and has made that clear now. This week,
the housing market fever is finally showing signs of breaking
mortgage applications following three percent last week. A home bolder
stocks took a hit Wednesday because RBC Capital Market Worm
(09:00):
that rising home prices could temper the housing demand and
potentially pressure buildings. So we spoke about it all with
Ellie Wolf, the chief economist at Zonda Housing Data and
Research firm, who tracks the housing market at a very
granular level and we started by asking her if she's
seeing signs that this red hot housing market is starting
to pull down just a little bit. Yeah, so good
(09:21):
to talk to you guys again. And I think the
way that you should look at the housing market right
now is that it went from a hundred and fifty
miles per hour two. Okay, so it is softer than
the past couple of times that we have spoken, but
it's still a very very housing market. So with regards though, okay,
it's a very strong housing market. A lot of folks
(09:43):
in this room, uh can attest to that. No names here,
but I am curious Ali when we talk about whether
builders are sort of rising to meet demand or whether
there's still one sort of these elongated schedules where they
just build a couple of houses, sell them, and wait
till they get the materials for the next couple and
build them. That's still kind of the playbook for a
lot of these companies for the next foreseeable future. Yeah,
(10:05):
So the answer to that remain is really both. So
we do have builders that have bought a lot of
land that over the next day six to thirty six months,
those homes are going to come to the market and
that's going to be them rising up to meet the
demand that you're talking about. But we do still have
the longer build cycles. We still have the issues that
(10:25):
we've talked about over and over again from the supply chain,
to the labor side, to the government side that's holding
it back, holding overall building back. But an interesting shift
that we're seeing is that the building costs have not
come down. There's still just a huge pain point for
the builders to the point that we're seeing a strategy
shift now. So we have from again Zanda's Division President survey,
(10:49):
we have these leaders of home builders across the country,
thirty of them that are saying they're shifting their strategy
to build more specs because at least if you're building aspects,
you have a better handle on your costs before you
go to market. What about prefab, like, have those also
companies that they manage. Has anyone played it well? Has
anyone managed to hedge appropriately or managed to look in
(11:13):
prices that perhaps you haven't thought about. Yeah, So the
prefab market is a really fun one to watch because
in theory, it's this great idea, you're efficient, you're able
to use the products really well, you don't you can
use recycled products, you can do it at all different
times of a year, and that's a problem in some
parts of the country when you have to slow down
(11:34):
building as it gets colder or weather. What has panned out,
at least to date, is that there are some companies
that do prefab well, but they're running into skilled labor
problems and they don't have factories to be able to
build the homes quick enough anyways. So some solutions, but
I think the interesting thing, at least from my research
on prefab is they may be a little bit more efficient,
(11:56):
but these homes are not necessarily going to be cheaper
because there are other costs when you go to build
homes inside as well. So another point that you make
which I hadn't heard many people discussed before, but in
your research, just to share that cities are being text
the people who give a permit to say okay, you're
allowed to build homes on some new plot of land.
(12:17):
There's only so much paperwork that they can process in
the span of a day or a month or a quarter,
and even that is emerging as one of the main
bottlenecks in this area. That for sure is and I
know the National Association of Homebuilders has data on this
as well that shows that not only is it taking
longer for those cities to work through those permits, but
they're also becoming more expensive. So when we talk about
(12:39):
the construction costs of how everything is going up, we've
always talked about all the different things that you can
think of easily, but it's also that that supply the
issue that you're seeing on the government side as well.
So let's go back now to this idea alley of
sort of once we get past this, Let's assume we
get past some of these price pressures, whether it's the lumber,
whether it's the wages that they have to pay. If
(13:02):
we get pass this, do we return to some sort
of normal seasonal cycle in the housing market or are
there structural changes here that are going to stick with
us for years to come. So a couple of points
to hit on. The first is from a builder's point
of view, Let's say that their costs have calmed down,
they are unlikely to drop their current prices. They may
(13:23):
be smart with how they build homes in the future,
but if they drop a price of an actively selling
community and they still have people in backlog, meaning people
that are waiting for their home to be built. That
creates a vicious cycle. So we don't expect prices at
least for active communities to come down again. Future maybe.
But the interesting thing that I think we need to
(13:43):
watch is spring selling season. I'm sure you guys remember
before there was a spring selling season that people were
rushed to buy homes before school so that they could
get settled and they didn't have to move their kids
in the middle of a school year. That wasn't such
a big deal last year. In fact, we actually saw
home sale continue really strong through the end of the year.
I think that's going to make our comps really hard
(14:04):
this year if we go back to a normal seasonal pattern. Also, Alia,
I'm just trying to work out how much of the
theorizing is becoming a reality as to who's staying in
the suburbs, who isn't, who's coming back to the cities,
who isn't. Who's only now really getting guidance from certain
corporates coming out as to whether really they're sticking to
(14:25):
their yes, who can work from home or not as
the case may be. How are you seeing these decisions
actually impact the decision making process of those who are buying.
It's such an important question because we've talked before about
how the ability to work from home is one of
the reasons people have been willing to move further away.
Before the pandemic, suburbs were already popular. It was just
(14:48):
that eleven to thirty minutes from downtown versus the further outlocations.
When look at the work from home trends, we had
a client hire us to look into this, and we
went through each of their markets and we went through
all the top employers and we looked at what are
the top employers to what extent have they come out
and said what model they're gonna do? And it did seem,
(15:08):
at least from the markets we looked at, that the
hybrid model is more likely here to stay. But if
you still are going back three days a week when
you thought you weren't going back at all, I think
people will be a little bit more inclined to move
closer to downtown. Maybe don't need to be urban, but
you still want to be in those close in suburbs now.
This week, bitcoin games and more legitimacy. When l Salvador
(15:32):
became the first country to have formally adopt the cryptocurrency
as legal tender. The country and it's thirty nine year
old president are embarking on a big economic experiment with
the embrace of bitcoin, and naturally the news broke out
on Twitter. We got reaction from Nick Carter, the founding
partner of Castle Island Ventures. Nick hosted a historic Twitter
spaces and he started talking about bitcoin, the only thing
(15:54):
he talked about online really, Jack Dorris, he showed up
and then the President of El Salvador joined to break
the right as the Congress approved the proposal. We started
by asking Nick about the conversation he had with the
President of Elsalvinor and to explain the main benefits of
the new law. How will it help the country's economy
and its people. Well, it was a fascinating time because
(16:16):
the President President bou Keley, joined us on Twitter live
as this law was being voted in. We could actually
hear the clapping and the votes from the Parliamentary Chamber.
UH to discuss with bigcoinners on Twitter the merits of
the law. UH. The objective seems to be making using
bitcoin as an actual medium of payment medium of exchange
(16:40):
much more frictionless in the country. Eliminating all capital gains taxes,
which is you know, of course a big impediment to
actually using this thing as a currency. Uh, you know,
potentially in service of making you know, bitcoin based fer
mintances cheaper and less frictional, for instance. So that seems
to be sort of the main thrust of the law.
What don't we's appellate then, Uh, As far as what
(17:02):
the future holds beyond Al Salvador here, do you think
we'll see other I guess legitimate countries like Al Salvador
embraces in other larger countries well. And following the Salvadorian news,
a number of politicians in Latin America, many of them
younger on the millennial side, signaled their affinity for bitcoin
(17:23):
as well, um and made noises about potentially introducing similar ideas.
We'll see if any of that actually transpires. We know
that bitcoin cryptocurrency stable coins have very high penetration in
places like Columbia and Argentina. Uh. You know, Latin America
is certainly no stranger to sovereign defaults or periods of
(17:44):
high inflation and monetary repression, so we see high penetration there.
There's certainly a class of policymakers that see an opportunity
to gain favor by signaling their affinity. Uh and uh,
you know, we'll see what happens. But this is the first.
El Salvador is the first non prior state to really
legitimize and legalize bitcoin usage in sort of its intended way. So,
(18:09):
you know, it seems like a big sea change. Frankly,
a big sea change that only though meant that we
saw a seven percent rally. You're still seeing bitcoin and
of itself under pressure significantly off as highs that we
saw previously in the Arnick. Are you expecting the issue
from El Salvador going forward? Is also the ongoing volatility
(18:30):
within bitcoin as well? Is there any point we're expecting
that to just reduce a little bit so we see
it more regularly used as a currency, not just by
those that are suffering significant inflation or indeed seeing an
issue with a hard currency peg. It's hard to say
Bitcoin's volatility seemed to be money as as you know,
a natural consequence of the security of the system. Of course,
(18:53):
something like gold, which is you know, similarly kind of
a commodity fixed in issuance, doesn't evidence such signific volatility,
But Bitcoin is still early in its life and uh,
you know, very actually adopted globally and also in terms
of all Solvador, it's a very small country. Um. You know,
foreign exchange reserves in the single digit billions. Um. The
(19:15):
fund that the President bou Keley was talking about establishing
which would hold a position in bitcoin, uh, he's signaled
that would be in kind of the hundred and fifty
million dollar range, so smaller than many kind of crypto
hedge funds. So while this does represent sovereign adoption, it's
not sovereign adoption by the largest sovereigns just yet. So
(19:36):
we'll see. But inasmuch as using bigcoin as a medium
of payment or a bridge currency, you don't necessarily have
to have exposure to the asset for a long period
of time in order to sort of take advantage of
it's it's nice properties. Uh. Nick. The bitcoin community has
a history of like sort of getting excited about certain
people and then they break your heart. Uh. Elon Musk
(19:56):
is probably the most prominent one, and ever then he
sort of us to have doing the back. Are you
worried that the president won't have a commitment to bitcoin
per se? And next month it's like and now we've
asked the Ethereum Foundation to digitize health records and x
RP to modernize er banking system, and then it'll just
be like a bunch of crypto buzzwords in a few weeks. Well,
(20:16):
what was notable about this bill that was passed was
it specifically says bitcoin, and all of the messaging is
about the Lightning network and about these payment systems built
on top of bitcoin, and there's relatively little messaging around
cryptocurrency more generally. So the commitment in this case does
seem to be regarding Bitcoin. Of course, who knows what's
(20:37):
going to happen in the future, and in fact, there
is gonna be plenty of narratives out there around bitcoin
is consorting with, you know, someone that is perceived by
many of the West as an authoritarian dictator. But any
adoption of bitcoin of the sovereign level is interesting and noteworthy. Um,
we don't shy away from that. There has been adoption
of bitcoin by other sovereigns that you know, are considered
(20:59):
parized state, and nobody tries to hide that. So it's
certainly interesting to watch this play on real time. Then
we went from a bitcoin true believer to a crypto skeptic.
I spoke with Senator Elizabeth Warren, the senior Democratic Senator
from Massachusetts, right after the Senate Banking Committees hearing on
(21:19):
digital currencies in blockchain. Senator Warren started with the hearing
with some pretty harsh words for digital currencies, saying they
failed to deliver on the promises of a more inclusive
financial system, And I asked her if there are some
specific regulations she has in mind that in her view,
would bring crypto under control. So this was our first
(21:39):
herring on digital currencies, and we had a chance to
talk with experts, bring in a lot of senators around it.
But the bottom line was that what's happening right now
in cryptocurrency? Why bitcoin and doge coin? It's wild West
out there, and it makes it not a good way
(22:01):
to buy and sell things, and not a good investment
and an environmental disaster. So do we need some regulation
around this? You bet we do in your view? Whose
perview should this fall under? And when you say, okay,
we need more regulation, do you have something in mind
or like a sort of conceptual framework for how regulators
(22:22):
should should approach this burgeoning space, Because you say kind
of has a wild West vibe. Well, right now, I
think what we need to do is the next round
of hearings and investigations. Since uh, these cryptocurrencies have gone everywhere,
then that means we need to bring in the people
who have different responsibilities. So when we're talking about the
(22:43):
investor aspect that people are buying bitcoin for speculation, uh,
you know, if you were buying stock for speculation, to
be protected by rules against things like pump and dump,
but not when you're buying bitcoin for speculation. We need
to talk with the s you see about that. On
the other hand, when we're talking about the question about
(23:04):
bringing it into our monetary system and uh banks uh
either holding bitcoin, that becomes an issue that we need
to talk about with the bank regulators. So there are
a lot of different pieces to this uh. And I
think the answer that we saw today is that right
now our regulators and frankly, our Congress is an hour
(23:28):
late and a dollar short, and we need to catch
up with where these cryptocurrencies are going. Let's talk about
the idea of a digital US dollar, the idea that
someone could hold a digital dollar in an online wallet
or in a wallet on their phone, in some way.
Lots of talk about it's still kind of unclear to
me of if something like that were to be implemented,
(23:50):
what the goal would be. What do you think about
the idea of, say a central bank digital currency, and
how do you and what do you think the purpose
would be if the u s we're doing at some
point launch one. You know, that's one of the things
that came up in this hearing multiple times today. It's
that I understand how a digital currency would work. Instead
of the United States government printing dollar bills or minting coins,
(24:12):
it would, for example, pay a Social Security check by
just putting digital money in your wallet. But the question was,
what is the problem it's trying to solve, because, as
we all know, most of what happens today is digital
in the sense that my bank does not hold those
(24:36):
dollars physically, right, It has a it has a number
in a ledger, and when I transfer money to pay
on my credit card, they make a transfer that happens electronically,
So you really have to kind of think through this.
On the other hand, we had some really thoughtful experts
who were saying, you know, you may want to integrate
(24:58):
this into other systems. Uh, for payment for international payment,
and there are questions about whether or not the United
States maintains competitions, say with China that's looking deeply into
digital currency. Uh. Of course, the Chinese want to be
able to track all the purchases of all of their citizens,
something we're not looking to do in the United States.
(25:20):
But I think the answer there is it's it's on
the front edge. And here's what troubles me is that cryptocurrency,
the private version, has has swept the earth. Digital currency
is not really out of the starting gate yet. And
so so you've got this situation where we kind of
(25:41):
need to figure out is are we going to try
to give digital currency a little boost here, but we
really need to keep an eye on digital currency while
we're doing. Man, I want to ask you a question,
and I think it actually applies bok to cryptocurrencies and
the idea of a national digital currency. And I'm glad
you brought up China and the idea of okay, a
system to monitor everyone's transactions, because right now, if you
(26:03):
and I wanted to transact online, we would do it
through I don't know, PayPal or something like that, and
it would be an entity that could look at it.
Do you think private transactions should be preserved in some way?
This is a thing that people worry about with physical
cash disappearing, the idea of transaction privacy. Is this a
value that you have in that in some way we
should find a way to continue to allow that to
(26:26):
exist in the digital space. So I understand the idea
behind privacy, and I don't want the federal government tracking
how I spend my dollars. On the other hand, think
about the key feature of a cryptocurrency, and that is secrecy.
And it's pretty clear right now that that secrecy really
(26:47):
is helpful for drug dealers and for uh crypto warriors
who are hacking into systems around the world and demanding
ransom up because it's a secret way to make payment. Now,
the United States has dealt with this traditionally by saying
(27:09):
that what happens in checking accounts is secret until someone
goes before a judge and gets an order to be
able to look at a checking account. That means that
checking accounts are not in great ways to transfer money
between drug dealers, they are not great ways to collect ransom.
And this is one of the concerns about cryptocurrency there's
(27:32):
no equivalent to be able to say, Okay, you can
be private nearly all the time, but not so much
that you've created a haven for the criminals. And just
want to remind viewers and listeners were speaking with Democratic
Senator Elizabeth Warren of Massachusetts. UH, Senator Warren, you know,
another sort of theme that runs through all this, and
(27:53):
of course a lot of talk in both actually progressive
and conservative circles, frankly, is corporate power, and particularly tech
corporate power and the power of the Big four, Apple
and Facebook. Do you think, um, you know, one of
the things about digital currencies is they are these decentralized networks,
and do you think that this should be something that
potentially you could be um enthusiastic about the idea of
(28:16):
these sort of like digital decentralized networks that aren't necessarily
under the control of any anyone company. Wow, you took
a turn. I didn't expect you to take their I
thought you were going to go in the other direction
and say, does it make you at all nervous if
Amazon or Apple is collecting an incredible amount of private
(28:37):
information not only about your purchases with them, but every
place you spend every single penny. That makes me really uneasy.
And it makes me particularly uneasy because there's no consumer
protection in any part of this. You know, write me off,
you use your credit card, You and I both know
(28:59):
that if you get ammed, the most you lose is
fifty bucks, right that if it gets lost, the most
you lose is fifty bucks. Not so if you use
a cryptocurrency, one of these as you call it decentralized,
but we could also call it wild west, no rules,
no protection kind of currencies. And when you load the
(29:22):
information of all your purchases with other information aggregation that
we know Amazon is engaged in, that we know Apple
has engaged in. Then look at the power that's becoming
concentrated in one company, uh, and the ability to be
able to exercise influence politically, economically. That really makes me uneasy.
(29:49):
So a lot of people really are uncomfortable with this
level of corporate power for all of the reasons you
just described. It seems like the main tool that people
talk about for going after it is antitrust, but it's
not the classical sort of monopoly pricing power issues that
you've just laid out. Is there a better tool out
there in the tool kit to address what you've identified
(30:12):
than the sort of antitrust approach that is sort of
commonly taken here. So there are two ways to think
about anti trust. First, and one is to say, let's
take anti trust back to its roots, where big is
a problem and it poses a threat economically and it
poses a threat um politically. So that's one part. Another
(30:37):
is to say, maybe it's time to add to our
anti trust laws to make sure that they're covering the
kind of platform approach that has created uh so much
more concentrated power. But the other is to say, hey, regulators,
get up off your duff's and get in on this.
(30:59):
We need the SEC see, we need the FED, we
need others who say, if you're using this like a currency,
or you're using it like an investment, then those agencies
have a responsibility to step up and make sure that
we have some basic consumer protection that we don't threaten
our entire economic system. And that's it for what you
(31:25):
missed this week. If you like to show, make sure
to subscribe and rate us an Apple podcast or wherever
you listen to podcast, you can catch our show every
weekday from three thirty to five pm on Bloomberg TV
and from four to five pm on Twitter. Thanks for
listening and have a great week.
Welcome to What You Missed This Week? I'm Joe Wisenthal.
This podcast has some of our favorite interviews from the
Daily Market Clothes Show that I co anchor along with
Romaine Bostick and Caroline Hyde. What Do You miss It's
the perfect way to kick off your weekend. We went
into last weekend with another major job's day. US job
growth picked up last month, along with worker pay payrolls
(00:30):
increasing by five fifty nine thousand in May, coming in
below economist estimates yet again. A solid labor market recovery
is clearly continuing, but the headline numbers continued to fall
short of expectations. So we got some reaction from the
White House about how they were thinking about the labor
market data and if it would impact their agenda. Heather Boucher,
(00:50):
a member of President Biden's Council of Economic Advisors who
formerly served as the president and CEO of the Washington
Center for Equitable Growth, joined us. We started by asking
her what the number one reason is for the gap
between a little lot of people thought the labor market
recovery was going to look like? First, is what is
looking like right now? Well, here's the thing, Joe, I
(01:11):
mean the numbers that we saw coming out today, I
mean that we are on an upward trend. Right. We've
seen over five jobs created each month for the past
four months. That's way better than the last three months
of when we saw jobs created about sixty a month. So,
you know, this is certainly an indication of a labor
market that's moving in the right direction, especially when combined
(01:33):
with the drop and the unemployment rate to five and
certainly in line with what many folks were expecting. But
you know, I think, given you know, the need to
recover from COVID getting shots and arms and all the things,
we always knew this would be a bit of a
bumpy ride. But this seems right in line with, you know,
a strong economic recovery. It does appear to be a
strong economic recovery. And yes, there is some asymmetry out there, Heather,
(01:56):
there's also a lot of questions here right now about
some of the policy prescriptions coming out of the White House,
whether more stimulus is needed, whether there should be some
pullback and existing programs here. How do you respond to
the general idea here that if we do add more
stimulus to the fire so to speak, here, that it
could potentially create a situation where we maybe overheat the economy. Well,
(02:19):
I think at this point, you know, the American Rescue
Plan is it's out. You know, we've been sending checks
out to families. The child tax credit benefits will start
going out in July. And certainly all of the work
that the administration has done to get money out there
to make sure that those vaccines are being distributed, and
the work that we're doing to to make sure that
child care centers can stay running and get up and running,
(02:41):
and schools can reopen, all of that is certainly helping.
I think moving forward, we need to make sure that
the kinds of fragilities that we saw across our economy
and across our society that were there long before COVID,
that we started addressing some of those fundamental issues. But
in terms of this recovery for the next few months, um,
you know, we've got a lot of support going out
through the economy and I think that that's gonna do
(03:03):
a lot of good. So walking it forward, though you
have the job's plan, you have the family plan, how
does that wind up creating jobs? When we saw the
labor force participation rate fault, So now you have to
create more jobs and then get those people back in
the workforce. How do those plans do that? Well, here's
the thing. One of the things that became so crystal
clear to all of us in the United States over
(03:25):
the past year and a half was that if you
don't have access to care, people can't get to work.
Millions of workers are struggling with kids not in school
and lack of childcare options. And so that's one of
the core features of the American Families Plan is let's
make sure that families have what they need so they
can be successful and so that parents can fully engage
in the labor force. And the Jobs Plan is going
to make these historic investments in infrastructure all across the country, um,
(03:49):
you know, making sure that we're shoring up the basic
foundations that in too many communities are just crumbling. So
those are both going to create jobs, are going to
improve labor supply, and they're gonna help sustain a long
um along economic recovery that's going to see the kind
of growth that's going to be um you know, drive
American innovation and investment over the long haul. So there's
sort of two pieces of the puzzle there seems to
(04:12):
be some debate still, obviously about whether the expanded unemployment
insurance is contributing to culty of them um employers hiring workers.
Why not lean into it and say, yes, we've set
this new baseline for what you can make when you're
not able to find a job. This is creating wage
increases we saw today, This is a good model going
forward to start boosting wages at the bottom end and
(04:35):
permanently give workers more bargaining power. Well, you know, those
are such important issues. We do need to make sure
that workers have more bargaining power, and we do need
to make sure that we're unemployed for not fault of
your own, that those benefits are available and if they
are consistent with you know what the you know, making
sure that families have what they need during those times
of unemployment. So these additional benefits were so critical because
(04:58):
so many folks couldn't have access to work. You know,
there's over seven million jobs still missing from our economy.
So these benefits remain important. And of course, you know,
the President has made clear that you know, thinking about
a fixing of the unemployment entrance a system for the
long haul is a part of the plans that he
laid out, you know, in the last couple of months.
But you know, I want to be really clear that
(05:20):
you know, we are really down a lot of jobs still,
and so getting people back to work. Um, you know,
we've always known it's going to be a little bit bumpy,
but we're moving in the right direction. Okay, we're moving
in the right direction. Let's talk about the labor force
participation rate, which a lot of people are pointing to
and saying it still remains stagnant. It's still sort of
hearkens back to some of the issues we dealt with
coming out of the last financial crisis, the global financial crisis,
(05:43):
and some of the challenges that then Obama administration had
and trying to really not only generate job growth, more
importantly generate economic growth. Well, we are seeing economic growth
being generated, so that's that's a plus. But you know,
one of the things I'll say is that when you
look at the trajectory of job gains, this is much
sharper um than the recovery from the Great Recession. So
(06:03):
we're already on a much faster path and that's excellent.
We need to make sure those supports for families are
there so they can get to work and stay employed.
And again that's a key part of what the Rescue
Plan is doing, and that's those are key goals of
the Family's Plan and the Jobs Plan moving forward to
make sure that for the next time, all of those
supports are there. For the Jobs Plan, Um, how do
(06:24):
what does it do to help sustain the growth and
wages that we saw this month. Well, there's a few
things in the Jobs Plan that do that. I mean, first,
the Job's Plan includes what's called the Proact, which would
help make it easier for workers to organize and collectively
bargain so unions. That's one thing that's in there. But
there's a lot of really critical investments, investments in infrastructure
(06:48):
all across our economy. Those investments are gonna create jobs
over the next few years for workers in those sectors,
and they're going to create the foundation of economic activity
in community ease all across the country, those communities that
need those bridges that are falling down, those communities that
need broadband. This is the core of economic vitality is
that infrastructure. And then don't forget core parts of the
(07:11):
Job's Plan are about making sure that our economy is
prepared to be competitive for the decades to come. So
helping the transition to electric vehicles that's gonna boast, sustain jobs,
and create jobs. These are core pieces of our economic
future that we need to be investing in. Have there
one area that surprisingly some jobs that climate is actually
in construction? I think, and you know, it's interesting. We
(07:34):
hear a lot about these bottlenecks in the economy and
shortages of lumber and shortages of windows and areas, and
it stands to reason perhaps that perhaps some employers may
not be hiring simply because look, if they can't get
lumber or windows, then why get workers on the job? Set?
Job site are the things the White House is doing
or thinking about to ease those aspects of the economy
(07:54):
so that employer, you know, potential employers have reasons to
bring people back on the job. Certainly, you know, supply
chains is something that the President has been concerned about,
you know, for for many years now, and certainly was
something you talked about a lot on the campaign. We
saw this during COVID. We didn't have enough protective gear
because we hadn't paid enough attention to our supply chains.
And now we're seeing it at the other end. So
(08:17):
this has been an ongoing challenge. You know. The President
has set out you know, examining American supply chains, looking
at this as a as a longer term issue, and
it is also committed to, you know, thinking about what
is it that we need to do right now. Um,
you know, many of these are likely to work themselves out,
you know, in the near term, because again it's we're
trying to turn in e comedy back on after a
pandemic and getting everything running at the same pace as
(08:39):
a little bit challenging. It's going to take us a
few months, you know, to get things all moving at
the same level. But certainly the President is committed to
looking at that and has made that clear now. This week,
the housing market fever is finally showing signs of breaking
mortgage applications following three percent last week. A home bolder
stocks took a hit Wednesday because RBC Capital Market Worm
(09:00):
that rising home prices could temper the housing demand and
potentially pressure buildings. So we spoke about it all with
Ellie Wolf, the chief economist at Zonda Housing Data and
Research firm, who tracks the housing market at a very
granular level and we started by asking her if she's
seeing signs that this red hot housing market is starting
to pull down just a little bit. Yeah, so good
(09:21):
to talk to you guys again. And I think the
way that you should look at the housing market right
now is that it went from a hundred and fifty
miles per hour two. Okay, so it is softer than
the past couple of times that we have spoken, but
it's still a very very housing market. So with regards though, okay,
it's a very strong housing market. A lot of folks
(09:43):
in this room, uh can attest to that. No names here,
but I am curious Ali when we talk about whether
builders are sort of rising to meet demand or whether
there's still one sort of these elongated schedules where they
just build a couple of houses, sell them, and wait
till they get the materials for the next couple and
build them. That's still kind of the playbook for a
lot of these companies for the next foreseeable future. Yeah,
(10:05):
So the answer to that remain is really both. So
we do have builders that have bought a lot of
land that over the next day six to thirty six months,
those homes are going to come to the market and
that's going to be them rising up to meet the
demand that you're talking about. But we do still have
the longer build cycles. We still have the issues that
(10:25):
we've talked about over and over again from the supply chain,
to the labor side, to the government side that's holding
it back, holding overall building back. But an interesting shift
that we're seeing is that the building costs have not
come down. There's still just a huge pain point for
the builders to the point that we're seeing a strategy
shift now. So we have from again Zanda's Division President survey,
(10:49):
we have these leaders of home builders across the country,
thirty of them that are saying they're shifting their strategy
to build more specs because at least if you're building aspects,
you have a better handle on your costs before you
go to market. What about prefab, like, have those also
companies that they manage. Has anyone played it well? Has
anyone managed to hedge appropriately or managed to look in
(11:13):
prices that perhaps you haven't thought about. Yeah, So the
prefab market is a really fun one to watch because
in theory, it's this great idea, you're efficient, you're able
to use the products really well, you don't you can
use recycled products, you can do it at all different
times of a year, and that's a problem in some
parts of the country when you have to slow down
(11:34):
building as it gets colder or weather. What has panned out,
at least to date, is that there are some companies
that do prefab well, but they're running into skilled labor
problems and they don't have factories to be able to
build the homes quick enough anyways. So some solutions, but
I think the interesting thing, at least from my research
on prefab is they may be a little bit more efficient,
(11:56):
but these homes are not necessarily going to be cheaper
because there are other costs when you go to build
homes inside as well. So another point that you make
which I hadn't heard many people discussed before, but in
your research, just to share that cities are being text
the people who give a permit to say okay, you're
allowed to build homes on some new plot of land.
(12:17):
There's only so much paperwork that they can process in
the span of a day or a month or a quarter,
and even that is emerging as one of the main
bottlenecks in this area. That for sure is and I
know the National Association of Homebuilders has data on this
as well that shows that not only is it taking
longer for those cities to work through those permits, but
they're also becoming more expensive. So when we talk about
(12:39):
the construction costs of how everything is going up, we've
always talked about all the different things that you can
think of easily, but it's also that that supply the
issue that you're seeing on the government side as well.
So let's go back now to this idea alley of
sort of once we get past this, Let's assume we
get past some of these price pressures, whether it's the lumber,
whether it's the wages that they have to pay. If
(13:02):
we get pass this, do we return to some sort
of normal seasonal cycle in the housing market or are
there structural changes here that are going to stick with
us for years to come. So a couple of points
to hit on. The first is from a builder's point
of view, Let's say that their costs have calmed down,
they are unlikely to drop their current prices. They may
(13:23):
be smart with how they build homes in the future,
but if they drop a price of an actively selling
community and they still have people in backlog, meaning people
that are waiting for their home to be built. That
creates a vicious cycle. So we don't expect prices at
least for active communities to come down again. Future maybe.
But the interesting thing that I think we need to
(13:43):
watch is spring selling season. I'm sure you guys remember
before there was a spring selling season that people were
rushed to buy homes before school so that they could
get settled and they didn't have to move their kids
in the middle of a school year. That wasn't such
a big deal last year. In fact, we actually saw
home sale continue really strong through the end of the year.
I think that's going to make our comps really hard
(14:04):
this year if we go back to a normal seasonal pattern. Also, Alia,
I'm just trying to work out how much of the
theorizing is becoming a reality as to who's staying in
the suburbs, who isn't, who's coming back to the cities,
who isn't. Who's only now really getting guidance from certain
corporates coming out as to whether really they're sticking to
(14:25):
their yes, who can work from home or not as
the case may be. How are you seeing these decisions
actually impact the decision making process of those who are buying.
It's such an important question because we've talked before about
how the ability to work from home is one of
the reasons people have been willing to move further away.
Before the pandemic, suburbs were already popular. It was just
(14:48):
that eleven to thirty minutes from downtown versus the further outlocations.
When look at the work from home trends, we had
a client hire us to look into this, and we
went through each of their markets and we went through
all the top employers and we looked at what are
the top employers to what extent have they come out
and said what model they're gonna do? And it did seem,
(15:08):
at least from the markets we looked at, that the
hybrid model is more likely here to stay. But if
you still are going back three days a week when
you thought you weren't going back at all, I think
people will be a little bit more inclined to move
closer to downtown. Maybe don't need to be urban, but
you still want to be in those close in suburbs now.
This week, bitcoin games and more legitimacy. When l Salvador
(15:32):
became the first country to have formally adopt the cryptocurrency
as legal tender. The country and it's thirty nine year
old president are embarking on a big economic experiment with
the embrace of bitcoin, and naturally the news broke out
on Twitter. We got reaction from Nick Carter, the founding
partner of Castle Island Ventures. Nick hosted a historic Twitter
spaces and he started talking about bitcoin, the only thing
(15:54):
he talked about online really, Jack Dorris, he showed up
and then the President of El Salvador joined to break
the right as the Congress approved the proposal. We started
by asking Nick about the conversation he had with the
President of Elsalvinor and to explain the main benefits of
the new law. How will it help the country's economy
and its people. Well, it was a fascinating time because
(16:16):
the President President bou Keley, joined us on Twitter live
as this law was being voted in. We could actually
hear the clapping and the votes from the Parliamentary Chamber.
UH to discuss with bigcoinners on Twitter the merits of
the law. UH. The objective seems to be making using
bitcoin as an actual medium of payment medium of exchange
(16:40):
much more frictionless in the country. Eliminating all capital gains taxes,
which is you know, of course a big impediment to
actually using this thing as a currency. Uh, you know,
potentially in service of making you know, bitcoin based fer
mintances cheaper and less frictional, for instance. So that seems
to be sort of the main thrust of the law.
What don't we's appellate then, Uh, As far as what
(17:02):
the future holds beyond Al Salvador here, do you think
we'll see other I guess legitimate countries like Al Salvador
embraces in other larger countries well. And following the Salvadorian news,
a number of politicians in Latin America, many of them
younger on the millennial side, signaled their affinity for bitcoin
(17:23):
as well, um and made noises about potentially introducing similar ideas.
We'll see if any of that actually transpires. We know
that bitcoin cryptocurrency stable coins have very high penetration in
places like Columbia and Argentina. Uh. You know, Latin America
is certainly no stranger to sovereign defaults or periods of
(17:44):
high inflation and monetary repression, so we see high penetration there.
There's certainly a class of policymakers that see an opportunity
to gain favor by signaling their affinity. Uh and uh,
you know, we'll see what happens. But this is the first.
El Salvador is the first non prior state to really
legitimize and legalize bitcoin usage in sort of its intended way. So,
(18:09):
you know, it seems like a big sea change. Frankly,
a big sea change that only though meant that we
saw a seven percent rally. You're still seeing bitcoin and
of itself under pressure significantly off as highs that we
saw previously in the Arnick. Are you expecting the issue
from El Salvador going forward? Is also the ongoing volatility
(18:30):
within bitcoin as well? Is there any point we're expecting
that to just reduce a little bit so we see
it more regularly used as a currency, not just by
those that are suffering significant inflation or indeed seeing an
issue with a hard currency peg. It's hard to say
Bitcoin's volatility seemed to be money as as you know,
a natural consequence of the security of the system. Of course,
(18:53):
something like gold, which is you know, similarly kind of
a commodity fixed in issuance, doesn't evidence such signific volatility,
But Bitcoin is still early in its life and uh,
you know, very actually adopted globally and also in terms
of all Solvador, it's a very small country. Um. You know,
foreign exchange reserves in the single digit billions. Um. The
(19:15):
fund that the President bou Keley was talking about establishing
which would hold a position in bitcoin, uh, he's signaled
that would be in kind of the hundred and fifty
million dollar range, so smaller than many kind of crypto
hedge funds. So while this does represent sovereign adoption, it's
not sovereign adoption by the largest sovereigns just yet. So
(19:36):
we'll see. But inasmuch as using bigcoin as a medium
of payment or a bridge currency, you don't necessarily have
to have exposure to the asset for a long period
of time in order to sort of take advantage of
it's it's nice properties. Uh. Nick. The bitcoin community has
a history of like sort of getting excited about certain
people and then they break your heart. Uh. Elon Musk
(19:56):
is probably the most prominent one, and ever then he
sort of us to have doing the back. Are you
worried that the president won't have a commitment to bitcoin
per se? And next month it's like and now we've
asked the Ethereum Foundation to digitize health records and x
RP to modernize er banking system, and then it'll just
be like a bunch of crypto buzzwords in a few weeks. Well,
(20:16):
what was notable about this bill that was passed was
it specifically says bitcoin, and all of the messaging is
about the Lightning network and about these payment systems built
on top of bitcoin, and there's relatively little messaging around
cryptocurrency more generally. So the commitment in this case does
seem to be regarding Bitcoin. Of course, who knows what's
(20:37):
going to happen in the future, and in fact, there
is gonna be plenty of narratives out there around bitcoin
is consorting with, you know, someone that is perceived by
many of the West as an authoritarian dictator. But any
adoption of bitcoin of the sovereign level is interesting and noteworthy. Um,
we don't shy away from that. There has been adoption
of bitcoin by other sovereigns that you know, are considered
(20:59):
parized state, and nobody tries to hide that. So it's
certainly interesting to watch this play on real time. Then
we went from a bitcoin true believer to a crypto skeptic.
I spoke with Senator Elizabeth Warren, the senior Democratic Senator
from Massachusetts, right after the Senate Banking Committees hearing on
(21:19):
digital currencies in blockchain. Senator Warren started with the hearing
with some pretty harsh words for digital currencies, saying they
failed to deliver on the promises of a more inclusive
financial system, And I asked her if there are some
specific regulations she has in mind that in her view,
would bring crypto under control. So this was our first
(21:39):
herring on digital currencies, and we had a chance to
talk with experts, bring in a lot of senators around it.
But the bottom line was that what's happening right now
in cryptocurrency? Why bitcoin and doge coin? It's wild West
out there, and it makes it not a good way
(22:01):
to buy and sell things, and not a good investment
and an environmental disaster. So do we need some regulation
around this? You bet we do in your view? Whose
perview should this fall under? And when you say, okay,
we need more regulation, do you have something in mind
or like a sort of conceptual framework for how regulators
(22:22):
should should approach this burgeoning space, Because you say kind
of has a wild West vibe. Well, right now, I
think what we need to do is the next round
of hearings and investigations. Since uh, these cryptocurrencies have gone everywhere,
then that means we need to bring in the people
who have different responsibilities. So when we're talking about the
(22:43):
investor aspect that people are buying bitcoin for speculation, uh,
you know, if you were buying stock for speculation, to
be protected by rules against things like pump and dump,
but not when you're buying bitcoin for speculation. We need
to talk with the s you see about that. On
the other hand, when we're talking about the question about
(23:04):
bringing it into our monetary system and uh banks uh
either holding bitcoin, that becomes an issue that we need
to talk about with the bank regulators. So there are
a lot of different pieces to this uh. And I
think the answer that we saw today is that right
now our regulators and frankly, our Congress is an hour
(23:28):
late and a dollar short, and we need to catch
up with where these cryptocurrencies are going. Let's talk about
the idea of a digital US dollar, the idea that
someone could hold a digital dollar in an online wallet
or in a wallet on their phone, in some way.
Lots of talk about it's still kind of unclear to
me of if something like that were to be implemented,
(23:50):
what the goal would be. What do you think about
the idea of, say a central bank digital currency, and
how do you and what do you think the purpose
would be if the u s we're doing at some
point launch one. You know, that's one of the things
that came up in this hearing multiple times today. It's
that I understand how a digital currency would work. Instead
of the United States government printing dollar bills or minting coins,
(24:12):
it would, for example, pay a Social Security check by
just putting digital money in your wallet. But the question was,
what is the problem it's trying to solve, because, as
we all know, most of what happens today is digital
in the sense that my bank does not hold those
(24:36):
dollars physically, right, It has a it has a number
in a ledger, and when I transfer money to pay
on my credit card, they make a transfer that happens electronically,
So you really have to kind of think through this.
On the other hand, we had some really thoughtful experts
who were saying, you know, you may want to integrate
(24:58):
this into other systems. Uh, for payment for international payment,
and there are questions about whether or not the United
States maintains competitions, say with China that's looking deeply into
digital currency. Uh. Of course, the Chinese want to be
able to track all the purchases of all of their citizens,
something we're not looking to do in the United States.
(25:20):
But I think the answer there is it's it's on
the front edge. And here's what troubles me is that cryptocurrency,
the private version, has has swept the earth. Digital currency
is not really out of the starting gate yet. And
so so you've got this situation where we kind of
(25:41):
need to figure out is are we going to try
to give digital currency a little boost here, but we
really need to keep an eye on digital currency while
we're doing. Man, I want to ask you a question,
and I think it actually applies bok to cryptocurrencies and
the idea of a national digital currency. And I'm glad
you brought up China and the idea of okay, a
system to monitor everyone's transactions, because right now, if you
(26:03):
and I wanted to transact online, we would do it
through I don't know, PayPal or something like that, and
it would be an entity that could look at it.
Do you think private transactions should be preserved in some way?
This is a thing that people worry about with physical
cash disappearing, the idea of transaction privacy. Is this a
value that you have in that in some way we
should find a way to continue to allow that to
(26:26):
exist in the digital space. So I understand the idea
behind privacy, and I don't want the federal government tracking
how I spend my dollars. On the other hand, think
about the key feature of a cryptocurrency, and that is secrecy.
And it's pretty clear right now that that secrecy really
(26:47):
is helpful for drug dealers and for uh crypto warriors
who are hacking into systems around the world and demanding
ransom up because it's a secret way to make payment. Now,
the United States has dealt with this traditionally by saying
(27:09):
that what happens in checking accounts is secret until someone
goes before a judge and gets an order to be
able to look at a checking account. That means that
checking accounts are not in great ways to transfer money
between drug dealers, they are not great ways to collect ransom.
And this is one of the concerns about cryptocurrency there's
(27:32):
no equivalent to be able to say, Okay, you can
be private nearly all the time, but not so much
that you've created a haven for the criminals. And just
want to remind viewers and listeners were speaking with Democratic
Senator Elizabeth Warren of Massachusetts. UH, Senator Warren, you know,
another sort of theme that runs through all this, and
(27:53):
of course a lot of talk in both actually progressive
and conservative circles, frankly, is corporate power, and particularly tech
corporate power and the power of the Big four, Apple
and Facebook. Do you think, um, you know, one of
the things about digital currencies is they are these decentralized networks,
and do you think that this should be something that
potentially you could be um enthusiastic about the idea of
(28:16):
these sort of like digital decentralized networks that aren't necessarily
under the control of any anyone company. Wow, you took
a turn. I didn't expect you to take their I
thought you were going to go in the other direction
and say, does it make you at all nervous if
Amazon or Apple is collecting an incredible amount of private
(28:37):
information not only about your purchases with them, but every
place you spend every single penny. That makes me really uneasy.
And it makes me particularly uneasy because there's no consumer
protection in any part of this. You know, write me off,
you use your credit card, You and I both know
(28:59):
that if you get ammed, the most you lose is
fifty bucks, right that if it gets lost, the most
you lose is fifty bucks. Not so if you use
a cryptocurrency, one of these as you call it decentralized,
but we could also call it wild west, no rules,
no protection kind of currencies. And when you load the
(29:22):
information of all your purchases with other information aggregation that
we know Amazon is engaged in, that we know Apple
has engaged in. Then look at the power that's becoming
concentrated in one company, uh, and the ability to be
able to exercise influence politically, economically. That really makes me uneasy.
(29:49):
So a lot of people really are uncomfortable with this
level of corporate power for all of the reasons you
just described. It seems like the main tool that people
talk about for going after it is antitrust, but it's
not the classical sort of monopoly pricing power issues that
you've just laid out. Is there a better tool out
there in the tool kit to address what you've identified
(30:12):
than the sort of antitrust approach that is sort of
commonly taken here. So there are two ways to think
about anti trust. First, and one is to say, let's
take anti trust back to its roots, where big is
a problem and it poses a threat economically and it
poses a threat um politically. So that's one part. Another
(30:37):
is to say, maybe it's time to add to our
anti trust laws to make sure that they're covering the
kind of platform approach that has created uh so much
more concentrated power. But the other is to say, hey, regulators,
get up off your duff's and get in on this.
(30:59):
We need the SEC see, we need the FED, we
need others who say, if you're using this like a currency,
or you're using it like an investment, then those agencies
have a responsibility to step up and make sure that
we have some basic consumer protection that we don't threaten
our entire economic system. And that's it for what you
(31:25):
missed this week. If you like to show, make sure
to subscribe and rate us an Apple podcast or wherever
you listen to podcast, you can catch our show every
weekday from three thirty to five pm on Bloomberg TV
and from four to five pm on Twitter. Thanks for
listening and have a great week.
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