tv Whatd You Miss Bloomberg March 15, 2021 4:30pm-5:00pm EDT
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no expensive machines, no expensive memberships. get off the floor with aerotrainer. go to aerotrainer.com to get yours now. ♪ caroline: from the bloomberg world headquarters in new york and from here in london, i'm caroline hyde. joe: i'm joe weisenthal. romaine: the s&p 500 closing at a record high. joe: the question is, "what'd you miss?" caroline: optimism around economic recovery helping to fuel the rallies. the recovery will be met with policy changes ahead.
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taxes, central banks, rethinking how they work? president biden planning the next major federal tax hike. having to root out inequality. better for people who are able to work from home. maybe a hybrid model? before we get into where you are working from, what about taxes? joe: they may be bringing back more. i want to bring in nancy cook. the big question is, are we going to be getting this bigger bill? something to do with infrastructure, something the white house feels shouldn't be entirely added to the deficit?
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what are the most likely candidates for increased taxes to offset some of the spending the white house is going to those in part of this movie? >> they are going to try to do a few things. they are going to try to roll back the trump tax cuts. raise taxes on high income people, people who make over $400,000 per year, increasing the corporate tax rate. they are really going to look to try to raise taxes on their investment versus salary, things like capital gains, the estate tax. they are really going to go after that. we saw different economic officials and the white house press secretary talk about how you shouldn't expect tax increases below 400,000 dollars, but they are already drawing that redline. romaine: we know the counter
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arguments are going to paint this as a tax increase on everyone. how is the biden administration going to blunt that criticism that we know is coming? how do we sell a tax increase to a public that seems to be wary of those, no matter how you sell them? >> we should see a bunch of special interest groups come out against these tax increases. the democrats feel very emboldened after passing this $1.9 trillion stimulus bill. there's a feeling in the biden white house and on the hill that some of the thinking on taxes has changed a bit and that raising taxes on higher income people, particularly people who have not been hurt economically during covid, is a more popular idea than it was a decade ago when i was covering the obama in his treasure. i think they feel emboldened and that this is their last chance to do a major legislative
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package before the political calculus of the midterm takes over and they want to go over the biggest package of infrastructure spending that they can get. and part of how they are going to do that is through proposed tax increases. romaine: big plan here, coming out of washington. could cause a lot of controversy , one way or another. tax bill to a stimulus bill, now law. leaders are saying that there is a shift in political willingness for further fiscal stimulus. we will discuss it. coming -- this is bloomberg. ♪
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on policy shifts as we go further into this economic recovery. this week one of the areas of focus seems to be all about the inequality innovation. caroline: this is a new -- joe: this is a new thing for the fed, measuring the unemployment rate where the fed is looking beyond group three and wanting to see a compression by race -- , elevated unemployment for black, hispanic, latinos. it's going to continue to emerge and is something that the fed wants to see before it declares victory unemployment. joining us to discuss this, the director of progressive thought at the roosevelt institute. mike, talk to us about this
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shift. the fed is no longer just going to look at you three, it's going to want to see other signs of tightening labor. how historic is that to have a federal reserve that is that explicit about the goals on full employment? >> it's remarkable and is a really important shift. same way congress learned from the mistakes of 2009 and 2010, the fed is learning from their mistakes and their overcautious behavior where they acted as if unemployment couldn't get much below 4.5%. turned out unemployment got below 4% for two years. notably, the things that aren't captured are things like wage compression.
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they want to go back to that under powell. romaine: when you talk about the other headline rates, do they open themselves up to cherry picking data? or that they are being too biased with some factors over others? >> i think that right now all the data speaks from a different direction, how tight is the labor market and how high-pressure is it in terms of economic activity. when you think of unemployment there's a good reason to look at labor force participation, which is on the dashboard. catching up people who have stopped looking for work. you don't have a great sense of
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how intense the labor market is on the low end and as they were in 2019, they could be accused of this depending on how far out they go. right now they all speak in the same direction and many of the things, such as employment prospects for those who are locked out or have a hard time with labor markets, i think go further in depth to what they want to be doing in terms of dragging in other priorities. caroline: back on the campaign trail, it was back then that he was talking about a third mission for the federal reserve, to be back inequality issues, to take it in for policymaking. how much do you see a seachange? in europe we are amazed at that social safety net. more so than everyone used to be.
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will the pendulum swing again? >> i think the last year has made people rethink how we deliver care, the conditions of essential workers and labor. and how much government can deploy resources. we saw tremendous energy from the congress and from the federal reserve. checks working out for people, addressing these needs, the handling of the pandemic was often hit or miss. the economic recovery might be the strongest in the globe because the federal reserve and congress have coordinated together. hopefully as that goes forward we can tackle even bigger problems like poverty and climate change. romaine: we talked about it earlier -- joe: we talked about it earlier, the build back better program with tax hikes that came along with it, the
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infrastructure, in your view where right now should the administration be putting its energy? though it has the majority, it doesn't have unlimited political capital. the midterms are coming before too long. they barely have a majority in the house and senate. where would be a smart laced up with their chips that in spending and taxation and building on the momentum that progressives have seen? >> one, get unemployment by -- at 3.5% in the next year. it's a reasonable goal. though if things go wrong with the administration slips up in some ways, it might become a much harder goal. at the very least that's a baseline and i think they understand that. when people look at what president biden was promising on the campaign trail, he talked about spending $5 trillion this
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year, split between recovery and reform. the reform part was care work and climate, the second bill that we are talking about. i think there needs to be effort to work in that direction. i think that these things need to happen. the prospects look tough right now, but it will be a long road with room for places to change their mind. joe: you can hear a longer conversation with mike on the recent episode of the outlaws podcast, out this morning, you can find anywhere podcasts are found. romaine: from the fed to wall street, wall street facing long
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criticism about the lack of diversity in the finance industry. the cofounder of the greenwood project spoke with us about the pipeline for black and let max students for careers in the financial industry. take a listen. >> didn't know anyone in the business, didn't know what i was doing, didn't understand the markets. romaine: was there a reason you gravitated to trading? >> i was on the technology side, i was fixing computers on the trading floor. i made friends with traders and i started to learn as much as i could about the market and that's how i ended up going down the other road. making friends and some mentors as well. romaine: with regards to the learning curve, not having finance knowledge in the business, how hard was it to get on your feet?
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caroline: just staying close -- >> i just stayed close to the folks who knew how to do it every day. i saw the lucrative careers that people had and of the treachery of where they were heading, stuff like that. guys who were 30 years old and looking to retire. the learning curve was very steep. romaine: on the floor, in the office, how many look like you were also there? -- how many who looked like you were also there? >> it took me 15 years to see a black trader. i didn't see a female trader until maybe a couple of years ago, actually. i looked around, i didn't see anyone in the room who looked like me. i wanted to see more people who look like us. romaine: explain why that is
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important, for other people out there to look like us? >> greenwood project in particular, there's a lot of science behind the fact that people of color learn well together and learn better when they see people who look like them doing the things they want to do one day. romaine: at least one person who came out of that program, hayes, and alumni of the greenwood project, i'm told that you are working right now in finance? >> thanks for having me. i work as an analyst for companies in new york city in the financial strategies group, focusing on analytics and strategic advice across the country. balance sheet management, derivatives management, etc. romaine: fixed income analyst,
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for a lot of folks that's the sweet spot on wall street. how did you arrive there? >> telling the story, i was an engineering student and the path of my life and career was murky. to say that is an understatement. what's most valuable is he provided me with the opportunity in the network for social capital and i was intellectually curious. i started out with an internship in chicago with o'neill in the summer of 2019. romaine: talk about social capital. talk about some of the companies and organizations that greenwood partnered with, building up that
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social capital. >> having that experience of almost everyone i worked with in my career was related to someone at that firm and the realization that you need someone on the inside. i had a network myself. we said, you know what, let's go to one of my friends and asked them, are you willing to take a summer intern. not just any intern, we will train them and they will be ready to go. you know, one day they meet us and the circle is very small. the family, the community, their friends. at the end of the summer they met people from all different firms. they even came to bloomberg every year on a wall street tour . see the building, walk around on the see what's possible.
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it's very important that we take them out of the community. most of them have never been on a plane before. it's no-cost to them and it's important for them to come to new york, walk the floors, build the network. 75% of our alumni are working full-time jobs in new york and chicago at firms they had never heard of before. romaine: all right, that was a part of my interview with the greenwood cofounder. bloomberg philanthropy has been a supporter of this initiative, run by michael, founder and ceo of bloomberg lp and you can catch the full interview online. check on the three-day summit starting tomorrow, we will have a lot of highlights from that right here on bloomberg television. ♪ ♪
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caroline: today we are focused on what's expected in the economic recovery. as we enter the spring and more vaccines are given out, we are hearing more and more from ceo's about getting people back into the office. we haven't seen that much movement in nyc. i know that bloomberg is filling up, but what about getting to and from? joe: if you walk around new york city, it feels more and more normal everyday. if you look at subway ridership, daily mta turnstiles, another great data series on the terminal, there has been basically no recovery on this since september. there's a fair amount of traffic people are really not taking the subways. talking about normalization and a return to normal, this is one chart that isn't trending in the right direction.
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romaine: have you been on the subway lately? joe: a couple of times. pretty bare. but you have a great story about what's going on inside goldman sachs, including ceo david solomon, people not coming back to the office. what is the major source of that angst? why we desire to see more people? >> it's a valid question. a lot of folks inside goldman are asking the same question. why does it matter so much? much like other investment banks, goldman sachs did phenomenally well in 2020 with its best performance in a decade and stocks at an all-time high. on the business front, there can be no complaints. yet the ceo here is worried about the lack of an office preference -- presence.
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he wants more and more people to return to the office and it is causing increasing frustration. folks want to be back in the office and they would like to see more empathy and more flexibility when it comes to what will be a post-covid new normal. romaine: and a lot of this is really contingent on vaccinations and getting covid under control. things outside the control of many executives out there. but we have seen them as a way to jawbone, i guess, administrations, someone out there, to pick up -- pick up the pace of the stuff and leverage people back to the office. >> that is probably where i disagree with you, absolutely vaccines are a big part of it. you are trying to figure out the wind down of the pandemic and what it will look like. part of it has shifted into what
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works and what the office space looks like. you have gone through 12 months where many large firms have proven that you can work just as well in a remote set up, so why not be in a position to offer more flexibility? when you see the maximum strain and point of friction, when it comes to the war for talent in the financial firm that they are trying to reshape themselves as, tech firms are just as attractive to engineering graduates, but can you still attract talent when you have firms on the west coast bending over backwards to do what they want for the workforce to get the best numbers out there? caroline: it's a really great story, we urge everyone to go and read it. what else is interesting, we have talked about inequality before this. you can't really say that anyone working at goldman is too hard done by, but the people who work
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there and what they see the ceo doing in terms of a private jet. joe: the best anecdote in the peace that everyone should read is david solomon shaving, a junior banker coming up and saying high to him at lunch in the hamptons, which also he was at lunch in the hamptons during the day and it speaks to these big questions. romaine: i would never do that to you, joe. joe: did we do that, once? caroline: you'll come by. [laughter] romaine: people are coming back into the office. one of our producers is here today. caroline: shout out to hannah, back in the house. [laughter] caroline: meanwhile, that does it for "what'd you miss?" romaine: have a great evening, this is bloomberg. ♪
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