28 Burst results for "Jason Furman"
The Breakdown
A highlight from Markets Shrug Off Predictable Powell at Jackson Hole
"Welcome back to The Breakdown with me, N .L .W. It's a daily podcast on macro, Bitcoin and the big picture power shifts remaking our world. What's going on, guys? It is Friday, August 25th, and today we are doing a macro roundup. Before we get into that, if you are enjoying The Breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit .ly slash breakdown pod. Well, friends, today, the big thing, of course, is Jackson Hole and Powell's speech therein. And so I thought it would be good to put that in a wrapper of the stories that have been going on around and outside of the industry, things that have been impacting traditional markets to put that news of what Powell said in its proper context. And for that, I want to start with a story that those of you who have been listening to the AI Breakdown will be quite familiar with. That is, of course, Nvidia. Nvidia absolutely blew earnings out of the water after the market closed on Wednesday. Their Q2 net income came in at a staggering 6 .7 billion, which was a 422 % increase from the same quarter last year. Sales growth shot up by 171 % on an annualized basis to reach 13 .51 billion. Profit came in at 270 per share. Now, compared to analysts' estimates, those figures represented a 30 % beat on profits per share and a 22 % beat on sales. That is massive, especially considering how much hype and anticipation Nvidia had going into this. Now, overnight on Wednesday, shares rocketed up over 6 % and hit a high point of $517 per share. That pushed the stock up more than 220 % on the year. The company also announced the approval of a ridiculously large $25 billion in buybacks, representing a little over 2 % of the total market cap at current prices. Now, this is the second quarter in a row with blowout earnings for Nvidia. Q1 sales came in at 10 .3 billion, outperforming analysts' estimates by almost 30 % again. During their Q1 report, Nvidia had guided 11 billion in revenue for Q2, which was an estimate that exceeded analysts' forecasts by over 50%. And it turns out even that was far too conservative. Now, of course, Nvidia's success has been coupled to the rise of AI. The firm's H100 GPU is the top of the line in AI computing, and it's not particularly close. Individual units range in price between $25 ,000 and $30 ,000 with a volume discount, but that isn't even really the highest end product being demanded by the world's largest tech firms. That distinction goes to the HGX box, which is essentially eight H100s assembled into a single unit of raw AI computing power. Nvidia's CEO Jensen Huang said of the product line, We call it H100 as if it's a chip that comes off of a fab, but H100s go out really as HGX to the HGX unit's require a supply chain of 35 ,000 parts to put together and are sold at the lofty price tag of $299 ,999 per unit. And even at that price, Nvidia are struggling to keep up. Huang said, We're not shipping close to demand. Now, in a lot of ways, there really has not been anything like this phenomenon in recent memory. Nvidia has built their firm around the transition away from GPUs as just being used for graphics processing and video games to focus on more generalized use cases for that style of chip architecture. That transition started many years ago. For example, in 2012, researchers used Nvidia chips to achieve previously unheard of image recognition. Since then, the firm began working alongside AI researchers to optimize their chips for the tasks demanded by high -end AI models. They took on an explicit AI focus starting around 2017. That process of iteration has led to Nvidia being the singular leader in AI chips with a wide gap between them and their nearest competitor. During a recent interview, Huang said, This type of computing doesn't allow for you to just build a chip and customers use it. You've got to build the whole data center. And indeed, the customers seem perfectly willing to spend the high -end dollars for premium performance. One high -profile startup, for example Inflection AI, recently raised $1 .3 billion in funding to finance the purchase of 22 ,000 H100 chips. Mustafa Suleiman, the CEO at Inflection and previous co -founder at Google DeepMind, said that none of Nvidia's competitors could offer a comparable solution. Huang broke down the math of his company's product offering like this. He said, If you can reduce the time of training to half on a $5 billion data center, the savings is more than the cost of all the chips. We are the lowest cost solution in the world. This year, Meta has committed to spending $30 billion on data centers, with much of that capital likely to be spent with Nvidia as just one example. Now, Huang was not at all bashful on this week's earnings call, stating that a new computing era has begun. Many others agreed with him. Dan Ives from Wedbush called it a 1995 internet moment and said it was the guidance heard around the world. Indeed, so far this year, the market has been responding as if a paradigm -shifting technology change is underway. Nvidia is by far the best performer in the S &P 500, and alongside Nvidia, six other big tech firms have been benefiting from the AI enthusiasm as well. This includes Meta, Amazon, Apple, Alphabet, which is Google, Microsoft, and Tesla. Together, this group, which has now become known as the Magnificent Seven, have outperformed the S &P 500 over the past year. Historically speaking, this narrow range of market breadth is typically only seen in the wake of a massive market downturn, and even then only briefly. The only really comparable era of the last decade when market breadth had maintained such a lopsided slate for so long was in the second half of 2020. During that period, both Etsy and Tesla were added to returns respectively. The rest of the top performers that year were rounded out by L Brands, PayPal, and of course, Nvidia. As another comparison point, so far this year, the median S &P 500 company is up only 2 .34 % compared to the 16 % returns for the overall index. What's more, 228 companies in the index have seen their share price decline year to date. Now, the high -flying Nasdaq 100 index is a little bit more evenly spread. The index saw the best first half returns in its 52 -year history this year, notching up a 30 % gain. 32 firms are outperforming the index this year so far, while the bottom quarter declined in price. Now, these periods of narrow returns don't typically precede a major market correction. However, this situation is somewhat unique. It's rare that multiple companies across a leading sector are so reliant on a single company to supply a critical component. But that's a situation we find ourselves in right now. Now, part of why this matters, of course, is that, as you just heard numbers around, AI has effectively been keeping markets afloat this year. One of the most dramatic moments of this was during the battle around the US debt ceiling. This is a time that the market should have been, by all accounts, incredibly nervous, significantly wobbly. I mean, hell, we had our debt downgraded when all was said and done. But it couldn't beat out Nvidia and AI enthusiasm. Now, that wasn't exactly the case yesterday. A lot of the reporting on Thursday was about how concerns over what Jerome Powell would say at Jackson Hole on Friday were tamping down any particular bump from that Nvidia earnings beat. You'll remember that the annual Jackson Hole Symposium is a big central bankers event that focuses on the long term of monetary policy. It's a chance for the Fed to signal where things are going more than just in the next couple months. At least that's what it's historically been. Last year, it was notable because at the last minute, Powell decided to rip up his speech and give a terse eight minute diatribe that basically said that markets were getting way out ahead of themselves, effectively ending a late summer rally. Powell said at the time in no uncertain terms that the inflation fight was not over and stated explicitly that, quote, there will be pain. Now, coming into this, Adam Posen, president of the Peterson Institute for International Economics, said there's no way Powell's speech can be that tight and clear this time because the economic outlook is genuinely more uncertain. Central bank decision making in some sense is easier when you have policy wrong and you have a long way to go to where you should be. It's more difficult when you have to sort through being close to the right policy, but not sure you're there and that's where the Fed is now. And so a year later, the inflation fight is still underway and it was anticipated that Powell would use his appearance to reinforce the Fed's commitment to finishing the job. Up until now, the policy choices have frankly been somewhat obvious. Continue raising interest rates until inflation cools or something breaks. And even when something breaks, try to fix it without changing interest rate policy and see if that works. However, with inflation now moderating to its lowest level in almost two years, there is a lot more potential for disagreement among FOMC members. Powell was expected to give his views on whether rates should continue to go higher into the end of the year, as well as to sketch out how the Fed would determine when the time would come for rate cuts. Forecasts from Fed members have generally called for rates to be held higher for longer, but with pressure on the banking sector, it's unclear whether policymakers would be on board with sticking to that strategy. Now, as well as the rumors of dissent among FOMC members, the economic establishment is beginning to question whether the inflation fight is even worth taking all the way to its conclusion. Responding to a Wall Street Journal article published on Monday, Paul Krugman tweeted, I agree with Jason Furman's call for a 3 % inflation target. The rationale for 2 % has been overtaken by a couple decades of experience. So if you think 3 % is the right target, shouldn't we be declaring victory? Or to put it a different way, if 2 % was a mistake, how many people should lose their jobs for a mistake? Now, Yuga Kohler, senior staff engineer at Coinbase, captured much of the sentiment in the crypto space when they wrote, the difference between a 2 % and a 3 % inflation rate over the course of 75 years is literally 100%. Raising the target is a sleight of hand to inflate away national debt. Stephen Geiger, an economics commentator and Paul Volcker fan, said, or, and stick with me here, we keep it at 2 % and the Fed and federal government can just do their job. So what did we actually get? Well, in this case, it was much what we expected. Bloomberg's headline reads, Powell signals Fed will raise rates if needed, keep them high. The Wall Street Journal writes, Powell, Fed will proceed carefully on any rate rises. And as per Bloomberg, the key takeaways were that 1. Powell acknowledged that the economic backdrop is better than it was a year ago, but he said that the Fed stands ready and willing to raise interest rates further if they need to. 2. He continued to focus that everything going forward will be data driven, but he did not put the possibility of cuts on the agenda, saying based on this assessment, we will proceed carefully as we decide whether to tighten further or instead to hold the policy rate constant and await further data. Third, Bloomberg says the comments are consistent with expectations that the Fed will leave interest rates unchanged at the next meeting with the possibility of another rate hike later in the year. Fourth, Powell acknowledged that interest rates are now high enough to be restrictive, meaning that they are weighing down on growth and inflation. And finally, Powell said 2 % is and will remain our inflation target, throwing some damp water on that part of the conversation. Nick Timiros from the Wall Street Journal, widely viewed as the Fed whisperer, called it a risk management speech. He quoted Powell as saying, given how far we have come at upcoming meetings, we are in a position to proceed carefully. The Kobayisi letter pointed out some data from bond traders around what their predictions are. They write, odds of a 25 basis point rate hike in September more than doubled, 21 .5 % after Powell's speech. Odds of an additional rate hike this year just hit a two -month high of 52 .1%. Rate cuts are now not expected to begin until June 2024. Doug Bonaparte hit it out of the park again with another great headline. Breaking! Stocks fall as Fed Chair Powell signals he's willing to destroy the economy. But in point of fact, stocks are actually leveling out and even going up slightly, based I think on expectations being met. So all in all, a much less dramatic speech than last year, and frankly just a real continuation of what we've gotten from Powell for the last two years. Blockworks Jack Farley wrote, Powell chooses to close his speech with Paul Volcker's phrase, we'll keep at it for the second year in a row. And that is pretty much the story. Now the last interesting thing that I wanted to point out for this week just by way of closing is that the three -day BRICS summit came to a close on Thursday in South Africa with news that six new members would join the loose economic bloc. Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates have committed to join in January. This adds to Brazil, Russia, India, China, and South Africa — there's BRICS — bringing the ranks of membership up to 11. President Xi Jinping called the expansion historic and said it would be a new starting point for BRICS cooperation. Still, while the addition of new nations to the Economic Cooperation Group does add strength, the announcement falls far short of the hype that we had seen coming into it. There had been rampant speculation this year that the group would unveil a common trade currency backed by gold, which frankly rumors of a BRICS currency have been persistent for over a decade but have so far never materialized. So all in all, the world continues to be interesting but doesn't look all that different than it did heading into the week. AI is up, inflation is down, interest rates are flat, but maybe up. And so, as so often has been the case for the last few months, the best thing to do is go touch grass. Until next time, be safe and take care of each other.
WLS-AM 890
"jason furman" Discussed on WLS-AM 890
"The inflation beast is tamed. Really? Because the month over month went up in the latest inflation report that just came out. Here's, again, left leaning economist Jason Furman yesterday, what was he on? CNBC was on CNBC saying, eh. I wouldn't necessarily believe the hype that this whole inflation thing is over like Joe Biden's telling you, check this out. I look at tips, I look at swaps, they're have break evens of inflation of around 2%. I just don't see that. I don't see how we have inflation much below, 3% this year. I don't see it coming down below that without a decent sized recession. And nothing in this number gives me comfort. Yeah, it's not a surprise relative to the expectations we had yesterday. But compared to the narrative we had a month ago where we thought inflation was coming down, where we thought it was jumping off from a low point. We now have core this month at an annualized rate just for the month of January of 5.1%. Even if you take out shelter, which is lagged and the used cars, the so called super core, you're at an annual rate of 4.3% for this month. That's faster than the pace in the last two months. And that is with some special things that we're helping. Use cars. We got more relief there than we were expecting to. Medical services also fell, those aren't things you can count on continuing to happen. So I think this inflation issue is real. I don't think it's going away anytime soon. And I think anyone who's overly calm about it is making me nervous. Yeah, making me nervous too. You know, again, it's interesting to get guys on the left who actually tell the truth and are bought and sold. May not agree with the guy, but I respect the fact that he's speaking out. A couple more things I want to get to. I always feel like I'm in a rush in the last half an hour of the show because they had so much to tell you, and I want to leave it for tomorrow because you know what happens. Jim's like, yeah, go to the graveyard. Lost story. We could do a month of shows on just things I've never gotten to. This is funny. Ron DeSantis, my governor, down here in Florida, that guy's amazing. He's doing just an incredible job. Just if you're ever going to run for office and you win as a conservative and you're out there listening to this show, you follow me at all. My recommendation is you follow the desantis approach. Which is what you hit them with a new thing every day. So that by the time they've adjusted to the thing you're hitting them with today, you're hitting them with a new thing tomorrow. And that's the thing with desantis. Whether it's now bid for constitutional carry, the thing about keeping porn out of kitty school and kiddie school libraries and stuff, you're not allowed to teach garbage CRT racism in schools. He's got the left on so many different fronts. They don't know what to do down here. That's the way to do it. So the reporters who are obviously activists and we don't have any real reporters in Florida very few. This one does. She gets caught on a hot mic and at the Santa event, right before the Santa comes to stage. This is real. This isn't like a thing we do. You gotta listen, and Jim bumped the audio a little bit. But she gives up the whole thing. She's talking to I guess another reporter in the front row and she's like, oh, I'm gonna get this desantis, man. You watch, she goes, we're gonna try to get at least one question and make them really uncomfortable. This is supposed to be, he's supposed to be the true talent here. Listen to this. I've
Bloomberg Radio New York
"jason furman" Discussed on Bloomberg Radio New York
"The fed ultimately needs to go very aggressively to just start to get a crack in the real economy. There needs to be additional paying felt to really bring down price pressures back in line with what the fed is looking for. The risk is for higher rates, I think, especially in light of an economy that's still resilient. That thing to keep in mind is there's a lot of money on the sideline. A year from now, we might be in a world, Lisa, we're inflation is not 5 anymore or four. Maybe it's three. This is Bloomberg surveillance with Tom Keene, Jonathan farrow, and Lisa Abraham always. Forget the Macy's day parade. It is the fed parade. And this is Bloomberg surveillance, Tom Kane, Lisa ramachandra off today on a well deserved day off. We do continue good morning. I'd really right now, I am saying Tom, this is all about a fed that has one message with Jim bullard coming out. We are not yet sufficiently restrictive levels. Yeah, that's the fed talk and we'll get much more today as well, but you see it in the markets. Let's get right to the data check as Lisa, you open SPX and negative one Dow negative 1%, NASA negative 1%. These are markets moving on fed speak. Well, this is St. Louis fed president James bullard, Jim bullard coming out right now, saying that fed policy is not yet at sufficiently restrictive levels. Hikes have only had limited impact so far on inflation. This is the lag effect. But that isn't going to stop them, right? Rates need to be increased further to curb inflation. And this really is the key. They are going to keep raising until they see some progress and right now, whether it's retail sales, whether it's other economic indicators they're not seeing it. Yeah, ten year yield up 6 basis points, 3.75% off 3.69%. Yesterday, but Lisa, to me, what is so, so important here is there's a crew out there saying they're beginning to see substantial tea leaves showing a lesser inflation. Jason Furman's incredibly important to yesterday housing and we get more housing data here in 8 30. The tea leaves aren't enough. And this to me is what's telling that when markets get optimistic about the tea leaves. Fed officials come out and they say, just stop it. Well, they're institutional. If Jim bullard was a professor at Indiana University, it'd be a different gimbal. These guys, including the vice chairman, have an institutional responsibility to be exposed and alter cautious. They have, they don't have the luxury of being academic. They have to affect markets in real time. And this is where the gamesmanship comes into play, where they're saying we're going to go hard and go into this. And then we're going to cap the S&P level basically. For all intents and purposes, it's essentially what they're saying. We don't want to see things rallying that have risk. And markets are saying we don't buy it. We think that you're going to cave. It's incredibly important side of guests here and we will do Bitcoin and FTX and all the rest of it here in 8 45 category. I'm thrilled as dark in the door and we'll get her on here on real uproar within the, what do I call it? The blockchain, is it the bit chain? It's crypto assets. It's fair to say. I'm already getting hate mail on this. It's not fair. I'm getting an 8 million. It's working out negative 41 on SPX future is a full 1% down, down, negative three O 7. The vix doesn't move yet, but I don't believe that number. 24.88 yield I mentioned up 7 basis points 3.76% on the ten year yield. I do agree it's off of the bullet statements that curve inversion. Thank you, Ian lingan, for joining negative 66 basis points stunning over 45 years with global Wall Street, truly back to the time of Volcker, oil we've barely mentioned this morning, oil at 90 oils down a little bit, maybe some economic slowdown bet there, $91 on Brent crude. I don't know what to do with foreign exchange today, currently. The Chancellor moose currency must Sterling rather a little weaker and a little bit of dollar strength. They do a little bit. Yeah, you did great. But what we're seeing right now is a market that continually is surprised by the same message being sent by the fed over and over again. Why is the market surprised? I don't understand, let's speak to the market beat occur is going to represent the market today. Could have investment strategies at Bernstein private wealth. I'm curious from your perspective. Why is the market surprised that the fed keeps getting more and more hawkish in the rhetoric? I'm not sure that the market surprised, I think the market is trying to find its footing, the same things that you've been quoting this morning. All investors are struggling with. It is a macro led market. We're focused on earnings and differentiation and companies, but there's no doubt about it that inflation inflation inflation, like you said earlier, is the key to market direction. What's the sense of consumer spending? And I say this because at the same time that you have fed officials saying we're not seeing signs of slowing. It's not trickling and as quickly as we would like. We see the likes of Kohl's having a really hard time. We see the likes yesterday from some others having a really hard time target not doing well. How do you parse out the winners from the losers with some sort of narrative that really gives you a sense of where things are heading? Well, there's two different narratives that you can start to interpret from the retail sales data as well as the earnings from these companies. First of all, you look at the macro picture and say, what does that mean about what the consumer has left to spend? And where in the consumer spending bucket, who's getting most affected. And there's no doubt about it that the low end consumer is squeezed more. That's not surprising. That's what we've historically seen when you see food and gas prices up over time. That's what's happening. Walmart, we know that they noted over 100,000 consumers are spending more on groceries at Walmart. But then you start to differentiate between these retailers and you look at a franchise like Costco, membership based, huge loyalty, done an excellent job, not just on supply chain, but on labor, and it makes a big difference. So I think when it comes to the micro, the time now is for stacks election and company differentiation. Companies are different in how they're able to manage the chain and labor as well. We're talking my book. But what I love in your research note and you get down to something that was gospel in my house, SPX, midterms, up 16%, presidential year, up 8%. You got to be kidding me. The history of these midterms we just had inflicted upon us is double digit SPX return. Wow, we had to be careful saying history always repeats. It would be awesome to see it 16% recovery post the midterms that is in history. And that is what we published. But you got to get back to fundamentals and state balance. I mean, at least this point earlier about surprise. You don't want to be playing the game of trying to switch asset classes and sectors in a fast way here. Because there is so much surprise that's possible in the market. And I think the midterms are some element of surprise as well, obviously. So I think we have to be humble and you have to be balanced. Okay, you got to be balanced, but do you buy quality? I mean, by small pack small cap quality, mid cap quality, big stuff, Apple, whatever. Give us a differentiation of those sectors that create the active alpha you're predicting. Yeah. You must have read our note. By people read the note. I don't read the notes. Yeah. Quality growth is an area that we like, and I think we like it most in large cap space. Small caps are interesting as well, but obviously we feel we could be entering recessionary period. And even if that recession is mild, small caps could be more vulnerable. At least it wants to jump in here, but this is critical. Are you going to see record use of cash by those big cap quality names? I think we could. I think they've got more strength in their balance sheets. They've got more ability to maintain quality just on labor as well. Obviously you're seeing cuts and ad spending and intact, but there's still quality names like Microsoft
Bloomberg Radio New York
"jason furman" Discussed on Bloomberg Radio New York
"The data isn't collapsing on them. They may well have to go to 6% as Larry summers will be able to charge Jason Furman have. But I think they can afford to pick their heads up and look around a bit come first order of 2023 before going all the way. Adam, you did refer briefly to what's been going on in the United Kingdom. Certainly the markets believe that there was some sort of mistake made there. I suspect it was actually made by the government not by the Central Bank, the center back had to react. What do you make of what the Bank of England is having to do and the possible crisis with respect to guilt? Yeah. I think the Bank of England, the Bank of England got a request and the treasury select committee, which is the part of parliament that oversees the bank. I've testified before them in the past for giving evidence as the great saying. And they asked for a memo from the Bank of England to say why terrible things were happening in the guild markets in the memo with the lead author being deputy governor John con level. I think excellent. I think it sets out the basic facts and TLDR. It was the government overruling and ignoring and getting around the standard budget processes like having the office budget responsibility review. There was a problem. It was the government putting forward a huge amount of additional tax cuts on top of the necessary spending to keep households together during the energy crisis. And it was doing so without any regard for the fact that the bank was tightening monetary policy to stop inflation. Or for the fact that there's been a huge accumulation of debt in recent years or for the fact that the bank's policy was going in the other direction. So this is in Brit speak an own goal, but not just an own goal, an own goal in the middle of the Euro quarterfinals. In front of millions. And as policy mistakes go, this one's pretty bad. They can reverse it. And they're incrementally doing so. And I'm hoping chance of courting uses the IMF meetings and the G 7 G 20 meetings as a fair excuse to cover his reversing some of these mistakes. Okay, Adam, it's always such a treat to have you with this Adam pose and president of the Peterson institute for international economics. Coming up, we're going to speak with Leslie Cantor of the Rutgers school of public health about the possible surge in COVID coming this winter. This is balance of power on Bloomberg television and on radio. Market coverage that so good. What's important is when an equity is you do the 5 ratio DuPont dance. What's that? It's like when I do renegade on TikTok. Nice. You feel like dancing. What is your TikTok handle
Bloomberg Radio New York
"jason furman" Discussed on Bloomberg Radio New York
"That rainy day is here. Everywhere you look, economies and markets are struggling with Jason Furman of the Kennedy school saying Europe may be in the worst shape. I think Europe is one of the biggest risks for a recession. Even as the world was also focused this week on the United Kingdom and the British pound, something the British opposition party hammered home. What we've seen in the past few days has no precedent. The government has lost control of the British economy. And for what? They've crashed the pound. But what happens in the UK and Europe doesn't necessarily stay there as Atlanta fed president Rafael bostic pointed out. What we've seen in terms of market reaction is that the proposal is really increased on certainty and really cause people to question about what the trajectory of the economy is going to be or might be moving forward. All of this leads Alvaro Pereira the chief OECD economist to take down growth estimates overall worldwide. Our forecast certainly is a challenging one because we are forecasting a significant slowdown of the economy. To save the United States growing at 0.5% next year, the Euro area growing 0.3%. Globally, we're talking about significant slowdown. Right now, it looks like more than just a rainy day. We may be headed into a real storm, and if so, where are the ports for the smart investor to head into as we batten down the hatches? And we welcome now someone
Mark Levin
Jared Bernstein: Analysts Ignore the Restart of Student Loan Payments
"Take a listen to this cut 14 go It's been a brutal couple of weeks for the market obviously Awful inflation numbers Now the likelihood of a hard landing maybe even a global recession according to some The student loan forgiveness in the middle of all this adding hundreds of billions even a $1 trillion to the demand side Doesn't that make the fed's job even more difficult your allies Larry summers Jason Furman both warned that that's a problem The president once again bowing to the far left Does that justify increasing demand in making things worse right at this time Jared I know you know it's no way you can sell this to me with a straightforward Wait a second Let me try the following because this is a fact that I is not reflected in the rap you just gave me Did you ask And if you ask Jason and Larry about this I think they'll agree You should try and find out for yourself Okay The thing you left out was restart that is restarting student loan payments which of course have been in forbearance since the pandemic began That begins in January And if you actually look at the numbers month by month the amount of restart even with debt forgiveness basically offsets the amount Let me see if I can understand this This is the game You ready
Bloomberg Radio New York
"jason furman" Discussed on Bloomberg Radio New York
"If you graduate, you may not have access to middle class life that the college degree once provided. The president of the United States fulfilling a campaign pledge and TK a controversial one at that I'd say in the last day or so. Yeah, just not to waste a lot of time, Jason fuhrman with us tomorrow. I think he's on team Biden scathing in his critique. Jason fuhrman is on with us tomorrow. And Jason Furman, like Larry summers, at times Lisa, has been a bit of a headache for this administration. In particular with the inflationary impulse of some of their stimulus of some of their plans and how much does this sort of feed into that on the margins, not significantly, but basically giving people more power to spend at a time where that's a problem. That argument to me is second tier to the top tier argument, which is they've started a process and is Megan mcardle in The Washington Post says, once it gets started, what's next? What's the next program after this? What about me? It's the. Range you heard a lot. So, you know, one of the Abraham was clan gets into something that costs 80,000 bucks a year, and you go, wait, the people 5 years before me got tuition relief, where's my tuition? As you cite some. The $80,000 a year though. That's the heart of the problem, isn't it? Oh, absolutely. Why are you pledging that to me? And we would all go to a snap from Washington, D.C., Emily, how controversial is this one proving to be? So this one is even controversial within the Democratic Party. I mean, you've seen some lawmakers like Bernie Sanders, Elizabeth Warren, come out and phrase the Biden administration for it. But you've seen other groups notably the NAACP, saying that this really did not go far enough. And then on your more moderate Democrats, we saw one of Chris Papas, he's a frontline Democrat. He's going to be running a very competitive race in November. And he said, look, this doesn't really address the main problem, which is that college tuition is too high, and we need to find ways to bring that back down. So a lot of mixed response here, a lot of criticism from Republicans. At the same point, what Biden seemed to really do here was kind of choose that middle ground. He didn't go as far as more initially pitched on the campaign trail with $50,000 of relief. He went for a smaller number. He limited it to those who make less than a $125,000 a year. Right. And he tried to really focus it on low income students. Emily, Emily ghost Spartans on us here. What is the distinction between University of Chicago at 81,000 all in Michigan state in a number that's a little bit beneath that? How are those two schools treated in this new legislation? Well, to a certain extent, if you see schools, there's an argument out there that if schools see that the government is willing to forgive student loans, that doesn't really incentivize colleges to try and keep their tuition prices low. And let's also point out, I haven't heard this in the discussion too much, but the federal government has already forgiven hundreds of billions of dollars of student loans through numbers of other forgiveness programs. They've had their public service loan forgiveness. They've had other programs where after you pay a certain month for certain amount of time, you get the rest forgiven. So Americans have already been putting the bill for a lot of folks who have gone to college and racked up a lot of student debt through these other federal government programs. And you'll hear folks, particularly on the right, but even some on the left say that they're concerned that some of this government aid that's been going out there, it really has not incentivized colleges to try and figure out ways to keep tuition low. And so we're going to see folks increasingly saddled with more and more debt and then the question becomes, do you start seeing things like Biden's move yesterday become more common? Yeah, Emily milkins of Bloomberg government, thank you so much for being with us, the underlying question here really has become also, though, how protracted is the inflationary impulse if you start to get increasing numbers of programs that do aim at increasing the spending power of a whole swath of individuals, which brings us to the Jan hats costs of Superman and a Bank of America still back with us. What is your view of the ramifications for equities if the fed were to hold rates at 4%, three and a half percent for years in the face of some of these structural changes fueled by fiscal policy? You know, I think that that is that is essentially what the market is pricing in. I mean, my view here is that what we're seeing now is actually a healthy although somewhat volatile return to normalcy. I mean, I thought that by the end of June we had positive real rates and then they retraced quickly back to zero. So I think part of what we're seeing is a move towards a rational market with a rational discount rate. You know, holding rates fixed, I think, is, I mean, I just think that we need to let some of the leverage grow more expensive in order to shake out, you know, kind of excessive spending, excessive leverage levels, which fortunately aren't sitting on consumer or corporate balance sheets, but are sitting on government balance sheets. So, you know, I think the other argument that we hear around, you know, why we should be bullish is the idea that we have so much debt that the government can't afford to let rates move higher. I think that's actually a very bearish sign that we are in this. We've gotten ourselves into a box basically where we have to keep rates low forever in order to shoulder this burden of debt. You know, I guess I look at a lot of the fiscal responses to this. And I think some of it's good. I mean, if you look at the green spend outlined in the inflation reduction act, I think what that does is it shows corporations that they're not alone in getting to net zero in reducing their emissions and that the government is going to help along the way. But I also think that this pulls forward a lot of CAPEX spending that companies were planning to do over a longer time horizon. Now they're going to pull it forward into the next 5 years. So, you know, if you think about it, the easiest way to get to lower emissions is by moving your operations closer to your consumer. And that's what we're seeing most companies do. In fact, our analysts, our analyst based asked our companies, how are you going to reduce emissions? And one of the most frequent responses was reassuring near shoring. So the inflation reduction act, I think, is really interesting in that it does encourage moving to that goal faster, but what it might also do is push inflation up as companies spend more aggressively on CAPEX as this tax benefit basically lasts for about 5 years. So it's a complicated, I don't know if keeping great flow forever is the answer. Thank you. Thanks. I certainly not
Bloomberg Radio New York
"jason furman" Discussed on Bloomberg Radio New York
"Wednesday NBC News reports FedEx express is locked down a government contract to bring the shipment from ramstein Air Force Base in Germany to dulles international airport near Washington D.C. It's not yet clear how much infant formula will be brought over on this flight It comes after our first shipment of about 78,000 pounds of baby formula arrived in the U.S. Sunday Atop economist says Americans shouldn't worry about a recession at least not yet But the market is sending a signal and it's one that we should be somewhat concerned about and pay attention to Just no time to panic Appearing on CBS's face the nation former Obama administration economic adviser Jason Furman explained he doesn't expect a recession in the next 6 to 12 months He pointed to strong consumer spending low employment and job growth has indicators of a healthy economy However Furman said further down the road when the Federal Reserve's policy has more of an effect the outlook becomes less clear He also suggested President Biden lower tariffs on China put in place by his Republican predecessors Former Secretary of Defense Robert Gates says Finland and Sweden applying to join NATO will dramatically change the geopolitics in Europe especially with Russian president Vladimir Putin Now that you have the Swedes and the fens as part of that he's really put Russia in a much worse strategic position than it had before the invasion Appearing on CBS's face the nation Gates explained that this move puts pressure on Putin not just in Ukraine but on one of his own borders He also noted that Putin has led Sweden to abandon 200 years of neutrality in its bid to join the military alliance A likely case of monkeypox is being identified in Florida the Department of Health and Broward county says the presumptive case involves international travel NBC 6 reports the state is working to identify potential exposures as the patient is in isolation The World Health Organization has confirmed over 90 cases worldwide including 5 in the U.S. says of Saturday I'm Chris coraggio A popular peanut butter brand is being recalled because of possible salmonella contamination J.M. Smucker says the recall involves certain types of GIF peanut butter that are sold nationwide the recall of products include creamy and crunchy peanut butter and peanut butter to go packs symptoms of salmonella infection include fever diarrhea nausea vomiting and abdominal pain Comedian John Mulaney is fishing backlash after his tour stop in Columbus Ohio on Friday during the show fellow comedian Dave Chappelle joined as an opener while there's no video footage of either comedian sets Chappelle's jokes are being described as transphobic fans flooded social media asking why millennia would let Chappelle open for his show if his jokes were at the expense of the LGBTQ+ community One of the mighty morphin Power Rangers is being charged with fraud Jim Forbes has more The actor who played the red power ranger in the 1990s TV series is facing federal charges for COVID-19 fraud Jason Geiger known professionally as Austin St. John was arrested this week in McKinney Texas following his indictment Federal prosecutors say Geiger took part in a scheme to falsify government documents to get funds from the paycheck protection program He allegedly obtained over $400,000 in loans If convicted he faces up to 20 years in prison his lawyer says Geiger is pleading not guilty I'm Jim Forbes Streaming giant Hulu is looking to bring in new and former subscribers with a special deal from now until May 27th new and eligible returning subscribers can sign up for Hulu's ad supported tier for only a dollar per month for three months The offer is in celebration of national streaming day The push for new subscribers comes after the Disney own platform reported a gain of just 300,000 subscriptions last quarter Other services are also struggling as Netflix reported losing 200,000 subscribers in quarter one In the NBA playoffs the heat beat the Celtics Saturday in Boston to take a two one lead in the Eastern Conference Finals game three in the west is tonight in Dallas with the warriors up two O on the maps I'm Chris And I'm Doug Krishna at Bloomberg world headquarters in New York Let's check this hour's top business stories on the markets We are told Broadcom is in talks to buy the cloud computing company VMware talks we are told are ongoing and there is no guarantee that discussions will lead to a deal VMware has a market cap of roughly $40 billion so far this year it shares our down 20% South Korea's early trade data shows exports remain buoyant in the month of May it may be a sign that global economy is adjusting to war in Ukraine and China gradually beginning to wind back virus lockdowns South Korean exports were up 24.1% in the first 20 days of the month compared to last year Overall imports were higher by 37.8% BlackRock's investments in China are beginning to pay off the world's largest money manager saw assets for Greater China mutual funds and ETFs jump to $48 billion in 2021 research from firm Z Ben shows that's up more than 40% from the prior year Apple has reportedly told some of its contract manufacturers it wants to boost production outside China The Wall Street Journal says Apple has cited Beijing's strict anti COVID policy among other reasons We check markets every 15 minutes here on Bloomberg right now in Hong Kong the hang seng down 1.2% on the Chinese mainland trying to hide composite off just a tenth of 1% The nikkei off session highs better by about a half of 1% and in Sydney the ASX 200 is a head two tenths of 1% although in Seoul the cost speed down a tenth of 1% US Treasury yields rising across the curve a ten year at two 80 a two year at two 61 and the dollar showing weakness with the Bloomberg dollar spot index down three tenths of 1% Global news 24 hours a day on air and on Bloomberg quicktake powered by more than 2700 journalists and analysts This is Bloomberg This is Bloomberg intelligence The new tools that a metaverse can bring allows you to create more immersive content To sell less oil more electrons.
Bloomberg Radio New York
"jason furman" Discussed on Bloomberg Radio New York
"Settled down the treasury market settled down You said we're a two 80 Last week we were at three 20 and again the concern was that we were headed to three 50 It feels as though the market is getting very comfortable with the narrative that the path to a 3% fed funds rate will be enough for now to slow down growth and inflationary pressures or at least get the fed to pause Now look I'll admit it wasn't a perfect bond market Corporate credit still had a tough week Thanks very much equity market and Sarah It was the lousy earnings that Sarah talked about And we had high yield yielding now 8% It started the month at 7% Bob Sarah raised a recession How do you see the likeliest recession I think most people I've talked to not over the next 12 months but you go out 24 months it's different I think when you look at the next 12 months in the U.S. you still have to get through the summer where there's a lot of pent up demand for travel and leisure and unemployment is still very low in wages are going up I think when you start to get out 18 to 24 months then you're looking a lot of things You're looking at where rates will be the cumulative impact of rate hikes We think there'll be about 3% You're looking at the bite that inflation will have taken out of the economy You'll have another year year and a half of higher inflation than the consumer would like to see You'll have a strong dollar It's still possible for the fed to engineer a soft landing But frankly it looks very aspirational when you figure they have to battle the highest rate of inflation in 40 years And drain away the greatest amount of liquidity we've seen in the history of earth This is Sarah bob's right What does that say to equities I think you know for equities it definitely leads to more downside in a recessionary environment They have not priced it in But that's also why we're looking for those companies that are less dependent on economic growth That does lead us to growth stock They have some of the worst returns here to date And then also fundamentally strong sectors Energy is a sector we still like because of the fundamentals tight supply demand reasonably strong and producers are being very disciplined And then finally dividend growers if you look at history companies that have strong balance sheets cash flow can continue to grow their dividends They'll give you that portfolio of protection with inequities and should perform quite well while the Fred raises heights and be defensive during a recession Okay Sarah bob we're going to be staying with us because we.
Bloomberg Radio New York
"jason furman" Discussed on Bloomberg Radio New York
"From Bloomberg radio We've got some inflation built into the system and price rises aren't going to go away Overnight but I think we've been seeing some hopeful signs that we're at a point here where we can begin getting a grip on this situation That of course was Paul Volcker on Wall Street with way back in 1975 That was when he was the president of the New York fed before he got to administer his medicine to the economy as head of the Federal Reserve David Bianco of DWS America's and Kate Moore of BlackRock are still with us So Kate let me ask you a question that I'm hearing more and more Some people are suggesting this may be here for a long time to come We had Jason Furman on from Harvard earlier this week on Bloomberg and he said he thinks it could be years we have really high inflation If that's right if that proves to be true what does that say for two investors Well actually as much stress as we have around higher inflation rates particularly since most of us haven't had to deal with this for the majority of our lives There's actually really interesting investment theme around higher inflation It's really interesting to look at within industries which companies have pricing power which companies are doing a really good job of managing their costs and managing to their margins And which are struggling I mean I also like this theme of looking at companies that have very high labor intensity to sales In other words do they have to continue to hire and especially at a time where we know the total cost of employee continues to rise Or do they have business models that are scalable They can continue to grow without adding two additional labor I mean we have to live in this environment and invest in this environment And I think there's some pretty interesting opportunities Even though inflation does pinch our wallets Well okay give me an example What sorts of sectors at least are you talking about Okay an example might be like if you're just thinking in the consumer sectors for example some companies have done a really good job of writing longer term contracts of managing their input costs Sometimes they've made great investments in software and systems and technology so that they've been able to reduce their dependence on labor All of these things help to sort of mitigate the margin pressure that an inflationary environment might otherwise scare us into right And so there are some decent fundamental stories even in the higher inflationary environment But you've really got to get to know the company And there are some beneficiaries of the fed fighting inflation banks insurance companies they should benefit from higher interest rates We think utilities are a really good Bond substitute with inflation protection and probably delivering the energy that the future and electrification And we like healthcare and healthcare has become the biggest part of consumer spending and continues to be the fastest growing part productivity medicines devices are needed there These productivity providers we think they're going to be able to play an important role in capture profits Look about your clip In 1975 is that even the provoker recognized the challenge ahead It surprised even him The big man to the upside inflation can be a very big problem when that Genie is out of the bottle Okay that leaves me exactly my question to you David which is you study.
Bloomberg Radio New York
"jason furman" Discussed on Bloomberg Radio New York
"Well I think it's certainly tied to the pandemic in terms of that mix of spending but also the policy response both from the fed and the government So we had robust policy response both fiscal and monetary where I think policymakers of both sorts were very weary about falling into the same low inflation issue that we saw throughout the course of the last cycle So wanting to make sure that that didn't happen again And then you layer on this commodity shock that comes from the conflict in Ukraine but then you add that to the fact that you still see supply shocks ongoing with China's lockdown And so I think it's really kind of an all of the above response where you don't get generational high inflation without a myriad of factors It was a polish response from both the fiscal and the monetary side of course and goodness knows we don't want to forget how bad it looks when the response came in And we probably needed to do an awful lot if not all of what was done But that raises the question of what the policy response now should be how much can be done on the fiscal side Put aside for a moment the Federal Reserve So I think on the fiscal side at this point there's very little that's realistic to get done in terms of what you can actually get through Congress with the midterms already So so close And so I think it does come down in terms of realistically where you're going to get help and bringing inflation down It's going to come from the monetary policy side We've already take the fed take this more hawkish stance So pointing towards the chance of multiple 50 basis point hikes And I think today's inflation numbers and where we expect that to go suggest that you are going to see more of those 50 basis point hikes coming at the upcoming meetings 50 basis points but do the numbers today make 75 basis points to be back on the table So I think you'll hear chatter about that but I think overall it seems like a beneficial as well They're not going to rule anything out I think barring a clear reacceleration in inflation I think that's going to be a tough sell at this point You know historically 50 basis points is already pretty big especially if you're talking about back to back meetings You go back to the 94 cycle Yes you did CS 75 basis point hike in there but otherwise the fed was moving 50 basis points at every other meeting So when you couple that with where we are today and probably what's the neutral rate of interest we're still seeing some really aggressive pikes when you talk about 50 basis points at back to back meetings over the course of this summer Is it inevitable Sarah that we have to slow the economy down to get inflation in check And as a practical matter can we slow down and enough to really check inflation without tipping it over into recession Well that's the tough job that the bed has ahead I think by definition they need to slow growth below its potential So you have output continuing to grow but not as fast as resources in the economy So given the low rate of potential growth that we have today you know probably just 2% maybe even a touch under It's a very small needle with Fred and that's what makes the fed's job so hard So I think there are scenarios that you can come up with where maybe they do get a lucky escape but a lot of pieces have to fall in place So for example you get a much bigger pickup in labor supply that helps hold down wage pressures You see the mix of spending rotate back towards services relieving some of that historic goods inflation that we see And I think you also have to see things settle down when it comes to the conflict in Ukraine pretty quickly here So it's going to be a tough job ahead for the fed Whenever we talk about the Federal Reserve at this point we talk about the so called neutral rate that I've learned is not written down somewhere I can't look it up Where it is but the fed is basically said they think it's around in the two to three range I think is actually what J pile said earlier this week At the same time Jason Furman The Economist on Bloomberg a little earlier he said he thinks it may be four and they may need to go to 5 in order to really bring an inflation What do you think Well I think we when we look at where the fed funds rate is going So our expectation is that it is going to get north of three given the ongoing inflation pressures that we have and given how tight the labor market is So we're focused a lot on goods and services in this conversation but I think underpinning all that is that you do have a lot of pressure coming from the labor market in terms of those labor costs That's going to affect services more than goods but it's an issue for companies across the spectrum And that's really a more persistent source of inflation and one that the fed does have I think more influence over when they look at with their monetary policy settings in terms of the overall impact of labor demand So I think when we step back and look at the whole picture you are going to have to see policy move into a restrictive stance above whatever that estimate of neutral may be Sarah finally it's become something of a national pastime I think to talk about the 1970s now What was going on inflation then And we inevitably talk about wage price spiral Do you see any evidence of that yet So I think we've seen some flirtations with that but I don't think that we're in one right now I think one key difference between the 1970s is that you do have a lot of latent supply on the sidelines So where we have lower participation even among prime age workers And so you don't need wholesale societal changes in kind of the types of people who are working or how many of them are working to see that relief in terms of labor supply Of course you don't have the rates of unionization but you're still again overall pretty tight labor market And so I think there's still some cost pressures there but I think given the prospects of higher labor supply coming back on trend I think that's an important aspect of not falling into this wage price spiral And getting some control around inflation So thank you so very much for being here Sarah House of Wells Fargo Coming up here we're going to get to work talking about getting New York back up and running again after.
Bloomberg Radio New York
"jason furman" Discussed on Bloomberg Radio New York
"Policy makers will be meeting next week in a report today showed the employment cost index a measure of business labor costs posted a record gain in the first quarter that's a plus for workers over the short haul but longer term rising labor costs are adding to the worst inflation in 40 years So how might this affect the fed's inflation fighting goals Jason Furman is a professor at the Harvard Kennedy school and former chair of the council of economic advisers He was interviewed by our Joe Matthew right here on balance of power I think the underlying inflationary trend in our economy right now is about four to 5% that's based off of the wage growth we saw that UCI number came in above expectations It came in high That was the most important number we got today So I think the underlying trend is four to 5% I think there is some upward pressure on that trend because labor markets remain very tight I think it's a while before the fed can get this down After earnings Apple shares now down by 2% Intel shares after earnings down 6.2% Amazon plunging 13.2% after earnings One O two on Wall Street ExxonMobil and Chevron are pledging to ramp up shareholder returns as crude oil and natural gas prices surged to multiyear highs following Russia's invasion of Ukraine shares of both oil majors are lower ExxonMobil down now by 1.1% Chevron is tumbling by 2.4% Elon Musk has disclosed an additional four and a half $1 billion worth of Tesla stock sales in new regulatory filings today bringing the total he is disposed of in the wake of his deal to buy Twitter to more than 8 and a half $1 billion Again recapping a down day on Wall Street here with the Dow the S&P now to stack all declining just about the lows of the day right now on the S&P down 94 a decline there of 2.2% Your ten year yield 2.89% I'm Charlie pallet that is a Bloomberg business flash This is balance and power with David Weston These new sanctions aren't just because the war is dragged on It's in response to the viewing of atrocity The destruction of this democracy is a threat to our world order Where the world of politics meets the world of business There have been clear losers from deglobalization and it now appears to be attempt to shorten supply chain There's a lot of concern that there are new variants arising and that COVID rates are creeping up again Balance of poem with David Weston on Bloomberg radio From the Bloomberg interactive broker studio welcome to the second hour of balance of power I'm Joe Matthew in for David Weston today We've been.
Bloomberg Radio New York
"jason furman" Discussed on Bloomberg Radio New York
"Two and a half percent faster than I could have imagined I think where they have more work to do is setting the expectation that they're going to keep raising rates as long as they need to that that might be a while And absolutely I agree with Larry rates above 4% are very plausible very likely to be needed I think it actually is what the fed is going to do I just wish they were sending clear signals and that the market believed that that was going to happen I'd like to get to the causes of inflation with you for a moment here Jason because you wrote an important column for project syndicate just last week that questions the conventional wisdom the arguments that we tend to hear from The White House that inflation is happening because of the supply chain bottlenecks that we've seen and because of the pandemic You're writing that there's much more involved here that this is about demand that will make this likely last longer than those other two phenomena Where is the administration wrong on this Look it's not just the administration I think a lot of people have overstated the importance of supply shocks and all of this And understated the importance of demand And I think that demand has a lot of persistence to it Why do I think that Well if demand increases a lot you're going to see supply problems but it wasn't the supply problems that caused it It was the demand increase that caused it And that's what we're seeing for example in ports where the volume and ports is way up it's just not up as much as we wanted it to be And broadly there's sort of a disconnect People talk about supply chains as an excuse for high inflation But then they don't talk about it when they talk about real GDP growth Real GDP growth has been strong A supply chains were such a problem We would have also seen weak real GDP growth Janet Yellen didn't talk about it yesterday in an important speech Jason I know that you were there And I wonder what your thought is as the treasury secretary talked about lessons learned from the pandemic policy response made no mention whatsoever about the side effects of inflation Was that an oversight or worse Look I think the American rescue plan contributed to inflation I think the American rescue plan was too large That going forward though the administration can't do a lot about inflation I mean inflation really is the responsibility of the Federal Reserve Jay Powell is basically their inflation czar That's right And the one who's tasked with bringing it down So I think it's the fed that really needs to make sure it internalizes these lessons and changes And I think it's done a lot of that pretty well Well with that said in the dual mandate in mind is the lesson for Democrats here who are just getting hammered starting with the president on down through the rank and file on Capitol Hill Is the lesson here that we should be in fact much more aggressive about inflation than we are about employment I think it's that you want to be balanced I was involved in the response to the last crisis We had too little employment and inflation was too low This one the problem is the opposite So I think you want to get a balance And there are better places to strike the balance than where we are at this moment So what's the messaging from Democrats What should it be Jason If you're back in The White House you're advising the president You have to keep talking about it but you also can not over promise It's difficult obviously based on our conversation right now to know what the trajectory is going to be Because come November there are going to be some tough questions to answer Jason How should this be communicated from The White House Look I'm not a communications genius but when working with the communications people I tell them three things One don't expect this inflation to fall down very quickly So be prepared for this to last Number two it really is hurting Real wages are down And number three the main solutions to this in reality are at the fed In The White House there's some things they can do I think the spro release was a good idea I think the student loan pause was a bad idea one of those is going to help inflation One of those is going to hurt it But you sort of need to take those inputs and then form your best judgment in our communication But there's no great way to communicate about this until we have lower inflation Oh it's a great conversation with Jason Furman Jason we thank you for your insights Today coming up on balance of power.
Bloomberg Radio New York
"jason furman" Discussed on Bloomberg Radio New York
"Maintain this level of sanctions It's causing pain all around Do you have any doubt about the solidity of this relationship right now I think the key to this David is communication I think president von der Lyon President Biden and several of the other EU leaders need to communicate very very clearly what is going to happen to prices The fact that they're going to go up hopefully they won't stay up long hopefully that these sanctions even though President Biden mentioned they weren't designed to have a deterrent effect what they were really designed to do was to annoy enough of the people around Putin that they decide that life would be a lot easier without Putin running Russia That's really what the sanctions were designed for And as soon as that happens you know we don't know who his successor will be It could be worse but in the short term just changing the guard will make a huge difference in the shooting war I doubt very very much that if Putin is displaced for having started this war in Ukraine that his successor would just pick up where he left off and continue the kinetic activities He might want to drive a hard bargain with Ukraine but I think the shooting would stop very definitely Mister besser is very very helpful to talk with you today Thank you for the time That's Gordon Sondland He is the United States ambassador to the united European Union under president Trump Coming up what the war in Ukraine means for the global economy with Jason Furman.
The Dan Bongino Show
Child Care Effect On Unemployment?
"And the new lie is it's definitely childcare. Here. It is, while Street Journal editorial board the other day I've been trying to get through this story seriously for three days now it's called the childcare excuse for unfilled jobs. So you would think they had some data on that the left when they said child care was the reason nobody was going back to work. They don't Here's a quote the Peterson Institute for International Economics on Monday. Released. The study on parents in the workforce told Childcare was a problem. It would affect parents, right Study was lead by former Obama administration economist Jason Furman. Studies suggest that child care isn't the main factor keeping workers at home or even a significant one.
Planet Money
Bond Voyage
"We're going to start in the early nineties back before this shift. When the old rules about government borrowing still applied. Bill clinton had just been elected president. He appointed an economist named laura tyson to be one of his top advisors and she looked at the economy and she saw this glaring problem year after year. Both government deficits and interest rates. Were going up and then he said omega if we don't get a hold of this federal deficit than that trend will continue. Those rates will continue upward. That was a very significant concern. Higher interest rates were concerned for a couple of reasons for one thing. Obviously they meant that the government had to pay more to borrow money but also when interest rates for the government went up. Interest rates also went up for everybody else. And that's it up this whole cascade of problems so we're people won't buy as many houses. There won't be as many houses constructed in their wealth as much capital equipment invested in and investments in important part of the Economic growth in your all sorts of every interest sensitive part of the economy the way the government runs a deficit. The way it borrows money is by selling bonds treasury bonds. The government says to really anybody. Okay lend us whatever one hundred dollars and in say ten years we will pay you back with interest will pay you back one hundred twenty dollars. The bond is basically the government's i. Iou you that it will pay back that loan with interest and during the clinton administration because of that link between deficits and interest rates. Everybody in the white house talked about treasury bonds about the bond market time. James carville was a political advisor to president. Clinton was just an obsession. In the early days of clinton's everybody say what's the bond market could house bot mocking react to hell multiple. i don't know it just became this omnipresent. The heart of every conversation. James carville was not an economics guy but as he spent time at the white house he realized that sort of bizarrely all these people who worked there making policy the people who had what seemed like the most powerful jobs in the world. We're in fact terrified of the bond market so when a reporter from the wall street journal called up carville to talk about the bond market. He came up with this line that became sort of famous or at least bond market famous kid. I wanted to grow up with four hundred hitter. The pope and the president. But i just want to be the bond. Market's gonna scare the hell out of everybody pleat. What did he say. A what a hundred hitter like in baseball pope the president baseball. I cannot tell you how many times he said that's me. Every meeting every meeting a lot of my memories are about carville sort of making jokes about you. Know you issues as a bond trader bond traders. These are the people who work in finance all around the world who manage a bunch of money. Generally other people's money pension funds or college endowments that kind of thing and every day they decide what bonds to buy and what bonds to sell what companies and countries to lend to and what companies and countries to not lend to to stop lending to and like with any lender bond traders worry about lending more money to a borrower who is already borrowing a lot because all that borrowing makes it more risky and so to compensate for that risk bond traders demand a higher interest rate. They stop lending until rates. Go up and this bond traders demanding higher interest rates when the government is borrowing more money. This is the scenario that everyone was so worried about people. Were so afraid of this that there was even a special term for the bond traders. Who do this bond vigilantes. Bill clinton has convinced. The bond vigilantes are scary and in fact he decides the us needs to bring the deficit down. He decides to build a whole economic plan around getting rid of the deficit. One of the economists he brought in to make that happen was jason and a central argument. That we made was if you do this. It will lower interest rates and interest rates are lower will have more investment and more economic growth and sort of amazingly. All of this happened. They did raise taxes and cut spending and get the deficit down. In fact by the end of the clinton administration the deficit felt all the way to zero. And what came next was sort of a golden moment for the economy in silicon valley. There was the dot com boom but really the whole economy was doing great businesses of all kinds. Were doing well. Ordinary workers were getting breezes lower deficits lead to lower interest rates which led to more investment. And that was good for basically everybody. The system was working. The next big moment in the story comes right after the financial crisis of two thousand eight and this is the moment when everything is about to change when this big shift in the way the world works is about to happen but nobody quite nosy yet. Brock obama has just been elected. President obama brings in clinton's guy. Jason furman as one of his economic advisors and ferment. Goes into this meeting to discuss. How big of a stimulus. Bill obama should push for as he takes office. We met with the president-elect december sixteenth two thousand eight and we're all crowded together in a conference room. I think it was in a law firm in chicago and he wanted it to be big. He wanted to be bold but there was this worry. The stimulus was going to be funded with deficit. Spending government was going to borrow the money. And some of obama's own economic advisers worried that borrowing and spending too much money might actually harm the economy for that classic reason
Bloomberg Radio New York
"jason furman" Discussed on Bloomberg Radio New York
"Case today and former President Trump's impeachment trial. The prosecution wrapped up It's case yesterday, the impeachment managers featured hundreds of video clips from the capital, Riot, Democratic Senator Chris Coons said the footage revealed how harrowing the scene within the nation's capital truly was That day. Many of us in the Senate didn't realize just how close and angry violent mob came. Until harming vice president Pence toe harming Speaker Pelosi to attacking each of us individually. The defense says they plan to only take about four hours to present their case. Then President Donald Trump was reportedly sicker with covert than the public knew back. In October, The New York Times says four people familiar with his condition saying they had extremely low blood oxygen levels reported about the president. And there were fears that he was close to being placed on a ventilator. Dr. Imran Ali spoke to ABC Ventilator issue is we want to put put people event later? Early on. Before they decompensate at so I think that's what the doctors were considering once his oxygenation levels were below that 88% threshold, it is said Mr Trump also had a lung problem associated with pneumonia. A group of more than 60. Economists urged President Joe Biden to create a path of citizenship for undocumented immigrants in his forthcoming economic and infrastructure plan. Argue it would raise US wages, productivity and tax revenue. One of the economist includes President Obama's former top economists, Jason Furman, live.
77WABC Radio
"jason furman" Discussed on 77WABC Radio
"Jason Furman talks about how the supply side isn't the promise that demand side. I think he's wrong. Americans sitting on so much cash right now. Yes, I understand that there are people who don't have that. Overall, there's a tremendous urge to spend pent up demand, and I think very quickly our economy will bounce back, and a lot of this relief will not be needed again. His idea about tying The flow of benefits to some measurements of economic activity. I think that's actually smart quickly. Mr Biden is declared a halt to oil and gas leasing on federal lands. He's made remarks about fracking, and he's indicated that he's moving the Federal fleet, a car fleet to electric. I do not see this in the price of anything yet. Is this a price to be paid because oil and gas energy in general employ hundreds of thousands of good paying jobs? Yeah. So what Fine is done, I think is incredibly stupid. Uh, the United States surge in domestic energy production has been a miracle. It has fallen off now, but not because of strictures like leasing, but rather because of the price being so low, the price has now recovered to the point where oil drilling is starting to turn back up again. Biden is a kind of virtue, signaling so less that is all in on climate change. I think it's a really bad decision. I think this Keystone decision will come back to bite him. It's extremely unpopular even with a lot of union workers because it's gonna cost a lot of jobs. And I think politically, John to your point as we go into the next midterms in states like California. I'm sorry, Pennsylvania, where fracking is a big deal, and by the way, fracking is a big deal for all of almost all oil and gas production. Now, this is not a fringe activity. This is essential tart, maintaining our oil and gas production. I think it's going to hurt Democrats to be cutting down on this. The other thing that it just doesn't get nearly enough commentary is that U. S oil and gas production is incredibly important. She had politically the more oil and gas we produce less Russia gets to produce, the more we keep a lid on prices, the better for Americans. And the worst for Russia. If we're really and by the way, China if we're really concerned about Maintaining our balance of power in our importance in the world she had politically cutting back on on gas production is a terrible, terrible idea. This peak columnist at the Hill and it Fox News, often on Fox business, We turned to politics snake next. The impeachment trial set for the middle of February unless I'm John Bachelor, this is the John by John Basso.
KCRW
"jason furman" Discussed on KCRW
"Trillion of programs to get people through the pandemic. Marketplaces. Nancy Marshall Ganz ER joins us for individuals. What's there? Well, David, there are an additional direct payments of $1400 for most Americans that adds up to $2000 per person. If you combine it with the $600 in the most recent relief package, and the extra federal unemployment benefit would be increased to $400 a week. President elect Biden is trying to narrow the wealth gap, he says. The pandemic has made it a lot worse. You won't see this pain if you score If your scorecard is how things are going on Wall Street. But you will see it Barely. Clearly You examine what the twin crises of a pandemic and this sinking economy have laid bare. And and see some goals were longer term. Yeah. Biden, once a nationwide $15 an hour minimum wage, But the emphasis last night really was on immediate relief. We talked to Jason Furman about this. He's a Harvard economist who was chair of President Obama's Council of Economic Advisors, He says the thinking now goes like this. These households are hurting. How can we help? These states don't have enough money. What can we do to get the money? We need money for vaccination. Let's do that. Chances. Congress will go along with this. Well, Democrats. Of course, we'll have a razor thin majority in the Senate. But Biden could get support from some Republicans who have been urging him to top up the relief checks to $2000. Came and in a burst of optimism that vaccine will fix pandemic banking giant JP Morgan this morning said it won't need to use the $3 billion in a previously set aside for emergency loan losses. Its quarterly profits were a record $12 billion. Yet the stock is down more than 3% now. The Dow is down 235 points 8/10 of a percent s and P down 8/10 percent as well. The NASDAQ is down 7/10 percent now to incentives for employees to get vaccinated. Here's marketplaces Nova Sappho regulators have ruled that companies can require most of their workers to get vaccinated. But employers appear to be opting for encouraging workers. Instead, insta card is giving its grocery delivery drivers a $25 stipend. The grocer trader Joe's and the Variety store chain Dollar general are offering the equivalent of four hours of pay. The companies say they want to make sure workers don't have to choose between maintaining their income and getting vaccinated, either Dollar General nor trader Joe's have in store pharmacies Target, which does says it won't offer pay incentives, but those pharmacies will make vaccines available to staff. Governments Vaccine advisory panel has set grocery workers among the second group to get immunized. I'm.
WNYC 93.9 FM
"jason furman" Discussed on WNYC 93.9 FM
"Incoming President Biden laid out what he's calling his American rescue plan last night $1.9 trillion of programs to get people through the pandemic. Marketplaces Nancy Marshall Gangsters here for individuals what's in there? Well, David, there are an additional direct payments of $1400 for most Americans that adds up to $2000 per person. If you combine it with the $600 in the most recent relief package, and the extra federal unemployment benefit would be increased to $400 a week. President elect Biden is trying to narrow the wealth gap, he says. The pandemic has made it a lot worse. You won't see this pain if you score If your scorecard is how things are going on Wall Street. But you will see it barely clearly to examine what the twin crises of a pandemic and this sinking economy have laid bare. And Nancy. Some goals were longer term. Yeah, Biden, once a nationwide $15 an hour minimum wage, but the emphasis last night really was on immediate relief. We talked to Jason Furman about this. He's a Harvard economist who was chair of President Obama's Council of Economic Advisors, He says the thinking now goes like this. These households are hurting. How can we help? These states don't have enough money. What can we do to get the money? We need money for vaccination. Let's do that. Chances. Congress will go along with this well. Democrats, of course, will have a razor thin majority in the Senate. But Biden could get support from some Republicans who've been urging him to top up the relief checks to $2000. Thank you. In a burst of optimism That vaccine will soon fix pandemic. Banking giant J. P. Morgan just now said it won't need to use the $3 billion that had previously set aside for emergency loan losses. Its quarterly profits were a record $12 billion. Stocks now are mixed. The S and P futures down 4/10 percent. The NASDAQ future just turned slightly positive. Some companies with frontline workers are offering incentives to nudge employees to get vaccinated. Here's marketplaces nervous, a foe. Regulators have ruled that companies can require most of their workers to get vaccinated. But employers appear to be opting for encouraging workers. Instead, insta card is giving its grocery delivery drivers a $25 stipend. The grocer trader Joe's and the Variety store chain Dollar general are offering the equivalent of four hours of pay. Companies say they want to make sure workers don't have to choose between maintaining their income and getting vaccinated, either dollar General nor trader Joe's have in store pharmacies. Target, which does says it won't offer pay incentives, But those pharmacies will make vaccines available to staff. The government's vaccine advisory panel has set grocery workers among the second group to get immunized. I'm nervous, Awful for marketplace. Marketplace.
WDUN AM550
"jason furman" Discussed on WDUN AM550
"It really is real news for real people. 20 after this is America in the morning. A recap of Friday's market close and what's moving the markets this week. Here's CNBC's Jessica Edinger. With business headlines. Stocks open at record highs this morning on Wall Street for all three major indexes after a week of gains, the Dow and the S and P 500 more than 1% so far this new year, the NASDAQ is up more than 2%. Investors are keeping an eye, though on pandemic risk, and a new American strain added to the UK variant, which the White House covert task force believes are behind the rapid spread and devastating case numbers and death toll. The strain that's circulating here in United States seems to be behaving like the strain of circulating in the United Kingdom. Now it's not that strange. If it was, we'd recognize that because we're looking for it. But there is a perception that there could be a different variant here spreading in the U. S. It has characteristics similar to the strain that spreading United Kingdom. Former FDA commissioner Dr Scott Gottlieb on CNBC. The FDA is now encouraging states to open up those vaccinations to older Americans and other groups. Get the process moving, but are the wealthy, jumping the line and getting vaccinated before they should. The Florida Health Department has launched an investigation into a luxury elder care home that doled out vaccines to wealthy donors and members of the Palm Beach, Florida Country Club. The virus is impacting the economy. Experts are cautioning investors to be ready for a pullback in the markets. At some point, I think there are enormous pockets of speculation they may not necessarily apply to the entire market. But certainly I do think the 17 million individual traders who have taken to day trading and options trading are going to have Rough day somewhere down the road. CNBC contributor Ron Insana. It was a horrible December jobs report is the virus stores and businesses cut people. Economists say This could continue worse than I thought. We're still I don't know around 11 million jobs short. Of where we should have been at this point in time, Harvard economist Jason Furman on CNBC. If you go fill up the tank this morning, you're probably going to see higher prices. The national average for a gallon of regular is up to $2.30. 15 cents more a gallon today, on average than you were paying a month ago. Wow, that is a jump and home prices going up. Well, nothing changed to the calendar. Home. Prices are generally still very high because there's not much out there to buy. But if you're looking for a house in the middle of the country, open your wallet. For decades, prices have surged on the coast in major markets like San Francisco, L, a. Seattle, Boston, New York and Miami. They are still going up there. But it is the middle. That is the new star cities like Indianapolis, Kansas City, Boise, Austin and all the three biggest cities in Ohio Memphis and not spill in Tennessee. These have all been historically more affordable markets that makes the suddenly strong price growth in the middle of the country that much more striking CNBC's Diana Olick on Today's watch list. It's quiet, no earnings or economic reports. Interesting as always. CNBC's Jessica Edinger is 23 after more details are starting to emerge after a jetliner in Indonesia carrying 62 people crashed into the sea minutes after taking off correspondent Karen Shamas has the latest Authorities confirmed that they have located the site of the crash and black boxes of a Boeing 737 500 aircraft. The discovery comes after the plane crashed into the Java Sea carrying 62 people on board. Such a rescue team 53 the DEP Aries shortly after military chief had each judge Anto confirmed there had been progress in their search. We have determined the position of the plane's black boxes from two signals emitted by the devices. Official diving team signaled the.
Start Here
Hopes dimming for another round of stimulus checks in 2020
"Regardless of a vaccine for so many americans. This is emergency time. We're so close. There is a light at the end of the tunnel and yet people are going to the hospital now. Businesses are getting closed now and without financial relief a lot. More people will lose their jobs some getting ready to spend their first winter in homeless shelters but this week you're also seeing some hope in washington that a deal can get done for the first time in months it seems. Lawmakers are close to passing another round of support. Compromise is within reach behind the scenes. There was clearly some bipartisan cooperation. Happening for example many democrats wanted direct stimulus checks sent to americans will it now appears some republicans and perhaps even the white house itself may be on board with that idea. Some workers have gotten sick. Have sued their employers for not protecting them better from the virus. Republicans wanted to shield corporations from that type of lawsuit. Mitch mcconnell is no longer saying that really has to be included. But they're so lots of hangups lots of reasons. This could be sunk so this morning. I don't want to talk about the partisan back and forth. I wanna ask a simple question what happens. Congress does not pass a code relief. Bill what are the consequences days weeks and months from now. Abc's chief business and economics correspondent. Rebecca jarvis is here rebecca. Can you smell it the stakes for me at the capital this week will brad incredibly important. It is make or break. It's life or death. I'm just day by day trying to figure it out day. Bonday that in the pocket of for example a single mother like angel recently spoke to in detroit who works in a hospital makes minimum wage. Therein has three school age. Children were that school. As of last friday is no longer available to her in person. The choice of work and kids shouldn't be a choice. I want to be the best mom i can be. This could be the difference between her being able to afford to pay for childcare to have someone come to her home or to even drop her children off at daycare or her potentially having to quit her job because she has no other alternative to care for her children and at the same time work so it's been challenging trying to keep going to work and prevent being far low or fire to keep you know inconsequential our lives and our lifestyles. But at the same time some nights. I go to sleep. And i'm like why am i going to work. What are the domino's that would actually fall. Just nothing happened like. Can you walk me through how that would play out from. The halls of washington to small business will two things especially are hammering. Small businesses and many small businesses in this country happened to be independent restaurants. They have not given us money and they have shut us down. We cannot survive. My staff cannot survive in one case particularly in california. You have a number of restaurants who've been told to close their doors because of the spike in cova cases now that we are going to close the outside. It's of our employees go home. And how are they going to pay their bills in new york while restaurants can remain open and they can serve primarily outdoors. They have a tipping point because things have just gotten so cold that as goldman sachs estimates about forty degrees. Is the tipping point where people are no longer going to be interested in dining outside while we're there in new york. The summer has just been a disaster to scott freezing cold after thanksgiving and the world has just completely fallen apart. Earlier this year in september the national restaurant association pulled all of its members and said how many of you can make it. The next six months without any additional aid from the government forty percent of the national restaurant association members. These are small independent restaurants across the country. Said they weren't gonna make it six months without help. That was three months ago. We're already in the territory where they weren't sure they were going to be able to survive. We see all these posters that were all in this together but it doesn't seem like we are when a particular industry as being targeted stricter than others for many of them. they're using their home as collateral their mortgage as collateral. What does it mean if they go out of business it means they could lose their home. It also means that their retirement savings for for many small businesses. The retirement account is the business itself. You've seen from j. p. morgan for example. They're now estimating the first quarter of next year. We'll see negative economic growth Moody's they're saying at this point that without help from the government we will see a double dip recession. And that's really what we're talking about here brad. What's you're not just envisioning like stays really bad. You're envisioning a scenario where it could even get a lot worse really suddenly affecting everyone with a potential deal rebecca here. I'm sure the average person would just take what they can get. But when you talk to economists business leaders are there things that need to be in this deal to avoid that disaster scenario. You just talked about well brad. According to a group of more than one. Hundred and twenty-five economists including jason furman who's a former top economic advisor to president obama. Those direct cash payments to american families are incredibly important. I need the help. My kid's name to eight other people's kids. The the the thing about stimulus checks is that they're one of the fastest ways to get people money that money gets spent immediately and it gets spent immediately in ways that can help give the economy a little bit of juice at a time where people have been pulling back but once you start looking at what various analysts in what economists are calling for. They're saying at this point sooner rather than bigger is better in fact If you look at what. Bank of america's chief economist is calling for right now. She wants to see money for testing for the vaccine and contact tracing pandemic employment insurance. That's the employment insurance for gig workers and people who have lost coverage because they've already extended out all of the benefits because they've been collecting benefits for too long and then direct aid to small businesses. Moody's mark zandi adds to that list. Rental assistance among the programs ending soon is the cdc eviction moratorium. If it expires it will lead up to five million tenants facing eviction in january the beginning of winter. I've never been in this situation ever before my life. I've never had to come out to beg for help. And even calling any of this stimulus is sort of a misnomer. It's really about relief. So that people can just get to the other side.
AP 24 Hour News
UK to launch new watchdog next year to police tech giants
"Will create a new watchdog to police. Big tech companies, including Google and Facebook. The AP Syria. Shockley reports the U. K government says that setting up a digital markets unit next year to enforce a new code of conduct governing the behavior off tech giants that dominate the online advertising market. The digital markets. Units scheduled to launch in April will oversee a new regulatory regime for tech companies that's aimed at spurring more competition. The measures were foreshadowed in findings, but former Obama economic advisor Jason Furman, who was commissioned by the UK Treasury to carry out the review off the digital economy. Sarah Shockley, London, Delta
Intelligence Squared U.S. Debates
Has Globalization Undermined the American Working Class?
"America's working class has been cheated is an assertion that has been getting a lot of currency lately are last presidential election went deep on that claim in both parties by the way and the culprit most often blamed for that. It's that monstrous five syllable word globalization, the philosophy and the practice of free trade which has been great for companies and for shareholders but has had a devastating impact. It is argued on the American working woman and. Man Well Economist do agree that in the past four decades the American working class, which we're defining tonight as people who lack a four year college degree. They have seen flat wages and a steady disappearance of good jobs. But is globalization a main reason that that's happening to those workers and for those workers is globalization entirely bad. Well, we think this has the makings of a debate. So let's have it. Yes or no to this statement globalization. has undermined. America's working. Class I'm John Donavan, and I stand between two teams of experts in this topic who argue for and against this resolution globalization has undermined America's working class as always. Our debate will go in three rounds and then our live audience here at the Saint Regis Hotel and Aspen Colorado where we are appearing in partnership with the Aspen Ideas Festival will choose the winner and as always if all goes well civil discourse, we'll. Also win a resolution once again, globalization has undermined America's Working Class Jared Bernstein you have debated with us before. So welcome back you're a senior fellow at the center on Budget and policy priorities. You were Vice President Joe. Biden's chief economist. The last time you debated with US interestingly Jason Furman who is your opponent at the other table tonight was your debate partner as a team you were formidable formidable I, almost want to use the French pronunciation. Formula, so are you planning to use your insiders knowledge of Jason's debate battles against him to very much am the way to do that with Jason is to make a lot of sports analogies because they repealing confusing. All right. Thank you and I see you detail to Aspen. You were a to aspen well I. Think the guy with the tie is the guy you want to listen to, but I'll let you decide. All right. Thanks very much. Jared Bernstein and can tell us who your partner is. This someone I've known for twenty five years she's a dear friend of mine and I consider her my mentor in this topic feely gentlemen feeling. Theo welcome to intelligence squared your president of the Economic Policy Institute. You've spent two decades as an economist for the AFL CIO, which is America's largest federation of unions. It represents some twelve point, five, million working women and men. You've spent twenty five years working on trade policy. So what got you interested in trade? Well, when I came to Washington in the early nineties I got drawn. INTO THE NAFTA debate the North American Free Trade. Agreement. And I realized pretty early on that. This was not some kind of a dry text book discussion about tariffs but it was a transnational battle over democracy good jobs, workers, rights, and regulation. So I was hooked because a lots at stake a lot is at stake. Okay. Thanks very much thelia once again, team arguing for the motion. And motion again, globalization has undermined America's working class. We have to debaters arguing against it, I Jason Firm. Welcome back to intelligence squared Jason you're a professor of the practice of economic policy at the Harvard Kennedy School you're a senior fellow at the Peterson Institute for International Economics, you were Chairman of the Council of Economic Advisers under President Obama tonight. As we said, you're going to be debating your former colleague Jared Bernstein on the impact of globalization. So is this the first time you to have debated the globalization issue with each other jared and I agree on I'd say about ninety five percent of economic issues and my goal tonight is to bring to one hundred percent. Thanks very much Jason and can you tell us who your partner is someone I've only known for a few years and every single thing. He's ever told me I have believed James Manica Legitimate James Manyika. Welcome the first time telling squared you're a senior partner at McKinsey, and company you're the chairman of their economics research arm, the McKinsey Global Institute, your first time debating with us. But not your first debate you debated at Oxford I did you studied robotics and computers earlier in your career you were visiting scientist at NASA. So how do you go from very eclectic from robotics and space to thinking about trade policy? In American. Workers I've always been fascinated by the kinds of technologies that drive innovation and growth, but also affects what will people in the real world actually do. So when you put that together with the economy, these issues around trade and workforce become very, very important. Those are the issues that motive a great perspective to bring here and then once again, thank you. Thank you again to the team arguing against them.
All Things Considered
Democratic Economist Predicts A Rosy Economy That May Work In Trump's Favor
"It's the economy stupid they line up widely attributed to democratic strategist James carvel carvel helped run bill Clinton's winning campaign for president back in nineteen ninety two so how much might be twenty twenty presidential election hinge on the economy and economy by the way with historic levels of unemployment double digit contractions in economic growth large sectors of the economy shut down for weeks now months well because of the corona virus will it is tempting to think all of that would be an albatross for president trump but maybe not so says Jason Furman a Democrat and economist and chair of president Obama's council of economic advisers he has got a theory that the economy could it be a winner for Republicans this fall and he is here now to make the case Jason Furman welcome thanks for having me so your argument is that yes said complete economic carnage right now the economy the data is dire but then in the coming months we could see the best economic data in history really make the case so I'm not a political forecaster I'll tell you what I think's gonna happen the economy then can speculate about what it means for the economy economy collapsed over a one month period from mid March to mid April after that it's gone from very very very bad to what on election day will probably just be very bad now the difference between very very very bad and very bad will be four months in a row when we might see more than a million jobs created a month when we might see the unemployment rate falling really rapidly and so if you just focus on the most recent data there will be a case that one can make with a straight face that we're seeing you know the fastest economic recovery ever so you're saying the numbers might still actually be bad come fall but they would be moving in the right direction if you're president trump and thinking this might help your reelection prospects yeah and and I don't expect that right direction to last forever but could it is the first phase of the recovery is the fastest part that's where you turn the lights back on in your business that's where the furloughed workers get called back and that can lead to a rapid decline in the unemployment rate a rapid increase in jobs even at the end of that process you'll still have an unemployment rate in the double digits and you know what I think a lot of the debate will hinge on is you know the unemployment rate is twelve that's terrible or the unemployment rate has come down really far from you know the twenty percent it was out earlier in the year isn't that great nobody knows what the fall will bring of course but it does seem the base than expected second wave of the virus would follow up with throw a serious flying they want out of this argument yes the second wave a large second wave would make this wrong it is what most economic forecasters are expecting right now and but I do think you know the Great Depression forecasts and the like are setting the bar in the wrong place we are very unlikely to have something like the Great Depression we are much more likely to have a very bad reception is very bad recession is a problem I think we should be doing everything we can to avoid it but for some people you know there may be a relief that you know it will appear as if the worst is behind us I do I mean the politics and economics are hard to untangle here because we are in an election year and and inside of six months from that presidential election how how tricky a spot does this put Democrats in it in the sense that everybody just about everybody but surely wants the economy to recover we would all like to see it doing better but if it does does that play straight to president trump's advantage come November I think the relevant question for voters in November will be who has a better plan to make the economy better in twenty twenty one twenty twenty to twenty twenty three who has a plan for infrastructure for training for paid leave you know whatever it is you think you're going to need for the recovery of the economy on a sustained basis that is Jason Furman he's an economics professor at Harvard and he served as chair of the council of economic advisers to president Obama Jason Furman thank you
The Last Word with Lawrence O'Donnell
Pelosi: House 'close' to striking deal with Trump on coronavirus response package
"Breaking news from Capitol Hill as House Speaker. Nancy Pelosi announced that she is close to an agreement to legislative deal with the trump administration on a package that could be passed tomorrow to deal with mostly the economic effects of the Corona virus and Donald Trump has not been involved in the negotiations is treasury. Secretary has done the president's job for him because the president is not in the mood to speak with Nancy Pelosi and reportedly believes that Speaker Pelosi would humiliate him if he involved himself in the discussions. This is of course one way of looking at the other way of looking at it as Donald trump humiliates himself whenever he opens his mouth as he did last night. While Donald Trump was addressing the nation last night for ten minutes from the office stock market futures trading started to drop dramatically and then when the market opened today proceeded to crash by the largest amount since nineteen eighty-seven losing almost ten percent of its value today. Harvard economics professor and former Treasury Secretary Lawrence Summers tweeted hostess sets. What I believe is a new world record for presidential market value destruction. Joining us now. Is Jason Furman? The former chairman of the Council of Economic Advisers. The President Obama. He is now professor of the practice of economic policy. At Harvard's Kennedy School. Thank you very much for joining US tonight. Professor Ruin what. What would you suggest the government action that could be taken now? What action could be taken to deal with what we're seeing as the economic effects of this crisis? Lawrence this is the most serious economic crisis. This country may have faced since the Great Depression bigger than what we faced in two thousand eight. Two thousand eight was terrible. It was devastating but most people kept their jobs. Many people kept spending right now. Everyone is cutting their spending large swaths of the economy. People's jobs are at risk. And so once you start to think about that the answer to your question of what we should do the more. We can do the better so my next question was going to be. Is this one thousand. Nine hundred eighty seven or is this nineteen twenty nine which you've already answered that it's closer to that of maybe about six months ago. I reread John. Kenneth Galbraith book the Great Crash About The nineteen twenty nine stock market crash. And when you read the things people were saying As it was already underway as the crash was happening others so many people who sounded like Donald Trump that saying it will bounce back as the president said today the stock market will bounce back. Don't worry about it Larry cudlow the other day saying invest As it's going down you know you'll be very happy with that. Of course it's dropped dramatically since Kudlow said that so just to set this of for our audience perspective you are comparing this now to the nineteen twenty nine crash of the stock absolutely and you know the difference is it depends on what happens if we get through this virus and the next two months then maybe it bounces right back if it takes us nine months even at that point if we find a cure for the vaccine a lot of damage a huge amount of damage will be done to companies to workers on to unemployment of type. That would persist. And you could take a long time to to recover from so I I'd love to have more reassuring things to say for Lawrence but I just I am. I am worried right now. Well you're confirming what. I've been feeling in my my amateur way about this but so this presents an enormous policy-making challenge because when you talk about things like payroll tax cut which the president mentioned a few days ago and it died instantly when the Senate Finance Committee chairman said he wouldn't even consider it. That could come back. But a payroll tax cut to a person. Who's no longer on payroll Doesn't work the way it bye-bye in the stimulus way. You might have wanted it to a while. That person was still on the payroll. That's absolutely right so what I think we should do. Is Number one everything. We can do on health free testing which is in the house legislation. I think that's terrific. We're GONNA eat a lot of hospital beds. A lot of ventilators. We're going to need that fast
The Indicator from Planet Money
Does the Deficit Matter?
"As evil number one fat, sandy not wanna eat fat. It was bad. There was no such thing as good fat. It was just all bad fat. And so in the store there was low fat everything there were these Lafayette cookies your snack cookies cardio. Yes. Like hockey pucks like had the consistency of packing phone. We're like frozen yogurt. Then it was like a low fat alternative to ice cream, which also kind of had the consistency of packing foam eighties. Eating a lot of stuff with the consisting of packing foam, like even low fat butter. You could've mentioned cholesterol, good, cholesterol, and bad cholesterol. Is at all bad. You know, that's that's another one for your list. That is Jason Furman. He's a professor of economic policy at the Harvard Kennedy School, and he also worked as an economist for the Obama administration. And we wanted to talk to Jason because he writes anything's a lot about another kind of universal evil that we had back in the eighties deficits the deficit is the shortfall between the tax revenue. The government collects in a given year and the money it spends when the government spends more money than it takes in. It has to borrow money to cover the shortfall that is the deficit, by the way, the deficit is not to be confused with the national debt. So the debt is like the amount of water in the bathtub and the deficit. Is like the amount of water. That's coming out of the tap in a given period of time and flowing into the bathtub to the debt is you're running total. The deficit is what you do in any given year politicians on the right on the left in the center. The one thing they could all agree on was the deficits were bad. It came up a lot deficit spending should not be a feature of budget. We have to cut the deficit because the more we spent paying off the debt the less tax dollars. We have to invest in jobs and education, the massive national debt, which we accumulated is the result of the government's high-spending diet. Well, it's time to change the diet and to change it in the right way. Government spending is a dangerous road. The deficits the people of America have been overcharged and on their behalf. I'm here asking for a refund, but now attitudes about budget deficits are evolving a lot. There's even a whole sort of tr. Trendy school of thought economics now, saying budget deficits, don't matter nearly as much as we thought that unless budget deficits lead to inflation. We can rack up all the deficits we want. No big deal. Jason Furman is not in that camp. But he says, you know, just like fat deficits are not the universal evil that we used to think they were. Although he did say that he didn't think it was an exact analogy it's a little bit different in that there. Probably is some timeless truth about dieting undefeated. I don't even think there is an underlying timeless truth because the world actually is changing and financial markets are functioning one way in the eighties and other way now and you need to. You know, change, your your an update, your ideas with with us changes in the world this indicated for planet money, I'm carseat, and I'm Stacey Vanik Smith. Dan, the show deficits why did everybody used to think deficits were bad, and what changed? Support for this podcast in the following message. Come from Jimmy Nye, the regulated exchange making it easy to add bitcoin and other crypto currencies to your portfolio, protecting your investments with oversight and state of the art cybersecurity open a free account at Jim ni- dot com slash indicator. Support also comes from WordPress dot com with powerful site building, tools and thousands of things that she was from users can launch site that's free to start with a room to grow. Get fifteen percent off any new plan. Purchase at WordPress dot com slash indicator. Today's indicator is a trillion as in a trillion dollars this year. The budget deficit is set to hit a trillion dollars. Jason Furman urine economist with Harvard's Kennedy School, you also served as an economist under President Obama trillion dollar sounds like a lot. That's scary Ohno's lot and that'll be popping for people absolately. Do I wish the deficit was smaller? Yes. Would I feel better about our economy? We had a lower debt as sheriff are Konami. Yes. So I feel like when I was growing up in eighties. The deficit was just this universally acknowledged terrible thing like the deficit was was bad. I feel like that his changed. But why has it changed? I mean, why did I mean it was really talked about. I think sort of this universal evil. Like, the one thing we could all grand was that the deficit was bad. Sometimes deficits can be good. Sometimes they can be bad. And sometimes they can be just not nearly as important as you'd like to think the time when they're good is in a recession you need to get yourself out of a recession. A'deficit means you're spending money or cutting taxes, that's helping the economy and in the nineteen eighties deficits back then really were a problem now deficits aren't causing high interest rates. So I don't think they're causing nearly the same magnitude of problems for the economy as they once were. Feel like they're kind of two parts of the deficit that people tend to worry about one is this kind of like there's almost sort of a morality like a moral principle at stake about deficits and the other one is just that sort of drags are Konami down. You could think about it in terms of morality because it can affect the distribution of income between generations. They're it depends on what you're doing it for if you're running a deficit to invest in infrastructure. You might actually be helping a future generation if you're running a deficit to give big tax cuts to people who are going to just run out and spend it today, you might be hurting a future generation. So I think there is a morality play between how this affects different generation. So what do you think is the best approach to the deficit right now? I mean, it sounds like maybe one extreme the other extreme don't like neither of those are good idea. What's a good idea? I can't give you. Scientific certainty. Exactly what the right way to handle the deficit is if you have a great new idea for college or a great new idea for social security or a great new tax cut. You wanna do then, you know, cut spending or raise taxes so that you're not adding to the deficit and making even higher than otherwise would have been that strikes. Middle course, it says you're not making a major exit for deficit reduction. You're just doing no harm. What I wouldn't do though is pass a law that makes that deficit even larger what are some good things about running a deficit. You know, the good is in a recession. It can help stimulate demand. Get people in businesses to spend more and help you get out of the recession in normal times. If you're using the deficit as a way to spend money on good things like infrastructure like scientific research, then it can actually make you richer in the future. Not. Poorer the flip side, the bad is if you're spending money on bad things, it can make future generations poorer, and it can drive up interest rates. Probably only happens a little, but it can that results in less business investment unless economic growth, you mentioned that like the economics of deficits have changed. How how have they changed? What has changed? And what is what does it mean for deficits the single most important number to know in? Judging country's fiscal situation is the difference between its interest rate and its growth rate 'cause if your interest rate is higher than your growth rate, your debt is going to be spiraling up as a share of the economy. If your interest rate is lower than your growth rate that helps contain how much your debt is rising relative to the economy right now in the United States growth rates are higher than interest rates, and that's helping us. To grow out of some of our debt burden and it's that key variable or minus Chee watching how that changes over time is I think a real key to understanding how much you should be worried about deficits at any point in time. Jason furman. Thank you so much. Thanks for having.
Politics, Policy, Power and Law
Seattle, Bloomberg and Jonathan Ferrell discussed on Politics, Policy, Power and Law
"A top aide kim jong un is in washington about to deliver a letter from north korean leader to president trump and we'll have more on that as soon as it happens the most restrictive abortion law in the country is temporarily blocked by federal judge it stops the so called fetal heartbeat law from taking effect in iowa next month under an agreement between lawyers for the state and abortion rights groups they sued to block the law that would ban most abortions if a fetal heartbeat can be detected president trump started the day by breaking with presidential practice again this time it had to do with the jobs report trump tweeted about the main numbers more than an hour ahead of their official release signaling a good report was on the way jason furman chaired the council of economic advisers under president obama he says presidents typically wait until after the report is out to comment on it president obama had done this tweet i would have had exactly the same reaction and conveyed it directly to him and everyone else in the white house that it was a major major problem that he had done it and i would hope that that's what's happening right now in the white house economic adviser larry cudlow says the president did have the numbers last night but his tweet wasn't meant to signal a positive report the unemployment rate did fall to an eighteen year low but democratic leader nancy pelosi says wages only grew by a third of a percent and even that is being offset by rising costs of healthcare and gasoline repeating we expect that letter to be delivered to president trump any moment now from a north korean official a top aide kim jong global news twenty four hours a day on air and it tectonic on twitter powered by more than twenty seven hundred journalists and analysts in one hundred twenty countries it's not enough to get the right people in the room somebody has to know what to ask them me dr somebody's how far is the united states from an age of a sturdy just asking because we've been talking about this in japan tom keene care for ten enjoyable book value seven percent lower than it was a biblical and jonathan ferrell seattle's been cutting costs aggressively bloomberg surveillance weekday mornings at seven eastern on bloomberg radio.