Latest / Bloomberg Intelligence / Trump's Order Lets Employers Offer Stingier Insurance, Nisen Says

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Trump's Order Lets Employers Offer Stingier Insurance, Nisen Says · Bloomberg Intelligence

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  Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.
• 0:08
  Speaker 1: Along with my co host Lisa Bramowitz. Each day we
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  Speaker 1: bring you the most important, noteworthy, and useful interviews for
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  Speaker 1: you and your money, whether you're at the grocery store
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  Speaker 1: or the trading floor. Find the Bloomberg p m L
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  Speaker 1: Podcast on Apple Podcasts, SoundCloud and Bloomberg dot com. You know,
• 0:31
  Speaker 1: a Lisa. We are also awaiting President Trump. He's going
• 0:34
  Speaker 1: to be talking about the healthcare reform that he has
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  Speaker 1: been trying to initiate, and maybe trying to do it
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  Speaker 1: by executive order rather than by floating a specific plan
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  Speaker 1: that would have to pass the Congress. This would, in
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  Speaker 1: a sense, dilute the options. Even though they say they're
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  Speaker 1: going to offer more options, it's gonna maybe dilute them
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  Speaker 1: because of it more expensive. Well, here's the here's the challenge.
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  Speaker 1: So basically, what President Trump, from my understanding, wants to
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  Speaker 1: do is to allow insurance companies to offer a wider
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  Speaker 1: array of plans to potential customers. In other words, you
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  Speaker 1: could just get certain protection that would cover uh, primary
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  Speaker 1: care visits or and catastrophic uh, you know, insurance. The
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  Speaker 1: concern here is that this will essentially, uh, make it
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  Speaker 1: more expensive for people who have pre existing conditions, and
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  Speaker 1: we need to get more comprehensive plans, thus basically pricing
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  Speaker 1: them out of the market. It follows, it follows the
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  Speaker 1: letter of the law, which says that you can't deny
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  Speaker 1: coverage for existing conditions pre existing conditions rather, but that
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  Speaker 1: the cost would be so exorbitant that it wouldn't really
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  Speaker 1: make any sense for people to be able to access
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  Speaker 1: this because they wouldn't be able to pay for it.
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  Speaker 1: And the treatments in many cases, as we've noted with,
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  Speaker 1: you know, orphan drugs or so on, are so expensive
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  Speaker 1: that you'd go broke just paying for the for the
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  Speaker 1: for the insurance plan because the cost of the medication
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  Speaker 1: or the treatment is so high. Yeah. I mean, it's
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  Speaker 1: sort of interesting to see the reaction as we get
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  Speaker 1: all of the new details out of President Trump's expected
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  Speaker 1: plans come out, the reactions and healthcare shares right, because
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  Speaker 1: you see them bouncing around and and responding to the volatility.
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  Speaker 1: President Trump is also thrown out the idea of withholding
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  Speaker 1: funds from the program which they have to subsidies subsidies, right,
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  Speaker 1: that's right, And so this is something to It affects
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  Speaker 1: a pretty wide variety of companies of just speaking from
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  Speaker 1: a markets view and looking right now at Etna, its
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  Speaker 1: shares are down today along with others, nearly one percent,
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  Speaker 1: and they've been generally declining over the past few weeks.
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  Speaker 1: So it's interesting just to note that this could end
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  Speaker 1: up being a negative for them, or at least viewed
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  Speaker 1: that way by by investors. Yeah. Sure, well, I mean
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  Speaker 1: also Molina well Care Centene as well as Anthem. I mean,
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  Speaker 1: these are insurers that all participate in the Affordable Care
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  Speaker 1: Act exchanges, and the if the executive order goes to
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  Speaker 1: the point where it makes those plans uh not competitive
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  Speaker 1: in the marketplace because companies were forced to bottom, then
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  Speaker 1: you're going to end up with a very fragmented market
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  Speaker 1: that is going to be very difficult for consumers to untangle.
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  Speaker 1: You know, I'm struggling with the idea that Congress tried
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  Speaker 1: to pass some kind of healthcare law twice at least twice, right,
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  Speaker 1: and they couldn't come up with something that could get
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  Speaker 1: enough votes. And here we have the President acting unilaterally,
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  Speaker 1: and I wonder what this does to Congressional negotiations going forward.
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  Speaker 1: Given the fact that he's changing the backdrop quite a
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  Speaker 1: bit and and he is making uh some people would
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  Speaker 1: say A C A less viable. I want to bring
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  Speaker 1: a Max Niece in biotech, pharma and healthcare calumnist for
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  Speaker 1: Bloomberg gat Fly. He joins us here in eleven three
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  Speaker 1: Oh Studios. Max, you know you wrote a fantastic column
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  Speaker 1: basically saying that President Trump is kneecapping Uh, the A
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  Speaker 1: C A otherwise known as Obama Care. What's the path
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  Speaker 1: forward and how can A C A b resurrected? Is
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  Speaker 1: their political will to give it a little bit more
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  Speaker 1: after this? So there's sort of two components to this.
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  Speaker 1: There's what the administration is already doing, which includes cutting
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  Speaker 1: funds to to market the A C A and for
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  Speaker 1: groups that help people sign up for insurance, as well
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  Speaker 1: as shortening the period people have to enroll. And then
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  Speaker 1: there's what is happening today, which is the signing of
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  Speaker 1: an Executive Order UM that seeks to kind of make
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  Speaker 1: it easier to offer insurance and sort of skirts around
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  Speaker 1: some of the A c IS regulations. And what this
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  Speaker 1: does is it basically all kind of conspires to to
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  Speaker 1: damp and enrollment in the A C A and and
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  Speaker 1: leave the pool that's left there as people that tend
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  Speaker 1: to be sicker and higher costs, which raises premiums, which
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  Speaker 1: means more fewer people sign up. So it's kind of
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  Speaker 1: a really unfortunate cycle that that's difficult to derail. And
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  Speaker 1: I'm not sure if there's political will to do otherwise,
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  Speaker 1: because you know, the President has made his priorities known,
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  Speaker 1: which is effectively weakening this market. So um it would
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  Speaker 1: take action that that sort of contradicts him, and I'm
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  Speaker 1: not sure that the Congress is quite up for that.
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  Speaker 1: What does it also contradict the very notion of what
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  Speaker 1: insurance is that you want a large pool of people
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  Speaker 1: to pay into a group plan in order to diversify
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  Speaker 1: their risk so that when one person needs the funds
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  Speaker 1: in this case for healthcare, they exist while other people
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  Speaker 1: continue to pay because they don't want to get sick,
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  Speaker 1: but they might. Yeah, So that that was kind of
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  Speaker 1: the central logic of the A C A, which was
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  Speaker 1: to take you know, a large and fragmented individual market
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  Speaker 1: and create a larger risk pool out of it by
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  Speaker 1: subsidizing people, making people that couldn't previously afford it be
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  Speaker 1: able to afford it and making it accessible to a
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  Speaker 1: large group of people, and then adding the penalty if
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  Speaker 1: you didn't sign up to encourage people to sign up,
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  Speaker 1: because the insurance industry doesn't necessarily care where the money
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  Speaker 1: comes exactly. They don't care who pays the premium as
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  Speaker 1: long as the premium gets paid and its matched to
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  Speaker 1: the actual liability. Yeah. So the thing that's damaging about
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  Speaker 1: this order is that it it instead of making the
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  Speaker 1: risk pool larger, it divides it by basically making it
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  Speaker 1: easier to purchase cheap short term insurance and for little
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  Speaker 1: groups of employers to band together and offer less generous
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  Speaker 1: and cheaper coverage. So that will basically potentially siphon off
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  Speaker 1: people from the individual market, making the risk wool worse. There.
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  Speaker 1: Do you think that if President Trump goes through with
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  Speaker 1: pairing back both the subsidies as well as the requirements
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  Speaker 1: for insurance companies, that that will actually remove the pressure
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  Speaker 1: on Congress to do something substantial with the A C A,
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  Speaker 1: since they just have to uh since already been watered down,
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  Speaker 1: and there'll be less money flowing toward it um. So
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  Speaker 1: there there might be pressure on two sides, one other
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  Speaker 1: pressure to do something to sort of counter this to
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  Speaker 1: try and make the market a little more stable, um,
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  Speaker 1: or if the the aim might be through these kind
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  Speaker 1: of actions to deliberately destabilize it as a way to
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  Speaker 1: to galvanize another repeal replaced effort, although that that would
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  Speaker 1: obviously be complicated by the need to pass tax reform,
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  Speaker 1: so it's unclear if they'll be able to do that.
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  Speaker 1: Is there any in your mind can be and then
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  Speaker 1: any explanation for why we haven't seen a huge reaction
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  Speaker 1: in the stocks. I mean Anthem at United Health SIGNA.
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  Speaker 1: I mean, you know, okay, over the last month, AT
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  Speaker 1: is down four percent, but Anthem's up four tenths of
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  Speaker 1: a percent today, Anthem is higher. I mean, there's no
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  Speaker 1: real consensus here, is there? Um? I think if you
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  Speaker 1: look at some of the smaller insurers that are a
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  Speaker 1: little bit more narrowly focused on the A C A,
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  Speaker 1: you'll see a little bit more of a reaction, and
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  Speaker 1: Molina well care um, because everyone except Anthem has taken
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  Speaker 1: an even Anthem has taken a pretty big step back
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  Speaker 1: in the market. And the other thing is is it
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  Speaker 1: might be that this this order is a little bit
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  Speaker 1: less severe than than some were expecting. Over the last
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  Speaker 1: week and previously UH kind of limits the expansion of
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  Speaker 1: what are called association health plans to employers rather than
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  Speaker 1: seeking to add individuals to it. That was something that
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  Speaker 1: that people feared might happen. So so it's still bad,
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  Speaker 1: but not as bad. And and there's no kind of
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  Speaker 1: specific effort to make insurance UH be able to sell
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  Speaker 1: insurance across state lines, which was also a potential policy remedy.
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  Speaker 1: Are there any estimates on what President Trump's expected action
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  Speaker 1: UH in a few moments will do with respect to
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  Speaker 1: the number of uninsured in the US? UM? You know
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  Speaker 1: that there isn't a specific estimate on on this exact proposal,
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  Speaker 1: but pretty recently the CBO of the Congressional Budget Office
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  Speaker 1: did substantially revise downward its estimates of how many people
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  Speaker 1: would be on the individual exchanges UM, in part due
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  Speaker 1: to the fact that, you know, they just haven't performed
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  Speaker 1: as well as expected for a variety of reasons, but
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  Speaker 1: in part because of UM, you know, other actions taken
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  Speaker 1: by the president, like not committing to funding cast sharing
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  Speaker 1: reduction subsidies. What will this due to actual doctors, health
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  Speaker 1: care centers, I mean, does it actually have an effect
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  Speaker 1: on the healthcare networks that have been set up in
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  Speaker 1: different communities. It absolutely does, I mean, any any increase
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  Speaker 1: in the number of uninsured people exposes insured and expose
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  Speaker 1: hospitals to more uncompensated care. Um. And when people have
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  Speaker 1: you know, if they signed up for these skimpy short
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  Speaker 1: term plans, uh, they're likely to defer healthcare that they
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  Speaker 1: might have otherwise consumed if they had a comprehensive plan.
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  Speaker 1: And then there's the fact that you know, in insurance
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  Speaker 1: is in place. Um. You know, comprehensive insurance is desirable
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  Speaker 1: because you don't know when you're gonna need healthcare. I
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  Speaker 1: mean that that's why one of the goals of the
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  Speaker 1: a c A was to promote um you know, care
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  Speaker 1: insurance that actually served its role as opposed to being
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  Speaker 1: like so narrow or or having so much cost sharing
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  Speaker 1: for the patient that you know, actually getting sick in
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  Speaker 1: a real way was financially toxic. So you might see
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  Speaker 1: some of the return of that, you know, Max. One
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  Speaker 1: of the things that strikes me as ironic is that
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  Speaker 1: you have Medicare and Medicaid, although Medicaid typically administered by
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  Speaker 1: the states in a variety of places, but Medicare national plan, right,
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  Speaker 1: and then you have the situation where you cannot sell
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  Speaker 1: health insurance plans across state lines. It's almost as if
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  Speaker 1: we're sort of, you know, trying to do something with
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  Speaker 1: one hand tied behind your back. Is that accurate? Um,
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  Speaker 1: a little bit. It is tough to have a you know,
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  Speaker 1: unless you're the size of Medicare, and you know it's
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  Speaker 1: a program that's been around for many years. It's sort
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  Speaker 1: of tough to have UM insurance that extends across multiple
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  Speaker 1: places because you have to design a plan and a
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  Speaker 1: provider network UM and account for state regulations. But you know,
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  Speaker 1: the privately run Medicare advantage programs do kind of tend
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  Speaker 1: to be considered within states. So there's a little bit
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  Speaker 1: of a let's put in that market as well. Do
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  Speaker 1: you have any sense of whose advising President Trump and
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  Speaker 1: drafting what he's doing today? UM? I mean this, this
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  Speaker 1: particular piece of this particular executive order has Rand Paul's
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  Speaker 1: fingerprints all over it. Uh. It kind of has some
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  Speaker 1: some proposals that that he's kind of been in favor
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  Speaker 1: of for a long time, although not all of them.
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  Speaker 1: But I'm sure he's still thrilled at the result today.
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  Speaker 1: Hospital corporations. Uh, what what pain are they going to
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  Speaker 1: feel if indeed this happens. You know, it's a it's
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  Speaker 1: a segment. Hospitals are already struggling with kind of reimbursement
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  Speaker 1: issues and uh generally like a kind of over consolidation
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  Speaker 1: and a lot of debt. So UM, any anything at
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  Speaker 1: the margin that reduces their flow of business, as you know,
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  Speaker 1: arise in the uninsured rate um and an uncompensied care
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  Speaker 1: could is definitely a bad thing. Because I was looking
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  Speaker 1: at Tenant Healthcare, for example, and the stock is down
• 11:59
  Speaker 1: five and a half percent this year and shares are
• 12:01
  Speaker 1: you know, down again today and that's going to be
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  Speaker 1: a difficult business, right, I mean they're down more than
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  Speaker 1: three and a half percent. So the hospital seemed to
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  Speaker 1: be bearing the brunt of this absolutely. Um. You know,
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  Speaker 1: especially something like Tenant that that has a really substantial
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  Speaker 1: debtload and UM, you know it's trying to dispose chunks
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  Speaker 1: of the business to pay it down. UM. And anything
• 12:20
  Speaker 1: that that looks negative will obviously be reacted to. Well.
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  Speaker 1: But max, will this make it cheaper for the US
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  Speaker 1: with respect to their healthcare bills? Um? For a subset
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  Speaker 1: of people, you know, if you're healthy and young and
• 12:33
  Speaker 1: only one really limited insurance, you might have a better
• 12:36
  Speaker 1: option now that just has various knock on effects. And
• 12:40
  Speaker 1: if you become not healthy then uh, you know, that's
• 12:42
  Speaker 1: the position we were in before the A you're potentially
• 12:45
  Speaker 1: a lot of trouble. Actually was talking about the federal
• 12:46
  Speaker 1: government and that that was one thing that people were
• 12:48
  Speaker 1: talking about, was that reducing the A S A would
• 12:51
  Speaker 1: actually free up all this money and it could kind
• 12:53
  Speaker 1: of bridge any budget deficits that would arise from the
• 12:57
  Speaker 1: tax plan. You know, the truly ironic thinking is that
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  Speaker 1: there's a really good chance that this will increase federal expenditures. Um.
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  Speaker 1: It sounds kind of um contradictory. You think of the
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  Speaker 1: A C as a big government program that pairing it
• 13:10
  Speaker 1: back might reduce federal spending. But because you're taking all
• 13:15
  Speaker 1: these actions that are likely to send insurance premiums up um.
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  Speaker 1: For the for about the individual market that gets subsidies, Uh,
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  Speaker 1: they'll still want this insurance, they don't pay for a
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  Speaker 1: whole lot of it. The subsidies are tied to their ensure,
• 13:30
  Speaker 1: their their income levels and tied to premiums. So when
• 13:33
  Speaker 1: premiums go up, those subsidies go up, and and those
• 13:37
  Speaker 1: premiums are set to go up a lot because of
• 13:39
  Speaker 1: these actions. So so in addition to kind of disrupting
• 13:42
  Speaker 1: the market, this might actually turn out to be very
• 13:43
  Speaker 1: expensive for the government. Max Neeson our gad Fly columnist
• 13:47
  Speaker 1: expert when it comes to biotechnology, pharmaceuticals and healthcare, and Max,
• 13:51
  Speaker 1: I'm sorry to keep harping on the hospitals because this
• 13:54
  Speaker 1: is kind of, you know, the point of care, right
• 13:56
  Speaker 1: And I've just been looking at the stocks and Tenant
• 13:58
  Speaker 1: is down eighteen and a half percent this over the
• 14:01
  Speaker 1: last month. I beg your pardon over the last month.
• 14:04
  Speaker 1: Community Health down over the last month. H C a
• 14:11
  Speaker 1: life point all the universal health. If the investing public
• 14:16
  Speaker 1: is saying we don't want to own a hospital, uh,
• 14:20
  Speaker 1: what's that going to due to the infrastructure of those
• 14:23
  Speaker 1: institutions that are going to be the ones to actually
• 14:25
  Speaker 1: administer they care where they're going to get the money,
• 14:27
  Speaker 1: They're gonna have to go out and borrow more money. Yeah,
• 14:31
  Speaker 1: So I'm a kind of rough equity environment for for
• 14:34
  Speaker 1: hospitals does make it a lot tougher. Um And when
• 14:38
  Speaker 1: you have these sort of big consolidated groups, um, you know,
• 14:42
  Speaker 1: they're they're kind of struggling in this market, and um,
• 14:46
  Speaker 1: you know, it's unclear whether that model is gonna end
• 14:49
  Speaker 1: up being sustainable. Um. So yeah, really really not sure
• 14:52
  Speaker 1: how this is gonna impact because the whole point of
• 14:53
  Speaker 1: consolidation for the hospital industry was that it was supposed
• 14:56
  Speaker 1: to lower costs and improve patient care. Have they've done
• 15:00
  Speaker 1: away with the same kind of state by state regulations
• 15:03
  Speaker 1: that would limit, for example, the sharing of information between
• 15:06
  Speaker 1: hospital groups or is that still part of you know,
• 15:09
  Speaker 1: the privacy laws. So yeah, that that was sort of
• 15:11
  Speaker 1: the promised impact of these big consolidation moves. But but
• 15:15
  Speaker 1: obviously it hasn't quite come to fruition as as the
• 15:20
  Speaker 1: investor the I banks might have pitched when they were
• 15:23
  Speaker 1: making these deals, because you know, the amount of debt
• 15:26
  Speaker 1: that they raised has not kind of been it's been
• 15:29
  Speaker 1: out of proportion with the sort of synergies and and
• 15:33
  Speaker 1: anything they've realized by actually doing these transactions. Max Neison,
• 15:36
  Speaker 1: thank you so much for joining us. Always a pleasure
• 15:38
  Speaker 1: to get your insights, and always his columns are full
• 15:42
  Speaker 1: of insights, So I recommend people read at Bloomberg dot com,
• 15:45
  Speaker 1: slash gad Fly, Max Neeson is a Bloomberg gad Fly
• 15:48
  Speaker 1: columnist focusing on the healthcare and and biopharmaceutical companies and
• 15:54
  Speaker 1: everything else related to that field. Yeah, all right, let's
• 16:09
  Speaker 1: turn our attention now to the world of banking and finance.
• 16:11
  Speaker 1: I want to bring in Frank Sorentino. He is the
• 16:13
  Speaker 1: chairman and the chief executive of connect to One Bank,
• 16:16
  Speaker 1: assets under management four point seven billion dollars, based in
• 16:19
  Speaker 1: Englewood Cliffs, New Jersey, and you can follow Frank online
• 16:24
  Speaker 1: on Twitter at Frank and just Roman numeral three. Frank,
• 16:29
  Speaker 1: always good to have you here. You know, maybe you
• 16:32
  Speaker 1: could just start off by one of the things I
• 16:35
  Speaker 1: know slightly in the weeds. But when I think of
• 16:38
  Speaker 1: a bank, I don't necessarily think of changes in the
• 16:40
  Speaker 1: transportation industry. But I've got to think about that when
• 16:43
  Speaker 1: I think I'll connect one. Because you specialized in taxi
• 16:47
  Speaker 1: medallions and find helping to finance taxi taxi medallions, the
• 16:52
  Speaker 1: business has got to really have changed in the last
• 16:55
  Speaker 1: five years. I wonder if you could just tell us
• 16:57
  Speaker 1: your relationship how that's changed, and then how do you
• 17:00
  Speaker 1: meet a change like that, Because it's not as if
• 17:02
  Speaker 1: people still don't want to travel by automobile. PIM. Great
• 17:05
  Speaker 1: to be here again, Thank you so much. And yes,
• 17:08
  Speaker 1: of course, you know, there's lots of change in the
• 17:10
  Speaker 1: world today and transportation is one of those areas that
• 17:14
  Speaker 1: have changed dramatically. We we don't think about transportation in
• 17:18
  Speaker 1: the same way that we did even three years ago,
• 17:21
  Speaker 1: never mind five or ten years ago. Um, and here
• 17:24
  Speaker 1: it connect one bank. While that's a very very small
• 17:26
  Speaker 1: piece of what we do, we've seen and we continue
• 17:30
  Speaker 1: to see changes in all aspects of the businesses that
• 17:33
  Speaker 1: were involved in, whether it's in the transportation space, whether
• 17:37
  Speaker 1: it's in the retail space. There's tremendous change going on there, habitation,
• 17:42
  Speaker 1: office space. But I want to tell me about you
• 17:46
  Speaker 1: used to mean, I remember because you put them on
• 17:48
  Speaker 1: the balance sheet, they were listed as held for sale.
• 17:50
  Speaker 1: To just explain what it is you you used to
• 17:53
  Speaker 1: set you specialize in this, well, we never it was
• 17:55
  Speaker 1: never a specialty, very very small piece of our balance sheet, PIM.
• 17:59
  Speaker 1: We we're near a five billion dollar institution and this
• 18:03
  Speaker 1: is this is one percent of our entire balance sheet,
• 18:05
  Speaker 1: So I wouldn't call it a specialty. But um, we
• 18:08
  Speaker 1: certainly liked the transportation space in New York and that's
• 18:12
  Speaker 1: you know, that's what the taxi industry is about, and
• 18:14
  Speaker 1: taxing and the ownership of taxi medallion um and that
• 18:18
  Speaker 1: has definitely changed dramatically, and our view of how that
• 18:23
  Speaker 1: transportation is going to take place in New York City
• 18:25
  Speaker 1: has changed dramatically over time. Frank, I want to broaden
• 18:28
  Speaker 1: out a little bit into the relationship of community banks
• 18:32
  Speaker 1: with the incredible upsurge in financial technology, and I'm wondering,
• 18:38
  Speaker 1: from your firm's perspective, how have you upgraded your systems
• 18:43
  Speaker 1: and kind of adopted some more modern technology to both
• 18:48
  Speaker 1: streamline your employees as well as catered to potentially a
• 18:53
  Speaker 1: younger well, just as a jumping off from you know,
• 18:56
  Speaker 1: what's gone on in the transportation space. Uh, it's the
• 19:00
  Speaker 1: same thing here at connect One Bank and many other
• 19:04
  Speaker 1: financial institutions. You know, people, when we used to think
• 19:06
  Speaker 1: about a bank, you say the word bank, there's a
• 19:08
  Speaker 1: segment of the population today that thinks about a limestone
• 19:11
  Speaker 1: building with you know, with with leather couches and stone floors.
• 19:15
  Speaker 1: But today when we say bank, and you know, there's
• 19:17
  Speaker 1: another segment of the population who thinks about their mobile
• 19:21
  Speaker 1: device and thinks about ones and zeros and thinks about
• 19:23
  Speaker 1: an electronic media as opposed to you know, cash that
• 19:27
  Speaker 1: you get out of the vault at the bank and
• 19:29
  Speaker 1: connect One has always been a technological leader relative to
• 19:33
  Speaker 1: employing different ways of bringing banking services to our clients
• 19:38
  Speaker 1: and being able to leverage technology, innovative technology to to
• 19:43
  Speaker 1: create a better experience for our clients. But how because
• 19:46
  Speaker 1: a lot of the big banks have been spending an
• 19:48
  Speaker 1: increasing amount of money, hundreds of billions of dollars on
• 19:52
  Speaker 1: their technological infrastructure. Uh, given the size of your bank,
• 19:57
  Speaker 1: how do you have a competitive advantage or edge or
• 20:01
  Speaker 1: even keep up. So, as you know, recently, we just
• 20:03
  Speaker 1: announced the partnership with zel, which is a consortium of
• 20:08
  Speaker 1: a number of large financial institutions in the payment space,
• 20:12
  Speaker 1: and this will be a product that will compete against
• 20:15
  Speaker 1: venmo and other types of payments. It will have the
• 20:18
  Speaker 1: security that banks are known for, and so we believe
• 20:21
  Speaker 1: this is going to be a very popular products as
• 20:24
  Speaker 1: time moves on. We also announced the pretty substantial partnership
• 20:28
  Speaker 1: with Encino, which is a deposit and loan origination platform
• 20:33
  Speaker 1: which brings us technology that rivals the largest institutions and
• 20:37
  Speaker 1: will allow us to be much more efficient than how
• 20:40
  Speaker 1: we manage our client relationships. Uh. And so there are
• 20:44
  Speaker 1: partners out there. We don't have to have that i
• 20:47
  Speaker 1: T department and create, you know, the technological innovation. There
• 20:51
  Speaker 1: are partners that we will get together with in the future.
• 20:54
  Speaker 1: And these are two examples where we can bring the
• 20:56
  Speaker 1: same level of client service as our largest intitution. Colleagues,
• 21:01
  Speaker 1: what's your thoughts on bitcoin? Do you agree with Jamie
• 21:04
  Speaker 1: Diamond or I think I'm more in the Jamie Diamond
• 21:07
  Speaker 1: camp than than not. Um, I am a big fan
• 21:11
  Speaker 1: of the blockchain technology. I don't know that the Federal
• 21:15
  Speaker 1: Reserve is prepared to let go of our currency as
• 21:18
  Speaker 1: we sit here today. Uh and I and I believe
• 21:21
  Speaker 1: that's what bitcoin represents, right, it represents an alternate currency. Um.
• 21:26
  Speaker 1: We can just imagine what that will mean and how
• 21:29
  Speaker 1: it's going to be used. But I don't think that.
• 21:32
  Speaker 1: I think the Federal Reserve is allowing the sandbox to
• 21:34
  Speaker 1: occur for right now, but at some point they're going
• 21:37
  Speaker 1: to take control or maintain control of our currency. Well. Actually,
• 21:40
  Speaker 1: just to sort of update or give a little more
• 21:42
  Speaker 1: nuance to Jamie Diamond's statements, JP Morgan's Marianna Lake came
• 21:46
  Speaker 1: out today and said that JP Morgan is quote very
• 21:49
  Speaker 1: open minded to possible uses for cryptocurrencies like bitcoin if
• 21:53
  Speaker 1: they quote are properly controlled and regulated. Based on Frank
• 21:58
  Speaker 1: what you just said, you think proper controlled regulation will
• 22:01
  Speaker 1: ultimately kill these cryptocurrencies, I think in the format that
• 22:06
  Speaker 1: we look at them today. Yeah, that would be a
• 22:08
  Speaker 1: true statement. Excuse me. I think that over time, though,
• 22:12
  Speaker 1: the technologies that that that are behind bitcoin and other
• 22:16
  Speaker 1: types of currencies maybe things we will see in our
• 22:19
  Speaker 1: own currency system. So you mean as far as blockchain goes, well,
• 22:23
  Speaker 1: but what's the advantage of blockchain versus say, just an
• 22:27
  Speaker 1: automatic computer system held by JP Morgan, which is basically
• 22:31
  Speaker 1: just you know, a spreadsheet basically of accounts. I mean,
• 22:34
  Speaker 1: why is blockchain better? I wouldn't sit here and profess
• 22:38
  Speaker 1: to be an expert in blockchain. However, the technology there
• 22:42
  Speaker 1: is certainly more ubiquitous, and it is not controlled by
• 22:46
  Speaker 1: any single source um and it can be relied upon
• 22:50
  Speaker 1: in ways that current technology cannot. And I think that's
• 22:53
  Speaker 1: what the attractiveness is there. And I think there are
• 22:57
  Speaker 1: many institutions that are looking to utilize blockchain, and lots
• 23:01
  Speaker 1: of places, whether it be in currency as bitcoin, but
• 23:03
  Speaker 1: also in the real estate area entitle um, you know,
• 23:07
  Speaker 1: in ownership chains. There are just lots of places where
• 23:11
  Speaker 1: that type of technology will replace many archaic systems. And
• 23:16
  Speaker 1: you know, again, I know we started the conversation there
• 23:19
  Speaker 1: disrupt industries that exist today in a big way. If
• 23:23
  Speaker 1: there was one rule that you could change having to
• 23:26
  Speaker 1: do with the banking industry, what would it be? Oh boy,
• 23:30
  Speaker 1: um pim, that's a tough one. Um. You know. I
• 23:34
  Speaker 1: I like to look at all regulation in the industry
• 23:38
  Speaker 1: and think about why it came to be, and think
• 23:41
  Speaker 1: about the iterative change over time that has created a better,
• 23:46
  Speaker 1: safer system today. I don't really think I have a
• 23:48
  Speaker 1: favorite or maybe that's not the right word to use,
• 23:51
  Speaker 1: but I can't even I can't even begin to think.
• 23:53
  Speaker 1: There are so many places where I do believe change
• 23:56
  Speaker 1: needs to occur, um, some places more subtle than other
• 24:00
  Speaker 1: ers and and I think we're actually starting to see
• 24:02
  Speaker 1: that occur, right. We're seeing some very different tonal change
• 24:05
  Speaker 1: at the top of the regulatory structures. Uh. And I
• 24:08
  Speaker 1: think it's becoming a better environment for banks in general. Frank,
• 24:12
  Speaker 1: I'd love to get your take, just on the banking
• 24:14
  Speaker 1: business itself, the idea of lending money out, the idea
• 24:17
  Speaker 1: of having deposits. UM, what's your outlook for community banking
• 24:23
  Speaker 1: and from your own perspective, where do you see the
• 24:25
  Speaker 1: biggest opportunity for your firm? So, I think there's still
• 24:31
  Speaker 1: great opportunity in the marketplace for community banks like connect
• 24:35
  Speaker 1: One Bank, and you know what we're starting, what we
• 24:37
  Speaker 1: are seeing and have seen over the last number of years,
• 24:40
  Speaker 1: there's been a lot of consolidation going on for a
• 24:42
  Speaker 1: lot of the smaller players, and I think what we're
• 24:45
  Speaker 1: gonna get to is our much larger small banks and
• 24:49
  Speaker 1: connect One is one of those types of institutions where
• 24:52
  Speaker 1: we're getting larger, but we're still a small bank in
• 24:55
  Speaker 1: a in a community such as the New York metro market,
• 24:57
  Speaker 1: which represents some ten percent of our g d P.
• 25:00
  Speaker 1: So I think there'll be a place for banks like
• 25:03
  Speaker 1: connect One. UM. I think the opportunities are going to
• 25:06
  Speaker 1: be tremendous. I think people still want that, you know,
• 25:09
  Speaker 1: personalized client service that they just can't get at some
• 25:13
  Speaker 1: of the lords that we have more hands on kind
• 25:16
  Speaker 1: of approach. Yeah, I think you can get to the decision.
• 25:19
  Speaker 1: Look if you have a UM cookie cutter need. Uh,
• 25:24
  Speaker 1: there's plenty and there will be plenty of opportunity for
• 25:27
  Speaker 1: people to be able to do that online without ever
• 25:29
  Speaker 1: talking to an individual. But if you're an entrepreneur and
• 25:32
  Speaker 1: you're going to start a business and you're gonna need
• 25:35
  Speaker 1: some advice and you're gonna need help and trying to
• 25:37
  Speaker 1: figure your way through this system, and I believe that
• 25:40
  Speaker 1: will always be the case, then you're gonna need a
• 25:42
  Speaker 1: place like connect One Bank to come to to speak
• 25:45
  Speaker 1: to a banker. Well, you're going to be speaking, I believe.
• 25:47
  Speaker 1: On Sunday, on a panel at the annual Convention of
• 25:51
  Speaker 1: the American Bankers Association, the theme you describe this year
• 25:55
  Speaker 1: is called rapid Change? Is UH? Is there any um,
• 26:01
  Speaker 1: Is there any sort of detail that you can share
• 26:03
  Speaker 1: in terms of what has been the biggest stumbling block
• 26:06
  Speaker 1: to change for for the banks? Is it just is
• 26:08
  Speaker 1: it management decision making? Is it cost? What? Him? I
• 26:12
  Speaker 1: think you know our industry and you started right. You
• 26:15
  Speaker 1: know they're talking about disruption in the transportation space. It's
• 26:18
  Speaker 1: the same thing in banking. There's a lot of disruption
• 26:20
  Speaker 1: that's going on in the banking space, and there are
• 26:23
  Speaker 1: other players out there who are coming to market with
• 26:26
  Speaker 1: with products and services that seem to be more streamlined,
• 26:31
  Speaker 1: you know, take away a lot of the friction that's
• 26:33
  Speaker 1: in the system. And I think as banks and bankers
• 26:36
  Speaker 1: community bankers, we need to recognize that we need to
• 26:39
  Speaker 1: get that friction out of this system as well, and
• 26:41
  Speaker 1: we need to develop. We need to develop and deliver
• 26:45
  Speaker 1: a product that you know, can compete with our fintech brethren, UM,
• 26:50
  Speaker 1: and partner with those people in order to come up
• 26:52
  Speaker 1: with the change that that the economy is requiring. You know,
• 26:55
  Speaker 1: the speed of change today is just extraordinary. Frank, real quick,
• 26:59
  Speaker 1: how much do you think that you can grow your
• 27:02
  Speaker 1: assets in the next couple of years? UM, So, I
• 27:06
  Speaker 1: can't give forward looking statement there, but we've been growing
• 27:10
  Speaker 1: in the mid to high teens for the last I
• 27:12
  Speaker 1: don't know how many years, and you know, consistent with
• 27:16
  Speaker 1: the marketplace that we're in today and consistent with the
• 27:20
  Speaker 1: market share grab that we're able to get from the
• 27:23
  Speaker 1: larger institutions, I don't really see anything standing on our way.
• 27:27
  Speaker 1: Thank you so much for joining us. Frank Sorrentino, Chairman
• 27:30
  Speaker 1: and chief executive officer of Connect One Bank, which has
• 27:34
  Speaker 1: nearly five billion dollars under management and is based in Englewood, Cliff's,
• 27:38
  Speaker 1: New Jersey. He's on Twitter at Frank s I, I,
• 27:42
  Speaker 1: I and uh talking about the connection between community banks
• 27:46
  Speaker 1: and fintech. Definitely an increasing trend where firms are partnering
• 27:51
  Speaker 1: with existing platforms to get state of the art technology.
• 27:54
  Speaker 1: At least rom woit's with pim Fox. This is Bloomberg.
• 28:09
  Speaker 1: So what to do when machines do Everything? How to
• 28:12
  Speaker 1: get ahead in a world of artificial intelligence, algorithms, bots
• 28:17
  Speaker 1: and big data? Well, perhaps the first thing you do
• 28:20
  Speaker 1: is should call Ben Pring. He is the co director
• 28:22
  Speaker 1: of the Future of Work Center for Cognizant. They're based
• 28:26
  Speaker 1: in Boston, home the Bloomberg one one Boston, Newburyport, Metro
• 28:30
  Speaker 1: West and the South Shore, and he is the co
• 28:32
  Speaker 1: author of the book What to Do When Machines Do Everything? Well, Ben,
• 28:36
  Speaker 1: thank you for being here in our studios. What do
• 28:39
  Speaker 1: you do other than I imagine, first of all, you
• 28:41
  Speaker 1: read the book, that's the right, yeah, say all right,
• 28:44
  Speaker 1: I got a machine might have been able to give
• 28:46
  Speaker 1: you that answer, But the end of the interview that's
• 28:49
  Speaker 1: well so, But seriously, what what First of all can
• 28:53
  Speaker 1: you just describe what attitude should you have when you're
• 28:58
  Speaker 1: trying to learn about the challenges of automation and artificial intelligence.
• 29:04
  Speaker 1: Should you have one of fear, defensiveness, optimism, what what
• 29:07
  Speaker 1: should you hold? I think, Yeah, it's a great question,
• 29:10
  Speaker 1: and it's really the central question of the book, And
• 29:12
  Speaker 1: what we're trying to argue is that rather than worrying
• 29:14
  Speaker 1: about sort of the ethical implications of robots in fifty
• 29:19
  Speaker 1: years time, the issue most business people have to focus
• 29:21
  Speaker 1: on is what do you do about it now? What
• 29:23
  Speaker 1: do you do about it in the next few months,
• 29:25
  Speaker 1: the next few quarters. Because these technologies, which are incredibly
• 29:28
  Speaker 1: powerful and developing incredibly fast, are going to change all
• 29:32
  Speaker 1: aspects of society or aspects of business. So we're trying
• 29:35
  Speaker 1: to offer advice in the book to people about how
• 29:37
  Speaker 1: to make the trend your friend. Not worry about too
• 29:40
  Speaker 1: that the far off future. Worry about what you can
• 29:42
  Speaker 1: you can do today. And the first sort of fundamental
• 29:46
  Speaker 1: building block of that is accepting, as you say, Phim,
• 29:48
  Speaker 1: that this is real and you can use these technologies today.
• 29:51
  Speaker 1: You can adopt them in your financial services practice, you
• 29:54
  Speaker 1: can adopt them in your health care practice. You can
• 29:56
  Speaker 1: adopt them in the way you schedule meetings, and all
• 30:00
  Speaker 1: of these little kind of incremental things are going to
• 30:02
  Speaker 1: have profound implications in the next few years. So can
• 30:05
  Speaker 1: you point to a specific industry that is currently undergoing
• 30:09
  Speaker 1: a transformation on the heels of increased use of artificial
• 30:14
  Speaker 1: intelligence and computers that serves as a poster child for
• 30:19
  Speaker 1: what happens. Who loses jobs, who gains? Can you give
• 30:23
  Speaker 1: us an example. I think the financial services sector is
• 30:25
  Speaker 1: probably the most obvious one where this is happening very
• 30:27
  Speaker 1: very quickly. Out of the top ten hedge funds are
• 30:30
  Speaker 1: now basically albo traded. Um. You see what's happening in
• 30:34
  Speaker 1: the big the big banks who are replacing traders with
• 30:37
  Speaker 1: with people who can write code. Um. You hear what
• 30:40
  Speaker 1: people are saying about the back office in big banks,
• 30:43
  Speaker 1: how that's going to be sort of fundamentally rewired using
• 30:46
  Speaker 1: automation software in the next few years. So yeah, I
• 30:48
  Speaker 1: think you can look to New York, You can look
• 30:51
  Speaker 1: to this town Wall Street to is for an industry
• 30:55
  Speaker 1: that's really taking this seriously. They've seen the disruption and
• 30:58
  Speaker 1: other industries and media in in um in um entertainment
• 31:04
  Speaker 1: by software is that comes in and eats that industry,
• 31:06
  Speaker 1: and they don't want to let that happen to them.
• 31:08
  Speaker 1: So one of the claims in your book was that
• 31:11
  Speaker 1: an increased use of technology doesn't necessarily lead to fewer jobs.
• 31:16
  Speaker 1: And yet, certainly what we've seen with financial services the
• 31:19
  Speaker 1: poster child right now, is a loss of jobs. Fewer
• 31:23
  Speaker 1: people already did. This is all wrapped up in the
• 31:25
  Speaker 1: cost cutting that we're seeing at the big bank. So
• 31:27
  Speaker 1: can you square those two ideas? Yeah. Again, that's what
• 31:29
  Speaker 1: we try and get into in real detail in the book,
• 31:32
  Speaker 1: and our conclusion is that these sort of predictions about
• 31:35
  Speaker 1: a jobless future, about jobs going away in the next
• 31:38
  Speaker 1: few years, they're they're pretty wide of the mark. They're
• 31:41
  Speaker 1: not really they don't really stand up when you drill
• 31:43
  Speaker 1: into them. The reality is that the churn is going
• 31:46
  Speaker 1: to happen in the next few years. The work that
• 31:48
  Speaker 1: you do today is not the work you're going to
• 31:49
  Speaker 1: do in the future. But to imagine that all the
• 31:51
  Speaker 1: jobs are going to go away, that's unrealistic. And we
• 31:54
  Speaker 1: spend a lot of time in our book. Again, one
• 31:56
  Speaker 1: of the central messages of the book is that there's
• 31:58
  Speaker 1: so much innovation going on around technology. I mean around
• 32:02
  Speaker 1: the blockchain revolution. There's going to create new work for
• 32:05
  Speaker 1: people to do. It's not going to be the work
• 32:07
  Speaker 1: people do today or in the past. But if you can,
• 32:11
  Speaker 1: you know, if you can have that perspective from a
• 32:14
  Speaker 1: portfolio perspective within your organization, you know, redeploy people who
• 32:18
  Speaker 1: were doing X into why. That's how we think in
• 32:22
  Speaker 1: ten years time, UH net employment levels will be actually
• 32:26
  Speaker 1: higher than they are now. That's the part of the story.
• 32:29
  Speaker 1: A lot of people missing, we think at the moment.
• 32:31
  Speaker 1: Ben one example, and I want to get your reaction
• 32:34
  Speaker 1: to this that I recently was shown. It was a
• 32:37
  Speaker 1: demonstration of software whereby a camera was put into an
• 32:42
  Speaker 1: industrial kitchen and the goal was to make sure that
• 32:46
  Speaker 1: everybody in this industrial kitchen was wearing the appropriate coveralls,
• 32:52
  Speaker 1: gloves and hats, and the point being that it's a
• 32:56
  Speaker 1: very difficult thing to keep track of on a regular basis.
• 32:59
  Speaker 1: But the camera was loaded with software that would zoom
• 33:03
  Speaker 1: in on each of the members of the culinary team
• 33:07
  Speaker 1: and it would make sure it would track whether they
• 33:10
  Speaker 1: were wearing the right hats, whether they had the right
• 33:12
  Speaker 1: gloves on, and so on, and that at the end
• 33:15
  Speaker 1: of the day this could be reviewed or it could
• 33:17
  Speaker 1: even be automated to the point where if they didn't
• 33:20
  Speaker 1: follow these specific rules that would be noted. Is that
• 33:23
  Speaker 1: an example of the kind of thing that's going to happen. Yeah.
• 33:26
  Speaker 1: I mean, one again, one of the sort of core
• 33:27
  Speaker 1: trends that's been going on for a long time, but
• 33:29
  Speaker 1: it's now collided with these machine learning systems of intelligence
• 33:33
  Speaker 1: is the data that's being generated by IoT sensors. In
• 33:37
  Speaker 1: that kind of context, you're basically sensor enabling the whole
• 33:41
  Speaker 1: physical environment using you know, visual but also using other
• 33:44
  Speaker 1: types of sensor that's throwing off huge data, more data
• 33:48
  Speaker 1: than people can make sense of. So you need these
• 33:51
  Speaker 1: new machines to then be able to create sort of
• 33:54
  Speaker 1: business rules and business decisions and business results out of that. Now,
• 33:58
  Speaker 1: of course, you know the some are e raise raises
• 34:01
  Speaker 1: lots of privacy sort of kind I understand that, but
• 34:04
  Speaker 1: I'm just talking about in terms of safety issues. I mean,
• 34:06
  Speaker 1: for example, if you have someone handling any kind of
• 34:09
  Speaker 1: hazardous material, you know there are certain protocols that you
• 34:12
  Speaker 1: would have to follow. And I'm wondering what are the businesses.
• 34:15
  Speaker 1: Who are the companies that you know of that are
• 34:17
  Speaker 1: able to exploit this from a technological point, yeah, I
• 34:21
  Speaker 1: mean a lot of people are talking about the three
• 34:23
  Speaker 1: D s dull, dirty and dangerous work being replaced by
• 34:26
  Speaker 1: this type of automation software, and we certainly buy into that.
• 34:30
  Speaker 1: I mean, the mining industry is one where where this
• 34:32
  Speaker 1: is pretty advanced. Now, the big big minds in Australia,
• 34:36
  Speaker 1: around um in South Africa, they're using this kind of
• 34:39
  Speaker 1: technology already from an automation perspective, both in the vehicles
• 34:44
  Speaker 1: and in the safety context as well. So that's you know,
• 34:46
  Speaker 1: it's a it's a great example. Ben, you were saying
• 34:48
  Speaker 1: that the net jobs could potentially even increase due to
• 34:53
  Speaker 1: the adoption of artificial intelligence. But one very big concern
• 34:56
  Speaker 1: is that the people who are going to get the
• 34:58
  Speaker 1: jobs will be people with higher levels of education. That
• 35:02
  Speaker 1: this will only widen the divide between the wealthier and
• 35:06
  Speaker 1: more educated versus the poor and less educated, basically as
• 35:10
  Speaker 1: people who do the triple D jobs are unable to
• 35:14
  Speaker 1: find those jobs anymore. Well, again, it's a great question.
• 35:17
  Speaker 1: It's a central theme within the book that we try
• 35:19
  Speaker 1: to discuss, and again we think that people need to
• 35:21
  Speaker 1: take personal agency to recognize, you know, what's going on
• 35:26
  Speaker 1: and to to you know, figure out that they need
• 35:29
  Speaker 1: to sort of upscale themselves, retrain themselves, um, be able
• 35:33
  Speaker 1: to learn to use these new tools and understood. I
• 35:37
  Speaker 1: guess that there's there's a big concern though, that there
• 35:39
  Speaker 1: are entire swaths, entire communities of people who have kind
• 35:43
  Speaker 1: of been left behind. That's where a lot of the
• 35:45
  Speaker 1: anger has been driven. And how do those communities, uh,
• 35:50
  Speaker 1: you know, find the tools and the requirements. I mean,
• 35:53
  Speaker 1: this is sort of a big sort of tension. This
• 35:55
  Speaker 1: is a big policy issue. This is you know, this
• 35:58
  Speaker 1: is a government full issue. This is a local, um
• 36:03
  Speaker 1: political issue. It's a societal issue. Um. The root of it,
• 36:09
  Speaker 1: that's the only solution to it, fundamentally is is in training.
• 36:13
  Speaker 1: Is in STEM based education and and stem based education
• 36:17
  Speaker 1: that people from an arts background or from a you know,
• 36:20
  Speaker 1: a non technical background can use those tools to be
• 36:23
  Speaker 1: relevant in the future. I mean, our book is about
• 36:27
  Speaker 1: wealth creation rather than wealth distribution. That that that's a
• 36:31
  Speaker 1: broader issue in a way. It's a very real issue.
• 36:34
  Speaker 1: And obviously, you know, the future of work is being
• 36:37
  Speaker 1: dominated by Mr Trump and Mr Robot. They're the two
• 36:39
  Speaker 1: kind of central characters in this story at the moment,
• 36:41
  Speaker 1: just us quickly. If if I had the time, where
• 36:45
  Speaker 1: would you send me physically to go and see this
• 36:49
  Speaker 1: kind of future in action right now? Well on the
• 36:52
  Speaker 1: robotic side, I mean, look at the just look at
• 36:54
  Speaker 1: the Kiva videos, the Amazon Warehouse videos. I mean, if
• 36:57
  Speaker 1: that doesn't blow your mind, I don't know what will.
• 36:59
  Speaker 1: On a more sort of tactical, very sort of points solution,
• 37:03
  Speaker 1: There's a great company here in New York called x
• 37:05
  Speaker 1: dot Ai. Check them out. They have software that automates
• 37:08
  Speaker 1: meeting scheduling. I don't when you guys have heard of that.
• 37:11
  Speaker 1: I mean you think about how how much time people
• 37:13
  Speaker 1: spend scheduling meetings. Uh, time is money. You can automate
• 37:17
  Speaker 1: that all the way. That's a great little example. Thank
• 37:20
  Speaker 1: you so much for joining us. Bennett Pring of Cognizance,
• 37:23
  Speaker 1: an I T futurist and co leader of the Future
• 37:25
  Speaker 1: were of Work Center, also the co author of a
• 37:28
  Speaker 1: new book, What to Do When Machines Do Everything All Right.
• 37:44
  Speaker 1: President Donald Trump is said to be angered by learning
• 37:49
  Speaker 1: that the change to certain tax breaks for people in
• 37:53
  Speaker 1: high tax states would hurt middle class income taxpayers, and
• 37:57
  Speaker 1: here to tell us more. As Kevin Cirelli covers, the
• 37:59
  Speaker 1: President the White House and all things politics and joining
• 38:02
  Speaker 1: us from Washington, d C. And of course you can
• 38:03
  Speaker 1: follow Kevin on Twitter at Kevin Surreally. Alright, keV SURRELLI,
• 38:08
  Speaker 1: what's the I thought? Did the President not know previously
• 38:12
  Speaker 1: that this would be, uh, you know, an obstacle for
• 38:16
  Speaker 1: people in the middle class who take those deductions? Hey? Then,
• 38:20
  Speaker 1: so I spoke with some sources yesterday who told me
• 38:23
  Speaker 1: that the President was frustrated when reports came out regarding
• 38:28
  Speaker 1: these state and local deduction that, of course at tax
• 38:32
  Speaker 1: that salt as a commonly called inside the Beltway. Now
• 38:35
  Speaker 1: supporters of it are saying that it would be a
• 38:38
  Speaker 1: source of one point three trillion dollars in revenue, a
• 38:41
  Speaker 1: huge chunk of the six trillion that the tax plan
• 38:44
  Speaker 1: will cost. But I have to be really honest here.
• 38:46
  Speaker 1: Many Republicans on Capitol Hill are divided on this, and
• 38:49
  Speaker 1: the President was frustrated when he realized that some reports
• 38:52
  Speaker 1: suggest that taxes would actually be raised on the middle
• 38:56
  Speaker 1: class should this plan go through. We're told if the
• 39:00
  Speaker 1: President is making tweaks to this plan sometimes over the
• 39:04
  Speaker 1: next couple of weeks ago announced the later name Kevin.
• 39:07
  Speaker 1: I want to bring to you some headlines. Gary Cone,
• 39:11
  Speaker 1: the chief economic advisor to President Trump, just told reporters
• 39:15
  Speaker 1: that President Trump is not reconsidering state his state and
• 39:19
  Speaker 1: local tax position. Um. And he said this two reporters.
• 39:24
  Speaker 1: I find this compelling. It's sort of this push and
• 39:26
  Speaker 1: pull that we're getting, which is that perhaps there will
• 39:29
  Speaker 1: be some kind of rewrite around this to uh, among
• 39:33
  Speaker 1: other things, short support among New York Republicans right uh,
• 39:38
  Speaker 1: and also to alleviate any burden to middle class voters.
• 39:41
  Speaker 1: This seems to suggest maybe not what's your take on this, Well,
• 39:45
  Speaker 1: the votes right now, there's a huge, large contingency of
• 39:49
  Speaker 1: folks in the House of Representatives, being led by Representatives
• 39:52
  Speaker 1: Peter King, who are really um against UH this, and
• 39:57
  Speaker 1: so any type of tweaks that are going to be
• 39:59
  Speaker 1: made UH would have to be made in order to
• 40:02
  Speaker 1: win some of their support because right now, Garry Cone,
• 40:06
  Speaker 1: and I'm not really sure he's that influential in Capitol Hill.
• 40:08
  Speaker 1: Most people expect him to be out by the end
• 40:11
  Speaker 1: of the year if you ain't even have the president's
• 40:13
  Speaker 1: fare anymore. UM. But you know, Gary Cone really just
• 40:17
  Speaker 1: hasn't been able to form a winning coalition in order
• 40:20
  Speaker 1: to get this across the finish line. Um, So it'll
• 40:24
  Speaker 1: be interesting to see whether or not he has any
• 40:26
  Speaker 1: more influence with a lot of these conservatives up on
• 40:29
  Speaker 1: Capital Will quite frankly, have never really spoken to Garry
• 40:32
  Speaker 1: Cone to begin with. Kevin, is the plan still supposed
• 40:36
  Speaker 1: to be revenue neutral? Well, that's another sticking more in them. Uh.
• 40:43
  Speaker 1: And there are some Republicans who wanted to be and
• 40:45
  Speaker 1: others you don't. Uh. And that's really drove a lot
• 40:48
  Speaker 1: of the separation before uh, behind the uh, behind the scenes,
• 40:54
  Speaker 1: because a lot of folks are concerned about the deficit,
• 40:56
  Speaker 1: people like Senator Bob Corker, who we all know is
• 40:59
  Speaker 1: in in tangled in a tip for tat with with
• 41:02
  Speaker 1: folks earlier today. So I'm sorry with the president earlier
• 41:05
  Speaker 1: this week. So right now, if you were a betting
• 41:09
  Speaker 1: kind of guy, was your expectation that there will be
• 41:12
  Speaker 1: some formal bill that will at least be presented in
• 41:16
  Speaker 1: Congress within the next few weeks. Well, the tax rating
• 41:20
  Speaker 1: committees are hard at work on this. I think the
• 41:22
  Speaker 1: dynamic between conservatives and the Freedom Caucus, as well as
• 41:25
  Speaker 1: other conservatives in the Senate their relationship with the Big sixes.
• 41:29
  Speaker 1: They're known as that's really where all of the framework
• 41:32
  Speaker 1: is being hammered out, um, and there's a lot of
• 41:34
  Speaker 1: tension there. I mean chronicled this policies, ideological conservative fits
• 41:39
  Speaker 1: over several years now and there's still alive as well.
• 41:41
  Speaker 1: We just all it exists on healthcare. I think we're
• 41:43
  Speaker 1: gonna watch it again on fold the tax reform, Has
• 41:46
  Speaker 1: there been any more detail offered than those nine pages? Now?
• 41:50
  Speaker 1: There's literally been no details. And that's really what's been
• 41:53
  Speaker 1: frustrating for a lot of folks on Capitol Hills that
• 41:56
  Speaker 1: typically tax reform is something that has talked about a
• 41:59
  Speaker 1: nod him, and so the idea that this would not
• 42:03
  Speaker 1: be discussed has really mean a lot of people frustrated
• 42:05
  Speaker 1: because right now they're just being asked to come out
• 42:07
  Speaker 1: against you know, taxes, lowering tax cuts essentially, which no
• 42:11
  Speaker 1: Republican will come out and say, but they're again, but
• 42:13
  Speaker 1: in terms of how to achieve those goals, the details
• 42:16
  Speaker 1: us simply aren't there, no matter what Jerry Tone seemingly
• 42:20
  Speaker 1: wants to suggest. Well, kevinnes Well, he just called in
• 42:26
  Speaker 1: that he wasn't offended. I do want to just wonder, though,
• 42:29
  Speaker 1: is there anyone talking about infrastructure spending at this point,
• 42:32
  Speaker 1: because we also heard a lot about that, and there's
• 42:34
  Speaker 1: nothing that I can see that points to anything on
• 42:37
  Speaker 1: that real quick, no nothing, nothing, No new developments on infrastructure.
• 42:41
  Speaker 1: Really tragic conversation on tax reform um and foreign policy.
• 42:47
  Speaker 1: But yeah, there has lived virtually been silent on the infrastructure.
• 42:50
  Speaker 1: From Kevin's really, thank you so much for joining us,
• 42:52
  Speaker 1: and thank you. We'll be hearing more from you as
• 42:55
  Speaker 1: this whole tax reform plan goes forward. Kevin's really as
• 42:59
  Speaker 1: a White House course on it for Bloomberg. Thanks for
• 43:05
  Speaker 1: listening to the Bloomberg P and L podcast. You can
• 43:07
  Speaker 1: subscribe and listen to interviews at Apple Podcasts, SoundCloud, or
• 43:11
  Speaker 1: whatever podcast platform you prefer. I'm pim Fox. I'm on
• 43:15
  Speaker 1: Twitter at pim Fox. I'm on Twitter at Lisa Abramo.
• 43:19
  Speaker 1: It's one before the podcast. You can always catch us
• 43:21
  Speaker 1: worldwide on Bloomberg Radio.