Janet Yellen to Speak About the Road to Economic Recovery

On the second day of the DealBook DC Policy Project, we will hear from more policymakers and business leaders about the challenges for the coronavirus vaccine rollout, the future of financial regulation and the outlook for bipartisanship in polarized times.

Here is the lineup (all times Eastern):

12:30 P.M. – 1 P.M.

Karen Lynch took over CVS Health this month as the pharmacy chain takes center stage in efforts to fight the pandemic. It is working with the government to distribute the coronavirus vaccine in its stores, as well as in nursing homes and assisted-living facilities. To aid in those efforts, the company hired 15,000 employees at the end of last year, staffing up to deal with what President Biden has called “gigantic” logistical hurdles to the vaccine rollout.

2:30 P.M. – 3 P.M.

At the center of the recent meme-stock frenzy was the online brokerage firm Robinhood, which has attracted millions of users with commission-free trades but drew outrage among its users when it halted trading in GameStop and other stocks at the height of the mania.

Vlad Tenev, Robinhood’s chief executive, is fresh from facing hours of hostile questioning at a congressional hearing last week about his company’s business practices. Joining him to discuss what regulators should now do — if anything — is Jay Clayton, the veteran Wall Street lawyer who led the Securities and Exchange Commission during the Trump administration. From the beginning of his tenure, Mr. Clayton said that his mission was protecting “the long-term interests of the Main Street investor.”

5:30 P.M. – 6 P.M.

Senator Mitt Romney, Republican of Utah, crossed party lines to vote to convict President Donald J. Trump on articles of impeachment, twice. He is also drafting a bill with Senator Tom Cotton, Republican of Arkansas, that would raise the minimum wage while forbidding businesses to hire undocumented immigrants. This is typical of Mr. Romney’s approach, speaking to concerns on both sides of the aisle in an era of stark partisan divisions.

Ed Bastian, the chief executive of Delta Air Lines, spoke on Monday at the DealBook DC Policy Project about how the airline industry will recover from its deep pandemic slump.

Highlights from the discussion:

  • “The pent-up need and urge and desire to travel is like never before,” said Mr. Bastian. “Our product is missed.”

  • Domestic travel is going to be the “focus within the industry,” he said. “I don’t see international coming back in any meaningful form for probably another 12 months, maybe spring of ’22 would be the real start.” He added: “I think a lot of parts of the world, Asia particularly, are going to be very, very careful about letting anyone into their borders.”

  • “Once the virus is in a contained mode, once people, I think, feel safe, I think a lot of people will still choose to wear masks,” he said. “It’s commonplace in Asian society, as you know, and I think this is something that’s going to change us. By the way, it’s not just in air travel. It could be in movie theaters. It could be at a sporting event. I think the public shame of wearing a mask won’t be what it may have been a couple of years ago.”

  • On the possibility of mandating vaccines for travelers and staff: “We’re doing everything we can to help get people vaccinated,” he said. “But I don’t know where you draw the line. Are you going to require that to go into a restaurant? Are you going to require it to go into a hotel, to go to a sporting event? Where do you draw the lines? Why pick on the airline?”

  • Last year, Delta pledged to go carbon neutral. “You can’t have a sustainable business model if you’re not creating a sustainable environment for your customers to feel good about what you sell,” Mr. Bastian said. To get there, “we need incentives for sustainable aviation fuels, because if you look in the marketplace today, the cost of a gallon of sustainable fuel is probably 10 times what it is for jet fuel.”

  • On the potential for the corporate tax rate to rise under President Biden: “We’re not in a position right now to fight that,” he said. “We need to be in a position of being able to pay tax. So for us, the way we look at our industry, it’s actually a high-class problem.”

  • Delta’s home base of Atlanta is “the birthplace of the civil rights movement in our country” and Delta is the largest employer in both the city and the state, Mr. Bastian said. On racial justice and equity, “I think we have a special responsibility to lean into this issue,” he said. “Corporate America has an outsized opportunity to lend its voice for social change in the right way, not on every social program, but social programs that align with the values of your corporation. This is hard to let governments lead on. This is something that actually job developers can actually do something about.” How so? “Here in Atlanta, we 20-plus percent of our employee base is Black but only 7 percent of our leadership is Black. What does that tell you? It tells you there’s a pathway forward and we’ve got to close those gaps and make commitments and be unapologetic about it.”

  • Ten years from now, what will the airline industry look like? “I think it’s going to look a lot like it is today, only bigger,” Mr. Bastian said, adding that there will be more international travel, where the growth for the airline industry is. “Every year since deregulation, you look back, travel has increased the last 40 years and airfares consistently have come down over that same period of time. I think you’re going to see more of the same going forward because people want to experience life.”

Treasury Secretary Janet Yellen opened the DealBook DC Policy Project on Monday, moderated by The New York Times’s Andrew Ross Sorkin, about the prospects for a post-pandemic recovery.

Highlights from the discussion:

  • “We need to make sure that those who have been most affected aren’t permanently scarred by this crisis,” Ms. Yellen said. “There are a lot of different metrics we can use to judge success,” she said. “Success, to me, would be if we could get back to pre-pandemic levels of unemployment, and see the re-employment of those who have lost jobs in the service sector particularly.”

  • “Of course, a key job for a Treasury secretary is to make sure our country is on a sound fiscal course,” she said. “If you don’t spend what is necessary to get the economy quickly back on track, that has a fiscal cost as well.” Although U.S. debt levels are much higher than they were during the 2008 financial crisis, because of lower interest rates, the share of interest payments as a share of G.D.P. today is roughly the same, she noted. “I think we have more fiscal space than we used to because of the interest rate environment, and I think we should consider using it.”

  • A so-called digital dollar, maintained by the Federal Reserve and based on a blockchain, could result in “faster, safer and cheaper payments,” she said. There are also issues to resolve first. “What would be the impact on the banking system? Would it cause a huge movement of deposits out of banks and into the Fed? Would the Fed deal with retail customers or try to do this at a wholesale level? Are there financial stability concerns? How would we manage money laundering and illicit finance issues? There’s a lot of things to consider here, but it’s worth looking at.”

  • “I don’t think that Bitcoin is widely used as a transaction mechanism,” Ms. Yellen said. “It’s an extremely inefficient way of conduction transactions and the amount of energy that’s consumed in processing those transactions is staggering.”

  • “I find it exciting that so many American companies are recognizing the climate change is something we really have to deal with meaningfully in the coming decade,” Ms. Yellen said. The same goes for diversity in corporate America. “I don’t know if there needs to be a law,” Ms. Yellen said, but, “first of all, I think it’s unfair. And second of all, in terms of the performance of organizations, there’s a great deal of research that shows that organizations that are diverse do perform better in a whole variety of ways. So this is an important goal and it’s top of mind to me at Treasury where promoting diversity and inclusion will be a key objective.”

  • “We need to understand and detail the facts of the matter,” she said of the trading frenzy around GameStop’s shares, noting that the Securities and Exchange Commission is preparing a report that could inform potential regulatory action. “Are investors sufficiently well-informed and protected? I think that’s a really important question and it’s too soon to draw conclusions,” she said.

  • And finally, why is it taking so long to add Harriet Tubman’s portrait to the $20 bill? “It’s a complicated manufacturing process, so it takes longer to issue a new set of bills than you would imagine,” she said. “But I promise I will do everything I possibly can to expedite this and I would love to see Harriet Tubman honored on our currency.”

Letitia James, the New York state attorney general, spoke on Monday at the DealBook DC Policy Project about the power of accountability, citing several of the investigations that her office is pursuing to make her points.

Highlights from the discussion:

  • The Supreme Court’s rejection of an attempt by former President Donald J. Trump to shield his tax records from the Manhattan district attorney “doesn’t change the tenor of our lawsuit,” said Ms. James of her office’s civil action against the Trump family’s businesses. “They inflated their taxes for the purposes of gaining benefits from insurance companies as well as from mortgage companies, and then deflated the very same assets for the purposes of evading tax liability in New York State.”

  • “I’m never surprised by the conduct of the former president of the United States,” she said of speculation about “secret pardons” that have not come to light. (“It’s nothing more than that: pure speculation,” she added.)

  • “It’s not my objective to run Amazon out of town,” Ms. James said of her office’s suit against the tech giant for workplace safety and alleged retaliation against employees. “It’s my objective to protect the safety and the health of its employees. That really is my objective. And right now this day, Amazon could approach my office. We can engage in a consent decree where they rehire these employees, and they put forth efforts to protect the health and the safety of their employees. And we will call it a day.”

  • “I am guided by one simple concept, the concept of justice,” she said. “Standing up for the rights of individuals, particularly when big business or powerful business trample on those rights. In addition to that, I tend to test the law. And I tend to bring novel cases and novel theories because it’s really critically important that over the years our Constitution, as you know, is a living document. And it has been bended. So I continue to press the law.”

  • “The federal government under the previous administration was absent in a lot of areas, and particularly in the area of antitrust,” Ms. James said. “The point is that these big tech companies stifle competition, innovation, creativity. They’re a threat to our privacy by monetizing our data.” That’s why, she added, “it is really critically important that I and other attorneys general in this nation decided to take action against Big Tech.”

  • On cryptocurrencies and the law: “It’s a balancing act between innovation and protecting investors against fraud,” she said. What will be the outcome years from now? “I don’t have a crystal ball. I wish I did. All I know is: buyers beware.”

  • “Arresting essential workers, arresting observers, all that and more was wrong. So it’s important that we engage in reforms,” she said about her lawsuit against the New York Police Department for the handling of protests during the “racial reckoning” after the killing of George Floyd.

  • “I love the law. It’s both the sword and shield and can be used to advance the interest of the general public and protect those who are vulnerable and marginalized,” she said. “I view this through the lens of justice and correcting wrongs and standing up for those without a champion. And using my voice and my platform to seek justice for them. I view myself as the people’s lawyer.”

Steve Ballmer, Microsoft’s former chief executive, is the founder of USAFacts, a nonprofit organization that spotlights data about the United States in easy-to-understand ways. At the DealBook DC Policy Project on Monday, he spoke with The New York Times’s Andrew Ross Sorkin about the big economic and financial issues that confront the country.

Highlights from the discussion:

  • Mr. Ballmer questioned the efficacy of the government’s return on its economic stimulus spending during the pandemic. “For me, it is stunning that G.D.P. shrunk by $800 billion, with a $2 trillion increase in government spending,” he said. “And I know economists will say, ‘Blah blah blah, it would have been worse if we hadn’t spent the $2 trillion.’ I get that. But if I just look at these things like a businessperson, I say, ‘Hmmm, there’s something fishy about spending $2 trillion and only getting $800 billion back for it.’”

  • He also channeled a business leader hat in discussing whether to raise the federal minimum wage to $15 an hour. He personally believed the rate should go up, but he added that “it is hard for me to understand how raising wages” for nearly two million workers who receive lower wages, out of 150 million people with jobs, “will have the dramatic effect” on the state of the economy as predicted by the Congressional Budget Office and other economists.

  • As the founder of a nonprofit organization devoted to facts and statistics, Mr. Ballmer is dismayed by the rise in skepticism about empirical data. “It is troubling to me — very troubling — that people don’t believe government numbers that describe what happened. When a politician says that, I say, ‘Darn it, your job is to get those numbers right. You’re making decisions on those numbers.’” He likened it to a business leader saying, “Oh, I don’t believe the financial numbers I’m reporting to the S.E.C.”

  • Despite being more tech savvy than most, Mr. Ballmer said that he did not fully understand what drove the wild ups and downs of the price of Bitcoin. (“It isn’t about technology,” he said, but “some financial thing that is a step beyond the technologists.”) But he added that the Los Angeles Clippers, the pro basketball team he owns, has held internal discussions about whether to accept the digital currency at its arena. He told Andrew of one such meeting, ‘I sat in it the other day and thought, ‘Oh my God, this might be a really important thing for us.’”

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