You might say better late than never. Adam that is exactly what i would say. Better late than never but also powell and Richard Clara for the process. There is a reality going back to well before the Global Financial crisis that the phillips curve has been flat. This is a fancy way of saying you can have deviations in inflation deviations in employment to the upside and you do not get that much inflation for it. Then you combine that with the reality we have seen in japan for a long time and in the u. S. And europe for the last 12 to 15 years that when youre too close to zero on your Interest Rate balance, you cannot react as well as you should to policy and adjust policy. Fomc powell and the they unanimously adopted the statement before he spoke what jay powell and the fomc are saying is they are catching up with reality. And jay powell was framing this as we have to be realistic and pragmatic. This is how the economy has changed in our process must reflect the way the economy has changed. David youve been a central banker on the Monetary Policy committee and the bank of england. As we look at changing fund mental policy, we have talked repeatedly about the fact we cannot figure why unemployment could go solo. Did we figure that out . Did we figure out the mechanism, and if we did not do we want to change the policy without knowing how it works . Adam is a really good question. Years ago, trying to say you cannot not follow patterns in the data, you have to know why. I think we know part of why but not all of it. One part is economists and central bankers have blinders on. There was an assumption that once people dropped out of the workforce were out of work for a long time or went on disability, they cannot easily come back in. If women moved out for reasons of childcare or looking after people, they could come back in. That turns out not to be true. As early as 2014, Danny Blanchflower and i were talking about looking at Labor Force Participation across the u. S. States as the main way to predict inflation. That was part of a Broader Movement of people. You should not focus on the narrow unemployment. Wet of what we understand is were mismeasuring the actual amount of slack in the labor market. I think the fed has caught up with that. The other thing going on that is powellrtant is chair made a lot of references to things call the real economy, which sounds ironic. Meeting not just money supplier inflation expectations, but real factors like productivity growth, our demographics, what is the effect of the pandemics, and pointing out that when real trend rate goes down it has impacts on the Interest Rate. These are not things the fed can control. I think this is very reasonable. There is not a great theory behind it, but the theory took us to the long to the wrong place. The fed can determine inflation a matter what. Sorry to go on so long, but i think this is genuinely important good david clearly it is important. At the same time, you have any concern the coronavirus pandemic may affect some of the mechanisms which is kept inflation down, particularly things like globalization and trade . Adam i think it is fair to raise that. The pandemic is having longlasting effects on the productivity growth rate, on demographics, and those of facts of the kind the chair was already talking about will be on balance or disinflationary than inflationary. We will have shortages. People suddenly decide they want to buy free weights or meet for their freezer. Those goods go up in value. At the same time we are having a fundamental shift akin to what we had after the Global Financial crisis. Young people will be more reluctant to take on debt, more scared about losing their jobs. They will not demand as much wages as a result. They will wait to form families and by housing. These kinds of factors, and the lack of competition that comes out of lack of trade, was was mentioned later at the jackson hole conference and the academic papers, that pushes down and our productivity and are trend growth rate. The pandemic matters hugely, but i think it reinforces the trend that makes you less worried about inflation. David you said this is a constructive step, maybe overdue. At the same time, is this the medicine for what ails us . You mentioned productivity. We need to get productivity increase or more people. We are not getting more people. Is this pushing on a string . Adam i think you are right. I think youve understood the right economists correctly in this case. Chair powell was pretty blunt about that, especially in his responses to the questions this morning, that there is only so much Monetary Policy can do. Pushing on a string is the classic keynesian image and we saw that in the last Global Financial crisis. You can provide liquidity and put a floor under credit markets , you can alleviate immediate stress in asset markets, but that can be a precondition recovery, keep things from getting worse, but it does not create the recovery itself. Households will still be scared. Investors may not see things to invest in. , muchut it yesterday better at playing defense than offense. It cannot advance the ball on the offensive side that much. If there is Something Real going on, low Interest Rates will not be enough to kickstart. David let me put you on the spot. We have a president ial election going on. I will oversimplify, but i think it may be fair we are seeing two different economic approaches for the economy. On the one hand we have more Government Spending from the bided campaign, on the other hand cut taxes more from President Trump at the same time. If you had to choose, not as a political matter, but as an economist, is one better than the other for the economy . Adam absolutely. It is clear that investment like making sure state and local governments are open, keeping open our educational institutions, Public Health as well as energy will have much higher returns than privatesector investment. It is clear from all of the evidence that tax cuts do not have the benefits for the economy as a whole people have reported they would. This is not about politics. This is reality. You can go back to 1979 1980 you can make those claims and they have some justification because the tax rates were high and the evidence was not clear. At this point, looking back at the trump tax cuts before the pandemic, it is a bad way to go. David in fairness to President Trump, he would say does not just tax cuts, but also deregulation, and claim deregulation has already increased productivity. Some people try to put numbers against it. Is that a fair claim . Adam it is a fair claim if the evidence supports it and that is in dispute. The basic theory there can be overregulation and that when you in the end is a question out of more regulation or less, but which regulations. There are regulations cut by executive order by President Trump that have led to shortterm growth, right like deregulation of the fracking industry, downplaying inspections and Safety Standards and production networker safety, which immediately lead to growth but, athort term, various peoples expense and do not add to productivity in the longterm. It is not enough to say we will deregulate. The trump approach kept talking about things in quantity terms. Here is this number of federal register will set on fire, here is how tall the list of regulations will get. What matters is how good are the regulations, that is something people should be looking at. David as is so often economics, it depends. Adam posen, president of the Peterson Institute for international economics. Coming up, jeff blau. He has been pushing to get workers back into offices in new york. Ons is balance of power Bloomberg Television and radio. David this is balance of power on Bloomberg Radio and television. We turn to Mark Crumpton for bloomberg first word news. Mark hurricane laura is using is losing steam. The National Hurricane center says laura has been downgraded to a 1 hurricane and is likely to become a Tropical Storm later today. Louisiana landfall in with winds of up to 150 miles per hour. The biggest storm to ever hit the state and because billions of dollars in damage. Laura is now headed towards arkansas. President trump will accept the Republican Party nomination for president tonight and make his case for another four years. He will make his remarks from the south lawn of the white house. Aids say the president will defend his attempt to manage the Coronavirus Crisis and argue he is the best choice to lead the country through an economic recovery. The advisors have indicated he will also look to outline his second term agenda. The World Health Organizations top european official says the coronavirus outbreak is not going away anytime soon. Doctor described the virus as a tornado with a long tail. Speaking at the who headquarters, the doctor warned rising infections among young people could spread to more vulnerable older people and cause an uptick in deaths. The nba playoffs are back on, theyre not right away. Espn is reporting that had a meeting today, players voted to continue the remainder of the playoffs. The decision comes after a night in which they set out in protests over Police Shootings and racial inequality. Today three playoff games will be postponed. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am Mark Crumpton. Is bloomberg. David thanks so much. Low Interest Rates and federal subsidies can help the economy tied itself over, but sooner or later we need to get back to consumer demand, that will require people coming back to the office. Jeff blau is the ceo of related companies, the Company Behind hudson yard. He has been speaking out about the need to return to work in new york. We welcome him back to bloomberg. I know youre on a campaign to try to persuade ceos and leaders to bring their people back. How much success are you having an who are you talking to . Jeff thanks for having me. Good to be here. I am on a campaign in trying to recruit others as well. Basically reaching out to businesses across the city, whether it is our tenants or others, we noted talk about bringing employees back to new york city. This is not a real estate campaign. It has nothing to do with the office buildings. It is about the impact of Office Workers on the new york city. Conomy weve been back in our offices since june 22. Every day i ride around the city and see what is going on. The city is very quiet. The residential neighborhoods have picked up. If you go to the west village of the upper eastside, they are active, there is life. If you go to the business district, midtown, it is deserted. If you think about Office Workers, they fill those areas each and every day. When they come to work they stop at the coffee shop, they stop at the deli, they spend money and they enable the Small Businesses to survive. The concern is of Office Workers are not back in the city, those businesses will not survive. There are only two things. If you think about people today in the city, either they are staying with their parents or in the hamptons or westchester, the only thing that will bring them back is two things. One is school, which were all hopeful will open next week or the week after, and their jobs. If employers tell their employees they do not need to come back, they will decide to hang out at their parents and. Ound it in and phone it in david are there some employers are businesses that are especially crucial. Are the big banks important . Who do you need to get . Jeff they are critical by sheer numbers. Those are the biggest employers and they have the most number of employees. Interesting this morning, jamie dimon came out and said all of their new recruits in london and new york have to report to the office. That is a critical statement and an important statement. It also reinforces that you cannot run business you cannot bring new people into culture and training online. I talked to another ceo of one of the banks yesterday. He has 2500 new employees starting september 15. How are those people going to know what that bank is all about, what the culture is all about, how do they even do their job . It is important for business to operate properly, and two, the real message, we want new york to recover, the only way it will recover his of people returned back to the city. One of the main ways to get back to the city is for them to go back to work. David what longerterm effects are you seeing in the real estate market, both commercial and residential . I know youre converting Neiman Marcus, the large Neiman Marcus to offices. Is there an appetite for that . Jeff that is interesting. There is quite a bit of demand for class a office space, maybe now more than ever. I think there will be a differentiation between class a and the older class b buildings. Primarily these buildings if you think about hudson yards, we design these buildings for anything that might happen. Super resilient, the latest sustainability initiative. We do not know there was going to be a pandemic, but we were very prepared. These buildings have the latest hvac systems, fresh air circulation, large lobbies and big elevators and lots of employees to do cleaning. He do not find that in the b buildings. There is demand for a shift to the class a buildings from the b buildings. People can go through without touching, touchless access. The nieman space presents a unique opportunity. We started that retails 10 years ago. Just what is happened in the Retail Sector in a decade is unbelievable. Obviously the demand for retail space has declined. We do not need as much space. The demand for office space has been incredible. The ability to take our best floors at retail and create 400,000 square feet of class a office space, decrease the size of the retail, move some of the stores down into the remaining retail, presents an Incredible Opportunity and we are talking to several people about that space. David both as an employer and the things you can do for your employees as a landlord and investor, a lot of people will not have the resources, the Financial Resources to do that in your b buildings. Can we get back in new york if we only have the big guys, jp morgan and the like . Jeff no. The office people, everyone has to come back. It is not that expensive. We have an incredible protocol package, and that is another thing we have been doing it sharing all of the work we did as safety protocols to bring people back. We are not suggesting anyone come back in an unsafe manner. Our protocol standards are high. In the morning you get any mail at 5 00 a. M. Asking you to take her temperature answer five questions. At the office there is thermal scanning, everyone is wearing masks, lots of social distancing , Conference Room capacity is reduced, oneway directions and all of that. We are doing all of those things. They do not cost much money but they take a lot of initiative to get them done. We have a package of materials, sending them out to companies, and anyone it and anyone that needs the knowhow, we are providing that. I talked to our employees the first couple of days. People are nervous, they are scared. After that, the idea of being back together, socialize, collaborate, create innovation, people are happy to be back. David why we are talking we have had a viewer right in with the question. As you talk, are there concerns about legal responsibility, that you might get sued . Jeff it has come up quite a bit people are concerned. The general consensus in the Business Community is that congress it does seem to have bipartisan support. It is an issue people talk about. There is no case law. Nobody knows who would ultimately be responsible. I do not know how you would say someone contracted covid in a certain location. I do think congress will pass a bill on that. David jeff, great talking to you. That is jeff blau, related companies cfo. Still ahead, part of my interview with the home depot cofounder kenneth langone. Ons is balance of power Bloomberg Television and radio. David this is balance of power on Bloomberg Television and radio. Ken langone, cofounder of home depot spans the range from business, economy, and health care, and investor and big pharma and chama of the nyu langone center. I started with the subject of the coronavirus. Virus is rapidly receding in impact and importance. Results in newe york City Hospitals this day are dramatically lower than they were in april. Whether it is herd immunity, whether it is compliance. Mask, 90 ofwore a the problem would go away. That is the easiest way to convey infection. I am very optimistic about how we are learning to deal with that. One of the points we have learned at nyus we had patients who had it lying on their bellies. Believe it or not, it had a significant effect on their dependence on a ventilator. If you do not have to put somebody on a ventilator, please do not. I think the pharmaceutical industry deserves a lot of credit. Collectively,made not with the profit motive. I believe, based upon hearing people smarter than me, that we will have at least one successful vaccine by christm