Happening . Moynihan spentan time in washington meeting with people. I do not think his story is over yet. Why is that . Idea, anyt have any facts, but i would doubt they get off that lightly. You look at how much jpmorgan has been targeted, and it seems like we are in an environment where the government is out for blood. It is bank of america next. Who knows, but i think Brian Moynihan has been a hell of a job. These guys will go as far as they can go. Jpmorgan i thought was done, and then they came after them on madoff. There is never an end to this ticky bank attack piggy bank attack. I hate it. You do not think it is justified . The scale of these things are wild. So were the losses, the issues were high scale as well. You cannot fight the government. They win. When they come after you for a number like this, it is now becoming they repaid. Off. Ake mad off sec was told about mad and they threw it away. Jpmorgan, give me a break. What about the bad mortgage tons, bundling up mortgages investors that did not know any better. Fannie mae got part of the settlement. They did not know, come on. There is a lot of blame, but the most expedient thing to do is blame the banks because they are the ones with the money. They have the money, go to the bank, and everybody hates them right now. Specifically on bank of america, they just reported with a good quarter, relatively speaking, people were criticizing bank of america because so much of the business was generated in america. It does not look so bad anymore. They have done a nice job. They were down as well as you could get, and brian has brought the team back. What you think makes him a good leader . A nice, even keel, steady as you go. He is a lawyer. That is better than being a banker. That is one against him. Job, but hea solid has really focused on the team. Keel, part of what makes him a good leader. We have another person stepping into the leadership role today, mary barra over at gm, first day as ceo. Last night, the Company Announced a new cfo and a dividend, the first dividend since 2008. Have they gotten all of the big things out of the way, leaving her in a position to focus on innovation, or would you say it is more challenging because she cannot offer dividends . You have to hope so if those are her takes. She has the ticket punched. There. Rted she worked her way up through stanford. Lets give her every break in the world. I hope she knocks it out of the park. You have the chairman in a given row, the president in a whatrent role, the ceo does it look like when you have a lot of cooks in the kitchen trying to run the company . Ugly. Everybody goes shopping. Barra uphis set mary to fail . Lets hope not. There are multiple levels. If i go to you for a deal and i do not like it, i go to trish. How difficult is it going to be for mary barra to keep a guy happy . N he was the cfo, now he is the president. How tough is it because we have seen what happened to ge . Ammann may not be exactly what she wants, but she is getting delivered him. Will she ever fully trust him . He was always be worried gunning for her job . I do not know mary barra, so i do not know what her style is. She might have a style that accepts having someone nextdoor that is shooting bullets rather than giving hugs. I do not know. Big deal, a woman. I like to see that. You think about the change in corporate culture. We have jeannie at ibm. You could still lift them on one and. One hand. We are watching apple. China mobile is offering a free iphone with the most expensive data plan and it is subsidizing the phone if you get the basic plan. Part of the reason the child the iphone was not selling was because it was too expensive. What kind of revenue opportunity does that unlock in a company that is eating up all of the smart phones out there . A huge opportunity. That was the differentiating factor, the idea that the phone was so expensive. It is something. I think there is a lot of demand and this will only in the state. Jack, do you have an iphone . I have an iphone. To have multiple phones or gadgets . Do you still use the blackberry . I had been using the keypad blackberry, and now i have almost the tablet version. They have the virtual keyboard better than anyone. You are canadian, dont you have to buy a blackberry . Amks when you in rome, i doing as the romans do, im quite happy with a iphone or samsung, but i want to give these guys a shot. I think the big story is t mobile and verizon. That work could be destructive. At t, you verizon and are under siege with these deals. Theyey will pay you if switch. If you switch. It is a big deal. How sustainable is that revenue model . You know, it happens in televisions, all of these properties in consumer electronics. Ou watch the prices come down productivity increases as well. Absolutely. Razor thin margins. A does the industry me provocative or like john leger of at t . I do not think of jack welch. When i think of arnold schwarzenegger, i do not think of you that much either. [laughter] fighting words. Ouch. Characterbeen quite a , a charismatic force for the company. The ceo of tmobile we are talking about here. Party. Hed the at t we will see what happens to guys like that, the strategy of. Eing a disruptive with price disruptive with technology is one thing. Disruptive with price is another. All the disruptiveness means is the willingness to sacrifice margin to the point where you might be losing money. Any company can do that. It is just whether you think the strategy can gain market share to recover Pricing Power and take on the guys who had you over the barrel. That is a timing issue. It is working for amazon. Less than 2 . Do you think that tmobile is losing money on this, chalking it up to marketing . I do not know. Before we go to a commercial break, i want to bring everyone up to speed with the agenda. Its firstment issues report on Producer Prices for december at 8 30 a. M. This morning and economist except to see prices up 1. 1 . Christine lagarde will give a speech at the National Press club and focus on the prospects for Global Growth over the next year. At 2 00 p. M. , the fed releases the beige book, and anecdotal look at Economic Conditions around the country. That is the agenda. How much should workers get paid . I was is debating the minimum wage, and so will we. Staying in washington, d. C. , do not miss charlie roses conversation with former secretary of defense bob gates. That is tonight at 8 00 p. M. And 10 00 p. M. Eastern on bloomberg tv. I think president s have been too quick to pull a gun to solve a problem, using military force as a first choice rather than a last resort. You are watching in the loop , live on Bloomberg Television and streaming on your phone, tablet, and on bloomberg. Com. Steelrish regan with alix and our guest host jack welch. How much should workers get paid . Some in congress are pushing for 10. 10 an hour with the idea that people who make more money spend more, and others worry anything about 7. 25 an hour would hurt job creation. There are so many views, and one way to look at it is who is on the hook for worker pay, and this was discussed by varying the halt and he picked apart the walmart pay plan. Because walmart is not paying their workers enough. Is a complex issue. You want to say something, i see it. Wouldk, the law of demand suggest that higher prices mean people will purchase less of them. Does that also apply to labor markets . A prices go up for labor at mandatory level, are we in a situation where fewer people might be employed, and therefore we will be stuck with the exact same Tax Obligations that Barry Ritholz is talking about . Government intervention labor markets is by definition disruptive. It is not a free market. It messes things up. On the other hand, there are more studies saying it will hurt jobs and studies saying it will help the economy by giving money to people to spend. I will not enter the debate on who is right on each side, but i know you cannot totally disrupt with two rapid of an increase. Does that mean you want to get rid of the minimum wage altogether . No, i am for a minimum wage, increasing it. The New York Times has an editorial page saying we have to 8 theyre, and on page a have the story about queens casino that had a cafeteria with 180 employees, and they doubled the wages. In. Arbitrator came they were making five dollars in chips, and they raise the two 12. What happened to the cafeteria . Gone. 180 workers are they had to close down. It was not economically efficient. At the end of the day f they take it up slowly it did take it up slowly. No, they did not. You cannot adjust when you go from one and double it. Too much, too fast. Indexing to inflation might work. Gei took a look at wages at in 1981, and were 3. 35, adjusted for inflation they are 10. 75. Pay 10. 75, i will tell you that. In july, 2009, congress up wages by 10 , and in six months jobs. Ost 600,000 teen 250,000 nonite teen jobs being added to the economy. It had a direct effect on the minimumwage jobs, you could argue. I know people who have kids care about teens, but this is not about teenagers. It is about the single mother working parttime who is making 55 less than the fulltime worker. Versus sam at costco club, the productivity there can be so much higher, and that is where you will find a career. People are famous for being for starting up the floor and becoming to be division managers. Walmart builds more leaders than just about any company in the game, and they build them from the floor up. Doug macmillan, i think he started as a check out boy had as long as they get their. Oot in the door as a boy as long as they get their foot in the door as a fulltime employee. They have cheap candles. Will get over to Erik Schatzker for a quick discussion on amazon. It is a critical day for amazon. 30 employees in delaware will decide whether to become the companys first lowcost union and challenge the model that has allowed amazon to become an e commerce behemoth. Julie hyman has the details. This would be the first union in the united states, and were not talking about a lot of people, 30 workers who will vote tonight whether to join the union of machinists. Machinists, and repair guys. We are talking about a factory that employs about 1500 people, and a company as the last filing that employed 80,000 people. So, proportionally, very small. But symbolic. Milestone for the company. It has been resistant to unions. In a statement it released, and it has said this consistently, they prefer to have opened communication. If you were jeff bezos, you might be similarly assistant if you are running and operating margin of less than 1 . Of course. You are working with tight constraints. At the same time, the analyst i spoke to said the workers are known as being relatively wellpaid. They receive benefits. Amazon provides a program that will provide people with Higher Education that is paid for by the company. These analysts allege that is why there has not been more unionization attempts. Do we know if this particular group is getting more support from organized labor . We know they are getting some support, but amazon has high powered attorneys to help prevent this from happening. Great update on amazon. We will be watching the vote closely tonight, 30 employees deciding whether to form the companys first u. S. Union. That was julie hyman. Back, google goes shopping, trying to hold onto its dominance in technology. Spending more cash than its rivals will it pay off . We will ask jack welch. Stay tuned. You are watching in the loop , everybody, live on Bloomberg Television and streaming on your phone, tablet, and on bloomberg. Com. I am Erik Schatzker with trish regan and our guest host, jack welch, who led ge for a couple of decades. A famous guy. Alix steel has a check on futures. It is 26 minutes after the hour. Bloomberg television is on the market. Stock futures are inching their way higher with the nasdaq in. 3 ,ead up almost indicating stocks could extend the biggest rally we saw yesterday in a most four weeks. Bank of america quadrupled, which helps stocks as well. Thank you. As theyalking google, are outspending the top five als combined diversification, largecap companies. If you look at the numbers, 17 billion spent in the last two years on hardware and software, and the deal announced this week, 3. 2 billion for next. This is a company on the acquisition trail. Jack, i would think this should give us hope when you see a company like google putting money to work, investing in new technology, it has to mean that google believes in the future, and there is a lot of text that could be coming our way. Without question, google is taking swings. When a company is flush, one it has a dominant position, it is time when a company is flush, when it has a dominant position, it is time to spread its wings, what can i do with all of this money . . Like microsoft i do not want to criticize microsoft. I want to talk about google, and affected the keep going after different stuff, it is a big deal. I think we do need to talk about other companies because they are not doing what google is doing. Of hearing ceo after ceo complain about an action in washington, but they are not taking risks, not balance cash on their sheet. The demand is not there. It is a chicken and egg argument, hire people, to create demand. Google has a days, where you think, freeeek off, this, free that, they have the world by the tail. I have 15 or 16 private equity companies. We are grinding out 1 , 2 growth in a crappy economy fighting to get a little bit of cash flow. That is because you have optimized your Balance Sheet and you have Debt Service Payments you have to pay off. The facts are there is no demand. In this economy you get happy talk about things looming. Booming. They are not, i will tell you that. Does this go back to the washington argument . Dysfunction, not enough of the right kind of rhetoric . We have a recession in europe we are barely out of, china is slowing, and we have a better global position than we have had in the last five years when there is more of a synchronized, slow growth, but it is slow growth. A company like google, you do not realize how flush they are. They are loaded. They would be criminals not to take some of this enormous cash flow they have and spend it, and they are doing this. Made a private Equity Portfolio Companies cannot do that, but what about microsoft, apple . The reason carl icahn is in a war with apple he wants dividends. Right, but the company has to make a choice, we have cash, what do we do with it . Invest it in a zero percent rate environment . Invest in the business . Make acquisitions . You do not let it burn a hole in your pocket. Dont they run a risk of becoming the next blackberry or hp . There is no question, but you cannot say that about microsoft d budget. F their r they are spending a crazy amount of money, but they have not had the hits. Should they be on the acquisition trail, trying to find things that have already succeeded . That is a choice they are making. You could argue that there profits have grown. Everybody beats them up, but their profits have grown up. The last time i talked to you, Sam Paula Abdul was who you wanted to see. I talked to you at the World Business forum. I thought i would get traction. I thought sam would be a great ceo of microsoft. Mulally is not going to do it. I did not think he had the background. Sam, it is not going to be who is it . I do not know the answer. Thehen we come back to point youre making about google having the world by the tail. Maybe it is a cultural problem. If google has the dream days and the world by the tail and google can make it work we do not know what these acquisitions, but the nice thing about google is i always say when you are in this position, bat. Get to there is no sense in staying in the dugout. Google has this juicy position, tons of cash, swing at it. One of my favorite expressions from wayne gretzky, you will miss 100 of the shots you do not take. Eq think its sam got the call from microsoft he would do you think if sam got a call from microsoft he would take the job . You have till he will former ceos there, which makes it tough from the outside. From the inside, he would be comfortable. Jack welch is with us. We have breaking Economic Data. Scarlet fu has numbers. A big lead on empire manufacturing, showing a 12. 5 read when the consensus was only 3. 5, one of the first indicators for the month of january. Wholesale inflation prices came in line with analyst estimates,. 4 gains. Backing out food and energy, they gained more than anticipated,. 3 . Retail sales came in better than expected, and the world bank said it was updating its global gdp forecast. Morein the loop for conversation and Economic Data added. We will be right back. Hello accenture the management of healthcare. Gov was awarded to accenture after the troubled rollout. Accenture is not squeaky clean. Too, as inuble here, a Bloomberg View column is being asked why the government is entrusting accenture, who switched their headquarters to ireland to save money on Corporate Taxes, and his view is ideally the u. S. Would set a good example and take a contract that is not a poster child for clever tax shelters. They switched from bermuda to ireland. They were not even doing it right in 2009, and by the way, this is not the only company. This has been an issue of federal contractors that use tax havens. As politicized as obamacare has been, im surprised this was not politicized. If you are asking which you rather have an incompetent Company Running a website that is good he two shows, or someone that knows what it is doing that has the affection for tax havens. I would rather have the company that has the affection for tax havens. I would pick the second one. At the same time, how is this not become an issue . Republicans will not call out the tax haven, democrats will not call out something negative about obamacare. Accenture switched from bermuda to ireland, and in may of last year, the senate excoriated apple over its use of ireland as a tax shelter. Apple is based in the u. S. , and ireland is like the new cayman islands. How did this not show up on anybodys radar . I think it also brings up the question of what is wrong with our tax code system that we have all of these companies doing work for the u. S. Govern