tv WSJ at Large With Gerry Baker FOX Business January 30, 2021 11:00am-11:30am EST
money," every weekday at 2 p.m. eastern on fox business. thanks for watching, we'll see you next time. ♪ ♪ ♪ gerry: welcome to the "wall street journal at large." now we know at least where some of that stimulus money went. the big story on wall street this week was a few hedge funds getting crushed by trade thers perhaps using their $600 checks from the government. who would guess fiscal policy could be so effective? we'll have more on the gamestop insurrection later in the show. the weight of the fury on trading platforms, this was the first full week of the biden administration.
joe biden was elected in the large part because he wasn't donald trump. more than two-thirds of biden voters, according to polls, back their candidate primarily as a vote against president trump. what's more, president biden got the democratic nomination in the first place because he was seen as the least threatening candidate. president trump may have nicknamed him sleepy joe, but for many americans, that was fine. perhaps they hoped after the exhausting insomnia of the trump years, a long nap was just what the country needed. but sleepily joe has clearly had an adrenaline infusion. the president has unveiled a radical progressive agenda that his democratic primary opponents wanted in the first place, race, immigration, green energy and elsewhere. now, you can agree or disagree with these policies, but you can't deny what they represent is a radical remaking of the american system, its economy, its society and just about everything about it. as we have known the u.s. essentially for generations, it is revolution their.
on -- revolutionary. on tuesday the president launched a program to bring about racial equity in america. >> i believe this nation and this government need to change their whole approach to the issue of racial equity, and that means we need to make the issue of racial equity not just an issue for any one department of government, it has to be the business of the whole of government. gerry: now, it's important to remember that that term, racial equity, is the phrase that is now favored by the left. it supersedes racial equality which president biden almost said in that clip in the first place. but the difference crucial. the dawn of racial equality is -- the goal is equal treatment regardless of color are. racial equity starts with the premise that america is systemically racist. the system will always favor white people. to achieve ec equity requires a
redistribution of resources to balance out discrimination against minorities. the idea that the inequality is not driven mainly by talent or hard work, it's driven by a system that discriminates in the service of white supremacy. this is, indeed, radical stuff. then there's the green agenda which promises to completely remake the u.s. economy. the president's already canceled the keystone xl oil pipeline with the loss of thousands of american jobs, and on wednesday, john kerry, the president's climate czar, indicated that fossil fuels which have been the life blood of the u.s. economy for generations were a thing of the past, and that would mean an end to millions of traditional jobs. >> the president of the united states has expressed in every comment he has made about climate the need to grow the new jobs that a pay better, that are cleaner. i mean, you know, you look at the consequences of black lung for a miner, for instance, and
measure that against the fastest growing job in the united states before covid was solar power technician. the same people can do those jobs. gerry: that kind of assurance that workers can simply switch to any other job can only be uttered by someone who's never done a proper day's work in his life, i suspect. the democrats won the election, sure. it's far from clear they have a mandate to remake the nation like this. so why are they doing it? that's the answer, they see the covid emergency as an opportunity for the country to change radically, a great reset, it's called. the calculation may be that if they can get on top of covid, optimism will soar, the u.s. economy will bounce back, and americans will accept the big changes they want to make. so here's a look at what's happening in the fight against covid to get a sense of where all this is heading. on friday we got more good news on the vaccine as johnson & johnson announced its drug had tested well in trials. that could be ready in a month or so. but meanwhile, the rollout of the vaccines we do have
continues to be uneven. the administration hopes to have enough vaccine for as many as 300 million americans by the summer, but so far only half of the vaccines that have been made have been distributed. some states are have made big strides. west virginia has vaccinated 1 in7 of its residents, but california's only managed half that. there is worrying news about the new strains of virus that could be more virulent. here to discuss is professor of molecular medicine, dr. eric toppel. thank you for joining me. >> great to be with you. gerry: this vaccine rollout seems to be very uneven. about a third of the states have actually only managed to administer about half of the vaccine supplies that they've had to american citizens, some states doing much better than others. west virginia's had a remarkably good record, other states not so well. california, very poor.
what explains this variable, and so far it seems quite weak overall rollout? >> well, it's a formidable challenge. unfortunately, as was promised, it was supposed to be digital tracking of every vial. we haven't are seen that at all. the states have a lot of lack of coordination. it's been now, you know, well over a month, and it's getting better. we've had days up to 1.6 million vaccines administered, but it has to get much better than this, gerry. we need to get up to 3 million a day and that's, of course, with the supply being maintained. so hopefully, the glitches are getting reduced, and we should learn from each state. like you mentioned, west virginia, dakotas, some of these are doing exemplary work, and we should get the other states up to speed. gerry: you mentioned the supply. that's obviously critical too. some states are saying they are coming close to running out of supplies, that it's not distribution, but supplies.
we got the good news on friday that johnson & johnson's latest company with the vaccine that looks to be effective. so what's -- you see it right now with the vaccines we already have, with the ones we might get in the next month or two, how are we placed for supply, and what does that means in terms of the number of americans that will be able to be vaccinated, say, by mid summer? >> novavax reported yesterday, and johnson & johnson today, these results are quite with good. and so that will -- if we can get the production revved up for those, pfizer, moderna, we should be in very good shape for supply. certainly be able to get everyone vaccinated by mid year. so that shouldn't be the hold up really now that we have two other trials that look like the results are quite good. that's, of course, without accounting for the variant that we will talk about. but, you know, i think for the
strain that we have been dealing with since, essentially, the beginning of the pandemic, these vaccines have a lot of efficacy. gerry: let's talk about that new variant, the various new variants, the british one, the south african one, the brazilian one. i think johnson & johnson in their trial report on friday said that while their overall efficacy was very good against the sort of conventional variant, if you like, the original, it does seen to be significantly less effective against, perhaps, the south african one, and that might require maybe some adaptation to the vaccine? how much of a concern should that be? >> that's very concerning. we've seen it now twice. so it's, replicated both novavax where it dropped down from around 900 to 5 -- 90 to 50, and then we saw it again today with j&j dropping down in the 70s to the 50s. so there's no question there's a partial resistance to the
vaccine. it's still working but not neary as well as the strain that we've been dealing with for the whole year. past year. so that's going to pose a challenge. and then the other thing is the b117, the one that was identified in the u.k. that one also appears to have some resistance, not as much, but it has this super-spreader feature which is going to be very daunting to contain over the weeks ahead in the united states. it's already in the majority of states. it's going to keep becoming a dominant strain, and that's going to pose trouble particularly if this resistance is assured. gerri: doctor, thank you. sounds like we're making progress. thank you very much, indeed. >> thank you. gerry: coming up, when can we expect a full economic recovery, and what might be the long-term changes in the u.s. that we'll see after after the covid pandemic? ♪ ♪
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♪ gerry: financial markets are indicating on optimism that the u.s. economy will bounce back quickly later this year once the vaccine has been given to most americans. what can we expect not only for the immediate recovery, but also how the u.s. may be permanently changed by the pandemic? here to take it up is the dean of professional business at tufts. professor, thank you for joining me. >> absolutely. thank you for having me. gerry: there's a lot of optimism on wall street now. i seeing estimates being revised up for growth i think for the second half of the year. does obviously seem to be heavily dependent on how quickly the vaccine comes along. but what's your expectation? the can we expect a strong recovery x if so, when? >> i think there are a couple of different ways to look at this. i think, pretty much across the board everyone is expecting a recovery. the big question is by how much.
and if you ask the imf, they are somewhat more positive. in fact, they upped their projection for 2021 and 2022, they expect global economic growth to be about 5%, 5.5% between 2021 and 4.1% in to 2022. part of their positivity comes from the vaccine rollout, the change in administration in the united states and other factors. but if you talk to business executives, a recent survey from mckenzie actually paints a little bit more of a -- not a negative picture, but a somewhat more toned down, particularly in latin america and europe. there are concerns that the pandemic is still surging, and they're worried about the new variants, and the rollout is not going as well as might have been expected, and unemployment is still a big issue.
so i think people are expecting a recovery, but there is some moderation in terms of how fast that's going to happen. gerry: it's an interesting point you raise. how much of the u.s.' performance depend on worldwide, because it's a very variable picture right now. israel, for example, has vaccinated more than half its population, the u.k. is doing very well, about 10%, the u.s. has vaccinated maybe 7% of the population. those countries are probably going to emerge quickest from this. is that going to restrain, though, is the fact that other countries are going to be lagging behind, is that going to significantly restrain the ability of the u.s. to recover? >> well, the u.s. is tied to the global economy, and whenever there is a constraint or a slowdown anywhere, it affects the u.s. but the biggest economy that the u.s. is connected to, in fact, every economy's connected to is china. and china has,sing in fact, done pretty well in terms of covid response and bringing its
economy back. so i think the ones you mentioned and on top of that china and the fact that it is growing is good news for the u.s. gerry: what about jobs? obviously, it's been a very mixed picture in the last year. we've seen probably three-quarters of the economy has basically been fine. people are able to work from home, but people who are working service industries in particular, particularly in retailing -- retail, hospitality, travel, they've been hit very hard. can we just expect -- there's a huge pent-up demand for people to travel and stay in hotels, and they've got a lot of savings. there's optimism around that, that people are going to go out and spend money on these things x those jobs are going to come back probably perhaps as they were. do you think that's likely? >> well, i definitely think the jobs are going to come back, because if you think about the people who managed to ride it out through the pandemic, the lockdown and the social distancing and remote working,
these are the knowledge workers, these are the information-intensive workers, and these are also the workers who used to travel and used to spend a lot of money whether it was in travel and tourism or business-related expenses. and once we start coming closer to the light at the end of the tunnel, these are the workers who are likely to get back on airplanes and get back into hotels and restaurants. so we are going to see that surge. but it is going to take a while to get back to pre-pandemic levels because, you know, a lot of people have been left out in the cold. you know, many businesses this used to serve -- that used to everybody the travel and tourism and other service industries, you know, they had to shut down. so it's going to take a while to get them back on their feet. gerry: we've got to take a short break, but we'll be back with more on how our economy will be changed for the long term by covid. that's next.
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with each other are going to go back to pre-pandemic ways. but a lot is going to change. a lot of the changes that we've had over the past 12 months are going to stick around. the biggest change is going to happen in the area of how technology is going to mediate work, school and play. and over the course of this last year, we accelerated in terms of digital adoption by five years in a matter of the first eight weeks of the global lockdown. which is quite stag therring. staggering. and whenever digital technology has made inroads, about three-quarters of that is going to remain post-pandemic, and that's true for school, it's true for work, and it's true for a lot of entertainment that people might be doing. and that's going to last for a couple of years, and then we are going to see more in-person activity slowly come back. but my anticipation is a lot of
the information related businesses are going to go into sort of a partial work from home and work from office mode. and that is going to be a significant transformation not just in work, but also in the way we organize our urban infrastructure, transit and the way we organize everything else that supports people at work and people at home. gerry: one other thing and just very briefly, final question, one of the other big features we've seen is a massive widening of inequality. big, successful companies and small businesses, inequality between people who have financial wealth already are, stocks are are done well, housing has done well, and those who don't, inequally between those who keep their jobs and those who lost their jobs. we have a problem of widening inequality in this country. quickly if you would, what are we going to have to do to address that? >> one of the first things we need to do going back to the fact that technology is going to be the mediator of a lot of activity is to close the digital divide. there's a belief that the united
states is a digitally advanced society, which it is, however, half this country still does not use the internet at broadband speeds which is a shocking statistic. the other shocking aspect is the government agency that's supposed to keep track of that still is not aware of it. and so the new administration if needs to come up to speed on how big this divide is, how wide this divide is and start making some investments and bringing the relevant actors together. gerry: my thanks very much, indeed. coming up, the big boys on wall street took a hit this week after small business investors teamed up and caught the shares of -- got the shares of gamestop to skyrocket. how did this happen? how did this happen? that's next.
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gerry: small investors generally get sm pick, while the big investors get fat on their wings. in the past year, a bunch of hedge funds have been taking short positions in gamestop, a retailer which sells video games. coming together on social media, a group of enterprising individual investors saw an opportunity to make some money while handing the hedgies a big loss. you can buy back the stock at a lower price, handing the shares a back to the lender and pocketing the difference.
it's risky. if the price goes up, you can get squeezed and pile up big losses as you're forced to buy shares in a rising market. this is what happened to gamestop. the small investors bid up the price, and at one point this week it was over 1,000% higher than a week ago. one hedge fund had to be bailed out. special tax treatment on their earning, getting fleeced by day traders was just too much for some people. at least one trading platform limited trading in gamestop. the biden administration said it was looking into the activity. there was chorus of criticism of this on media. a famous economist once said the market can remain irrational longer than you can remain solvent. the frenzy will soon en, and some of these individual investors will get hosed. there's no need to brock traders from -- block trade depressor doing this. market -- traders from doing
this. well, that's it for us this week. be sure to follow me on twitter, facebook and instagram, and i'll be back next week with more in-depth interviews right here on "the wall street journal at large." thank you for joining us. ♪ ♪ ♪ ♪ jack: welcome to "barron's roundtable" where we get behind the headlines and prepare you for the week ahead. i'm jack otter. where does bank of america see the economy come going this year? ceo brian hoin moynihan -- moynihan will join us. and later, todd alston will give us his stock picks for 2021. but we begin, as always, with what we think are the three most important things investors ought to be thinking about right now. the crazy, frenzied trading in gamestop