Commercial > COVID-19 updates > DC insider view: COVID-19 and the response from Washington

COVID-19 has dramatically upended the U.S. economy, leading to unprecedented policy and economic actions. In this replay of an April 17, 2020, conference call, get the inside perspective on the rapidly evolving landscape in Washington as policymakers move quickly to deal with this crisis.

Panelists

Expert economist Glenn Hubbard and Bill Daley, Vice Chairman of Public Affairs, Wells Fargo & Company

Moderator

Hilary Rosen, senior political strategist and CNN contributor

Panelists provide analysis on the largest economic relief bill in U.S. history, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, actions to shore up the economy by other regulators, and next phase stimulus plans in progress. They also offer views on expected impact for both Wall Street and Main Street, and predictions for future government and policymaker actions, as more likely remains to be done.

Audio: DC insider view: COVID-19 and the response from Washington

Transcript: DC insider view: COVID-19 and the response from Washington

WELLS FARGO BANK, N.A.

Moderator: Kelly Vives
April 17, 2020
3:15 p.m. ET

OPERATOR: This is Conference # 7893949

Operator: Ladies and gentlemen, thank you for standing by and welcome to the D.C. Insider View, COVID-19 and the Response from Washington Conference Call.

At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. If you require any further assistance, please press "star" "0."

I would now like to hand the conference over to Ms. Alison Hawkins. Thank you. Please go ahead, ma'am.

Alison Hawkins: Thanks, (Felicia). Welcome to today's call, everyone. Thank you for being clients of Wells Fargo. We very much appreciate your business during this tumultuous and very busy time for everyone.

I'm going to do a brief introduction of the three speakers we have on this call. Our first is William Daley, we call him Bill Daley here, and he currently serves as the vice chairman of Public Affairs. And his responsibilities are over our corporate communications, government relations, public policy, sustainability, corporate responsibility and philanthropy.

He was recently vice chairman at BNY Mellon and just before that was head of U.S. operations for Argentiere Capital. Rounding out his financial services experience, Bill was vice chairman at JPMorgan Chase and served in a variety of leadership positions during the financial crisis.

You also likely know Bill from his time as chief of staff to President Barack Obama. And he also served as chairman of Al Gore's presidential campaign and as Commerce secretary under President Clinton. Bill hales from Chicago and we're very lucky to have him as a leader at Wells Fargo.

For all of you who read The Wall Street Journal every day, our next guest needs no introduction. Dr. Glenn Hubbard currently serves as dean emeritus at Columbia Business School. He served as chairman of the Council of Economic Advisors from 2001 to 2003, leading the economic response after 9/11.

Dr. Hubbard also served as deputy assistant secretary at U.S. Treasury, and was a consultant at the Federal Reserve Board and at the Federal Reserve Bank of New York, and held many other positions. He's an extremely accomplished author of many books and is a frequent contributor to many publications that we all read every day on important financial and policy matters.

And lastly, moderating today's discussion is Hilary Rosen, vice chair of the public affairs agency SKDKnickerbocker and is also an on-air CNN political analyst. Hilary has an extensive political background and one of the most respected political minds in Washington.

She previously led as CEO the Recording Industry Association of America, which is one of the most sought after advocacy positions in Washington. She has consulted for several tech and media companies, assisting them on public affairs matters, companies like Facebook, American Airlines, Pfizer, MTV, Starbucks, PepsiCo, Apple and many others.

Earlier in her career, Hilary worked as chief of staff for Senator Dianne Feinstein and has been an advisor to many elected officials over the years. She also serves on the board of trustees for Howard University.

With that, Hilary, I'll hand it to you to take it away.

Hilary Rosen: Thank you so much, Alison, and thank you all for having me. I've been looking forward to this conversation for days – I hope you all have, too – because there really aren't two people in this country who can bring as much clarity to what we're going through right now as Dr. Glenn Hubbard and Bill Daley.

So let's get right into this and start with kind of the big picture. Glenn, we're about a month into major societal changes as a result now of COVID-19. What is kind of your big picture takeaway about how this is changing America?

Glenn Hubbard: It's a great question. I think we are learning the value to the economy of lots of sectors and lots of individuals that we might have taken for granted. I think many policymakers forgot how important things like restaurants, leisure, hospitality, travel were to the economy as well as all the many millions of workers that make them work.

We're also seeing how fragile employment relationships can be. The fact that we have 22 million now looking for work that weren't doing so six weeks ago is a huge problem.

Over time, I think we're going to learn that the economy may operate a bit differently. We may change our behavior is some ways, the way we travel, the way we consume, the way we save, the way we invest, so a lot to be done here.

Hilary Rosen: Yes, good point. Bill, thoughts?

Bill Daley: I obviously would agree with Glenn and his view of the fundamental sort of shift that may be going on here. I also think we have not been, as a country, rocked like this to our core for so long.

The 9/11 tragedy, after a week planes were flying. People were somewhat getting back. Obviously, enormous (fear) around another terrorist action in '08 that lingered but there was a sense that we've got this and America, and what we were, and how we operate, and what we considered normal in our lives would come back. It would be difficult and it was, and lots of people suffered for a time during the '08, '09, '10 period, '11. But there was never this sort of uncertainty to this degree that we have about something that we really (have, seemingly) so far, no control over.

So I think that's been a fundamental shift. I think the doctor is right on understanding what we took for granted, whether it was those restaurants and those businesses, that way of life can be changed forever.

Hilary Rosen: It's a good point. And Glenn – for those of you who don't know, Glenn was the chair of the Council of Economic Advisors under President George Bush after 9/11. And so, you have a lot of experience with an economy in crisis and, frankly, a country in panic.

And I wonder if the things that you just said about this focus on workers and community and those sorts of things, did – that feels different than it did at 9/11, doesn't it?

Glenn Hubbard: I think that's right. Some things are similar and some are very different. I agree with Bill in that respect. The thing that's similar is, when fear strikes, you do get a sharp economic slowdown.

You also have to think about linkages in the economy. And 9/11 still had to do with the travel industry but also with just the daily life and the fear of terrorism. At the time, there were also the anthrax scares. There was a Washington shooter. It was an environment of fear.

What's different about this one, and I agree with Bill, and it's worth saying a bit more about, is you have a shutdown of the entire economy. Where parts of the U.S. economy 9/11 was (their) story about New York or about Washington, here we really have a national story that's affecting Americans everywhere, and affecting people all over the world, and is not going to quickly snap back.

I'm not one of these people that thinks this is something you turn a light switch off and then it turns back on. It's going to take a while. So in that sense, it's different and it's going to require policymakers thinking a bit differently than they do in a typical recession or even a terrorist attack like 9/11.

Hilary Rosen: Good point. I want to get to the government response and what – (I'll) have you guys look into your crystal ball in a minute. But let's stay in the present because – Bill, what are you seeing the best companies do right now? So beyond the federal response, what is the financial services' responsibility? What are many of the customers who are on this calls responsibility? How are companies dealing with this and what are the best companies doing and thinking about right now?

Bill Daley: I think we – much is made often around CSR and ESG and all those things that we look at, (or clients are being withheld while companies iron out opportunities).

But when it gets down to it, what really matters is in a moment of difficulty – and this obviously is unprecedented. When companies in their normal – what they do normally in their business and they're able to then step forward and go the extra mile, (and really are giving them a) financial service, whether it's delaying fees, deferring payments, (actions) that are trying to help the consumers.

We've helped well over a million consumers and small businesses deferring or waiving fees and that – and this is all very – in a very short period. We (extended) in March, I think, $80 billion in loan commitments to our commercial clients.

And how you treat your employees, the sort of work we're all trying to do – there's plenty of reason to criticize and we all get criticized for not doing enough or not doing it right, but there is no playbook for this one. OK?

And so – but I think that the best companies are those that are really trying to engage their clients. Be there for them and their employees in a very basic way in a fast moving, ever changing – a small example, for a while (there, we were all) trying to get masks for our employees who are engaging our customers.

And then not only was there a scarcity of them but then the move was all the health care people should get them. And that's fine and that's great. But we're doing this almost day-by-day. And then it was hand sanitizers. And then, all of a sudden, on one of our calls we were making a deal with some alcohol distilleries to make hand sanitizers. And that was kind of all by the seat of the pants in the middle of this thing.

So the best companies are those that are really there for their clients and are engaging them constantly. And I think we're doing that and I hope our clients would think we are there for them to try to help them and answer their questions.

Hilary Rosen: Yes. And in many respects, government and business has been operating a bit by the seat of our pants while the government is worrying about the public health system.

But the government did do a few things recently, Glenn, as we know, the CARES Act, which I know you had a hand in helping develop some of the programs within the CARES Act, including the Paycheck Protection Program for small businesses and the like. How do you feel like those tools and that $2 trillion that Congress has already appropriated is working, and are there tweaks to how it should be working before we start thinking about additional money?

Glenn Hubbard: Well great question. Before I get to some issues I think could be done better, let me just step back and see hoe remarkable it was that the CARES Act came together in a week. If you think about '08, the responses of the government and the Federal Reserve took some time as the crisis developed. Here, it came together quickly.

So is it perfect, no, but you've got to give the Congress a lot of credit and the federal reserve a lot of credit and the administration credit for coming together. I think what was important about the CARES Act was its desire to help people in a variety of ways who are being hurt by the economic shutdown. As I said earlier, it's not a typical recession. Here, I think a big goal was to keep businesses operating. It's not stimulus, you're not trying to get people to go buy things; we're all stuck t home anyways.

The question is really, can we stimulate a normal economy. So if we can keep people attached to the employers, one, they have income and the benefits that may come with it, and second, when the economy restarts, they don't have to go look for jobs. That was a big thing behind the Paycheck Protection Program, I think it could have been more flexible, should have been more flexible for small business, that's the point that I made, rather than focus so much on payroll; although it was critical to give the grants conditional on keeping one's payroll.

It's important to use banks in that, banks were the ones with the business relationship, so you couldn't really stand up the government agency fast enough. The Fed's also been active, it deserves a mention. Their main street facility is in very early days, I don't give them very high marks so far for what they're doing, but it's a good idea and I'm hopeful. So while tings could be different, I still think the speed is important and its time both to put more money in and to reconsider some of the flexibility.

Hilary Rosen: Interesting. And do you feel like – there is quite a lot of attention right on who's applying and whether everybody who applies is legitimate in the thing and there's sort of a lot of threat of scrutiny around this. Do you feel like there's too much attention on that and not enough attention on getting more resources in to the system?

Glenn Hubbard: Well I think both (is true here). We need more resources. The fact that the money went quickly even with the Treasury and the SBA being a little halting in their approach, tells me there's enormous demand, we need to get that done. At the same time, legitimate borrowers should be the ones borrowing.

I think so far if you look at the data the SBA has picked out – its put out, it is doing primarily fairly small business that are getting a lot of the loans. So I think it's getting to the right places, but it's woefully underfunded. The estimates I gave the leaders office when it was being considered was that the program (he) wanted to do would have cost $1 trillion, not $350 billion. I think they're learning that.

Hilary Rosen: Interesting. Bill, what are you hearing from your sources on Capitol Hill about how quickly or even if another round of funding is coming for the program?

Bill Daley: Well there's been a lot of chatter now that the PPP program has run out of the 350. And I agree with what Glenn was advising. If you just take the criteria to fall into that pot of under 500 employees and the status, you're well over $1 trillion probably in theory, in need, or those who could qualify for need.

I think – I saw somebody on TV the other day who's gotten a substantial grant, saying he's not going to use it for payroll in his business, he' going to hold it and wait until he reopens and then use it for that period of helping them cover the costs to reopen, which I thought was a little strange, being on that television and saying that when that's not what it was meant for. But I think there's enormous pressure.

Let's be honest, in addition to the crisis and they're – I don't think anybody really understands where this (may go) economically (inaudible) sense of anyone. But so – and you have an election year where (all the) House and a third of the Senate and the presidential race is up, so there is a demand and that will be responded to; I don't know how many more times, but I think there's got to be a – and they keep throwing a number around, 250, and rumor has it that they're getting close to a deal.

I think that they should, at least in theory, kind of do what the Fed kind of set out to imply, that it will do whatever it takes. Now there's consequences of that long term, and those of us who believe in some (inaudible). But right now, I think it's kind of what (inaudible) at the very beginning, you've got to do what you've got to do to try to prop up our entire economy (in any way).

Hilary Rosen: Glenn, what about the Fed's efforts at the supporting mid market companies than the so called main street lending facilities that we've been hear that they are setting up? Obviously a lot of companies don't fall into the small business category and yet they're not one of the major industries that is getting direct, sort of targeted loans.

Glenn Hubbard: Well what the Fed has done is call (the) main street facilities and says in its term sheet it's for borrowers between a d single employee and 10,000 or revenue up to $2.5 billion. Yet when you look at the fine print, the minimum loan is $1 million. So it's not really small businesses, I would say they're probably aimed at the middle of that distribution, say 500 to 10,000 workers.

I've urged them to try to bring that down a little bit. I also don't think they're standing up enough capital (for a long term) program like that. They have 75 billion in capital, for a 600 billion program. (Distressed time), I think the big issue though is getting banks to participate and borrowers to want to. They need to make sure this is simplified and streamlined for borrowers.

And for banks, I think they want to make sure banks don't worry that the government will come after them if somehow there are a lot of defaults later, there is a risk retention provision for banks. I think banks are probably more worried about the government coming after them as it did after the financial crisis.

Hilary Rosen: Right. Because there's not a forgiveness component to this money like there is with the other programs.

Glenn Hubbard: Correct. This is a real loan and real underwriting, and so banks are a little worried. PPP is more of a grant as long you meet certain conditions, this is an actual loan.

Hilary Rosen: Yes. And the – do you feel the Fed has other tools in their toolkits that they could be exercising to help keep the economy propped up, or (as) the economy sort of wakes back up again?

Glenn Hubbard: I think it's really – (inaudible) if you put the Fed's tools in three baskets, its traditional one is the market making and treasuries, agency, (these are) mortgaged back securities. They've done a great job there. If you look at nontraditional interventions in a second basket, like investment grade corporate debt, high yield debt, municipal bonds, they've done that and improved those markets.

Where they really need to act, I think is in the main street facility for small and midsized firms. And there, they're not quite there. Part of what I worry about is that the Fed may be thinking, well we don't want to lose money, that is not the right attitude. Now the way to not lose money is not to lend at all, and I think they need to be bold. The Congress gave them money. I mean the Fed (inaudible) shouldn't be conducting fiscal policy on their own, but the Congress gave the Fed $454 billion of capital to stand up these facilities and they need to do it.

Hilary Rosen: So how much do you think has gone out the door to date, because nobody is releasing any numbers?

Glenn Hubbard: Well, they haven't started (inaudible). Their other facilities they've been very, very active in every one of those markets, but the main street facilities as far as I know is just the term sheet.

Bill Daley: My understanding is that they're probably a week or two at least away from sort of selling out that (rules) and how this is all going to work. And obviously because they are real low, it doesn't seem to be (inaudible) because there's going to be legitimate underwriting on each of these and that always takes a bit of a period (not just a quick) application form that's four or five questions.

You've got to go deeper for your own practicality. And I think Glenn raises a good point (inaudible) you get another administration and new rules and a new Fed and new – and then all of a sudden (and unless it's) very clear and very precise for these things that will be around for a few years, these loans, and how they're treated, there's a uncertainty about that and some (of them are in fear) because of what happened in the past.

Hilary Rosen: So not just an uncertainty from companies being reluctant to increase their debt service, but also you're saying from lenders worrying about the rules changing on them going forward.

Glenn Hubbard: Correct.

Bill Daley: What happens is – that's a very bad memory for the financial service sector from the last crisis in 12 years ago. So that's why (inaudible) demand. And the FED has been great about reaching out to get advice from the industry, and then take all that advice in the layout, depend more than just the term sheet.

Hilary Rosen: Which is why the expectation is that lenders will be most comfortable with current customers.

Glenn Hubbard: Right, yes.

Hilary Rosen: Yes. In terms of the, as I call it, the crystal ball and this goes to it, when we think about how much more money Congress will need to put into the economy, how much more reliance we'll have on these programs. We saw the president yesterday announce a series of activities that the public could look to in terms of waking the country back up.

How much do you think an economic recovery and, for instance, one state or two states or three states or four states that have had lower COVID infection rates are going to actually help the national picture Glenn. Is that it does feel like phased in approach has a lot of benefit locally, but what is the in – is there a national impact?

Glenn Hubbard: I think so, there's a confidence building impact of seeing parts of the country open up. I live in New York City, and I don't expect we're going to be at the early part of that. But I think the larger areas in the country, as they open, will be confidence builders. It's important to remember though, it's not just about supply, it's about demand.

So even if restrictions were listed this afternoon, how many people were eager to sit in the middle seat of an airplane, even if you ever were, or on a crowded subway or a movie theatre or crowded restaurant or bar. So that's really the issue, so to me, the economic question follows the health question. At what point will people feel comfortable going out again, whatever the rules are, just in terms of their own personal comfort level.

Ultimately, it's going to be the American people, it's going to be consumers that open up the economy. I mean the rules will be the rules, but it will be people's behavior that is what you need to watch.

Hilary Rosen: And we did see some of that conversation yesterday after the president had the call – had a call with business leaders, when he was encouraging a more gung-ho attitude and business leaders were saying we're going to have to have testing, listen to our customers, and phase into this. And so I guess the question is, has – how are business leaders going to be able to judge that and are they on their own here or do you see the government entities coming to their aid?

Glenn Hubbard: It's both, business leaders will certainly set standards for their own workplaces to try to maintain safety. The most responsible business leaders, I agree with something Bill said earlier, they're focused on people first. Their customers, their employees, they want to keep people safe. Governors in cities can help with the rules of the road, and that's going to be important. And having a clear policy is going to be important.

Hilary Rosen: A bill governor, go ahead.

Bill Daley: (inaudible). Just answered that. We are all already trying to figure out what steps you would take depending on some – we're never going to have a switch. OK, everybody go back and do what you did. So everyone's trying to figure out right now, and the impact of this could be enormous, positive or negative as we go forward economically on how different we may be. The – to be very honest, I've never been a great believer in work from home, but it sure is working to a degree.

And it will be accept – what's more acceptable than – we have now 200,000 people working from home and I'm lying and doing work and so the way you'll need is much real estate as you had. Will you begin to have to move people further apart, the idea of everybody being clumped together and even in a more modern open setting as opposed to the old individual offices, you're going to have to spread people out more.

And so when you want more people in this facility or fewer and where they will be more comfortable, those begin to change and then fewer people are going to an office, all those ancillary businesses that are around that – those buildings and those situations going to affect them. So it's going to be a tremendous shift in many ways.

Hilary Rosen: That's a really good point and obviously, smart business leaders are looking at these issues in terms of space, in terms of commuting cost, and other sorts of things that create quality of life for workers, but also safety for workers and I wonder, Glenn, if economists are thinking about how work will change, not just how – and how that will affect the economy for things like real estate or transportation or other things?

Glenn Hubbard: A lot of great projects and initiatives going on, on exactly that. I agree with Bill that a lot of people are learning that working from home with technologies that wouldn't of been available after 9/11 certainly is Zoom for everybody uses all day long. That will change the nature of work. Some meetings need to be face to face. Many things we do don't have to be that way and it saves time, it saves money to do it this way.

And even in my own world on the education sector, we're seeing now, by – because we have to, a lot of use of online tools, even if you're elite universities. I expect that's going to continue as well, so we're going to see some significant changes, some of which may make us better off. Others of which may be painful to some people.

Hilary Rosen: Right. So clearly business leaders and educators, they're imperative to looking at things differently. Both of you have been at the highest levels of government. How do you think government will change after this, and what lesson does the public sector need to learn to – from this?

Bill Daley: My two cents is – and there's always been, in our history, a sense of the importance of government or the role the business can always do it better than government, the business community. And what is being shown through this crisis is that the vital nature of what public servants and what their charge is and the need for the resources to help them do that, whether it's the federal level, which is – had an enormous, obviously enormous actions down to the state and cities and towns and the importance of that.

And the respect for that hopefully will be appreciated more through this and the vital nature of the healthcare system and the research around these things that often times Glenn's been there, I've been there, you've been there, Hilary were.

When you've got to allocate resources, you begin to look at what's really vital and what you thought six months to a year ago was not very vital and suddenly today, possibly the most important thing that you should of allocated some resources for, and that's not a partisan, that's just a statement of how we're going to look at things differently. Those who are in government are charged with that.

Hilary Rosen: Right.

Glenn Hubbard: Yes, I agree with that. I think that I would put it into two groups, one about preparation and one about organization. In some sense, we should've been more prepared for this. Not that we – anybody would've known exactly about COVID-19, but pandemic scenarios, I spent months on this in the Bush administration, I'd be surprised if every administration hasn't done these.

And being prepared more, it's not just being prepared for the pandemic itself, but to Bill's point, do we really – are we putting enough resources into our public health infrastructure. Every one of these tabletop exercises would lead you to believe probably that we're not well enough prepared, so government, like you'd expect of any business, needs to be more prepared. The other's organization, crises will happen, and thinking ahead of time about how you organize during your crisis is important.

For example, when would you evoke the Defense Production Act? When is it OK to have America's decentralized, wonderful approach to business determine what gets allocated? And when do you need a little more centralized direction? The time to think about that's on a clear day, not in the middle of a crisis. So the preparation and the organization we can do better for.

Having said that, we all know in government, just like in business leadership, the urgent can crowd out the important, so I get it.

Hilary Rosen: How would you rate the relative performance of the governors in this, and in planning, has some of the planning experiences you've both have had at the federal level, have the governors in the role of the states been as prominent as we've been seeing over these last few weeks?

Bill Daley: I don't think there's any doubt that they have been. And back to '01, 9/11 when Mayor Giuliani stepped to the forefront and was able to – people in Washington, (inaudible) president, obviously the president can give great comfort to a nation.

But at the local level with – watch a lot of these governors where it's Mike DeWine in Ohio, Richard Newsom, obviously, Andrew Cuomo in New York, they are playing a vital role, and many of them have called out the National Guard, many of them are out there day in and day out in a very visible way.

So I think it's been pretty impressive. And again, we are very cynical about our politics and politicians too often, but I think there's been very few – with very few exceptions, a lot of really admirable public service at the governor level.

Glenn Hubbard: I agree with that. I think governors and mayors are on the frontlines as executives. They have to get things done, they have a public that demands accountability and they have finite resources relative to the federal government. So I think while we've seen governors do slightly different things, there have been some very, very impressive actions and I think we should feel good about that kind of decentralization of the country.

Hilary Rosen: (Inaudible) ...

Bill Daley: And also if I could add – also, Hilary, just quickly. The governors also have great relationships generally, with their business communities.

Glenn Hubbard: Yes.

Bill Daley: And we see them being able to get businesses to respond in a way that someone in Washington, all due respect (toward that bureaucrat) or political person may be – they don't have that ability. But they're pretty unique in their relationships with the business community to get actions.

Hilary Rosen: One other issue that is – feels like has local implications – has kind of been disparate impact on minority communities that the coronavirus has had. And there are obviously unique challenges to identifying and supporting specific communities, and I wonder if either one of you have some thoughts about what ought to be done to address kind of this disparate impact at this late stage?

Glenn Hubbard: Well it's a great question. I think in some senses a crisis like this accentuates, or maybe accelerates problems that have already been there. Obviously differences in health across populations, income inequality, inequality in opportunities for work – all of those were problems before COVID-19, but have shown up in really high relief here.

And it makes clear the notion of having broader healthcare access, having broader access and training for work, and trying to get at some of these root cause factors. They're not different, but we're seeing them in high relief – it really is quite striking if you look at both morbidity and mortality information from COVID-19 the relationships across income groups, across social classes, across race are very prominent and very concerning.

Hilary Rosen: Right.

Bill Daley: I obviously agree with what Glenn said, and I think though to expect that in the middle of the crisis – what we would all hope, and what we should hope for and try to work for is after this alleviates, that we honestly do look at these horrendous statistics of the disparity between communities of color and the impact this has had on them,

And the rest of society – that we then put that in to the body politic and begin to address some of these deep disparities that really do affect us. And I would assume after this, because of this tremendous difference this will have a very big impact on us as a nation and as a society in trying to pull together, not pull apart as a result of this crisis.

Hilary Rosen: I hope so. We have a few minutes left, and I just want to leave our audience with a few more kind of concrete things for them to take back to their colleagues. So one is on retirement savings, both the CARES Act and the SECURE Act had provisions that essentially made it easier for Americans to access retirement savings.

We know that we've already been worried that Americans haven't been saving enough. What do you think the implications are for sort of encouraging access to retirement savings as opposed to finding other pots of money for people?

Glenn Hubbard: I think that's not a very good idea. I would not encourage people to dip in to their retirement savings during a crisis. We all know that assets markets fell, and may be low for a period of time. This wouldn't be the time to liquidate.

So individuals should make whatever decisions they want to make, or their investment advisor suggests to them. But I think in general a public policy that's trying to make it easy to use up your retirement savings is a mistake. Many Americans are already underfunded for their retirement, I don't think this is the time to do that, but that may be just one person's view.

Hilary Rosen: (Yes).

Bill Daley: I'm going to agree with that. I think that obviously we also know how many – the number of people that don't have the ability to save. But if you have some sort of pot and you absolutely – I don't think we should make it easier for people to access that at this – in the middle of a crisis (inaudible) and I think people, if they can, I would be a strong encouragement that in the middle of a crisis is not the time to try to take money out of something and use it for short-term. That would be consensus, but it's not advice to anyone, it's just my opinion.

Hilary Rosen: Well, you know, and advice is worth what people are paying for it, right? (Inaudible) ...

Bill Daley: But you should – I would encourage our customers to talk to their bankers who help them day in and day out, year over year, and engage with them on advice.

Hilary Rosen: And that's also to another question which is, obviously neither of you are in the prediction business but the business leaders on the phone today are trying to figure out how to make decisions about how spending resources for three weeks, four weeks, six weeks, eight weeks – and figuring out how to cut costs, manage investments and the like?

Any insight Glenn, in particular? You spend time on the phone with the White House, so I know you're talking to governors, what should people really be thinking about in terms of their own markets? We saw sort of the vague analysis from the White House yesterday, but how long should these executives be thinking about (inaudible) these resources and dealing with their investment strategy?

Glenn Hubbard: I think it depends on the kind of firm. Because if you think that your firm's business recovers in a few months, it's basically a question about liquidity and making sure you have the right rainy day funds for the enterprise. And most well-run businesses are like that anyway.

If you think there are these potentially long-tail behavioral changes, that's a different issue. Companies where I sit on the board, I've urged CEOs to think about what the future of the business is. Will there be behavioral changes that affect the demand for the product? How would you reorganize? What markets would you be in?

Normally in a crisis you think, oh, I don't have time for that – yes you do, because it does affect your resource allocation and your investment strategy going forward. So yes, focus on liquidity, but don't forget the long-tail.

Hilary Rosen: And is that more important than figuring out what date people will be back at their desks?

Glenn Hubbard: I think so, in the sense that we don't know – there's no zero-one on back at your desk, it's a process. And so the question is really, for your business how does the slope of that recovery affect you? Obviously it's going to be very different, let's say if you're an airline of a pharmaceutical company. So you just have to decide.

Hilary Rosen: (Inaudible) ...

Bill Daley: (Inaudible) to that – I would also add to that, I do think you – yes, you cannot wait. Because I think these changes as result – my opinion of this crisis. They're going to be real, and it's real-time and the quicker one could begin to understand where their business may be and begin to make what may be very fundamental changes in the way you do your business. It will be those that win long-term, this is a long-term game for those of us who are in business.

Hilary Rosen: That's helpful. Could we just close with maybe building on that with kind of one piece of advice that each of you would have for the folks on this call today?

Glenn Hubbard: Well, I think it's to remember something the Queen of England said when she said, we will meet again. We're going to get through this crisis as individuals, as many – not all, but as many firms, and certainly as a nation. The question is will be plan sufficiently for what the world will look like for us as individuals, as businesses, as governments? And then keeping our eye on the horizon with an (optimistic spirit) is still the right answer.

Bill Daley: Yes, I agree with that. I think it's being positive we will get through this. It may be different, but any time someone's questioned America's ability to survive (was thought) to be a big blow (they've lost). So I would just say I'm positive about us short-term and long-term.

Hilary Rosen: And that's because the economy is strong enough to withstand this disruption, is that your view, Glenn?

Glenn Hubbard: Definitely.

Hilary Rosen: OK. Well, thank you all for this time. Thank you for joining us. (Bill), did you want to close on behalf of (Bill)? Did I lose (Bill)? OK. Well, thank you all for joining us. Have a good afternoon.

Glenn Hubbard: Thank you.

Operator: And ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

The views expressed in this conference call represent the opinions of the authors on prospective trends in the international markets and the financial industry. We do not guarantee this information but have obtained it from sources we believe to be reliable. Opinions expressed are based on our experience and judgment as of this date and are subject to change without notice. This is not an offer to sell or to buy any security of foreign currency.

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