I dont think the feds job is to make sure there is never a recession. Viviana speaking of Central Banks, their independence often perplexes political leaders. Not just the white house. I would like the central bank not only to work on controlling inflation, but thinking about growth as well. Viviana the outgoing and incoming heads of the imf had plenty to say to bloomberg about global trade. We need to have fair trade. We need to have reciprocated benefits in trade. We are talking about trade, peace, not trade war. Viviana a u. S. Election looming in 2020. Key figures in the political conversation buckle up for a wild ride. The economy is outperforming expectations. Economic policies from the president are working. I think our capitalism has to be more inclusive. We believe in Free Expression and we believe in political speech. Viviana it is all straight ahead on this special edition of bloomberg best. Hello and welcome. I am viviana hurtado. On this special edition of bloomberg best, we look back in 2019 in the americas. We will revisit some of the years most interesting interviews with newsmakers, policymakers, and leading figures in business, finance and politics. Lets begin with conversations about markets and the Global Economy. We start with Goldman Sachs ceo David Solomon in an interview with jonathan ferro. He set the scene for 2019. The Global Economy is in ok shape. The economy is. Our economist are talking about 3. 5 Global Growth. In the u. S. , 2. 25 . If you look at just the economy itself, i think we are doing just fine. The growth trajectory has maybe slowed but the economy is chugging along pretty well. There is a lot going on in the world at a high level. Particularly around big picture macro issues, whether it is the shutdown in the u. S. The trade negotiation between the u. S. And china, brexit just to name a few. Markets are watching these. It is a lot for markets to digest. I think that is actually the big thing people are focused on. How these issues will progress and what impact they will have on the Economic Activity we are seeing. You have made some waves in davos. The headline everyone is running around with is David Solomon says a 50 chance of recession in 2020. What does that mean, a 50 chance . Context lets put that in context. Our economists wrote a report where they were talking about the chance of recession in the u. S. They thought in 2019, a 15 chance. In 2020, a 50 chance. It is hard to put in context what that means. I think the u. S. Economy is in good shape. I think it is chugging along. I think there is a possibility as we get into the later part of 2020 and we see continuing tightening as the fed continues to manage Monetary Policy we can see an economic slowdown. It is just as well possible this run could continue and we could see Economic Growth continuing into 2021. It is hard to predict in advance but i think thats an indication we are closer to the end of the cycle rather than the beginning. China is slowing. It is slowing to 6 . That is not so bad. That is what they say. Ok, 5 . The cities are still growing nicely. China is experiencing the same two type of economies were one where one is growing in one is slowing down. Maybe populism, unrest issues in the future, thats another story. Japan is growing at 1 . Southeast asia is growing quite nicely. Supply chains are moving into the Southeast Asia region. You have europe, which compared to where we were in january or march of 2018, we were much more pessimistic. I was worried about europe. That does not mean europe will be in a recession in 2019 but it will not be maybe it is a 1 growth. Probably closer to 0 . In the u. S. , we have the sugarhigh from the tax reforms. We all anticipated the economy will slow down after the sugar high. And that is what is happening. Where is the u. S. Economy this year . 2. 5 , 2. 7 . Not so bad. Consumer confidence is still good. I would almost call this a goldilocks moment where it is not so bad, not so good. Central bank behaviors are probably more on the dovish side from where they were in the fourth quarter. I would say its a time for investors to be a little more relaxed. I dont think we will go much higher than we are today. You mean in stock prices . We will be fine. What i worry about is rising populism. We are witnessing shorterterm behaviors by governments. I talk a bit about longterm behaviors. It gets harder and harder when you see governments who are becoming more and more shortterm. Are you worried about a u. S. Recession in the next year or two . I have not been. I was somewhat alone in the fourth quarter. I dont know why there was a huge drumbeat. We did not see it with our companies. Our 200 companies in that part of the business. No ceo thought we were going into a recession. They remain confident . They remain confident. It is not as good as it was a year ago. It has a good footing at a lower growth level. When i talk about Consumer Spending at bank of america through august 12, 1. 9 trillion was spent by our consumers on debit, credit cards, checks written, bills paid, ach payments. 1. 9 trillion. That is up 5. 9 yeartodate through august 12 versus year to date for august 12 of 2018. 2018 was up about 8. 5 . 8. 5 growth and almost 6 growth. That means consumers are spending money across the board, whether it is experiences, going out to dinner, traveling. The nice thing is they are getting a lift from gas prices coming down which provides a benefit to spend. That means it is going somewhere else in the economy. What happened to the bond market this week . We have the 30year that set a new record low. Yield adverting on the 2s and 10s. What caused this . Brian largely outside the United States and concerns around trade and manufacturing. You look around the world. There has not been a lot of great news lately. Whether it is the brexit situation. Europe is slowing down and the Europe Central Bank saying we need to slow down. China is slowing down. The impact of the trade war across the region. The need for companies to restructure supply chains to avoid the tariffs, which means they are spending money to move things. Not really spending money to produce new products and capabilities. More importantly the debate about the debate. The old saying we have nothing to fear but fear itself. We have nothing to fear about a recession except a fear of recession. Viviana still ahead on the year in conversation, more debate about the state of the u. S. Economy. This from two of the most influential figures in washington. I think the country has come around to the president s narrative. We have to be thinking more than trickle down. Viviana fed actions inspire plenty of reaction. Up next, a look back at the turbulent year in Monetary Policy. We are at a sort of equilibrium right now. I would like to do more. Viviana this is bloomberg. Viviana this is bloomberg best. Viviana hurtado. We are revisiting the years top interviews on Bloomberg Television in the americas. In 2018, the fed raised rates four times. Investors entered 2019 anticipating further hikes. Chairman Jerome Powell faced pressure from wall street and from the white house. Both called to reverse the tightening trend. Powell insisted the central bank would remain independent and data dependent. His problem, the data was not telling a consistent story. We are in a place where we can be patient and flexible and wait and see what does evolve. For the meantime, we are waiting and watching. For my own personal view is as longest it stays quiescent, we will probably be on hold. If the economy keeps growing, more pressure on resources. It will probably start the trip back up again. My best judgment is the fed is probably not done yet. How far do they go . At one point do you risk an accident . That is why i think they are being patient right now. They dont want to inadvertently cause a recession with inflation this low. The data we are seeing is not currently sending a signal which suggests moving either direction for me, which is why we are being patient. The chairman is doing a very good job. I think it is a difficult job. But as you look forward, it does not look like there will be a lot of policy activity into 2020. Right now that economy is chugging along pretty well. Policy is going to be relatively stable. We do think our policy stance is appropriate right now. We dont see a strong case for moving any direction. When does the damage from a trade war, people are not looking for anything to and quickly. If there is a deal made, when would it become severe enough . When would it tell you it is time to start looking at a possible rate cut . We just have to keep assessing, evaluating what we are learning from the data in terms of those effects, but also the broader set of developments. I dont think any specific point. It is just assessing where we are in terms of our goals to get inflation back to 2 . Making sure we can sustain the economic expansion as long as possible. We have to assess and evaluate. Point,ou think at this the markets are ahead of themselves and thinking you have got to do a rate move one way or another. They are betting on a rate cut. I am not in the position right now where i think a move in one direction or the other is more likely. There are a lot of risks out there. If they come to fruition might have the economy weaken. If that happens, our rate cut mate might be appropriate. There are a lot of sources of uncertainty. The economy, might get a lot stronger which could suggest we might want to do a rate hike. Right now, there is still uncertainty. So it is hard to say what the next move will likely be. I am not in a case where if you ask me how the scales are, i dont feel like for me it is more to the cut than to the hike. I think we are pretty much in balance. Many participants believe a cut would be appropriate in the scenario they see is most likely. As of a week from now, this will become the longest expansion in u. S. History. We had very strong growth in the first quarter. North of 3 . We could see moderation and growth this year but the baseline outlook is good. Sustained growth, a strong labor market and inflation are the objectives. Why are we speaking about cutting Interest Rates . In this environment, especially in the last few weeks there have an elevated uncertainty about the outlook. The economy is hitting some cost currents. Crosscurrents. There has been a marking down in Global Growth prospects. There is uncertainty about international trade. There is evidence that is weighing on sentiment a bit. We are monitoring that closely and we will act as appropriate to sustain expansion. Labor markets have been strong. Unemployment at a 50 year low. And still we are looking at inflation running below target by a preferred measure. Inflation expectations are deteriorating. Growth still ok looking backwards, but looking forward it looks like a slowdown with downside risk. You have an inverted yield curve. It seems like this is a good chance to make insurance rate cuts and try to recenter inflation and Inflation Expectations back at the 2 target. You have the g20 meeting in osaka. President trump and president xi are talking. Could you have just waited to see what happens there . What if there is a positive surprise . Would that have changed your view . Would it be more prudent to say you have to go now . I think the idea of recentering inflation and Inflation Expectations is not that dependent on what happens in osaka. Most are downplaying what will come out of that anyway. By not cutting, now we are putting high probability on the july meeting. Generally speaking i dont like that as a tactic, to say we are not going to do something, and dont worry we will go next time. I dont like that as a tactic. If you think conditions are right today, you should go today. That is one of the reasons i dissented. The fed has no basis to cut rates based on the data. If you say to me, should they cut rates . The answers going to be i think they have to because they have set the market up so if they didnt cut rates today we would have a tantrum. I think they have got themselves pretty well boxed in. We decided to lower the target for the federal funds rate by. 25 the outlook for the economy remains favorable. This action is designed to support that outlook. Were thinking of it as essentially in the nature of a midcycle adjustment policy. The fed can stimulate. Should it do so . Is it the feds job properly i get the feeling you dont think it should. I dont think it should. I dont think the feds job is to make sure there is never a recession. Where rates are right now relative to the Unemployment Rate and inflation suggests we are at an equilibrium. I would be happy to leave rates here absence some weakness or some strengthening, some kind of upside risk to cause me to think rates should be somewhere else. The biggest concern is when you talk to business leaders, nobody i talk to says the cost of capital is inhibiting investment. That has been the drag on the economy. Not the consumer. The consumer has been the hero of the american economy. If that is true, that Business Investment is not held best the cost of capital, thus reducing Interest Rates will have no effect. What is holding it back . Uncertainty around policy, particularly trade policy. Is there anything for the fed to do this moment . Are you feeling pressured to be the savior of the economy because youre the only game in town . I think we have to act as appropriate when we see the economy having a shock. I dont see that right now. I dont think we need to act right now. The economy does turn down, a more extensive sequence of rate cuts could be appropriate. We dont see that. It is not what we expect, but we will follow that path of a became appropriate. If it became appropriate. You dissented on a half a point cut and of a quarterpoint cut. Do you still think the next time around that we need half a point cut . Generally speaking i would like to do more but i dont want to prejudge the meeting. Lets get to the meeting and make the decision there. The policy adjustments since last year are providing and will continue to provide meaningful support to the economy. We believe Monetary Policy is in a good place. We made some adjustments in the policy rate. We think they will give significant support to the economy. We have a favorable outlook for the year. Lets talk about the outlook and the balance of risk around the outlooks right now. How would you describe the balance of risks . For most of the year at the balance of risks has probably been tilted to the downside. Not so much because of the u. S. , but we are part of the Global Economy. We have a global slowdown. We are in a good place. The composition has been a little different to be inspected. We expected exports to be stronger. We did not inspect consumption expect consumption to be quite. It is weaker than we would have forecast. Consumption has picked up and been quite strong and we expect it to continue. Do you think it would have been that way without the feds rate cuts . You dissented on all three of them. One challenges thinking about what the side effects are with low Interest Rates. There are two side effects i particularly worry about. One is how much room we have if we get an actual slowdown as opposed to a concern about a slowdown. In that case we dont have that much room before shortterm Interest Rates would hit zero. The second concern is right now the stock market is doing quite well. Other Financial Markets in some areas have been quite a bill and. The question is, is this the stage of the cycle you want to have a little more push the Financial Markets . I would argue im not so certain that is necessary. Developments emerge that cause material reassessment of the outlook and we will respond accordingly. Policy is not a preset course. Viviana much more to come as we revisit the top interviews from bloombergs coverage of the americas in 2019. Later on, a candid conversation with bill gross. This year he retired. The bond king sharing the story he has never told before. We are not the best witness when it comes to trying to figure out whether something is affecting you. Viviana straight ahead, an exclusive interview with mexicos president. His centralbank goals should go beyond simply stimulate growth. Stimulating growth. This is bloomberg. Viviana you are watching a special edition of bloomberg best. We are highlighting conversations from the year 2019 on the business, finance and politics in the americas. I am viviana hurtado. Hi, john traveled to mexico city and conducted an exclusive interview with mexican president lopez obrador. Interest rates have been too high. He explained how he would like the nations central bank to adjust its policy. I would like the central bank not only to work on controlling inflation, but for it to be thinking about growth as well. Can you give us more about growth . We are talking about with the what the central bank is doing. They are more cautious about inflation. This is not a bad thing. No, this is not the wrong thing to do. I am not saying that. But its important to lower the rates to encourage growth. This is an issue i am leaving for the Central Banks to decide. Because we trust we are not just going to be able to grow, but also to develop. Not only growth, but development, because growth, that is what we want to change. And to create new paradigms. Growth is creating wealth, but not necessarily distributing wealth. Development is growing and distributing wealth. Our administration, our government, what it is now doing is better than before, is distributing income. Although growth is scarce, little growth, there is a better distribution of wealth. That is, there is more wellbeing. Viviana the year in conversation in the americas continues. Coming up, a new era begins at the imf. The outgoing and incoming directors shared exclusive insights with bloomberg. Central banks must cooperate on the basis of data. There is, in my view, a risk of complacency. Viviana regulators turned up the heat on facebook, but Sheryl Sandberg says the social media giant does not have to change is its Business Model. I think we have to help people understand targeted ads and privacy are not at odds. Viviana this is bloomberg. Viviana welcome back. I am viviana hurtado. This is a special edition of bloomberg best. We are wrapping up 20 in the americas by playing back the years top interviews. In april, the International Monetary fund warned of slowing Global Growth. According to Christine Lagarde, trade tensions and the trend towards protectionism influenced the forecast. In washington, she spoke about the situation. I am convinced many forces authorities around the world are supportive of trade. We need to have fair trade. We need to have reciprocated benefits in trade. As a result things need to be fixed. Also at the domestic level where people should not be left to the side. Your 3. 3 global statistic, is that because in terms of priority of order, is that because of President Trumps trade war with china . You have a series of factors that impact it. If they reduced it by. 2 , it has to do with many countries around the world. There are specific factors. The u. K. Is affected by brexit. You look at turkey. It is suffering. You look at argentina. It is at rock bottom. And you look at what happened at the end of 2018 on the part of the monetary authorities. All of that has an impact. Trade tensions being fixed would help growth from 3. 3 to 3. 6 . How dangerous is it monkeying around with the fed . The fed around the world they are called different names. Central banks must cooperate on the basis of data. They have a mandate, given to them traditionally from countries, laws in other countries. That mandate depends if its going to be either price stability or on employment, price stability, generally around 2 . They have to really rely on data, numbers, on hard data that they collected in order to define what is going to be best to deliver on their mandate. It is a healthy, almost sanitized approach that were give them credibility and will help all Economic Agents anticipate what will happen in as a result what they can do, where they can invest, how they can organize themselves. Viviana in summer, 2019, Christine Lagarde stepped down as imf managing director. She took the reins from mario draghi to become president of the European Central bank. Her successor at the imf also emphasized the connection of free and fair trade to Global Growth. In october, she sat down with an exclusive conversation with tom keene. The new imf chief discussed the need to avoid a deeper downturn later by taking Global Action now. Of course there is a big issue of trust. There is also, in my view, a risk of complacency. We are decelerating. We are not stopping. And it is not that bad. Yet unless we act now, we are risking a potential massive slowdown. You brought up the issue of trust. It is absolutely fundamental for trust, to always think not only what is good for me, but what is it you face . What is your domestic constraint . What kind of challenges for you . And how we can craft space for decisionmaking that allows the whole to be bigger than the individual parts. From where i sit in the privileged position i sit in with the news coming in, it is titfortat not only with the obvious, the United States of america and china, but you mentioned switzerland that rebounds across everyone right now. This trade war. How do you define the trade war these meetings . What is your to do list to remove this from the titfortat . We are talking about trade peace, not trade war. What is so obvious, is that it is the indirect impact that really bites. Loss of confidence. That is right where i wanted to go. Loss of productivity, market impacts because they have to pay more for credit. Because they are trading the indirect is what we need to work on. Why . We know confidence, once undermined, is harder to rebuild. We also know for many decades of experience the mother of all crises crisis of confidence. David lipton mentions in your september magazine mentions governance. What is your leadership approach to begin to instill the confidence necessary to get toward your trade peace . What we need to do is solve show as quickly as possible that everybody is a loser in a trade war. Everyone would be a winner with trade peace. Make it clear that loss may be higher on some countries and lower on others, but everybody is impacted. And then concentrate on rational behavior. Viviana still to come on this special edition of bloomberg best, how americans view the economy could be the most important factor in the 2020 election. Up next, leaders from the major parties put a very different frame of the economic picture. America is a happy place when it is working. American workers still feel stagnation. Viviana this is bloomberg. Viviana this is bloomberg best. I am viaviana hurtado. We are looking back at 2019 in business, finance and politics in the americas through the lens of the years best interviews. Throughout 2019, President Trump and his administration pointed to strong employment numbers and a rising stock market as evidence of a booming economy. At the same time, the white house downplayed the negative impact of trade tensions and an overall deceleration in growth. On the day of the monthly jobs report, National EconomicCouncil Director larry kudlow spoke with bloombergs jonathan ferro. Here is what he said in early december. This followed a november report that beat analyst estimates. Despite, i dont know, a certain amount of pessimism, the economy is outperforming expectations. Economic policies for the president are working. America is going back to work. I think that is crucial. You know what, jonathan . I cant member who wrote my the book, my pal at the American Enterprise institute. Brooks. America is a happy place, when it is working. I mean that. America is a cranky place when it is not working. I think as this new rebuilding of the economy with new incentives from taxes and regulations and energy and protecting ourselves on trade, as the numbers come in and people come out of the woodwork, as production workers are getting higher wages or faster wages anyway. This is a country that is gone back to work and i think it is a happier country as a result. Protecting ourselves on trade. Are you saying the current trade stance, you think is helping the u. S. Economy . With that in mind, is there any reason to pullback the tariffs . I have Something Different in mind. I think one of President Trumps most important accomplishments in his first three years in office is to change and clarify the narrative on china. And this country, the usa, cannot permit unfair trading practices, either by allies or nonallies. Technology, innovation, we have the freedom to create. That freedom is what drives our economy forward at the fastest rate of any country in the world for all these years. His job as he sees it is to defend america, protect the workers, farmers, manufacturers, the people working in technology. That is his job. When i say people are happy i think the country has come around with the president s narrative. We must be tough with china. And anybody else who thinks they can willynilly steal not just our technologies but our godgiven creativity. Viviana from the other side of the political aisle, nancy nancyker of the house pelosi pushed back against the white house message. This as her Democratic Party tries to unseat President Trump and maintain his House Majority in the 2020 election. Speaking with david westin in new york, pelosi made the case the republican view of the economy is too rosy. While you make indications the economy may be improving, and god willing it is. In the lives of American Workers they still feel stagnation. Stagnation of wages, stagnation of their opportunity. So, i know we have been having some constructive conversations about how we have an economy that works for everyone. An economy recognizes we are a free market economy. We want everyone to participate more fully in our success. That means we i always say to people there are two books. Adam smith wrote two books. Wealth nations, and the other about responsibilities to each other. It was not really a compassionate book but it was pragmatic and that you have to lift everybody up. I wish he had written one book to combine those things. I think when president bush ran as a compassionate conservative, it resonated well with the very can people. I think our capitalism has to be more inclusive in terms of its success. Our policies, whether it is taxation, appropriations, policy for how we value the Climate Crisis and Job Opportunities and for many new people who have not been in the higher rungs of our economy, to have opportunity, we have to be thinking more than just trickle down, but bubble up. In 2020, the entire house of representatives and a third of the senate, what is the democratic conservative compassionate . It is something we have to do together. We are talking about every aspect of the federal government in terms of taxation, budget spending, investment, etc. What our agenda was in the last election which we continued with is, for the people is lowering Health Care Costs by lowering the cost of prescription drugs and guaranteeing the benefit for a preexisting condition, and not bar you from health care. That addresses not only the health of the American People but the health, the financial health. We are very concerned about making it impossible for them to succeed. Prescription drugs is a big part of that. Viviana democrats and republicans are competing to reach voters on social media. That effort has already stirred up controversy. In october, twitter announced it would ban all political advertisements on its platform. Jack dorsey said, political message reach should be earned, not bought. Despite facing criticism on its role in the political information ecosystem, facebook declined to follow suit. In an exquisite interview with caroline hyde, chief operating officer Sheryl Sandberg explained why. We are not doing it because of the money. This is less than 1 of revenue. Revenue is not worth the controversy. What mark said is, we believe in Free Expression, political speech and ads can an important part of that. Where we are really focused and leading on transparency. We put up an ad library. We announced president ial at d tracker. You can see any ad anyone is running anywhere in the u. S. , anywhere in the world if it is not targeted at you. That kind of transparency is really important to people understanding. We talked about investing in protection. One thing we talked about on the Earnings Call was the size of the investments we are making. Prepared for 2020, working with election commissions, hiring engineers, using machines and human reviewers. Really doing what we can to make sure people are kept safe. When twitter decides to go the opposite direction, does that make you question your decision . Mark said on the call we thought about this for years. We have been thinking about it now. We firmly believe political ads can be important against incumbents or for new views. We believe Free Expression across the board is something that we stand for as a company. People all over the world are using that. Certainly politicians are using it and people are using it and that is how you see the growth continuing. Lets talk more about politicians. It will be tough in terms of regulatory scrutiny. Are you worried about the Business Model being under attack. How do you see your role in educating those on capitol hill about it . I think we have to help people understand targeted ads and privacy are not at odds. We can do both. If youre an advertiser for the Biggest Company or the smallest company, and we have 7 million advertisers, 140 million businesses using our services, and you want to show and ad to women in their 50s in california, we take the ad and show you aggregated results. We can do very good ads targeting that makes ads good for people and helps advertisers reach the right person without violating privacy. That is something i think we need to do a much better job of explaining. Viviana for the last word on this year bill gross reflects on his legendary career. He also shares a very personal story. Do you think i have aspergers . She said, oh yeah. Viviana this is bloomberg. Viviana welcome back to this special edition of bloomberg best. We are summing up the year in conversation with a focus on the americas. I am viviana hurtado. In 2019, bill gross announced his retirement. The billionaire Portfolio Manager and cofounder of pimco bowed out in april. This after 48 years as one of the biggest names in fixed income investing. In an exclusive interview with bloombergs erik schatzker, he took the occasion to reflect on his career. In addition to sharing insight on markets, he shared some information from his life that cast his success in a fascinating new light. My personality, not to get personal, i have aspergers. Can compartmentalizes\. They can operate in different universes, without the other universes affecting them as much. I still had feelings about pimco. I think they did pretty well in compartmentalizing. Not that i didnt wake up in the middle the night and start damning one side or the other. But when i came to work, it was all business. I dont think it affected me that much. It is hard to know. You are not your best witness when it comes to trying to figure out whether something is affecting you or not. So thats a possibility. I did not know you had aspergers. Is that what you meant in february of 2016 . You wrote about Michael Lewis book and the movie, the big short. You shared an attribute or affliction with one of the heroes in that book. Dr. Michael berry. If you have a minute and a half, its a fascinating story. I read that book. And lewis is a great writer. Within that chapter about Michael Berry he listed 10 things aspergers have that michael had as well. Some of them were not being able to look someone in the eye, which i am not doing well at the moment. Singular hobbies, etc. , etc. I go, thats me. I took the book out to my exwife and said, read this. And she read it. I think i have aspergers. She said you do. Not, you do . She said, you do. You did not know this about yourself . No, not before i read it in that book. You were in your early 70s. It explained a lot. I am sort of proud of it because it explains a lot about me. All aspergers are not geniuses. The intelligent thing is not necessarily a big part of it. My personal behavior and ability to relate to people, my singular hobbies, stamp collecting and this and this and this. I said, hey, maybe i do. I did go to a psychiatrist. In the first meeting, at the end i said, do you think i have aspergers . She said, oh yeah. Viviana you can see much more of that exclusive conversation with bill gross as well as many more compelling interviews at bloomberg. Com. That wraps up our special edition of bloomberg best. We hope you have enjoyed these conversations from Bloomberg Televisions coverage on business, finance and politics in the americas in 2019. We look forward to bringing you more news, analysis and interviews in the year ahead. Thank you for watching. Im viviana hertado. This is bloomberg. Welcome to bloomberg businessweek, im carol massar. Turnseek, businessweek 90. Women on wall street. Manyweek, me too and why Financial Firms still dont get it