What to watch at the Milken Institute conference

Danielle Wiener-Bronner and Lydia DePillis

Updated 9:38 p.m. ET, May 1, 2019
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7:57 p.m. ET, April 29, 2019

Eric Schmidt calls Ivanka Trump an 'American hero'

By CNN Business' Lydia DePillis

Workforce development is the mom's apple pie of American politics. On the Milken Institute Global Conference stage, it brought together Ivanka Trump and former Google CEO Eric Schmidt, a longtime Democratic insider.

At the conclusion of the luncheon plenary, Schmidt called all of the panelists — including Trump as well as the CEOs of Visa, EY, and Lockheed Martin — "American heroes."

The focus of the panel was creating pathways for both early and late-career workers into high demand jobs that don't necessarily require an expensive education, especially blue-collar trades, which have more openings than available workers. Schmidt opened the panel with a question to Trump: "Why can't I find an electrician?"

The President's daughter has been working to re-orient the resources of the federal government from subsidizing four-year college degrees toward career and technical education.

"Education and learning generally needs to be rebranded," Trump said. "This idea that to achieve the American dream you need a 4-year degree is so steeped in American education that it’s taking people off very viable career pathways." 

(Workforce development advocates generally agree that's a fine goal, but have voiced concern that White House budgets have thus far proposed reducing the total amount of federal funding that goes into workforce development.)

The CEOs on the panel also talked up their investments in apprenticeships for young workers as well as re-skilling programs for their longer-term employees. They also celebrated the rise of more flexible work opportunities, such as EY's GigNow platform, which the company uses to outsource short-term tasks.

"There are all these people who would like to work but can’t work in a traditional structure for a number of reasons," Schmidt said, remarking on the rise of Uber.

Of course, there are also downsides to the gig economy, including a lack of workplace protections and benefits available to traditional employees.

It's also worth noting that while few disagree with the need for better workforce education and greater visibility into available opportunities, labor experts also say that the longtime deterioration in the condition of the American worker also has to do with a loss of bargaining power because of the deterioration of unions and degradation of labor standards.

Schmidt himself took fire after his philanthropy launched an initiative to find a "$1 billion unicorn to grow the middle class," which he defined as an idea that would raise the wages of 100,000 workers by $10,000 a year by 2021 — something that unions have long done for millions.

3:35 p.m. ET, April 29, 2019

What consumers want: A greener planet

From CNN Business' Danielle Wiener-Bronner

At a panel moderated by billionaire activist investor Nelson Peltz, leaders from Sysco (SYY), Boxed, Disney (DIS), Alibaba (BABA) and Mondelez International (MDLZ) discussed what future consumers — read: Millennials — want.

The executives talked about tech, innovation and personalization. They also talked about the environment.

  • For Disney, reducing the environmental footprint of its theme parks is particularly important, CFO Christine McCarthy said. She added that the company is on track to eliminate single-use plastic straws this year.
  • Alibaba is trying to make its data centers greener and reduce emissions, noted Joe Tsai, executive vice chairman of Alibaba Group.
  • Sysco is installing solar panels, among other things, explained CEO Tom Bené.
  • For Mondelez, it's about sustainable packaging and a sustainable supply chain, particularly cocoa.

Mondelez CEO Dirk Van de Put announced on stage that the company is planning to use sustainable cocoa in all of its chocolate brands, including Toblerone and Cadbury, by 2025.

Van de Put spoke with me ahead of the panel to discuss the new cocoa commitment.

5:05 p.m. ET, April 29, 2019

Facebook gets panned for lax cybersecurity

By CNN Business' Lydia DePillis

Facebook has taken a lot of heat for its series of blunders and scandals over the last year.

Those criticisms continued at the Milken Conference on Monday. During a session that discussed the threat of cyber attacks from nation states, one expert blasted Facebook for not taking the problem seriously enough, and for not doing enough to protect the private data of its users.

"They were so bad, and continue to be so bad," said Eric Rosenbach of Harvard's Kennedy School of Government.

"If anyone thinks that Facebook is doing the right thing, has had an organizational cultural shift in terms of thinking they should do something that contributes to democracy, you’re totally kidding yourself."

Other panelists praised Facebook and other big social media platforms, including Google, for cooperating with government officials. Anne Neuberger, a National Security Administration senior adviser, and John Demers, assistant attorney general in the national security division of the Department of Justice, said those companies have taken down accounts that US officials determined were run by foreign governments.

Rosenbach, meanwhile, didn't just lay the blame on Facebook — he said the federal government should've done something by now too.

"The only thing more pathetic than Facebook is the fact that that Congress can’t get it together to regulate the social media platforms in an intelligent way," he said.

He added that a solution doesn't have to run afoul of the First Amendment.

"People who do broadcast on TV or radio or any other place are responsible for making sure they don’t live broadcast an assassination or mass murder in another country," Rosenbach said. "It’s not that new."

After that stemwinder, Neuberger agreed. She voiced personal distress that the United States — a beacon for technological entrepreneurship — could allow intolerance to fester.

"I think we can way to use American innovation to make progress," she said, "and also not be a key way in which hate and racism is spread around the world. 

4:58 p.m. ET, April 30, 2019

This is the kind of chart being shared all over Milken

By CNN Business' Lydia DePillis

The theme of this year's Milken Conference is "Shared Prosperity," and that's being framed as — how to tweak capitalism so that more people can benefit from it.

The genre of op-ed that takes note of rising economic inequality and calls for CEOs to serve a broader set of stakeholders has become commonplace. BlackRock CEO Larry Fink and Ray Dalio, founder of hedge fund giant Bridgewater Associates, have added their voices. The subtext: Populism is rising, and if business doesn't want some kind of radical change, it better figure out how to make the system less winner-take-all.

That conversation is cropping up during panels, including this slide shown by Mark Attanasio, managing director of Crescent Capital Group. It shows the stock market rising faster than wages. Put aside the fact that the different Y axes don't really mean much in relation to other. But the point is clear: Owners of capital are doing better than people who work for a salary. "It’s created all kinds of divides," Attanasio said.

So far — and it's still early! — the masters of the universe here haven't proposed many concrete solutions. But they do generally agree that those who haven't benefited from the capitalist system should have access to better education.

"We are coming to a juncture where we are going to have very radical changes if businesses don’t step up and do something," said Scott Minerd, chief investment officer at Guggenheim Partners. He said the University of Pennsylvania — his alma mater — should make tuition free rather than paying for fancy buildings or sitting on its huge endowment.

"What’s more important? That we have marble sidewalks?" Minerd said. "Or that we have an open system where the best people an have access to the best education without worrying about financing?"

That line got the first applause I'd heard yet.

1:21 p.m. ET, April 29, 2019

Lagarde says capitalism is under threat

From CNN Business' Danielle Wiener-Bronner

IMF Chairwoman Christine Lagarde kicked off the Milken Institute global conference in earnest on Monday morning, in a well-attended 7:45 am PT panel.

The good news: She doesn't see a recession on the horizon.

But in a conversation with Wall Street Journal editor-at-large Gerard Baker, Lagarde said the world economy is still in a delicate moment, though she's "not expecting a recession," citing a surprisingly good US quarter.

On capitalism, a key theme of the event, Lagarde had a more ominous prognosis. The system as we know will be threatened if rising inequality isn't curbed, she said. And for the planet, things are even worse. "We will not be talking about [capitalism] in 20 years time when the planet is completely gone," she said.

1:42 p.m. ET, April 29, 2019

What's keeping America's biggest investment fund managers up at night

By CNN Business' Lydia DePillis

Lara Warner, group chief risk officer, Credit Suisse.
Lara Warner, group chief risk officer, Credit Suisse.

In the conference opener, Bloomberg News senior executive editor Stephanie Flanders asked panelists to talk about what worries them most in the medium-term. Here's what they said.

  • Lara Warner, group chief risk officer, Credit Suisse: "I have to come back to Europe," she said. She cited increasing regulation as a cause of the bloc's slowdown, as well as the uncertainty surrounding Britain's exit from the European Union. "You can be overly pessimistic, but we are in a period where small earthquakes can lead to large tsunamis."
  • Tom Finke, chairman and CEO, Barings: "What’s going to disrupt those companies that we may be investing in today, and are they aware of it? ... Are we disrupting ourselves to bring a better result to our clients more efficiently over time?  
  • David Hunt, president and CEO, PGIM, the investment management business of Prudential: Cyber risk is the least understood, biggest threat. "We all suffer from fighting the last war, and I think we’re very aware of what happened during the financial crisis, but the next crisis is going to come from a different place," he said. "What worries me the most is an attack on the infrastructure of the financial markets."
  • Scott Minerd, chief investment officer, Guggenheim Partners: He's worried that the economy appears so good that we'll miss some kind of butterfly effect kind of event, like the devaluation of the Thai baht that set off the Asian financial crisis in the 1990s. "What we’re living through today looks a lot like the 1940s and the '50s," he said. "We’re just like the proverbial frog in a boiling pot of water." 
  • Ronald O'Hanley, president and CEO, State Street Corporation: Technology is fueling consolidation across every industry, and that comes with risks. "It’s no longer too big to fail, it’s too small to scale," he said. "It’s great to develop the app, but the app doesn’t work unless you have the platform, and the platform doesn’t work unless you have the scale."

1:17 p.m. ET, April 29, 2019

Everybody's worried that politics will get in the way of solving the next crisis

By CNN Business' Lydia DePillis

On the first marquee panel of the day, executives of some of the nation's largest financial services firms fretted what happens if the global economy starts to crack. Will political cooperation among nations be strong enough to deal with it?

Policymakers, central bankers and regulators have tools to deal with financial crises. Public balance sheets have improved around the world, and that gives governments the money to spend liberally if needed to keep people employed.

"The bigger question though is, will political systems around the world work to employ that firepower?" said Ronald O'Hanley, president and CEO of State Street. "Thats where I’m quite skeptical."

That concern echoes a fear articulated recently by Christina Romer, who as chair of the US Council of Economic Advisers helped President Barack Obama fight the 2008 crisis. Romer co-authored a paper this month showing that politicians too often don't deploy fiscal stimulus when they should.

On top of that, interest rates remain low in Europe and America, reducing the ability of central banks to cut rates in a crisis.

"Monetary tools are less, because rates are very low and we’ve done a lot of easing," said Tom Finke, chairman and CEO of Barings. "And I don’t have a lot of confidence that coordinated fiscal policy could offset that during a crisis."

1:06 p.m. ET, April 29, 2019

How to restore faith in capitalism

From CNN Business' Penelope Patsuris

People are losing faith in capitalism, says Milken Institute CEO Michael Klowden. And the only way to reverse that trend, he writes in the CNN Business Perspectives section, is to make sure that more of the world's population benefits from capitalism.

That's why the theme if this year's conference, which kicks off this week, is "Driving Shared Prosperity." 

Klowden notes that research indicates that young people in both developed and developing countries can no longer assume that they will have a higher standard of living than their parents.

Read more from Klowden's Perspectives piece about how free trade can create "better opportunities for more people."

6:57 a.m. ET, April 29, 2019

How to keep up with Milken Conference events

From CNN Business' Danielle Wiener-Bronner

Stay tuned right here for live updates from the ground.

You can also stream some of the panels directly from the Milken site, and Milken is encouraging people to tweet and post about the event using the hashtag #MIGlobal, so that’s another way to follow the event.