Warsh’s Waiting Game, EU Merger Rules, Robotic Surgeons

Summary

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Wall Street Week (Bloomberg) – July 31, 2026

Episode: Warsh’s Waiting Game, EU Merger Rules, Robotic Surgeons
Host: David Westin
Main Theme:
This episode explores the Federal Reserve’s current communication and strategy amid persistent inflation, the European Union’s sweeping new merger guidelines aiming to foster tech champions, the robotic surgery race led by Johnson & Johnson’s new entry, and the function and impact of think tanks in the U.S. and globally.

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1. The Federal Reserve’s “Waiting Game” and Inflation (01:50–13:10)

Key Points:

• The Fed held rates steady this week amidst ongoing inflation concerns and internal dissents.
• Discussion focuses on Chair Kevin Warsh’s communications strategy and the institution’s credibility.

Major Discussion & Insights:

• Dissent within the Fed:
  Jason Furman, Harvard professor and former Obama CEA Chair, highlights that the dissents were the most important part of this week’s decision:

  "It's very clear where a lot of members of this committee want rates to go going forward." (Jason Furman, 02:51)

• Causes of Persistent Inflation:

  • Inflation remains unacceptably high (over 2%) for five years.
  • Contributors include tariffs, the Iran conflict raising energy prices, and supply shocks—not just labor tightness.
  • Furman warns against always attributing new inflation to one-off factors (“excuse after excuse”) but acknowledges some shocks have had a real impact:

    "Tariffs in Iran, they really are pretty big things...They don't permanently raise the inflation rate, or at least they shouldn't. As long as the Fed is credible." (Jason Furman, 05:32)

• Inflation Transmission and Labor Market:

  • The risk is inflation expectations being built into wages/prices, causing a persistent cycle.
  • For now, wage growth is not matching inflation, “cautiously optimistic” that expectations aren’t spiraling.

• Labor Market Status:

  • The labor market has stabilized; unemployment is low and steady.
  • This provides room for the Fed to focus primarily on curbing inflation:

    “The employment mandate right now is in better shape than I can almost ever remember.” (Jason Furman, 08:12)

• Fed Communication, Credibility & Forward Guidance:

  • Warsh has pulled back from forward guidance, creating more market surprise and potentially volatility.
  • Furman:

    “Forward guidance was overdone, but we don't want to go too far in the other direction.” (Jason Furman, 10:52)

    • Less talk may require bolder action; silence breeds uncertainty and sharp reactions to each move.

• Maintaining Credibility:

  • Despite five years of missed inflation targets, markets still trust the Fed:

    “It's amazing. Five years of promising inflation will come down, having inflation not come down, and yet having the market expectation of inflation still be really tame is a testament to the way in which people believe in the Fed.” (Jason Furman, 12:23)

Notable Quotes:

• “If your child said that to you over five years and never did it, you’d have some doubts.” – David Westin (12:09)
• “Chair Warsh has said all of the right things. He may need to actually start putting his money where his mouth is if he doesn't want to start going into deficit on the credibility bank.” – Jason Furman (12:23)

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2. EU’s New Merger Guidelines and the Quest for Tech Champions (16:03–26:40)

Key Points:

• The EU is overhauling its merger guidelines for the first time in 20 years, aiming to boost innovation and enable home-grown tech giants to better compete with U.S. and Asian firms.

Major Discussion & Insights:

• Why Now?

  • European tech growth has lagged; only 1 of the 50 largest AI firms is European.
  • The Draghi and Letta reports spotlight Europe’s “catch-up” challenge.

• What’s Changing?

  • Efficiencies and “Theory of Benefit”:
    The EU will weigh pro-innovation and other benefits, not just harm to competition.
  • Dynamic Market Assessment:
    The guidelines focus on the future—potential new entrants, evolving markets, and possible constraints that don’t yet exist.
  • Startups and Exits:
    Greater clarity for investors and startups seeking exit routes via acquisition.

• Expert Analysis:

  • Fiona Scott Morton (Yale/DOJ): New rules give explicit leeway to argue mergers’ innovative benefits and let startups plot clearer exit strategies.
  • Ingrid Vandenborghe (Skadden Arps): Sees the new framework as robust but admits much depends on how the Commission applies its broad discretion in early cases:

    “No one wants to be the guinea pig on a first efficiencies full out assessment because it's more discretionary...” (23:43)

• Intended and Unintended Consequences:

  • Increased clarity in some areas, but more discretion and complexity in others.
  • The rules recognize the need for scale, but increased scrutiny as oligopolies form—parallel to U.S. Big Tech oversight.

• Global Influence:

  • The EU’s shift will shape global merger standards—most of the world aligns to EU, not U.S., guidelines.
  • Europe’s approach now borrows from the 2023 U.S. merger guidelines but goes further on innovation and exit strategies.

• Is Competition Policy Enough?

  • Scepticism remains that policy tweaks—rather than deeper EU market integration—are the key to truly world-beating European firms:

    "If you think about Google or Microsoft or IBM back in the day, they didn't come from a merger, they came from very fast growth of an innovative firm." (Bloomberg Correspondent, 26:40)

Notable Quotes:

• "Growth has been slowing down for a long time in Europe, but we've ignored it. Now we cannot ignore it any longer." – European Tech Analyst (16:29)
• "We need new tech champions in Europe." – European Tech Advocate (16:41)
• “[The guidelines are] a piece of prose… almost 100 pages long. Efficiencies as a core part of that.” – Ingrid Vandenborghe (21:21)
• "These guidelines will be a clarification... not a sea change." – Bloomberg Correspondent (24:38)

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3. Robotic Surgery: Johnson & Johnson vs. The Field (30:13–41:39)

Key Points:

• Johnson & Johnson receives FDA approval to market its new robotic surgical platform OTAVA, aiming to disrupt a space long dominated by Intuitive Surgical.

Major Discussion & Insights:

• J&J’s Late Entry:

  • Legacy of innovation in surgery since 1886, but it trails after leader Intuitive’s Da Vinci robot—approved in 2000 and controlling 80% of the market in 2024.

• Product Strategy:

  • J&J’s system, OTAVA, is uniquely “the table” itself, with integrated arms designed for ergonomic ease and efficient use of existing OR space.
  • Years of setbacks (notably, a $900M delay due to technical challenges) have delayed launch, but the device is finally ready.

• Market Opportunity:

  • Robotic soft tissue surgery still has only 8% market penetration; J&J sees room for rapid growth globally.

• Competitive Edge:
  Hany Abou Halka (J&J Surgical Tech lead):

  “Sometimes we're not first, but when it's said and done, we are best. We brought innovation that no one can really match. ...this is still early and we're bringing something that's completely differentiated...” (41:22)

• Surgeon Training and Execution:

  • Robotic surgery requires more complex physician training, but can make resource-limited or rural surgery more autonomous.
  • Dr. Christy Hawley (Univ. of Colorado):

    “I often get asked whether robots are going to take over our jobs as surgeons, and I believe that would be very difficult to accomplish.” (36:30) “Minimally invasive surgery can actually decrease your hospital length of stay, which is very important to both patients and hospital administrators overall.” (37:53)

• Outlook:

  • J&J aims to leverage U.S. market size before expanding globally.
  • Expects the business to be material toward the decade’s end.
  • Continued clinical trials and regulatory submissions will be required for broader applications.

Memorable Moment:
“Sometimes we're not first, but when it's said and done, we are best.” — Hany Abou Halka (41:22)

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4. The Role and Impact of Think Tanks (44:16–55:32)

Key Points:

• The U.S. leads the world in think tanks, but their function, measurement of success, and real-world influence vary widely.

Major Discussion & Insights:

• Definition and History:

  • Carolyn Elkins (Harvard Business School): These “nonprofit idea generators” originated in the Second Industrial Revolution, flourished post-WWI and again after WWII—connecting university ideas with practical decision-making.

• Models of Influence:

  • Dan Porterfield (former Aspen Institute head):

    “We're less of a think tank than a do tank. ...We're more likely to build the table around which many players sit so they together can sort out how to frame and address a problem.” (46:14)

• Measuring Success:

  • Convening power, dialogue, and “ideas in the zeitgeist” are as important as concrete policy change.
  • Philanthropic support (e.g., Bezos and Walton Family Foundations) is both fuel and validation.

• Political Shift:

  • Since the 1970s, many think tanks have become more explicitly political—example: Heritage Foundation’s playbook for the Reagan administration and Project 2025.
  • Despite this, places like Aspen retain a focus on human flourishing and societal dialogue rather than direct prescriptive policy change.

• Resource Allocation:

  • Strategic focus and clarity of mission are essential—allocating capital, time, and talent like CEOs.

Notable Quotes:

• “These are precisely the things that folks like Sam Altman will tell us AI won't do for us.” – Carolyn Elkins (49:01)
• “Make sure you have a clear purpose statement so people know what it is you do and what you don't do.” – Dan Porterfield (55:32)

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Timestamps for Important Segments

| Time | Segment | |------------|------------------------------------------------------------| | 01:50–13:10| Fed Rate Decision, Inflation, Communication | | 16:03–26:40| EU Merger Guidelines and European Tech Champions | | 30:13–41:39| Johnson & Johnson in Robotic Surgery | | 44:16–55:32| The Role, Power, and Evolution of Think Tanks |

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Memorable Quotes (with Timestamps)

• Fed’s Credibility Gap:
  “If your child said that to you over five years and never did it, you’d have some doubts.” – David Westin (12:09)

• On EU Innovation Policy:
  "We need new tech champions in Europe." – European Tech Advocate (16:41)

• M&A Guidance:
  "No one wants to be the guinea pig on a first efficiencies full out assessment because it's more discretionary..." – Ingrid Vandenborghe (23:43)

• Robotics Race:
  "Sometimes we're not first, but when it's said and done, we are best." – Hany Abou Halka (41:22)

• Think Tank Measurement:
  “These are precisely the things that folks like Sam Altman will tell us AI won't do for us.” – Carolyn Elkins (49:01)

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Summary

This episode of Wall Street Week investigates the sometimes slow, uncertain paths to progress—in central banking, European tech policy, corporate innovation, and even the nonprofit world of ideas. Whether it’s the Fed’s “waiting game” on inflation and messaging, the EU’s measured approach to mergers in pursuit of tech greatness, J&J’s careful entry into robotic surgery, or the blend of convening and influence that characterizes think tanks, the episode emphasizes the tension between bold action, prudent adaptation, and the long view in shaping capitalism’s future.

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Transcript

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[Bloomberg Correspondent]

Bloomberg

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Audio Studios Podcasts Radio News.

[David Westin]

This is Wall Street Week. I'm David Westin bringing you stories of capitalism. The European Union is moving toward new merger guidelines to help it develop the sort tech champions that drive much of US growth. Will they do the trick? Plus Johnson and Johnson finally got approval for its new approach to robotic surgery. Now it needs to do some catching up in a rapidly growing field. And the US Leads the world in think tanks. We take a hard look at what they are and what they really accomplish. But we start with the Federal Reserve decision this week addressing persistent inflation, rising borrowing costs and a whole lot of uncertainty. Jason Furman is professor of Economics at Harvard and and served as the chair of President Obama's Council of Economic Advisers. So Jason, we got three things out of the Federal Reserve this week. We got a decision not to do anything about rates. We got a statement that didn't change a whole lot from what it before. And then we got a news conference from Chair Warsh. Of the three, which was the most important?

[Jason Furman]

The dissents were the most important. It's very clear where a lot of members of this committee are want Rates to go going forward.

[David Westin]

And in the news conference, certainly Chair Warsh was asked about those dissents, why they dissented, why he disagreed with them. I'm not sure we got a clear answer to that question. Do we have a sense from him, from the way he thinks about it, why he did not join with the dissents?

[Jason Furman]

I don't think we got a clear sense from him. I think he has to. Sheryl Warsh has two points which I agree with him on. One is you want to look at financial conditions, and there's been a lot of tightening on the long end of the curve. Now, you need to be a little bit careful. Some of that is in anticipation of what the Fed is going to do. And if the Fed ends up not doing that, some of that would end up unwinding. But so far, financial conditions, at least on the rate side, have tightened. And second, this really is a different type of inflation than what we had a couple of years ago. It's not the same type of labor market tightness, high wage growth, high price growth, high inflation expectations that we saw in the past.

[David Westin]

Before we get into exactly what you think is causing the inflation, let's talk about the level of inflation itself. We're often taught the core PCE is what the Fed really pays a lot of attention to, that has been rising fairly steadily. So it does give rise to the question which was asked, what are you waiting for?

[Jason Furman]

Yeah, I think that's a totally reasonable question. Inflation is intolerably high. It's been intolerably high for five straight years. Now, the argument on the other side, in terms of what you would be waiting for, the two best arguments are, one, that rates may be set above neutral already, so there may be a little bit of a foot on the brake pedal. And yes, you could debate whether you should be pushing harder on the brake pedal, but maybe, and I think arguably, and plausibly, you are on the brake pedal already. And then the second argument is the transitory one, and I don't think we're going to hear that word from any government official ever again, probably for another 50 years before they get over what happened last time they used that word. But implicitly, that is what the Dove case is, at least at the moment,

[David Westin]

when it comes to the T word, whether we use the word transitory or not. How long is transitory? I mean, it's been five years now that we've been over 2%. And there may be different reasons for the over 2%. But as I say, it doesn't look to be going back to 2% anytime soon?

[Jason Furman]

Yeah, the different reasons is important. I mean, it looked at the end of 2024 as if we were headed back to 2%. It was almost within spitting distance. And then it took off again. Why did it take off again? I think in part that was tariffs, which probably have added half a point to a percentage point to the inflation rate. And then subsequently the Iran conflict, which has added maybe a few tenths more to core pce, a lot more to headline inflation. And so in some sense, things were lined up nicely. Now, the story in the 1970s was one excuse after another. Each time you had high inflation, it might have been different than the year before. So you want to be a little bit careful if you find yourself making excuse after excuse after excuse. But you know, tariffs in Iran, they really are pretty big things and they raise the price level. They don't permanently raise the inflation rate, or at least they shouldn't. As long as the Fed is credible.

[David Westin]

It raises the question, I think, whether the cause of inflation can be limited to the specific clause, whether it's tariffs or whether it's Iran. And energy, when you start there, can it spread into other sectors of the economy?

[Jason Furman]

Yeah, that's the most important question, and that's what the Fed is trying to figure out right now. And there's a few mechanisms for that. Some of it is direct. You know, just the cost of jet fuel goes up, so airplane tickets go up. That's not the biggest concern. The big concern is if it gets built into expectations. And the way that manifests itself is, is economy wide wage setting and economy wide price setting. So if you see prices go up faster and that leads to wages going up faster, and wages going up faster leads to prices going up faster, and you end up with a sort of persistent cycle. That is so far where I am cautiously optimistic. We're not seeing the wage growth commensurate with this type of inflationary economy, again, in the way that we saw it a couple years ago. But that is where we would see the broadening out if it really starts to show up, not just in specific prices, but across the board prices, and especially in wages.

[David Westin]

Do the numbers coming out of the labor market cut both ways? There was a time not too long ago there was a lot of concern on the Fed that in fact there was a loosening of the labor market. We needed to really keep rates low for that reason. That does not appear to be true now. It's more stable now than it was six, nine months ago. Does that give the Fed actually some license to increase to address the inflation question.

[Jason Furman]

Yeah, it absolutely does. You know, the Fed has two mandates. The employment mandate right now is in better shape than I can almost ever remember. Normally the unemployment rate is either too high and it's coming down or, you know, maybe it's too low and it's rising quickly or something like that. It's just been amazingly stable. It peaked in November of last year. It's fallen a bit since then. It's basically the same place for the last two and a half years. And it's not clear what would dislodge that unless there was some big exogenous shock to the economy, say the AI bubble burst. And I don't think there's any reason to expect that to happen anytime soon. So, yeah, the Fed really just needs to worry about the one side of its mandate right now, which is inflation.

[David Westin]

The Fed certainly does not say it moves off of the markets, but the markets are a data point. And one thing that happened in the wake of the news conference was particularly the yield on the 30 year going up to the highest level in 19 years since before the great financial financial crisis. Is that some information that Kevin Wash and the members of the Fed need to take into account?

[Interviewer/Reporter]

What does that tell them?

[Jason Furman]

What that tells them is that, you know, markets to some degree are expecting them to keep their word. A lot of that movement was in the real rate, not in expected inflation, and says they expect the Fed to deliver rate hikes as needed to keep inflation under control. In some ways I saw that as a sign of credibility that the Fed would be there to deal with this problem. You know, that being said, I'm not entirely sure of the strategy that you try to keep the markets calm by not speaking and then you deliver some big surprises. In some sense, the meeting itself was a surprise. We didn't know. I expected them to hold, but it was much less certain than it often has been in the past. The dissents were a surprise. Some of the communication was a surprise. And so some of this volatility to me seems unnecessary. And I hope it's a growing pain, not something that's here to stay.

[David Westin]

We'll talk about that communication issue because Chair Warsh from the beginning has made no secret the fact he does not believe in a lot of forward guidance. He thought it might have been necessary. We're coming to the great financial crisis, don't need it anymore, and so he's moved away from that. But at what point does that really undermine some of the stability in the market because as you say, then you wait and you get a big surprise. Is this really giving rise to some debt doubt about his new policy of really cutting back on forward guidance?

[Jason Furman]

Yeah, forward guidance was overdone, but we don't want to go too far in the other direction. First of all, a lot of members of the committee are going to be communicating. So if you don't hear more authoritative communications, you'll end up with more noise and confusion. Every time the chair does communicate, you can end up with a bigger reaction. And finally, I think most important what the Fed really needs to grapple with, which is if it wants to talk less, it probably needs to act more. Chair Warsh was relying on the moves in the long end to justify not moving rates. Well, part of why the long end is moving is an expectation about what the Fed is going to do in the future. Where does that expectation come from if the Fed doesn't communicate? In a world where the Fed wants to say less, you know, maybe it's going to actually need to move rates more aggressively. And so it lets its actions speak rather than its words. And I haven't seen any willingness to do that.

[David Westin]

And it's all about that critical word you raised, which is credibility of the Fed, which is we all need, the markets needed, the economy needs credibility of the Fed. And some people today are questioning whether they've lost a bit of credibility.

[Interviewer/Reporter]

What is the danger here?

[David Westin]

Particularly as I, as not an economist, look at this. Five years over, five years over 2% and you say, oh no, we're going to get to it, we're going to get to it. You know, if, if your child said that to you over five years and never did it, you'd have some doubts.

[Jason Furman]

The Fed is starting with an enormous amount of credibility now. It doesn't want to be reckless and spend that credibility willy nilly. That would be a real mistake. But you know, to me it's amazing. Five years of promising inflation will come down. Having inflation not come down and yet having the market expectation of inflation still be really tame is a testament to the way in which people believe in the Fed. So far, Chair Warsh has said all of the right things. He may need to actually start putting his money where his mouth is if he doesn't want to start going into deficit on the credibility bank that the Fed has built up over the years.

[European Tech Analyst]

Coming up, growth has been slow down for a long time in Europe, but we've ignored it and now we cannot ignore it any longer. Now conditions have changed.

[David Westin]

Mario Draghi urged the European Union to figure out how to get in the tech race. Now the European Commission is trying to move in that direction with new merger guidelines, but are they enough?

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[David Westin]

This is a story about keeping up with the Joneses. The United States has led the world in building huge technology companies and attracting enormous capital. Now it's riding the crest of that wave into the revolution that is artificial intelligence. While Europe looks on with envy, or at least with a strong desire to try to catch up now at the highest levels, it's trying to do something about it.

[European Tech Analyst]

Growth has been slowing down for a long time in Europe, but we've ignored it. Now we cannot ignore it any longer. Now conditions have changed.

[European Tech Advocate]

We need new tech champions in Europe.

[David Westin]

The fact of the matter is 43

[Jason Furman]

of the largest 50 companies in AI are US based. Europe has won.

[Interviewer/Reporter]

The quest for Europe to get into the mega tech game is one of the reasons it's now undertaking the biggest revision to its merger rules in over 20 years. And few people know more about the potential impacts for businesses and consumers than Fiona Scott Morton, a professor at the Yale School of Management and a former chief economist at the Antitrust division of the U.S. department of Justice.

[Bloomberg Correspondent]

There's been a lot of angst in Europe over growth and the ability of Europe to stay at the technological frontier. And we've had a couple of reports, the Letter report and most recently the Draghi report, that have really hammered on that and pointed out all the issues in Europe that are holding back Europe from more growth.

[Interviewer/Reporter]

Scott Morton says the new guidelines, which were published in April and are now under review, aim to change that.

[Bloomberg Correspondent]

I think the complaint has been among some parties in Europe that the Commission is not favorable enough toward the mergers they would like to do. So this is explicitly laying out, how do you come to us with a story for why your merger is really good, why your merger is going to increase innovation, something like that, and explicitly laying out what those factors would be and how you might go about showing them.

[Ingrid Vandenborghe]

It's a big deal. It's a big deal because it's been 20 years since there was a revision of the guidelines. And it's a good exercise in showing the direction of where competition law is heading.

[Interviewer/Reporter]

Ingrid vandenborghe is the head of Skadden Arp's European competition practice in Brussels. It's firms like hers that are navigating the changes on the front lines.

[Ingrid Vandenborghe]

What the guidelines do is they set out also for the difficult deals, also for those that may not be so easy to get through. There's a couple of factors that are more developed. A the Commission's going to look at efficiencies in a much more robust way. They call it the theory of benefit in the guidelines. So they're not only looking at what will the harm be to the economy of a transaction potentially, but also what will the benefits be? The second element is that they're going to look at markets on a dynamic way. The key term in the guidelines is dynamic, dynamic competitive potential of a transaction. And so it's going to be forward looking. One of the examples set out in the guidelines is to say we're going to look at non European companies and how they may bring product into Europe in the future. Even if they're not doing that today, we're going to look to constraints that may happen in the future.

[Interviewer/Reporter]

Beyond giving companies explicit leeway to argue for efficiencies or changes in the market to justify their mergers, the new guidelines specifically address the question of startups and provide ways for early investors to reap rewards for taking chances.

[Ingrid Vandenborghe]

We all know that that's what startup companies need. When you invest, you need to know you have an exit route as well. And that's really what the guidelines are trying to do. So those are a couple areas where very concretely, the guidelines set out some more robust frameworks for companies. Following us on the Draghi report that indicated investment needs confidence, and confidence needs to come with the knowledge that there is an exit strategy and an exit route that's possible.

[Bloomberg Correspondent]

So if I invent a drug and I want to sell it to a big pharma company, what are going to be the rules about which firm can purchase my startup? And there's various cutoffs according to what market share the startup has or the acquirer has and how big they are, and so on. So that's very helpful for investors and founders of the small companies that want to plot out their exit strategy, for example, and for innovation, same thing. If I'm going to merge with another firm and I'm going to bring forward an innovation story of benefit, that because we're together, we're going to have more innovation. I need to understand what the Commission wants to hear to explain that that's going to be the reason why our merger is going to be great. So I think those are perfectly useful things and should help with growth.

[Interviewer/Reporter]

The new guidelines may make some deals easier, or at least more certain, but some think they could fall short in the specifics. For one thing, in giving more play in the joints, they may require additional work for companies and their lawyers. In any set of regulations, and particularly

[David Westin]

in competition, there's a balance between certainty and discretion with the regulator, right? Where do these proposed regulations come out on that sort of barometer? Does it give you more certainty and more clarity, or does it increase discretion? Because in Reading through them, there's a lot of discretion. There are a lot of factors put into the hopper.

[Ingrid Vandenborghe]

Yes, yes, That's a very important point. We've been assessing with our clients as well. There's a large efficiencies framework. It's pages and pages. I mean, this is a piece of Prose. It's almost 100 pages long. Efficiencies as a core part of that. So it goes on for some while in this document. I think what is important is to. We'll have to see how the Commission will assess it in the first decisions to come under these guidelines and to see how they will set out this framework and implement it in practice. Because I would think initially it may lend itself to a bit of discretion.

[Interviewer/Reporter]

And although the new guidelines would recognize the need for scale in some sectors to achieve the sort of innovation that Europe seeks, with that scale may also come greater scrutiny.

[Bloomberg Correspondent]

The thing that really does come through in the enforcement of mergers is when you need to be that big to participate in an industry successfully. We know there will not be hundreds of competitors. We know right up front there's going to be 1, 2, 3, 4, not that many. So we regulate with that in mind, with this oligopoly, as it's called, kind of theory in mind. And you wouldn't want, for example, Coke to merge with Pepsi. That would leave us with too few drinks choices. It's going to have the same kind of impact on mergers that have similarly few competitors. So if we only have three big clouds, then both conduct and mergers become scrutinized in a way that they would not if it was restaurants.

[Interviewer/Reporter]

The guidelines we've seen so far are only a proposed version, with the Commission now pouring over a raft of comments. But those who know suspect that the finished product won't be all that different from what we've seen seen, and that it will be out before the year is over.

[Ingrid Vandenborghe]

So the consultation period ended end of last month. You know, summers tend to be a quiet period. I don't know if we'll be much more ahead of Q4, what we've been told is Q4 of this year, so we. We may have to wait until then.

[David Westin]

As you advise clients considering possible deals. Does the proposal of these new guidelines affect timing? I mean, do you have companies saying, we better get it done now because we know what the old guidelines were, we're not sure what it's going to be? Or on the other side, did they say, you know what, maybe we could wait a little while, because it may be a little bit Easier to get it through.

[Ingrid Vandenborghe]

Yeah. And we've had questions like that. Or sometimes companies say, well, we'll just not look at these drafts yet because we only want to be dealing with the final product once it's there and then will assess. It's kind of similar. We've said repeatedly this is already how the Commission is analyzing mergers today. We don't think it's going to materially change. Whether you notify a transaction action, say next week versus in November, there may be one or two decisions that will come out that will reflect efficiency assessments. That would be something to wait for. I think the private bar among practitioners. No one wants to be the guinea pig on a first efficiencies full out assessment because it's more discretionary how that will come out and how exactly the Commission will now be applying this very robust framework.

[Interviewer/Reporter]

Whatever the strengths or weaknesses in the new proposed guidelines, it will take some time to see how much they truly change what mergers make it through the European process.

[Bloomberg Correspondent]

I don't think these guidelines will be a sea change. I think there'll be a clarification. I think they're going to cause firms to think more carefully in a good way about is their merger going to enhance something like resilience, innovation, help the environment. And one of the ways that's credited in the guidelines do something useful and be able to come with an affirmative story of that usefulness. That would be, of course, great and that might encourage some beneficial mergers. But I don't think we're going to see a big, a big change.

[David Westin]

If we go back through history, I think it's fair to say there's been something of a dialogue back and forth between Europe regulators and US Regulators when it comes to competition antitrust. One learns from the other, one gets ahead of the other. Sometimes one is proud of being ahead of the other. Will these regulations as drafted have much influence in other parts of the world, including the United States?

[Bloomberg Correspondent]

Well, they definitely will have influence in other parts of the world because most of the world follows Europe on competition law, not the United States. We're not that good at it, it turns out. But the thing about the United States is we redid our merger guidelines in 2023. So really there's some learning from those 2023 guidelines that you can see in the European revision. And then some things that they're doing that go beyond what the United states did in 2023. I would say there's more on innovation. There's more on these little small firms being acquired. There's more on the theory of benefit. There's a bit less on labor and monopsony, because in Europe labor regulations are so strong you don't have as big a monopsony problem.

[Interviewer/Reporter]

When the dust settles, the most is important question will be whether the new guidelines are fit for purpose, the purpose of keeping up with or at least not falling further behind the US or whether the thing holding the development of European tech champions back has had little to do with competition policy, but turns much more on deeper integration of the European Union itself.

[Bloomberg Correspondent]

The argument that they're putting forward is that that merger will make a bigger firm and therefore make some kind of European champion champion. That's actually not typically how we've seen the champions in other parts of the world emerge. If you think about Google or Microsoft or IBM back in the day, they didn't come from a merger, they came from very fast growth of an innovative firm. And so a lot of what the Draghi report talks about is not in fact mergers, but is about the barriers to the single market being really effective. If you start up a company in the Netherlands, how quickly can you sell across all 27 member states, 500 million people. If you could do that as fast as can happen in the United States because we have free commerce between our states, you could grow really fast.

[David Westin]

Up next, Robotic surgery is a rapidly growing segment of healthcare. Johnson Johnson got its start helping surgeons 140 years ago. Now it has its own approach to using robots in the operating room. Can it catch up with the leaders in the field?

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[David Westin]

This is a story about losing the race, at least at the beginning. Inventors become household names when they do something for the first time. Thomas Edison and the light bulb. The Wright brothers and the first manned flight. With time, their names have become synonymous with their innovations because of the leaps in technology that made their products viable. Everyone always wants to be first, but can it sometimes pay off to be slower out of the gate? Johnson and Johnson hope so, at least in the fast growing field of of robotic surgery.

[European Tech Advocate]

I want to introduce you to otava.

[Interviewer/Reporter]

Last week, Johnson and Johnson got the green light from the FDA to take its robotic surgery device OTAVA to market. It's the latest move by a company whose legacy traces back to the 19th century. Johnson Johnson was founded by three brothers in 1886 when they created ready to use sterile surgical dressings. But the original Johnson brothers could not have anticipated how far surgery would come over the next 140 years.

[David Westin]

Otava is Rocco de Bernardis baby.

[Interviewer/Reporter]

He has been with the med tech division of JJ for 14 years. De Bernardis gave us a first hand look at what the new platform can do at JJ's campus in Santa Clara.

[European Tech Advocate]

The ergonomics was an important element. You know, definitely there's an improvement where you move as a Surgeon from bedside to behind the console.

[Carolyn Elkins]

Meet Otava.

[Interviewer/Reporter]

J and J has traveled a long road to get to the newly approved version of otava. Although it has sold robotic systems for other procedures, it started its pursuit of soft tissue robotic surgery 11 years ago when it teamed up with Alphabet to create Verb Surgical, which it ultimately took over. In 2019, the company bought robotics surgery startup Auris Health for $3.4 billion and subsequently invested billions more in the effort. Then came its first version of Otava with six arms, but suffered a $900 million delay before getting approved in a simpler form by the fda.

[European Tech Advocate]

It's not being a a linear journey for us, but I'm really proud of what we have accomplished, particularly over the last five years, how the technology has evolved, and what we're going to be bringing to market anytime soon. We acknowledged that there were some technical challenges at that time, and we went back to the surgeons that was talking about, and we are very happy with the decision we made at that time.

[Interviewer/Reporter]

While Johnson Johnson has been developing its version of soft tissue robotic surgery, others have forged ahead. The leader in the field is Intuitive, whose Da Vinci system was first approved in 2000 for urologic surgical procedures. Global Data estimated that intuitive held around 80% of the market in 2024, with the rest shared by firms like Medtronic and CMR Surgical. JJ knows it's starting from behind in the race, but it believes Otava is a very different kind of competitor, one that will help it move up the leaderboard.

[David Westin]

As you know, well, you're not first into this space. There are other people who are fairly well entrenched. Are you happy with your position of being second or third or fourth?

[Hany Abou Halka]

Well, first, we're very happy that we're bringing a new category defining innovation to the market.

[Interviewer/Reporter]

Hany Abou Halka is in charge of the company's surgical technologies, including Otavo. That group falls under its MedTech division, which made up a third of Johnson and Johnson's overall revenue in 2025.

[Hany Abou Halka]

If you look at globally, there is maybe 40 companies with robots, but all of them are either stuck in two different architectures, either modular or boom. And the biggest difference here is our robot is the table. The arms are integrated. You walk into the or. If they're not deployed, you don't see it. And when it's needed, it comes on and you'll tell me, is that a big deal? I can tell you, when I started my career in jj, I remember the first day I was in or, and I felt it's without even noticing it. There is tension and friction between the surgical team and the machines. And I've always had this idea that we can do better and we should do better, and I believe we did.

[Interviewer/Reporter]

Johnson and Johnson believes it has a better way to address robotics soft tissue surgery, one that will appeal, particularly where space in the operating room is at a premium. But it also sees the overall robotic surgery market as being in its early stages, providing an opportunity for its product to grow as the market does.

[European Tech Advocate]

Robotic surgery, if you look at the total addressable market, the way we look at it, has 8% penetration around the world. It's a fast growing segment of the market, definitely one that we see more and more adoption for, and there is more and more company like us willing to contribute and bring meaningful solutions to market.

[Dr. Christy Hawley]

One of the big benefits of the robot is that it is collecting a lot of the surgeon information.

[Interviewer/Reporter]

Dr. Christy Hawley is an assistant professor of surgery at the University of Colorado and just recently led the department's annual robotic acute care surgery course.

[Dr. Christy Hawley]

Robotic surgery definitely adds another element of complexity to general surgery training. The resident physicians are being asked to not only learn open operations and laparoscopic operations with straight sticks, but now they are also being asked to learn how to operate on a robotic console. At my institution, I'm the director of robotic surgery education for about 80 general surgery residents. And so really thinking about how to train them on the platform is challenging.

[Interviewer/Reporter]

Another challenge for robotic surgery is the misnomer of the role of the robots. Dr. Hawley says. They don't perform surgeries on their own. They are meant to be used by human surgeons.

[Dr. Christy Hawley]

I often get asked whether robots are going to take over our jobs as surgeons, and I believe that would be very difficult to accomplish. Being a surgeon involves patient selection, diagnosing a patient, and ensuring that you've built that trust with a patient to go to the operating room. But I also think that there's the possibility of these robots being performing components of the operation. I'll give you one example. A simple task like suturing. If a program was able to actually see different pieces of tissue, and you, as the surgeon sitting at the console, say, I'd like to suture this to this and point to the robot and show it, then maybe it's possible that that component of the operation could be done by a robot. But that's certainly not something that's going on today. So I wouldn't say that every surgery necessarily should be robotic. I think it takes a very well trained surgery surgeon in both robotic surgery, laparoscopy and open operations to decide patient selection. So which patient is going to benefit from the robotic platform for what type of surgery?

[David Westin]

Robotic surgery may not be right for

[Interviewer/Reporter]

every procedure, but where it is used, Dr. Hawley says it fills a gap for both patients and the hospitals that use the new technologies.

[Dr. Christy Hawley]

There have been multiple studies showing that laparoscopic and minimally invasive surgery do have many benefits to patients. One of the biggest benefits is decreased pain. As you can imagine, an open operation requires a large incision and can be very painful. So if you have less pain, you can recover more quickly, go back to work more quickly, and get out of the hospital faster. And so one piece is that minimally invasive surgery can actually decrease your hospital length of stay, which is very important to both patients and hospital administrators overall. When choosing robotic surgery, specifically, it really depends on patient selection, the operative team you have available, if the platform is available in your center, and, of course, how well the surgeon is, is trained on the robotic platform. If I do not have a resident, I'm an academic surgeon. And so we have residents in our operating room to help us operate as the attending surgeon. And it's very beneficial that if a resident's not available on the robotic platform, there are less needs for assistance. It's a lot easier to just place the ports on your own and then operate robotically. I have spoke to many surgeons in the community or in rural settings who don't have surgical trainees or can't. Their systems really can't afford surgical assists. And so the robotic platform can be another way to make us more autonomous and be able to rely on ourselves to perform operations in totality.

[Interviewer/Reporter]

Johnson Johnson is hopeful not just that it can catch up in robotic soft tissue surgery, but that it can make a large and successful business of it. That will require further FDA approvals for specific procedures down the road, But Johnson Johnson is confident that those will be forthcoming.

[Hany Abou Halka]

The FDA have been incredible partners on this journey. We've been back and forth with them. The people at the FDA have been incredible professionals from day one. They're trying to do what's best for patients and for healthcare. And from our perspective is we're trying to move with precision and with speed. Our intention is to be a leader in surgical robotics. And to do that, we need incredible technology innovation, which we have then. Our next submission we announced was in inguinal hernia. And subsequently after that, we're going to have multiple submissions to be able to bring again multiple geographies and multiple specialties. And that's what we're planning to do. If you just take one step back and understand that. We chose to come to the US first for a couple reasons. One, it's the largest robotic market. Two, it's a sign of confidence of our program and how differentiated it is that it can take something that's been there for a while. As you know, surgical robotics is not new, OTAVA is. And that's why we're coming here first. And hopefully we'll expand quickly after that to key markets like Japan and Europe.

[David Westin]

So give me a sense again in success how big this could be for Johnson and Johnson. How do you measure that? First of all, start with you're starting the United States. What is the potential of the United States as opposed to outside the United States?

[Hany Abou Halka]

I mean, as I said, it's incredibly exciting for us, for J and J. In terms of from a financial perspective, we expect this to be material towards the end of the decade.

[Interviewer/Reporter]

As the saying goes, the pioneer takes the arrows, but the settler takes the land.

[Hany Abou Halka]

Sometimes we're not first, but when it's said and done, we are best. We brought innovation that no one can really match. And what excites me here is that this is still early and we're bringing something that's completely differentiated and it's going to help us take robotic surgery to the future.

[David Westin]

Up next, the US Leads the world in think tanks, those non profit idea generators. But what do they really do? And do they make a true difference?

[Bloomberg Correspondent]

Foreign.

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[David Westin]

This is a story about return on a different kind of investment. An investment not in plants and equipment, but in ideas. We hardly go through a day without getting a new report or policy proposal proposal from a think tank from the Council on Foreign Relations or Rand or Heritage or Brookings, all supported by wealthy individuals and corporations. But do they make a real difference? And how do we tell? For that matter, how do they tell?

[Carolyn Elkins]

I've been intensely interested in this question, what I call the business of ideas.

[Interviewer/Reporter]

Carolyn Elkins studies think tanks at Harvard Business School.

[Carolyn Elkins]

How do ideas get formulated? How do they make it in the marketplace? How do we value them? And more importantly, what influence and impact do they have on the society in which we live?

[Interviewer/Reporter]

Elkin says that There are between 8,000 and 10,000 nonprofit organizations worldwide that deal in the business of ideas. And the U.S. has 20% of them. The five biggest think tanks in the U.S. brought in roughly $1.3 billion in their latest reported fiscal years. But their rise has been been a long time in the making.

[Carolyn Elkins]

They go back, you know, really all the way into, at least in the United States, into the second Industrial Revolution. And they really take off after World War I. Brookings is among the first. And then we have the Council on Foreign Relations. And then we see another uptick Again in these think tanks in the post Second World War period. And that's when we have institutes like the Aspen Institute coming into fruition. A lot of them focusing on, you know, sort of big sort of geopolitical problems like the Random Corporation and others. And these think tanks were really meant to bridge this kind of research for research sake, which is really what universities were doing with practical implementation decision makers.

[Interviewer/Reporter]

One of the most prominent of these nonprofit idea generators is the Aspen Institute. Dan Porterfield took over leadership of the institute in 2018 and has just stepped down to become CEO of the Jack Kent Cooke Foundation.

[Dan Porterfield]

There's a lot of different models for being a so called think tank. Many think tanks that are well known like the Brookings Institute or the American Enterprise Institute, assemble scholars who then write reports that are meant to be very relevant about issues facing our country or the world. In the case of the Aspen Institute, we're less of a think tank than a do tank. We don't sit around and go up to Capitol Hill. We don't have any lobby at the Aspen Institute. We don't tell the government what it should do. We're more likely to build the table around which many players sit so they together can sort out how to frame and address a problem.

[David Westin]

When you went to lead the Aspen Institute, what did you feel you needed to accomplish?

[Interviewer/Reporter]

What were your goals?

[Dan Porterfield]

Probably two big things to start. The first was that the Aspen Institute, led by Walter Isaacson, had taken off as an organization, had seeded many fantastic programs in leadership or in collective problem solving around the country. And part of my responsibility as CEO was to develop an enterprise strategy so that the collection of programs would fit well together and so that they all would benefit from a robust and sustainable enterprise. The second part of my work when I started was to figure out ways that we could get younger as an organization to be more relevant to a changing world.

[David Westin]

Looking back at it now, what do

[Interviewer/Reporter]

you feel like you did accomplish?

[Dan Porterfield]

We have a stronger understanding of our identity. We have more cooperation and collaboration across the organization. We're able to propose bigger concepts for bigger donations, for bigger impact because we're using all of our enterprise muscles. That's one thing. A second thing is I think we developed a logic in the institution to compete confidently, to go make a difference. And of course, these are challenging times because there's so many events that have happened, even in the eight years I've been CEO, that you wouldn't have predicted in our society. From a pandemic to the killing of George Floyd to more. And so I Think that competing confidently means taking all of those moments of societal anxiety and difficulty and disagreement and saying, okay, this is our moment to contribute and to lead by bringing people together, by using our strength in the service of what society needs.

[Interviewer/Reporter]

All worthy goals for Aspen and for others. But can one measure progress toward them? Elkins says her study of organizations like the Aspen Institute has convinced her that there are ways to measure success even in the generation of ideas is we

[Carolyn Elkins]

can optimize and the way in which we. We measure that is we have all kinds of ways that we can count the very basis of Aspen. The PEPC's vision was to create a good society, to cultivate human flourishing. And I think it's one of the things that we're looking at in society today. How do we cultivate empathy? How do we cultivate judgment? How do we cultivate ethics? How do we cultivate leaders? Leadership? And by the way, I should say these are precisely the things that folks like Sam Altman will tell us AI won't do for us. So it's very difficult in some ways to measure it other than to say they're very good at it. And I would measure it in, perhaps in. In one way that does actually come to mind is what are the kinds of people who can they bring around the table? I know of no one that has the kind of. Of convening power that aspect has. People trust the institute to have closed doors, Chatham House rules to discuss not just thorny issues, but issues that really are impacting society everywhere. From Vivian Schiller's work in media. And I love the way she approaches problem solving, which is precisely how Aspen in general does, which is, is this an important problem or question that we should be answering?

[Interviewer/Reporter]

Another way to measure success is by what others in the field say about the work and whether they step up to share the burden. Romy Drucker is director of the Education program at the Walton Family foundation, which has given millions of dollars to the Aspen Institute.

[Romy Drucker]

The Walton Family foundation recently conducted a study in partnership with Gallup about opportunity and what's going to help opportunity flourish in America. And there were some really interesting findings, including that most Americans are really excited to invest in their communities to give back. But the number one obstacle they cited was who's going to listen to them? No one is there to really receive their ideas, to help uplift them. I think when we think about think tanks and forums that are convening people and ideas and resources around new ideas and innovation, it's about overcoming that barrier. I think what's been really powerful about Aspen is their unwavering commitment to fostering a dialogue across lines of difference as well as intergenerational change. You will find in every conversation at Aspen differing perspectives. You will find an openness to disagreement. We are a foundation that believes in evaluation and. And we have our own way of measuring roi. And so we want to see not just powerful convening, but ideas that make their way into the zeitgeist. And we have tools to measure that. So we work with our partners to develop those outcome measures. If we're going to push for systems change and bowls ideas, we have to have clear goals. This is one of the things about philanthropy where sometimes, you know, we are working in a gray area in terms of social impact.

[Interviewer/Reporter]

And financial support from wealthy individuals and foundations in itself can be an indicator of success. Recently, the Bezos family Foundation created a center for rising generations at Aspen, contributing $186 million and leading others like the Walton Family foundation to join in.

[Romy Drucker]

This is a critical step in Aspen elevating its commitment to young people, believing in them as future shapers, investing in their leadership skills. We think that bringing together all of Aspen's youth work under one umbrella is going to be a really powerful signal about what it's going to take for both Aspen as an institution itself to evolve, but also for it to evolve its influence in the world.

[Interviewer/Reporter]

While think tanks like the Aspen Institute focus on goals that may be hard to put numbers to, like the free exchange of ideas, others are driven by more specific, measurable results. The last 50 years have seen the rise of the explicitly partisan think tank devoted to getting things done in Washington.

[Carolyn Elkins]

Since the 60s and 70s, what we've really seen is a. There's a shift in them becoming much more political. And then we have Ed Fulner in the basement of Congress. He was just a young sort of staffer, I believe, at the time, and frustrated by the fact that the American Enterprise Institute refused to release its report on, I think it was supersonic jets to the Senate because it didn't want to influence policy. And at that point, we see a real turn, certainly with the Heritage foundation and others saying, actually, what we want to do is to really influence policy in a particular political direction. And we see that coming to fruition, as we know, in the 80s when the Reagan administration had done, adopts the Heritage report as the bible of the Reagan administration, adopting two thirds of its 2,000 recommendations. It was extraordinary. And they really have played a very large role in shaping American society.

[Interviewer/Reporter]

Recently. The Heritage foundation has made a name for itself with its Project 2025 blueprint for the second Trump administration, something Mr. Trump disavowed during his campaign, but much of which has since come to fruition. There's no denying the impact of the Heritage Foundation's approach and its demonstrable successes. But Elkin says there remains an important role for organizations like the Aspen Institute.

[Carolyn Elkins]

I felt very strongly that that institute has the potential of playing an outside role in society. I've sort of borne witness to the fact that we have moved away from sort of exploring ideas just for the sake of exploring ideas to being really quantified, metrics being asked all the time, sort of what we call sort of the audit culture, which is in some ways reflective of this kind of culture of efficiency that we all live in. And in many ways, the Aspen Institute, their direction isn't necessarily headed that way. What they're asking, as I said, is the question, what makes for great human flourishing? And so what that means is they're not looking to sort of necessarily change policy directly or at being prescriptive about policy. What they're looking to do is to cultivate a good society.

[Interviewer/Reporter]

But accomplishing even the most important goals requires resources and difficult decisions about where

[David Westin]

to direct those resources. Perhaps the most important job of a CEO of a for profit company is allocating capital. It strikes me you're allocating capital as well. If you're running the Aspen Institute. It's money, but it's also time and talent. When you decide, yes, we're going to do something like the Bezos initiative, or we're going to cut back, perhaps in other places, how do you decide how to allocate that capital?

[Dan Porterfield]

It's a big deal. Make sure you have a clear purpose statement so people know what it is you do and what you don't do. We worked with a consulting company, SY Partners, from here in New York, to really drill down over the course of six months, why are we here? What is the reason this institute even exists? But that allocation of capital of time, talent and resources is critical because an organization can't do everything and it shouldn't try.

[David Westin]

That does it for us. Here at Wall Street Week, I'm David Westin. See you next week for more stories of capitalism.

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