1 00:00:02,720 --> 00:00:12,000 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. It's Everybody's business from 2 00:00:12,039 --> 00:00:14,720 Speaker 1: Bloomberg BusinessWeek. I'm Brad Stone and. 3 00:00:14,600 --> 00:00:18,160 Speaker 2: I'm Stacy Vanicksmith. And Brad you are the editor of BusinessWeek. 4 00:00:18,200 --> 00:00:21,520 Speaker 2: You've been looking over business and economic stories all week, 5 00:00:21,800 --> 00:00:24,640 Speaker 2: and there are a few that stood out, like some 6 00:00:24,720 --> 00:00:28,440 Speaker 2: of the winners and losers from Trump's tariffs. That's starting 7 00:00:28,440 --> 00:00:29,480 Speaker 2: to become a little clearer. 8 00:00:29,960 --> 00:00:33,400 Speaker 1: It was another week of whiplash, Stacy and Trump's America. 9 00:00:33,680 --> 00:00:37,760 Speaker 1: We had the president attacking major college campuses, and this 10 00:00:37,840 --> 00:00:41,720 Speaker 1: week Harvard refused to comply with demands from the Trump administration, 11 00:00:42,040 --> 00:00:45,479 Speaker 1: which froze two billion in the university's federal funding and 12 00:00:45,720 --> 00:00:48,520 Speaker 1: he threatened to revoke its tax exempt status. 13 00:00:49,000 --> 00:00:52,240 Speaker 2: We also have our underrated story of the week, Stasey, 14 00:00:52,360 --> 00:00:56,240 Speaker 2: I'm going to make the unpopular argument that bethos as 15 00:00:56,240 --> 00:00:59,080 Speaker 2: the women in Space mission was actually kind. 16 00:00:58,920 --> 00:01:01,680 Speaker 1: Of pretty cool and all part of his master plan. 17 00:01:02,040 --> 00:01:06,279 Speaker 2: Okay, we will have to discuss, but first, like you said, 18 00:01:06,800 --> 00:01:14,480 Speaker 2: it has been a lot of whiplash this week. One 19 00:01:14,480 --> 00:01:17,639 Speaker 2: of the things really looming over the economy right now 20 00:01:17,760 --> 00:01:19,600 Speaker 2: is I mean, I guess, for lack of a better word, 21 00:01:19,680 --> 00:01:25,000 Speaker 2: feelings people are really worried about what tariffs and all 22 00:01:25,080 --> 00:01:27,360 Speaker 2: of these policy changes are going to do to the economy. 23 00:01:27,400 --> 00:01:30,520 Speaker 2: We got some really alarming consumer sentiment numbers out last 24 00:01:30,520 --> 00:01:33,840 Speaker 2: week from the University of Michigan. They found that sentiment 25 00:01:33,959 --> 00:01:36,640 Speaker 2: was at its second lowest level in history. 26 00:01:36,920 --> 00:01:41,440 Speaker 1: Right and investors are clearly queasy about the economy right now. 27 00:01:41,720 --> 00:01:45,040 Speaker 1: I mean, every day feels like a year. The stock market, 28 00:01:45,080 --> 00:01:49,040 Speaker 1: the bond market just shaking at the foundations. These last 29 00:01:49,040 --> 00:01:52,840 Speaker 1: couple of weeks, really dramatic ups and downs. Companies have 30 00:01:52,960 --> 00:01:56,480 Speaker 1: lost trillions of dollars of value. J Powell came out 31 00:01:56,480 --> 00:01:59,240 Speaker 1: this week in an interview basically saying he's not that 32 00:01:59,320 --> 00:02:01,320 Speaker 1: sangue about the state of the US economy, and that 33 00:02:01,400 --> 00:02:05,720 Speaker 1: Donald Trump wrote on truth Social that his termination cannot 34 00:02:05,760 --> 00:02:06,800 Speaker 1: come fast enough. 35 00:02:07,080 --> 00:02:10,560 Speaker 2: He's not a constructive criticism person, I think is one 36 00:02:10,560 --> 00:02:12,640 Speaker 2: of the things that we can safely say about the president. 37 00:02:12,639 --> 00:02:16,399 Speaker 2: But yes, Jerome Powell was talking about the threat of stagflation, 38 00:02:16,720 --> 00:02:20,080 Speaker 2: which is essentially when prices are rising and unemployments rising 39 00:02:20,120 --> 00:02:22,480 Speaker 2: at the same time, and he's worried that that's where 40 00:02:22,520 --> 00:02:26,200 Speaker 2: tariffs could take us. But you know, hear at everybody's business. 41 00:02:26,280 --> 00:02:28,400 Speaker 2: We like to talk to not just like the people 42 00:02:28,440 --> 00:02:32,080 Speaker 2: who are overseeing the economy and traders and experts and 43 00:02:32,120 --> 00:02:33,839 Speaker 2: economists and things like that, but we like to talk 44 00:02:33,880 --> 00:02:36,800 Speaker 2: to the people who are also living in the economy 45 00:02:36,800 --> 00:02:39,320 Speaker 2: and who make up the economy. Happened to be down 46 00:02:39,400 --> 00:02:43,720 Speaker 2: in Austin, Texas earlier this week, so I thought I 47 00:02:43,760 --> 00:02:46,519 Speaker 2: would ask some Texans how they were feeling about the economy, 48 00:02:46,560 --> 00:02:49,760 Speaker 2: if like the consumer sentiment data was resonating with them, 49 00:02:50,120 --> 00:02:53,160 Speaker 2: if they've changed any spending habits. So, Brad, here's what 50 00:02:53,200 --> 00:02:53,600 Speaker 2: they said. 51 00:02:53,720 --> 00:02:55,480 Speaker 3: I'm not the type of guy who pays attention to 52 00:02:55,639 --> 00:03:02,000 Speaker 3: consumer sentiment data, so I've been spending fairly recklessly, only 53 00:03:02,120 --> 00:03:04,320 Speaker 3: I guess I spinned with a lot more anxiety. 54 00:03:04,360 --> 00:03:06,520 Speaker 2: Now there's going to be a lot of business owners 55 00:03:06,520 --> 00:03:08,920 Speaker 2: that are very deeply impacted by this, and you know, 56 00:03:09,200 --> 00:03:12,760 Speaker 2: running a business is pard enough, and so that that 57 00:03:13,040 --> 00:03:13,840 Speaker 2: really sucks. 58 00:03:14,120 --> 00:03:15,920 Speaker 1: I think people were worried because they think price is everything. 59 00:03:15,919 --> 00:03:17,600 Speaker 4: I'm going to go up, which is a fair thing 60 00:03:17,600 --> 00:03:18,160 Speaker 4: to worry about. 61 00:03:18,400 --> 00:03:21,880 Speaker 1: But the only things that I buy are American Anyway. 62 00:03:21,960 --> 00:03:23,560 Speaker 3: Three or four days a week I would drive to 63 00:03:23,720 --> 00:03:27,280 Speaker 3: a barbecue spot here in Austin called Rudi's and buy 64 00:03:27,360 --> 00:03:30,800 Speaker 3: two cups of banana pudding, but the price has. 65 00:03:30,720 --> 00:03:33,000 Speaker 2: Gone up, so now I only buy one, So now 66 00:03:33,040 --> 00:03:35,000 Speaker 2: you just have half the banana putting it used to have. 67 00:03:35,360 --> 00:03:36,840 Speaker 4: Yeah, no, it's a terrible economy. 68 00:03:37,720 --> 00:03:42,200 Speaker 2: Well, everybody has their own take on the economy. 69 00:03:42,560 --> 00:03:44,560 Speaker 1: But you know what this reminds me of a little 70 00:03:44,600 --> 00:03:47,680 Speaker 1: bit like when the hurricane is off the coast and 71 00:03:47,720 --> 00:03:50,960 Speaker 1: it's heading in and everybody's battening down the hatches and 72 00:03:51,120 --> 00:03:54,160 Speaker 1: runs out to stock up on supplies. And we see 73 00:03:54,160 --> 00:03:57,160 Speaker 1: this in the data, like retail sales kind of boomed 74 00:03:57,200 --> 00:04:00,240 Speaker 1: in March. They were up one point four percent in March, 75 00:04:00,360 --> 00:04:03,400 Speaker 1: zero point two percent in February. So, you know, if 76 00:04:03,400 --> 00:04:07,080 Speaker 1: there's some wild argument that Trump is playing four dimensional chests, 77 00:04:07,120 --> 00:04:10,200 Speaker 1: maybe it's all about scaring people into opening their wallets 78 00:04:10,200 --> 00:04:12,280 Speaker 1: and trying to get ahead of something. But no, it 79 00:04:12,320 --> 00:04:14,680 Speaker 1: does seem like there's a fair amount of anxiety out there. 80 00:04:20,120 --> 00:04:22,520 Speaker 1: So Stacey, it's only been a couple of weeks since 81 00:04:22,640 --> 00:04:26,280 Speaker 1: Liberation Day. Oh cha, we all remember where Trump unveiled 82 00:04:26,320 --> 00:04:30,000 Speaker 1: as tariff plan, which really sent shock waves around the world. 83 00:04:30,360 --> 00:04:33,480 Speaker 2: Yeah, but even still as things are settling down, there 84 00:04:33,560 --> 00:04:37,280 Speaker 2: is a lot of uncertainty over how things will pan out, 85 00:04:37,360 --> 00:04:39,960 Speaker 2: what the tariffs will actually look like, what kind of 86 00:04:39,960 --> 00:04:42,080 Speaker 2: deals will be made that maybe get around the tariffs 87 00:04:42,160 --> 00:04:45,480 Speaker 2: or mitigate the tariffs for some industries. But some answers 88 00:04:45,560 --> 00:04:48,279 Speaker 2: are starting to emerge, and so we thought we would 89 00:04:48,279 --> 00:04:50,240 Speaker 2: take a look at some of the industries and the 90 00:04:50,279 --> 00:04:54,040 Speaker 2: companies that are hardest hit, and maybe even some industries 91 00:04:54,040 --> 00:04:56,040 Speaker 2: and companies that might see a little boost from all this. 92 00:04:56,720 --> 00:04:59,960 Speaker 1: We talked about picking some winners and losers based on 93 00:05:00,080 --> 00:05:02,320 Speaker 1: what we know so far. Now, I just want a 94 00:05:02,400 --> 00:05:06,480 Speaker 1: caveat this by saying, you're talking about uncertainty, and Trump 95 00:05:06,600 --> 00:05:10,000 Speaker 1: is negotiating. He might be trying to reduce trade barriers. 96 00:05:10,120 --> 00:05:13,640 Speaker 1: He was personally involved in discussions with a Japanese trade 97 00:05:13,680 --> 00:05:17,000 Speaker 1: delegation that was at the White House, and on Thursday 98 00:05:17,320 --> 00:05:21,080 Speaker 1: it was the Italians and Italian Prime Minister Maloney who 99 00:05:21,160 --> 00:05:23,800 Speaker 1: is at the White House. So it really remains to 100 00:05:23,839 --> 00:05:26,760 Speaker 1: be seen. Does this end up being better for global 101 00:05:26,760 --> 00:05:30,039 Speaker 1: trade or does he mean what he says when he 102 00:05:30,040 --> 00:05:34,120 Speaker 1: talks about protectionism and William mckinlee and bringing back the 103 00:05:34,120 --> 00:05:36,400 Speaker 1: golden age of tariffs. We do not know where this 104 00:05:36,440 --> 00:05:36,920 Speaker 1: will all. 105 00:05:36,880 --> 00:05:39,359 Speaker 2: End up, although I feel like we're starting to see 106 00:05:39,360 --> 00:05:41,880 Speaker 2: some strong signals. I feel like every time I check 107 00:05:41,920 --> 00:05:46,000 Speaker 2: the news, the tariffs against Chinese goods go up again. Well, 108 00:05:46,000 --> 00:05:48,320 Speaker 2: I think it's now at two hundred and forty five percent, 109 00:05:48,640 --> 00:05:50,920 Speaker 2: and that is our biggest trading partner. So I feel 110 00:05:50,960 --> 00:05:53,440 Speaker 2: like we know that there will be some change, but 111 00:05:53,480 --> 00:05:55,040 Speaker 2: I think you're right, there's a lot of uncertainty. 112 00:05:55,279 --> 00:05:59,360 Speaker 1: That's a great point with regards to China. It's relatively 113 00:05:59,400 --> 00:06:02,080 Speaker 1: clear that President Trump is into getting a trade war, 114 00:06:02,360 --> 00:06:03,720 Speaker 1: and that leads me to my. 115 00:06:03,800 --> 00:06:06,040 Speaker 4: Pick for the losers, Yes, what is your loser? 116 00:06:06,960 --> 00:06:09,240 Speaker 1: And I think the stock market agrees is in Vidia 117 00:06:09,760 --> 00:06:13,080 Speaker 1: down about twenty two percent year to date. This week, 118 00:06:13,200 --> 00:06:18,240 Speaker 1: the Trump administration tightened export controls on in Vidia's basically 119 00:06:18,320 --> 00:06:21,839 Speaker 1: kind of dumbed down H twenty chip, which it devised 120 00:06:21,880 --> 00:06:24,960 Speaker 1: for the Chinese market, and to accommodate the last wave 121 00:06:25,000 --> 00:06:29,800 Speaker 1: of export controls, this week, US official said that in 122 00:06:29,960 --> 00:06:33,159 Speaker 1: Video would need to get a license to sell that 123 00:06:33,240 --> 00:06:35,960 Speaker 1: equipment in China. In Vidia said that it was going 124 00:06:36,000 --> 00:06:38,520 Speaker 1: to take about a five billion dollars hit to its inventory. 125 00:06:38,960 --> 00:06:41,800 Speaker 1: Jensen Wong, as we speak, is in China meeting with 126 00:06:41,920 --> 00:06:45,440 Speaker 1: Chinese officials and this is bad for just a whole 127 00:06:45,480 --> 00:06:48,200 Speaker 1: bunch of reasons. Not only is it sitting on all 128 00:06:48,240 --> 00:06:51,719 Speaker 1: this inventory, not only is the world's second largest AI 129 00:06:51,880 --> 00:06:55,279 Speaker 1: market now basically going to be off limits for Nvidia, 130 00:06:55,320 --> 00:06:58,960 Speaker 1: but I think the biggest problem is that it will 131 00:06:59,040 --> 00:07:03,839 Speaker 1: even further motive Chinese companies a Chinese government to increase 132 00:07:04,120 --> 00:07:07,440 Speaker 1: the domestic production of AI chips. And you just never 133 00:07:07,600 --> 00:07:11,480 Speaker 1: underestimate the speed at which an authoritarian government will move 134 00:07:11,640 --> 00:07:14,280 Speaker 1: when it feels like it's sovereignty is at stake, when 135 00:07:14,280 --> 00:07:17,560 Speaker 1: it's future competitiveness is at stake. We've seen this before, 136 00:07:17,840 --> 00:07:20,160 Speaker 1: and I think in videos losing out how. 137 00:07:20,000 --> 00:07:23,400 Speaker 2: Important is China to in video Though it seems like 138 00:07:23,440 --> 00:07:27,080 Speaker 2: it's only about thirteen percent of in Vidia sales are 139 00:07:27,120 --> 00:07:28,040 Speaker 2: in China. 140 00:07:28,200 --> 00:07:30,880 Speaker 1: Well, I think estimates vary. I think if you look 141 00:07:30,880 --> 00:07:34,800 Speaker 1: at data center revenue, it's more like a quarter. But look, 142 00:07:35,040 --> 00:07:39,320 Speaker 1: we're moving into this, you know, bilateral world where the 143 00:07:39,480 --> 00:07:43,240 Speaker 1: US and China are in a race to create these 144 00:07:43,640 --> 00:07:48,480 Speaker 1: AI chips and these AI powered data centers, and the 145 00:07:48,560 --> 00:07:51,840 Speaker 1: fact that half of that market might be off limits 146 00:07:52,480 --> 00:07:55,400 Speaker 1: to the company that is most associated with this underlying 147 00:07:55,760 --> 00:07:59,160 Speaker 1: AI infrastructure trend is a big blow and anyway, Stacey, 148 00:07:59,200 --> 00:08:01,480 Speaker 1: I'm curious who your loser. 149 00:08:01,240 --> 00:08:05,040 Speaker 2: Is actually brought soybeans into the studio, because my loser 150 00:08:05,320 --> 00:08:06,800 Speaker 2: is soybean farmers. 151 00:08:07,200 --> 00:08:09,640 Speaker 1: Stacey, who will think of the soybean farmers? 152 00:08:10,120 --> 00:08:11,640 Speaker 2: Think of the soybean farmers? 153 00:08:11,680 --> 00:08:11,920 Speaker 4: I know? 154 00:08:12,240 --> 00:08:16,040 Speaker 2: Strangely enough, our top export to China is soybeans. We 155 00:08:16,120 --> 00:08:19,960 Speaker 2: export about thirteen billion dollars worth of soybeans every year 156 00:08:20,080 --> 00:08:23,000 Speaker 2: to China. It's about half of all the soybeans we produce. 157 00:08:23,600 --> 00:08:26,960 Speaker 2: Apparently the Chinese mostly use it for livestock feed. As 158 00:08:27,000 --> 00:08:30,000 Speaker 2: the middle class has grown in China, meat consumption has 159 00:08:30,080 --> 00:08:32,240 Speaker 2: gone way up, and so soybeans are one of the 160 00:08:32,240 --> 00:08:35,400 Speaker 2: big sort of sources of feed and protein for pigs 161 00:08:35,400 --> 00:08:38,960 Speaker 2: and chickens in China. But a two hundred and forty 162 00:08:38,960 --> 00:08:43,600 Speaker 2: five percent tariff is probably going to do a lot 163 00:08:43,640 --> 00:08:47,360 Speaker 2: of damage to soybean farmers in the soybean industry. It's 164 00:08:47,480 --> 00:08:49,480 Speaker 2: really leaving the farmers in a tough position. 165 00:08:50,360 --> 00:08:53,080 Speaker 1: Doesn't the US government kind of swoop in when these 166 00:08:53,120 --> 00:08:57,600 Speaker 1: trade policies impact farmers or bats growing seasons and offer 167 00:08:57,679 --> 00:08:59,800 Speaker 1: subsidies to kind of cushion the blow and get them 168 00:08:59,800 --> 00:09:01,480 Speaker 1: through the tough years. Could that happen here. 169 00:09:02,400 --> 00:09:05,400 Speaker 2: Yes, farming has a lot of subsidies and has for 170 00:09:05,480 --> 00:09:07,680 Speaker 2: a long time. It's kind of part of the industry 171 00:09:07,720 --> 00:09:10,400 Speaker 2: at this point. Because it's such a huge part of 172 00:09:10,440 --> 00:09:12,959 Speaker 2: the soybean market, and because the harriffs are so high. 173 00:09:13,040 --> 00:09:16,520 Speaker 2: I'm just not sure where these farmers can go. That 174 00:09:16,520 --> 00:09:19,599 Speaker 2: would be a huge subsidy from the government. Certainly is 175 00:09:19,640 --> 00:09:21,920 Speaker 2: an option on the table. Certainly there's a big precedent 176 00:09:21,960 --> 00:09:25,600 Speaker 2: for it. But it's not just soybean farmers either. It's 177 00:09:25,720 --> 00:09:28,360 Speaker 2: corn and pork and a lot of producers who sell 178 00:09:28,400 --> 00:09:30,840 Speaker 2: a lot to China. They're one of the biggest buyers 179 00:09:30,840 --> 00:09:33,800 Speaker 2: of a lot of our agricultural products. So thirteen billion 180 00:09:33,840 --> 00:09:35,960 Speaker 2: dollars of subsidies would be a lot. 181 00:09:36,200 --> 00:09:38,960 Speaker 1: Well, you know, I like your pick. My loser was 182 00:09:39,040 --> 00:09:43,040 Speaker 1: multi billionaire Jensen Wong and Nvidia, and you're a loser 183 00:09:43,160 --> 00:09:45,120 Speaker 1: or the poor soybeans part of. 184 00:09:45,120 --> 00:09:47,680 Speaker 2: Soybean farmers exactly of South Dakota. 185 00:09:47,679 --> 00:09:49,160 Speaker 1: So that's a good one. Okay. Do you want to 186 00:09:49,160 --> 00:09:49,760 Speaker 1: hear my winner? 187 00:09:49,960 --> 00:09:52,160 Speaker 2: Absolutely? I feel like there aren't that many winners in 188 00:09:52,200 --> 00:09:53,439 Speaker 2: this situation right now. 189 00:09:53,640 --> 00:09:56,040 Speaker 1: It's just incredibly hard to pick. I mean, this is 190 00:09:56,120 --> 00:09:59,800 Speaker 1: really literally changing every day, and I think my proposed 191 00:09:59,840 --> 00:10:03,480 Speaker 1: win here Apple Really it's a great example of this. 192 00:10:03,640 --> 00:10:07,880 Speaker 1: So last Friday, it seemed like Apple had a huge 193 00:10:08,000 --> 00:10:11,160 Speaker 1: exemption of the one hundred and forty five percent tariffs 194 00:10:11,559 --> 00:10:16,000 Speaker 1: on Chinese goods. The US Custom and Border Protection Service 195 00:10:16,080 --> 00:10:20,199 Speaker 1: said in a note that smartphones and other electronics were exempt, 196 00:10:20,480 --> 00:10:24,760 Speaker 1: with maybe the exception of the twenty percent fentanyl crisis. Now, 197 00:10:24,960 --> 00:10:27,720 Speaker 1: then Trump came out and said there were some tech 198 00:10:27,760 --> 00:10:31,640 Speaker 1: specific tariffs. It wouldn't be one hundred forty five percent, 199 00:10:32,000 --> 00:10:35,280 Speaker 1: but there would be something. Here's what I think Apple 200 00:10:35,320 --> 00:10:37,840 Speaker 1: got an exemption last time. You know, Tim Cook is 201 00:10:38,360 --> 00:10:42,240 Speaker 1: enormously sophisticated when it comes to getting to mar A 202 00:10:42,360 --> 00:10:44,080 Speaker 1: Lago and working the Trump administration. 203 00:10:44,240 --> 00:10:46,440 Speaker 2: Yeah, he's been having a lot of power lunches with 204 00:10:46,800 --> 00:10:47,559 Speaker 2: the President for. 205 00:10:47,520 --> 00:10:48,400 Speaker 4: Sure, exactly. 206 00:10:48,480 --> 00:10:51,040 Speaker 1: And Apple has also prepared for this moment that now 207 00:10:51,040 --> 00:10:54,640 Speaker 1: makes twenty percent of its iPhones in India via fox 208 00:10:54,720 --> 00:10:57,320 Speaker 1: Con and its factory in southern India. I think what 209 00:10:57,360 --> 00:11:00,880 Speaker 1: we're seeing is Apple moving some of the supply chain 210 00:11:00,960 --> 00:11:04,320 Speaker 1: for at least it's US products over to India. It 211 00:11:04,480 --> 00:11:07,400 Speaker 1: assembled twenty two billion dollars worth of iPhones in the 212 00:11:07,480 --> 00:11:10,560 Speaker 1: last year in India. And I just think, you know, 213 00:11:10,640 --> 00:11:13,040 Speaker 1: not only is Apple sort of flexible, not only has 214 00:11:13,080 --> 00:11:15,520 Speaker 1: it prepared for this moment, but you know, the old 215 00:11:15,559 --> 00:11:18,679 Speaker 1: saying that there's a third rail in American politics, and 216 00:11:18,720 --> 00:11:21,920 Speaker 1: the answer to that's usually been social security, yeah, or 217 00:11:22,000 --> 00:11:25,640 Speaker 1: medicare I think we can now add smartphones to that least. 218 00:11:27,080 --> 00:11:30,160 Speaker 1: I think that, you know, the Trump administration is you know, 219 00:11:30,280 --> 00:11:33,960 Speaker 1: maybe just sensible enough to know that if you screw 220 00:11:34,120 --> 00:11:38,880 Speaker 1: with people's iPhone prices, oh, they're going to be annoyed. 221 00:11:38,960 --> 00:11:40,960 Speaker 1: And so I just expect kind of Apple to come 222 00:11:41,000 --> 00:11:43,959 Speaker 1: out of this, not maybe unscathed, but in a better 223 00:11:44,000 --> 00:11:47,280 Speaker 1: position than a lot of other companies, in particularly small businesses. 224 00:11:47,920 --> 00:11:49,640 Speaker 2: But even though they have moved a lot of their 225 00:11:49,640 --> 00:11:52,520 Speaker 2: production to India, there's a big tariff against India too, 226 00:11:52,600 --> 00:11:56,319 Speaker 2: isn't there is like twenty four twenty five percent or 227 00:11:56,360 --> 00:11:56,920 Speaker 2: something like that. 228 00:11:57,320 --> 00:11:59,680 Speaker 1: So I think prices will go up, but I just 229 00:11:59,720 --> 00:12:04,120 Speaker 1: don't think it's the wallop that everybody expected two weeks ago. 230 00:12:04,400 --> 00:12:08,360 Speaker 1: And again, Apple's prepared for this moment. They apparently airlifted 231 00:12:08,400 --> 00:12:11,000 Speaker 1: a ton of iPhone supplies to the US before the 232 00:12:11,040 --> 00:12:12,040 Speaker 1: tariffs took shape. 233 00:12:12,080 --> 00:12:12,560 Speaker 2: They stop. 234 00:12:12,600 --> 00:12:15,480 Speaker 1: I think, yeah, that they're like us. They're preparing for 235 00:12:15,520 --> 00:12:16,120 Speaker 1: the hurricane. 236 00:12:16,600 --> 00:12:18,680 Speaker 2: Corporations, they're just like us. 237 00:12:19,360 --> 00:12:23,160 Speaker 1: Look, this regime favors large companies with a lot of 238 00:12:23,200 --> 00:12:25,960 Speaker 1: cash on hand to go and make the changes that 239 00:12:26,000 --> 00:12:29,120 Speaker 1: they need to weather the storm. Who's your winner, Stacy? 240 00:12:29,640 --> 00:12:34,560 Speaker 2: My winner is consultants. Consultants and lawyers. 241 00:12:35,160 --> 00:12:36,720 Speaker 4: They always come out on top. 242 00:12:36,800 --> 00:12:38,959 Speaker 2: They always come out on top. If you want to 243 00:12:39,000 --> 00:12:41,960 Speaker 2: win in this world, you become a consultant or a lawyer, because, 244 00:12:42,200 --> 00:12:45,880 Speaker 2: especially right now though, with all the uncertainty, international trade 245 00:12:45,960 --> 00:12:51,000 Speaker 2: lawyers and international trade consultants are really getting inundated because 246 00:12:51,960 --> 00:12:54,720 Speaker 2: companies are trying to map out all kinds of different scenarios. 247 00:12:54,760 --> 00:12:56,360 Speaker 2: Like you said, I mean, there are deals being done 248 00:12:56,400 --> 00:12:58,480 Speaker 2: every day. It's hard to keep track of what's going on, 249 00:12:58,960 --> 00:13:01,200 Speaker 2: and consultants are coming in doing I think a lot 250 00:13:01,240 --> 00:13:05,480 Speaker 2: of different if then type situations. I actually talked with 251 00:13:05,559 --> 00:13:08,920 Speaker 2: Martin Ludovics. He is the president of IWSR, which is 252 00:13:08,960 --> 00:13:13,160 Speaker 2: this huge international beverage industry consultancy, and he's that he 253 00:13:13,200 --> 00:13:18,480 Speaker 2: has just been getting calls from everywhere. Kentucky, Bourbon, Irish whiskey, 254 00:13:18,559 --> 00:13:21,760 Speaker 2: French champagne, German beer, Japanese sake. They are all calling 255 00:13:21,880 --> 00:13:26,200 Speaker 2: him just desperate, desperate for help in navigating this, and 256 00:13:26,800 --> 00:13:28,840 Speaker 2: you know that hasn't been the worst thing for business. 257 00:13:29,040 --> 00:13:30,040 Speaker 2: Here is what he told me. 258 00:13:30,440 --> 00:13:33,320 Speaker 3: I mean, it's great for us because everyone needs answers. 259 00:13:33,559 --> 00:13:35,920 Speaker 2: I mean, it's it's difficult because obviously my clients are 260 00:13:35,920 --> 00:13:38,240 Speaker 2: feeling the pain, so it's hard not to empathize. 261 00:13:38,280 --> 00:13:41,720 Speaker 5: But at least from our perspective, it's great. 262 00:13:43,120 --> 00:13:46,520 Speaker 1: Stacy does consider lobbyists to be in this umbrella. 263 00:13:46,640 --> 00:13:48,199 Speaker 4: I mean, oh, totally. 264 00:13:48,520 --> 00:13:52,280 Speaker 1: You know, anyone who has a role in helping companies, 265 00:13:52,760 --> 00:13:56,680 Speaker 1: rich companies navigate these tariffs to create personal connections, to 266 00:13:56,720 --> 00:14:00,000 Speaker 1: carve out exemptions that and I imagine the hotel business 267 00:14:00,040 --> 00:14:02,160 Speaker 1: and mar al Lago is quite swift these Oh. 268 00:14:02,120 --> 00:14:04,440 Speaker 2: Yes, apparently they've seen quite an uptick. 269 00:14:10,280 --> 00:14:13,600 Speaker 1: So Stacey, Harvard has been in the news all week, 270 00:14:13,640 --> 00:14:16,480 Speaker 1: which is usually just how Harvard alums like it. 271 00:14:16,840 --> 00:14:19,600 Speaker 4: Yeah, exactly, but it's not for good reasons. 272 00:14:19,680 --> 00:14:22,280 Speaker 1: It's because Harvard has refused to give into the Trump 273 00:14:22,320 --> 00:14:23,840 Speaker 1: administration's demands. 274 00:14:24,200 --> 00:14:27,800 Speaker 2: Yes, so the Trump administration demanded that Harvard ban masks 275 00:14:27,840 --> 00:14:31,320 Speaker 2: on campus, eliminate a lot of its DEI programs, and 276 00:14:31,400 --> 00:14:33,880 Speaker 2: make a lot of changes to some of its different 277 00:14:33,920 --> 00:14:39,040 Speaker 2: programs and departments that quote fuel anti Semitic harassment. Harvard 278 00:14:39,320 --> 00:14:39,960 Speaker 2: said no. 279 00:14:40,400 --> 00:14:43,480 Speaker 1: Right, and Trump did not like that. So he's frozen 280 00:14:43,520 --> 00:14:46,560 Speaker 1: more than two billion dollars in federal funding and has 281 00:14:46,640 --> 00:14:51,400 Speaker 1: reportedly asked the IRS to revoke the university's tax exempt status. 282 00:14:51,840 --> 00:14:54,160 Speaker 2: Yes, it's a big issue. There are lots of parts 283 00:14:54,200 --> 00:14:55,920 Speaker 2: of it. And so to help us make sense of 284 00:14:55,960 --> 00:14:58,560 Speaker 2: what is going on for Harvard and for other colleges 285 00:14:58,600 --> 00:15:02,200 Speaker 2: and universities. Right now, we are joined by Janet Lauren. 286 00:15:02,360 --> 00:15:04,880 Speaker 2: She covers the finances of higher ed at Bloomberg. We're 287 00:15:04,920 --> 00:15:08,120 Speaker 2: very lucky to have her. She's very busy right now. Hi, Janet, Hi, 288 00:15:09,200 --> 00:15:12,200 Speaker 2: So what has your week been like so far. It's 289 00:15:12,200 --> 00:15:12,560 Speaker 2: been a. 290 00:15:12,480 --> 00:15:16,720 Speaker 5: Little busy, multiple stories every day, lots of things changing 291 00:15:16,960 --> 00:15:17,640 Speaker 5: very quickly. 292 00:15:18,200 --> 00:15:21,360 Speaker 2: Well, what is happening right now as of Thursday late morning. 293 00:15:21,960 --> 00:15:25,600 Speaker 5: Well, there's this idea that Trump might try to take 294 00:15:25,640 --> 00:15:29,120 Speaker 5: away Harvard's tax exempt status. He mentioned that earlier in 295 00:15:29,160 --> 00:15:32,120 Speaker 5: the week. We think Harvard is a really rich place. 296 00:15:32,360 --> 00:15:32,720 Speaker 4: It is. 297 00:15:32,960 --> 00:15:35,560 Speaker 5: It has fifty three billion dollars, which is quite a 298 00:15:35,600 --> 00:15:38,400 Speaker 5: lot of money. It's a good cushion, it's a nice cushion, 299 00:15:38,520 --> 00:15:41,640 Speaker 5: but they can't spend it like a bank account. Something 300 00:15:41,720 --> 00:15:45,680 Speaker 5: like eighty percent of that is restricted because donors make 301 00:15:45,720 --> 00:15:49,120 Speaker 5: a gift for the crew team or the English Department 302 00:15:49,280 --> 00:15:52,360 Speaker 5: and only sign an agreement and you're not supposed to 303 00:15:52,520 --> 00:15:55,360 Speaker 5: use that for other purposes. So you can't fund that 304 00:15:55,720 --> 00:15:59,080 Speaker 5: money for the crew team, you know, to hire postdocs 305 00:15:59,200 --> 00:16:01,760 Speaker 5: in the physics depart If your funding goes away. 306 00:16:01,600 --> 00:16:04,520 Speaker 2: You can't just pull out fifty three billion dollars in cash. 307 00:16:04,840 --> 00:16:08,160 Speaker 5: No, and it wouldn't even be all liquid. That's a 308 00:16:08,200 --> 00:16:10,560 Speaker 5: whole other thing about how they invest their money. The 309 00:16:10,640 --> 00:16:13,920 Speaker 5: last time they gave an asset allocation, something like thirty 310 00:16:14,040 --> 00:16:17,520 Speaker 5: nine percent was in private equity, So that means it's 311 00:16:17,680 --> 00:16:18,440 Speaker 5: it's tied up. 312 00:16:19,000 --> 00:16:23,120 Speaker 1: Channa. What does it mean to revoke the university's tax 313 00:16:23,160 --> 00:16:25,960 Speaker 1: exempt status? How serious a blow would that be? And 314 00:16:26,000 --> 00:16:28,960 Speaker 1: how practical is it? Can the administration just do that? 315 00:16:29,520 --> 00:16:33,240 Speaker 5: Well, the administration has been issuing a lot of executive orders, 316 00:16:33,400 --> 00:16:37,680 Speaker 5: so it's unclear where the process goes. But Harvard gets 317 00:16:37,680 --> 00:16:42,480 Speaker 5: a lot of benefits for its tax exempt status. For example, 318 00:16:42,640 --> 00:16:46,600 Speaker 5: it doesn't pay property taxes. It has the ability to 319 00:16:46,840 --> 00:16:51,760 Speaker 5: issue tax exempt bonds. Now they also recently issued taxable bonds, 320 00:16:51,880 --> 00:16:54,640 Speaker 5: and that gives them a lot more flexibility. If you 321 00:16:54,720 --> 00:16:58,160 Speaker 5: make a gift to Harvard, you get a tax deduction 322 00:16:58,280 --> 00:17:00,480 Speaker 5: as a donor. So there's a lot of ways that 323 00:17:00,600 --> 00:17:04,760 Speaker 5: benefits it. And in twenty twenty three the benefit was 324 00:17:04,800 --> 00:17:08,680 Speaker 5: something like four hundred and sixty five million dollars, which 325 00:17:08,720 --> 00:17:12,560 Speaker 5: is a nice chunk of change. Now, Also in December 326 00:17:12,640 --> 00:17:17,000 Speaker 5: twenty seventeen, there was a massive tax bill and endowments 327 00:17:17,080 --> 00:17:21,280 Speaker 5: were ensnared in there, and for the first time schools 328 00:17:21,280 --> 00:17:24,639 Speaker 5: had to pay taxes on their investment income. Up until 329 00:17:24,680 --> 00:17:29,240 Speaker 5: twenty seventeen, they did not pay taxes on their investments 330 00:17:29,320 --> 00:17:30,320 Speaker 5: in their endowment. 331 00:17:30,480 --> 00:17:32,880 Speaker 2: On the fifty three billion dollars, they didn't pay taxes. 332 00:17:33,280 --> 00:17:37,000 Speaker 5: No that it wasn't fifty three billion dollars back then, okay, 333 00:17:37,119 --> 00:17:38,919 Speaker 5: but it was still quite a lot of money. And 334 00:17:39,240 --> 00:17:43,760 Speaker 5: they pay one point four percent on the net investment return. 335 00:17:44,160 --> 00:17:48,600 Speaker 5: And people in Congress and JD. Vance and others have 336 00:17:48,840 --> 00:17:50,680 Speaker 5: would like to see that increase. 337 00:17:50,920 --> 00:17:53,160 Speaker 1: And how likely is it to happen. Do you think 338 00:17:53,200 --> 00:17:57,400 Speaker 1: that university isn't Harvard in particular lose this taxing some status. 339 00:17:57,640 --> 00:17:59,560 Speaker 5: Well, if you would have asked me a year ago, 340 00:18:00,320 --> 00:18:04,960 Speaker 5: two billion dollars in federal research grant be frozen. I 341 00:18:05,000 --> 00:18:08,000 Speaker 5: would have said, I don't know how that happens, but 342 00:18:08,440 --> 00:18:10,000 Speaker 5: we're kind of in a different world here. 343 00:18:10,560 --> 00:18:13,320 Speaker 2: How big of a deal is this for Harvard? I mean, 344 00:18:13,359 --> 00:18:15,439 Speaker 2: I keep thinking, like a lot of these stories have 345 00:18:15,520 --> 00:18:17,679 Speaker 2: come up. It's come up with Columbia and Princeton and 346 00:18:17,720 --> 00:18:20,919 Speaker 2: a lot of stories. But all these institutions have so 347 00:18:21,040 --> 00:18:23,720 Speaker 2: much they do have so much money, like, and they 348 00:18:23,800 --> 00:18:25,760 Speaker 2: charge a lot of money, and the charge a lot 349 00:18:25,800 --> 00:18:27,639 Speaker 2: of money. Can they tough it out? It feels like 350 00:18:27,640 --> 00:18:29,880 Speaker 2: they can tough Is this a really big deal for them? 351 00:18:30,000 --> 00:18:32,919 Speaker 5: Well? Each school is going to be different. So Columbia, 352 00:18:33,160 --> 00:18:36,600 Speaker 5: which had four hundred million threatened, has an endowment of 353 00:18:36,640 --> 00:18:40,520 Speaker 5: about fifteen billion, so they're a lot less rich. Now 354 00:18:40,520 --> 00:18:43,320 Speaker 5: if you look at a place like Princeton, I think 355 00:18:43,359 --> 00:18:45,800 Speaker 5: it's up to thirty four billion ish, But they don't 356 00:18:45,800 --> 00:18:48,520 Speaker 5: have a lot of students there, so the endowment per 357 00:18:48,560 --> 00:18:52,600 Speaker 5: student ratio is like over two million dollars. So if Princeton, 358 00:18:53,000 --> 00:18:56,399 Speaker 5: which it relies on its endowment for about seventy percent 359 00:18:56,400 --> 00:18:59,600 Speaker 5: of its budget, they would have an easier time, you know, 360 00:19:00,440 --> 00:19:03,720 Speaker 5: more than a place like Harvard. Last year Harvard, the 361 00:19:03,840 --> 00:19:07,760 Speaker 5: endowment brought in about two point four billion dollars. It's 362 00:19:08,040 --> 00:19:12,240 Speaker 5: spending five percent, so they could spend more, but you know, 363 00:19:12,320 --> 00:19:15,840 Speaker 5: some of it is restricted, and the reality is they 364 00:19:15,880 --> 00:19:17,600 Speaker 5: would have to make a lot of cuts. 365 00:19:17,400 --> 00:19:19,879 Speaker 2: But they wouldn't be They wouldn't like shut down. 366 00:19:20,200 --> 00:19:22,840 Speaker 5: No, they wouldn't shut down. And they've just issued debt 367 00:19:22,920 --> 00:19:25,639 Speaker 5: for seven hundred and fifty million dollars. They also have 368 00:19:25,680 --> 00:19:28,240 Speaker 5: a one point five billion dollar line of credit, so 369 00:19:28,280 --> 00:19:30,359 Speaker 5: they have a lot of tools in their toolkit. They 370 00:19:30,480 --> 00:19:33,080 Speaker 5: learned a good lesson in two thousand and eight when 371 00:19:33,280 --> 00:19:37,359 Speaker 5: the financial crisis happened and their endowment did not have liquidity. 372 00:19:37,520 --> 00:19:40,440 Speaker 5: Liquidity is a really important word here. It's their cash 373 00:19:40,480 --> 00:19:43,560 Speaker 5: on hand, because remember, places still have to make payroll 374 00:19:43,600 --> 00:19:44,639 Speaker 5: every two weeks. 375 00:19:44,960 --> 00:19:47,520 Speaker 1: I feel like this week, Janet, we saw major sat 376 00:19:47,680 --> 00:19:52,400 Speaker 1: change and the willingness of schools to fight the Trump administration. 377 00:19:52,520 --> 00:19:56,000 Speaker 1: So a few weeks ago our alma mater, Columbia, seemed 378 00:19:56,000 --> 00:19:58,800 Speaker 1: to give in the Trump and said it would negotiate 379 00:19:58,800 --> 00:20:01,760 Speaker 1: with the administration. And then this week kind of Harvard 380 00:20:01,800 --> 00:20:06,200 Speaker 1: stood up and Columbia's new acting president spoke out, wrote 381 00:20:06,240 --> 00:20:09,159 Speaker 1: a letter and said the university wouldn't do anything to 382 00:20:09,200 --> 00:20:12,520 Speaker 1: compromise its independence. So do you think schools are now 383 00:20:12,560 --> 00:20:15,200 Speaker 1: fighting and this all moves to the courts, and how 384 00:20:15,240 --> 00:20:16,200 Speaker 1: does it play out. 385 00:20:16,359 --> 00:20:19,040 Speaker 5: It's really hard to know how it plays out, and 386 00:20:19,119 --> 00:20:23,000 Speaker 5: it really is going to depend on what happens with Harvard. 387 00:20:23,400 --> 00:20:28,160 Speaker 5: But the government came down very hard, very swiftly. Within 388 00:20:28,280 --> 00:20:33,119 Speaker 5: hours of Harvard's very defiant letter, two point two billion 389 00:20:33,160 --> 00:20:37,000 Speaker 5: dollars was frozen. Now last night they brought up the 390 00:20:37,080 --> 00:20:42,640 Speaker 5: specter of potentially limiting international students. That is a huge 391 00:20:43,080 --> 00:20:48,120 Speaker 5: game changer because last year more than one million international 392 00:20:48,119 --> 00:20:51,600 Speaker 5: students came to colleges. You know, at Harvard it was 393 00:20:51,960 --> 00:20:54,840 Speaker 5: in the realm of like six thousand. So that's opening 394 00:20:55,000 --> 00:20:58,280 Speaker 5: a completely new front. But you have to remember, you know, 395 00:20:58,320 --> 00:21:01,520 Speaker 5: fifty three billion dollars is nothing to the federal government. 396 00:21:01,920 --> 00:21:05,280 Speaker 5: It's about money, and Harvard may seem like they have 397 00:21:05,560 --> 00:21:09,240 Speaker 5: endless money, but the federal government is more powerful than Harvard. 398 00:21:09,600 --> 00:21:12,960 Speaker 2: I'm wondering what you see as the stakes here, because 399 00:21:13,000 --> 00:21:15,280 Speaker 2: I mean, this is a story that's really grabbed headlines, 400 00:21:15,320 --> 00:21:17,320 Speaker 2: and like you say, like Harvard, they'll be okay at 401 00:21:17,400 --> 00:21:19,520 Speaker 2: least for a while. Why do you think this is 402 00:21:19,600 --> 00:21:24,000 Speaker 2: kind of captivating everybody so much. Well, we write about money, power, 403 00:21:24,040 --> 00:21:26,000 Speaker 2: and influence. That's why we spend a lot of time 404 00:21:26,000 --> 00:21:29,040 Speaker 2: writing about Harvard. But the idea that this is a 405 00:21:29,080 --> 00:21:33,160 Speaker 2: private university, the government shouldn't have such a big stake here. 406 00:21:33,960 --> 00:21:37,000 Speaker 2: But the government is one of the biggest funders, if 407 00:21:37,040 --> 00:21:39,399 Speaker 2: it's not the biggest funder of Harvard University. 408 00:21:40,040 --> 00:21:43,800 Speaker 5: And I think people don't realize that the government pays 409 00:21:43,920 --> 00:21:47,240 Speaker 5: for student loans. If you are a graduate student at 410 00:21:47,280 --> 00:21:50,720 Speaker 5: Harvard Law School, where I believe it's going to be 411 00:21:50,720 --> 00:21:53,640 Speaker 5: one hundred and twenty thousand dollars for one year next year, 412 00:21:54,119 --> 00:21:56,880 Speaker 5: and you can't pay that you take out a government 413 00:21:56,920 --> 00:22:01,160 Speaker 5: loan at nine percent. So the government plays a massive 414 00:22:01,240 --> 00:22:05,760 Speaker 5: role within higher education. Since World War Two, they've partnered 415 00:22:05,800 --> 00:22:09,359 Speaker 5: with universities to give money to do research that's in 416 00:22:09,400 --> 00:22:12,679 Speaker 5: the interest of the country. So we will fund this 417 00:22:12,760 --> 00:22:17,400 Speaker 5: physics lab at Harvard or at cal Tech or wherever 418 00:22:17,520 --> 00:22:21,120 Speaker 5: to do really important work. You know, Princeton has won 419 00:22:21,840 --> 00:22:26,000 Speaker 5: multiple Nobel Prizes recently. All these top research universities have 420 00:22:26,480 --> 00:22:29,639 Speaker 5: by using money from the government. I forget how much 421 00:22:29,760 --> 00:22:33,119 Speaker 5: money Harvard puts in for research. It may be like 422 00:22:33,160 --> 00:22:36,520 Speaker 5: a billion dollars itself. But the government is a huge 423 00:22:36,560 --> 00:22:41,280 Speaker 5: sponsor of higher education, and you know, if they're taking 424 00:22:41,320 --> 00:22:44,000 Speaker 5: the government's money, they may want to listen to what 425 00:22:44,040 --> 00:22:44,840 Speaker 5: the government says. 426 00:22:45,160 --> 00:22:48,199 Speaker 2: Well, you've gotten like I like, so many alerts have 427 00:22:48,240 --> 00:22:50,600 Speaker 2: come up on your phone just in like the last Yeah, 428 00:22:50,680 --> 00:22:53,360 Speaker 2: I feel like you've sent like several emails. I think 429 00:22:53,400 --> 00:22:57,119 Speaker 2: you're you're typing right now. Yeah, yes, I don't know 430 00:22:57,160 --> 00:23:00,480 Speaker 2: how you're doing that. It's amazing. But but I mean, clearly, 431 00:23:00,520 --> 00:23:03,240 Speaker 2: this is a story that's kind of grabbing everyone. Do 432 00:23:03,320 --> 00:23:06,359 Speaker 2: you think it has to do with like the place 433 00:23:06,480 --> 00:23:10,240 Speaker 2: that universities have in our country. 434 00:23:11,040 --> 00:23:15,920 Speaker 5: Yes, of course. I think people were thrilled to see 435 00:23:15,920 --> 00:23:19,920 Speaker 5: somebody stand up to Trump. And I think if anybody 436 00:23:19,960 --> 00:23:24,440 Speaker 5: could do it, it's Harvard. The oldest richest university in America, 437 00:23:24,600 --> 00:23:27,760 Speaker 5: pre dates the United States, seems to have you know, 438 00:23:27,920 --> 00:23:31,720 Speaker 5: endless money. And if the law firms couldn't stand up 439 00:23:32,040 --> 00:23:36,000 Speaker 5: to Trump, at least here is an entity that seemingly could. 440 00:23:36,680 --> 00:23:39,440 Speaker 5: And I think, you know, Harvard is finding out it's 441 00:23:40,520 --> 00:23:41,600 Speaker 5: having consequences. 442 00:23:42,119 --> 00:23:45,960 Speaker 1: A few weeks ago, Janna, we brought together a panel 443 00:23:46,080 --> 00:23:50,240 Speaker 1: of university presidents and chancellors included the head of NYU 444 00:23:50,520 --> 00:23:54,080 Speaker 1: A CU Boulder, and you know, it really preceated the 445 00:23:54,080 --> 00:23:56,400 Speaker 1: current crisis. But they were all making the point that 446 00:23:56,440 --> 00:24:01,040 Speaker 1: this is not just an attack on schools, but really 447 00:24:01,440 --> 00:24:06,600 Speaker 1: an attack on American competitiveness. They were making the argument 448 00:24:06,640 --> 00:24:10,439 Speaker 1: that if you defund science and research, you're just tying 449 00:24:10,520 --> 00:24:14,159 Speaker 1: one hand behind America's back in terms of competitiveness in 450 00:24:14,200 --> 00:24:16,920 Speaker 1: future markets. And clearly like they're trying to make an 451 00:24:17,000 --> 00:24:19,960 Speaker 1: argument like a pro growth argument. I have to say, 452 00:24:20,000 --> 00:24:21,919 Speaker 1: now a couple of weeks later, it feels like that 453 00:24:22,119 --> 00:24:25,320 Speaker 1: argument fell on deaf ears. I mean, do you agree 454 00:24:25,359 --> 00:24:28,960 Speaker 1: that the Trump administration just seems to be discarding that well. 455 00:24:29,000 --> 00:24:33,280 Speaker 5: I think there's a lot of mistrust within higher education. 456 00:24:33,840 --> 00:24:37,080 Speaker 5: I wrote a story in December sort of previewing all 457 00:24:37,160 --> 00:24:41,360 Speaker 5: of this, and part of it described the view that 458 00:24:41,480 --> 00:24:45,160 Speaker 5: some faculty feel like their social justice advocates instead of 459 00:24:45,920 --> 00:24:51,080 Speaker 5: academics and researchers. And I think that idea maybe doesn't 460 00:24:51,280 --> 00:24:55,000 Speaker 5: sit well with middle America. And you know what the 461 00:24:55,000 --> 00:24:58,360 Speaker 5: cost of college is. It's ninety three thousand dollars at 462 00:24:58,400 --> 00:25:02,600 Speaker 5: many schools, and a lot of college presidents say, oh no, no, 463 00:25:02,600 --> 00:25:06,399 Speaker 5: nobody pays that. But that's that's actually not true. About 464 00:25:06,400 --> 00:25:09,320 Speaker 5: half of the people pay it. Granted, you know, Harvard 465 00:25:09,320 --> 00:25:13,359 Speaker 5: has extremely generous financial aid. They just upped it for 466 00:25:13,640 --> 00:25:17,560 Speaker 5: under two hundred thousand dollars, but you still have to 467 00:25:17,560 --> 00:25:20,320 Speaker 5: get into Harvard. It's going to be even more competitive now, 468 00:25:20,920 --> 00:25:23,359 Speaker 5: and they're asking people to pay a lot of money 469 00:25:23,400 --> 00:25:25,680 Speaker 5: if you don't make that threshold. I mean, there are 470 00:25:25,840 --> 00:25:29,040 Speaker 5: lots of people in America who make two hundred thousand 471 00:25:29,080 --> 00:25:32,720 Speaker 5: dollars and to pay ninety three thousand dollars is still 472 00:25:32,800 --> 00:25:35,400 Speaker 5: quite a lot of money. I think most Americans think 473 00:25:35,520 --> 00:25:40,160 Speaker 5: that is outrageous. 474 00:25:42,320 --> 00:25:45,960 Speaker 2: Okay, Bradstone, it is time for our underrated story of 475 00:25:46,000 --> 00:25:49,439 Speaker 2: the week, this one you are bringing in. So what 476 00:25:49,520 --> 00:25:50,080 Speaker 2: have you got? 477 00:25:50,560 --> 00:25:52,639 Speaker 1: Yeah, so this was a great story and it was 478 00:25:52,720 --> 00:25:55,919 Speaker 1: certainly not underrated in terms of coverage. I got a 479 00:25:55,920 --> 00:26:01,840 Speaker 1: lot of attention. On Monday, a all female crew traveled 480 00:26:01,880 --> 00:26:05,560 Speaker 1: to the very edge of space on Jeff Bezos's Blue 481 00:26:05,600 --> 00:26:06,600 Speaker 1: Origin rocket. 482 00:26:07,000 --> 00:26:09,119 Speaker 2: You guys, I will have to tell you, look at 483 00:26:09,119 --> 00:26:09,520 Speaker 2: the moon. 484 00:26:09,720 --> 00:26:10,440 Speaker 4: That's amazing. 485 00:26:11,240 --> 00:26:13,000 Speaker 2: Wow, look at the blue line. 486 00:26:13,200 --> 00:26:18,399 Speaker 1: The crew included CBS broadcast journalist Gail King, musician Katie Perry, 487 00:26:18,840 --> 00:26:23,240 Speaker 1: Bezos's fiance, Lawrence Sanchez, and that'sa rocket scientist, Aisha Bo. 488 00:26:23,680 --> 00:26:26,560 Speaker 1: The trip was a success. They were in space for 489 00:26:26,600 --> 00:26:29,640 Speaker 1: about three minutes and they all made it safely back 490 00:26:29,680 --> 00:26:30,640 Speaker 1: to Terra Firma. 491 00:26:33,800 --> 00:26:37,359 Speaker 2: I got a singing space. I died inside a little 492 00:26:37,400 --> 00:26:41,199 Speaker 2: when I saw the story. Why is this underreach story? Okay? 493 00:26:41,280 --> 00:26:46,280 Speaker 1: Well, all right, they were sort of savaged, right, yes, yes, look, 494 00:26:46,440 --> 00:26:48,919 Speaker 1: I mean I Stacey, you might not know this. I 495 00:26:49,040 --> 00:26:52,040 Speaker 1: read the first ever story about Blue Origin way back 496 00:26:52,040 --> 00:26:55,800 Speaker 1: in two thousand and four. I did exposed its existence. 497 00:26:55,840 --> 00:26:57,960 Speaker 1: I tell the story in my book The Everything Store, 498 00:26:58,280 --> 00:27:00,840 Speaker 1: where I really went to the top seat Great Headquarters 499 00:27:00,840 --> 00:27:03,399 Speaker 1: and I this was an embarrassing revelation. I was a 500 00:27:03,400 --> 00:27:06,960 Speaker 1: young journalist at the time. I went through the trash 501 00:27:07,320 --> 00:27:09,920 Speaker 1: and I found all the sort of founding mission document 502 00:27:10,040 --> 00:27:11,000 Speaker 1: through Blue Origin at the. 503 00:27:10,960 --> 00:27:12,320 Speaker 4: Time origins trash. 504 00:27:12,400 --> 00:27:13,240 Speaker 2: What did you find? 505 00:27:14,119 --> 00:27:17,680 Speaker 1: Okay? So I found all these mission statements. And part 506 00:27:17,680 --> 00:27:21,560 Speaker 1: of Bethos's vision back then was to create a road 507 00:27:21,640 --> 00:27:26,480 Speaker 1: to space, to make space travel so reliable, so consistent, 508 00:27:27,080 --> 00:27:29,439 Speaker 1: so safe that people didn't think about it that it 509 00:27:29,520 --> 00:27:33,320 Speaker 1: was like air travel. And here we are twenty years later, 510 00:27:33,920 --> 00:27:37,080 Speaker 1: and this is what he's trying to do. This is 511 00:27:37,119 --> 00:27:42,879 Speaker 1: like the twelfth Crude mission to suborbital space. It is 512 00:27:43,119 --> 00:27:46,680 Speaker 1: by no means routine. In fact, Blue Origin lost one 513 00:27:46,680 --> 00:27:49,240 Speaker 1: of these rockets at the end of twenty twenty two, 514 00:27:49,400 --> 00:27:51,359 Speaker 1: like they had to figure out how to make it 515 00:27:51,400 --> 00:27:54,320 Speaker 1: safe again. And you look at this crew. I mean, 516 00:27:54,400 --> 00:27:57,600 Speaker 1: Gail King is a truly serious journalist. I love her. 517 00:27:57,680 --> 00:28:00,800 Speaker 1: She's such a great interviewer. She doesn't like even flying 518 00:28:00,840 --> 00:28:04,080 Speaker 1: on planes. She looked like there was not enough xanax 519 00:28:04,400 --> 00:28:07,199 Speaker 1: in the world to get her on that rocket, but 520 00:28:07,280 --> 00:28:10,240 Speaker 1: she did it. You know, yes, it was a little cringe, 521 00:28:10,640 --> 00:28:13,359 Speaker 1: But I think it's all part of like Bezos's long 522 00:28:13,560 --> 00:28:16,160 Speaker 1: arc of making this seem fairly routine, and the fact 523 00:28:16,200 --> 00:28:19,440 Speaker 1: that they were there and they were criticized and they 524 00:28:19,440 --> 00:28:21,600 Speaker 1: did it, I think sort of speaks to the success 525 00:28:21,640 --> 00:28:24,880 Speaker 1: of its mission. Maybe not the financial or business success, 526 00:28:24,920 --> 00:28:27,359 Speaker 1: because I don't think anybody's paying for this yet, but 527 00:28:27,640 --> 00:28:31,160 Speaker 1: like making this routine, getting people over the hump and 528 00:28:31,240 --> 00:28:33,800 Speaker 1: opening up the frontier for this vision that he has 529 00:28:34,080 --> 00:28:36,280 Speaker 1: of people living and working one day in space. 530 00:28:37,800 --> 00:28:40,000 Speaker 2: I have to say, you make a very strong case. 531 00:28:40,200 --> 00:28:43,760 Speaker 2: You've come quite close to turning my mind around about this. 532 00:28:43,920 --> 00:28:45,800 Speaker 4: And you know, I feel like there's a butt. 533 00:28:46,000 --> 00:28:48,520 Speaker 2: It makes me feel terrible to go after this story 534 00:28:48,560 --> 00:28:51,200 Speaker 2: so much because gender equality, women in stem these are 535 00:28:51,360 --> 00:28:54,720 Speaker 2: very important things to me. But the whole way that 536 00:28:54,760 --> 00:28:59,960 Speaker 2: this happened in reality I found distressing for a number 537 00:28:59,920 --> 00:29:03,880 Speaker 2: of reasons. There were just the details I thought were 538 00:29:03,960 --> 00:29:08,920 Speaker 2: so difficult for me to swallow. The crew they called themselves, 539 00:29:09,000 --> 00:29:12,120 Speaker 2: I think the six women taking up space by the way, 540 00:29:12,160 --> 00:29:14,400 Speaker 2: which is also terrible. I feel like they did not 541 00:29:14,520 --> 00:29:17,400 Speaker 2: do themselves any favors. Like Lauren san just had special 542 00:29:17,440 --> 00:29:21,320 Speaker 2: like sexy spacesuits designed, and like Katie Perry gave an 543 00:29:21,320 --> 00:29:23,840 Speaker 2: interview and said she was putting the ass an astronaut. 544 00:29:24,160 --> 00:29:26,360 Speaker 2: There was like one of the passengers yelled, oh my 545 00:29:26,440 --> 00:29:28,720 Speaker 2: goddess while you were taking off. 546 00:29:30,320 --> 00:29:33,240 Speaker 1: Oh my god, my god, oh my goddess. 547 00:29:33,880 --> 00:29:36,840 Speaker 2: Which is perhaps the worst of the details. 548 00:29:37,040 --> 00:29:40,479 Speaker 1: I'm gonna make you feel even worse about this because 549 00:29:40,520 --> 00:29:42,720 Speaker 1: I feel like there was a little bit of sexism 550 00:29:42,760 --> 00:29:45,000 Speaker 1: in the in the coverage, like when Bezos went up 551 00:29:45,000 --> 00:29:49,720 Speaker 1: on the first launch, same skepticism in his cowboy hat. 552 00:29:49,800 --> 00:29:53,680 Speaker 1: I mean he was gently ridiculed. When William Shatner went up. 553 00:29:53,800 --> 00:29:57,600 Speaker 1: They did a whole documentary about his enlightening, mind blowing 554 00:29:57,680 --> 00:29:59,760 Speaker 1: experience and yeah, I mean. 555 00:30:00,080 --> 00:30:01,600 Speaker 2: And change and he's earned his. 556 00:30:01,640 --> 00:30:04,280 Speaker 4: Stripes, right, It was a lot. 557 00:30:04,640 --> 00:30:07,400 Speaker 1: But I feel like the criticism is shooting fish in 558 00:30:07,440 --> 00:30:10,120 Speaker 1: a barrel a little bit. And look, I might think 559 00:30:10,160 --> 00:30:13,400 Speaker 1: twice about getting on top of a rocket fueled by 560 00:30:14,360 --> 00:30:19,080 Speaker 1: hydrogen and oxygen, having a burn for you know, three minutes, 561 00:30:19,160 --> 00:30:21,960 Speaker 1: going up one hundred kilometers and then going back into 562 00:30:22,000 --> 00:30:24,560 Speaker 1: free fall like it's you know, I don't know. I 563 00:30:24,560 --> 00:30:26,760 Speaker 1: give him credit for a little bit of bravery. 564 00:30:27,200 --> 00:30:28,560 Speaker 2: Okay, Okay, I see that. 565 00:30:28,600 --> 00:30:31,320 Speaker 1: And by the way, one less point Elon Musk is 566 00:30:31,360 --> 00:30:34,600 Speaker 1: not has not strapped himself a top of a SpaceX rocket, 567 00:30:35,080 --> 00:30:38,840 Speaker 1: you know, for for all skill, yeah, religious fervor about 568 00:30:38,880 --> 00:30:41,680 Speaker 1: space travel and going to Mars. He has not taken 569 00:30:41,760 --> 00:30:48,280 Speaker 1: the risk that Jeff Bezos's fiancee took in the past week. 570 00:30:49,240 --> 00:30:51,200 Speaker 2: So bred would you say it's fair that you're like 571 00:30:51,240 --> 00:30:54,480 Speaker 2: a semi believer in the space tourism business right now, 572 00:30:54,720 --> 00:30:55,720 Speaker 2: I'm a space geek. 573 00:30:56,000 --> 00:30:57,040 Speaker 1: I have to be a believer. 574 00:30:57,480 --> 00:31:00,480 Speaker 2: Oh me too. I love all of that, Like the 575 00:31:00,560 --> 00:31:04,320 Speaker 2: amazing images coming back from the telescopes out in the universe. 576 00:31:04,360 --> 00:31:07,440 Speaker 2: It is pretty spectacular, but also for our listeners, like 577 00:31:07,520 --> 00:31:09,640 Speaker 2: what do you think of the business of space, what 578 00:31:09,640 --> 00:31:14,000 Speaker 2: do you think about the six women taking up space 579 00:31:14,080 --> 00:31:16,360 Speaker 2: and that whole journey. We would love to hear from you. 580 00:31:16,360 --> 00:31:19,040 Speaker 2: You can send us an email at Everybody's at Bloomberg 581 00:31:19,120 --> 00:31:23,240 Speaker 2: dot net. That's Everybody's with an s at Bloomberg dot net. 582 00:31:27,200 --> 00:31:31,000 Speaker 2: Everybody's Business is produced by Stacy Wong. Magnus Hendrickson is 583 00:31:31,040 --> 00:31:34,280 Speaker 2: our supervising producer, Amy Kean is our editor, and Brendan 584 00:31:34,320 --> 00:31:39,280 Speaker 2: Francis Nenam is our executive producer. Sage Bauman heads Bloomberg Podcasts. 585 00:31:39,520 --> 00:31:41,760 Speaker 1: Thanks for listening and see you next week.