Speaker 1: You're listening to the Bloomberg Opinion podcast count US Saturdays
Speaker 1: at one and seven pm Eastern on Bloomberg dot Com,
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Speaker 2: Welcome to Bloomberg Opinion I Amy Morris. Meetings take up
Speaker 2: a lot of time, maybe more than you'd like. In
Speaker 2: a Microsoft report from earlier this year, workers said inefficient
Speaker 2: meetings were the primary barrier to getting stuff done, and
Speaker 2: now there's one company that is resorting to putting a
Speaker 2: price on those meetings. Then we'll be taking you to
Speaker 2: San Francisco, which is having a rough go of it
Speaker 2: as its population shrinks, its real estate values are dropping,
Speaker 2: and downtown activity has fallen off a cliff. Can San
Speaker 2: Francisco avoid the fate that has befallen Detroit? And then
Speaker 2: we'll look at the weather and climate and the heat
Speaker 2: and how Maine, Minnesota, and Michigan are replacing Florida and
Speaker 2: Arizona as retirement destinations. But we begin with a partisan
Speaker 2: fight on Capitol Hill in the House of Representatives over
Speaker 2: a bill that normally would be an easy vote. Far
Speaker 2: right Republicans loaded up the National Defense Authorization Act with
Speaker 2: dozens of amendments on issues like abortion, book banning, renaming
Speaker 2: military bases, and more. Some of those amendments pushed by
Speaker 2: GOP Senator Tommy Tubberville of Alabama. White House Press Secretary
Speaker 2: Caree Jean Pierre responded.
Speaker 3: Senator Tubberville is hijacking what has traditionally been a bipartisan process,
Speaker 3: the National Defense Authorization Act. He's also delaying the confirmation
Speaker 3: of hundreds of qualified and capable military nominees, depriving our
Speaker 3: armed forces of leadership it needs.
Speaker 2: Okay, let's get a closer look.
Speaker 4: Now.
Speaker 2: Blueberg opinion columnist Jonathan Bernstein covers politics and policy, and
Speaker 2: he joins me. Now and Jonathan, the odds that those
Speaker 2: provisions that were tacked on to the Defense bill are
Speaker 2: going to be stripped off anyway. And if that's the case,
Speaker 2: what's the big deal. Why are we worried about this thing?
Speaker 5: It's not clear when we're going to actually get a
Speaker 5: Defense Authorization Bill, which is needed for various policies to
Speaker 5: take effect. It needs to pass every year because policies
Speaker 5: change and have to be updated. So that's one piece
Speaker 5: of it. It's also telling us a lot about what's
Speaker 5: going on in the House generally, and what is going
Speaker 5: to happen with appropriations bills is the basic spending bills
Speaker 5: that fund the rest of the government, which are due
Speaker 5: at the end of September, and which we very well
Speaker 5: may not get until after a government shutdown.
Speaker 2: In your call on you say that this could foreshadow
Speaker 2: a potential government shutdown, and I thought, wait, what, But
Speaker 2: this the National Defense Authorization Act that's supposed to be
Speaker 2: the easy one, and it doesn't seem to be working
Speaker 2: that way with the easy one. So I'm worried about
Speaker 2: the hard ones now too.
Speaker 5: And this is again the dynamic within the House of
Speaker 5: Representatives is that Republicans have a very narrow majority. They
Speaker 5: can only afford to lose four or five votes if
Speaker 5: they want to pass something by a party line vote.
Speaker 5: And because of the rules about speaker elections, the House
Speaker 5: Freedom Caucus and other radical Republicans are constantly threatening to
Speaker 5: revolt against Speaker Kevin McCarthy, and they can force a
Speaker 5: vote to kick him out basically at any point. And
Speaker 5: he's reacted to this by appeasing them constantly, by trying
Speaker 5: to stay on their good side. The result is what
Speaker 5: they're trying to do is they keep trying to pass
Speaker 5: these things by a party line vote. And the problem
Speaker 5: with that is that the House is not the entire government.
Speaker 5: We have divided government with a Democratic majority in the
Speaker 5: Senate and with the Democratic president. So if you pass
Speaker 5: something by a party line vote in the House with
Speaker 5: no Democrats, well you're going to get no Democrats in
Speaker 5: the Senate. You're not going to get a presidential signature.
Speaker 5: So you're gonna get you know, the bill's going to
Speaker 5: go nowhere. And the House is repeatedly, you know, taking
Speaker 5: these votes on things which can't get anywhere, and because
Speaker 5: this radical group is insisting on it, and because McCarthy
Speaker 5: is a piece of them.
Speaker 2: Let's look a little bit at the House Speaker McCarthy then,
Speaker 2: because it sounds like all of this goes back to
Speaker 2: that speaker position. And let's remember when he ran to
Speaker 2: become House Speaker, there were a lot of votes that
Speaker 2: were taken before he actually was able to land the position.
Speaker 2: Did that maybe paint the picture? Did that sort of
Speaker 2: set the table for what we are seeing now where
Speaker 2: he has to keep everybody happy, which is impossible to do.
Speaker 2: I don't care who you are or where you work,
Speaker 2: You're not going to keep everybody happy. But that's the
Speaker 2: position he may be in now, to be.
Speaker 5: Fear of McCarthy. This is something that goes back well
Speaker 5: before him, and the last two were public speakers before this.
Speaker 5: Paul Ryan and John Bayner both basically threw up their
Speaker 5: hands and left cause they had to deal with they,
Speaker 5: you know, because there's this group of by now it's
Speaker 5: thirty forty fifty Republicans whose whole sort of goal in
Speaker 5: life is to prove that they're the true conservatives as
Speaker 5: opposed to the rest of the party. And by now
Speaker 5: we've got some some of them who are particularly sort
Speaker 5: of off the wall, you know, and and and that
Speaker 5: group seems to get larger every year. There's no way
Speaker 5: to appease them. They're not going to Eventually, you have
Speaker 5: to pass these bills. You have to pass the defense
Speaker 5: aviization bill, you have to pass spending bills, you have
Speaker 5: to pass, as we saw back in the spring, the
Speaker 5: debt limit. And so eventually you're gonna have to make
Speaker 5: a compromise with the Democrats, and this whole group they
Speaker 5: exist to denounce compromise, you know, the compromise, feeling the
Speaker 5: compromise you know is there is there number one principle
Speaker 5: and you can't you know, there's no solution for the
Speaker 5: speaker to get over this. Now McCarthy is particularly bad
Speaker 5: at it because what he's his tactic seems to be
Speaker 5: get through today, don't worry about tomorrow. What that winds
Speaker 5: up doing is at the end he has to cut
Speaker 5: a deal because the bills have to eventually pass. They
Speaker 5: may pass after a debt Liamic crisis, as we saw
Speaker 5: the first time. They may pass after a government shutdown,
Speaker 5: but no matter. You know, the government can shut down
Speaker 5: for a week, for six weeks, for ten weeks. Eventually
Speaker 5: they're going to have to cut a deal on spending bills.
Speaker 5: That bill, that compromise is going to be denounced by
Speaker 5: the House Freedom Caucus as the Delimit deal was denounced
Speaker 5: by them, because that's their whole point. That's you know,
Speaker 5: we know they're going to denounce whatever deal is reached,
Speaker 5: and they're going to say that McCarthy sold them out.
Speaker 5: But McCarthy sort of figures, well, i'll put I'll deal
Speaker 5: with that later instead of you know, what he could
Speaker 5: have done is he could have said, look, we'll pass
Speaker 5: this thing. It'll pass with a bipartisan majority. The bill,
Speaker 5: the Defense Authorization Bill, passed out of the MIDI with
Speaker 5: a fifty four to one vote bipartisan almost unanimous vote.
Speaker 5: They could have passed that same bill, you know, with minor,
Speaker 5: non controversial amendments. They could have passed that bill on
Speaker 5: the House floor. But you know, with four hundred votes
Speaker 5: losing thirty votes or maybe three hundred and eighty votes
Speaker 5: something like that. There's four hundred and thirty five in
Speaker 5: the House. They could have passed it with an overwhelming
Speaker 5: bipartisan majority. That would have, you know, given them negotiating
Speaker 5: position against the Senate. They might have passed a bill
Speaker 5: that was more in tune with some Republican priorities than
Speaker 5: the Senate bill. They would have kind of deal, they
Speaker 5: would have gone halfway. You know, things would have worked out. Okay.
Speaker 5: As it is, they've got all these off the wall amendments.
Speaker 5: Senate it's not interested in any of that. Senate's going
Speaker 5: to pass the Senate version of a bipartisan bill. It's
Speaker 5: probably going to pass with ninety votes maybe more, out
Speaker 5: of the one hundred votes in the Senate, and they're
Speaker 5: going to tell the House take it or leave it.
Speaker 5: And the same thing is going to happen with spending bills.
Speaker 2: Okay, we are talking with Bloomberg opinion column is Jonathan
Speaker 2: Bernstein on the future of the upcoming congressional agenda. Jonathan,
Speaker 2: I want to look farther into the future now. You
Speaker 2: say in your column, and you just said in that
Speaker 2: answer that they're more concerned about proving that they're the
Speaker 2: true conservatives rather than nudging the public policy in their direction.
Speaker 2: Is the GOP fundamentally changing, is it turning away from
Speaker 2: its traditional conservative roots? And if so, what is a
Speaker 2: true conservative?
Speaker 5: You know, a true conservative seems to be what anybody
Speaker 5: who claims to be conservative and is taken seriously within
Speaker 5: the party and especially within the most important people in
Speaker 5: the party, which is the Republican Onliine media, Fox News,
Speaker 5: the talk shows, the podcasts. You know, if you can,
Speaker 5: if they certify you as conservative, then your conservative. It
Speaker 5: has nothing to do with public policy. Sometimes it has
Speaker 5: to do with how much you support Donald Trump these days.
Speaker 5: Sometimes it has to do with whether you're in favor
Speaker 5: of a government default back in the spring, or how
Speaker 5: much you were in favor of a shutdown, a government
Speaker 5: shutdown and against the eventual compromise. So yeah, I mean,
Speaker 5: it's not values about size of government or particular programs,
Speaker 5: although you know there's still conservatives who have preferences about
Speaker 5: those things. It's about these ideas of never compromising, going
Speaker 5: hard after Democrats, going hard after liberals, supporting Donald Trump,
Speaker 5: supporting other controversial Republicans, and it's not about policy, and
Speaker 5: therefore when they lose over policy, which they're going to
Speaker 5: do as a result of all this, that deadly count
Speaker 5: for them.
Speaker 2: So you do see the GOP changing in the Republican Party,
Speaker 2: turning away from what we would consider the traditional sort
Speaker 2: of Reaganesque Republican reagan Esque conservativism. Is there any way
Speaker 2: the pendulum is going to swing back.
Speaker 5: That's the million dollar question about US politics. In a
Speaker 5: lot of ways, political scientists tend to think that parties
Speaker 5: will care about elections enough that if they lose a
Speaker 5: bunch of elections they moderate. We'll see Republicans certainly have
Speaker 5: not moderated after the twenty twenty election. Part of the
Speaker 5: problem for the Republican Party is that because Republican aligned
Speaker 5: media is so central within the party, and because Fox
Speaker 5: News isn't damaged when Republicans lose elections, they in fact
Speaker 5: probably do better. Republican books sell better for the Democrat
Speaker 5: in the White House, you know. So there's a real
Speaker 5: breakdown where it's not entirely clear that the electoral incentive,
Speaker 5: which is the big thing that causes parties to try
Speaker 5: to reach to the center, to reach to as many
Speaker 5: people as they can, whether that's still working for Republicans.
Speaker 5: And that's scary stuff.
Speaker 2: Bloomberg Opinion columnist Jonathan Bernstein also covers politics in policy. Now,
Speaker 2: coming up, we're going to take a look at what
Speaker 2: one company is doing to discourage meetings. You're listening to
Speaker 2: Bloomberg Opinion.
Speaker 1: You're listening to the Bloomberg Opinion podcast counts Saturdays at
Speaker 1: one in seven pm Eastern on Bloomberg dot Com, the
Speaker 1: iHeartRadio app, and the Bloomberg Business app, or listen on
Speaker 1: demand wherever you get your podcasts.
Speaker 2: You're listening to Bloomberg Opinion. I'm Amy Morris. Have you
Speaker 2: ever been to a meeting? Could have actually been an email?
Speaker 2: Evidently the folks that shopify have, and the company is
Speaker 2: putting a price on meeting creep. The way meetings tend
Speaker 2: to take up so much time you can't get any
Speaker 2: work done. Bloomberg Opinion editor Sarah Green Carmichael looked at
Speaker 2: this and joins us now with some insights, what is
Speaker 2: the new Shopify practice when it comes to meetings.
Speaker 6: So, the new Shopify practice is that when you go
Speaker 6: into your calendar, they have now added a calendar add
Speaker 6: on that when you schedule the meetings the average salaries
Speaker 6: of the people that you've invited and the length of
Speaker 6: the meeting, and it gives you a little red price
Speaker 6: tag saying, hey, this meeting is costing US seven hundred
Speaker 6: dollars or seventeen hundred dollars, or even if you've invited
Speaker 6: a senior executive, probably over two thousand dollars for a
Speaker 6: thirty minute meeting. So they are hoping that this will
Speaker 6: work with the other meeting practices they've already implemented, like
Speaker 6: banning meetings, standing meetings with more than three people, can't
Speaker 6: have a regular meeting with that many people, and trying
Speaker 6: to keep Wednesday's meeting free. So they're hoping that together
Speaker 6: this will all help cut down on meeting creep.
Speaker 2: So that the motivation of this meeting creep were they
Speaker 2: discovering that the productivity was dropping, or were they hearing
Speaker 2: complaints from employees or even middle managers or managers saying
Speaker 2: all these meetings are keeping me from actually doing my
Speaker 2: real job.
Speaker 6: Shopify seems to have really diagnosed too many meetings as
Speaker 6: a serious problem for them. I think what's unusual about
Speaker 6: them is that, you know, such complaints are very common
Speaker 6: at companies, you know, and if you look at employee surveys,
Speaker 6: you know, microsofted one earlier this year. They across companies
Speaker 6: and found that meetings excessive meetings with a number one
Speaker 6: productivity killer identified by employees. A lot of companies say,
Speaker 6: you know, we have too many meetings. They're scattered throughout
Speaker 6: the day. I can't get anything done that's meeting. Good
Speaker 6: of been an email. But Shopify actually seems to be
Speaker 6: taking some serious measures publicly to try and really curtail
Speaker 6: that problem. So that's really what's unusual. It's not that
Speaker 6: Shopify has some crazy meeting problem, it's that they're actually
Speaker 6: trying to solve it.
Speaker 2: Is there a chance or risk that this could somehow backfire?
Speaker 6: Oh definitely.
Speaker 4: So.
Speaker 6: I think a couple of things about that. One is
Speaker 6: that when you convince people that time is money, they
Speaker 6: actually become less helpful there's some really interesting research on
Speaker 6: this out of Harvard Business School where they you know,
Speaker 6: prime subjects to think of money and time as sort
Speaker 6: of fungible, and when people think that way, they become
Speaker 6: more stressed, they become less likely to help one another.
Speaker 6: So if what you're trying to do is kind of
Speaker 6: promote collaboration, this could actually backfire by making people less
Speaker 6: likely to collaborate. There could also be you know, challenges,
Speaker 6: uh with how this interacts with other aspects of their culture.
Speaker 6: You know, at companies that have very consensus driven leadership styles,
Speaker 6: often you need to have a meeting to make a
Speaker 6: decision because you know, otherwise how do you get all
Speaker 6: the stakeholders to send off on it. So if you
Speaker 6: just ban meetings but you don't address something like, oh,
Speaker 6: you know, we have an overly consensus driven culture, then
Speaker 6: you've sort of set yourself up for a conflict.
Speaker 2: We've sort of established in this interview that useless meetings
Speaker 2: maybe just this universal issue a problem for companies all
Speaker 2: over the world. So could other places adopt this? Is
Speaker 2: that likely or is this too radical?
Speaker 6: I don't think it's too radical. In fact, you know,
Speaker 6: I'm kind of surprised that There isn't already an app
Speaker 6: that any of us could install, you know, in Microsoft
Speaker 6: Outlook or Google Calendar, whatever we're using that says, hey,
Speaker 6: you know, this meeting probably costs about you know, xyz
Speaker 6: amount based on the people you've invited. I think this
Speaker 6: is something that companies have sort of talked about for
Speaker 6: a long time. There have been some apps that you
Speaker 6: could get if you went out of your way to
Speaker 6: download it on your phone, but you have to be
Speaker 6: really motivated ort to do that. So I'm a little
Speaker 6: surprised that this is only just coming up now. I
Speaker 6: think we've also seen other companies experiment with things like
Speaker 6: meeting free days or Zoom free days. It's obviously been
Speaker 6: difficult to implement, given that we are still talking about it,
Speaker 6: but you know, even something like a half day free
Speaker 6: of meetings can have real productivity benefits.
Speaker 2: Where do all these meetings come from? Sarah, Oh, good question.
Speaker 6: I think one reason we seem to have so many
Speaker 6: meetings now is actually that we don't have offices anymore.
Speaker 6: You know, back in the days, people had private offices.
Speaker 6: If you needed to have a quick word, you just
Speaker 6: pull someone into your office. And now everything has to
Speaker 6: be a meeting because you probably have to reserve a
Speaker 6: conference room, and that's what sort of makes something feel
Speaker 6: like a meeting instead of a quick chat. So the
Speaker 6: loss of privacy and offices has actually increased the sense
Speaker 6: where we need to have designated times and spaces known
Speaker 6: as meetings to talk to each other. And then there's
Speaker 6: also sort of a shift in cultural norms. People don't
Speaker 6: generally pick up the phone anymore and just call people
Speaker 6: out of the blue. Usually you send an email or
Speaker 6: a text saying, hey, is this a good time to
Speaker 6: chat for whatever reason? And I think a meeting is
Speaker 6: kind of the same thing. You're kind of saying, Hey,
Speaker 6: could we all meet at this time? Maybe that's because
Speaker 6: we just feel so busy these days, but so there's
Speaker 6: definitely some other broader shifts that are helping to propel
Speaker 6: meetings to become more common.
Speaker 2: You know, I was going to ask if the pandemic
Speaker 2: and working from home had an impact on this, and
Speaker 2: it sounds like it did. But what you just said
Speaker 2: was something had not occurred to me, which was like
Speaker 2: the open office space that really could have had more
Speaker 2: of an impact than I even realized as we are
Speaker 2: living through it.
Speaker 6: Yeah, I think that the meeting problems long predate the
Speaker 6: pandemic and are much more driven by things like office design.
Speaker 6: But definitely the pandemic has had a compounding effect. You know,
Speaker 6: when people are in different locations, whether that's because some
Speaker 6: are working from home or because you just are in
Speaker 6: a company where employees are scattered among different offices, different cities,
Speaker 6: that does mean that it takes more effort to collaborate.
Speaker 6: You can't just sort of quickly have a spontaneous conversation.
Speaker 6: It has to take some planning, and that makes it
Speaker 6: a meeting. And the other issue here is that I
Speaker 6: think so much meeting scheduling software defaults to an hour
Speaker 6: or even half an hour, when you probably just need
Speaker 6: ten minutes.
Speaker 2: I was working literally decades ago at a different company
Speaker 2: where the employees would tend to take matters into their
Speaker 2: own hands. I worked with one gentleman who, when he
Speaker 2: knew a meeting was coming, and he knew that this
Speaker 2: was one of those meetings where you could have just
Speaker 2: had it done an email, it does and have to
Speaker 2: be a meeting. He would have the secretary at the
Speaker 2: front desk, let's say, wait ten minutes and call my
Speaker 2: cell phone, and then she'd call him and oh, I'll
Speaker 2: be right there. I'm sorry, I have to leave the meeting.
Speaker 2: To your point of this has been going on for
Speaker 2: a long time and finally now people are starting to
Speaker 2: pick up on it.
Speaker 6: Yes, you know, And to your point about people taking
Speaker 6: matters into their own hands, I was known also at
Speaker 6: a previous company to put fake meetings on my calendar
Speaker 6: just to get some breaks in the day from the
Speaker 6: back to back meetings so that I could do other works,
Speaker 6: so I could actually get my heads down work done.
Speaker 6: And I learned that you can't block out like three
Speaker 6: hours because everyone looks at your calendar and realizes that's
Speaker 6: a fake meeting. But if you put in that sort
Speaker 6: of three back to back hour long blocks, then you
Speaker 6: could get yourself some thinking time, some worktime without really
Speaker 6: people realizing that you're actually not in meetings all that time.
Speaker 6: But yeah, at companies where there's meeting creep is real,
Speaker 6: employees have to resort to these sort of almost comical
Speaker 6: or cough can ask kind of ways to fight back
Speaker 6: because otherwise there's no time to do any of your
Speaker 6: other work.
Speaker 2: And to be fair, meetings are not inherently evil or wasteful.
Speaker 2: It's just they're just so dug on many of them.
Speaker 2: What's the best use of meetings?
Speaker 6: The best use of meetings is really for conversations that
Speaker 6: would be difficult to have in other formats, so to
Speaker 6: talk about with it, to talk with employees, not at employees,
Speaker 6: you know, to talk about, Hey, how's this project going,
Speaker 6: What are the obstacles in your way? Do we need
Speaker 6: to reassign this work? Is there something going off the
Speaker 6: rails that we need to course correct? Those kinds of
Speaker 6: conversations are really the highest and best use of meetings,
Speaker 6: And to your point, those meetings are really valuable. One
Speaker 6: of the researchers I talked to for this column was
Speaker 6: a gentleman named Ben Laker who's a professor in the UK,
Speaker 6: and he had actually done a survey of companies that
Speaker 6: tried to ban meetings, and companies without meetings really saw
Speaker 6: productivity decline, engagement decline. It's not you need some meetings,
Speaker 6: you can't go entirely without. So well, I guess we
Speaker 6: can just make sure that we're not throwing a baby
Speaker 6: out with the bathwater.
Speaker 2: Everything in moderation. Sarah, thank you so much for taking
Speaker 2: the time with us.
Speaker 6: Thanks for having me.
Speaker 2: Bloomberg Opinion editor Sarah Green Carmichael with insight into the
Speaker 2: useless meeting phenomenon, and don't forget We're available as a
Speaker 2: podcast on Apple, Spotify or your favorite podcast platform. Coming up.
Speaker 2: San Francisco not necessarily destined to be the next Detroit,
Speaker 2: but how will it break out of its downward spiral?
Speaker 2: This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Opinion podcast count Us Saturdays
Speaker 1: at one and seven pm Eastern on Bloomberg dot Com,
Speaker 1: the iHeartRadio app and the Bloomberg Business App, or listen
Speaker 1: on demand wherever you get your podcasts.
Speaker 2: You're listening to Bloomberg Opinion. San Francisco has been having
Speaker 2: a rough year, well a rough decade really. Last year's
Speaker 2: Census Bureau numbers show the estimated population of San Francisco
Speaker 2: is down seven and a half percent from twenty twenty.
Speaker 2: That's a lot. Downtown activity is dipped to sixty eight
Speaker 2: percent below pre pandemic levels. Commercial real estate values have
Speaker 2: fallen as much as eighty percent. Conventional wisdom says San
Speaker 2: Francisco may be on the fast track to be the
Speaker 2: next Detroit, But not so fast, says Bloomberg opinion columnist
Speaker 2: Justin Fox. Justin covers economics and business and he joins
Speaker 2: us now. Justin tell us the similarities between San Francisco
Speaker 2: and Detroit.
Speaker 4: Superficially, it's two things. One is the population drop in
Speaker 4: San Francisco. Detroit, I mean, obviously has been doing it
Speaker 4: for a lot longer. It has lost population every decade
Speaker 4: since nineteen fifty. And San Francisco had lost population in
Speaker 4: the sixties and seventies, like a lot of cities, but
Speaker 4: then started growing again and has dropped now and then.
Speaker 4: The other is just that clearly there are parts of
Speaker 4: San Francisco, mostly not too far from downtown, and I
Speaker 4: think a lot of this is on cable TV news
Speaker 4: a lot that are just have some real issues with
Speaker 4: mainly drug addicted people on the streets, and there's crime
Speaker 4: related to that, although it's kind of when you look
Speaker 4: at like murders and stuff. San Francisco is not a
Speaker 4: particularly dangerous city, at least not by American standards. So
Speaker 4: that's the comparison. It's like, Detroit is this city where
Speaker 4: everything went wrong. San Francisco is a city that's on
Speaker 4: top of the heap, has been on top of the
Speaker 4: heap which actually Detroit was back in the late forties.
Speaker 4: It was the most affluent large city in the country,
Speaker 4: as San Francisco has been over the past decade, and
Speaker 4: so hey could be could be the beginning of something terrible.
Speaker 2: Okay, On that note, San Francisco is a tech heavy region,
Speaker 2: though I would have thought that that would have given
Speaker 2: them some sort of advantage.
Speaker 4: Well, I mean, part of the issue is, I mean,
Speaker 4: the auto industry was a tech industry when it began
Speaker 4: in the early days in Detroit. It was full of
Speaker 4: startups and that era's form of venture capital and lots
Speaker 4: and lots of competition, and around in the fifties that
Speaker 4: it started consolidating. I mean, it probably started long before them,
Speaker 4: but it really consolidated into the Big three or even
Speaker 4: really two and a half. Even Chrysler couldn't really keep
Speaker 4: up with the others, and that job started moving out
Speaker 4: of the city proper, and then eventually the whole Detroit region.
Speaker 4: I guess the issue is could tech be something like that?
Speaker 4: So far, there have been individual tech industries like semiconductors
Speaker 4: that have started up in the San Francisco area. Really
Speaker 4: San Jose area consolidated, moved most of the jobs and
Speaker 4: then new ones have come along, But I guess that
Speaker 4: can't go on forever. And there's certainly been this sort
Speaker 4: of There are now these giants Apple, Google, Alphabet, and
Speaker 4: Meta that are just these really big dominant companies, and
Speaker 4: so I think there's been some concern there are some
Speaker 4: things about what's going on with tech that are a
Speaker 4: little bit similar to what happened with the maturing of
Speaker 4: the auto industry.
Speaker 2: You mentioned both Detroit and San Francisco in their heyday.
Speaker 2: Does that seem more like a dramatic fall because they
Speaker 2: are or were on top of the heap. The bigger
Speaker 2: they are, the harder they fall.
Speaker 4: I don't know, because I mean San Francisco has been
Speaker 4: among the more affluent, definitely metropolitan areas pretty much all along.
Speaker 4: I mean, Detroit had this moment in mid century, and
Speaker 4: you know New York has never New York area has
Speaker 4: never fallen all that far. The city did for a while.
Speaker 4: So I don't think there's this inevitable thing that the
Speaker 4: mighty must fall. And I guess so one of the
Speaker 4: things I did I started thinking it's basically an editor
Speaker 4: here asked, Hey, could you do a column on this?
Speaker 4: And I thought, well, I guess I should learn more
Speaker 4: about Detroit. And there's this classic history written in the
Speaker 4: nineties by Thomas Sugru I hope I'm pronouncing that right,
Speaker 4: A professor history professor at NYU A out The Fall
Speaker 4: of Detroit. It's really interesting because I think most people
Speaker 4: it's called the Origins of the Urban Crisis, race and inequality,
Speaker 4: and post war Detroit. Most narratives of Detroit kind of
Speaker 4: start with the riots of nineteen sixty eight and how
Speaker 4: it went downhill from there. Suh's book stops right before them,
Speaker 4: and he just sort of paints this picture of how
Speaker 4: everything was already unraveling before that. It was really it
Speaker 4: was two things. One was sort of the consolidation and
Speaker 4: change in the auto industry, and one is just the
Speaker 4: incredible racial polarization in Detroit, where black workers had started
Speaker 4: coming up before World War two, and basically Ford had
Speaker 4: been pretty welcoming to black workers, but none of the
Speaker 4: other automakers during the war things really opened up because
Speaker 4: there was such labor shortages. They were still all forced
Speaker 4: to live in a couple of really tiny, decrepit old
Speaker 4: neighborhoods in the city, and basically Detroit's mayors for about
Speaker 4: twenty years there. Their main calling card was keeping black
Speaker 4: people from moving into white neighborhoods. That finally broke through
Speaker 4: and it became Detroit was this mostly black city and
Speaker 4: all the suburbs were trying to keep the black people out.
Speaker 4: It was just this long history of just total sort
Speaker 4: of metropolitan area dysfunction and conflict. That's just not the
Speaker 4: vibe in the Bay Area at all. And so that
Speaker 4: I guess to me, it's like that's that second part
Speaker 4: of the Detroit story that caused things to go so
Speaker 4: badly there that I just it's hard to see any
Speaker 4: parallel to that in the San Francisco area.
Speaker 2: And just to clarify, I wasn't trying to imply that
Speaker 2: a fall is inevitable because of the city's success, right,
Speaker 2: I was mainly wondering about the perception of the fall
Speaker 2: being more dramatic because it's such a long way down
Speaker 2: when you're on the top.
Speaker 4: Yeah, that's true. I mean, the city of San Francisco
Speaker 4: median household income is about a h twenty thousand dollars
Speaker 4: and the national is around seventy and so that's a
Speaker 4: lot higher. And even you know, if it just became
Speaker 4: a normal place, there's a lot of you know, houses,
Speaker 4: housing prices would have to fall a lot and a
Speaker 4: lot of other things would have to change. And I mean,
Speaker 4: what's happening in San Francisco now, most of all is
Speaker 4: simply that people stop going into the office. And I
Speaker 4: mean we've got versions of that everywhere. I mean, DC,
Speaker 4: I think is one of the other places where it's
Speaker 4: been most extreme. But DC's sort of different because it's
Speaker 4: all these federal agencies that people aren't coming into and
Speaker 4: that just hasn't had the same real estate ramifications.
Speaker 2: Yet how did they get here? You mentioned the pandemic,
Speaker 2: you mentioned the shutdown, You mentioned people not going into work,
Speaker 2: and the decline of the of the real estate. They
Speaker 2: can't be all of it, though.
Speaker 4: You could see starting about six or seven years ago
Speaker 4: some signs that things had peaked in San Francisco real
Speaker 4: estate values flat doubt it looked like pulp population might
Speaker 4: be starting to flatten out or drop a little bit.
Speaker 4: And it's two things. It's one is it's just so expensive.
Speaker 4: If you're making one hundred and eighteen thousand, five hundred
Speaker 4: and forty seven dollars a year, the median income in
Speaker 4: San Francisco. You can't really afford to buy a house there,
Speaker 4: or probably not an apartment either. Problem two is that
Speaker 4: San Francisco has just had this issue and it's not
Speaker 4: unrelated to the housing problem, but it's it's to some
Speaker 4: extent separate. San Francisco has had this very tolerant attitude
Speaker 4: towards sort of street behavior, from sleeping on the street
Speaker 4: to also just acting out using drugs other things on
Speaker 4: the street. It's been an issue in the city since
Speaker 4: the eighties. I mean the Tenderline district and sort of
Speaker 4: the areas towards City Hall have been troubled for decades.
Speaker 4: But it felt like, and I think in various statistics
Speaker 4: it showed up that things were sort of getting worse
Speaker 4: in towards the in the years before the pandemic.
Speaker 2: What is the lesson from Detroit and now from San
Speaker 2: Francisco that other American cities probably should take to heart.
Speaker 4: One of it is just if things don't seem to
Speaker 4: be working, you should try to change them, and that's
Speaker 4: sort of San Francisco's need right now. I guess the
Speaker 4: other one is just that what happened to the Detroit area,
Speaker 4: I mean in the Detroit area is still reasonably prosperous.
Speaker 4: It's sort of middle of the road among big metro areas.
Speaker 4: The city is much poorer, although it's kind of the decline.
Speaker 4: It's still losing a little population, but it's doing it
Speaker 4: seems to have been doing better the last few years.
Speaker 4: And part of it is that there's no longer this
Speaker 4: huge sort of hostility between the city and the suburbs
Speaker 4: that there used to be. There's still a lot of distrust,
Speaker 4: but the politics are no longer as polarized. One of
Speaker 4: the big ones is there's this long history in this
Speaker 4: country of being very suspicious of cities and this whole
Speaker 4: mythology of how the countryside is more decent and whatever.
Speaker 4: And that's fine, but at the same time, when you
Speaker 4: let cities totally disintegrate, it's not really great for the
Speaker 4: suburbs either, And I think there's a pretty widespread understanding
Speaker 4: of that in California. I mean, I guess the issue
Speaker 4: California just has a bunch of statewide issues, from water
Speaker 4: to climate to its tax structure that make it hard
Speaker 4: to fix things. But at least they're not kind of
Speaker 4: at odds with each other in the same way that
Speaker 4: I think Detroit and its suburbs were for decades.
Speaker 2: Bloomberg Opinion colonist Justin Fox. You're listening to Bloomberg Opinion.
Speaker 2: I'm Amy Morris. The world is hot. The National Oceanic
Speaker 2: and Atmospheric Administration NOAH has recorded June as the hottest
Speaker 2: on record, and at least ten days in July as
Speaker 2: even hotter than that. So after years of millions of
Speaker 2: Americans moving to the southeast, transforming real estate markets, there's
Speaker 2: this reverse snowbird migration happening now, and it makes sense
Speaker 2: that more people are migrating back north to beat the heat.
Speaker 2: Joining us not to talk about this. Bloomberg Opinion columnist
Speaker 2: Connor Sen, founder of Peach Tree Creek Investments. Connor, We're
Speaker 2: thinking about some of those northern states, like Maine. Is
Speaker 2: Maine the new retirement destination?
Speaker 7: I believe so. And I had some anecdotal evidence here,
Speaker 7: as a friend of ours who lives in Orlando bought
Speaker 7: a summer home in Maine. So we got to go
Speaker 7: up there and see it. And they're in a new subdivision.
Speaker 7: They say a lot of southern home buyers are moving in.
Speaker 7: And you know, to your point, it's really hot down here.
Speaker 7: In the South. I'm in Atlanta, and people are looking
Speaker 7: for a way to get away, but there's not that
Speaker 7: same history of sort of people going up there, so
Speaker 7: people have to figure out what communities they like and
Speaker 7: kind of build that pipeline to migrate during the summer.
Speaker 2: What sort of migration patterns for lack of a better term,
Speaker 2: are we seeing now.
Speaker 7: So it's hard to see it in the data, but
Speaker 7: school gets out very early here in Atlanta. School gets
Speaker 7: out right before Memorial Day, So for us, it would
Speaker 7: be a sort of go up in June and July
Speaker 7: to get back here for August school year. That would
Speaker 7: sort of be the framework, And so that might be
Speaker 7: a little different for people in the North who are
Speaker 7: used to going back to school around Labor Day. So
Speaker 7: there is a bit of a seasonal difference there, But
Speaker 7: it's really a June and July story.
Speaker 2: I would say, are we talking about retirees specifically, or
Speaker 2: like you just said, we were talking also about families
Speaker 2: with kids, So this must cross demographics.
Speaker 7: My guess is there's probably more of an impulse for
Speaker 7: families just because you want to be active with your
Speaker 7: kids during the summer and when it's ninety five and
Speaker 7: humid or one hundred and fifteen and dry, You can't
Speaker 7: really do that very well. Maybe it's people who are
Speaker 7: sort of more used to new behavior patterns and looking
Speaker 7: to do something like that. So I think families will
Speaker 7: be the key demographic for this, and it's about will
Speaker 7: these communities welcome people like that and can you kind
Speaker 7: of create that amenity and pipeline to make it happen.
Speaker 2: Now, historically it's been Florida and Arizona, the Carolina's welcoming
Speaker 2: winter travel from Northerners. They've built entire industries and economies
Speaker 2: around it. Are we bound to see something like that
Speaker 2: from Maine and Michigan and Minnesota states like that?
Speaker 7: The question that I have that is less clear to
Speaker 7: me is whether these states would want that. I could
Speaker 7: imagine people in Maine who like it a certain way,
Speaker 7: who have been doing it for decades, not being super
Speaker 7: psyched if sort of wealthy Southerners are coming up and
Speaker 7: taking their great restaurants and their housing and driving at costs,
Speaker 7: and people in Minnesota, in Michigan and Wisconsin maybe the
Speaker 7: same thing. So I'm less sure that there'll be the
Speaker 7: embrace of this kind of migration. But again, the demand
Speaker 7: is there from people who want to do it, So
Speaker 7: there's going to be something that happens here.
Speaker 2: How can this trend expand where could we be going
Speaker 2: from here? Are families liable to say buy second homes
Speaker 2: in these cooler climates? Is this just vacation land? What
Speaker 2: are you seeing down the road?
Speaker 7: I think the demand is going to keep growing because
Speaker 7: there's a lot of wealth that's moved down here and
Speaker 7: people who want to get away for the summer. Going
Speaker 7: north is sort of climate wise the place to be.
Speaker 7: And the question is just which communities will embrace this
Speaker 7: and kind of build out to meet that demand. And
Speaker 7: maybe there are struggling parts of of some communities that
Speaker 7: we'll see this as a lifeline and that could be
Speaker 7: an opportunity for them. And so it's really about, well
Speaker 7: communities in the north welcome this and build to it
Speaker 7: or will they kind of fight it? And that it's
Speaker 7: sort of a high cost thing but less opportunity, less capacity.
Speaker 2: Is there any way to tell who would.
Speaker 7: Be more welcoming Anecdotally, I don't know. There's not like
Speaker 7: a trend that people are saying, oh, we're all going
Speaker 7: to Grand Rapids in Michigan to do this with summer, sir,
Speaker 7: But it's kind of like a lot of things where
Speaker 7: once there's a bit of a trickle of a trend,
Speaker 7: there's a word of mouth boom, and then people all
Speaker 7: kind of flock the same places. And so that's what
Speaker 7: I'm interested in over the next five or ten years,
Speaker 7: to see which places capitalize in the opportunity.
Speaker 2: We're going to continue to watch it with you. It's
Speaker 2: really interesting to see how this is developing. Connor, thank
Speaker 2: you so much for taking the time with us. Connorson
Speaker 2: is a Bloomberg Opinion columnist and a founder of Peachtree
Speaker 2: Creek Investments. And that does it for this week's Bloomberg Opinion.
Speaker 2: We're produced by Eric Molop and you can find all
Speaker 2: of these columns on the Bloomberg terminal. We're also available
Speaker 2: as a poddcast on Apple, Spotify or your favorite podcast platform. Now,
Speaker 2: stay with us. Today's top stories and global business headlines
Speaker 2: are coming up. I'm Amy Morris, and this is Bloomberg