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Speaker 3: Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast.
Speaker 3: Another week where it was a given that we would
Speaker 3: talk tariffs, the US China relationship, fed independence, job security
Speaker 3: for Jay Powell, along with a big dose of earnings
Speaker 3: and yes, market volatility, and.
Speaker 1: So that's all ahead as this hour we dig into
Speaker 1: the quarterly updates of two companies, talking supply chains, consumer sentiment,
Speaker 1: and the reality of manufacturing with the CEO of Whirlpool Corporation,
Speaker 1: Mark Bitzer.
Speaker 3: And then it was also a big, big week for
Speaker 3: Tesla as it reported disappointing but not entirely unexpected results
Speaker 3: and getting Elon Musk's presence on the call with analysts
Speaker 3: to announce his soon to come actual presence back at
Speaker 3: or at least is paying more attention to the company
Speaker 3: he runs we will hear from one well known investor
Speaker 3: who owns Tesla's and has at times been a buyer
Speaker 3: and seller of company shares.
Speaker 1: All that to come, we begin with the US China
Speaker 1: trade war, President Trumps signaling an exit ramp may be
Speaker 1: in sight for those sweeping tariffs he's placed on Chinese goods.
Speaker 1: The President said Wednesday that quote everything's active when asked
Speaker 1: if he was engaging with China, and that Beijing was
Speaker 1: quote going to do fine once talks had settled. Meantime,
Speaker 1: US Treasury Secretary Scott Bess and Warren negotiations could take
Speaker 1: up to three years.
Speaker 3: This situation felt really fluid, and there was a lot
Speaker 3: of back and forth throughout the week, which is what
Speaker 3: really kept investors on their toes and markets volatile. Highly
Speaker 3: recommend that you check out the Bloomberg and Bloomberg dot
Speaker 3: com because all of this stuff, as we know, it
Speaker 3: feels like every day there's a whole new batch of headlines,
Speaker 3: especially when it comes to the US China relationship. And
Speaker 3: to help break down the intricate balance between the US
Speaker 3: and China, we turned to Caroline Freund. She is Dean
Speaker 3: of Global Policy and Strategy at uc SAN Diego. She's
Speaker 3: also a former Senior Fellow at the Peterson Institute for
Speaker 3: International Economics, a former Global Director of Trade, Investment and
Speaker 3: Competitiveness at the World Bank, and she also worked at
Speaker 3: the FED and IMF. Her perspective and valuable.
Speaker 1: I want to start with this idea of respect and
Speaker 1: really what it means in the way that China is
Speaker 1: using it in your view in regards to tariffs and
Speaker 1: the tit for tat when it comes to this trade war.
Speaker 4: Yeah, I think you have.
Speaker 5: To take into account that China is a country that
Speaker 5: prides itself on having five thousand years of civilization, so
Speaker 5: a five thousand year history, and they do things gradually.
Speaker 5: They've had the time to learn to do things gradually,
Speaker 5: and Trump is doing things very chaotically and that's not
Speaker 5: something they're used to dealing with.
Speaker 4: There have been comments by.
Speaker 5: Jadie Vance and others talking about peasants lending money to
Speaker 5: buy things made by peasants lending money to the US.
Speaker 5: So this isn't the way to work with China. They
Speaker 5: expect to have a deal worked out by the technical folks,
Speaker 5: and then the leaders to only meet once that deal
Speaker 5: is worked out. So bottom up and gradual, not the
Speaker 5: top down and chaotic that that Trump is initiating.
Speaker 3: So is this just jocking. I keep wondering these two
Speaker 3: economies still kind of need each other or do they not?
Speaker 3: Like is there something we're missing in terms of what's
Speaker 3: going in internally in China? And Tim and I have talked,
Speaker 3: We've listened to some podcasts who said, you know, COVID
Speaker 3: changed a lot of things and a lot of American
Speaker 3: businesses pulled back or executives and eyes on the ground,
Speaker 3: Maybe not so much in China. And there's a lot
Speaker 3: more sophistication in terms of what they are producing and
Speaker 3: how they are doing it that maybe is going unawares
Speaker 3: by the world at large. But help us understand what
Speaker 3: is China today. It's not just a manufacturer of sneakers
Speaker 3: and T shirts.
Speaker 5: No, China is a very advanced country with some of
Speaker 5: the frontier technologies on things like electric vehicles, autonomous driving,
Speaker 5: and even in AI. They've made substantial progress, though they're
Speaker 5: still behind the US. But there is a symbiotic relationship.
Speaker 5: So China is worried about deflation, We're worried about inflation.
Speaker 5: And these are exactly two sides of the same coin
Speaker 5: they have over capacity. We don't really have the capacity
Speaker 5: or know how to do manufacturing anymore. And while there
Speaker 5: have been problems with the relationship, we do need each other.
Speaker 3: And why do we still need each other? Why do
Speaker 3: we still need each other? Because I think there are
Speaker 3: some who say China maybe doesn't I don't know, or
Speaker 3: maybe the US doesn't.
Speaker 5: Well, there are a lot of things we get from
Speaker 5: China that we need to keep our economy going. So
Speaker 5: we live in a world of global supply chains where
Speaker 5: parts and components are coming from China as well as
Speaker 5: other countries. So trying to manufacture in isolation is just
Speaker 5: frankly a non starter. Won't be competitive in a global market.
Speaker 5: China is also sitting on seven hundred billion in US
Speaker 5: dollar assets, so that's another area where China has a
Speaker 5: pretty big trump card to play. I don't think they will.
Speaker 5: It's a country that wants stability. It's a careful in
Speaker 5: any policy move it takes. But we very much need
Speaker 5: each other. We need the goods each other produces, and
Speaker 5: we need to work together and work through this. It's
Speaker 5: not perfect. Some decoupling is probably good, but sudden and
Speaker 5: sharp is going to be painful. And that's why we
Speaker 5: see it. With what's been happening with the stock market now,
Speaker 5: I think we're not only having an own goal, we're
Speaker 5: on our way to an own hat trick.
Speaker 1: The White House Press Secretary Caroline Levit said this week
Speaker 1: that China needs what the US has, which is consumers
Speaker 1: who spend money. Is that accurat in your view?
Speaker 4: Yeah, it is.
Speaker 5: That's why they're suffering deflation, That's why they have excess capacity.
Speaker 5: They need what we have, but we need what they
Speaker 5: have too. We have a population that's used to buying
Speaker 5: things and buying things cheaply. The growth of the Chinese
Speaker 5: economy has been part of what kept inflation so low
Speaker 5: for so long and supported global growth. So yes, they
Speaker 5: need but I wouldn't say that doesn't mean we don't
Speaker 5: need them.
Speaker 4: This is going to hurt us both.
Speaker 5: It may be a question of who it hurts more.
Speaker 5: But there could be a way to make it a
Speaker 5: little softer for both of us.
Speaker 1: You know, one question that I keep asking anyone who
Speaker 1: will speak to me about this is who has the
Speaker 1: leverage in this negotiation between the US and China. You
Speaker 1: said the relationship is symbiotic. These two countries need each other.
Speaker 1: But is there one trading partner that is more powerful
Speaker 1: than the other and why?
Speaker 5: Well, I think initially it looked like the US because
Speaker 5: China's economy is already in a slowdown because of demographics,
Speaker 5: because of their own property issues, property crisis there, so
Speaker 5: it looked like we had more power. They really really
Speaker 5: need our consumer. But there's one thing they have that
Speaker 5: we don't have, which is a population that they can
Speaker 5: control and that is more willing to talk pain than
Speaker 5: the US consumer. So at this point, I think it's
Speaker 5: kind of a toss up.
Speaker 3: So does that just mean President g is willing to
Speaker 3: inflict a little bit more pain maybe on his people
Speaker 3: and means he can kind of fight this fight a
Speaker 3: little bit longer than maybe the US can. Yeah, And
Speaker 3: he has.
Speaker 5: More authorities, so he has complete control of the media.
Speaker 5: So my understanding from Chinese colleagues is that in the
Speaker 5: Chinese press now a lot of people have access to VPNs,
Speaker 5: But in the Chinese press, the average person doesn't know
Speaker 5: that tariffs are over one hundred percent now, so the
Speaker 5: numbers aren't out there, the information isn't out there. There's
Speaker 5: a calm there, and there's an ability to control the economy,
Speaker 5: stimulate the economy, support people that we just frankly don't have,
Speaker 5: as well as the consumer here, who's going to be upset.
Speaker 5: You saw what happen over price of eggs. Imagine when
Speaker 5: that's everything you go to the you go to the
Speaker 5: store for.
Speaker 1: That's a really good point. That is a very good point.
Speaker 4: Hey.
Speaker 1: One of the reasons we wanted to speak to you
Speaker 1: is you have done so much when it comes to trade.
Speaker 1: A reminder, you're a senior fellow at the Peterson Institute
Speaker 1: for International Economics, Global Director of Trade, Investment and Competitiveness
Speaker 1: at the World Bank. How does this trade war end?
Speaker 5: That is the million dollar question. Hopefully it ends with negotiation.
Speaker 5: So there does seem now to be negotiation with other countries.
Speaker 5: Trump has made it clear that if she rings him up,
Speaker 5: he'll take the call. So I think we can get there.
Speaker 5: But right now we have two big trucks driving at
Speaker 5: each other and it looks more like a game of chicken.
Speaker 5: So it's time will tell.
Speaker 3: I guess if the United States aim Caroline is to
Speaker 3: contain the rise of China, if that is the ultimate goal,
Speaker 3: than what I think, that's a really hard thing to do.
Speaker 5: China is a big country, so I think it can
Speaker 5: slow it. I think probably it already has with some
Speaker 5: of the restrictions on technology. That the other side of
Speaker 5: that is it's encouraging innovation in and of itself. So
Speaker 5: the fact that we held back on AI chips probably
Speaker 5: made something like deep Seek more likely. So I don't
Speaker 5: think there's a holding back of a country the size
Speaker 5: of China. So what we need to work towards is
Speaker 5: managing in a world with China and working more.
Speaker 3: Closely with our allies.
Speaker 5: So this could have been handled, in my view, much
Speaker 5: better by working with countries in Europe, countries like Japan
Speaker 5: and Australia, and sort of isolating China that way, couraging
Speaker 5: China to play by the rules that we want to
Speaker 5: set as a globe. The US is less than fifteen
Speaker 5: percent of global trade right now, so there's eighty five
Speaker 5: percent of economic might out there without us. We really
Speaker 5: can't engage in this fight alone, do our allies?
Speaker 1: And I use that term loosely right now, because I
Speaker 1: think a lot of folks would say we're fighting with
Speaker 1: allies right now, at least when it comes to trade.
Speaker 1: Do they feel the same way about China?
Speaker 5: I think they're beginning too. And I think one thing
Speaker 5: this will do is China now needs to sell all
Speaker 5: the goods it's not selling to us somewhere else, and
Speaker 5: other countries are very very worried about that. So in
Speaker 5: that sense, we may pull them along with us, but
Speaker 5: Trump's vitriol has certainly pushed them away. So I think
Speaker 5: we're going to have to see. But I do think
Speaker 5: there's room for that if we behave a little more nicely.
Speaker 3: Ah See, the world would be better if we all
Speaker 3: just were a little bit nicer. It's really kind of
Speaker 3: sim pocomically that now looking at me when you said
Speaker 3: you're super nice. No, I'm not looking at you, but
Speaker 3: I just Carolyne, thank you so much. We were really
Speaker 3: looking to do kind of this deep dive because we
Speaker 3: feel like it certainly is that relationship between the US
Speaker 3: and China so important to kind of what happens next globally.
Speaker 3: She's dean at the UC San Diego School of Global
Speaker 3: Policy and Strategy. Joining us from La Joya, California.
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Speaker 3: Chairs of Whirlpool rally as the company maintained its full
Speaker 3: year financial outlook despite uncertainty over global tariffs, saying their
Speaker 3: long term impact will benefit the company's position in the
Speaker 3: US home appliance market.
Speaker 1: Whirlpool manufactures most of its US bound products in the
Speaker 1: US and expects the new trade restrictions will help the
Speaker 1: company compete against foreign rivals.
Speaker 3: We spoke to l Pool Corporations chairman and CEO Mark
Speaker 3: Bitzer just after the company released it's quarterly update.
Speaker 6: Well, you know, I mean, obviously we saw in our
Speaker 6: earnings release where despite everything else going on, we're pretty
Speaker 6: pleased with our Q one. I mean, we're basically I
Speaker 6: would consider our business largely on track. We hit the
Speaker 6: EPs pretty much in line with consensus. On organic revenues,
Speaker 6: we're up two percent almost six percent margin, which puts
Speaker 6: us on track to our folio guidance, and we're reconfirming guidance. So,
Speaker 6: I mean, obviously it's not all euphoric, but give them
Speaker 6: everything else going on, I think we should feel pretty
Speaker 6: good about being on track in the current environment.
Speaker 1: How would you describe the US consumer right now.
Speaker 6: Yeah, I mean, obviously it's been a lot of all
Speaker 6: utility also a consumer side, and I think, if you
Speaker 6: want to say so, we're probably a little bit the
Speaker 6: cannery and the cole min when it comes to consumer confidence.
Speaker 7: And the reason why I'm saying this one.
Speaker 6: You know, every day, you know, many companies have a
Speaker 6: big order pipeline. Our orders are pretty much seven days.
Speaker 6: I see it pretty fast if consumer orders something or not.
Speaker 6: And we saw actually a very healthy consumer sentiment following
Speaker 6: the election pretty much through January mid February, and then
Speaker 6: we saw a clear deteriation of consumer confidence in particular
Speaker 6: particular my discretionary side of demand and iving.
Speaker 7: That continued to also in Q two. So we see right.
Speaker 6: Now the consumer probably lacks confidence about the financial future
Speaker 6: and holding back discretionary purchases.
Speaker 1: Wellw does that compare with your where consumers have been
Speaker 1: during your tenure at Whirlpool, Because we've spoken to you
Speaker 1: quite a bit over the last few years, throughout through downs,
Speaker 1: through relatively calm periods. How would you describe the consumer
Speaker 1: right now relative to where the consumer has been during
Speaker 1: your tenure?
Speaker 6: Yea, Tim, I've been twenty six years, so you don't
Speaker 6: have enough time to go.
Speaker 7: You give you all the ups and.
Speaker 1: But is it better than the that gives us a
Speaker 1: great view? Is it better than the financial crisis, better
Speaker 1: than the dot com bust? Better than covid?
Speaker 6: You know, it's it's how should I put from an
Speaker 6: economic perspective, it does not from a human perspective. From
Speaker 6: an economic perspective, I think there's a lot of similarities
Speaker 6: to what we saw in the early days of COVID
Speaker 6: and what I'm saying based on consumers.
Speaker 7: It just there's a you know.
Speaker 6: Everyday new messages which don't necessarily help consumer confidence. So
Speaker 6: from a pre consumer confidence perspective, we just want to
Speaker 6: have stability in the message.
Speaker 7: I think consumers can deal with good or bad news.
Speaker 6: It's just the every day changing news and the uncertainty
Speaker 6: which neither helps business investors or consumers.
Speaker 7: And I think so the drop which.
Speaker 6: We've seen kind of in the course of six weeks, yep,
Speaker 6: that was probably among the biggest jobs I've seen. Now
Speaker 6: hopefully at one point it will also come back up again,
Speaker 6: but right now they drop was pretty fast and pretty drastic.
Speaker 3: So we love talking with you. We've got through so
Speaker 3: many cycles together and I'm just thinking of those who
Speaker 3: are watching and listening to Bloomberg Business Week on this Wednesday.
Speaker 3: I am curious about your supply chain, like we are
Speaker 3: all getting a great lesson right in global trade, global
Speaker 3: supply chain, and tell us about your supply chain and
Speaker 3: how the US China or just the US terror of
Speaker 3: trade war is potentially impacting you or making.
Speaker 8: You change it.
Speaker 6: First, well, Carol, I want to give you credit, but
Speaker 6: it took you to question free to raise the ward Tarraff.
Speaker 8: I'm trying.
Speaker 9: I'm trying to kudos to.
Speaker 6: You, you know, And obviously there's a lot of moving
Speaker 6: parts of play. Ultimately comes back to we are kind
Speaker 6: of the only and last American appliance company, and we
Speaker 6: produce eighty percent of what we sell in the US
Speaker 6: in US, and of what we produce in US, more
Speaker 6: than eighty percent of aparts are sourced in the US,
Speaker 6: So we are a domestic producer. I know a lot
Speaker 6: of companies talk about reshoring or on showing. We never
Speaker 6: left Okay, and that's a big difference. So as such,
Speaker 6: even more, we're also faced with some headwinds in particular components,
Speaker 6: et cetera. Ultimately we will be a net winner because
Speaker 6: we're a domestic producer and in this case, this is
Speaker 6: different from our industries.
Speaker 7: There's capacity.
Speaker 6: We have enough capacity, enough factories to fill them, and
Speaker 6: I appreciate other industries. You know, it may take some time,
Speaker 6: but I think ultimately and we all don't know what
Speaker 6: the final final picture of for terifs is, but something
Speaker 6: will be there and we do see us benefiting from
Speaker 6: this one.
Speaker 3: How do you want to see this trade war play out?
Speaker 3: Because I'm assuming that some of these tariffs help you domestically.
Speaker 6: Well, and again I think that probably needs a libit explanation.
Speaker 6: So Carol, actually we're not asking for exemptions. We're not
Speaker 6: asking for tech subsidies or gifts or handouts or whatever
Speaker 6: there are right now in the pre existing so called
Speaker 6: two thirty two and three or one teffs, there are
Speaker 6: loopholes which hurt us and they structurally benefit Asian producers.
Speaker 6: And it's put in simple terms, you know, because the
Speaker 6: two thirty two terriffs, I pay in US for steel
Speaker 6: two or three times more than Asia steel and any
Speaker 6: component which I can't get them US, like an LED
Speaker 6: panel IPAI teriffs. So if the same product is produced
Speaker 6: in Vietnam or Korea. They don't have to pay the
Speaker 6: tariffs and steel they don't have to pay the teriffs
Speaker 6: of components. That difference is big. It's about seventy dollars
Speaker 6: per products and put that in retail price. That basically
Speaker 6: means one hundred and fifty dollars different retail price. So
Speaker 6: all we ask for is just close the loophole. We're
Speaker 6: all in support of having a strong US based steal production.
Speaker 6: I think it's we all agree it's important. Just close
Speaker 6: the loophole. That's all we ask for. So we don't
Speaker 6: ask for special treatment. Just close the loophole. Take the
Speaker 6: disadvantage away. Again, I'm not looking for an unfair advantage.
Speaker 6: We're just looking for a level playing field and then
Speaker 6: when we can compete BAREI well.
Speaker 3: So we're talking, of course with Mark Bitzer. He is
Speaker 3: chief executive officer at Worldpool Corporation, joining us from Michigan.
Speaker 3: One thing I want to ask you what you have
Speaker 3: learned about manufacturing in the United States. Is there a
Speaker 3: lesson or something a message you'd like to share with
Speaker 3: other folks who are saying I can't manufacture in the
Speaker 3: United States.
Speaker 6: You know, and again it's Carol, as you can probably
Speaker 6: tell for my accent, dual citizen of American and German.
Speaker 6: So to say sit here and say I'm staying here
Speaker 6: for patriotic reason, it's probably not credible. US production can
Speaker 6: be working well well, and I really and I'm proud
Speaker 6: of our ten strong factors in the US. And if
Speaker 6: you go to a factory like in clyde O, Hi,
Speaker 6: where you have three generational factor workers, these are proud
Speaker 6: people that have worked very hard. So I know there's
Speaker 6: now a lot of jokes about US manufacturing. You can
Speaker 6: produce in US, and there's a very good skilled workforce
Speaker 6: which you can have as long as we don't harm
Speaker 6: ourselves with kind of you know, issues which make production
Speaker 6: more difficult in US, like steep price and component costs.
Speaker 6: So I really, I know some people are hesitating about
Speaker 6: moving back to US. We have been producing in the
Speaker 6: US for one hundred and fourteen years, this success.
Speaker 1: So you know, I'm curious about since you already produced
Speaker 1: here in the US, and you have eighty percent of
Speaker 1: the production that goes to the US actually being made here,
Speaker 1: plus you source a lot of the parts here, you're
Speaker 1: relatively unaffected by tariffs. Would you say that the tariffs
Speaker 1: that the Trump administration has proposed or is even putting
Speaker 1: on have been a net benefit for your business.
Speaker 6: You know, it's again so far, there's more announcements than
Speaker 6: already action in place. So far what is in places
Speaker 6: for two thirty two and the ten percent tariffs? But
Speaker 6: you know, I go back to and I know there's
Speaker 6: a lot of talk about what the previous Trump administration did,
Speaker 6: but two A one tariffs in twenty eighteen, because I
Speaker 6: know there's.
Speaker 7: A lot of talk about did they raise price or not?
Speaker 6: If you now today look back, these terrfs were put
Speaker 6: in place in twenty eighteen, and where we are today.
Speaker 7: Washer prices today are lower than wevern two or fourteen.
Speaker 6: So tell me one product category which has lower prices
Speaker 6: been two or fourteen and compared to twenty eighteen, there's
Speaker 6: two more factories producing washes in US.
Speaker 7: So from that perspective, what the.
Speaker 6: Prior Trump administration did actually in our industry worked. It
Speaker 6: brought new production and the prices did not raise. Now
Speaker 6: there's always some moving parts as you go through this one,
Speaker 6: but it worked. Now that may be different in other industries,
Speaker 6: But I think I know ironersty pretty well you add
Speaker 6: production capacity to ultimately build benefit for consumer.
Speaker 1: Does the risk though, of declining US consumer sentiment as
Speaker 1: a result of rising prices in other categories and concerns
Speaker 1: about uncertainty moving forward? Does that way to a greater
Speaker 1: extent than the benefit that you get from tariffs as
Speaker 1: a US producer of products.
Speaker 6: Yeah, I mean, I think it's a fair question. Of course,
Speaker 6: in the short term there will be call it wobbliness
Speaker 6: along the way. But I think, as I mentioned earlier,
Speaker 6: consumer confidence can drop fast, but it can also increase
Speaker 6: pretty fast.
Speaker 7: We've seen that in Q four.
Speaker 6: So I would say, you know, what I describe on
Speaker 6: a structural capacity is are long term effects. I mean,
Speaker 6: you don't build factories on wheels, but you build them
Speaker 6: for thirty or fifty years. Consumer confidence moves within a quarter.
Speaker 6: So I think even though there may be some volatility
Speaker 6: in consumer confidence, I think the long term benefits will
Speaker 6: clearly output the negatives or term consumer sentiment mark.
Speaker 3: You definitely have a global perspective. I think there's some
Speaker 3: concerns though that the longer this trade back and forth,
Speaker 3: especially between the United States and China, but really between
Speaker 3: the US and the world, that there will be long
Speaker 3: term damage. How do you see it?
Speaker 6: Well, you know it's again I can speak more for
Speaker 6: my industry. I think ultimately what the current administration is
Speaker 6: trying to do in our industry I support, of course,
Speaker 6: because we're a US producer. I think the most important
Speaker 6: thing in matter is not only for our innestry. People
Speaker 6: just want to have predictability. Okay, if you have pretty
Speaker 6: much every day changing problem definition, that just makes it
Speaker 6: hard because you don't plan industrial production. You don't make
Speaker 6: industrial decisions if you don't know if that assumption is
Speaker 6: true tomorrow.
Speaker 7: So I think everybody will deal with whatever.
Speaker 6: It is if I know this is now, that's a
Speaker 6: picture and it's going to be stable and people can
Speaker 6: count on this one. So I think it's more stability
Speaker 6: and predictability more than anything else, which I would be
Speaker 6: hoping for.
Speaker 1: You mentioned that much of the sourcing you do for
Speaker 1: the US based production is actually domestic sourcing. Still, I
Speaker 1: imagine there are components that are made outside of the US.
Speaker 1: Do you anticipate any supply chain issues as a result
Speaker 1: of what we've seen happening.
Speaker 7: Yeah, And it's a little bit.
Speaker 6: And part of that is today our disadvantage because there
Speaker 6: are as you point out, some components I can't buy
Speaker 6: in US, like an LED panelful washer, that kind of stuff.
Speaker 6: So today we have to pay tariffs, while anybody producing
Speaker 6: Thailand Vietnam doesn't have to pay tariffs. I think over time,
Speaker 6: I would expect that for the vast majority of these
Speaker 6: components over time where will be supply based iborn Us
Speaker 6: or Mexico. And we see already some early indications it
Speaker 6: will take its time in particular, and electronics site more
Speaker 6: than anything else, but more of a mechanic parts like motors, etc.
Speaker 7: I think it will be quickly resolved.
Speaker 9: All right.
Speaker 3: I just want to know, have you created a dishwasher
Speaker 3: that my husband I don't have to like argue over
Speaker 3: who's going to load it and unload it. I just
Speaker 3: want to know, how do you have one like that,
Speaker 3: a robotic one that actually unloads and unloads. Have we
Speaker 3: gotten there?
Speaker 6: Yeah, well, if you have a patent, let me know
Speaker 6: and we can hire you as an engineer. You know,
Speaker 6: first of all, I pride ourselves we have the best
Speaker 6: dish washer with the biggest capacity in the industry. Unfortunately,
Speaker 6: it doesn't load itself. I feel the same pain every
Speaker 6: day at home, not every days.
Speaker 7: I'm accused of that every day.
Speaker 3: Hey, listen, one last question. Do we have to be
Speaker 3: worried about a global recession? Is that anything that's on
Speaker 3: your radar? Just real quickly?
Speaker 6: I mean again, That's why I said, Carol Earl. It
Speaker 6: feels a little bit economically to step back to earlier
Speaker 6: days of COVID and whatever else. It's just an uncertain outcome.
Speaker 6: I think right now the odds of a recession have increased.
Speaker 6: I'm not quite sure we're all the way there.
Speaker 7: It depends a lot what.
Speaker 6: Happens the next two three weeks weeks in terms of
Speaker 6: business predictability. But I think we're living with an uncertain outcome,
Speaker 6: and that's what our job is to manage to words that.
Speaker 3: All right, Well, when I get that design for that
Speaker 3: dishwasher that loads and unloads itself, I'll let you know,
Speaker 3: Mark Bits or be Well CEO or Pool Corporation. This
Speaker 3: is Bloomberg.
Speaker 2: This is the Bloomberg Business Week Daily Podcast. Listen live
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Speaker 10: Thirty starting next month, yet allocating far more of my
Speaker 10: time to Tesla and now that the major work of
Speaker 10: establishing the Department of Governm Efficiency is done.
Speaker 3: Bettelon Musk on this week's Tesla earnings call with investors
Speaker 3: and analysts, assuring them that he will significantly pull back
Speaker 3: from his work with the US government and pay more
Speaker 3: mind to Tesla. After the carmaker reported its worst quarter.
Speaker 1: Years, investors and analysts have increasingly called for Musk to
Speaker 1: refocus on the company, which is struggling under the weight
Speaker 1: of slumping sales and rising costs from President Trump's trade war.
Speaker 1: Protests too, have sprung up in recent months, and a
Speaker 1: consumer backlash against Musk's government work.
Speaker 3: One especially vocal Tesla shareholder and cyber truck owner is
Speaker 3: Ross Gerber, the co founder, president, and CEO at Gerbert
Speaker 3: Kawasaki Wealth and Investment Management. The firm owns about sixty
Speaker 3: five million dollars worth of Tesla shares.
Speaker 4: I think this.
Speaker 11: Perception that somehow Elon's going to come back to Tesla
Speaker 11: and be working at Tesla more is a false perception
Speaker 11: because I'm also involved with Xai and I'm an investor
Speaker 11: in Xai, so I know exactly what's going on there.
Speaker 4: And they just merged with Twitter and now they're.
Speaker 11: Raising even more capital to even get bigger to compete
Speaker 11: with Chat and all the other llms. And that's his
Speaker 11: main focus, and that's what he really cares about. So
Speaker 11: I think, you know, it's nice what he says, but
Speaker 11: it's what he does that will ultimately matter.
Speaker 9: Well.
Speaker 3: And you know, we love talking to you, and we
Speaker 3: have for a few years now, and you know, we
Speaker 3: always remind and I always go here that you know,
Speaker 3: you're not only just an investor in the company or
Speaker 3: various elon property, but you have owned Tesla.
Speaker 1: He's got a cyber truck.
Speaker 4: Multiply a cyber truck.
Speaker 3: You got a cyber truck.
Speaker 4: But I drive a cyber truck.
Speaker 1: But he still drives a cyber truck.
Speaker 3: It's not so easy to drive a cyber truck, is
Speaker 3: it anymore?
Speaker 11: I drive it right down the middle of Woke Avenue,
Speaker 11: you know what I mean, which is where I live.
Speaker 4: And you know, fortunately.
Speaker 11: Everybody else has a Tesla, so it's kind of hard
Speaker 11: to yell at a guy and a cyber truck from
Speaker 11: your Tesla, right, yeah, And this is probably the biggest
Speaker 11: issue that I have is I feel like Tesla is
Speaker 11: not Elon's company. It's a public company that's owned eighty
Speaker 11: seven percent by the public, not Elon. And now the
Speaker 11: perception going from being this climate friendly, changing the world
Speaker 11: for a better place company to being associated with Elon
Speaker 11: Musk and Donald Trump is really one of the saddest
Speaker 11: things that I can imagine for Tesla's brand. So I
Speaker 11: kind of am like fighting back from that because I'm like, no,
Speaker 11: I drive an environmentally friendly truck and you're yelling at
Speaker 11: me from a Ford F one point fifty. And Henry
Speaker 11: Ford was an actual Nazi, So I'm like, this is
Speaker 11: really odd that an oil loving Nazi driving car guy
Speaker 11: is flicking me off.
Speaker 1: You know, do you like the cyber truck. There's a
Speaker 1: lot of reports online about parts falling off, though I
Speaker 1: have read a lot about how people love it. Hannah
Speaker 1: Elliott loved driving it around last year.
Speaker 4: Do you like it?
Speaker 11: Tesla should be paying me to do ads for the
Speaker 11: cyber truck because I actually love the cyber truck.
Speaker 4: The cyber truck saved my life during the Palisades fire.
Speaker 11: I can give you five reasons why you should have
Speaker 11: a cyber truck. And I can also tell you five
Speaker 11: things that are disappointing about the cyber truck that could
Speaker 11: have been better or could be better in new versions
Speaker 11: of it to make the car sell that.
Speaker 4: You know, so I know the truck in and out,
Speaker 4: and part of.
Speaker 11: The performance on the manufacturing side is very disappointing. I
Speaker 11: have not had those problems personally. My truck has been solid.
Speaker 4: You know. I let some kid drive it. He crashed it.
Speaker 4: They fixed it quickly. You know. The car's been great.
Speaker 4: The car's been great.
Speaker 11: But I can't tell you how important it was to
Speaker 11: my survival actually during one of the hardest periods of
Speaker 11: time of my life.
Speaker 1: Is it because of the air filtration? Like what, yes,
Speaker 1: how did you use it?
Speaker 12: Yeah?
Speaker 4: They all filtrations.
Speaker 11: What saved my life because I was in the middle
Speaker 11: of the fire and I couldn't breathe, and so I
Speaker 11: was trying to fight the fire like an idiot. And
Speaker 11: but this was before the fireman came and saved me.
Speaker 11: And it was so smoky that my and I had
Speaker 11: an N ninety five mass that I was like dying,
Speaker 11: and so I would like jump into the truck, and
Speaker 11: I had the Hepa filter thing running and it works,
Speaker 11: you know, and so I could breathe, and then I
Speaker 11: would jump out of the truck and then like try
Speaker 11: to deal with fire, and then I could only deal
Speaker 11: with that for so long before I have to get
Speaker 11: back in the Other thing about the truck, you know,
Speaker 11: was the tonu.
Speaker 4: You know, it's a hard tone new So when.
Speaker 11: I when I put all my stuff, I was living
Speaker 11: out of my truck for two months and it locks.
Speaker 11: And this is a really nice thing where most pickup
Speaker 11: trucks don't have a way to cover and lock every
Speaker 11: thing in your bed, and so I was able to
Speaker 11: basically keep all my.
Speaker 4: Important belongings safe in this truck.
Speaker 11: And one of the things that happened after the fire
Speaker 11: was people looters were attacking people's cars knowing that they
Speaker 11: had all their stuff in it, and a lot of
Speaker 11: people got stuff stolen out of their cars even after
Speaker 11: they dealt with the fire, which has sucked, you know,
Speaker 11: And that was.
Speaker 4: Not a problem I had.
Speaker 11: So, you know, there are many things about this truck
Speaker 11: that are great, and the story just isn't being told.
Speaker 3: Are you okay, your family, your loved ones okay?
Speaker 9: Now?
Speaker 11: Yeah, my family's great. I'm not okay, I guess it's
Speaker 11: the best way to put it. I've moved back into
Speaker 11: my house. I'm one of the few people that survived
Speaker 11: this fire. The fire ended two blocks from my house
Speaker 11: where I fought it and the fireman ultimately stopped it.
Speaker 11: And so my neighborhood's you know, normal, except nobody lives
Speaker 11: there yet except for me.
Speaker 9: You know.
Speaker 11: I was able to fix my house pretty quickly, and
Speaker 11: I felt it was best for me and my family
Speaker 11: to move back as quickly as possible. And that's been true,
Speaker 11: you know, But I live a very surreal life, you know,
Speaker 11: right next to the edge of hell, and I see
Speaker 11: it every day.
Speaker 4: And it sucks.
Speaker 11: And you know, for me, I'm mostly suffering from you know,
Speaker 11: some level of depression and you know PTSD from the
Speaker 11: event itself, which was really traumatic.
Speaker 4: Like I don't recommend fighting fighters.
Speaker 3: We can only imagine, and we from AFAR watching, you know,
Speaker 3: certainly felt it, but I cann't even imagine seeing it firsthand. Well,
Speaker 3: speaking of challenges, and forgive me for this segue, but
Speaker 3: one of the things that struck me, you know, we've
Speaker 3: been lucky to talk with you. This is you know,
Speaker 3: our second time in the last twenty four hours, and
Speaker 3: one of the things that continue to kind of tim
Speaker 3: and I want to know more and more. And you
Speaker 3: really shed some great color and I want to share
Speaker 3: it with our audience who are watching and listening right
Speaker 3: now who may have missed it yesterday, of what you
Speaker 3: had to say about what's going on in terms of
Speaker 3: EVS in China. I think we don't have any concept
Speaker 3: of how sophisticated, how good they are getting on stuff
Speaker 3: like evs and other things.
Speaker 4: Well, you know, once again, I haven't been to China.
Speaker 11: I only know because I follow all the car companies
Speaker 11: in China, and I you know, there's a big mister
Speaker 11: perception about China. I think, and you saw it a
Speaker 11: little bit with the trade negotiations, like they're somehow behind
Speaker 11: us in technology, and like we're holding back our technology
Speaker 11: from them and that will slow them down.
Speaker 4: That is a wildly incorrect way to look at China.
Speaker 11: If we hold our technology back from China, what happens
Speaker 11: is they develop even better technology because we force them
Speaker 11: to in a way, you know, And they're extremely determined,
Speaker 11: intelligent people who will work extremely hard to achieve.
Speaker 4: Whatever goal they need to achieve.
Speaker 11: And so when Tesla came to China, China was Tesla
Speaker 11: was the first company China said, you can have one
Speaker 11: hundred percent ownership of the factory. Come here with open arms,
Speaker 11: and we had never really seen that before with companies
Speaker 11: we're trying to always made them do a JV where.
Speaker 4: They would own half the company kind of thing.
Speaker 11: And so the part of that strategy was to send
Speaker 11: a whole new generation of Chinese workers to work for
Speaker 11: Tesla to learn how to do stuff.
Speaker 4: And they have and they have, and so.
Speaker 11: You have Chinese entrepreneurialism, which is pretty good for a
Speaker 11: communist country, and then you add in know how and
Speaker 11: government support and you get a pretty potent way to
Speaker 11: develop pretty good vehicles.
Speaker 4: And that's what they've done.
Speaker 11: And so China's built a whole new infrastructure around electric vehicles,
Speaker 11: which was actually my dream for the United States.
Speaker 1: So that raises the question raws, since China's evs are
Speaker 1: so good, should and those are not available here in
Speaker 1: the US, should investors really think about the US being
Speaker 1: the only market for Tesla because it can't compete outside
Speaker 1: of the US.
Speaker 4: No, No, Tesla can compete and.
Speaker 1: Want to compete on Can it compete on price? Can
Speaker 1: it compete on quality?
Speaker 4: It can't. You know.
Speaker 11: Once again, if Tesla had a focused CEO who wanted
Speaker 11: to be the Chinese composition, they could have released that
Speaker 11: cyber cab as a model too, with a steering wheel
Speaker 11: on it, and made that thing for twenty five thousand dollars.
Speaker 11: Like people would buy it. It would be really successful.
Speaker 11: The problem with Tesla is they don't want to sell
Speaker 11: cars anymore. It's fairly obvious. In fact, they work really
Speaker 11: hard to convince people not to buy their cars. I
Speaker 11: mean it's like the CEO every day talks people out
Speaker 11: of the products. So the real issue to me is,
Speaker 11: you know, if you don't really want to sell cars
Speaker 11: and you want to sell cab rides instead or robots, boy,
Speaker 11: that's going to be a long time till it makes
Speaker 11: one hundred billion in revenue.
Speaker 4: You know what I mean.
Speaker 11: Yeah, So the Chinese are like, okay, we're fine with this,
Speaker 11: and Tesla's falling behind and they're attacking everywhere they can.
Speaker 11: The Europeans and the United States have a lot of
Speaker 11: trade barriers against these Chinese vehicles because they're inexpensive and
Speaker 11: they sell very well.
Speaker 4: And I was in Mexico City, all you see are BYD's.
Speaker 11: They can't afford a Tepsla, you know, And so I
Speaker 11: think quality, you know, Europe and the United States more.
Speaker 4: Europe has always won on quality of.
Speaker 11: Vehicles like design and interior style and things like that,
Speaker 11: where China seems to be behind on that. But when
Speaker 11: it comes to technology, China seems to be well ahead.
Speaker 3: All right, Elon gets into your cyber truck. Not exactly,
Speaker 3: not exactly cark karaoke, but you guys have a conversation.
Speaker 1: They know each other. Elon has responded to Ross. I've
Speaker 1: seen the tweets. He knows is an investor in Xai.
Speaker 3: I know he knows you. So what's the thirty second
Speaker 3: question you ask him?
Speaker 11: Why do you think he said he's coming back to
Speaker 11: Tesla because he knows I've been saying it every.
Speaker 4: Day for like months.
Speaker 3: So that's what you ask him.
Speaker 4: Would I say to Elon?
Speaker 3: Yeah, thirty seconds, I.
Speaker 11: Said to Elon when I when I first met Elon
Speaker 11: long ago, when he was tweeting a bunch of garbage
Speaker 11: and Tassla was struggling, I think was the end of
Speaker 11: twenty eighteen, and like I was, like, dude, you got
Speaker 11: to stop tweeting this garbage.
Speaker 4: This was like seven years ago, you know what I mean? Yeah,
Speaker 4: And I was like, how is this the mission? And
Speaker 4: we got to raise money and we got to save Tesla,
Speaker 4: and like this is just not helping.
Speaker 11: And I remember him looking at me sort of like, yeah, right, sure,
Speaker 11: like you think I care what you'd say about my Twitter?
Speaker 11: And I was like please, just like I'm just saying
Speaker 11: this is nicely. And I remember, because I was standing
Speaker 11: with somebody from our investments and people were pretty surprised
Speaker 11: at it. Confronted him about Twitter, and I was a
Speaker 11: little bit nervous because he's a big guy, and.
Speaker 4: You know, I like Elon at the time, and so
Speaker 4: I was trying to be nice, you know.
Speaker 11: And of course he didn't stop tweeting, and he raised
Speaker 11: money the next day, which we invested in Tesla at
Speaker 11: that time, and it was extremely profitable. And I would
Speaker 11: say the same thing to him today, and it's like,
Speaker 11: I don't have to agree with your opinions and your
Speaker 11: viewpoint in life, but do you have to share that
Speaker 11: with everybody all the time. It's not necessary and it's
Speaker 11: not helping you be successful, So why share opinions? That
Speaker 11: are so unpalatable to so many people when it's completely
Speaker 11: hurting you from achieving your goals.
Speaker 4: That's what I would say.
Speaker 3: All right, good stuff. Elon, if you're listening, we'd love
Speaker 3: to hear what you would respond to to Ross. Ross,
Speaker 3: thank you so much for all of it and for
Speaker 3: being so honest and real. Ros Gerber, He's president and CEO.
Speaker 3: Stay safe, be well, of course, of Gerberg Kawasaki Wealth
Speaker 3: and Investment Management. Out there in Santa Monica.
Speaker 2: You're listening to the Bloomberg Business Weekdaily Podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern. Listen
Speaker 2: on Apple CarPlay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch us live on YouTube.
Speaker 3: Plenty ahead in our second hour of the weekend edition
Speaker 3: of Bloomberg Business Week, including threats to the independence of
Speaker 3: the FED, the most powerful person in Washington, d C.
Speaker 3: That's not named Trump, and the guy who connected President
Speaker 3: Trump to the Manisphere.
Speaker 1: Plus speaking of the President, how his global tariffs may
Speaker 1: affect agriculture, farming, and sustainability. The director of the film
Speaker 1: Common Ground joins us later this hour.
Speaker 3: First up, President Trump raised eyebrows this past week over
Speaker 3: whether he will seek to limit the federal reserves independence
Speaker 3: and try to remove that chair J.
Speaker 1: Powell, which raises the question can the president even do it?
Speaker 1: To better understand it all in the possible long legal fight,
Speaker 1: we reached out to Columbia Law School associate professor levman
Speaker 1: And and Bloomberg Economics editor Molly Smith.
Speaker 12: I mean, it's definitely a serious consideration right now, and
Speaker 12: the way that Trump just keeps going after Powell day
Speaker 12: after day in all of these different tweets, whether people
Speaker 12: are taking seriously this idea of preemptive cuts quote being
Speaker 12: discussed by many that is definitely refutable and not at
Speaker 12: all being priced in.
Speaker 8: I mean, there's a roughly like, I don't know.
Speaker 12: Sixteen percent chance right now looking at the Bloomberg warp
Speaker 12: screen of a rate cut in May, which is coming
Speaker 12: in a week or two.
Speaker 8: So no one's really thinking about that happening right now.
Speaker 12: And if raatecuts are to happen, people are saying that's
Speaker 12: because the economy is going to slow because of Trump's policies,
Speaker 12: not because inflation is slowing, like Key claims exactly.
Speaker 3: Professor man Enn, come on in on all of this.
Speaker 3: The Supreme Court considering a petition from I'm the President
Speaker 3: that could allow him to override some legislation establishing independent
Speaker 3: agencies such as the FED and remove their leaders without
Speaker 3: cause or notice. What exactly is this case about, Why
Speaker 3: are we talking about it, especially since this case does
Speaker 3: not involve any FED officials, and why is it, though
Speaker 3: potentially so significant for the FED, for FED governors and
Speaker 3: perhaps other heads of different organizations in the government.
Speaker 9: So if FED is one of many independent agencies in
Speaker 9: the government and its seven member board enjoy the same
Speaker 9: sort of protection from at will removal by the president
Speaker 9: as other agencies like the Federal Trade Commission, the National
Speaker 9: Labor Relations Board, and President Trump, in his few months
Speaker 9: in office so far, has already challenged the laws protecting
Speaker 9: these officials from removal at pleasure by the president, and
Speaker 9: those challenges he removed several officials illegally. Those challenges are
Speaker 9: making their way through the courts right now, and the
Speaker 9: Supreme Court of the United States is currently considering a
Speaker 9: petition from the government from Trump to allow him to
Speaker 9: push these officials out of office until their cases make
Speaker 9: their way through the whole court, which could be months
Speaker 9: and months, and that petition could be decided this week,
Speaker 9: and if Trump were to prevail, then he could go
Speaker 9: ahead potentially and fire the whole FED Board, not just
Speaker 9: Chair Pale, and those officials if they wanted to challenge
Speaker 9: those removals, would be out of a job during the
Speaker 9: tendency of the litigation.
Speaker 1: Professor Manand given what you know about the case, what
Speaker 1: you know about the arguments and the history, and of
Speaker 1: course the justices as well, do you have a prediction
Speaker 1: what is likely to happen if the Supreme Court Court
Speaker 1: rules one way or the other.
Speaker 9: It's really hard to say. But already we have an
Speaker 9: administrative stay issued by Chief Justice Roberts in this case
Speaker 9: Trumphy Wilcox, which meant that Wilcox, who had been put
Speaker 9: back in her job at the NLRB by the lower court,
Speaker 9: was taken out of her job while the Supreme Court
Speaker 9: considers President Trump's emergency application. That suggests to me that
Speaker 9: there are many members of the Court who might consider
Speaker 9: granting this stay pending appeal on an ongoing basis. I
Speaker 9: think that there are members of the Court who have
Speaker 9: expressed in prior cases real reservations about allowing the expansion
Speaker 9: of presidential power to touch the FED. There's a desire
Speaker 9: to carve out a FED exception. But the more uncertainty
Speaker 9: there is in this space, the more likely we would
Speaker 9: see President Trump potentially testing the boundaries. And so that
Speaker 9: might not mean a removal of Chairpalell, but it could
Speaker 9: mean a removal of Governor Barr, Governor Cook in the
Speaker 9: coming weeks.
Speaker 3: Whatever happened to checks and balances? Professor man Anne, I'm
Speaker 3: just curious. We always just thought this government, how incredible, right,
Speaker 3: three separate branches, checks and balances? Are you, as someone
Speaker 3: who teaches, who studies and the power of the Supreme Court, like,
Speaker 3: are we losing that? Have we lost it?
Speaker 9: We are very much losing checks and balances. This is
Speaker 9: not a new thing. This is the culmination of forty
Speaker 9: plus years of efforts to reconceptualize the presidency under the
Speaker 9: Constitution in such a way that Congress's laws attempting to
Speaker 9: constrain presidential power can be violated by the president. And
Speaker 9: Ronald Reagan was the first really to push this in
Speaker 9: nineteen eighty one when he took office and there was
Speaker 9: a Democratic House, and there have been a Democratic House
Speaker 9: as long as anybody could remember. Reagan administration officials sought
Speaker 9: to assert presidential authority under the Constitution to do certain
Speaker 9: things that they didn't have the votes for in Congress.
Speaker 9: Those moves were ultimately embraced by the Clinton White House,
Speaker 9: and we've had a sort of ever expanding conception that
Speaker 9: the Supreme Court has validated at several points, starting in
Speaker 9: twenty ten with the Roberts Court decision in a case
Speaker 9: called Free Enterprise, which restricted the ability of Congress to
Speaker 9: protect the independence of the PCAOB, the board within the
Speaker 9: sec that regulates accountants. We had a series of cases
Speaker 9: that validated more and more this once fring sort of
Speaker 9: constitutional theory of the presidency. And now we have President
Speaker 9: Trump in his second term trying to do a full
Speaker 9: bear hog of this sort of of this presidentialist theory.
Speaker 9: It's called unitary executive theory, and that is very inconsistent
Speaker 9: with traditional checks and balances.
Speaker 12: Just to expand on this idea of checks and balances,
Speaker 12: it's not so much one that's afforded by the law
Speaker 12: and the different branches of government, but just within the Fed.
Speaker 12: Something that I don't think we speak about enough with
Speaker 12: respect to who makes decisions on interest rates is that
Speaker 12: the Chair of the Fed does not act similarly to
Speaker 12: the President of the United States.
Speaker 8: They don't have executive.
Speaker 12: Power to just unilaterally make a decision for the entire
Speaker 12: Federal Open Market Committee, which is comprised of twelve members,
Speaker 12: which includes the six governors on the board, which Powell
Speaker 12: is one of those people. And to what the professor
Speaker 12: was just saying that if Trump were to remove Powell,
Speaker 12: then that would also then set a president. Is he
Speaker 12: going to go after all these other governors? But again,
Speaker 12: this is a decision that on interest rates.
Speaker 8: It's set by this whole committee.
Speaker 12: It is not just by one person, And there would
Speaker 12: be some real credibility concerns if if new people were
Speaker 12: to come in that all of these other people who
Speaker 12: are on the board or on the committee rather, who
Speaker 12: have been advocating for keeping interest rates steady, are they
Speaker 12: really just going to go along with this new person
Speaker 12: just because Powell was fired.
Speaker 1: Look, I understand why the president wants interest rates to
Speaker 1: be lower. He has background in real estate. He likes
Speaker 1: low rates. You know, we talked about this in the past,
Speaker 1: But Carol, I would think that a leader of a
Speaker 1: country would want a strong, independent federal reserve because of
Speaker 1: the confidence it gives markets and because of the way
Speaker 1: that historically the US has been looked at as as
Speaker 1: Eric just told us, the central Bank for the entire world.
Speaker 3: Gold standard like in terms of the US Central Bank.
Speaker 3: And I do think about this, Molly, that if essentially,
Speaker 3: if it's not just the FED share but goes after
Speaker 3: the other FED governors, that's a whole new ballgame just quickly.
Speaker 12: Yeah, of course, I mean this is we're talking about
Speaker 12: half of the Federal Open Market Committee right there.
Speaker 8: If he goes after all those other people.
Speaker 12: So right, and again all of them are. The thing though,
Speaker 12: that I guess maybe gives me some confidence is that
Speaker 12: no one is calling for these preemptive rate cuts. I
Speaker 12: don't know what economist Trump is going to find who
Speaker 12: is calling for that right now.
Speaker 3: But it also plays into the game of instability if
Speaker 3: we see this kind of movement, both of you, thank
Speaker 3: you so much. Professor Levmanan, thank you, Thank you, Columbia
Speaker 3: Law School Associate Professor of Law, joining us along with
Speaker 3: our Bloomberg News Economics editor Molly Smith right here in studio.
Speaker 2: This is the Bloomberg Business Week Daily Podcast. Listen live
Speaker 2: each weekday starting at two pm Eastern on Apple CarPlay
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Speaker 2: New York station Just Say Alexa played Bloomberg eleven thirty.
Speaker 3: Now, as President Trump continues to challenge the long standing
Speaker 3: order of many things inside and outside the United States,
Speaker 3: we were reminded this past week of some of the
Speaker 3: forces that brought him back to the White House. That
Speaker 3: included the predominantly male digital creators that emerged as a
Speaker 3: key force behind Trump's presidential victory.
Speaker 1: And indeed, if you go back to March of twenty
Speaker 1: twenty two, the Nelk Boys, which I hadn't heard about until,
Speaker 1: I mean.
Speaker 3: I learned so much in this story.
Speaker 1: They hosted President Trump on his first podcast. He then
Speaker 1: appeared on several conservative friendly shows, including the ones hosted
Speaker 1: by Joe Naden Ross, Andrew Schultz and THEO Vos.
Speaker 3: I didn't even know there's a Nilk boy. Keep going,
Speaker 3: keep going, all right.
Speaker 1: Out Let's including The Wall Street Journal credited Baron Trump
Speaker 1: for his father's entree into this world, and Baron indeed
Speaker 1: advises on his demographics interests. But it's John Shahiti who
Speaker 1: actually is making the calls to arrange the appearances or
Speaker 1: finding out who can.
Speaker 3: And if you're saying who, well, then maybe you should be.
Speaker 3: And this is why you want to listen, stop what
Speaker 3: you're doing and check out what our Sarah Fryar has
Speaker 3: to say. She writes in Bloomberg BusinessWeek about Shahiti, who's
Speaker 3: now looking pretty critical to President Trump's twenty twenty four win.
Speaker 3: Sarah is Big Tech team leader for Bloomberg News. She's
Speaker 3: also the author of No Filter, the inside story of Instagram,
Speaker 3: and she's out there in our San Francisco. You're all right, Sarah,
Speaker 3: lay it out. Who is John Shahiti.
Speaker 13: Well, he was a manager in the music industry of
Speaker 13: folks who had pop contracts, a big songs in like
Speaker 13: Anita Blila Pond's. He works with several DJs and then
Speaker 13: he realized.
Speaker 3: All right, Tim and I are it feels like you're
Speaker 3: speaking a foreign language. I'm just gonna say, but go ahead,
Speaker 3: go ahead.
Speaker 1: The people keep going.
Speaker 13: So so this is this is a guy who's who's
Speaker 13: running with the music business, doing great, but starting to
Speaker 13: really warm up to Trump. This is during the first
Speaker 13: Trump term, and he's he's not getting good response when
Speaker 13: he's talking about it. People are kind of shutting him out.
Speaker 13: He doesn't get invited to the parties he used he's
Speaker 13: used to getting invited to. People decided not to include
Speaker 13: him in meetings, and he realizes, instead of shutting up
Speaker 13: about about how much I like Trump, I'm just going
Speaker 13: to leave this industry and go for a new opportunity.
Speaker 13: And he saw podcasting become it is really emerging as
Speaker 13: a way that people were wanting to spend time online.
Speaker 13: The pandemic occurred, it was becoming even more and more
Speaker 13: like a regular consumer behavior. And he's a YouTube guy.
Speaker 13: He's works a lot with digital creators on he was
Speaker 13: you know, the reason I knew him back in the
Speaker 13: day was because of his work on Vine with a
Speaker 13: lot of influencers, Instagram influencers, and so he thinks podcasts
Speaker 13: are going to go big on YouTube, and he starts
Speaker 13: partnering with a lot of those businesses. Now, meanwhile, he
Speaker 13: gets back in touch with his old friend Dana White,
Speaker 13: who's also a very close friend to Trump, who's running
Speaker 13: the Ultimate Fighting Championship, and he decides White decides that
Speaker 13: Shahida needs to know Trump because Trump should be on
Speaker 13: these podcasts reaching young people. And so that's what happens.
Speaker 13: He really works with through White to get to Trump
Speaker 13: and convinces Trump to go on with the k Nelk Boys,
Speaker 13: with THEO Vaughn, with a bunch of these other names
Speaker 13: you listed in a way that he can appeal to
Speaker 13: a voter where they're where they're listening casually. I mean,
Speaker 13: this is maybe somebody who might not be showing up
Speaker 13: at his rallies or might not be watching Fox News.
Speaker 13: Fox News demographic is very much aging at this point,
Speaker 13: and it's somewhere where Trump can cannot be edited. You
Speaker 13: can talk about whatever he wants, and there's not going
Speaker 13: to be a time limit. These podcasts Rogans shows sometimes
Speaker 13: three plus hours long, so it becomes a perfect venue
Speaker 13: for Trump. He kind of has no idea what a
Speaker 13: podcast is. Once he starts doing it, he starts loving
Speaker 13: the response he gets, and he sees he sees the numbers,
Speaker 13: and he's really been embracing this group of podcasters and
Speaker 13: Shahiti and the whole UFC world as part of this
Speaker 13: new era in his presidency.
Speaker 1: We'll talk a little bit about how Shahiti sort of
Speaker 1: went from somebody who wasn't necessarily invited to dinner or
Speaker 1: parties to somebody who's now at UFC fights with members
Speaker 1: of the administration, including the President. What's happened there. And
Speaker 1: also he's been kind of accepted into the tech side
Speaker 1: of things, Sarah, which you cover. You know, he's got
Speaker 1: a direct line too. It sounds like the folks at YouTube,
Speaker 1: at Google's YouTube.
Speaker 2: Well.
Speaker 13: He became a kind of honored guest by the standards
Speaker 13: of Spotify, YouTube and Meta at the inauguration. They realized
Speaker 13: what he'd done here, had this investment in podcasts. Google
Speaker 13: actually spoke to the power of podcasts on his last
Speaker 13: earnings call, and they said that people really tuned in
Speaker 13: to get their news from podcasts ahead of the twenty
Speaker 13: twenty four election, and they credit that as a really
Speaker 13: strong growth area of their YouTube business. So Shihidi was
Speaker 13: pretty early to that market, and he's he's also realizing
Speaker 13: that this is this is where all of the platforms
Speaker 13: are going to go. He knows Elon Musk. He's known
Speaker 13: Elon Musk for years. He brought Elon Musk to fights
Speaker 13: back in the day when he was Representingoy Mayweather worked
Speaker 13: with Justin Bieber Elon Musk. I have a picture of
Speaker 13: them going to fight together in twenty thirteen. So he's
Speaker 13: known Musk for a long time. He invested in x
Speaker 13: in the new rendition of Twitter. So this is the
Speaker 13: crowd that he hangs with, and he's really not so
Speaker 13: much a manager of these podcasters but a business partner,
Speaker 13: and that to him is more more fool proof and
Speaker 13: more unlikely that he will be fired with a change
Speaker 13: in the wins politically. If he's a business partner with
Speaker 13: these guys, they're selling a product together, he's merchandising for them,
Speaker 13: and they have some sort of goal that's not related
Speaker 13: to what advertisers think about content policies, which is another
Speaker 13: big factor in this. In another area where he's very
Speaker 13: aligned with Musk.
Speaker 3: Great strategy until you have a tariff war, trade war
Speaker 3: and those goods and merchandise maybe are produced in China
Speaker 3: and then there's no there's no podcasts.
Speaker 13: That it's rough, but it's rough on everyone at one. Yeah,
Speaker 13: you know, I think that's that's a good point too,
Speaker 13: is that podcasts are are a good that just requires
Speaker 13: some guys in a room talking. In this case, it
Speaker 13: is mostly guys. I mean, this is this is the manisphere.
Speaker 13: This is like ninety eight percent male viewership, podcasts where
Speaker 13: they they're very much you know, the fraternity demographic, and
Speaker 13: these are the people who are who were really encouraged
Speaker 13: by a lot of Shahidi's partners and podcast friends to
Speaker 13: go out and vote for Trump.
Speaker 3: I mean, that's what's kind of cool just thirty seconds.
Speaker 3: I mean, it sounds like the Trump administration realized the
Speaker 3: access that Shahiti has right to.
Speaker 13: And we've written in prior pieces about how the Harris
Speaker 13: campaign realized towards the end that they were they were
Speaker 13: going to need to make a last stitch appeal to men,
Speaker 13: and they tried to make it work out with Rogan,
Speaker 13: they tried to make it work out with THEO Vaughn.
Speaker 13: They had a lot of rules that Trump didn't have
Speaker 13: around what they wanted to say, and they couldn't get
Speaker 13: the scheduling right, and it was hard to convince people
Speaker 13: to act right to say we got to do this,
Speaker 13: We've got to prioritize this, because it didn't seem like
Speaker 13: that was going to be a big deal. But you know,
Speaker 13: in the twenty twenty four lest it really was like
Speaker 13: are women going to show up or are men going
Speaker 13: to show up? And the men did show.
Speaker 3: Up, Yeah, and you got to find them where they
Speaker 3: are at. Sarah Fryar, thank you so much, Big Tech
Speaker 3: team leader Bloomberg News. Check out her book No Filter,
Speaker 3: and check out her story from Bloomberg BusinessWeek. You can
Speaker 3: find it on the Bloomberg and of course at Bloomberg
Speaker 3: dot com. Also in the upcoming new issue of Bloomberg
Speaker 3: Business Week magazine Cool Stuff.
Speaker 2: You're listening to the Bloomberg Business Weekdaily podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern. Listen
Speaker 2: on Applecarplay and the Android Auto with the Bloomberg Business
Speaker 2: Act or watch us live on YouTube.
Speaker 3: Russell Vote is a Trump loyalist. He's now the Director
Speaker 3: of the Office of Management and Budget. He's also Acting
Speaker 3: director of the Consumer Financial Protection Bureau.
Speaker 1: A self described boring budget guy, he's best known for
Speaker 1: co authoring the nine hundred at page policy playbook of
Speaker 1: the Heritage Foundation's Project twenty twenty five, which has become
Speaker 1: something of a bible for Trump's second term.
Speaker 3: It's Votes think tank that has produced numerous policy papers
Speaker 3: that advocate for such Trump fixations like the annexation of
Speaker 3: Greenland and enacting broad tariffs, among many others.
Speaker 1: And according to Bloomberg BusinessWeek columnist Max Chafkin. It's also
Speaker 1: really Russell Vote, not Elon Musk, who's steering the Trump
Speaker 1: administration's dog crusade. So who is he Russell Vote?
Speaker 14: Well, he is the director of the Office of Management
Speaker 14: and Budget. But more than that, Tim, as you said,
Speaker 14: he is one of the core idealogues behind this presidency.
Speaker 14: So russ Vote, he served as the head of OMB
Speaker 14: at the end of the last Trump presidency. And his
Speaker 14: big idea really goes around executive power. And it's this
Speaker 14: idea that the executive that's the president, Donald try Trump
Speaker 14: should be able to have much much wider discretion to
Speaker 14: run the government and really to run the country. Then
Speaker 14: I think most even either Democrats or Republicans have generally
Speaker 14: allowed in the past. He's also a big time deficit hawk.
Speaker 4: You know, he started his.
Speaker 14: Career working for Phil Graham, uh the he was a
Speaker 14: senator starting in the in the eighties, was one of
Speaker 14: the key people behind the effort to like balance the
Speaker 14: budget in the in the eighties and the nineties. And
Speaker 14: so so Vote has these two threads, one deficit hawkery
Speaker 14: and the other being executive power, and those two things
Speaker 14: work really nicely with what Elon Musk is trying to do,
Speaker 14: because of course DOGE is about both of those things.
Speaker 14: It's about like cutting the deficit, but also sort of
Speaker 14: doing things more aggressively, uh, you know, with the power
Speaker 14: of the presidency, and so so Vote and Elon Musk
Speaker 14: had this kind of interesting alliance, and it especially interesting
Speaker 14: because they're so different. They're like, they couldn't be more
Speaker 14: different from one another.
Speaker 3: All right, So, having said that, we focus so much
Speaker 3: on Elon Musk, he's been the face out there in
Speaker 3: public in the Oval Office when Donald Trump is holding
Speaker 3: the president Donald Trump of course is holding press conference
Speaker 3: about what DOGE is doing, and so on and so forth.
Speaker 3: So I guess there's an assumption that once maybe you know,
Speaker 3: there's been some speculation that maybe Elon Musk his days
Speaker 3: at DOGE are numbered, that that's it. And yet that's
Speaker 3: not the case, is it. If that's all plays out.
Speaker 14: You know, people within the Trump administration definitely don't see
Speaker 14: it that way. I mean, as you say, Carol, at
Speaker 14: some point, Elon Musk is going to have to give
Speaker 14: up his full time role in the Trump administration because
Speaker 14: he is a temporary government employee that is going to
Speaker 14: sunset after one hundred and thirty days. We don't know
Speaker 14: exactly what that'll be, how exactly they're counting the days,
Speaker 14: and it would not surprise me if it stretches on.
Speaker 4: But at some point Musk is going to take a
Speaker 4: step back.
Speaker 14: And and certainly within Trump world, this is seen as
Speaker 14: being part of russ Vote's domain, and and that he
Speaker 14: and and and people around him are ready to pick
Speaker 14: up where Elon Musk left off. And and and it's
Speaker 14: not as if Elon. I don't think Elon Musk is
Speaker 14: going to go away from from from the world of Trump.
Speaker 14: I think he'll still be very vocal on social media,
Speaker 14: but when you're talking about that day to day role,
Speaker 14: it will go away. And if you're thinking that Musk
Speaker 14: going away is going to change the trajectory of of
Speaker 14: what Trump is trying to do, I think you would
Speaker 14: be mistaken because russ Vote has been working on these
Speaker 14: issues for years, long before Elon Musk proposed the idea
Speaker 14: of doje Vote was proposing sort of very similar things
Speaker 14: from his perch as the head of this you know
Speaker 14: MAGA Think Tank as being one of the kind of
Speaker 14: leading lights intellectually in Trump world.
Speaker 3: All Right, and as we've you talked about. I mean,
Speaker 3: he's very different that Elon Musk. And so I do wonder, like,
Speaker 3: what's the speculation about how these cuts and things might
Speaker 3: play out if Elon Musk leaves and vote Vote is
Speaker 3: he's in charge?
Speaker 8: Yeah, I mean the difference is it's almost comical.
Speaker 14: So Musk, of course, he's he loves to be front
Speaker 14: and center, vote, very low profile, barely talks about himself,
Speaker 14: you know, you know, rarely gives interviews, you know, rarely
Speaker 14: gives up any any personal information. You know, we know
Speaker 14: everything there is to know about Elon Musk's personal life. Musk,
Speaker 14: of course, ideologically scattered Vote is very very disciplined, and
Speaker 14: and you know that you could see that in two
Speaker 14: different ways.
Speaker 4: On one hand, I.
Speaker 14: Think there's some people who see Musk kind of working
Speaker 14: against Vote and some of the ideological components of Trump's space.
Speaker 14: On the other hand, Vote and people close to him
Speaker 14: see Musk as this kind of force multiplier, as this
Speaker 14: face of this otherwise maybe political like difficult to sell operation.
Speaker 14: You have the very popular, you know, out there guy
Speaker 14: and Elon Musk representing these changes in the public. Meanwhile,
Speaker 14: behind the scenes, you have russ Vote and his allies
Speaker 14: doing actual work.
Speaker 1: Well, so what have they been able to accomplish thus far?
Speaker 1: Because Project twenty twenty five was brought up during the
Speaker 1: campaign quite a bit in fact by Democrats in the
Speaker 1: president at that time. Distance since himself from Project twenty
Speaker 1: twenty five, what have they been able to accomplish?
Speaker 4: Yeah, there's a lot there.
Speaker 14: I mean, Project twenty twenty five has a large number
Speaker 14: of co authors. In terms of and and there they
Speaker 14: are different positions. Like if you look at the tariff
Speaker 14: section of Project twenty twenty five, there was a pro
Speaker 14: tariff section and an anti tariff section. They're actually like
Speaker 14: two dueling proposals. Vote is pretty much aligned with Trump
Speaker 14: on everything, so he he was for the tariff. He
Speaker 14: was publishing, you know, these very hawkish pieces about tariffs
Speaker 14: in the years running up to the election. And in
Speaker 14: terms of sort of executive of power of this idea
Speaker 14: that Trump should be able to run the government. I mean,
Speaker 14: that is a place where they they're making a lot
Speaker 14: of changes. I mean we're seeing you know, some of
Speaker 14: this has been is caught up in court right now,
Speaker 14: and it's unclear how many of these attempts to you know,
Speaker 14: drastically close or reduce the size of federal agencies.
Speaker 4: How much of that will stick.
Speaker 14: But but you know, in the story we talk about
Speaker 14: the CFPB, that's the Consumer Financial Protection Bureau. Vote is
Speaker 14: also running the cfpv PB and and right now this
Speaker 14: is locked up in court. It's it's not clear what's
Speaker 14: going to happen. But but when you talk to people
Speaker 14: who work there, I mean, nothing is happening right now.
Speaker 14: You know, the agency has not been shuttered, but it
Speaker 14: also is clear that its ability to do stuff has
Speaker 14: been drastically reduced. And so in that sense, he's done
Speaker 14: a lot that said, there is this, there is there
Speaker 14: are the questions around, you know, how much of this
Speaker 14: is gonna is gonna stand in court? How much of
Speaker 14: it will you know, be stand up to congressional scrutin
Speaker 14: a change of power and so on.
Speaker 4: So the jury's still out there.
Speaker 1: Well before the jury was even out there, our team
Speaker 1: spoke to Kevin Roberts, the president of the Heritage Foundation.
Speaker 1: That was back just after President Trump won the election.
Speaker 1: This was on November eleventh. He was on balance of power.
Speaker 1: Check out what he had to say about the opportunity
Speaker 1: that he saw.
Speaker 15: Then we think that this is the beginning of a
Speaker 15: golden era of conservative reform. I will say that because
Speaker 15: the work of Project twenty twenty five represents the conservative movement,
Speaker 15: it would be very difficult for anybody to implement policies
Speaker 15: on education, on the border, on taxation without at least
Speaker 15: consulting those ideas in people. That's not some arrogant or
Speaker 15: hubristic comment on our part. That's just the nature of
Speaker 15: how policy making works.
Speaker 1: That was Kevin Roberts, the president of the Heritage Foundation,
Speaker 1: back on November eleventh, twenty twenty four, joining us on
Speaker 1: a balance of power, Max. When you think about this
Speaker 1: term versus Trump's first term, are there ideological differences because
Speaker 1: of the influence of the Heritage Foundation of Project twenty
Speaker 1: twenty five. Do you see differences in the way that
Speaker 1: he's well making rules or the way that he's putting
Speaker 1: policy into effect? Do you see it for sure?
Speaker 9: Now?
Speaker 14: I think the difference is that during the last Trump presidency,
Speaker 14: Trump came in without this kind of broad base of support.
Speaker 14: You know, it had been a closely contested nomination. You know,
Speaker 14: there were a lot of competing factions within Trump World,
Speaker 14: and in particular, you had this kind of business faction,
Speaker 14: right that was pushing against some of these policies that
Speaker 14: we've been talking about a lot, you know, whether we're
Speaker 14: talking about tariffs or you know, various erratic behavior on
Speaker 14: the economy. And what's happened instead is you have this
Speaker 14: kind of base of committed ideologues who have spent years
Speaker 14: preparing for this moment. That's what Project twenty twenty five
Speaker 14: was all about. It was like, let's well, you know,
Speaker 14: the last time we had this, you know, as they
Speaker 14: see at this like deep state that was thwarting them.
Speaker 3: Now let's now we're going.
Speaker 14: To figure out how to actually do stuff. So what
Speaker 14: they're trying to do is avoid the kind of checks
Speaker 14: of these more moderate factions within Trump world. And Vote
Speaker 14: is a really interesting person here because Vote was kind
Speaker 14: of dead center of some of the biggest controversies of
Speaker 14: the last term. So Vote was involved in holding the
Speaker 14: money up, the aid to Ukraine up that happened through
Speaker 14: the Office of Management and Budget. Now that led to
Speaker 14: obviously an impeachment hearing and everything. As Vote saw it,
Speaker 14: that was the deep state, you know, trying to stop
Speaker 14: Donald Trump. So there's a lot of ways in which
Speaker 14: these the guys involved with Project twenty twenty five, including
Speaker 14: Russ Vote, have been sort of preparing for this moment
Speaker 14: for years, and I think that's one of the reasons
Speaker 14: this presidency has been so much more hardline ideologically than
Speaker 14: the previous one.
Speaker 3: Well, that's what I find interesting. And you go into
Speaker 3: some great history about his time working for Senator Phil Graham,
Speaker 3: I mean, pull out your political history books, but Texas
Speaker 3: Republican fiscal hawk, and you say he certainly had quite
Speaker 3: an impact on vote in terms of where he got
Speaker 3: that from. But I think what's really interesting is, you know,
Speaker 3: this idea of these views on executive power. I mean,
Speaker 3: I think we thought. I mean that, I think is
Speaker 3: what's so fascinating right about this second Trump term, consolidating
Speaker 3: executive power like we've never seen before, and he certainly
Speaker 3: is helping the president do this.
Speaker 14: Yeah, and that's certainly where these kind of libertarian you know,
Speaker 14: Phil Graham has had long an interesting career, but I'd
Speaker 14: say he's more of the sort of libertarian bent than
Speaker 14: somebody like Russ Vote that and that's where the difference.
Speaker 4: Is, right.
Speaker 14: Whereas a lot of these deficit hawks, the old old
Speaker 14: line deficit hawks were really interested in Congress as the
Speaker 14: forcing function for russ vote. It's the executive It's it's
Speaker 14: kind of clearing the field and letting Donald Trump have
Speaker 14: as much leeway as possible.
Speaker 4: You know.
Speaker 14: Of course critics are going to say too much leeway,
Speaker 14: We're you know, bordering on an imperial presidency. And so
Speaker 14: that's the kind of like ideological conflict that's playing out
Speaker 14: behind the scenes, you know, as as Trump does his thing.
Speaker 3: Yeah, it's just you know, fascinating a story like yours.
Speaker 3: You know, the people that are so instrumental in shaping
Speaker 3: what this Trump term looks like. Just really amazing stuff. Max,
Speaker 3: Thank you so much, really appreciate Max Chack and comments
Speaker 3: at Bloomberg BusinessWeek, co host of the Elon Inc. Podcast.
Speaker 3: Check out his story This is on the Bloomberg coming
Speaker 3: also in the new issue of Bloomberg BusinessWeek magazine. Can
Speaker 3: find at Bloomberg dot com too.
Speaker 2: This is the Bloomberg Business Week Daily Podcast. Listen live
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Speaker 2: flagship New York station, Just Say Alexa played Bloomberg eleven thirty.
Speaker 3: Earth Day was this past Tuesday, and once again we
Speaker 3: find farmers among those at the center of President Trump's
Speaker 3: trade war with China.
Speaker 1: With lower crop prices and higher costs for farm necessities,
Speaker 1: the threat of retaliatory tariffs can further hurt US farmers.
Speaker 1: That's not all in the US farmers have a deep
Speaker 1: sense of just how dependent they are on China for
Speaker 1: a steady clip of demand, a trade flow that's allowed
Speaker 1: the US to rank among the world's top crop exporters.
Speaker 3: If that trade dramatically shrinks, it would likely spell disastrous
Speaker 3: consequences for the agricultural economy that helps power America's heartland.
Speaker 3: Rebecca Takeuel knows about farming in the United States. She
Speaker 3: is also filmmaker and director, along with her husband Josh,
Speaker 3: of the film Common Ground, which looks into how food
Speaker 3: production and agriculture can be done better with less environmental impact.
Speaker 3: We've talked with them before. She has a great understanding
Speaker 3: of the industry. Rebecca, it's great to have you back
Speaker 3: here on Bloomberg Business Week. Got to start though, with
Speaker 3: what kind of dominates our world. We're all focused on
Speaker 3: DC policies, tariffs, trade, wars, supply chains, the current political environment,
Speaker 3: the current talk about tariffs, how does that impact the
Speaker 3: agricultural world and also really more specifically the regenerative farming world.
Speaker 16: Specifically, how it affects agriculture today is farmers are going bankrupt.
Speaker 16: They have become death surfs to feeding us. And the
Speaker 16: reason is because there's so many agricultural inputs that not
Speaker 16: only are creating runoff, degrading the land, creating food that
Speaker 16: doesn't have nutrition, but as the costs rise, what's happening
Speaker 16: is these farmers are getting less and less profit and
Speaker 16: it's created an industry where farmers have a five times
Speaker 16: higher suicide rate than any other industry. And we're talking
Speaker 16: about the US, which is a huge agricultural exporter, and
Speaker 16: an industry that's harming the very people that are growing
Speaker 16: the food that we're extorting. It's a system that's not
Speaker 16: currently working. Regenerative agriculture is based on local supply chains,
Speaker 16: local economies. It's more based on circular economies versus this
Speaker 16: idea of extraction and this sort of global food supply
Speaker 16: chain that is not a system that actually is realistic
Speaker 16: or could ever work. That's not how living in a
Speaker 16: regenerative way could ever function. Because you have to eat
Speaker 16: the food that you grow in your local environment, with
Speaker 16: inputs that come from your local environment. It has the
Speaker 16: benefit of not only creating a huge surplus of economic
Speaker 16: growth for the farmers and the economy, but it creates
Speaker 16: this wealth of resiliency, of biodiversity, of a variety of
Speaker 16: different types of crops versus a monocrop that's then going
Speaker 16: to give that farmer a much higher revenue stream. And
Speaker 16: farmers that are switching from industrialized agriculture to regenerative agriculture
Speaker 16: see a ninety percent increase in their profits with in
Speaker 16: here one.
Speaker 1: Yeah, I just want to jump in because we don't
Speaker 1: have a ton of time here, and I want to
Speaker 1: stick on one point that you mentioned, which is the
Speaker 1: idea of eating what is produced close to us, the
Speaker 1: way that we experience food in the United States right now,
Speaker 1: And I'll just use my own kitchen as an example
Speaker 1: and my own fridge as an example. I've got bananas
Speaker 1: from outside of the US. I've got strawberries from very
Speaker 1: far away, maybe California, maybe Mexico, maybe somewhere else. I've
Speaker 1: got apples from New York. We've got greens from California.
Speaker 1: We've got almonds from California, and you know that's twenty
Speaker 1: five hundred miles away. So everything that I'm eating right
Speaker 1: now in April is from outside of the state except
Speaker 1: for apples right now. That's just because of where we
Speaker 1: are seasonally. Are you saying that we should only be
Speaker 1: eating what's produced close to us.
Speaker 16: I'm saying that if you want the most nutrient dense food,
Speaker 16: if you want to support a healthy agricultural system, then
Speaker 16: we're going to start looking at the regions that we
Speaker 16: live in to feed us. And so we don't need
Speaker 16: to be sending our food out of the country. We
Speaker 16: don't need to be importing synthetic, toxic inputs to spray
Speaker 16: on our fields and farms and that we then get
Speaker 16: exposed to. There is a natural, simple way to farm
Speaker 16: in nature's image, the way it was done for millennia
Speaker 16: before we started farming in this crazy way with all
Speaker 16: these synthetic inputs that we call it the quote unquote
Speaker 16: green revolution.
Speaker 1: I think one challenge to that. I think one challenge
Speaker 1: to that could be the fact that you have different
Speaker 1: regions in the United States that are set up specifically
Speaker 1: for growing certain things like Let's think about Iowa, for example,
Speaker 1: and the so many acres that are filled with soybeans
Speaker 1: in Iowa corn as well. Over half the soybeans that
Speaker 1: are produced in the US actually are exported, or over
Speaker 1: half the soybeans that are exported or exported to China.
Speaker 1: We can't really change the environment to use those soybeans
Speaker 1: that are actually going somewhere else.
Speaker 4: Right.
Speaker 16: The idea that soybeans being shipped to China is somehow
Speaker 16: feeding the world is totally a backwards like, we don't
Speaker 16: need soy to be healthy. That's soy then is fed
Speaker 16: to something else, that then is fed to something else.
Speaker 16: That is an insane model that we're going to ship
Speaker 16: soy to China, then they're going to feed that to
Speaker 16: an animal, and then we're going to ship that animal
Speaker 16: back here and eat that. That is not a system
Speaker 16: that is regenerative. It's not a system that is healthy.
Speaker 16: That's not a system that makes any sense economically. The
Speaker 16: way to be healthy, the way to have a thriving economy,
Speaker 16: the way to support the people who grow our food
Speaker 16: is to support the people that we can find in
Speaker 16: our regions. It drastically reduces the transportation costs of the
Speaker 16: supply chains of reducing the dependency on the fossil fuel
Speaker 16: based inputs.
Speaker 3: Well, you know one thing I want to challenge you with,
Speaker 3: And I think some people who are listening who are like, yeah,
Speaker 3: this sounds so good. And I think when we've talked before,
Speaker 3: I remember maybe bringing up working with Chipotle, who really
Speaker 3: thought about their producers. And we're trying to to kind
Speaker 3: of go back the way things used to be produced,
Speaker 3: this clean cycle that doesn't hurt the environment, that actually
Speaker 3: helps the environment and keeps it going. But I'm wondering, is,
Speaker 3: you know, Rebecca, can we really transform industrial farming to
Speaker 3: regenerative ag and ramp it up so that the process
Speaker 3: of regenerative farming can feed everyone in the United States
Speaker 3: and you know, potentially feed the world. Is it even
Speaker 3: possible to.
Speaker 16: Do that one hundred percent? It's already happening. The USDA
Speaker 16: is already find funding climate smart agriculture, major institutional investors
Speaker 16: and banks are exploring soil health linked financial instruments.
Speaker 3: We are literally at.
Speaker 16: The tipping point right now, and it's the early movers
Speaker 16: and the regenerative AAG movement that will be the leaders
Speaker 16: of this huge next green economic wave.
Speaker 3: What's holding really back, what's still holding it back, and
Speaker 3: what percentage? What percentage of the food we eat is
Speaker 3: actually regenerative farmed.
Speaker 16: Currently is a small percentage. It's less than five percent.
Speaker 16: In the United States, you'll find regenerative organic agriculture. What's
Speaker 16: holding us back has been the policies that keep us
Speaker 16: locked in to this crazy industrialized cycle of growing food.
Speaker 16: That's I believe beginning to change. We're starting to see
Speaker 16: people get really excited about the economic benefit of regenerative
Speaker 16: agriculture and the surplus of food that comes from that,
Speaker 16: and the health benefits that I mean, it's a win
Speaker 16: win win, the environmental benefits that come from that, the
Speaker 16: climate resiliency that then impacts the farmer's pocketbook because they
Speaker 16: don't want to talk about climate change, but they do
Speaker 16: want to talk about the weather, and all of that
Speaker 16: is impacted by how we grow our food. And farmers
Speaker 16: are beginning to realize that and they want to get
Speaker 16: out of this model. They want to make a profit,
Speaker 16: they want to take care of their land, they want
Speaker 16: to grow healthy food. This is something that's important to them.
Speaker 16: I come from a legacy farming family, and I know
Speaker 16: and my family has suffered from exposure to these inputs
Speaker 16: that have been imported, and so there's a real opportunity
Speaker 16: for us as a country to lead the way, to
Speaker 16: show what it looks like to create real revitalation of
Speaker 16: our economy, of our environment, to create stability. And all
Speaker 16: of that is through making some very simple shifts in
Speaker 16: how we grow our food. And the big part that's
Speaker 16: holding us back is the way we think about it
Speaker 16: and the way that government has put these policies into
Speaker 16: place that keep us locked into that extractive model.
Speaker 1: It sounds like perhaps maybe you see this trade war
Speaker 1: as an opportunity to completely reshape the US agricultural industrial complex.
Speaker 16: Now I think that's the only way to look at it.
Speaker 16: This is a huge opportunity. We have a very short
Speaker 16: window of time to course correct here, because if we
Speaker 16: think it's bad now, we should look at what it's
Speaker 16: going to be like in thirty years. If we continue
Speaker 16: down this path, it's going to be we're going to
Speaker 16: reshape our parent And so if we are able right
Speaker 16: now to start to look at how we can really
Speaker 16: build that resiliency, that economic resiliency that create resilience, then
Speaker 16: we're going to see a totally different world, and this
Speaker 16: is the moment to do it. The farmers know it,
Speaker 16: the government is starting to catch on, and you know
Speaker 16: who else is starting to catch on, Big business. I mean,
Speaker 16: Monsanto Bear is already developing a quote unquote organic roundup.
Speaker 16: So people are starting to think about what they're starting
Speaker 16: to act.
Speaker 3: So I might say, finally, one thing, one thing I
Speaker 3: want to ask you, do we have to get used
Speaker 3: to when I grew up And it's not that long ago.
Speaker 3: It's like things were in season. We had apples in
Speaker 3: the fall, we went apple picking, like we had peaches
Speaker 3: at certain times. We had berries at certain times, we
Speaker 3: had watermelon in the summer. Like we just like that
Speaker 3: was our world because it was the cycles of the
Speaker 3: seasons and what we could get because it wasn't such
Speaker 3: a global food supply. I mean, I can get strawberries
Speaker 3: every time of the year, like I can get It's
Speaker 3: like kind of amazing. Do we have to maybe redefine
Speaker 3: our expectations when it comes to our access to food
Speaker 3: if we really want to maybe be more respectful of
Speaker 3: our environment and how we grow things, we do.
Speaker 16: Need to reset our expectations about what we eat. If
Speaker 16: we think that what we're eating now is going to
Speaker 16: create longevity and health that is totally backwards. If you
Speaker 16: look at what we eat one hundred years ago, it
Speaker 16: was locally sourced. People were healthy. They weren't nearly fat,
Speaker 16: sick and dead like we are all right now. Essentially,
Speaker 16: a regenerative model is one that is a healthy model,
Speaker 16: and it tastes good. Nutrient dense food tastes good. So
Speaker 16: when people start to make this switch, at first of like,
Speaker 16: oh it's too expensive and oh it's too restrictive, But
Speaker 16: that's not the case at all. When you go to
Speaker 16: your local farmers market, you suddenly get sess to a
Speaker 16: world of flavor and it's local and it's one that
Speaker 16: you are symbiotic with because it's from your local environment.
Speaker 16: So absolutely we need to reset our expectations when it
Speaker 16: comes to eating food. But it's one that we should
Speaker 16: celebrate and be excited about because it's going to make
Speaker 16: everyone's lives better.
Speaker 1: Hey, Rebecca, before we let you go, we only have
Speaker 1: about forty five seconds left. But can this be done
Speaker 1: in your view independent of government support or do you
Speaker 1: think the government needs to push farmers to do this.
Speaker 16: Farmers do not need to be pushed to do this.
Speaker 16: Farmers feel locked in the current cycle. They're stuck there,
Speaker 16: often by the bank loans that they have that make
Speaker 16: them forced to spray, which they do I don't really
Speaker 16: want to do. When they get access to regenerative agricultural information,
Speaker 16: everybody wants to make that transition when they realize they.
Speaker 3: Can, so.
Speaker 16: I thinks farmers are ready to make the switch. I
Speaker 16: think the government is starting to catch up. I think
Speaker 16: we're going to shift the policies that are keeping us
Speaker 16: locked in this broken model, and welcome to the new movement.
Speaker 16: This is the age of regeneration.
Speaker 3: This is the.
Speaker 16: Tipping points that and the whole world is about to
Speaker 16: shift into this new model, and this is the next
Speaker 16: trillion dollar industry.
Speaker 1: Rebecca Tikel, filmmaker and director of the documentary Common Ground.
Speaker 1: You can find streaming now on Amazon Prime.
Speaker 3: Rebecca, thanks so much.
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Speaker 5: Mhm