WEBVTT - Bloomberg Businessweek Weekend - July 1st, 2022 0:00:01.040 --> 0:00:05.400 This is Bloomberg business Week inside from the reporters and 0:00:05.559 --> 0:00:09.160 editors who bring you America's most trusted business magazine, plus 0:00:09.240 --> 0:00:12.600 global business, finance and tech news as it happened. S 0:00:12.600 --> 0:00:16.440 Bloomberg business Week with Carol Messier and Bloomberg Quick Takes 0:00:16.520 --> 0:00:21.239 Tim Stenovic on Bloomberg Radio. Hi, everyone, welcome to the 0:00:21.280 --> 0:00:23.960 weekend edition of Bloomberg Business Week. I'm Karl mass Or. 0:00:24.000 --> 0:00:26.680 Tim Stanovic is off this week, and he missed the 0:00:26.760 --> 0:00:29.360 latest release of one of the Fed's favorite inflation metrics. 0:00:29.400 --> 0:00:33.680 We're talking about core PC personal consumption expenditures. It was 0:00:33.760 --> 0:00:36.440 up less than expected for the smallest game since November, 0:00:36.520 --> 0:00:40.599 still though high. We'll talk though about how persistent inflation 0:00:40.680 --> 0:00:43.360 might affect your July four festivities. We'll get to that 0:00:43.479 --> 0:00:47.080 in just a moment. Also ahead, Nobel Laureate Paul Krugman 0:00:47.159 --> 0:00:50.120 on where he thinks the US economy is headed, look 0:00:50.120 --> 0:00:52.480 at the dark side of the late Jack Welch's celebrated 0:00:52.479 --> 0:00:56.200 corporate legacy, and we'll dig into the Heist Issue, Bloomberg 0:00:56.200 --> 0:00:59.640 Business Week's annual double issue dedicated to tales of robbery, 0:00:59.760 --> 0:01:02.640 s ams and snitches. All of that to come first 0:01:02.680 --> 0:01:05.360 up if you're thinking of having friends over for the 0:01:05.400 --> 0:01:08.720 Fourth of July, brace yourself. Hosting a party of ten 0:01:08.760 --> 0:01:11.399 could cost eleven percent more than it did last year. 0:01:11.720 --> 0:01:14.800 That's according to the Wells Fargo July fourth Food Inflation Report. 0:01:14.959 --> 0:01:17.920 Bloomberg News senior markets reporter Katie Greifeld and I spoke 0:01:17.920 --> 0:01:21.320 with Carol Flynn, ag tech analyst at Wells Fargo, and 0:01:21.360 --> 0:01:24.120 we asked her where to find some relief this fourth 0:01:24.120 --> 0:01:28.520 of July. It's absolutely a pain point. Food price inflation 0:01:28.760 --> 0:01:33.399 is hitting everybody's wallets. Um. And we wrote this UH 0:01:33.600 --> 0:01:37.160 research just to figure out where that pinch of inflation 0:01:37.319 --> 0:01:43.240 could be potentially solved by finding relative value and more 0:01:43.520 --> 0:01:46.880 palatable price points. And so what walk us through some 0:01:46.920 --> 0:01:50.280 of those relative value plays? Feelss like I'm talking about 0:01:50.280 --> 0:01:52.760 stocks here, but when it comes to food in particular, 0:01:52.760 --> 0:01:55.680 I mean, one are the substitutions that one could make 0:01:55.720 --> 0:01:57.920 if they are trying to host a party and not 0:01:58.080 --> 0:02:00.960 you know, pay a fortune for it. Well, that's a 0:02:01.000 --> 0:02:04.160 great question. You know, it's year over year in UH 0:02:04.360 --> 0:02:08.240 food price accloration that we're looking at here, and the 0:02:08.320 --> 0:02:12.079 substitutions are truly going to be UM things like, what 0:02:12.160 --> 0:02:14.720 else can we put on our grill. It looks like 0:02:14.800 --> 0:02:18.520 brisket is going to be more um affordable than try 0:02:18.600 --> 0:02:21.600 hip this time. Maybe, if you're gonna stick with the 0:02:21.639 --> 0:02:24.560 Hamburger patties, take a look in the frozen food section, 0:02:24.680 --> 0:02:28.400 anything that's sort of had shelf stay, book stability, or 0:02:28.520 --> 0:02:32.720 frozen foods versus perishable. You're gonna see some specials out 0:02:32.720 --> 0:02:35.560 there in some lost leaders. Um, it's gonna take a 0:02:35.600 --> 0:02:38.560 little more effort to make sure this is um the 0:02:38.639 --> 0:02:42.160 food price, the budget is taken care of. All right, 0:02:42.240 --> 0:02:43.919 Carol Kate is already weighed in, She goes, I'm not 0:02:43.960 --> 0:02:48.000 gonna eat shrimp and port tacos. I heard that there 0:02:48.040 --> 0:02:51.160 are so many prigans in the produce department, and you 0:02:51.200 --> 0:02:53.960 don't have to have that. That's I mean, that's the 0:02:54.000 --> 0:02:57.040 beauty of an American food and agricultural system. I mean, 0:02:57.160 --> 0:03:01.600 we have an incredible, incredible we'll see your foods available. 0:03:01.600 --> 0:03:05.600 But are shrimp tacos actually cheaper this time around? The 0:03:05.680 --> 0:03:09.280 reason we brought up shrimp is actually shrimp prices have 0:03:09.480 --> 0:03:12.320 not increased over the last five years. But you look 0:03:12.360 --> 0:03:14.720 at the other proteins on the grill, and they're looking 0:03:15.080 --> 0:03:18.680 at twelve or fifteen percent year over year increases. So 0:03:18.840 --> 0:03:22.560 again all about relative value. So we'll see the shoppers 0:03:22.600 --> 0:03:25.840 looking for relative value. If shrimp is already on your grill, 0:03:26.520 --> 0:03:28.800 you may have more of it this time. If there's 0:03:28.840 --> 0:03:31.760 something else that you like, um, then you're going to 0:03:31.840 --> 0:03:35.160 be maybe looking for substitutions in the frozen case or 0:03:35.240 --> 0:03:39.840 some new innovative menu items like shrimp. Uh no, I don't. 0:03:39.880 --> 0:03:41.920 I was gonna say shrimp prices probably haven't gone up 0:03:41.960 --> 0:03:44.880 because it's a weird food. It is that a weird food. 0:03:44.920 --> 0:03:47.640 It's a great food, weird texture, were not a fan. 0:03:47.760 --> 0:03:49.600 But in any case, I also want to talk about 0:03:49.600 --> 0:03:51.800 alcohol because personally I don't really like beer, more of 0:03:51.800 --> 0:03:54.200 a white wine gal, but a lot of people drink 0:03:54.320 --> 0:03:57.080 beer and other beverages at the fourth of July. What's 0:03:57.120 --> 0:04:00.840 the outlook there. It does look like some of the 0:04:00.880 --> 0:04:07.320 higher priced beverages in the beer case are up, and 0:04:07.360 --> 0:04:11.560 we're already seeing demand flow to the domestic um super 0:04:11.560 --> 0:04:15.840 premium brand, so people are already making a change. And 0:04:15.920 --> 0:04:19.720 the white wine and especially killed white wine is still 0:04:19.760 --> 0:04:23.560 out there, and there's some great, amazing brands that are 0:04:23.600 --> 0:04:26.679 at lower price points. If you're still looking to still 0:04:26.960 --> 0:04:29.080 you know that, you know, to prepare with a really 0:04:29.160 --> 0:04:32.680 nice wine, you're gonna be okay, okay, alright, So talk 0:04:32.720 --> 0:04:35.839 to me too about veggies or things like avocados between 0:04:35.839 --> 0:04:38.840 now have been expensive. We've talked about shortages. I feel 0:04:38.880 --> 0:04:40.440 like over the last year or so, where are we 0:04:40.520 --> 0:04:45.839 on that. Well, avocado shortages is another story altogether. You know, 0:04:46.000 --> 0:04:50.480 mostly supply chain. There's always a perishability issue and weather 0:04:50.600 --> 0:04:55.039 driven issues. Um, But California avocados are just about to 0:04:55.120 --> 0:04:57.800 come into season, into the peak of the season. So 0:04:58.040 --> 0:05:01.320 look for your in your protuce department. Again, seasonality is 0:05:01.320 --> 0:05:03.600 going to drive a lot when their hire supply. You're 0:05:03.600 --> 0:05:07.320 going to see prices get moderated and things move quickly. 0:05:07.360 --> 0:05:11.600 It's very dynamic space in the in the protest section, So, um, 0:05:12.080 --> 0:05:14.719 talk about sort of weird textures. People talk about that 0:05:14.760 --> 0:05:18.000 with avocados, but once you are a fan, it's usually 0:05:18.080 --> 0:05:21.520 a lifetime issue. So so are you saying they're expensive 0:05:21.560 --> 0:05:24.760 but they're around No, I actually think that price is 0:05:24.800 --> 0:05:27.359 going to come down because we're gonna better supplies because 0:05:27.360 --> 0:05:30.760 we're coming into the California see the avocados. Actually, I 0:05:30.760 --> 0:05:33.160 am not in avocado every single morning half of all. 0:05:33.279 --> 0:05:36.960 Not an entire avocado left the record ship. But we've 0:05:37.000 --> 0:05:40.200 covered the main course, We've covered beverages. What about dessert. 0:05:40.240 --> 0:05:43.440 What's the outlook there? Well, I think you might want 0:05:43.480 --> 0:05:46.000 to look at some of the non dairy alternatives. I'm 0:05:46.080 --> 0:05:48.520 a big fan of the real milk people, so don't 0:05:48.560 --> 0:05:51.160 forget the real live cream. But it does look like 0:05:51.200 --> 0:05:53.960 those are those priceges have gonna be up substantially. That 0:05:54.040 --> 0:05:57.359 was well Spargo actech analyst Carol Flynn coming up a 0:05:57.400 --> 0:06:01.240 new book reveals what maximizing shareholder value really entails and 0:06:01.320 --> 0:06:04.640 says the late Jack Welch has celebrated leadership techniques actually 0:06:04.680 --> 0:06:08.320 crushed the soul of corporate America. In many corners of 0:06:08.320 --> 0:06:11.640 the business world, he is still a hero, and that's 0:06:11.640 --> 0:06:13.600 part of the debate. I wanted to stir up not 0:06:13.680 --> 0:06:18.120 just a referendum on Welch himself, but a broader conversation 0:06:18.440 --> 0:06:22.640 about what we admire, what we look up to, the 0:06:22.720 --> 0:06:25.600 kind of business leaders we want to be putting up 0:06:25.640 --> 0:06:28.480 on those pedestals. Author of New York Times reporter David 0:06:28.520 --> 0:06:31.400 Gillis joins us, next, you're listening to Bloomberg Business Week, 0:06:31.680 --> 0:06:42.919 this is Bloomberg. This is Bloomberg Business Week with Carol 0:06:43.000 --> 0:06:47.200 Masser and Bloomberg Quick Takes. Tim Stenovik from Bloomberg Radio. 0:06:49.040 --> 0:06:52.360 The Manager of the Century. Fortune called him upon his retirement. 0:06:52.360 --> 0:06:54.680 Others referred to him as a rock star CEO, a 0:06:54.800 --> 0:06:58.679 champion of six Sigma and Stack rankings. His name became 0:06:58.760 --> 0:07:02.120 synonymous with consistent and predictable earnings growth and shareholder gains 0:07:02.160 --> 0:07:04.600 as well and with M and A chop cuts off 0:07:04.600 --> 0:07:07.120 shoring and outsourcing. We are talking about the man who 0:07:07.120 --> 0:07:09.360 broke capitalism, or at least that's what a new book 0:07:09.400 --> 0:07:13.160 calls Jack Welch joining us as David gillis Corner Office columnist, 0:07:13.200 --> 0:07:15.480 an award winning business reporter for The New York Times, 0:07:15.560 --> 0:07:18.680 author of The Man Who Broke Capitalism. How Jack Welt 0:07:18.800 --> 0:07:21.560 gutted the heartland and crushed the soul of Corporate American 0:07:21.640 --> 0:07:24.600 How to undo his legacy. David joins us via zoom 0:07:24.640 --> 0:07:27.640 in Canada. David um delighted. We've been looking forward to 0:07:27.720 --> 0:07:30.360 talking with you. How did he go from being somebody 0:07:30.360 --> 0:07:33.280 who was, you know, as we said, the Manager of 0:07:33.280 --> 0:07:36.920 the Century and we lauded him for his consistency, to 0:07:37.040 --> 0:07:42.480 someone who we realized, you know, was doing some financial engineering. Well, 0:07:42.520 --> 0:07:46.480 I think that evolution of of how we think about 0:07:46.560 --> 0:07:48.760 him is still very much underway. You know, there are 0:07:48.800 --> 0:07:52.800 still people who vehemently dispute with my characterization of him. 0:07:52.840 --> 0:07:56.000 In many corners of the business world, he is still 0:07:56.040 --> 0:07:58.320 a hero, and that's part of the debate. I wanted 0:07:58.360 --> 0:08:01.440 to stir up not just a referend him on Welch himself, 0:08:01.960 --> 0:08:06.440 but a broader conversation about what we admire, what we 0:08:07.080 --> 0:08:10.000 look up to, the kind of business leaders we want 0:08:10.120 --> 0:08:13.400 to be putting up on those pedestals. So listen, Welch 0:08:13.480 --> 0:08:17.320 himself had ups and downs during his tenure. We have 0:08:17.400 --> 0:08:20.320 to remember, shortly after taking over, he wasn't called the 0:08:20.320 --> 0:08:22.840 manager of the center. He was called neutron Jack because 0:08:22.880 --> 0:08:27.840 everyone was so upset with his mass layoffs and factory closures. 0:08:27.840 --> 0:08:31.000 But over the course of his twenty years as CEO, 0:08:31.320 --> 0:08:34.480 he was able to repair that initial damage to his 0:08:34.720 --> 0:08:38.640 reputation and go out from the company on top. So this, 0:08:38.800 --> 0:08:42.400 you know, process of thinking about the legacy of a 0:08:42.440 --> 0:08:45.440 man so consequential. I don't know that it's ever over. 0:08:45.720 --> 0:08:48.280 And what I'm trying to do with this book is 0:08:48.440 --> 0:08:52.360 put his tenure in perspective, yes, but also make it 0:08:52.400 --> 0:08:54.960 a conversation, I hope about more than just one man, 0:08:55.000 --> 0:08:57.160 but about a system. And it's a system that I 0:08:57.160 --> 0:08:59.840 don't need to tell you both has created all sorts 0:08:59.840 --> 0:09:04.679 of bizarre negative externalities and strange consequences and inequalities that 0:09:04.720 --> 0:09:08.120 we as a society are still wrestling with every day. Well, 0:09:08.200 --> 0:09:12.480 David talked more about that system, and you know, we'll 0:09:12.600 --> 0:09:14.520 just roll in it. I mean, how do we go 0:09:14.679 --> 0:09:17.360 from the manager of the century into, as you say, 0:09:17.400 --> 0:09:21.200 the man who broke capitalism? I think the story for 0:09:21.280 --> 0:09:24.559 me really begins in the post war years. Actually, that 0:09:24.640 --> 0:09:27.479 was what some people call the golden age of capitalism. 0:09:27.600 --> 0:09:29.960 And it was so fun to hear just g. S. Stock, 0:09:30.040 --> 0:09:32.480 you know, mentioned in the ticket right before this segment, 0:09:32.880 --> 0:09:36.720 because g E. It's a reminder has been this influential 0:09:36.880 --> 0:09:41.720 Bell Weather Bedrock Corporation for more than a century. But 0:09:41.880 --> 0:09:45.319 back then, in the late forties, the fifties, the sixties, 0:09:45.360 --> 0:09:49.600 the way GE treated its employees, the way IBM and 0:09:49.720 --> 0:09:54.359 Johnson and Johnson treated their frontline employees was just fundamentally 0:09:54.480 --> 0:09:58.600 different than the way we think about major multinational corporations 0:09:58.679 --> 0:10:02.319 treated most of their employee is today, which is to say, 0:10:02.360 --> 0:10:06.800 back then, in this golden age of capitalism, companies and 0:10:06.920 --> 0:10:11.679 ceo s were excited about paying people better and better wages. 0:10:12.000 --> 0:10:15.280 They were eager to share the wealth that they were 0:10:15.320 --> 0:10:19.760 creating with their employees, with their suppliers, and even with 0:10:19.840 --> 0:10:22.840 the government. In the book, I cite the nineteen fifty 0:10:22.920 --> 0:10:26.440 three g E annual report where the company boasts about 0:10:26.440 --> 0:10:29.720 paying so many taxes. That's a world away from where 0:10:29.720 --> 0:10:32.280 we are today. And part of the way, a big 0:10:32.320 --> 0:10:35.280 part of the way we got there was through the 0:10:35.320 --> 0:10:40.839 way Welch changed g E. Upon taking over g E, 0:10:40.840 --> 0:10:43.920 everything I just described basically went out the window, and 0:10:43.960 --> 0:10:48.119 Welch brought to the job this maniacal focus on increasing 0:10:48.160 --> 0:10:51.800 shareholder value and on making g E the most valuable 0:10:51.840 --> 0:10:53.800 company in the world. And we can talk about the 0:10:53.840 --> 0:10:56.440 ways in which a kit it, but it's that it's 0:10:56.480 --> 0:10:59.600 that change in perspective that has partnered us from there 0:10:59.679 --> 0:11:02.440 to so one thing I'm curious about, and you get 0:11:02.520 --> 0:11:05.600 very much into ge capital and again that was another 0:11:05.640 --> 0:11:07.440 thing that we said, Oh, how great they've got this 0:11:07.520 --> 0:11:11.080 finance arm. Geither into all these things. They're a microcosm 0:11:11.160 --> 0:11:14.880 of the economy but they were actually overexposed to financial 0:11:15.840 --> 0:11:18.079 But that, you know, and some of what we're talking 0:11:18.120 --> 0:11:20.400 about is not new. Like I think about people who 0:11:20.440 --> 0:11:23.360 came on and were critical of G and its consistency 0:11:23.520 --> 0:11:27.320 and were suspect um, you know, there were those certainly 0:11:27.400 --> 0:11:31.000 naysayers that were out there. Um, when you we look back, 0:11:31.320 --> 0:11:34.040 should somebody have been held accountable? I mean they did 0:11:34.040 --> 0:11:39.880 pay some fines correct sec fines, um later on in 0:11:40.000 --> 0:11:42.000 terms of I believe they're accounting. I'm not sure if 0:11:42.000 --> 0:11:45.800 I'm saying it exactly correctly, but um, should they Should 0:11:45.840 --> 0:11:48.240 people have been held accountable for what they were doing 0:11:48.360 --> 0:11:51.000 or what they were doing was it was legal but 0:11:51.120 --> 0:11:55.000 maybe a little squishy, well a lot in there. It's 0:11:55.000 --> 0:11:57.640 not my job to say how and when we hold 0:11:57.679 --> 0:12:00.560 executives accountable. And I think it's also parting to point 0:12:00.559 --> 0:12:02.600 out that during the eighties and nineties there was just 0:12:02.679 --> 0:12:06.240 much less transparency than there is today. You know, Sarvings 0:12:06.240 --> 0:12:10.520 Oxley was passed after Jack Walts required. What happened though, 0:12:10.760 --> 0:12:13.959 is right after he retired. Bill Gross, who of course 0:12:14.000 --> 0:12:17.040 married child, just wrote a great book about UH, was 0:12:17.080 --> 0:12:20.320 among the first to say you know this eighty quarters 0:12:20.320 --> 0:12:23.560 in a row of meeting or beating analyst expectations like 0:12:23.800 --> 0:12:27.160 that doesn't happen naturally. Something is going on here. And 0:12:27.160 --> 0:12:29.360 then it was several years after that, as you referenced 0:12:29.480 --> 0:12:35.400 that under mult g E settled sweeping accounting fraud charges 0:12:35.760 --> 0:12:39.440 with the SEC that pointed to years and years of 0:12:39.559 --> 0:12:43.000 impropriety in terms of how they managed the books, how 0:12:43.080 --> 0:12:46.800 they managed their earnings. So listen, I don't think we 0:12:46.800 --> 0:12:49.240 can ever know exactly what was going on there, but 0:12:49.360 --> 0:12:52.480 what is clear and what welch is owned deputies said 0:12:52.640 --> 0:12:55.840 on the record then and even to this day, was 0:12:55.920 --> 0:12:59.679 that g E Capital was the key that let the company, 0:13:00.080 --> 0:13:04.040 let the parent corporation meet or beat those analysts expectations 0:13:04.120 --> 0:13:08.000 quarter after quarter in this most unnatural way, and that 0:13:08.040 --> 0:13:09.880 they did it with a flurry, you know, within the 0:13:09.960 --> 0:13:12.960 last week or two of a quarter, just funding tuning 0:13:13.080 --> 0:13:16.640 exactly whatever numbers wanted to you know, hit the number 0:13:16.720 --> 0:13:19.520 that they thought that the street wanted to see. And David, 0:13:19.559 --> 0:13:22.600 I want to talk about the the end of the title, 0:13:22.720 --> 0:13:26.720 how to undo his legacy? Walk us through that. Well, 0:13:26.720 --> 0:13:30.000 it's not easy. Listen. Uh, We're in a moment and 0:13:30.040 --> 0:13:33.480 I've covered CEOs for the last decade or so. You 0:13:33.520 --> 0:13:37.360 all know this. There's a different ethos in business today. 0:13:37.679 --> 0:13:41.240 CEOs are talking about their responsibilities and who they serve 0:13:41.559 --> 0:13:44.440 in new ways. You know. Called it stakeholder capitalism, call 0:13:44.520 --> 0:13:47.280 it cs R, E, S G, whatever you want. There's 0:13:47.280 --> 0:13:50.679 I think a broad recognition from companies, from CEOs, from 0:13:50.720 --> 0:13:55.280 the Business Roundtable that this era of shareholder primacy has 0:13:55.360 --> 0:13:57.760 probably run its course and that it's time to start 0:13:57.800 --> 0:14:01.240 considering a whole, much broader group of stake horse And 0:14:01.360 --> 0:14:05.240 that's easy to say, in practice, it's super hard to do. 0:14:05.640 --> 0:14:08.199 That was David Gallis. He's a New York Times reporter, 0:14:08.360 --> 0:14:10.920 author of the new book The Man Who Broke Capitalism, 0:14:10.920 --> 0:14:13.600 How Jack Welch gutted the heartland and crushed the soul 0:14:13.640 --> 0:14:16.680 of corporate America and How to undo his legacy. That 0:14:16.760 --> 0:14:18.959 book it is out now. Katie Gray felt of course, 0:14:19.040 --> 0:14:22.160 joining us there as well. Still ahead on Bloomberg Business Week, 0:14:22.440 --> 0:14:25.840 why the recent landmark rulings on abortion and guns shows 0:14:25.880 --> 0:14:29.680 the Supreme Court is ready to jolt America's Google system. 0:14:29.680 --> 0:14:41.880 This is Bloomberg broadcasting from the financial capital of the World, 0:14:41.960 --> 0:14:45.440 Bloomberg eleven Frio in New York to Washington d C, 0:14:45.640 --> 0:14:50.359 Bloomberg to Boston, Bloomberg one O six one to San Francisco, 0:14:50.400 --> 0:14:53.880 Bloomberg nine sixty to the country, Sirius XM Chado one 0:14:53.920 --> 0:14:56.880 nine team and around the globe the Bloomberg Business app 0:14:57.000 --> 0:15:01.360 and Bloomberg Radio dot Com. This is Bloomberg Business Week. 0:15:02.520 --> 0:15:05.200 Big recent High Court decision. You know that the Supreme 0:15:05.200 --> 0:15:08.400 Court overturning Roe versus Wade were now roughly half of 0:15:08.440 --> 0:15:11.320 the United States have either already or are expected to 0:15:11.400 --> 0:15:14.800 enact bands and other restrictions on abortions. And just one 0:15:14.880 --> 0:15:18.240 day before that ruling came out, the Court's conservative majority 0:15:18.280 --> 0:15:21.000 struck down a New York law that prevented most people 0:15:21.040 --> 0:15:24.080 from carrying a handgun in public. Greg Store covers the 0:15:24.160 --> 0:15:26.640 High Court for Bloomberg News. He writes that a group 0:15:26.680 --> 0:15:30.280 of republic injustices are poised to jolt the US legal system. 0:15:30.400 --> 0:15:35.200 It's a court that has been very aggressive. The Conservatives 0:15:35.200 --> 0:15:39.360 clearly have their seat. Collective sea legs. Uh. You know, 0:15:39.480 --> 0:15:42.520 these rulings on abortion and guns in the last few 0:15:42.600 --> 0:15:46.560 days were notable not only for the tremendous practical implications, 0:15:46.600 --> 0:15:51.560 but also the way they went about the reasoning, very 0:15:51.680 --> 0:15:56.040 sweeping reason reasoning about how to interpret the Constitution and 0:15:56.080 --> 0:15:58.680 in particular what rights are in there and what rights aren't. 0:15:59.440 --> 0:16:02.360 So how do we as US citizens think that this 0:16:02.480 --> 0:16:05.480 continues to play out. Well, the Court's going to have 0:16:05.560 --> 0:16:08.880 another huge term next next year. Um, they have big 0:16:08.880 --> 0:16:13.320 cases on affirmative action, religious and gay rights, UH, clean 0:16:13.400 --> 0:16:17.800 Water Act case, and they're just getting started the Uh 0:16:18.480 --> 0:16:20.880 you know, based on what we've seen from what the 0:16:20.920 --> 0:16:27.040 Court did this term. Uh, they are determined to They're 0:16:27.080 --> 0:16:31.080 willing to overturn precedents. They read the Constitution through that 0:16:31.160 --> 0:16:33.680 originalist lens of looking at the words and what they 0:16:33.720 --> 0:16:37.960 meant at the time, and they're going to evaluate American 0:16:38.000 --> 0:16:40.520 tradition and history as as they see it to see 0:16:40.560 --> 0:16:43.000 what sorts of rights were protected at the time the 0:16:43.040 --> 0:16:48.080 Constitution or perhaps the Fourteenth Amendment were enacted. And for 0:16:48.160 --> 0:16:51.480 the most part, that mode of analysis gives you very 0:16:51.600 --> 0:16:54.560 very conservative results. What are the cases that are set 0:16:54.600 --> 0:16:56.880 to be argued before them? And given what we know 0:16:56.920 --> 0:16:59.360 about this court already, I think it's I don't know, 0:16:59.400 --> 0:17:01.120 I mean, it seems like it's we have a good 0:17:01.200 --> 0:17:04.200 understanding of what these justices believe and how they've interpreted 0:17:04.200 --> 0:17:06.600 the Constitution thus far. So I don't even know if 0:17:07.320 --> 0:17:08.720 you know this better than I would. But are things 0:17:08.760 --> 0:17:10.119 actually up in the air at all with some of 0:17:10.160 --> 0:17:12.320 these cases, because it's kind of clear how some of 0:17:12.320 --> 0:17:15.800 these justices think. Yeah, it certainly is. And oftentimes the 0:17:15.880 --> 0:17:18.159 question is just whether the court's going to choose to 0:17:18.200 --> 0:17:20.679 get into an area once they've taken up a case. Uh, 0:17:20.800 --> 0:17:22.439 it's pretty clear which way they're going to go. So 0:17:22.560 --> 0:17:25.520 good example is the I mentioned affirmative action. They're gonna 0:17:26.160 --> 0:17:28.879 in the fall take up cases challenging the use of 0:17:28.960 --> 0:17:31.680 race and college admissions at at Harvard and the University 0:17:31.680 --> 0:17:36.080 of North Carolina. There's also a case, a variation of 0:17:36.080 --> 0:17:38.600 that case a few years ago, where the baker didn't 0:17:38.600 --> 0:17:41.080 want to make a cake to celebrate the same sex wedding. 0:17:41.320 --> 0:17:44.000 In this case, it involves a website designer who doesn't 0:17:44.040 --> 0:17:48.119 want to design web pages for same sex weddings. And UH, 0:17:48.320 --> 0:17:51.200 with both those cases and some others, there's not a 0:17:51.280 --> 0:17:53.239 huge amount of doubt about which way the court's going 0:17:53.280 --> 0:17:56.840 to go. Maybe there's some question about how far they'll go. Um, 0:17:56.920 --> 0:18:00.320 But but in terms of the direction, UH, get been 0:18:00.359 --> 0:18:03.000 given the makeup of this court, and you know their 0:18:03.160 --> 0:18:07.359 their their willingness to issue rulings that may prove unpopular, 0:18:07.560 --> 0:18:12.879 like like quite possibly the abortion or ruling will prove unpopular. Uh. Again, 0:18:12.920 --> 0:18:14.720 it's it's pretty clear which way the court is going 0:18:14.760 --> 0:18:16.600 to go. Greg. You know, I do wonder and I 0:18:16.600 --> 0:18:20.119 wonder what's the conversations you're having with academic scholars of 0:18:20.119 --> 0:18:22.439 the Supreme Court and you too, who have followed it 0:18:22.520 --> 0:18:27.240 for so long about there are issues in modern life 0:18:27.640 --> 0:18:29.639 that I think it's safe to say the fathers of 0:18:29.680 --> 0:18:32.879 the Constitution couldn't even think about, you know what I mean. So, 0:18:32.920 --> 0:18:35.439 how do we have to think about an evolution of 0:18:35.480 --> 0:18:39.280 our Supreme Court, maybe a more modern Supreme Court. Yeah, 0:18:39.320 --> 0:18:41.240 that's a really you know, it's interesting, Carl, he used 0:18:41.280 --> 0:18:45.440 the word fathers there, because of the Constitution was drafted 0:18:45.480 --> 0:18:49.280 by men, the fourteenth of men meant, and it was 0:18:49.400 --> 0:18:52.639 ratified in eighteen sixty eight by men. And in the 0:18:52.640 --> 0:18:55.080 case of abortion, you know, very much a right that 0:18:55.240 --> 0:18:58.680 affects women, uh in a way that it doesn't affect men. 0:18:59.000 --> 0:19:00.640 And I think that's actually going to be a real 0:19:01.200 --> 0:19:04.880 uh A point of contention going forward is that this 0:19:04.960 --> 0:19:07.200 is a court that looks to as I said earlier, 0:19:07.520 --> 0:19:09.520 you know what what rights had traditionally been there. You know, 0:19:09.520 --> 0:19:12.159 they did a survey of American law and and and 0:19:12.200 --> 0:19:16.200 talked about you know what, what where abortion was allowed, 0:19:16.280 --> 0:19:19.240 where it wasn't allowed throughout throughout history and to the 0:19:19.280 --> 0:19:22.760 extent that history doesn't reflect all the modern realities, including 0:19:22.760 --> 0:19:26.720 the modern reality that you know, women women vote that uh, 0:19:26.880 --> 0:19:28.720 black people vote in a way that they it was 0:19:28.800 --> 0:19:32.520 very hard for them to do before the civil rights era. Um. 0:19:32.920 --> 0:19:35.320 You know, it's a question of whose constitution are they 0:19:35.520 --> 0:19:38.240 interpreting And so very much what I'm talking to to 0:19:38.359 --> 0:19:41.000 folks on on the liberal side of things over the 0:19:41.080 --> 0:19:43.120 last few days, that's the kind of stuff I'm hearing. 0:19:43.680 --> 0:19:46.680 So Um, it's just interesting to think about the history 0:19:46.680 --> 0:19:49.040 of the courts and kind of where this goes ultimately. 0:19:49.359 --> 0:19:51.919 Should we anticipate any kind of structural changes? I know, 0:19:52.040 --> 0:19:54.600 right off of you know, Friday's decision, people are talking about, 0:19:54.880 --> 0:19:58.720 you know, expanding the Supreme Court. Does anything change? Well, 0:19:59.000 --> 0:20:00.920 you know, the problem of course for those who want 0:20:00.920 --> 0:20:03.040 to expand the court is, uh, you know, they don't 0:20:03.080 --> 0:20:05.919 have the votes right now, and there's no sign that 0:20:05.920 --> 0:20:08.400 they're going to have the vote. Our thanks to Bloomberg 0:20:08.440 --> 0:20:11.320 Supreme Court reporter Greg Store. We should note that Stephen 0:20:11.320 --> 0:20:14.280 Bryer officially retired from his post this past week, and 0:20:14.359 --> 0:20:17.720 Katangi Brown Jackson was sworn in as the Court's first 0:20:17.720 --> 0:20:21.480 black female justice. You're listening to Bloomberg Business Week. Up next, 0:20:21.520 --> 0:20:25.840 world famous economist Nobel Laureate Paul Krugman on the High Court, inflation, 0:20:25.920 --> 0:20:29.720 and the biggest risk facing the Federal Reserve. This is Bloomberg. 0:20:41.760 --> 0:20:45.280 You're listening to Bloomberg Business Week with Carol Messer and 0:20:45.359 --> 0:20:51.840 Bloomberg Quick Takes. Tim Stinovik from Bloomberg Radio. Our next 0:20:51.880 --> 0:20:54.520 guest is a Nobel Laureate columnist for the New York Times. 0:20:54.560 --> 0:20:57.560 He's also the author editor of more than two dozen books, 0:20:57.840 --> 0:21:00.320 as well as Distinguished Professor of Economics at the City 0:21:00.400 --> 0:21:03.399 University of New York Graduate Center, and he is someone 0:21:03.520 --> 0:21:06.000 we want to hear from at pivotal moments for the 0:21:06.119 --> 0:21:08.200 U S economy and really the country as a whole. 0:21:08.240 --> 0:21:12.359 He really looks at everything. While talking about, of course, 0:21:12.400 --> 0:21:14.679 the one and only Paul Kruegeman, My co host him 0:21:14.720 --> 0:21:18.000 Stanivic and Paul Sweeney of Bloomberg Surveillance spoke with Krugman 0:21:18.080 --> 0:21:21.320 recently about the FEDS path forward, and other pressing macro 0:21:21.400 --> 0:21:24.639 economic concerns, such as the potential impact of the Supreme 0:21:24.640 --> 0:21:27.800 Court's abortion ruling on our labor landscape. One of the 0:21:27.840 --> 0:21:31.040 big driving forces of change in the US economy of 0:21:31.119 --> 0:21:34.440 the past couple of decades has been this um kind 0:21:34.480 --> 0:21:39.720 of unequalizing as the knowledge economy has wanted to gravitate 0:21:39.840 --> 0:21:46.080 towards big cities with highly educated populations. Um. And now 0:21:46.560 --> 0:21:50.119 there's gonna be additional factor, which is um, if companies 0:21:50.200 --> 0:21:52.320 want the kind of workers that they can get in 0:21:52.359 --> 0:21:54.960 those locations, are they going to want to locate in 0:21:55.040 --> 0:21:58.400 the states that are going to be have really overregressive 0:21:58.720 --> 0:22:03.160 social policies. The kinds of social policies that that they're 0:22:03.200 --> 0:22:06.120 the workers they want really don't like. So you really 0:22:06.119 --> 0:22:09.520 have to think, you know, how how does Texas or 0:22:09.600 --> 0:22:13.399 Florida fair in this kind of competition for business, in 0:22:13.560 --> 0:22:17.439 this new legal environment, this federal reserve. They have a 0:22:17.480 --> 0:22:19.520 balancing act, they're very tough balancing act to reign in 0:22:19.560 --> 0:22:22.080 inflation while not going too far and pushing this economy 0:22:22.160 --> 0:22:26.840 into a recession. How do you think that plays out? Well, 0:22:27.080 --> 0:22:30.159 it's I mean, the fundamental problem is not does not 0:22:30.359 --> 0:22:33.200 actually look to me to be all that hard. It's 0:22:33.240 --> 0:22:35.359 a weird thing to say, but it's pretty clear that 0:22:35.400 --> 0:22:40.040 the US economy got overheated. UH fiscal monentary policy, Um, 0:22:40.040 --> 0:22:43.159 it was misjudged. I was among the people who misjudged it. 0:22:43.200 --> 0:22:45.960 And the U s economy got overheated. And so we 0:22:46.080 --> 0:22:49.320 have most of the inflation we're seeing as special factors 0:22:49.359 --> 0:22:53.240