1 00:00:05,760 --> 00:00:08,680 Speaker 1: This is Wall Street Week. I'm David Weston bringing you 2 00:00:08,840 --> 00:00:13,360 Speaker 1: stories of capitalism this week, the new era of populism 3 00:00:13,560 --> 00:00:18,040 Speaker 1: and what it means for global economics, plus failing into space, 4 00:00:18,480 --> 00:00:22,599 Speaker 1: how competition shapes innovation. But first we begin with a 5 00:00:22,600 --> 00:00:26,520 Speaker 1: story about tough love a local government, private sector leaders, 6 00:00:26,560 --> 00:00:30,160 Speaker 1: and city residents making hard decisions to fight off a 7 00:00:30,200 --> 00:00:31,240 Speaker 1: troubling trend. 8 00:00:34,760 --> 00:00:38,239 Speaker 2: We can't have more people die of overdoses in our 9 00:00:38,280 --> 00:00:41,360 Speaker 2: streets than were affected by COVID. I mean, this is crazy, 10 00:00:41,400 --> 00:00:42,960 Speaker 2: and the numbers continue. 11 00:00:44,159 --> 00:00:48,720 Speaker 1: Amik Mogadam is the CEO of Prologists, the largest logistics 12 00:00:48,760 --> 00:00:51,880 Speaker 1: real estate company in the world. He founded his firm 13 00:00:51,920 --> 00:00:54,760 Speaker 1: in nineteen eighty three in San Francisco and has seen 14 00:00:54,800 --> 00:00:58,360 Speaker 1: the cities ups and downs as a businessman and as 15 00:00:58,360 --> 00:00:58,920 Speaker 1: a resident. 16 00:01:00,360 --> 00:01:03,280 Speaker 2: San Francisco was a very different place in nineteen eighty three, 17 00:01:03,440 --> 00:01:07,120 Speaker 2: but it was not all great. We were just coming 18 00:01:07,120 --> 00:01:12,520 Speaker 2: off of the assassination of Mayor Moscone Harvey Milk, and 19 00:01:12,800 --> 00:01:18,360 Speaker 2: the eight epidemic was raging at that time. So we 20 00:01:18,520 --> 00:01:20,760 Speaker 2: always remember the good old days, but there were certainly 21 00:01:20,760 --> 00:01:25,560 Speaker 2: problems in those days as well. What was different was 22 00:01:25,600 --> 00:01:30,119 Speaker 2: that the San Francisco business community was much more engaged 23 00:01:30,160 --> 00:01:33,920 Speaker 2: and committed to the city. You had some large companies 24 00:01:34,000 --> 00:01:37,960 Speaker 2: like Bank of America, Wells Fargo, Chevron, PG and E, 25 00:01:38,040 --> 00:01:40,560 Speaker 2: and the list goes on. Levi of course, the San 26 00:01:40,600 --> 00:01:45,640 Speaker 2: Francisco based company. And there were a couple of individuals 27 00:01:45,760 --> 00:01:50,080 Speaker 2: who were really civic minded leaders in the community, people 28 00:01:50,120 --> 00:01:55,560 Speaker 2: like Warren Hellman, Chuck Schwab, Walter Shorenstein, and Don Fisher 29 00:01:56,440 --> 00:02:01,360 Speaker 2: that really had we're running significant businesses. And then really, 30 00:02:01,480 --> 00:02:05,640 Speaker 2: because of the passage of time, those companies either moved 31 00:02:05,680 --> 00:02:09,000 Speaker 2: to the suburbs or they moved out of town, and 32 00:02:09,280 --> 00:02:12,239 Speaker 2: over time they were replaced with companies that were less 33 00:02:12,240 --> 00:02:15,480 Speaker 2: committed to San Francisco, including a lot of tech companies 34 00:02:15,760 --> 00:02:20,760 Speaker 2: in the last cycle, social media companies, etc. So I 35 00:02:20,800 --> 00:02:25,080 Speaker 2: think that corporate core, if you will, hollow during this 36 00:02:25,120 --> 00:02:28,440 Speaker 2: period of time, and the commitment declined as a result 37 00:02:28,440 --> 00:02:30,680 Speaker 2: of that. So I think that's the big difference. 38 00:02:31,080 --> 00:02:34,560 Speaker 1: For San Francisco, as for many other major cities. The 39 00:02:34,560 --> 00:02:37,840 Speaker 1: trend that began years ago was made far worse in 40 00:02:37,840 --> 00:02:38,519 Speaker 1: twenty twenty. 41 00:02:39,400 --> 00:02:43,080 Speaker 3: I remember right up to the pandemic, I mean, downtown 42 00:02:43,240 --> 00:02:45,840 Speaker 3: was so booming you literally couldn't walk on the streets 43 00:02:45,880 --> 00:02:48,920 Speaker 3: so you know, the vacancy rates on the offices for 44 00:02:49,120 --> 00:02:52,600 Speaker 3: high tech companies was you could barely find anything. So 45 00:02:52,639 --> 00:02:55,639 Speaker 3: we were absolutely booming. Now that said, though, I think 46 00:02:55,680 --> 00:02:59,680 Speaker 3: that boom it kind of covered up some glaring problems 47 00:02:59,760 --> 00:03:01,080 Speaker 3: that we weren't facing. 48 00:03:02,200 --> 00:03:05,760 Speaker 1: Chris Larsen is a lifelong San Francisco and has founded 49 00:03:05,800 --> 00:03:10,560 Speaker 1: several Silicon Valley startups, among them the digital payments company Ripple. 50 00:03:11,880 --> 00:03:16,320 Speaker 3: San Francisco really suffers from sort of being a representation 51 00:03:16,400 --> 00:03:19,240 Speaker 3: of a certain way of life in America, so it 52 00:03:19,320 --> 00:03:21,040 Speaker 3: gets it's a little bit of a pile on that 53 00:03:21,120 --> 00:03:23,240 Speaker 3: goes on right, whether it's Trump or whether it's some 54 00:03:23,280 --> 00:03:25,239 Speaker 3: of the local folks that are trying to run for 55 00:03:25,360 --> 00:03:29,480 Speaker 3: mayor here, there's sort of some glee and sort of 56 00:03:29,520 --> 00:03:30,400 Speaker 3: trashing the city. 57 00:03:31,160 --> 00:03:33,959 Speaker 1: For many years, San Francisco was a magnet for people 58 00:03:34,040 --> 00:03:37,200 Speaker 1: and businesses, growing from one point eight million residents in 59 00:03:37,280 --> 00:03:40,440 Speaker 1: nineteen fifty to three point two million by two thousand. 60 00:03:41,080 --> 00:03:45,080 Speaker 1: But then the growth leveled off and actually turned negative 61 00:03:45,200 --> 00:03:48,320 Speaker 1: during the pandemic, driven by a range of factors that 62 00:03:48,440 --> 00:03:51,400 Speaker 1: can lead to what economists call doom loop. 63 00:03:52,920 --> 00:03:54,880 Speaker 4: The idea of an urban doom loop is that it's 64 00:03:54,920 --> 00:03:58,160 Speaker 4: a force that feeds upon itself, that we have a 65 00:03:58,320 --> 00:04:02,040 Speaker 4: decline in urban property values, that then perhaps leads to 66 00:04:02,080 --> 00:04:04,560 Speaker 4: a decline in local tax revenues, which leads to a 67 00:04:04,560 --> 00:04:06,640 Speaker 4: decline in the ability to pay for public safety or 68 00:04:06,680 --> 00:04:10,440 Speaker 4: maintain other amenities, which then wraps around again and pushes 69 00:04:10,480 --> 00:04:13,360 Speaker 4: prices down further, leading to lower tax revenues. 70 00:04:13,760 --> 00:04:16,680 Speaker 1: Economist Ed Glazer of Harvard has made a study of 71 00:04:16,839 --> 00:04:19,640 Speaker 1: urban doom loops and what leads to them. 72 00:04:20,160 --> 00:04:21,760 Speaker 4: You can take it to be sort of a larger 73 00:04:21,839 --> 00:04:25,400 Speaker 4: metaphor for the way in which things start to fall apart. 74 00:04:25,640 --> 00:04:28,479 Speaker 4: When things start to fall apart, so by which I 75 00:04:28,560 --> 00:04:31,359 Speaker 4: mean in general, people move out of an area, It 76 00:04:31,400 --> 00:04:34,000 Speaker 4: becomes less attractive for other people to move in that area, 77 00:04:34,200 --> 00:04:38,200 Speaker 4: it becomes it has higher vacancy rates. All of these 78 00:04:38,200 --> 00:04:41,280 Speaker 4: things then continue to push people away. So again it's 79 00:04:41,320 --> 00:04:44,239 Speaker 4: the idea of something that feeds upon itself and becomes 80 00:04:44,240 --> 00:04:45,840 Speaker 4: almost an unstoppable wave. 81 00:04:47,320 --> 00:04:51,080 Speaker 1: Public safety also looms large in the potential decline of 82 00:04:51,160 --> 00:04:54,480 Speaker 1: any city, and it's been a major issue for San Francisco, 83 00:04:54,720 --> 00:04:58,040 Speaker 1: which saw a jump in shoplifting and commercial burglary from 84 00:04:58,120 --> 00:05:02,120 Speaker 1: twenty nineteen to twenty twenty two. Since the pandemic. Stopping 85 00:05:02,160 --> 00:05:05,880 Speaker 1: criminals and punishing them has become a subject of rising tension. 86 00:05:06,640 --> 00:05:09,600 Speaker 2: We have policy on the books that if you steal 87 00:05:09,680 --> 00:05:12,240 Speaker 2: less than nine hundred and fifty dollars from a store, 88 00:05:12,480 --> 00:05:15,479 Speaker 2: you basically get a parking ticket. It's a misdemeanor. I 89 00:05:15,480 --> 00:05:18,280 Speaker 2: mean that has encouraged a lot of theft in the 90 00:05:18,279 --> 00:05:20,919 Speaker 2: city and that needs to get changed. There was a 91 00:05:20,960 --> 00:05:24,279 Speaker 2: gross receipt tax that was enacted that really is a 92 00:05:24,320 --> 00:05:28,200 Speaker 2: burden on business. So the list goes on and on. 93 00:05:29,120 --> 00:05:32,520 Speaker 1: In June of twenty twenty two, a Mogadam was mugged 94 00:05:32,560 --> 00:05:35,919 Speaker 1: at gunpoint when two armed men stole his Patek Philip 95 00:05:36,080 --> 00:05:39,359 Speaker 1: watch in broad daylight while he was outside of his 96 00:05:39,400 --> 00:05:42,720 Speaker 1: San Francisco home. Afterward, he wrote a letter to San 97 00:05:42,720 --> 00:05:47,320 Speaker 1: Francisco mayor London Breed, saying, quote, I recognize we live 98 00:05:47,360 --> 00:05:50,880 Speaker 1: in an urban environment, but the level of crime, including 99 00:05:51,000 --> 00:05:56,920 Speaker 1: violent behavior, has become absolutely unacceptable. But beyond endangering people, 100 00:05:57,240 --> 00:06:00,000 Speaker 1: crime also has very real economic effect. 101 00:06:01,040 --> 00:06:03,800 Speaker 5: I think there have been various estimates that something on 102 00:06:03,839 --> 00:06:07,679 Speaker 5: the order of three or four trillion dollars a year 103 00:06:08,320 --> 00:06:10,880 Speaker 5: if you add up all of the different direct costs 104 00:06:10,880 --> 00:06:13,160 Speaker 5: to victims, as well as indirect costs in terms of 105 00:06:13,320 --> 00:06:15,480 Speaker 5: just our sense of fear when we walk around a 106 00:06:15,480 --> 00:06:17,960 Speaker 5: neighborhood and not wanting to go to certain neighborhoods after 107 00:06:17,960 --> 00:06:19,760 Speaker 5: there's been there's been some crime incident. 108 00:06:20,920 --> 00:06:24,479 Speaker 1: Jennifer Doliak is the executive vice president of Criminal Justice 109 00:06:24,520 --> 00:06:28,080 Speaker 1: at Arnold Ventures, where she studies the economics of crime. 110 00:06:30,040 --> 00:06:33,839 Speaker 5: I think, in general, mayors would be best served by 111 00:06:33,839 --> 00:06:37,719 Speaker 5: thinking about this in a way that takes a more 112 00:06:38,160 --> 00:06:41,800 Speaker 5: scientific approach. Perhaps I am a researcher, after all, that's 113 00:06:41,839 --> 00:06:45,480 Speaker 5: going to be my advice, but focusing more on promising 114 00:06:45,520 --> 00:06:47,680 Speaker 5: to find a solution rather than claiming to have a 115 00:06:47,720 --> 00:06:50,480 Speaker 5: solution upfront. The reality is a lot of these problems 116 00:06:50,520 --> 00:06:52,919 Speaker 5: are really hard to solve. Most of the things we 117 00:06:53,120 --> 00:06:55,800 Speaker 5: were going to try, even when there's some evidence from 118 00:06:55,800 --> 00:06:58,680 Speaker 5: somewhere else, aren't going to work, and so the goal 119 00:06:58,800 --> 00:07:01,119 Speaker 5: often should be to fail fact rather than not fail 120 00:07:01,120 --> 00:07:03,360 Speaker 5: at all, so that you can keep trying something else. 121 00:07:03,640 --> 00:07:06,640 Speaker 5: And that's very different from the standard politicians approach was 122 00:07:06,680 --> 00:07:10,120 Speaker 5: just to say I've got the answer and then not 123 00:07:10,240 --> 00:07:13,840 Speaker 5: acknowledge when it doesn't go quite as planned. One big 124 00:07:13,880 --> 00:07:16,680 Speaker 5: thing that we've learned from a lot of research over 125 00:07:16,720 --> 00:07:20,000 Speaker 5: time is that increasing the probability that you get caught 126 00:07:20,280 --> 00:07:24,080 Speaker 5: for crime is by far the best and most cost 127 00:07:24,120 --> 00:07:27,760 Speaker 5: effective way to deter crime. And that's as opposed to 128 00:07:27,800 --> 00:07:29,760 Speaker 5: the punishment. I think for a very long time the 129 00:07:29,880 --> 00:07:33,520 Speaker 5: United States thought that, you know, just having really long 130 00:07:33,560 --> 00:07:35,800 Speaker 5: prison sentences, what's a really good way to deter crime. 131 00:07:36,080 --> 00:07:38,440 Speaker 5: Turns out most criminals are not that forward looking, so 132 00:07:38,560 --> 00:07:41,080 Speaker 5: increasing the probability that you get caught has a really 133 00:07:41,120 --> 00:07:42,000 Speaker 5: big bang for your buck. 134 00:07:43,120 --> 00:07:47,400 Speaker 1: Increasing the odds of catching criminals necessarily means better policing, 135 00:07:47,640 --> 00:07:50,840 Speaker 1: and for San Francisco that's become a key challenge in 136 00:07:50,880 --> 00:07:51,640 Speaker 1: recent years. 137 00:07:52,400 --> 00:07:55,640 Speaker 2: And I think we're today operating with sixteen hundred cops, 138 00:07:56,080 --> 00:08:00,160 Speaker 2: which means that there's a lot of overtime, and lot 139 00:08:00,160 --> 00:08:03,720 Speaker 2: of our officers are overworked and they're getting frustrated, and 140 00:08:03,960 --> 00:08:07,400 Speaker 2: that's leading to more of them retiring early. And actually 141 00:08:07,840 --> 00:08:11,160 Speaker 2: we have been bringing fewer cops into the system from 142 00:08:11,200 --> 00:08:14,520 Speaker 2: the academy than they've been retiring. So the problem is 143 00:08:14,560 --> 00:08:17,960 Speaker 2: going has been going in the right direction. And you know, 144 00:08:18,040 --> 00:08:19,920 Speaker 2: it's not a matter of pay. I think we pay. 145 00:08:21,040 --> 00:08:24,360 Speaker 2: We're one of the highest paying areas for police, but 146 00:08:24,400 --> 00:08:27,600 Speaker 2: the police feel that they're not appreciated, they don't have 147 00:08:27,680 --> 00:08:30,440 Speaker 2: the tools to do their job. We don't have license 148 00:08:30,480 --> 00:08:33,320 Speaker 2: plate readers. We do for a short period of time, 149 00:08:33,360 --> 00:08:36,880 Speaker 2: but we've really fought licensed plate readers the use of 150 00:08:36,960 --> 00:08:39,839 Speaker 2: drones and other technologies. So the only way we can 151 00:08:40,000 --> 00:08:45,880 Speaker 2: leverage a smaller police force is to apply technology and 152 00:08:46,080 --> 00:08:50,720 Speaker 2: help them. But most importantly, it's a perception problem. Nobody 153 00:08:50,760 --> 00:08:53,000 Speaker 2: wants to be a cop when everybody thinks that you're 154 00:08:53,080 --> 00:08:56,079 Speaker 2: the enemy of the city or the enemy of the citizens. 155 00:08:56,760 --> 00:08:59,520 Speaker 5: Technology can be a big help here. So a lot 156 00:08:59,559 --> 00:09:02,960 Speaker 5: of city like London use surveillance cameras around the city 157 00:09:03,320 --> 00:09:07,320 Speaker 5: and that that has a big impact on being able 158 00:09:07,360 --> 00:09:09,839 Speaker 5: to catch offenders when when they do commit a crime. 159 00:09:10,400 --> 00:09:15,160 Speaker 5: Other technologies like DNA databases help us match DNA from 160 00:09:15,200 --> 00:09:18,480 Speaker 5: crime scenes to offenders that are in the database, and 161 00:09:18,760 --> 00:09:21,680 Speaker 5: a whole lot of new technologies that are being invented 162 00:09:21,720 --> 00:09:24,960 Speaker 5: every day now here. The trade off often winds up 163 00:09:25,000 --> 00:09:28,640 Speaker 5: being between the big benefits, the big crime reduction benefits 164 00:09:28,640 --> 00:09:32,200 Speaker 5: we see, and what we might perceive as privacy costs. Right, 165 00:09:32,320 --> 00:09:35,440 Speaker 5: So if we're increasing the probability that people get caught, 166 00:09:35,520 --> 00:09:38,520 Speaker 5: we're doing that by keeping better tabs on people, and 167 00:09:38,559 --> 00:09:43,120 Speaker 5: that can be scary to people, that can trigger concerns 168 00:09:43,160 --> 00:09:46,600 Speaker 5: about privacy, and those concerns are are totally valid and 169 00:09:46,600 --> 00:09:50,000 Speaker 5: worth discussion. But I think it's also important to realize 170 00:09:50,000 --> 00:09:54,040 Speaker 5: that our status quo practices the alternative to using technology, 171 00:09:54,280 --> 00:09:57,520 Speaker 5: putting police on every street corner, for instance, that is 172 00:09:57,559 --> 00:10:00,280 Speaker 5: not costless when it comes to privacy, right, and so 173 00:10:00,760 --> 00:10:05,679 Speaker 5: standard investigative techniques without using technology can often be very 174 00:10:05,679 --> 00:10:09,800 Speaker 5: invasive for victims private lives and other people's private lives, 175 00:10:10,040 --> 00:10:12,400 Speaker 5: And so technology in that way can actually be a 176 00:10:12,440 --> 00:10:14,240 Speaker 5: huge game changer and really beneficial. 177 00:10:15,240 --> 00:10:17,400 Speaker 1: Crime gets a lot of the attention, but it's not 178 00:10:17,480 --> 00:10:20,240 Speaker 1: just public safety that can make a city less attractive. 179 00:10:20,600 --> 00:10:23,400 Speaker 1: It's also whether people are moving in or moving out, 180 00:10:23,800 --> 00:10:27,400 Speaker 1: and the occupancy rates, particularly for commercial real estate. 181 00:10:28,000 --> 00:10:31,199 Speaker 4: Our traditional measures of urban growth and decline are things 182 00:10:31,360 --> 00:10:37,680 Speaker 4: like population growth, housing price changes, income changes, and I 183 00:10:37,800 --> 00:10:40,240 Speaker 4: like to look at permits building permits as being a 184 00:10:40,440 --> 00:10:43,319 Speaker 4: sign of how much people actually want to move into 185 00:10:43,360 --> 00:10:46,280 Speaker 4: the city. I think all of those things are useful metrics. 186 00:10:46,920 --> 00:10:49,640 Speaker 4: So in our list of fifty metropolitan areas, where we 187 00:10:49,679 --> 00:10:52,680 Speaker 4: just form a sort of naive statistical index of those 188 00:10:52,679 --> 00:10:56,560 Speaker 4: four measures. San Francisco was last out of fifty metro areas. 189 00:10:57,600 --> 00:11:01,520 Speaker 2: I am less optimistic about the few of downtown San 190 00:11:01,559 --> 00:11:06,160 Speaker 2: Francisco that will take some effort, some serious effort. San 191 00:11:06,200 --> 00:11:09,320 Speaker 2: Francisco has a lot of fintech and a lot of 192 00:11:09,320 --> 00:11:13,480 Speaker 2: technology companies. Those are the companies that actually lend themselves 193 00:11:13,559 --> 00:11:16,719 Speaker 2: to the work from home phenomenon. And you know, this 194 00:11:16,800 --> 00:11:19,520 Speaker 2: is a difficult downtown to commute into. You've got to 195 00:11:19,559 --> 00:11:22,440 Speaker 2: basically cross a bridge, go through a tunnel, or come 196 00:11:22,480 --> 00:11:25,160 Speaker 2: down a very busy freeway to get in here. Very 197 00:11:25,160 --> 00:11:28,079 Speaker 2: few people actually that worked in San Francisco lived in 198 00:11:28,240 --> 00:11:32,640 Speaker 2: San Francisco proper. So as a result, COVID really really 199 00:11:32,640 --> 00:11:36,040 Speaker 2: affected the city more than other places. 200 00:11:37,440 --> 00:11:40,439 Speaker 1: To thrive, cities also need to be attractive to business, 201 00:11:40,720 --> 00:11:44,480 Speaker 1: and that means having economic policies that balance supporting the 202 00:11:44,520 --> 00:11:49,240 Speaker 1: population without imposing too heavy a burden on employers, particularly 203 00:11:49,440 --> 00:11:50,480 Speaker 1: through taxes. 204 00:11:51,240 --> 00:11:53,920 Speaker 4: I think it's incredibly important. I think you've got you know, 205 00:11:54,120 --> 00:11:56,120 Speaker 4: that's where the resources come from. The resources come from 206 00:11:56,120 --> 00:11:58,920 Speaker 4: the businesses, the resources come from the taxpayers, right, and 207 00:11:58,960 --> 00:12:01,640 Speaker 4: you need to make sure you keep the city to 208 00:12:01,679 --> 00:12:04,080 Speaker 4: being an attractive place for them, just as you use 209 00:12:04,160 --> 00:12:08,760 Speaker 4: them as a resource to take care of the poor. 210 00:12:08,840 --> 00:12:11,880 Speaker 4: In some sense, there's a metaphor that I like sometimes 211 00:12:11,880 --> 00:12:13,800 Speaker 4: with city governments, which it can be useful to think 212 00:12:13,840 --> 00:12:16,200 Speaker 4: of a city government as being sort of a for 213 00:12:16,240 --> 00:12:18,920 Speaker 4: profit real estate company that's owned by a not for 214 00:12:18,920 --> 00:12:22,760 Speaker 4: profit poverty alleviation company, and so the not for profit 215 00:12:22,760 --> 00:12:24,959 Speaker 4: poverty alleviation company is in the business of trying to 216 00:12:25,000 --> 00:12:26,640 Speaker 4: figure out how to make the lives of the poor better. 217 00:12:27,480 --> 00:12:29,920 Speaker 1: There's no doubt that San Francisco has had its share 218 00:12:29,960 --> 00:12:32,959 Speaker 1: of challenges, but those who know it best are often 219 00:12:33,000 --> 00:12:35,320 Speaker 1: the first to point out how much it still has 220 00:12:35,400 --> 00:12:38,600 Speaker 1: going for it and how much its past strengths give 221 00:12:38,640 --> 00:12:44,400 Speaker 1: it a strong foundation to build a brighter future. Up next, 222 00:12:44,440 --> 00:12:48,640 Speaker 1: the rise of populism and measuring its economic impact. That's 223 00:12:48,720 --> 00:12:50,040 Speaker 1: next on Wall Street Week. 224 00:12:50,559 --> 00:12:53,960 Speaker 6: You're listening to Bloomberg Wall Straight Week with David Weston 225 00:12:54,120 --> 00:13:13,440 Speaker 6: from Bloomberg Radio. This is Bloomberg Wall Street Week with 226 00:13:13,600 --> 00:13:16,000 Speaker 6: David Weston from Bloomberg Radio. 227 00:13:18,800 --> 00:13:22,000 Speaker 1: This is a story of populism, what the people want, 228 00:13:22,440 --> 00:13:25,199 Speaker 1: what the global economy needs, and how the two can 229 00:13:25,240 --> 00:13:28,920 Speaker 1: fit together the interests of the people. It's been the 230 00:13:28,960 --> 00:13:32,480 Speaker 1: clarion call of populist leaders through history, and one we've 231 00:13:32,520 --> 00:13:35,439 Speaker 1: been hearing more and more often in the United States, 232 00:13:35,880 --> 00:13:39,800 Speaker 1: in Europe and elsewhere. But why did it happen and 233 00:13:39,840 --> 00:13:40,800 Speaker 1: what does it mean? 234 00:13:41,480 --> 00:13:47,680 Speaker 7: Populism to me is the alternative when an individual or 235 00:13:47,720 --> 00:13:51,920 Speaker 7: political parties actually capitalize on individual situation where they don't 236 00:13:51,960 --> 00:13:56,920 Speaker 7: really have a visible path for economic opportunity and growth. 237 00:13:57,080 --> 00:14:00,360 Speaker 1: As the former US House Majority leader Eric Canter watched 238 00:14:00,360 --> 00:14:03,920 Speaker 1: as populism grew among his constituents in Virginia and across 239 00:14:03,920 --> 00:14:06,760 Speaker 1: the country during his thirteen years in Congress. 240 00:14:07,040 --> 00:14:10,440 Speaker 7: You look around America today and it's an amazing country, 241 00:14:10,840 --> 00:14:16,160 Speaker 7: very dynamic. There are pockets of extreme growth and innovation 242 00:14:16,360 --> 00:14:20,800 Speaker 7: and prosperity, but it's not equally dispersed across the country. 243 00:14:20,960 --> 00:14:25,160 Speaker 7: And I think in many ways populism serves as a 244 00:14:25,200 --> 00:14:30,720 Speaker 7: substitute for individuals who aren't necessarily accessing that tremendous growth engine. 245 00:14:30,760 --> 00:14:34,920 Speaker 1: Populist leaders might seize on major geopolitical events like pandemics 246 00:14:35,040 --> 00:14:38,800 Speaker 1: and mass migration to justify their calls for dramatic change, 247 00:14:39,200 --> 00:14:42,160 Speaker 1: but they come against the backdrop of longer term trends 248 00:14:42,560 --> 00:14:45,920 Speaker 1: like large parts of the population getting left behind. While 249 00:14:46,040 --> 00:14:50,800 Speaker 1: some of us recover from setbacks. For decades, inequality in 250 00:14:50,800 --> 00:14:53,240 Speaker 1: the United States and parts of Europe has been on 251 00:14:53,280 --> 00:14:57,120 Speaker 1: the rise as more money has become concentrated among fewer people. 252 00:14:57,640 --> 00:15:00,480 Speaker 1: In the nineteen seventies, the top ten percent of earners 253 00:15:00,520 --> 00:15:03,800 Speaker 1: took home about a third of America's income. Today it's 254 00:15:03,840 --> 00:15:07,160 Speaker 1: close to the half of all income and wealth accumulation 255 00:15:07,320 --> 00:15:10,360 Speaker 1: has also become more skewed in favor of the rich. 256 00:15:12,360 --> 00:15:16,360 Speaker 1: That inequality has unsettled workers around the world. Over the 257 00:15:16,360 --> 00:15:20,040 Speaker 1: past couple of years, auto workers, farmers, and dock workers 258 00:15:20,240 --> 00:15:23,880 Speaker 1: have picketed to have their wages raised. In the US alone, 259 00:15:23,920 --> 00:15:26,960 Speaker 1: more than five hundred thousand workers walked off the job 260 00:15:27,000 --> 00:15:29,520 Speaker 1: in twenty twenty three. That's a one hundred and forty 261 00:15:29,560 --> 00:15:31,960 Speaker 1: one percent increase from twenty twenty two. 262 00:15:32,440 --> 00:15:35,680 Speaker 8: There comes a point in time where you've been abused enough. 263 00:15:35,720 --> 00:15:37,440 Speaker 8: You have to stand up for yourself. And this is it. 264 00:15:37,960 --> 00:15:41,080 Speaker 8: This is our our generations defining moment. Either we turn 265 00:15:41,160 --> 00:15:44,520 Speaker 8: this around now or we're going to be in big 266 00:15:44,520 --> 00:15:45,280 Speaker 8: trouble down the road. 267 00:15:45,480 --> 00:15:49,640 Speaker 9: Our fight is with these foreign owned carriers that have 268 00:15:49,840 --> 00:15:54,760 Speaker 9: made billions of dollars on the backs of longshore men 269 00:15:54,840 --> 00:15:56,720 Speaker 9: and women for too long. 270 00:15:57,480 --> 00:16:00,600 Speaker 1: There's nothing new about populism or it's appeal. In the 271 00:16:00,680 --> 00:16:03,480 Speaker 1: United States, it's at least as old as Andrew Jackson, 272 00:16:03,640 --> 00:16:08,560 Speaker 1: seventh President and champion of farmers, mechanics, and laborers, people 273 00:16:08,560 --> 00:16:12,160 Speaker 1: who distrusted national institutions like the Central Bank because they 274 00:16:12,200 --> 00:16:14,960 Speaker 1: felt left out of the progress being made by others. 275 00:16:15,200 --> 00:16:18,800 Speaker 1: In the early nineteenth century, America saw populism rise again 276 00:16:19,000 --> 00:16:21,920 Speaker 1: with William Jennings Bryan during his crusade against the gold 277 00:16:22,000 --> 00:16:25,040 Speaker 1: standard and what it was doing to farmers, and then 278 00:16:25,080 --> 00:16:27,680 Speaker 1: in the nineteen thirties when the US plunged into the 279 00:16:27,720 --> 00:16:31,520 Speaker 1: Great Depression and President Franklin Delamore Roosevelt pursued a new 280 00:16:31,600 --> 00:16:34,640 Speaker 1: deal on behalf of the people and against the entrenched 281 00:16:34,640 --> 00:16:39,120 Speaker 1: elites of Washington and New York. Now, populism is seeing 282 00:16:39,160 --> 00:16:42,440 Speaker 1: a resurgence in the United States under Donald Trump and 283 00:16:42,480 --> 00:16:46,560 Speaker 1: in Europe under leaders like Marine Le Penn and Georgia Maloney. 284 00:16:47,120 --> 00:16:49,920 Speaker 1: The Tony Blair Institute for Global Growth reports that the 285 00:16:49,960 --> 00:16:53,280 Speaker 1: percentage of countries with populist leadership has gone from less 286 00:16:53,280 --> 00:16:56,800 Speaker 1: than five percent in nineteen eighty two to nearly twenty 287 00:16:56,840 --> 00:17:00,280 Speaker 1: percent today. Economists like Tito Boeri at the book Tony 288 00:17:00,400 --> 00:17:04,040 Speaker 1: University in Milan evaluate the causes of populism and the 289 00:17:04,080 --> 00:17:07,399 Speaker 1: long term effects of its policies on countries' economies. 290 00:17:07,840 --> 00:17:10,920 Speaker 10: We have seen that the the roots of populi is, 291 00:17:11,280 --> 00:17:16,320 Speaker 10: you know, the factor behind the better success, are very 292 00:17:16,400 --> 00:17:20,760 Speaker 10: much related to the consequences of a number of shocks 293 00:17:20,800 --> 00:17:24,439 Speaker 10: that they've been hitting our economies. So first of all 294 00:17:24,760 --> 00:17:28,400 Speaker 10: the great recession of two thousand and eight, in two 295 00:17:28,400 --> 00:17:32,000 Speaker 10: thousand and nine, and then also the pandemic. 296 00:17:33,960 --> 00:17:37,680 Speaker 7: When I was in office, that the populism of the 297 00:17:37,800 --> 00:17:41,840 Speaker 7: day was the so called Tea Party, and this was 298 00:17:42,760 --> 00:17:45,359 Speaker 7: I think the initial surge and what we now have 299 00:17:45,520 --> 00:17:49,440 Speaker 7: on my side of the Maga movement. And these were 300 00:17:49,600 --> 00:17:52,720 Speaker 7: people who really had otherwise not really been involved in 301 00:17:52,720 --> 00:17:56,000 Speaker 7: the political process, had come into it largely due to 302 00:17:56,080 --> 00:17:59,400 Speaker 7: social media and the ability to gather together much more 303 00:17:59,480 --> 00:18:03,160 Speaker 7: quickly and to identify each other's commonality. 304 00:18:03,720 --> 00:18:04,960 Speaker 11: And back then. 305 00:18:04,920 --> 00:18:08,600 Speaker 7: The Tea Party, if you remember, it was taxed enough already. 306 00:18:09,600 --> 00:18:13,919 Speaker 7: We discerned that maybe that was due to the overarching 307 00:18:13,960 --> 00:18:16,560 Speaker 7: reach of government, and that government had gotten too big 308 00:18:16,600 --> 00:18:20,040 Speaker 7: and we were spending too much money in Washington, and 309 00:18:20,119 --> 00:18:23,080 Speaker 7: so our prescription to respond to that was to try 310 00:18:23,160 --> 00:18:27,360 Speaker 7: and really stick to a course of fiscal discipline, try 311 00:18:27,400 --> 00:18:30,720 Speaker 7: and return the fiscal imbalances back. 312 00:18:30,560 --> 00:18:32,480 Speaker 11: To some prudence in Washington. 313 00:18:33,200 --> 00:18:36,720 Speaker 7: I think what I have seen since being off Capitol 314 00:18:36,800 --> 00:18:41,000 Speaker 7: Hill is that notion that somehow there was a philosophical 315 00:18:41,119 --> 00:18:46,199 Speaker 7: underpinning to the rise in populism really wasn't necessarily what 316 00:18:46,280 --> 00:18:46,800 Speaker 7: was going on. 317 00:18:46,960 --> 00:18:48,400 Speaker 11: It was just some real anger. 318 00:18:49,000 --> 00:18:52,080 Speaker 1: In Europe, like in the United States, populism has deep 319 00:18:52,200 --> 00:18:56,440 Speaker 1: roots going back in time. Agrarian groups have supported populist 320 00:18:56,480 --> 00:19:00,239 Speaker 1: ideals for centuries, but modern day populism gain support in 321 00:19:00,240 --> 00:19:04,919 Speaker 1: Europe after World War II. In France, the populist torch 322 00:19:04,920 --> 00:19:07,800 Speaker 1: has been taken up by Marine Leapenn and her National 323 00:19:07,880 --> 00:19:13,200 Speaker 1: Rally Party, campaigning against immigration and for greater security. Even 324 00:19:13,240 --> 00:19:16,600 Speaker 1: without being elected, her party has changed the landscape of 325 00:19:16,680 --> 00:19:17,679 Speaker 1: French politics. 326 00:19:18,080 --> 00:19:22,040 Speaker 12: Back in two thousand and seven, Nicola Sarcuzi actually won 327 00:19:22,080 --> 00:19:26,719 Speaker 12: the presidency by campaigning on Lupin's themes immigration and security, 328 00:19:27,880 --> 00:19:31,440 Speaker 12: and this was probably the first time that politicians realized 329 00:19:31,520 --> 00:19:36,280 Speaker 12: by really adopting and embracing their themes they could win. 330 00:19:36,680 --> 00:19:40,639 Speaker 1: In the most recent elections, President Macron out maneuvered miss Lapin, 331 00:19:41,080 --> 00:19:43,399 Speaker 1: depriving her of the ability to take over control of 332 00:19:43,400 --> 00:19:47,280 Speaker 1: the parliament, but the populist wave swept the European Union's 333 00:19:47,320 --> 00:19:50,879 Speaker 1: parliamentary election in June, giving her National Rally party a 334 00:19:50,920 --> 00:19:55,000 Speaker 1: surprisingly good showing, while Germany's far right party Alternative for 335 00:19:55,080 --> 00:20:01,320 Speaker 1: Germany entered parliament for the first time with fifteen seats. Historically, 336 00:20:01,480 --> 00:20:04,560 Speaker 1: the economic track record of the most extreme populism has 337 00:20:04,640 --> 00:20:07,640 Speaker 1: been clear. One doesn't have to go back to Juan 338 00:20:07,680 --> 00:20:11,439 Speaker 1: Peron's Argentina in the nineteen fifties, when inflation raged and 339 00:20:11,440 --> 00:20:15,200 Speaker 1: the Peso collapsed to see the failures of populist policies. 340 00:20:15,560 --> 00:20:18,959 Speaker 1: President Trump's imposition of tariffs on goods from China, Europe, 341 00:20:18,960 --> 00:20:22,000 Speaker 1: and even Canada did not lead to the resurgence of 342 00:20:22,040 --> 00:20:26,200 Speaker 1: domestic manufacturing that he had predicted. An America's economic growth 343 00:20:26,200 --> 00:20:29,280 Speaker 1: in recent years was made possible in part through increased 344 00:20:29,320 --> 00:20:34,600 Speaker 1: workers coming from abroad. But whatever the consequences of populist policies, 345 00:20:34,840 --> 00:20:37,320 Speaker 1: it can be a mistake to see populism as simply 346 00:20:37,520 --> 00:20:41,520 Speaker 1: a question of economics. Whenever the movement regains traction, it's 347 00:20:41,520 --> 00:20:45,040 Speaker 1: been about more than just the pocketbooks of voters. 348 00:20:45,920 --> 00:20:48,600 Speaker 10: I think for a long time economists have not done 349 00:20:48,680 --> 00:20:50,760 Speaker 10: this too, the cultural. 350 00:20:50,359 --> 00:20:52,920 Speaker 11: Roots of populism. 351 00:20:53,160 --> 00:20:57,360 Speaker 10: The fact that beyond their message and their popularity, there 352 00:20:57,520 --> 00:21:02,640 Speaker 10: was a very much as claim to preserve the national identity, 353 00:21:02,800 --> 00:21:07,320 Speaker 10: the national values. These are things that economists have started 354 00:21:08,160 --> 00:21:13,600 Speaker 10: really looking at carefully. Only the last ten to fifteen years. 355 00:21:13,880 --> 00:21:21,240 Speaker 10: We were clearly more looking at the economic performance broadly speaking, 356 00:21:21,280 --> 00:21:23,760 Speaker 10: and clearly that doesn't give you an answer to the 357 00:21:23,840 --> 00:21:28,879 Speaker 10: question why populists are there, why mainstream party are finding 358 00:21:28,880 --> 00:21:33,720 Speaker 10: it hard to survive under the pressure of populist parties, 359 00:21:33,760 --> 00:21:37,400 Speaker 10: Because if you look at the economic performance or country, 360 00:21:37,440 --> 00:21:42,000 Speaker 10: but where populists have been in government, think about the 361 00:21:42,040 --> 00:21:48,200 Speaker 10: Latin American experience, but also more recent episodes in which 362 00:21:48,520 --> 00:21:53,080 Speaker 10: a populists have been in government in Europe, the outcomes 363 00:21:53,160 --> 00:21:59,400 Speaker 10: are generally very bad for the country. You get recessions, depression, 364 00:22:00,119 --> 00:22:08,199 Speaker 10: hardship evaluation, inflation, large fiscal deficits, so all be measured. 365 00:22:08,280 --> 00:22:12,160 Speaker 10: We could possibly or unemployment, we could measure of disease 366 00:22:12,280 --> 00:22:16,000 Speaker 10: of artship from the population. Are there, and yet this 367 00:22:16,840 --> 00:22:21,200 Speaker 10: published party perhaps not the same person, but the same narrative, 368 00:22:21,320 --> 00:22:25,040 Speaker 10: the same people survive over time and that actually are 369 00:22:25,280 --> 00:22:28,119 Speaker 10: to still very very popular. 370 00:22:28,480 --> 00:22:31,320 Speaker 1: If our experience with populism has taught us anything over 371 00:22:31,359 --> 00:22:34,159 Speaker 1: the years, it's that it's not going away because it 372 00:22:34,200 --> 00:22:38,200 Speaker 1: is based in part on legitimate concerns of large segments 373 00:22:38,200 --> 00:22:40,560 Speaker 1: of the people who feel they have been left behind. 374 00:22:41,320 --> 00:22:44,399 Speaker 1: The question is whether this question for greater equality of 375 00:22:44,480 --> 00:22:47,879 Speaker 1: opportunity can be melded with other political forces to come 376 00:22:47,960 --> 00:22:49,520 Speaker 1: up with some better answers. 377 00:22:49,920 --> 00:22:51,159 Speaker 11: Look what's going on in Europe. 378 00:22:51,200 --> 00:22:53,960 Speaker 7: I mean, there are political senstences of being torn apart 379 00:22:54,359 --> 00:22:56,800 Speaker 7: by the rise of some of these parties on the right. 380 00:22:56,640 --> 00:22:57,560 Speaker 11: And the left. 381 00:22:58,240 --> 00:23:00,320 Speaker 7: And I think those who have been success or have 382 00:23:00,359 --> 00:23:03,960 Speaker 7: been able to merge and tap into this anger that 383 00:23:04,080 --> 00:23:07,600 Speaker 7: is fueling the populism. And we'll see whether they're able 384 00:23:07,640 --> 00:23:13,120 Speaker 7: to merge that with the more traditional if you will, 385 00:23:13,240 --> 00:23:18,680 Speaker 7: commitment on the right to physical conservatism or to national security, 386 00:23:20,040 --> 00:23:23,159 Speaker 7: versus trying to say we're just going to focus on 387 00:23:23,240 --> 00:23:27,080 Speaker 7: here and now and the fact that America is the 388 00:23:27,119 --> 00:23:30,040 Speaker 7: global superpower that we are doesn't really matter, and we're 389 00:23:30,080 --> 00:23:31,800 Speaker 7: just going to tend to the home front. We haven't 390 00:23:31,880 --> 00:23:35,679 Speaker 7: yet seen where we can successfully merge the two, but 391 00:23:35,720 --> 00:23:40,560 Speaker 7: I think that's the formula that ultimately could work and 392 00:23:40,640 --> 00:23:42,240 Speaker 7: could enable our country. 393 00:23:41,880 --> 00:23:44,680 Speaker 11: To arrive at a new consensus, going. 394 00:23:44,480 --> 00:23:50,680 Speaker 1: Forward, still Ahead, creative destruction, and the decision that revolutionized 395 00:23:50,720 --> 00:23:53,760 Speaker 1: the modern space race. Here on Wall Street Week. 396 00:24:06,720 --> 00:24:10,120 Speaker 6: You're listening to Bloomberg Wall Street Week with David Weston 397 00:24:10,280 --> 00:24:39,919 Speaker 6: from Bloomberg Radio. This is Bloomberg Wall Street Week with 398 00:24:40,080 --> 00:24:42,480 Speaker 6: David Weston from Bloomberg Radio. 399 00:24:43,720 --> 00:24:47,960 Speaker 1: This is a story about competition, competition between private companies, 400 00:24:48,040 --> 00:24:51,879 Speaker 1: and competition between private companies and the government, all for 401 00:24:51,920 --> 00:24:58,840 Speaker 1: the ultimate prize of space travel. At one. 402 00:25:00,720 --> 00:25:04,960 Speaker 11: By a flint and about nine. 403 00:25:05,359 --> 00:25:08,760 Speaker 13: Going into space is unbelievable. It was a yellow sun 404 00:25:08,840 --> 00:25:11,600 Speaker 13: on a black sky, floating in zero G. He was 405 00:25:12,040 --> 00:25:13,480 Speaker 13: just an extraordinary experience. 406 00:25:13,480 --> 00:25:18,320 Speaker 1: And investor Victor Voskovo went to space on Blue Origin's 407 00:25:18,400 --> 00:25:21,640 Speaker 1: New Shepherd twenty one mission, putting him in the Guinness 408 00:25:21,640 --> 00:25:24,320 Speaker 1: Book of World Records as the first person to achieve 409 00:25:24,320 --> 00:25:28,600 Speaker 1: what's been dubbed the explorer's extreme trifecta, a trip to space, 410 00:25:28,920 --> 00:25:31,359 Speaker 1: to the top of Mount Everest, and to the bottom 411 00:25:31,440 --> 00:25:32,560 Speaker 1: of the Marianas Trench. 412 00:25:32,960 --> 00:25:35,640 Speaker 13: And I've just always been drawn to exploration and seeing 413 00:25:35,640 --> 00:25:37,320 Speaker 13: what's on the other side of that hill. And when 414 00:25:37,320 --> 00:25:40,200 Speaker 13: I was three years old, my father plopped me down 415 00:25:40,240 --> 00:25:42,080 Speaker 13: in front of the black and white television, and I 416 00:25:42,119 --> 00:25:45,680 Speaker 13: saw Neil Armstrong walk on the Moon, and I am 417 00:25:45,720 --> 00:25:48,919 Speaker 13: convinced that had a pronounced impact on my desire to 418 00:25:49,040 --> 00:25:51,040 Speaker 13: explore to eventually go into space. 419 00:25:52,600 --> 00:25:56,199 Speaker 1: When it began, the space race was between governments, the 420 00:25:56,280 --> 00:25:59,679 Speaker 1: United States and the Soviet Union, the only two entities 421 00:25:59,680 --> 00:26:02,760 Speaker 1: in the sixties and seventies that could handle the cost 422 00:26:02,800 --> 00:26:06,640 Speaker 1: and complexity of sending a human beyond Earth's atmosphere. That 423 00:26:06,840 --> 00:26:10,520 Speaker 1: competition pushed them to innovate faster and to spend more. 424 00:26:11,040 --> 00:26:14,040 Speaker 1: In the mid nineteen sixties, NASA alone accounted for more 425 00:26:14,080 --> 00:26:18,080 Speaker 1: than four percent of the entire federal budget, But as 426 00:26:18,119 --> 00:26:20,919 Speaker 1: that era came to an end, the agency's legacy became 427 00:26:21,040 --> 00:26:24,919 Speaker 1: not one only of pride and achievement, but also of waste. 428 00:26:25,320 --> 00:26:30,080 Speaker 13: When government does things, they can do very large projects, 429 00:26:30,200 --> 00:26:34,040 Speaker 13: but they're not necessarily the most efficient. They can build 430 00:26:34,040 --> 00:26:37,600 Speaker 13: the Panama Canal, they can build the Apollo program, but 431 00:26:37,640 --> 00:26:40,120 Speaker 13: it won't necessarily be the most effective or the most efficient. 432 00:26:40,280 --> 00:26:42,480 Speaker 13: I dealt in the and I still do in the 433 00:26:42,520 --> 00:26:45,399 Speaker 13: aerospace and defense industry for many, many decades. I have 434 00:26:45,520 --> 00:26:48,280 Speaker 13: companies that are still involved in defense acquisition. And when 435 00:26:48,280 --> 00:26:50,359 Speaker 13: you involve the federal government. There are all sorts of 436 00:26:50,440 --> 00:26:54,080 Speaker 13: rules and regulations to prevent fraud, waste, and abuse. That 437 00:26:54,200 --> 00:26:56,920 Speaker 13: requires a lot of oversight, a lot of procedures, a 438 00:26:57,240 --> 00:27:00,479 Speaker 13: hell of a lot of paperwork, and by its very nature, 439 00:27:00,920 --> 00:27:05,680 Speaker 13: government contracts tend to be much larger, much slower, much 440 00:27:05,680 --> 00:27:06,400 Speaker 13: more expension. 441 00:27:06,560 --> 00:27:10,400 Speaker 1: Since its beginning, NASA has worked with businesses. Its relationships 442 00:27:10,400 --> 00:27:14,639 Speaker 1: with Boeing, Lockheed Martin, and Northrop Grumman span decades, but 443 00:27:14,760 --> 00:27:19,040 Speaker 1: until recently it oversaw every aspect of the design, construction, 444 00:27:19,240 --> 00:27:22,560 Speaker 1: and operation of spacecraft, which by the twenty first century 445 00:27:22,640 --> 00:27:27,760 Speaker 1: led to ballooning costs, missed targets, and ultimately relying on 446 00:27:27,880 --> 00:27:31,800 Speaker 1: Russia to get US astronauts back into space. All that 447 00:27:31,920 --> 00:27:33,880 Speaker 1: came to a head in twenty ten. 448 00:27:34,240 --> 00:27:37,199 Speaker 14: We could go into why we're doing this, but you 449 00:27:37,280 --> 00:27:39,840 Speaker 14: can read numbers as well as I can, and I 450 00:27:39,880 --> 00:27:41,720 Speaker 14: don't think I need to dwell on that. You know, 451 00:27:41,760 --> 00:27:45,000 Speaker 14: when you have a program that's just going to cost 452 00:27:45,000 --> 00:27:50,280 Speaker 14: a fortune to resurrect and schedules are getting harder to 453 00:27:50,320 --> 00:27:54,400 Speaker 14: make without much more money than wisdom says, you'd pick 454 00:27:54,400 --> 00:27:57,200 Speaker 14: a new course. And so that's what we've done. 455 00:27:57,040 --> 00:28:00,840 Speaker 1: All three engines up and burning after thirty years of service, 456 00:28:01,040 --> 00:28:05,120 Speaker 1: NASA retired as Space Shuttle and launched the Commercial Crew Program, 457 00:28:05,480 --> 00:28:08,639 Speaker 1: its goal to bring competition back to a system that 458 00:28:08,680 --> 00:28:12,680 Speaker 1: had grown unwieldy and unsustainable. Boeing and the others would 459 00:28:12,680 --> 00:28:14,919 Speaker 1: still be in the mix, but there would be newer, 460 00:28:15,080 --> 00:28:19,320 Speaker 1: smaller upstarts. The gates were open, and no longer would 461 00:28:19,400 --> 00:28:22,600 Speaker 1: NASA draw the map and give companies directions to follow. 462 00:28:23,000 --> 00:28:26,560 Speaker 1: Now the agency would provide the destination and it was 463 00:28:26,680 --> 00:28:28,600 Speaker 1: up to businesses to find out how to get there. 464 00:28:29,200 --> 00:28:30,560 Speaker 1: The race was back. 465 00:28:30,359 --> 00:28:33,880 Speaker 15: On a lot of late nights, a lot of early mornings, 466 00:28:34,000 --> 00:28:37,240 Speaker 15: a lot of very stressful situations that we went through, 467 00:28:37,600 --> 00:28:39,560 Speaker 15: but in the end it was all worth it. 468 00:28:39,840 --> 00:28:42,840 Speaker 1: Laura Crabtree was part of the race at the ground level. 469 00:28:43,360 --> 00:28:46,320 Speaker 1: She worked at SpaceX as a crew operations and resource 470 00:28:46,320 --> 00:28:49,560 Speaker 1: engineer and was among those charged with answering NASA's call 471 00:28:49,920 --> 00:28:52,959 Speaker 1: to take astronauts back to the International Space Station on 472 00:28:53,040 --> 00:28:56,800 Speaker 1: board a US craft. Over a period of nine years, 473 00:28:56,840 --> 00:28:59,239 Speaker 1: what began as a competition among more than half a 474 00:28:59,280 --> 00:29:03,479 Speaker 1: dozen firms came down to just two, SpaceX and Boeing. 475 00:29:04,040 --> 00:29:08,479 Speaker 15: I think healthy competition is extremely good to keep people 476 00:29:09,280 --> 00:29:14,840 Speaker 15: pushing boundaries without the competition with Boeing. I don't know 477 00:29:15,160 --> 00:29:18,280 Speaker 15: if we would have all been as invigorated to get 478 00:29:18,320 --> 00:29:21,880 Speaker 15: to the space station in twenty twenty. As you know, 479 00:29:22,200 --> 00:29:24,840 Speaker 15: a lot of things happened in twenty twenty, and there 480 00:29:24,840 --> 00:29:26,760 Speaker 15: were a lot of hardships for each and every one 481 00:29:26,800 --> 00:29:32,120 Speaker 15: of us during those times. And I personally put a 482 00:29:32,120 --> 00:29:35,200 Speaker 15: lot of things on hold to get that mission to 483 00:29:35,280 --> 00:29:39,280 Speaker 15: the space station that year, if not for the competition, 484 00:29:39,640 --> 00:29:42,760 Speaker 15: because we we thought at the time that we were 485 00:29:43,480 --> 00:29:46,880 Speaker 15: both probably launching in twenty twenty, and we just wanted 486 00:29:46,920 --> 00:29:49,960 Speaker 15: to be first, and so we pushed really really hard 487 00:29:50,000 --> 00:29:50,560 Speaker 15: to get there. 488 00:29:50,760 --> 00:29:54,680 Speaker 1: Liftah the Falcon Line are Driver. In the end, of course, 489 00:29:54,920 --> 00:29:58,280 Speaker 1: it paid off. In May of twenty twenty, astronauts flew 490 00:29:58,360 --> 00:30:01,320 Speaker 1: to the ISS on a craft built company that hadn't 491 00:30:01,360 --> 00:30:04,280 Speaker 1: even existed when the space station first launched. 492 00:30:04,360 --> 00:30:07,400 Speaker 16: We have Bob bankin from SpaceX demo to mission entering 493 00:30:07,480 --> 00:30:08,880 Speaker 16: the International Space Station. 494 00:30:09,240 --> 00:30:11,840 Speaker 1: The moment was symbolized by the recovery of a small 495 00:30:11,880 --> 00:30:14,640 Speaker 1: American flag that had been left behind in the space 496 00:30:14,640 --> 00:30:17,840 Speaker 1: station by some of the very same astronauts. A modern 497 00:30:17,880 --> 00:30:20,080 Speaker 1: day version of that old game we played as kids 498 00:30:20,120 --> 00:30:21,600 Speaker 1: called Capture the Flag. 499 00:30:21,880 --> 00:30:25,960 Speaker 16: This is the flag that we left here almost nine 500 00:30:26,040 --> 00:30:28,800 Speaker 16: years ago, and at some point after the end of 501 00:30:28,800 --> 00:30:34,200 Speaker 16: the Shuttle program, we decided we would have a little 502 00:30:34,240 --> 00:30:37,480 Speaker 16: friendly competition to see who came up and got this flag. 503 00:30:37,520 --> 00:30:41,600 Speaker 16: In congratulations, SpaceX, you got the flag. 504 00:30:41,840 --> 00:30:44,160 Speaker 15: I mean, there was a lot of relief. There was 505 00:30:44,160 --> 00:30:46,600 Speaker 15: a lot of joy. All of us were up there 506 00:30:47,040 --> 00:30:50,120 Speaker 15: sitting on the floor surrounding a couple of monitors that 507 00:30:50,280 --> 00:30:54,880 Speaker 15: was at one of our cubicles and just waiting until 508 00:30:54,920 --> 00:30:58,760 Speaker 15: they opened the hatch to get the flag that had 509 00:30:58,840 --> 00:31:01,280 Speaker 15: been left by the last Shuttle crew. 510 00:31:01,800 --> 00:31:04,160 Speaker 1: As for Boeing, it would be four more years before 511 00:31:04,200 --> 00:31:06,560 Speaker 1: it could get a crew to the space station. In fact, 512 00:31:06,880 --> 00:31:09,840 Speaker 1: in the time it took for one crewed Boeing Starlinner 513 00:31:09,840 --> 00:31:13,160 Speaker 1: mission to reach the ISS, SpaceX sent up no fewer 514 00:31:13,200 --> 00:31:16,320 Speaker 1: than nine crewed missions, and they're doing it for far 515 00:31:16,400 --> 00:31:20,040 Speaker 1: less money. The latest figures from NASA show the estimated 516 00:31:20,080 --> 00:31:23,600 Speaker 1: average cost per astronaut for SpaceX was around fifty five 517 00:31:23,600 --> 00:31:28,160 Speaker 1: million dollars for Boeing ninety million dollars, and that's assuming 518 00:31:28,320 --> 00:31:29,640 Speaker 1: things go according to plan. 519 00:31:30,280 --> 00:31:31,440 Speaker 11: But they haven't. 520 00:31:31,960 --> 00:31:36,920 Speaker 17: NASA has decided that Butch and Sonny will return with 521 00:31:37,160 --> 00:31:46,080 Speaker 17: Crew nine next February and that Starliner will return uncrewed. 522 00:31:46,320 --> 00:31:50,160 Speaker 1: Boeing Starliner couldn't complete its first mission and in September 523 00:31:50,160 --> 00:31:53,520 Speaker 1: it returned back to Earth without its crew. So to 524 00:31:53,560 --> 00:31:57,160 Speaker 1: bring them back, NASA turned once again to SpaceX. 525 00:31:57,560 --> 00:32:00,000 Speaker 13: What has been incredibly striking is just how much more 526 00:32:00,280 --> 00:32:03,840 Speaker 13: rapid and more cost effective and even more capable the 527 00:32:03,880 --> 00:32:09,640 Speaker 13: private sector rocket industry is compared to the legacy government 528 00:32:09,760 --> 00:32:13,040 Speaker 13: contractors in government itself, like NASA and Boeing. 529 00:32:13,800 --> 00:32:14,280 Speaker 11: Wow. 530 00:32:14,440 --> 00:32:18,200 Speaker 1: So what has made SpaceX more successful than Boeing. There's 531 00:32:18,240 --> 00:32:20,520 Speaker 1: no one answer, but at least part of it comes 532 00:32:20,520 --> 00:32:23,360 Speaker 1: down to culture, to the way the company not only 533 00:32:23,480 --> 00:32:25,800 Speaker 1: learns FA failure but cheers it on. 534 00:32:30,640 --> 00:32:34,560 Speaker 18: Everyone here absolutely pumped to clear the pad and make 535 00:32:34,600 --> 00:32:37,840 Speaker 18: it this far into the test flight, its first integrated 536 00:32:38,360 --> 00:32:41,400 Speaker 18: light of the baser and the starstup vehicle. 537 00:32:41,640 --> 00:32:46,200 Speaker 1: Starship just experienced what we call a rapid unscheduled disassembly 538 00:32:46,680 --> 00:32:48,120 Speaker 1: or a RUDD during asset. 539 00:32:48,880 --> 00:32:50,800 Speaker 11: But now this was the development tests. 540 00:32:50,840 --> 00:32:53,160 Speaker 1: There's the first test flight a starship and the goal 541 00:32:53,280 --> 00:32:54,320 Speaker 1: was to gather the data. 542 00:32:54,560 --> 00:32:58,040 Speaker 13: And I think what's fascinating is how exemplified by SpaceX 543 00:32:58,080 --> 00:32:59,719 Speaker 13: and El and Musk is that they're willing to have 544 00:32:59,800 --> 00:33:04,200 Speaker 13: rocket's blow up in order to learn faster, and there's 545 00:33:04,280 --> 00:33:06,600 Speaker 13: no question that it does. But I think that the 546 00:33:06,640 --> 00:33:10,040 Speaker 13: culture of say a NASA or a large government contractor 547 00:33:10,160 --> 00:33:13,040 Speaker 13: like Boeing would not exactly want to see their rockets 548 00:33:13,080 --> 00:33:16,040 Speaker 13: blowing up on a pad to learn faster. And yet 549 00:33:16,360 --> 00:33:18,480 Speaker 13: it seems to be the case that that absolutely is 550 00:33:18,480 --> 00:33:21,200 Speaker 13: the way that you can learn faster, make things cheaper, 551 00:33:21,560 --> 00:33:24,760 Speaker 13: and iterate your designs much more rapidly. 552 00:33:25,880 --> 00:33:29,760 Speaker 19: And if you look with that SpaceX's relationship with NASA, 553 00:33:30,400 --> 00:33:34,600 Speaker 19: it's been very different than the traditional contractor model. 554 00:33:34,720 --> 00:33:37,120 Speaker 1: Ron Epstein was an engineer for Boeing in the nineteen 555 00:33:37,240 --> 00:33:40,480 Speaker 1: nineties and today he's managing director at Bank of America 556 00:33:40,640 --> 00:33:42,360 Speaker 1: covering aerospace and defense. 557 00:33:42,840 --> 00:33:46,200 Speaker 19: The old model was, hey, we want this vehicle, here 558 00:33:46,200 --> 00:33:49,600 Speaker 19: are all the specs, build it to this spec, will 559 00:33:49,640 --> 00:33:53,800 Speaker 19: buy it. Where SpaceX has more of a launch it, 560 00:33:54,600 --> 00:33:57,120 Speaker 19: build it, try it, fix it, build it, try it, 561 00:33:57,120 --> 00:33:59,480 Speaker 19: fix it right. I mean you know on social media, 562 00:33:59,160 --> 00:34:01,959 Speaker 19: their you know, their rocket launches when they fail, get 563 00:34:02,000 --> 00:34:03,960 Speaker 19: a lot of airplay, but they learn a lot and 564 00:34:04,000 --> 00:34:04,880 Speaker 19: they move forward. 565 00:34:05,080 --> 00:34:06,920 Speaker 11: So what you see with the Falcon. 566 00:34:06,640 --> 00:34:10,080 Speaker 19: Nine landing itself and who would imagine that that that 567 00:34:10,200 --> 00:34:12,040 Speaker 19: could happen, and they do it now on a regular base. 568 00:34:12,160 --> 00:34:14,560 Speaker 19: It's it's almost boring now, you know. I say that 569 00:34:14,560 --> 00:34:16,359 Speaker 19: tongue in cheek. I mean, it's always fascinating to watch, 570 00:34:16,480 --> 00:34:18,640 Speaker 19: But who would imagine you'd have rockets that can come 571 00:34:18,640 --> 00:34:22,719 Speaker 19: back and land themselves very accurately. Well, SpaceX figure that out. 572 00:34:23,200 --> 00:34:25,000 Speaker 19: Build it, launch it, try it, break it. Build it, 573 00:34:25,040 --> 00:34:26,799 Speaker 19: launch it, try it, break it, and then you get there. 574 00:34:27,280 --> 00:34:30,799 Speaker 19: And that's a very different mindset than the traditional here's. 575 00:34:30,520 --> 00:34:33,759 Speaker 11: Our spec, build it, deliver it. Oh it doesn't work. 576 00:34:33,880 --> 00:34:37,240 Speaker 19: Fix our spec, which turns out to be far more expensive, 577 00:34:37,320 --> 00:34:38,719 Speaker 19: and I would argue probably doesn't. 578 00:34:38,480 --> 00:34:39,320 Speaker 11: Get you there as quickly. 579 00:34:39,440 --> 00:34:42,000 Speaker 1: For its part, Boeing has head its own share of problems, 580 00:34:42,040 --> 00:34:46,360 Speaker 1: besides falling behind in space. After multiple Senate hearings surrounding 581 00:34:46,400 --> 00:34:50,120 Speaker 1: the company's seven thirty seven Max crisis, CEO Dave Calhoun 582 00:34:50,239 --> 00:34:54,680 Speaker 1: stepped down, Kelly Ortberg took the helm. In August, Bowing 583 00:34:54,719 --> 00:34:57,360 Speaker 1: has a new CEO. If you were going to advise 584 00:34:57,440 --> 00:35:00,680 Speaker 1: him about what to do with Boeing Space OP, what 585 00:35:00,719 --> 00:35:01,680 Speaker 1: would you tell him? 586 00:35:01,960 --> 00:35:06,280 Speaker 19: Yeah, it's a good question. Decide if he really wants 587 00:35:06,320 --> 00:35:09,359 Speaker 19: it and if you really want to invest in it 588 00:35:09,400 --> 00:35:11,760 Speaker 19: and attract that talent lift off. 589 00:35:12,120 --> 00:35:15,320 Speaker 1: The United States has never known a space program without Boeing, 590 00:35:15,800 --> 00:35:19,600 Speaker 1: and its absence could reshape the competition. But explore and 591 00:35:19,640 --> 00:35:23,640 Speaker 1: investor of Victor Vescovo says today there is no shortage 592 00:35:23,640 --> 00:35:27,160 Speaker 1: of companies fighting to find new and better ways to 593 00:35:27,200 --> 00:35:30,279 Speaker 1: send humans back into space, whether it is with or 594 00:35:30,360 --> 00:35:33,759 Speaker 1: without Boeing. Vescovo still believes that America's story and outer 595 00:35:33,880 --> 00:35:35,600 Speaker 1: space is just beginning. 596 00:35:35,960 --> 00:35:40,239 Speaker 13: We are explorers, we are human beings, and there is 597 00:35:40,280 --> 00:35:44,719 Speaker 13: something about the connection of human beings walking on the 598 00:35:44,719 --> 00:35:48,600 Speaker 13: Moon that touched us at an almost spiritual level in 599 00:35:48,640 --> 00:35:51,560 Speaker 13: the way that the first lander on the Moon did not. 600 00:35:52,600 --> 00:35:56,040 Speaker 13: The first person to walk on Mars will be a 601 00:35:56,120 --> 00:36:00,680 Speaker 13: seminal event for humankind in a way that is probably 602 00:36:00,800 --> 00:36:04,920 Speaker 13: orders of magnitude more profound and affecting to people in 603 00:36:04,960 --> 00:36:09,360 Speaker 13: a positive way than the first Mars lander. And finally, 604 00:36:09,960 --> 00:36:13,720 Speaker 13: I do believe that at some point in the future 605 00:36:13,880 --> 00:36:16,640 Speaker 13: human beings will not be confined to planet Earth. We 606 00:36:16,719 --> 00:36:19,960 Speaker 13: need to explore our Solar system. We need to make 607 00:36:19,960 --> 00:36:23,720 Speaker 13: ourselves some multiplanetary species for our own survival, if nothing else. 608 00:36:24,160 --> 00:36:26,759 Speaker 13: And therefore I think why not start now. 609 00:36:27,320 --> 00:36:31,240 Speaker 1: Talk of becoming a multiplanetary species may sound far fetched, 610 00:36:31,719 --> 00:36:34,400 Speaker 1: but maybe no more far fetched that when, as a 611 00:36:34,480 --> 00:36:37,279 Speaker 1: nine year old boy, I heard President Kennedy say that 612 00:36:37,320 --> 00:36:39,360 Speaker 1: the United States would go to the Moon before I 613 00:36:39,480 --> 00:36:40,840 Speaker 1: graduated from high school. 614 00:36:41,160 --> 00:36:43,840 Speaker 16: We choose to go to the moon, and this decay 615 00:36:43,960 --> 00:36:47,240 Speaker 16: and do the other things not because they are easy, 616 00:36:47,440 --> 00:36:49,000 Speaker 16: but because they are hard. 617 00:36:49,360 --> 00:36:52,600 Speaker 1: Far fetched, which made it all the more surprising when 618 00:36:52,680 --> 00:36:55,560 Speaker 1: only seven years later I watched the black and white 619 00:36:55,600 --> 00:36:59,600 Speaker 1: images of Neil Armstrong taking that one giant leap for 620 00:36:59,760 --> 00:37:04,520 Speaker 1: man kind. Beautiful view. That does it for us. Here 621 00:37:04,560 --> 00:37:07,440 Speaker 1: on Wall Street Week, I'm David Weston. Join us again 622 00:37:07,520 --> 00:37:14,560 Speaker 1: next week for more stories of capitalism. 623 00:37:14,600 --> 00:37:18,040 Speaker 6: You're listening to Bloomberg Wall Street Week with David Weston 624 00:37:18,160 --> 00:37:19,360 Speaker 6: from Bloomberg Radio.