WEBVTT - Bloomberg Businessweek Weekend - February 28th, 2025 0:00:00.320 --> 0:00:07.240 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.760 --> 0:00:12.800 This is Bloomberg Business Week, Insight from the reporters and 0:00:12.960 --> 0:00:17.320 editors that bring you America's most trusted business magazine, plus. 0:00:17.160 --> 0:00:19.400 Global business, finance and tech news. 0:00:19.560 --> 0:00:23.520 The Bloomberg Business Week Podcast with Carol Masser and Tim 0:00:23.520 --> 0:00:25.919 Stenoveek on Bloomberg Radio. 0:00:26.360 --> 0:00:29.560 Hi, everyone, Welcome to the weekend edition of Bloomberg Business Week. 0:00:29.800 --> 0:00:32.920 A flurry of news this past week and video dropped earnings, 0:00:33.080 --> 0:00:37.120 US consumer confidence is souring. The FEDS preferred inflation gauge 0:00:37.159 --> 0:00:41.199 came in exactly as economists forecast. President Trump held his 0:00:41.240 --> 0:00:45.440 first cabinet meeting with Elon Musk in attendance, defending doge's 0:00:45.479 --> 0:00:49.640 attempts to fire federal employees. And then there was the 0:00:49.720 --> 0:00:52.280 heated exchange at the White House that led to a 0:00:52.320 --> 0:00:56.720 critical minerals plan with Ukraine being scrapped. So this hour 0:00:57.120 --> 0:01:01.360 we tackled geopolitics, US politics, and the US political divide 0:01:01.600 --> 0:01:03.040 thanks to two new books. 0:01:03.560 --> 0:01:05.560 One of the books is from a former State Department 0:01:05.640 --> 0:01:09.240 sanctions official on the choke points in global American power. 0:01:09.760 --> 0:01:13.640 The other book, Timely Considering the latest with Russia and Ukraine, 0:01:13.880 --> 0:01:17.360 from a retired lieutenant Colonel. It highlights American mistakes in 0:01:17.400 --> 0:01:20.800 Eastern Europe that led to a return of Russian imperialism. 0:01:20.880 --> 0:01:23.880 By the way, he served in President Trump's first administration. 0:01:24.400 --> 0:01:28.640 We are talking about retired Lieutenant Colonel Alexander Vinman. We're 0:01:28.640 --> 0:01:30.600 also going to dig into the details of those earth 0:01:30.640 --> 0:01:33.480 minerals from Ukraine, what you really need to know with 0:01:33.560 --> 0:01:36.200 a global investor in the space. We are talking about 0:01:36.200 --> 0:01:39.080 the CEO of Orion Resource Partners, and we get an 0:01:39.120 --> 0:01:42.319 update on state cases against Doze with the Attorney General 0:01:42.520 --> 0:01:43.880 of Connecticut, And. 0:01:43.840 --> 0:01:47.200 A little later on in our second hour, autonomous dump trucks, 0:01:47.480 --> 0:01:52.160 a boom in medical spas, Rome's legendary loss marbles, and 0:01:52.240 --> 0:01:56.600 the CEO behind the reboot of the world's largest retailer, Walmart. 0:01:56.680 --> 0:01:59.400 All of that to come. We begin with geopolitical impacts 0:01:59.400 --> 0:02:02.320 and Trumpet administration policies. There's a lot going on again 0:02:02.360 --> 0:02:04.880 this week. In fact, we did get a report that 0:02:04.920 --> 0:02:08.480 President Trump is planning to expand US semiconductor curbs at China, 0:02:09.000 --> 0:02:12.679 and that Trump administration officials have already met with key allies, 0:02:12.680 --> 0:02:16.280 including Japan and the Netherlands, to escalate their restrictions on 0:02:16.360 --> 0:02:17.560 China's chip industry. 0:02:18.040 --> 0:02:20.560 Edward Fishman has a lot of experience with sanctions as 0:02:20.600 --> 0:02:24.240 a former State Department sanctions official. Today he's senior research 0:02:24.280 --> 0:02:27.640 scholar and professor at Columbia University School of International and 0:02:27.639 --> 0:02:30.640 Public Affairs. He joined us to talk about his brand 0:02:30.639 --> 0:02:33.680 new book, Choke Points, American Power in the Age of 0:02:33.720 --> 0:02:36.560 Economic Warfare. We should note that we spoke to him 0:02:36.560 --> 0:02:38.480 before Friday's news on Ukraine. 0:02:39.480 --> 0:02:42.800 Sometimes people ask me do sanctions work? And my response 0:02:42.919 --> 0:02:45.200 is often, have you ever asked a general or an 0:02:45.200 --> 0:02:46.640 admiral does a bomb work? 0:02:46.919 --> 0:02:47.200 Well? 0:02:47.320 --> 0:02:49.800 A bomb is very effective at blowing things up, but 0:02:49.880 --> 0:02:52.720 it doesn't always get us what we want politically. Because 0:02:52.720 --> 0:02:54.639 of the choke points that I mentioned in my book, 0:02:54.960 --> 0:02:59.880 such as the US dollar, advanced semiconductor technology, oil supply chains, 0:02:59.480 --> 0:03:03.640 the government has tremendous power to impose economic harm on 0:03:03.720 --> 0:03:06.440 foreign countries. What we're less good at is taking that 0:03:06.480 --> 0:03:09.079 harm and translating it into the political outcome we want. 0:03:09.160 --> 0:03:11.360 Well, I remember three years ago we were sitting in 0:03:11.400 --> 0:03:14.000 this studio and we were going through all the companies 0:03:14.040 --> 0:03:16.880 that had just announced they would stop doing business in 0:03:16.960 --> 0:03:20.480 Russia as a result of Russia's invasion of Ukraine. No 0:03:20.560 --> 0:03:23.000 more McDonald's, no more Coca Cola. I mean, the list 0:03:23.280 --> 0:03:26.440 goes on and on, and people were theorizing, oh, as 0:03:26.480 --> 0:03:29.080 soon as you know Russians can't get their iPhones or 0:03:29.120 --> 0:03:32.000 their eye cloud doesn't work or whatever, then it's going 0:03:32.040 --> 0:03:36.200 to be an issue for Putin's government. Fast forward three years, 0:03:36.240 --> 0:03:38.600 and it looks like it didn't matter at all. 0:03:38.760 --> 0:03:39.760 I would disagree with that. 0:03:39.880 --> 0:03:41.920 I think that if you look back at the very 0:03:41.960 --> 0:03:46.160 beginning of the invasion, clearly Biden's goal was to deter 0:03:46.320 --> 0:03:48.200 Putin from invading in the first place through the threat, 0:03:48.280 --> 0:03:50.080 the threat of swift and severe consequences. 0:03:50.200 --> 0:03:50.720 That failed. 0:03:50.800 --> 0:03:54.400 Right then there was a big hit on Russia. They 0:03:54.480 --> 0:03:56.920 kind of adapted. But where are we now. You've got 0:03:57.000 --> 0:03:59.040 interest rates over twenty percent, you can't get a home 0:03:59.040 --> 0:04:02.160 mortgage in Russia anything less than thirty percent. You've got 0:04:02.160 --> 0:04:05.000 sky high inflation. The Central Bank of Russia projects zero 0:04:05.040 --> 0:04:07.480 growth basically this year. So what that means for those 0:04:07.520 --> 0:04:11.080 of us who interpret Kremlin stuff probably a recession. So 0:04:11.560 --> 0:04:13.880 I think that sanctions can take time to work, the 0:04:13.920 --> 0:04:17.119 same way that you know wars take long to be fought. 0:04:17.120 --> 0:04:20.280 Economic wars aren't usually one in a day. But right 0:04:20.440 --> 0:04:22.120 now Russia is on the ropes, and I think that 0:04:22.160 --> 0:04:25.000 explains why Putin is so desperate for a deal with 0:04:25.040 --> 0:04:25.760 Trump right now. 0:04:26.680 --> 0:04:28.800 Tell us about the history of choke points and how 0:04:28.800 --> 0:04:31.520 they've evolved into what the US considers choke points or 0:04:31.520 --> 0:04:33.520 what the US has as choke points today. 0:04:33.680 --> 0:04:37.240 Yeah, thanks for asking that, because you know, historically choke 0:04:37.320 --> 0:04:40.680 points are geographic features. So if anyone who's traveled to 0:04:41.000 --> 0:04:44.800 Turkey or Istanbul, the Bosphorus is a classic choke point 0:04:44.839 --> 0:04:47.359 where you have three million barrels of oil passing through 0:04:47.560 --> 0:04:50.599 a narrow strait every single day. And so throughout history, 0:04:50.760 --> 0:04:54.080 stats have used these choke points to put pressure on 0:04:54.120 --> 0:04:56.960 other countries, for instance, by parking a ship right in 0:04:57.000 --> 0:04:59.440 front of that choke point and saying vow shot not pass. 0:05:00.040 --> 0:05:01.880 And really that is how choke points were. 0:05:01.760 --> 0:05:03.720 Weaponized all the way up until the turn of the 0:05:03.760 --> 0:05:07.760 twenty first century, going back to the famous embargo on 0:05:07.920 --> 0:05:10.599 Iraq that the UN Security Council did in the nineteen 0:05:10.640 --> 0:05:14.520 nineties that was implemented by warships patrolling the Persian Gulf 0:05:14.720 --> 0:05:17.440 twenty four to seven for thirteen straight years. But the 0:05:17.560 --> 0:05:20.080 choke points that I described earlier, such as the US 0:05:20.200 --> 0:05:23.120 dollar and these integrated financial systems and supply chains which 0:05:23.160 --> 0:05:25.680 really come out of the hyperglobalization of the nineteen nineties. 0:05:26.160 --> 0:05:29.479 Now US officials can sign a document in their office 0:05:29.560 --> 0:05:32.760 from Washington and impose much much more economic harm even 0:05:32.800 --> 0:05:35.360 than those old blockades where you put warships in the 0:05:35.360 --> 0:05:35.960 Persian Gulf. 0:05:36.480 --> 0:05:38.400 So you said, I think before, and forgive me if 0:05:38.400 --> 0:05:41.479 I'm miss quoting, that the US maybe hasn't been so 0:05:41.560 --> 0:05:44.680 good about using their choke points to get maybe their 0:05:44.720 --> 0:05:49.799 desired outcome. But as President Trump, somebody who maybe understands 0:05:49.880 --> 0:05:53.000 the use of these choke points to maybe get to 0:05:53.720 --> 0:05:54.680 a desired income. 0:05:54.880 --> 0:05:59.560 So President Trump certainly likes using economic warfare. And during 0:05:59.560 --> 0:06:03.000 his first term he imposed twice as many sanctions as 0:06:03.040 --> 0:06:06.919 the previous record holder, Barack Obama. So he loves sanctions. 0:06:07.000 --> 0:06:09.200 He says, he's a tariff man. The thing I'm a 0:06:09.200 --> 0:06:11.560 little bit skeptical of, though, when it comes to Trump's 0:06:11.640 --> 0:06:15.280 use of economic warfare is his love for tariffs. Tariffs 0:06:15.279 --> 0:06:18.479 are a much weaker tool, frankly than sanctions. What a 0:06:18.520 --> 0:06:22.200 tariff is is a tax on importers, right, So for instance, 0:06:22.200 --> 0:06:24.400 we're putting a tariff on copper. I heard on your 0:06:24.440 --> 0:06:25.480 news program earlier. 0:06:25.200 --> 0:06:27.600 Today, possibly possibly doing an investigation and there. 0:06:27.839 --> 0:06:28.960 Yeah, so that's possible. 0:06:28.960 --> 0:06:31.960 What that would mean is a US importer of copper 0:06:31.960 --> 0:06:34.279 from a foreign country would have to pay a tax 0:06:34.360 --> 0:06:36.680 on that. It doesn't actually block things from coming into 0:06:36.680 --> 0:06:39.640 the United States. To really weaponize a choke point, you 0:06:39.680 --> 0:06:42.440 have to cut it off entirely. So actually, these tariffs 0:06:42.480 --> 0:06:44.760 are a fairly weak instrument, and I think that's why 0:06:44.800 --> 0:06:47.919 they haven't been particularly effective at getting anything that Donald 0:06:47.960 --> 0:06:48.680 Trump wants. 0:06:48.839 --> 0:06:52.200 So far, would you say that tariffs are part of 0:06:52.279 --> 0:06:54.400 economic warfare or would you not go that far? 0:06:54.600 --> 0:06:57.320 Yeah, this is a really important question because historically the 0:06:57.360 --> 0:07:00.120 answer is no. Tariffs have been used primarily for or 0:07:00.279 --> 0:07:04.400 economic reasons, such as protecting domestic industries from foreign competition 0:07:04.640 --> 0:07:08.200 or to use in trade negotiations. What they haven't been 0:07:08.279 --> 0:07:11.160 used as is a national security tool to try to 0:07:11.320 --> 0:07:14.240 get a deal, for instance, over the war in Ukraine, 0:07:14.480 --> 0:07:17.880 or to try to bludgeon Iran's economy. And the reason 0:07:17.880 --> 0:07:19.640 they haven't been used for that is because they're a 0:07:19.640 --> 0:07:22.360 weak tool. Right Iran. You know, we have a trade 0:07:22.360 --> 0:07:24.680 embargo on Iran. We don't import anything from Iran, so 0:07:24.680 --> 0:07:26.360 it wouldn't make sense to put tariffs on them. 0:07:26.960 --> 0:07:32.480 How effective are sanctions in a world where a country 0:07:32.520 --> 0:07:37.360 like China can come in and help other economies get 0:07:37.400 --> 0:07:39.840 around sanctions that are imposed by the rest of the world. 0:07:40.360 --> 0:07:43.360 So China certainly does play a white night role, and 0:07:43.400 --> 0:07:46.840 they've played that role for Russia right in particular, you know, 0:07:46.920 --> 0:07:50.840 when Russia was cut off from components, for instance, like 0:07:50.840 --> 0:07:54.200 semiconductors from the West, China has been a lifeline and really, 0:07:54.240 --> 0:07:56.480 you know, that's why I've seen Russia China trade double 0:07:56.640 --> 0:07:58.920 really since the beginning of the Ukraine War. But what 0:07:58.960 --> 0:08:01.200 I would say is that there are limits to the 0:08:01.280 --> 0:08:04.160 role China can play critically in this space of finance 0:08:04.320 --> 0:08:06.600 because the R and B is not a competitor to 0:08:06.640 --> 0:08:07.280 the US dollar. 0:08:07.360 --> 0:08:09.920 Well, that's where I want to go, because the ultimate 0:08:10.720 --> 0:08:13.200 tool weapon is the US dollar, is it not? 0:08:13.640 --> 0:08:16.440 Indeed it is so tell us about. 0:08:16.280 --> 0:08:20.120 As long as the US dollar rain supreme. You know, 0:08:20.480 --> 0:08:22.520 we go day to day, week to week, month to 0:08:22.600 --> 0:08:25.320 month talking geopolitics and what seems to be these new 0:08:25.360 --> 0:08:28.520 stress points and push back against globalization. But as long 0:08:28.560 --> 0:08:32.559 as the US dollar rain supreme, does the US kind 0:08:32.600 --> 0:08:33.480 of reign supreme? 0:08:33.880 --> 0:08:36.920 Yes, I think the dollar is the most impactful and 0:08:37.000 --> 0:08:41.480 important choke point in economic warfare, and that's why China, Russia, 0:08:41.520 --> 0:08:44.800 other countries are investing heavily in trying to figure out 0:08:44.800 --> 0:08:47.120 a way around this choke point. I think the thing 0:08:47.160 --> 0:08:50.080 that people misunderstand, though, is they say, oh, well, the 0:08:50.120 --> 0:08:53.240 dollar is still the world's reserve currency, so it's secure. 0:08:53.720 --> 0:08:56.520 The thing is, the way that the US weaponizes the 0:08:56.600 --> 0:08:59.760 dollar is really less as a reserve currency and more 0:08:59.840 --> 0:09:02.520 as a medium in exchange, a payment currency. And what 0:09:02.559 --> 0:09:05.600 you've seen China do is launch something like the Digital 0:09:05.720 --> 0:09:08.000 R and B, a central bank digital currency. They put 0:09:08.040 --> 0:09:12.319 forward a platform called Mbridge, which allows cross border payment 0:09:12.360 --> 0:09:14.000 settlement using digital currencies. 0:09:14.200 --> 0:09:15.319 These things could. 0:09:15.160 --> 0:09:18.120 Develop in parallel to the dollar based system and ultimately 0:09:18.160 --> 0:09:19.840 erode US financial power. 0:09:20.120 --> 0:09:22.280 So what you're saying, and this is kind of my 0:09:22.320 --> 0:09:24.920 world when it comes to crypto, the Crypto Show here 0:09:26.080 --> 0:09:32.440 every Tuesday at noon. If is there a chance that 0:09:32.720 --> 0:09:35.280 the rise of digital currencies, the rise of bitcoin, the 0:09:35.320 --> 0:09:39.320 rise of central bank digital currencies, will decrease the power 0:09:39.360 --> 0:09:41.360 that countries have when it comes to sanctions. 0:09:41.640 --> 0:09:44.200 The answer is no. But it could do, though, is 0:09:44.280 --> 0:09:48.240 redistribute the power. Because if you think about it. There's 0:09:48.280 --> 0:09:50.760 no reason that a digital currency couldn't be weaponized, right 0:09:50.800 --> 0:09:53.960 if the digital R and B becomes sort of the 0:09:54.040 --> 0:09:56.440 main currency for cross border settlement, which, by the way, 0:09:56.480 --> 0:09:59.000 it could because China's got one hundred and twenty countries 0:09:59.000 --> 0:10:00.640 where it's number who are who considered China? 0:10:01.160 --> 0:10:03.839 That's a centralized digital currency. What about a decentralized digital 0:10:03.880 --> 0:10:05.120 currency like bitcoin? 0:10:05.200 --> 0:10:09.000 Yeah, I think it depends. Look, ultimately, bitcoin does live 0:10:09.200 --> 0:10:11.360 on servers. There are companies that have to hold the wallets, 0:10:11.400 --> 0:10:14.080 and so there are ability to weaponize that. We've seen 0:10:14.280 --> 0:10:17.760 the US Treasury Department add bitcoin wallets to the sanctions list, 0:10:17.920 --> 0:10:20.760 and we also I mean, you know, famously, the most 0:10:21.000 --> 0:10:24.520 significant sanctions violation settlement of the last several years was 0:10:24.559 --> 0:10:26.959 against finance with when they were fined four billion dollars. 0:10:27.240 --> 0:10:31.240 So I do not think that cryptocurrencies or central bank 0:10:31.320 --> 0:10:34.200 digital currencies are in any way sanctions proved. The key 0:10:34.400 --> 0:10:36.680 for the United States if it wants to retain this 0:10:36.800 --> 0:10:39.280 dominance is for the United States to be the leader 0:10:39.440 --> 0:10:40.400 in digital currencies. 0:10:40.440 --> 0:10:41.680 Well, that's what I was going to ask you. Is 0:10:41.679 --> 0:10:45.600 this then the argument for the US government creating some 0:10:45.720 --> 0:10:50.600 kind of digital currency for transactional purposes, yes, like government, Yes. 0:10:50.520 --> 0:10:51.240 Yes, definitely. 0:10:51.280 --> 0:10:53.840 I think that it is a pity that the United 0:10:53.840 --> 0:10:55.920 States does not have a central bank digital currency. I 0:10:55.920 --> 0:11:00.000 have no idea why the Trump administration and seems hostile 0:11:00.120 --> 0:11:02.679 to that and that that dates back to their previous administration. 0:11:02.920 --> 0:11:05.520 But while we linger, China moves ahead. 0:11:05.600 --> 0:11:09.120 But would there be the same pushback against other nations 0:11:09.160 --> 0:11:11.600 who don't like the dominance of the US dollar to 0:11:11.640 --> 0:11:14.840 push back once again against the dominance of a US 0:11:14.840 --> 0:11:15.800 central bank currency. 0:11:15.800 --> 0:11:19.040 Sure, but worth the incumbent right, So if the if you, 0:11:19.160 --> 0:11:21.000 if the FED were to launch a central bank digital 0:11:21.000 --> 0:11:24.240 currency that was considered effectively the same as dollars, then 0:11:24.360 --> 0:11:26.640 all it would do is cut off at the knees 0:11:26.720 --> 0:11:28.880 things like the Chinese digital remnant BEU, which right now 0:11:28.880 --> 0:11:31.000 is running ahead in the race as we're kind of 0:11:31.000 --> 0:11:33.120 just sitting at the starting line doing nothing. And this 0:11:33.160 --> 0:11:35.760 is a really important point. I'm making choke points because 0:11:35.960 --> 0:11:39.360 these choke points they're not immutable. They some of them fade, 0:11:39.520 --> 0:11:43.040 others rise, they change over time, critical minerals, batteries. These 0:11:43.040 --> 0:11:45.760 are choke points that China controls, not us. And if 0:11:45.760 --> 0:11:48.640 we don't continue to innovate in these spaces, we will 0:11:48.640 --> 0:11:49.480 not stay ahead. 0:11:50.520 --> 0:11:51.839 AI. Is that a choke point? 0:11:52.280 --> 0:11:55.360 Well, yes, certainly, what I will say though, it's really 0:11:55.400 --> 0:11:58.439 it's really the computing power under undergirding AI. So the 0:11:58.480 --> 0:12:00.360 semi can components, Yazacly. 0:12:00.520 --> 0:12:02.160 Look, have you sent the book to members of the 0:12:02.160 --> 0:12:05.000 Trump administration? The crypto and AIS are David Sachs. 0:12:05.760 --> 0:12:07.400 I have not sent the book to David Sachs. I 0:12:07.440 --> 0:12:10.160 would welcome a conversation with David Sachs about the book. 0:12:10.160 --> 0:12:11.480 I think it would be great to talk to them 0:12:11.480 --> 0:12:13.560 about I am what I will say. You know, in 0:12:13.640 --> 0:12:15.920 touch with folks at the National Security Council, and I 0:12:15.960 --> 0:12:17.719 know that they're very interested in the book and we'll 0:12:17.720 --> 0:12:18.840 be talking to them about soon. 0:12:18.960 --> 0:12:22.120 Do they understand the need for central bank digital currency? 0:12:22.240 --> 0:12:24.320 I don't know, Honestly, I haven't talked to I haven't 0:12:24.360 --> 0:12:27.480 talked to people about that. I do not know David Sachs. 0:12:27.559 --> 0:12:29.440 I can't say where he stands. What I do know 0:12:29.480 --> 0:12:31.880 is that Trump himself has been hostile to this idea. 0:12:31.920 --> 0:12:34.160 We've talked more about war in the last couple of 0:12:34.240 --> 0:12:37.480 years around the globe, but is it economic warfare that 0:12:37.600 --> 0:12:40.520 is really the bigger challenges? Going forward and forgive me 0:12:40.559 --> 0:12:41.640 just about thirty seconds. 0:12:41.760 --> 0:12:42.400 Yes, it is. 0:12:42.880 --> 0:12:45.920 The reason is we have great power competition between the US, China, 0:12:45.920 --> 0:12:48.120 and Russia. We all got nuclear weapons. We're going to 0:12:48.200 --> 0:12:51.040 avoid fighting at all costs. So what's that mean? We 0:12:51.120 --> 0:12:54.320 are going to compete in the economic space, economic warfare. 0:12:54.600 --> 0:12:56.439 We're living in an age of economic warfare. 0:12:57.000 --> 0:13:00.440 Fascinating conversation. Do come back soon. Love to tone this. 0:13:00.720 --> 0:13:03.680 Edward Fishman, Senior research scholar and professor at Columbia University 0:13:03.720 --> 0:13:06.560 School of International and Public Affairs. We used to call 0:13:06.600 --> 0:13:07.880 it SIA when I was up there. 0:13:07.920 --> 0:13:08.920 They call it SIPA now. 0:13:08.880 --> 0:13:09.720 Right, zepa now. 0:13:09.840 --> 0:13:10.040 Yes. 0:13:10.760 --> 0:13:12.960 His new book took points American power in the age 0:13:12.960 --> 0:13:15.440 of economic warfare. Thank you so much, really enjoyed it. 0:13:21.160 --> 0:13:24.720 You're listening to the Bloomberg Business Week podcast. Catch us 0:13:24.800 --> 0:13:28.240 live weekday afternoons from two to five pm Eastern Listen 0:13:28.280 --> 0:13:31.000 on Apple CarPlay and the Android Auto with the Bloomberg 0:13:31.080 --> 0:13:33.800 Business app, or watch us live on YouTube. 0:13:35.040 --> 0:13:37.880 As we've noted, a meeting between President Trump and Ukrainian 0:13:37.960 --> 0:13:42.400 President Volodimir Zelenski ended in a fiery exchange on Friday, 0:13:42.679 --> 0:13:45.920 canceling a planned signing ceremony and press conference for a 0:13:46.000 --> 0:13:48.760 critical minerals agreement between the two countries. 0:13:49.040 --> 0:13:51.760 The day before that, we spoke to US Army Lieutenant 0:13:51.800 --> 0:13:56.040 Colonel Alexander Vinmanh. He was the Director for European Affairs 0:13:56.120 --> 0:14:00.000 in the White House's National Security Council, former Political Military 0:14:00.000 --> 0:14:03.560 Affairs Officer for Russia and diplomatic the American embassies in 0:14:03.600 --> 0:14:04.880 Moscow in Kiev, the. 0:14:04.960 --> 0:14:07.720 Senior fellow at the Foreign Policy Institute, and the author 0:14:07.880 --> 0:14:10.559 of the new book that is out now. It's entitled 0:14:10.559 --> 0:14:13.640 The Folly of Realism, How the West Deceived Itself about 0:14:13.720 --> 0:14:15.920 Russia and Betrayed Ukraine. 0:14:16.440 --> 0:14:19.400 Lovely launched so far, just lots of attention. I think 0:14:19.440 --> 0:14:22.480 the fact is the book subtitle says it all. It 0:14:22.480 --> 0:14:25.720 couldn't possibly be more timely. How the US deceived itself 0:14:25.720 --> 0:14:28.520 about Russia and betrayed Ukraine. We see that playing out 0:14:28.520 --> 0:14:30.520 in real life over the past couple of days. 0:14:30.600 --> 0:14:32.560 We want to get into that. What we want to 0:14:32.560 --> 0:14:35.400 ask you, is President trum Trump at least to start. 0:14:35.400 --> 0:14:37.560 President Trump said in his press conference with the UK 0:14:37.640 --> 0:14:40.200 Prime Minister at the White House about the moves being 0:14:40.280 --> 0:14:42.960 taken to quote lay the groundwork for a long term 0:14:43.000 --> 0:14:45.880 peace agreement, the President saying this, do you believe there 0:14:46.000 --> 0:14:48.240 is a long term peace agreement that can be made 0:14:48.240 --> 0:14:49.760 between Russia and Ukraine? 0:14:50.440 --> 0:14:52.400 Eventually there can be. I'm going to go ahead and 0:14:52.440 --> 0:14:54.800 say that it's that the prediction that it's not going 0:14:54.840 --> 0:14:57.720 to end at all is wrong, and that it's going 0:14:57.800 --> 0:15:00.520 to end very soon is also not right. The reason 0:15:00.600 --> 0:15:03.240 is that I think the steps that the Trump administration 0:15:03.560 --> 0:15:07.320 is taking right now, leaning so heavily into a Russia 0:15:07.400 --> 0:15:13.960 first approach, really kind of being quite flexible, seemingly appeasing 0:15:14.200 --> 0:15:16.760 Russia with some of the things that it's been seeking, 0:15:16.800 --> 0:15:20.720 like Ukraine out of NATO, Ukraine giving up territory outside 0:15:20.720 --> 0:15:23.760 of the construct of a negotiation doesn't really make a 0:15:23.800 --> 0:15:26.400 huge amount of sense. That the onus is really is 0:15:26.440 --> 0:15:30.360 on Russia to compromise. The Ukrainians are more than willing 0:15:30.400 --> 0:15:33.720 to compromise. They might not say publicly, but they recognize 0:15:33.760 --> 0:15:35.800 that they're not going to be able to retain regain 0:15:35.880 --> 0:15:39.480 control of their occupied territory, all of it anytime soon. 0:15:39.560 --> 0:15:41.720 That might play out over the course of years. So 0:15:41.760 --> 0:15:45.320 it's really the Russians. It's in their court. The way 0:15:45.320 --> 0:15:48.200 that we help that along, we don't ease the burden 0:15:48.240 --> 0:15:51.000 on Russia. We put additional pressure on Russia. We continue 0:15:51.000 --> 0:15:53.720 to support Ukraine. We continue to rush it up a 0:15:53.800 --> 0:15:56.960 pressure with regards to economic extensions, and that is what 0:15:57.000 --> 0:15:58.520 gets Russia to the negotiating table. 0:15:58.600 --> 0:16:01.840 There doesn't seem to necessarily be the appetite for a 0:16:01.880 --> 0:16:04.760 lot of folks in Washington to continue to support Ukraine. 0:16:04.800 --> 0:16:06.440 We actually saw this play out over the last couple 0:16:06.480 --> 0:16:09.880 of years. Every time a funding bill would come up, 0:16:10.000 --> 0:16:12.960 or the idea of providing aid or money to Ukraine 0:16:13.320 --> 0:16:16.560 would come up. In your view, make the case to us, 0:16:16.600 --> 0:16:19.840 to our viewers, to our listeners about why the US 0:16:20.080 --> 0:16:21.160 should support Ukraine. 0:16:21.360 --> 0:16:22.120 So, first of all, we. 0:16:22.120 --> 0:16:24.680 Should grant the fact that the Biden administration didn't do 0:16:24.760 --> 0:16:26.560 enough to make the case to the American public. And 0:16:26.640 --> 0:16:29.120 at the same time, Trump, as the de facto leader 0:16:29.160 --> 0:16:31.880 of the Republican Party, even before he ran for office, 0:16:32.200 --> 0:16:34.120 was making the case that Ukraine was a bad guy, 0:16:34.200 --> 0:16:36.560 corrupt Russia was the good guy. That is not a 0:16:36.600 --> 0:16:40.880 recipe to sustain resolve behind Ukraine. The merits of the 0:16:40.920 --> 0:16:44.880 case are pretty straightforward. Ukraine is on freedom's frontier. There 0:16:44.880 --> 0:16:49.080 are a bulbwark against aggression, towards Europe itself, NATO specifically, 0:16:49.800 --> 0:16:53.720 our strongest, most important security ally and our most important 0:16:54.400 --> 0:16:59.479 economic partner. So the case here is that if Ukraine breaks, 0:16:59.680 --> 0:17:04.880 Russia advances become stronger. By taking over, Ukraine is more 0:17:04.920 --> 0:17:09.920 emboldened to conduct aggression against other within its own backyard 0:17:09.960 --> 0:17:13.280 empire building and against NATO itself. So what we're doing 0:17:13.400 --> 0:17:16.400 is we're actually making a down payment on security long 0:17:16.520 --> 0:17:19.240 term by supporting Ukraine, and we've done it in the 0:17:19.280 --> 0:17:22.920 most efficient way possible with a modest amount of aid. 0:17:23.400 --> 0:17:26.879 Over the course of three years, Ukraine has stalled out, 0:17:26.960 --> 0:17:31.440 Russia has broken its conventional military as weakened Russia and 0:17:31.800 --> 0:17:35.880 its mischief making in Europe more broadly, now we're tipping 0:17:35.920 --> 0:17:38.840 the scales in Russia's favor. Kind of the worst possible 0:17:38.880 --> 0:17:42.360 scenario or the worst logic behind advancing US security. 0:17:43.640 --> 0:17:46.800 You know, some might suggest that the policies of both 0:17:46.880 --> 0:17:52.720 democratic and Republican presidencies, you know, have been to really 0:17:52.720 --> 0:17:54.840 push back on Russia right for a long time and 0:17:54.920 --> 0:17:58.719 kind of keep them at bay. And so that's saying 0:17:58.760 --> 0:18:01.639 of like keep your friends your enemies even closer, that 0:18:01.720 --> 0:18:05.119 maybe it is time for a different strategy with Russia 0:18:05.320 --> 0:18:06.720 between the United States. 0:18:07.520 --> 0:18:11.480 So that's I think contrary to the research in this 0:18:11.480 --> 0:18:15.119 new book. I look at six different administrations thirty plus years, 0:18:15.400 --> 0:18:18.280 and what I see is a consistent vein of Russia. 0:18:18.320 --> 0:18:22.760 First why because we succumbed to hopes that we could 0:18:22.880 --> 0:18:26.560 accomplish more with Russia. They dangled bright shiny objects, whether 0:18:26.600 --> 0:18:29.840 that's arms control a valiant thing for US to pursue, 0:18:30.240 --> 0:18:35.960 or climate change security or cooperation to root out transnational terror. 0:18:36.160 --> 0:18:39.320 These things didn't really materialize in any substantial way. We 0:18:39.400 --> 0:18:42.359 had pockets of success around arms control, and at the 0:18:42.400 --> 0:18:44.840 same time, we succumbed to fears that if we did 0:18:44.880 --> 0:18:49.040 more to condemned Russia as it graduated from just mischief 0:18:49.119 --> 0:18:52.840 making to hybrid warfare, interfering elections in our country but 0:18:52.960 --> 0:18:56.400 in other countries first along their border, and then graduated 0:18:56.400 --> 0:18:59.680 to military aggression, we didn't hold the line. We were 0:19:00.200 --> 0:19:03.840 very flexible consistently. We should have instilled some element of 0:19:03.880 --> 0:19:06.560 conditionality in the way we engaged with them early on, 0:19:07.240 --> 0:19:11.399 or condemnation and sanction as they graduated through all of 0:19:11.440 --> 0:19:15.280 these different destabilizing events. I think we've been way too flexible. 0:19:15.400 --> 0:19:19.040 So you would just say that President Trump's relationship with 0:19:20.560 --> 0:19:22.800 Vladimir Putin is just a continuation of what we've seen 0:19:22.840 --> 0:19:23.840 over the last three decades. 0:19:23.920 --> 0:19:26.560 It is a doubling down and probably the most extreme 0:19:26.640 --> 0:19:28.640 example of the mistakes that we've made over the past 0:19:28.680 --> 0:19:33.720 thirty plus years. My research is clear and concise clear 0:19:33.760 --> 0:19:36.360 on this point. I've interviewed the presidents involved, on both 0:19:36.400 --> 0:19:40.320 the US side and the Ukrainian side, European leaders, and 0:19:40.560 --> 0:19:44.000 what I've seen is a consistent vein of deep flexibility. 0:19:44.000 --> 0:19:47.240 Putting Russia first, we bought into this principle that Russia, 0:19:48.040 --> 0:19:52.879 large military, large country, was entitled to some sort of 0:19:52.880 --> 0:19:56.040 privileged sphere of influence, even when they were they. 0:19:55.920 --> 0:19:59.159 Not with nuclear weapons, were they not on some level. 0:19:59.160 --> 0:20:01.080 On some level they I think the fact is we 0:20:01.119 --> 0:20:03.480 made a valiant effort in the nineteen nineties to bring 0:20:03.560 --> 0:20:06.080 him on sides. We made huge investments to try to 0:20:06.080 --> 0:20:11.600 bring him into the democratic world. Those countless meetings that 0:20:11.680 --> 0:20:15.679 Clinton had with his counterpart Yelson, But those didn't materialize. Right, 0:20:15.840 --> 0:20:19.880 Russia was just biding its time, letting its economy regain strength. 0:20:20.280 --> 0:20:24.400 You really getting fat off commodity prices, prices in two thousands, 0:20:24.480 --> 0:20:27.920 and when they gathered their strength then acting aggressively to 0:20:27.960 --> 0:20:28.840 advance their efforts. 0:20:28.840 --> 0:20:31.080 Do you remember back in twenty twelve when during that 0:20:31.160 --> 0:20:36.240 debate between Mitt Romney and President Obama, when Mitt Romney 0:20:36.280 --> 0:20:41.520 said that the US's number one geopolitical foe was Russia, 0:20:41.800 --> 0:20:43.320 and he was kind of laughed out of the room, 0:20:43.520 --> 0:20:45.640 right at that point? Was he right? 0:20:45.800 --> 0:20:46.920 He was absolutely right. 0:20:47.040 --> 0:20:49.119 It looked like a distant prospect because we were in 0:20:49.119 --> 0:20:52.960 the midst of wars in the Middle East. It looked 0:20:53.000 --> 0:20:54.439 like it was a bygone error. But if you were 0:20:54.440 --> 0:20:58.280 paying attention, you saw the telltale signs in the two thousands, 0:20:58.480 --> 0:21:02.680 really years just into Putins or Rain. You saw this 0:21:02.760 --> 0:21:07.280 effort to coerce neighbors, muck around in Ukraine's election that 0:21:07.280 --> 0:21:10.159 precipitated the Orange Revolution. Anybody that was paying attention to 0:21:10.520 --> 0:21:12.520 Georgia in two thousand and eight and this war of 0:21:12.560 --> 0:21:15.680 aggression against Georgia, it was clear, but it just didn't 0:21:15.760 --> 0:21:18.480 resonate with the American public that wasn't paying attention to 0:21:19.480 --> 0:21:20.919 the direction that Russias taking. 0:21:21.960 --> 0:21:25.960 All right, so how are you What are the optics 0:21:25.960 --> 0:21:27.960 that you are seeing in terms of what kind of 0:21:28.040 --> 0:21:31.359 deal might ultimately bring this war to an end and 0:21:31.359 --> 0:21:34.760 what are the implications of that in your view and 0:21:35.000 --> 0:21:36.200 how you think it might play out. 0:21:36.240 --> 0:21:38.720 So, first of all, I want to give credit to 0:21:38.720 --> 0:21:42.480 both the Zelinsky administration and the Trump administration. They rationalize 0:21:42.520 --> 0:21:47.040 these this crazy five hundred billion dollar effort to draw 0:21:47.080 --> 0:21:50.000 funds out of Ukraine into something that makes sense. This 0:21:50.119 --> 0:21:52.440 deal that looks to be signed is a good deal. 0:21:52.440 --> 0:21:53.800 It's something that I talked about when I was in 0:21:53.800 --> 0:21:55.800 the White House. I was talking about the fact that 0:21:55.840 --> 0:21:59.880 we could cooperate with Ukraine on rare earths. We need them, 0:22:00.080 --> 0:22:01.920 we need them to drive our economy. They have them, 0:22:01.960 --> 0:22:05.800 they need investment. That all makes sense. Whether it actually 0:22:05.800 --> 0:22:08.480 advances the cause of peace, that's not entirely clear. There's 0:22:08.520 --> 0:22:12.480 no prescription in there for guarantees that the Ukrainians are 0:22:12.520 --> 0:22:16.399 looking for. It doesn't really forestall Russian aggression. What I 0:22:16.440 --> 0:22:19.040 see happening is right now, the pattern is the US 0:22:19.119 --> 0:22:23.720 is easing the pain on Russia, increasing the pain on Ukraine. 0:22:24.440 --> 0:22:26.399 I don't see how that brings Russia to the table. 0:22:26.880 --> 0:22:28.320 What I think is going to end up happening is 0:22:28.359 --> 0:22:30.240 that the Ukrainians are going to have to step the correction. 0:22:30.320 --> 0:22:32.680 The Europeans are gonna have to step in double down 0:22:32.720 --> 0:22:34.600 on support as best as they can. They can't fill 0:22:34.800 --> 0:22:37.520 the vacuum of US absence. We have the largest military 0:22:37.520 --> 0:22:41.040 industrial complex in the world, so they can't match that, 0:22:41.160 --> 0:22:43.840 but they could plug some holes and give the Ukrainians 0:22:43.840 --> 0:22:47.000 some staying power. Meanwhile, the Russians are taking significant losses. 0:22:47.200 --> 0:22:51.120 They're also getting drained economically, and they don't have They 0:22:51.119 --> 0:22:55.720 can't act forever with their manpower and then material they're dwindling, 0:22:55.960 --> 0:22:58.680 digging into Soviet stackpoles. This is going to have to 0:22:58.680 --> 0:23:01.040 play out of the course of the next six nine months, 0:23:01.359 --> 0:23:04.080 when the Russians realized that Europeans are going to be 0:23:04.119 --> 0:23:06.640 there the Russia, the Ukrainians aren't going anywhere, and when 0:23:06.680 --> 0:23:11.080 Trump realizes that Putin is just dangling the prospect of 0:23:11.680 --> 0:23:14.920 some sort of a victory form but he's not delivering. 0:23:15.040 --> 0:23:16.600 Trump is going to want to win also, so we 0:23:16.680 --> 0:23:20.720 may even relook our policy and come back to support Ukraine. 0:23:20.760 --> 0:23:23.080 But it's going to be down the road after months 0:23:23.119 --> 0:23:24.880 of learning the lessons that we should have learned over 0:23:24.880 --> 0:23:26.080 the past thirty years. 0:23:26.400 --> 0:23:30.480 We're speaking with the retired US Army Lieutenant Colonel Alexander Vinmann. 0:23:30.560 --> 0:23:32.280 He's got a brand new book out it's called The 0:23:32.280 --> 0:23:35.439 Folly of Realism, How the West deceived itself about Russia 0:23:35.800 --> 0:23:40.160 and betrayed Ukraine. Given your time studying both the governments 0:23:40.200 --> 0:23:44.360 of Ukraine and Russia, what would you say Vladimir Putin's 0:23:44.440 --> 0:23:45.360 ultimate goal is. 0:23:46.359 --> 0:23:49.320 He's empire building, he's building his legacy or what he wants. 0:23:49.359 --> 0:23:54.600 What I think Russian elites have wanted really across generations 0:23:55.119 --> 0:23:58.160 is they want Russia to be strong, and in order 0:23:58.200 --> 0:24:00.439 to be strong, that means Ukraine has to be in 0:24:00.440 --> 0:24:04.520 the fold. It's a central notion to them that great 0:24:04.600 --> 0:24:06.840 Russia could only be great if it has little Russia. 0:24:06.840 --> 0:24:09.080 That's what they refer to Ukraine, as and Belarus. Those 0:24:09.080 --> 0:24:12.760 are the three kind of the trinity of Russian identity. 0:24:13.200 --> 0:24:16.480 So it wants to fold these these countries and regions 0:24:16.560 --> 0:24:19.560 back in. And then what it's been doing since really 0:24:19.640 --> 0:24:21.960 the sixteenth century, the middle of the sixteenth century, it's 0:24:21.960 --> 0:24:25.240 expanded in all cardinal directions until it's been stopped, until 0:24:25.280 --> 0:24:28.120 it's hit a wall with other powers. So if they're 0:24:28.240 --> 0:24:31.520 given room, they will they will be aggressive and expand. 0:24:31.840 --> 0:24:35.560 If they are constrained, that is actually the recipe for 0:24:35.720 --> 0:24:41.000 Russia to reformat its belief in this, you know, multipolar 0:24:41.040 --> 0:24:44.280 world in which Russia is a central pole, is through 0:24:44.520 --> 0:24:46.520 a recognition of the fact that they are not who 0:24:46.600 --> 0:24:49.240 they were under the Russian Empire or the Soviet Union, 0:24:49.600 --> 0:24:52.520 and they have much more limited capabilities, much more limited aspirations. 0:24:52.600 --> 0:24:55.440 That is the recipe for you for Russia to coexist 0:24:55.840 --> 0:24:56.359 with its. 0:24:56.200 --> 0:25:00.399 Neighbors, Alexandrew. Does that mean then a US backstock of 0:25:00.400 --> 0:25:03.639 some sort for peacekeeping, you know, means we need to 0:25:03.680 --> 0:25:10.560 see forces there to US forces to backstop Ukraine. Is 0:25:10.560 --> 0:25:13.720 there some other kind of security guarantee that needs to 0:25:13.760 --> 0:25:15.280 be part of this. 0:25:15.760 --> 0:25:18.160 I think that we don't have to put this question 0:25:18.200 --> 0:25:22.199 of troops on the table inside Ukraine anytime soon. The 0:25:22.280 --> 0:25:25.560 Ukrainians are capable of defending on their own with adequate 0:25:25.560 --> 0:25:26.399 support from the West. 0:25:26.560 --> 0:25:29.600 Would US workers working in the mineral space and the 0:25:29.640 --> 0:25:31.679 critic like that are on the ground in Ukraine? Is 0:25:31.680 --> 0:25:33.119 that could that be part of the about it? 0:25:33.160 --> 0:25:36.320 In a peace time context, when there's a ceasefire, I 0:25:36.320 --> 0:25:40.080 think there's room for troops, peacekeepers to come in, there's 0:25:40.160 --> 0:25:45.639 room for workers to come in to cooperate on rarest. 0:25:46.000 --> 0:25:50.359 I think the ultimate security guarantee is that Ukraine does 0:25:50.600 --> 0:25:55.280 join NATO, but out in a ceasefire context somewhere after 0:25:55.320 --> 0:25:58.600 this war ends, and that prevents Russia from engaging in 0:25:58.760 --> 0:25:59.760 aggression down the road. 0:26:00.280 --> 0:26:00.920 I think it's hard. 0:26:00.960 --> 0:26:04.360 It's beyond the belief that we would do that right 0:26:04.400 --> 0:26:06.080 now when there's a hot war going on. 0:26:06.119 --> 0:26:09.520 Do you think that's a realistic possibility, given that this administration, 0:26:09.560 --> 0:26:13.320 including recently the President, said that Trump will never become 0:26:13.359 --> 0:26:14.119 part of NATO. 0:26:14.320 --> 0:26:17.639 I think in this administration there's no chance. But this 0:26:17.760 --> 0:26:22.520 administration has a clock. Also, we're talking about my time 0:26:22.600 --> 0:26:26.320 horizons beyond twenty twenty eight, when we return back to 0:26:26.680 --> 0:26:30.120 our pledges of two thousand and eight. That's a long 0:26:30.160 --> 0:26:32.840 time now, right, twenty years back to bring you can 0:26:33.359 --> 0:26:33.960 into NATO. 0:26:34.240 --> 0:26:37.800 Do you think that this war will continue until then. 0:26:37.960 --> 0:26:40.000 I'm not sure if it continues until then, because the 0:26:40.040 --> 0:26:42.480 Russians don't have the staying power to continue until then. 0:26:43.040 --> 0:26:46.080 I think the fact is that the both sides will 0:26:46.119 --> 0:26:50.600 probably reassess deeper into twenty twenty five, maybe a start 0:26:50.600 --> 0:26:52.879 at twenty twenty six. If the Russians are not able 0:26:52.920 --> 0:26:56.440 to get favorable conditions on the ground, then they'll look 0:26:56.480 --> 0:26:57.679 for some sort of off ramp. 0:26:57.640 --> 0:27:01.600 It's surprising to hear that just because it really truly 0:27:01.640 --> 0:27:03.840 does seem like President Trump wants to end this war. 0:27:04.400 --> 0:27:09.080 He talks almost every time we hear him, We hear 0:27:09.119 --> 0:27:11.000 the President speaking a lot. He speaks to the press 0:27:11.400 --> 0:27:15.760 a lot. He always talks about the young people who 0:27:15.800 --> 0:27:19.520 are being killed in this conflict. It really seems to 0:27:19.600 --> 0:27:22.320 affect him. It really seems to motivate him to want 0:27:22.359 --> 0:27:23.000 to end this war. 0:27:23.640 --> 0:27:26.000 I think that might be true, but he's going about 0:27:26.040 --> 0:27:28.560 it repeating the mistakes of the past. I think the 0:27:28.640 --> 0:27:31.920 fact is what's clear to me. If he wants to 0:27:32.920 --> 0:27:36.200 bring peace to the region, he should recognize that it's 0:27:36.200 --> 0:27:38.120 not the Ukrainians that are in the pediment to piece. 0:27:38.400 --> 0:27:41.080 They're going to have to do what they absolutely must 0:27:41.359 --> 0:27:44.960 to preserve their sovereignty and territorial integrity, maybe giving up 0:27:45.200 --> 0:27:47.760 some territory in the short term, but it's the Russians 0:27:47.760 --> 0:27:51.159 that have absolutely maximalist objectives. They have not given up 0:27:51.160 --> 0:27:54.120 on Ukrainian capitulation. They have not given up on Ukraine, 0:27:54.560 --> 0:27:57.439 you know, as a neutral player with no military that 0:27:57.440 --> 0:27:59.840 they could attack at will somewhere down the road. The 0:28:00.160 --> 0:28:02.760 party that he needs to recognize as an impediment piece. 0:28:04.080 --> 0:28:05.639 What can you tell us about you were in the 0:28:05.640 --> 0:28:09.920 first Trump White House, first administration, and as we are 0:28:09.960 --> 0:28:13.000 now seeing the beginning of the second term play out, 0:28:13.160 --> 0:28:16.720 what insight can you give us about how the president 0:28:16.800 --> 0:28:19.680 thinks about issues and how things operate, and how maybe 0:28:19.720 --> 0:28:21.600 different it is this time around. If you think it 0:28:21.680 --> 0:28:23.720 is different, again, you're looking from the outside. 0:28:24.080 --> 0:28:27.320 I think from my perspective what you have and you 0:28:27.359 --> 0:28:31.879 could still see the tension between the policy pros that 0:28:32.000 --> 0:28:34.760 try to rationalize these decrees that Ukraine has to give 0:28:34.800 --> 0:28:37.959 five hundred billion dollars and come up with this pretty sophisticated, 0:28:38.040 --> 0:28:41.800 interesting deal on rarets. We had a lot more of 0:28:41.840 --> 0:28:43.760 those folks in the cabinet back then. You had you 0:28:43.800 --> 0:28:45.960 know what we're called adults from the room. These are 0:28:46.280 --> 0:28:48.960 accepted foreign policy professionals. Right now you have a lot 0:28:49.000 --> 0:28:52.240 more yes men and loyalists. So you have stumbles from 0:28:52.640 --> 0:28:56.640 Secretary of Hegseth, Secretary of Defense that says makes these 0:28:57.440 --> 0:29:00.560 declarations as if he's a Fox News ang or instead 0:29:00.560 --> 0:29:04.240 of the Secretary of Defense holding out that negotiations that 0:29:04.320 --> 0:29:06.600 a lot of these issues have to be resolved in negotiations. 0:29:06.840 --> 0:29:09.080 So I think there's still going to be an effort 0:29:09.120 --> 0:29:12.280 from the professional class to try to add you know, 0:29:12.320 --> 0:29:16.480 clarity and resolve these these pronouncements that Trump makes. It's 0:29:16.520 --> 0:29:19.560 just much much tougher because I don't think the president's 0:29:19.560 --> 0:29:21.920 getting he's getting he has yes men, and he's not 0:29:21.960 --> 0:29:25.600 getting you know, the most knowledgeable council. I advise them 0:29:25.640 --> 0:29:27.000 to read my book and they could see what the 0:29:27.640 --> 0:29:30.680 shameless plug there, but to understand the mistakes of the 0:29:30.720 --> 0:29:33.200 past and how we can do better. The way we 0:29:33.240 --> 0:29:35.480 do better is we're not so transactional. We do not 0:29:35.560 --> 0:29:37.680 look at everything as a deal where we need to 0:29:37.720 --> 0:29:40.440 maximally extract. I mean, it's it's not this is not 0:29:40.480 --> 0:29:41.200 a business environment. 0:29:41.240 --> 0:29:43.840 We can't maxinate the balance of every administration because there 0:29:43.840 --> 0:29:45.800 are deals all the time, whether it's a Democrat or 0:29:45.800 --> 0:29:50.040 Republican right of deals being made to benefit citizens countries. 0:29:50.640 --> 0:29:52.000 But there's always kind of a give and take. 0:29:52.080 --> 0:29:53.840 But you want the but you want the buffet deal. 0:29:53.920 --> 0:29:56.440 You want the buffet deal. That's long term, longsighted, and 0:29:56.480 --> 0:29:59.160 that's where the growth is over the course of you know, 0:29:59.200 --> 0:30:01.520 not just a psych but over a long term. And 0:30:01.600 --> 0:30:04.520 what I'm prescribing here is that we don't we're not 0:30:04.600 --> 0:30:07.360 so transactional. We start thinking about the things that really 0:30:07.440 --> 0:30:10.239 matter to us. Democracies are the bedrock of both our 0:30:10.280 --> 0:30:14.760 security and economic prosperity. That's where we should be investing resources, 0:30:15.040 --> 0:30:17.720 not the bright shiny object that's that's we're immediately in 0:30:17.760 --> 0:30:18.160 front of us. 0:30:18.720 --> 0:30:21.120 You, I think it's fair to say much of your 0:30:21.160 --> 0:30:24.400 career was not political in the sense of partisan politics. 0:30:24.440 --> 0:30:26.160 None of it was until the very end. 0:30:26.320 --> 0:30:28.480 It's so not none of it, But until the very 0:30:28.560 --> 0:30:32.320 end you became certainly a lightning rod for politics. And 0:30:32.400 --> 0:30:33.840 you know, there are a lot of folks on the 0:30:33.920 --> 0:30:37.840 right who don't necessarily agree with you, especially after you 0:30:37.920 --> 0:30:41.960 testified in twenty nineteen and the impeachment hearing that said, 0:30:42.720 --> 0:30:47.040 do you still have the ear of people in the 0:30:47.040 --> 0:30:50.720 government right now? Do you have communications with them? Do 0:30:50.840 --> 0:30:52.280 you feel like you can talk to them? 0:30:52.600 --> 0:30:54.240 So I feel like I could talk to them because 0:30:54.240 --> 0:30:56.840 I understand the terms in which we talk to him about. 0:30:56.880 --> 0:30:59.320 You know that Trump wants to be the winner and 0:30:59.360 --> 0:31:01.520 how to get a deal or something like that. So 0:31:01.880 --> 0:31:04.600 I could talk to him understanding the Trump White House 0:31:04.640 --> 0:31:06.960 and a little bit about a state of mind. But 0:31:07.120 --> 0:31:10.120 I have to contend with the proclivity is he likes 0:31:10.200 --> 0:31:13.680 Russia and he dislikes Ukraine. He likes strong men, he 0:31:13.720 --> 0:31:17.280 doesn't like our democratic allies. So there's only so much 0:31:17.320 --> 0:31:20.160 you could do there. At the same time, I don't 0:31:20.200 --> 0:31:23.760 really have the means to talk to Republicans. I'm happy 0:31:23.800 --> 0:31:26.400 to try and talk to him in the merits. You 0:31:26.480 --> 0:31:28.640 mentioned that, you know, I became a political figure. I 0:31:28.720 --> 0:31:30.640 never really thought of my I still don't think of 0:31:30.680 --> 0:31:32.560 myself that way. I try to talk in terms of 0:31:32.600 --> 0:31:36.040 national security. What I in my twenty two years in 0:31:36.080 --> 0:31:39.640 the military, working at the Pentagon, writing the strategy for Russia, 0:31:40.080 --> 0:31:42.360 all these different roles, What is it that's best for 0:31:42.440 --> 0:31:45.480 US national security? Now, some people might see that my 0:31:45.760 --> 0:31:47.840 being drawn into testifying in front of Congress when I 0:31:47.880 --> 0:31:51.320 reported a presidential corruption is a political actor. 0:31:51.480 --> 0:31:52.000 But it wasn't. 0:31:52.040 --> 0:31:55.560 It was a duty as a as a somebody that's 0:31:55.560 --> 0:31:58.120 wore notes to the Constitution and then called by Congress 0:31:58.160 --> 0:32:01.880 to testify about what I witnessed. But I feel like 0:32:03.000 --> 0:32:06.040 there's not that much opportunity for the sides to talk 0:32:06.040 --> 0:32:08.280 together at all. It's not just me, it's you know, 0:32:08.600 --> 0:32:12.360 the communications between the folks that are perceived to be 0:32:12.400 --> 0:32:14.080 on the left and the folks that are perceived to 0:32:14.120 --> 0:32:15.920 be on the right. Although I don't know if I 0:32:15.960 --> 0:32:18.320 meet that bill, some people might call me a hawk 0:32:18.440 --> 0:32:20.720 or something of that nature, because I think we need 0:32:20.960 --> 0:32:23.280 a stronger, more muscular policy towards Ukraine. 0:32:23.360 --> 0:32:24.680 So it is, it's just. 0:32:25.040 --> 0:32:27.600 A moment where we're very, very tribal, and we were 0:32:27.640 --> 0:32:29.920 not communicating with each other, even if it's on the merits. 0:32:30.000 --> 0:32:32.360 Any regret in the action that you did in terms 0:32:32.360 --> 0:32:34.800 of testifying before Congress, I know you were subpoenaed, but 0:32:34.880 --> 0:32:39.640 we've seen subpoenas be issued and not everybody kind of testifies. 0:32:39.120 --> 0:32:41.640 So absolutely not. I felt I feel like those people 0:32:41.680 --> 0:32:45.959 that skirted their responsibilities for whatever personal I mean, they 0:32:45.960 --> 0:32:47.640 did it for personal reasons. They did it because they 0:32:47.640 --> 0:32:50.560 didn't want to be the lightning rod or subject to criticism. 0:32:50.840 --> 0:32:54.960 That wasn't my job. My job was as a military officer. 0:32:55.200 --> 0:32:58.080 I was obligated by a law to up here and testify. 0:32:58.760 --> 0:33:01.480 If I had been given awful order by Trump back 0:33:01.480 --> 0:33:04.000 then to not testify, things may have ended up differently 0:33:04.040 --> 0:33:05.640 we'd had to play out in the courts, But the 0:33:05.640 --> 0:33:07.760 bottom line is I felt like I did was what 0:33:07.800 --> 0:33:10.320 I did was right, I felt like I fulfilled my 0:33:10.720 --> 0:33:12.920 duty as an officer, and I could look my daughter, 0:33:13.400 --> 0:33:16.760 who's now fourteen in her eyes and not say thy 0:33:16.840 --> 0:33:20.880 shirked responsibility. And you know, continue to this day to 0:33:20.960 --> 0:33:23.640 frankly advocate for the things that matter to me, including 0:33:24.040 --> 0:33:27.040 a book that lands a month in the Trump's administration 0:33:28.080 --> 0:33:30.560 that's critical of the mistakes that we seem to be 0:33:30.600 --> 0:33:32.520 repeating instead of learning from the past. 0:33:32.880 --> 0:33:35.080 One thing I want to ask you, as a member 0:33:35.120 --> 0:33:39.760 of the military retired, We've seen the firing of the 0:33:39.840 --> 0:33:44.440 Joint chiefs of Staff, We've seen other military leaders being 0:33:44.520 --> 0:33:49.360 let go, also the top lawyers, which is considered so 0:33:49.400 --> 0:33:52.640 important in terms of military actions and making sure that 0:33:52.680 --> 0:33:56.160 there is kind of a level of security safety. If 0:33:56.160 --> 0:34:01.920 you will help us understand the military within a second 0:34:02.240 --> 0:34:05.120 Trump White House, and I do wonder about the independence 0:34:05.200 --> 0:34:09.319 of sure, because there are layers. When we talk about democracy, 0:34:09.400 --> 0:34:12.719 there's judicial, there's like like we talk about checks and balances, 0:34:12.760 --> 0:34:14.680 but military is an important part. 0:34:14.840 --> 0:34:18.279 So the military is non political. It serves at the 0:34:18.280 --> 0:34:21.319 pleasure of the president. Everybody I swear as an oath 0:34:21.360 --> 0:34:25.080 to the Constitution, and officers in that chain of command, 0:34:25.440 --> 0:34:27.800 commander in chief being the president of the United States. 0:34:28.440 --> 0:34:32.000 The thing is, this is not about these folks being disloyal. 0:34:32.840 --> 0:34:36.320 It's about the ability to ensure that when the president 0:34:36.920 --> 0:34:40.759 directs any element of the executive branch, that he has 0:34:40.840 --> 0:34:45.040 absolute loyalists that don't question anything. That was the reason 0:34:45.040 --> 0:34:49.080 that these three star jags were fired. These attorneys is 0:34:49.120 --> 0:34:52.040 because they interpret the law. They will determine and advise 0:34:52.120 --> 0:34:56.840 their four star bosses on whether the law orders that 0:34:56.880 --> 0:35:00.279 are coming down are legal. Now, the military going to 0:35:00.719 --> 0:35:04.600 follow the president's instructions if it's if it's a. 0:35:04.600 --> 0:35:07.640 Lawful order, lawful awful, they'll follow. 0:35:07.440 --> 0:35:10.080 The instructions because he's the commander chief. But what they 0:35:10.120 --> 0:35:12.400 won't do is they won't follow illegal orders. And I 0:35:12.400 --> 0:35:14.880 think this effort to sideline these three stars is to 0:35:14.920 --> 0:35:18.239 make sure that nobody interprets that any instructions that come 0:35:18.280 --> 0:35:21.200 from the president, not that anything has happened yet, but 0:35:21.320 --> 0:35:23.640 at any point in the future, that everything is interpreted 0:35:23.680 --> 0:35:29.000 as legal and that the officers in the military follow blindly. Really, 0:35:29.160 --> 0:35:32.120 so guardrail has been removed, absolutely, a guardrail has been 0:35:32.160 --> 0:35:35.440 removed these these I know some of these four stars 0:35:35.680 --> 0:35:38.560 that I served with them, that have served that none 0:35:38.560 --> 0:35:41.239 of them did anything disloyal. I think, on the face 0:35:41.280 --> 0:35:42.880 of it, you know, it was I think it was 0:35:42.880 --> 0:35:46.120 an attack on this whole DEI idea that there was 0:35:46.160 --> 0:35:48.759 some diversity amongst these folks, but none all of these 0:35:48.760 --> 0:35:50.759 folks who are going to follow the president's orders as 0:35:50.800 --> 0:35:52.640 long as they were legal, but that wasn't good enough. 0:35:53.000 --> 0:35:55.200 Does it worry you that this guardrail has been removed? 0:35:55.800 --> 0:35:58.960 I think it it's it's a it's a warning sign, 0:35:59.080 --> 0:36:02.360 and it's it's something that we should be mindful and 0:36:02.400 --> 0:36:05.000 cautious about. But we need to understand that the military 0:36:05.040 --> 0:36:07.920 is at large institution. These four stars have deputies that 0:36:07.960 --> 0:36:10.279 are four stars also, and the three stars that were 0:36:10.280 --> 0:36:12.800 removed to have deputy two stars. So there are plenty 0:36:12.880 --> 0:36:15.000 of layers of folks that are going to hold the line. 0:36:15.080 --> 0:36:16.759 It just has gotten a little bit harder than it 0:36:16.800 --> 0:36:17.240 was before. 0:36:17.320 --> 0:36:20.560 Well, you know, you talk about levels, right in terms 0:36:20.560 --> 0:36:24.359 of holding everybody to the true in military, what about 0:36:24.400 --> 0:36:29.839 someone like Secretary of the State Department Mark Rubio, Like, 0:36:30.000 --> 0:36:33.200 what are your thoughts about him and dealing with global 0:36:33.200 --> 0:36:38.680 diplomacy and talking with leaders directly, and yet obviously they're 0:36:38.880 --> 0:36:40.160 at the grace of the president. 0:36:40.320 --> 0:36:45.120 So I've had plenty of criticism of excusing of Mark 0:36:45.280 --> 0:36:49.319 Ruby in the past on policy differences. But he is 0:36:49.880 --> 0:36:52.640 a policy hand. He's been in the Senate for a while. 0:36:52.960 --> 0:36:56.239 He under he's been on Intel committees. He understands the 0:36:56.280 --> 0:36:58.839 state of play in the world, the seriousness of these 0:36:58.880 --> 0:37:03.360 negotiations with Russia, how that might implicate Russia Chinese aggression 0:37:03.360 --> 0:37:06.600 in the Pacific. Uh, he is going to try to 0:37:06.600 --> 0:37:10.080 do the best he can. I think I'm comfortent well. 0:37:10.440 --> 0:37:11.839 I think he's going to try to do the best 0:37:11.840 --> 0:37:14.160 he can. Whether he holds whether he has the courage 0:37:14.640 --> 0:37:19.880 the fortitude to withstand actors that don't want to really 0:37:19.880 --> 0:37:22.560 care or don't care about national security is a different story. 0:37:22.560 --> 0:37:24.719 I think Mike Walts probably is in the same category. 0:37:25.680 --> 0:37:25.799 Uh. 0:37:25.960 --> 0:37:28.600 They're never going to criticize the president directly because they 0:37:28.600 --> 0:37:30.759 know what happens. That's you know, the lessons have been 0:37:30.840 --> 0:37:33.080 learned in the first Trump administration, and I think they're 0:37:33.080 --> 0:37:35.040 going to try to probably do the best they can 0:37:35.120 --> 0:37:38.640 to rationalize some of the things that have been directed 0:37:39.000 --> 0:37:42.759 into into policy that could that could advance US national 0:37:42.800 --> 0:37:45.719 security interursts. I have more confidence in these folks than 0:37:45.800 --> 0:37:48.719 I do in the purely political actors that you know, 0:37:48.800 --> 0:37:51.400 really I have are unprepared for the positions they've been 0:37:51.400 --> 0:37:51.839 put into. 0:37:53.040 --> 0:37:55.520 What do you say to people who say, Alexander Vintman 0:37:55.560 --> 0:37:58.279 has got an ax to grind against the president. You 0:37:58.400 --> 0:38:01.640 testified against him, You suit some allies of the president 0:38:01.800 --> 0:38:05.759 for legendimidation of impeachment hearing. So what do you say 0:38:05.800 --> 0:38:08.120 to those? Because you've got this book out, it is 0:38:08.239 --> 0:38:12.239 very timely considering the geopolitics that consume much of what 0:38:12.320 --> 0:38:13.880 we talk about, what do you say to that? 0:38:14.960 --> 0:38:17.319 My axe is sharp, actually, and I'm prepared to wield 0:38:17.360 --> 0:38:19.919 it in order to advance US national security. And that's 0:38:19.920 --> 0:38:24.040 what my life has been about, a life of service 0:38:24.200 --> 0:38:27.919 to defend the nation. And if I feel like there 0:38:27.960 --> 0:38:31.799 needs to be something called out or criticism on the 0:38:31.840 --> 0:38:35.960 merits of national security and the dangerous country faces, I 0:38:36.040 --> 0:38:39.360 will wield that axe. But it's and I, frankly do 0:38:39.400 --> 0:38:42.160 I have. I don't like Trump. I mean he personally 0:38:42.200 --> 0:38:46.319 attacked my family and targeted my family, made us the 0:38:46.360 --> 0:38:50.040 targets of harassment and threats and things of that nature. 0:38:50.560 --> 0:38:54.360 But mainly this is about this, this was my doctoral dissertation. 0:38:54.400 --> 0:38:58.520 It's about how do we keep this country safe and prosperous. 0:38:57.960 --> 0:38:59.879 Just taking a hard turn in the last thirty six. 0:39:00.080 --> 0:39:01.399 We all need to lighten up a little bit. 0:39:01.600 --> 0:39:03.319 I've had this book on my desk and whenever someone 0:39:03.360 --> 0:39:07.320 walks by, they say, I loved Viman in Curb Your Enthusiasm, 0:39:08.160 --> 0:39:11.880 the penultimate season you and Larry David. How was it? 0:39:11.880 --> 0:39:13.960 It was lots of fun. And I did that season 0:39:13.960 --> 0:39:17.160 and actually the final episode, and it was it was 0:39:17.200 --> 0:39:19.000 a joy to do that. It was way outside of 0:39:19.000 --> 0:39:21.200 my comfort zone, being dragged into the public eye. But 0:39:21.440 --> 0:39:23.960 you know, open to these new experiences, all sorts of 0:39:24.000 --> 0:39:27.279 different friends that I never had before, being able to, 0:39:27.480 --> 0:39:29.840 you know, maybe leverage my voice in the way I 0:39:29.880 --> 0:39:32.120 didn't before. So it's a mixed It was a it's 0:39:32.120 --> 0:39:34.480 a blessing in that regard that I could, you know, 0:39:34.600 --> 0:39:38.600 lighten people's lives on Curb or give people some hope 0:39:38.920 --> 0:39:42.520 on the national security front. I'll embrace it, but I 0:39:42.520 --> 0:39:43.160 don't look back. 0:39:43.600 --> 0:39:45.440 Well, if you talk to Larry, tell him we need 0:39:45.480 --> 0:39:48.279 another season even though there's a finale. Hey, I really 0:39:48.280 --> 0:39:50.800 appreciate you taking the time. We've been speaking with retired 0:39:50.880 --> 0:39:54.600 US Army Lieutenant Colonel Alexander Vinman. It's a brand new 0:39:54.600 --> 0:39:57.320 book out. It's out now. It's called The Folly of Realism, 0:39:57.440 --> 0:40:00.320 How the West Deceived itself about Russia and Betraying Crane. 0:40:07.320 --> 0:40:11.120 This is the Bloomberg Business Week Podcast. Listen live each 0:40:11.120 --> 0:40:14.880 weekday starting at two pm Eastern on Applecarplay and Android 0:40:14.920 --> 0:40:17.800 Auto with the Bloomberg Business App. You can also listen 0:40:17.880 --> 0:40:20.799 live on Amazon Alexa from our flagship New York station, 0:40:21.280 --> 0:40:23.920 Just Say Alexa Play Bloomberg eleven thirty. 0:40:25.000 --> 0:40:27.760 On Friday, a critical minerals deal between the United States 0:40:27.760 --> 0:40:30.719 and Ukraine was scrapped after President Trump's heated exchange with 0:40:30.840 --> 0:40:34.640 Ukrainian President Volodomir Zelenski in the Oval Office. We've been 0:40:34.719 --> 0:40:37.680 talking about this now. The fate of the natural resources 0:40:37.719 --> 0:40:40.439 deal and a peace deal overall remains up in the air. 0:40:40.800 --> 0:40:43.400 On top of that, the world's top commodity traders are 0:40:43.480 --> 0:40:45.719 rushing to ship copper to the US from as far 0:40:45.760 --> 0:40:48.600 as Asia as Donald Trump's threat of import tariffs on 0:40:48.640 --> 0:40:51.520 the metal creates a huge opportunity for profit. Yet the 0:40:51.600 --> 0:40:55.000 question remains just how valuable are these metals and minerals. 0:40:55.200 --> 0:40:57.200 Someone who does know a thing or two about metals 0:40:57.200 --> 0:40:59.360 and the mining sector, In fact, he knows a lot 0:40:59.640 --> 0:41:03.320 is Scerlanowski. He is founder and group CEO at Oriyan 0:41:03.400 --> 0:41:06.440 Resource Partners. We note again that we spoke with him 0:41:06.480 --> 0:41:08.719 before the US Ukraine talks broke down. 0:41:09.280 --> 0:41:12.040 Copper is an imported material buy and large in the 0:41:12.160 --> 0:41:16.360 United States. Some domestic production exists, of course, but it 0:41:16.440 --> 0:41:19.840 is a big It is a big export from South America, 0:41:20.160 --> 0:41:24.319 particularly Chile, into the United States. Tariffs will depending on 0:41:24.680 --> 0:41:26.640 what shape they take, and obviously the devil is in 0:41:26.680 --> 0:41:30.840 the details, will certainly impact the price of landed material 0:41:30.840 --> 0:41:35.200 in the United States. I believe that there is probably 0:41:35.480 --> 0:41:38.239 an investigation now at the heart of this as to 0:41:39.440 --> 0:41:43.839 nd shaped material for various forms of copper. It's also 0:41:43.880 --> 0:41:47.440 a discussion about what to do about copper scrap versus 0:41:48.080 --> 0:41:51.960 refined primary material, but again it's too early to tell 0:41:52.360 --> 0:41:57.480 at this point. The details are vital to determining what 0:41:57.520 --> 0:41:59.040 the exact impact would be. 0:41:59.040 --> 0:42:02.239 Right, and it's an investor right. It's the section two 0:42:02.239 --> 0:42:04.200 thirty two of the Trade Expansion Act. I'm reading from 0:42:04.200 --> 0:42:08.240 our reporting it could lead mainly to terrorists on copper imports, 0:42:08.239 --> 0:42:10.880 which we know. If indeed that would raise costs for things, 0:42:11.400 --> 0:42:15.920 you know, it is interesting that's going on a headline 0:42:15.960 --> 0:42:21.279 crossing the Bloomberg coming from Reuters about Ukrainian President Zelensky 0:42:21.320 --> 0:42:24.960 playing to meet with President Trump on Friday. Earlier today, 0:42:25.400 --> 0:42:29.520 Oscar we had talked about a possible deal with Ukraine 0:42:29.560 --> 0:42:34.239 and the United States to develop Ukraine's natural resources, and 0:42:34.280 --> 0:42:38.000 we've talked about minerals, in particular, mineral deposits there. What's 0:42:38.040 --> 0:42:42.280 the reality of what is there in Ukraine, Where's the value, 0:42:42.400 --> 0:42:43.280 what's the amount. 0:42:45.239 --> 0:42:50.040 It's actually a fairly interesting dilemma for the Ukraine. They 0:42:50.080 --> 0:42:53.160 do have a fair degree of iron ore, they do 0:42:53.239 --> 0:42:56.840 have tungsten, they have titanium on sites. There are at 0:42:56.920 --> 0:43:00.160 least four mining companies that we know of that are 0:43:00.600 --> 0:43:06.080 developing or looking at. It's you know, increased refining capacity 0:43:06.120 --> 0:43:08.240 in that country to shift metal. 0:43:09.040 --> 0:43:11.240 Some of the best resources, though. 0:43:11.080 --> 0:43:14.479 Are really in this sort of ray zone where it's 0:43:15.200 --> 0:43:18.960 territory that's currently occupied by Russia or very close to 0:43:19.000 --> 0:43:22.960 the territory occupied by Russia. And the question will be 0:43:23.840 --> 0:43:26.960 how much of that material will stay with the Ukraine 0:43:26.960 --> 0:43:29.800 and how much will not. It's impossible to tell that 0:43:29.840 --> 0:43:34.200 at this point, but there's there's a lot of optionality 0:43:34.239 --> 0:43:37.640 in that country right now, and I believe that it's 0:43:37.640 --> 0:43:42.640 something that really speaks to how the US and and 0:43:42.640 --> 0:43:46.520 and allies of the US are are becoming more and 0:43:46.520 --> 0:43:50.320 more aware of the centrality of some of these mineral 0:43:50.400 --> 0:43:55.000 sources and and particularly how to process those into final 0:43:55.040 --> 0:43:57.840 shaped material that they that they can use for industrial 0:43:58.360 --> 0:44:02.040 and military and other uses. 0:44:02.360 --> 0:44:05.719 So it's a rich area. It sounds like it might 0:44:05.760 --> 0:44:09.560 be some questions about who actually has access to that territory, 0:44:09.640 --> 0:44:13.000 right either Ukraine or Russia. But it's is it a 0:44:13.120 --> 0:44:17.440 rich area. We did some reporting that said the president 0:44:17.480 --> 0:44:19.720 was looking for the equivalent of about half a trillion 0:44:19.760 --> 0:44:23.520 dollars from rare earths, mainly used in high strength magnets. 0:44:24.160 --> 0:44:27.480 Despite reports of ten trillion dollars in mineral deposits, Ukraine 0:44:27.480 --> 0:44:31.200 has no major rare earth reserves that are internationally recognized 0:44:31.239 --> 0:44:33.680 as economically viable. Is that correct? 0:44:35.200 --> 0:44:36.640 That is correct. 0:44:37.880 --> 0:44:41.000 You have to, of course assume certain price parameters when 0:44:41.040 --> 0:44:45.160 you make something economic or non economic. I think the 0:44:45.600 --> 0:44:49.200 more important question then whether not the reserves or resources, 0:44:49.239 --> 0:44:52.520 should they be economic or not at this point is 0:44:53.120 --> 0:44:56.080 what processing capability can be put to work on this. 0:44:56.160 --> 0:44:59.600 I mean, the rare earths themselves are not particularly rare. 0:44:59.719 --> 0:45:02.880 What they is very very difficult to separate from host 0:45:02.960 --> 0:45:07.600 rock and the expertise in the world in doing that 0:45:07.640 --> 0:45:10.320 it really resides in China, right and so the question, 0:45:10.680 --> 0:45:13.400 the question becomes, you might have the best war body 0:45:13.440 --> 0:45:15.719 in the world in the Ukraine, but if you don't 0:45:15.719 --> 0:45:20.000 have the processing capacity or knowledge, it might as well 0:45:20.040 --> 0:45:21.239 just sit in the ground. 0:45:22.000 --> 0:45:25.880 Well like bingo, right, like, it doesn't matter who has access. 0:45:25.960 --> 0:45:28.160 But ultimately then you've got to have a relationship with 0:45:28.280 --> 0:45:30.280 China in order to process. 0:45:30.360 --> 0:45:33.760 So well, why can't the US or why can't Ukraine 0:45:34.080 --> 0:45:34.960 process these? 0:45:35.040 --> 0:45:35.160 Like? 0:45:35.520 --> 0:45:38.800 Is it as difficult as making advanced semiconductors? 0:45:40.480 --> 0:45:46.800 It is incredibly difficult processes about a nineteen step chemical 0:45:47.760 --> 0:45:51.840 toxic process that needs as much art as science to 0:45:51.880 --> 0:45:58.640 be successful economically, and the US and the West have 0:45:58.840 --> 0:46:02.040 some capability in that area, but the real stars. 0:46:01.680 --> 0:46:02.640 Are the Chinese. 0:46:04.040 --> 0:46:07.239 So I am curious, we are curious. You're at this 0:46:07.480 --> 0:46:13.920 Global Metals Conference BMO. Global Metals Conference BMO. What is 0:46:13.960 --> 0:46:17.399 it that everybody's talking about? What's top of mind? 0:46:18.640 --> 0:46:23.640 I think there's two main topics. Obviously, the resiliency of 0:46:23.760 --> 0:46:27.440 the gold price. It's you know, we find ourselves in 0:46:27.520 --> 0:46:30.880 unusual circumstances, and that the goal price is stable to 0:46:30.960 --> 0:46:36.240 rising and the dollar hasn't exactly been a poor performer. 0:46:37.080 --> 0:46:41.759 That's that's atypical Historically. Usually the gold price is seen 0:46:41.800 --> 0:46:43.960 as the hedge against the US dollar, and so they 0:46:44.000 --> 0:46:46.839 move in opposite directions. They've been moving in the same 0:46:46.880 --> 0:46:50.480 direction largely now for a little while, and that anominally 0:46:50.520 --> 0:46:53.400 has led to a lot of conversations here in Florida. 0:46:55.080 --> 0:46:59.000 The second topic, obviously, is is to some degree what 0:46:59.520 --> 0:47:04.560 the West will do about critical materials, critical minerals. And 0:47:04.920 --> 0:47:09.080 the first you know, initiatives out of the administration recognizing 0:47:09.160 --> 0:47:12.080 ports to that, and you know, we were pretty happy 0:47:12.080 --> 0:47:15.480 in this conference to see sort of a more joined 0:47:15.600 --> 0:47:21.799 up initiative on sourcing that and potentially processing that. And 0:47:22.520 --> 0:47:26.320 I think what you heard today about the copper situation 0:47:26.680 --> 0:47:32.399 and the EO on that is really potentially a move 0:47:32.520 --> 0:47:35.920 to reshoring some of that processing capacity back into the 0:47:36.000 --> 0:47:37.120 United States. 0:47:37.160 --> 0:47:40.400 Do we do we want to be processing copper in 0:47:40.440 --> 0:47:41.240 the United States? 0:47:42.239 --> 0:47:43.680 Absolutely we do. Yes. 0:47:44.400 --> 0:47:47.759 It is it's called doctor copper for a reason. It 0:47:47.800 --> 0:47:51.480 is in central metal in many parts of the US 0:47:51.560 --> 0:47:56.680 economy and the US military. And having that onshore and 0:47:56.920 --> 0:47:59.840 being able to make sure that you have access to 0:47:59.840 --> 0:48:04.239 that vital raw material on your own terms is really 0:48:04.320 --> 0:48:04.920 essential to you. 0:48:05.000 --> 0:48:06.480 How did it move out of the US? Was it 0:48:06.520 --> 0:48:08.440 like everything else? It was just cheaper to process out 0:48:08.440 --> 0:48:08.960 of the US. 0:48:10.600 --> 0:48:14.560 It was cheaper to process outside of the United States. As 0:48:14.600 --> 0:48:16.799 part of, you know, the sort of trend of globalization. 0:48:17.560 --> 0:48:23.520 The lowest best cost center for processing was not the 0:48:23.600 --> 0:48:27.080 United States, and so therefore processing solely moved out of 0:48:27.120 --> 0:48:30.719 the country. And we find ourselves in a place now 0:48:30.760 --> 0:48:33.200 where we want to we want to balance that out 0:48:33.280 --> 0:48:34.960 a little bit, and we want to make sure that 0:48:35.440 --> 0:48:37.399 for national security and other reasons, we. 0:48:37.480 --> 0:48:42.799 Have access to vital raw materials. And I think just. 0:48:42.800 --> 0:48:44.680 Help us understand, because this is this I'm out of 0:48:44.719 --> 0:48:48.640 my element pun intended. Sure, but just in twenty seconds, 0:48:49.560 --> 0:48:52.040 do we need to have the copper in the ground 0:48:52.120 --> 0:48:54.880 here to process it? Or do we import the raw 0:48:54.920 --> 0:48:57.080 material and then process it just twenty seconds? 0:48:57.520 --> 0:48:58.719 Both are possible. 0:48:59.200 --> 0:49:02.160 Obviously, an integrated supply chain in the United States is 0:49:02.520 --> 0:49:06.839 the most favorable option, but certainly raw material concentrate form 0:49:06.920 --> 0:49:09.800 copper and then processing it here as a second alternative 0:49:09.960 --> 0:49:11.200 as also very possible. 0:49:11.760 --> 0:49:15.759 Either way process material Copper is. 0:49:16.440 --> 0:49:19.600 God to we get to run come back soon. This 0:49:19.880 --> 0:49:22.040 was fascinating. Oscar, thank you so much. He's the founder 0:49:22.080 --> 0:49:24.480 and group CEO of Orion Resource Partners. 0:49:27.320 --> 0:49:31.080 This is the Bloomberg Business Week podcast. Listen live each 0:49:31.120 --> 0:49:33.759 weekday starting at two pm e stern up on Applecar 0:49:33.880 --> 0:49:36.680 Play and the Android Auto with the Bloomberg Business app. 0:49:36.760 --> 0:49:39.520 You can also listen live on Amazon Alexa from our 0:49:39.560 --> 0:49:43.880 flagship New York station Just say Alexa Play Bloomberg eleven thirty. 0:49:45.160 --> 0:49:47.200 We go now from access and control of the world's 0:49:47.239 --> 0:49:50.480 materials and minerals to the control over changes to the 0:49:50.600 --> 0:49:53.680 US federal government made by Elon Musk and the Department 0:49:53.680 --> 0:49:55.880 of Government Efficiency. We were talking about. 0:49:55.680 --> 0:49:59.680 DOJE earlier this month. Nineteen mostly democratic controlled states sued 0:49:59.680 --> 0:50:03.640 to blo Elon Musk's DOSEE team from accessing confidential records, 0:50:04.040 --> 0:50:09.440 citing potential overreach and data privacy violations. One of those states, Connecticut. 0:50:09.640 --> 0:50:12.640 William Tong is the state attorney general for Connecticut. He 0:50:12.719 --> 0:50:15.360 joined us to talk about Elon and doge's ability to 0:50:15.520 --> 0:50:17.400 access sensitive government data. 0:50:17.560 --> 0:50:22.120 What's most important is that democratic state attorneys general are 0:50:22.160 --> 0:50:24.640 taking action to protect our states. You know, no matter 0:50:25.160 --> 0:50:29.000 who the president is, it's my job to protect Connecticut families, 0:50:29.080 --> 0:50:31.080 and right now they're exposed. 0:50:31.400 --> 0:50:34.520 You know, all about money that essentially should come to 0:50:34.520 --> 0:50:36.000 the states or what in. 0:50:35.920 --> 0:50:41.600 Particular money are social security numbers, banking information, important private 0:50:41.600 --> 0:50:45.040 information that's not just in the US Treasury that may 0:50:45.040 --> 0:50:46.759 be at the Department of Education, that may be at 0:50:46.760 --> 0:50:51.840 the IRS. Right an unelected billionaire and his army of 0:50:51.960 --> 0:50:55.080 hackers and want to be stormtroopers are now tearing up 0:50:55.120 --> 0:51:00.000 the federal government. Nobody elected them. There's no authority or 0:51:00.080 --> 0:51:02.359 statutory basis to give them this power to. 0:51:02.320 --> 0:51:03.800 Go in and tear up the federal government. 0:51:04.040 --> 0:51:05.799 It's as if I said to you, Carol, you know 0:51:05.880 --> 0:51:09.520 what's Donald Trump came down here and said, Carol, you're great. 0:51:09.880 --> 0:51:12.080 I'm going to put you in the most secure and 0:51:12.160 --> 0:51:16.040 nuclear weapons facility in the US Armed Forces. I'm going 0:51:16.080 --> 0:51:18.279 to give you the password, just log in and have 0:51:18.400 --> 0:51:20.520 at it. Would anybody have a problem with that? 0:51:20.719 --> 0:51:23.480 Is it, what's being done, who's doing it, or that 0:51:23.560 --> 0:51:25.960 there is no transparency to it. 0:51:25.960 --> 0:51:28.800 It's all of that, and it's the damage right now. 0:51:28.880 --> 0:51:34.040 You know, when he gained access to Treasury's central payment system, 0:51:34.080 --> 0:51:37.600 the Bureau of Fiscal Services. He had control one guy 0:51:37.840 --> 0:51:40.600 and again his army of hackers to cut off Social 0:51:40.600 --> 0:51:45.759 Security payments, veterans benefits. Right, they're already canceling contracts at 0:51:45.840 --> 0:51:49.759 the Department of Education. It's real world impact right now. 0:51:49.880 --> 0:51:54.360 Money is not flowing to states. The Medicaid portal was closed, 0:51:54.360 --> 0:51:59.120 the head Start portal was closed, important grants in federal 0:51:59.120 --> 0:52:04.040 funding for trans rotation products, electric vehicles, climate related investments. 0:52:04.080 --> 0:52:06.640 All of those, depending on the day and depending on 0:52:06.719 --> 0:52:08.360 the hour, they're open or they're closed. 0:52:08.719 --> 0:52:11.520 General Elon Musk did speak during a cabinet meeting or 0:52:11.520 --> 0:52:14.239 ahead of a cabinet meeting. He said that does is 0:52:14.239 --> 0:52:17.400 helping fix government computer systems. Overall, DOGE goal is to 0:52:17.480 --> 0:52:19.880 address the deficit. What would you say the folks out 0:52:19.920 --> 0:52:23.439 there listening who said, this is what Americans voted for. 0:52:23.719 --> 0:52:28.080 They voted for more efficiency, They voted for spending government 0:52:28.120 --> 0:52:32.800 spending to go to be reduced and as the President says, 0:52:33.080 --> 0:52:36.160 a reduction and again his words, waste, fraud, and abuse. 0:52:36.239 --> 0:52:39.800 Yeah, they didn't vote for mass unemployment, they didn't vote 0:52:39.840 --> 0:52:44.600 for mass layoffs. They didn't vote for an unelected billionaire 0:52:44.760 --> 0:52:48.200 to wreck families in Connecticut and across this country. You know, 0:52:48.239 --> 0:52:51.400 it's not just a federal employee in Alexander or Virginia. 0:52:51.480 --> 0:52:54.960 And by the way, that's important too. If mom or 0:52:55.040 --> 0:52:58.880 Dad gets fired tomorrow, many families, even families that do 0:52:59.000 --> 0:53:01.600 well and listen to this sho you know, they live 0:53:01.880 --> 0:53:05.720 thirty days out or check to check, and that family 0:53:06.320 --> 0:53:09.359 may have relatives in Connecticut. They are federal workers in Connecticut. 0:53:09.480 --> 0:53:12.760 There are nonprofits in Connecticut that are laying people off 0:53:13.200 --> 0:53:17.759 right now because they rely on, anticipate federal funding that 0:53:17.920 --> 0:53:21.080 is not flowing, and they have to make decisions amidst 0:53:21.120 --> 0:53:25.920 all of this uncertainty. And so families, children are being 0:53:26.040 --> 0:53:30.520 hurt right now, and it's my job, as Connecticut's turning 0:53:30.600 --> 0:53:31.319 general to protect them. 0:53:31.360 --> 0:53:33.640 Do you have specific examples of how many workers have 0:53:33.640 --> 0:53:36.719 been affected in Connecticut, how families have been hurt in Connecticut? 0:53:36.760 --> 0:53:39.000 What can you point to as sort of real world effects? 0:53:39.040 --> 0:53:42.680 So, for example, there are highway programs right now that 0:53:43.120 --> 0:53:46.920 aren't proceeding, that aren't going forward because funding from the 0:53:46.920 --> 0:53:51.120 Department of Transportation is not flowing. Remember, government isn't just 0:53:51.160 --> 0:53:53.359 a big employer, it's one of the biggest employers. It's 0:53:53.400 --> 0:53:57.640 also one of the biggest investors, spenders, and customers. And 0:53:57.680 --> 0:54:00.200 if the federal government is not there to buy, I 0:54:00.640 --> 0:54:04.600 invest to be a customer, then projects don't happen. And 0:54:04.640 --> 0:54:08.080 that impacts not just state government, not just the federal government, 0:54:08.239 --> 0:54:11.480 but all of the businesses, small businesses run by people 0:54:11.520 --> 0:54:16.000 in Connecticut, small business people who rely on that part 0:54:16.000 --> 0:54:16.759 of the economy. 0:54:16.960 --> 0:54:19.360 Some would argue, though, just because it's the biggest doesn't 0:54:19.360 --> 0:54:21.759 mean it's the best or being run the most efficiently. 0:54:21.960 --> 0:54:23.080 So what do you say to that. 0:54:23.239 --> 0:54:26.759 Yeah, so everybody, not just at the federal level, but 0:54:26.800 --> 0:54:29.840 at the state level, should be working on making government 0:54:30.239 --> 0:54:33.080 more efficient. And I don't disagree with that. I don't 0:54:33.080 --> 0:54:35.880 think anybody does. But number one, you got to do 0:54:35.920 --> 0:54:38.239 it in compliance with the law. You have to do 0:54:38.280 --> 0:54:41.680 it in a way that's safe, that maintains the safety, 0:54:41.680 --> 0:54:44.879 for example, of our personal information. Just because you want 0:54:44.880 --> 0:54:47.960 to make treasury more efficient doesn't mean you can affect 0:54:47.960 --> 0:54:51.480 the largest data breach in American history and expose all 0:54:51.520 --> 0:54:54.480 of our social Security numbers and god knows what happens 0:54:54.480 --> 0:54:56.520 to that. Does that end up on the dark web, 0:54:56.880 --> 0:54:58.879 and then we all become victims of scams, And by 0:54:58.880 --> 0:55:00.560 the way, that all comes back to as the state 0:55:00.560 --> 0:55:03.840 attorney general when my phone starts ringing off the hook. 0:55:04.040 --> 0:55:05.839 What would you propose is the right way to do it? 0:55:05.840 --> 0:55:09.480 That Congress exercises its power to do that. The Constitution 0:55:09.640 --> 0:55:12.840 is very clear, under the spending Clause of the US Constitution, 0:55:13.160 --> 0:55:18.520 it's Congress's prerogative to decide how the nation's resources get spent. 0:55:18.960 --> 0:55:20.520 Congress needs to do its job. 0:55:21.480 --> 0:55:23.759 And it is Congress not doing its job right now? 0:55:24.320 --> 0:55:27.320 Or do you feel like it's certainly not along party lines? 0:55:27.880 --> 0:55:32.000 Congress in many respects feels broken. But you know, one 0:55:32.040 --> 0:55:34.640 good example of how broken it is is that Congress, 0:55:34.920 --> 0:55:38.280 it seems, in this budget proposal, proposes to cut Medicare 0:55:38.600 --> 0:55:41.600 for the states. Are you kidding You're going to go 0:55:41.640 --> 0:55:45.560 after medicare healthcare children? You know, I said when the 0:55:45.560 --> 0:55:49.319 federal funding freeze was announced that this is a war 0:55:49.360 --> 0:55:51.760 on the American people. And maybe that felt a little 0:55:52.239 --> 0:55:54.880 dramatic at the time, but what's clear now four weeks 0:55:54.880 --> 0:55:58.040 in is that it's a war on America's children, right 0:55:58.239 --> 0:56:04.400 medicate healthcare, head start education funding, the Department of Education 0:56:04.480 --> 0:56:07.080 saying they're going to cut education funding, not just for 0:56:07.160 --> 0:56:08.879 colleges and universities, but for. 0:56:09.000 --> 0:56:11.040 All levels of education. 0:56:11.160 --> 0:56:14.480 If you can't meet their standards on what's acceptable not 0:56:14.560 --> 0:56:17.680 acceptable in terms of your curriculum and your programs, this 0:56:17.840 --> 0:56:21.719 attacks kids, children, families. What is the point of that. 0:56:22.480 --> 0:56:24.880 You've been in this position since twenty nineteen, that was 0:56:24.880 --> 0:56:27.560 a few years into the first Trump administration. You were 0:56:27.600 --> 0:56:30.799 active in big legal suits against the Trump administration during 0:56:30.800 --> 0:56:33.239 that time as well. We've talked a little bit about 0:56:33.280 --> 0:56:36.520 over the last few months how this administration feels a 0:56:36.520 --> 0:56:40.080 little different because of the people they've brought in. How 0:56:40.120 --> 0:56:44.480 would you say the legal aspect of this has been different. 0:56:44.719 --> 0:56:47.080 Do you think the Trump administration was much more prepared 0:56:47.080 --> 0:56:47.760 this time around. 0:56:47.800 --> 0:56:51.360 No, it's more lawless and more unconstitutional. And yes, it 0:56:51.480 --> 0:56:54.919 feels like they were more prepared to do the wrong thing. 0:56:55.080 --> 0:56:57.080 They were more prepared to break the law. They were 0:56:57.120 --> 0:56:58.880 more ready to break the law. You look at what 0:56:58.920 --> 0:57:03.360 are some examples of break and dan Bonjiorno, Well, first 0:57:03.360 --> 0:57:04.880 of all, the very first thing they did and we 0:57:04.960 --> 0:57:10.400 sued on, which is to abrogate birthright citizenship and to 0:57:10.440 --> 0:57:15.720 eliminate birthright citizenship. That is utterly unlawful and constitutional, unconstitutional. 0:57:15.760 --> 0:57:18.320 Look at the Fourteenth Amendment, and what the words the 0:57:18.360 --> 0:57:21.480 fourtheenth Amendment say. They're very clear. If you're born on 0:57:21.560 --> 0:57:25.520 American soil, you're an American citizen period. If not for 0:57:25.560 --> 0:57:28.760 the fourteenth Amendment, Tim, I'm not sitting here. I'm an 0:57:28.760 --> 0:57:31.120 American citizen by right of my birth. And it's as 0:57:31.160 --> 0:57:34.920 if Carol as if a democratic president, let's say some 0:57:34.960 --> 0:57:39.360 future presidents said, Okay, you know what, no Americans should 0:57:39.360 --> 0:57:43.880 carry firearms. It's that unconstitutional. People would lose their minds 0:57:43.960 --> 0:57:46.880 if some politicians said that. And Donald Trump is doing 0:57:46.880 --> 0:57:48.240 that with birthright citizens. 0:57:47.920 --> 0:57:50.280 Jerial Ton, what do you think will happen to Trump's 0:57:50.280 --> 0:57:53.280 Birthright Citizenship executive Order and his plan to also ban 0:57:53.440 --> 0:57:55.120 transgender people from the military. 0:57:55.760 --> 0:57:57.800 I think his effort will fail, and I think the 0:57:57.840 --> 0:58:00.760 Supreme Court will do the right thing and that it 0:58:00.800 --> 0:58:04.040 will read the fourteenth Amendment to say and mean what 0:58:04.040 --> 0:58:06.160 it says, which is that if you're born in America, 0:58:06.200 --> 0:58:06.920 you're an American. 0:58:07.280 --> 0:58:10.680 Is that the ultimate test of the president's policies? Do 0:58:10.920 --> 0:58:13.960 we continue to see legal challenges to the extent that 0:58:14.120 --> 0:58:16.120 pretty much everything just goes to the Supreme Court. 0:58:16.800 --> 0:58:21.360 Look, we every middle schooler in America knows that we 0:58:21.440 --> 0:58:24.680 have a system of checks and balances. Without checks and balances, 0:58:24.720 --> 0:58:29.720 there's no America right there. If the president has unchecked power, 0:58:30.080 --> 0:58:35.160 then Congress becomes optional, our rights become optional, States become optional, 0:58:35.640 --> 0:58:38.760 and so checks and balances. These lawsuits are about checks 0:58:38.800 --> 0:58:42.440 and balances. Congress right now isn't a very effective check, 0:58:42.840 --> 0:58:46.480 and so states state attorneys general. We are a check 0:58:46.720 --> 0:58:50.040 through the courts, through the judiciary, through the federal courts 0:58:50.080 --> 0:58:53.280 on a president who doesn't respect and follow the law. 0:58:53.920 --> 0:58:56.720 You know, it's interesting there definitely have been some protests 0:58:56.760 --> 0:59:01.240 at you know, community meetings with members of Congress. But 0:59:01.320 --> 0:59:04.160 going back to that, as you say, Congress is there 0:59:04.160 --> 0:59:07.600 to enact the law right and help make decisions. But 0:59:07.720 --> 0:59:11.960 people in general, the president is still popular. People agree 0:59:11.960 --> 0:59:14.760 with what he's doing. So I go back to kind 0:59:14.800 --> 0:59:18.920 of Tim's question. If you look at Americans, put this 0:59:19.000 --> 0:59:21.560 president in the popular vote. This time he won the 0:59:21.560 --> 0:59:25.160 popular vote. He won it all, and so there are 0:59:25.160 --> 0:59:27.000 a lot of Americans who think this is the right 0:59:27.040 --> 0:59:29.120 direction for the country. 0:59:29.160 --> 0:59:30.920 I guess I don't want to quibble with, you know, 0:59:32.240 --> 0:59:36.200 whether he's popular or not. I think he's underwater. According 0:59:36.200 --> 0:59:39.080 to most polls, meaning less than fifty percent. I think 0:59:39.120 --> 0:59:41.760 it's pretty clear that this country has split pretty evenly 0:59:42.680 --> 0:59:46.240 fifty to fifty. It was a very close presidential election. 0:59:46.800 --> 0:59:51.120 I don't think most Americans who voted for Donald Trump, 0:59:51.160 --> 0:59:54.840 I think I don't think most Americans expect him to 0:59:54.880 --> 0:59:58.000 break the law and to take the Constitution and set 0:59:58.080 --> 1:00:01.200 fire to it. I don't think anybody. And this is 1:00:01.240 --> 1:00:04.480 why I think Elon Musk and again his army of 1:00:05.000 --> 1:00:09.400 hackers are very unpopular, because nobody said, turn the keys 1:00:09.480 --> 1:00:12.560 over to somebody that we didn't vote for, give them 1:00:12.560 --> 1:00:15.640 the password, give them the codes, and have at it. 1:00:15.720 --> 1:00:19.600 Do whatever you want and hurt states and people directly 1:00:19.960 --> 1:00:23.720 right now. The damage is being done right now. If 1:00:24.480 --> 1:00:28.280 the state of Connecticut is working on its state budget 1:00:28.920 --> 1:00:31.320 for the next two years right now, we'll finish that 1:00:31.400 --> 1:00:35.160 work in early June. If they blow a huge hole 1:00:35.320 --> 1:00:38.440 in federal funding, we're in big trouble. And many states 1:00:38.480 --> 1:00:40.280 are the same position. And I would say something by 1:00:40.320 --> 1:00:43.560 the way, really correctly too. Yeah, red states are much 1:00:43.680 --> 1:00:45.200 bigger takers of federal funding. 1:00:45.280 --> 1:00:46.840 No, it's a really good point we got to leave 1:00:46.840 --> 1:00:49.080 with there. General Tom, thank you so much. This is 1:00:49.120 --> 1:00:50.160 Bloomberg Business Week. 1:00:55.400 --> 1:00:58.960 You're listening to the Bloomberg Business Week podcast. Catch us 1:00:59.040 --> 1:01:02.480 live weekday afternons from two to five pm Eastern. Listen 1:01:02.520 --> 1:01:06.080 on Applecarplay and the Android Auto with the Bloomberg Business app, 1:01:06.240 --> 1:01:10.160 or watch us live on YouTube. 1:01:09.520 --> 1:01:11.600 Plenty Ahead in our second hour of the weekend edition 1:01:11.600 --> 1:01:15.160 at Bloomberg Business Week, including how Walmart's CEO is navigating 1:01:15.200 --> 1:01:19.200 a second Trump presidency all while going after Amazon's e 1:01:19.240 --> 1:01:20.439 commerce crown. 1:01:20.480 --> 1:01:23.840 Plus the business of Botox, so called medspas, and a 1:01:23.880 --> 1:01:26.640 first glimpse of Rome's legendary Los Marbles. 1:01:26.720 --> 1:01:29.600 First up this hour, he is a former Google engineer 1:01:29.680 --> 1:01:32.560 that helped launch the company's self driving car program that 1:01:32.600 --> 1:01:35.400 we now know today as Wai Moo. Today he is 1:01:35.440 --> 1:01:38.680 the CEO of Pronto. It's an autonomous vehicle company for 1:01:38.720 --> 1:01:40.400 the mining and trucking industries. 1:01:40.600 --> 1:01:43.400 We're talking about Anthony Lewandowski, and now a new deal 1:01:43.480 --> 1:01:45.760 is poised to make him one of the biggest operators 1:01:45.760 --> 1:01:49.200 of an autonomous truck fleet. Writing all about Anthony Lewandowski 1:01:49.200 --> 1:01:52.360 is Bloomberg BusinessWeek columnist and co host of the Elinink podcast, 1:01:52.640 --> 1:01:53.400 Max Chafkin. 1:01:53.640 --> 1:01:57.640 Anthony Lewandowski is really the single person most responsible for 1:01:57.680 --> 1:02:02.800 creating driverless cars, as like an industry. He created a 1:02:03.000 --> 1:02:05.720 He was involved in the original DARPA Grand Challenge, which 1:02:05.800 --> 1:02:08.560 was this thing in the early two thousands where the 1:02:08.600 --> 1:02:11.240 military had a bunch of technologists try to make self 1:02:11.320 --> 1:02:15.400 driving cars. He built a prototype self driving Prius that 1:02:15.560 --> 1:02:19.120 was sold to Google and played a really important role 1:02:19.360 --> 1:02:24.200 at Google for years, and then left to join Uber's 1:02:24.200 --> 1:02:26.760 self driving car effort. Played an important role there, and 1:02:26.800 --> 1:02:31.400 then got into this intellectual property dispute with Google that 1:02:31.520 --> 1:02:34.480 led to him pleading guilty to stealing trade secrets. 1:02:34.600 --> 1:02:36.240 He was actually sentenced to a. 1:02:36.200 --> 1:02:38.880 Prison term, but was pardoned by Donald Trump, and he 1:02:39.000 --> 1:02:42.080 kind of emerged from this experience as a. 1:02:42.000 --> 1:02:44.880 Critic of the driverless car industry. 1:02:45.280 --> 1:02:51.720 Basically, Anthony Lewandowski's position is that these robotaxi services so Waimo, 1:02:52.280 --> 1:02:54.440 Tesla is trying to come up with one, as we 1:02:54.600 --> 1:02:58.240 just heard, and also GM Cruse which just folded theirs, 1:02:58.840 --> 1:03:03.000 that these businesses are basically much further away than most 1:03:03.040 --> 1:03:06.120 people realize, in fact, further away than the companies themselves 1:03:06.160 --> 1:03:07.840 are willing to admit. 1:03:07.920 --> 1:03:09.160 He's been talking about. 1:03:08.880 --> 1:03:11.640 This for years and he is offering kind of a 1:03:11.640 --> 1:03:16.400 different approach, which is bringing these technologies to essentially industrial 1:03:16.440 --> 1:03:20.640 sites where they are still essentially driverless cars. They're just 1:03:20.720 --> 1:03:24.919 driverless dump trucks, but they're not on city streets. They're 1:03:24.920 --> 1:03:29.840 on private land, and they're monitored more aggressively because they're. 1:03:29.640 --> 1:03:31.640 Essentially heavy duty construction equipment. 1:03:31.680 --> 1:03:34.760 So instead of having to worry about cyclists and potentially 1:03:34.760 --> 1:03:39.080 causing traffic jams and the interaction between customers and so on, 1:03:39.240 --> 1:03:42.720 all these problems have really been deviled the robotaxi industry 1:03:42.720 --> 1:03:45.360 and continue to bi devil the robotaxi industry. And one 1:03:45.360 --> 1:03:47.280 of the reasons these companies have been able to turn 1:03:47.320 --> 1:03:49.360 profit they basically take all that out of the equation 1:03:49.560 --> 1:03:51.920 and we're just talking about a dump truck moving some 1:03:52.040 --> 1:03:54.800 very heavy rocks from like one corner of a rock 1:03:54.880 --> 1:03:59.080 quarry to another. Obviously, this is a smaller business in 1:03:59.160 --> 1:04:02.720 the near term than in something like robotaxis, but I 1:04:02.760 --> 1:04:05.520 think this company, Pronto, is showing that it's a real business. 1:04:05.560 --> 1:04:08.520 And the news that we reported on today is they 1:04:08.920 --> 1:04:14.120 signed a deal to supply driverless dump truck technology to 1:04:14.400 --> 1:04:17.600 a dozen sights a dozen quarries around the world through 1:04:17.640 --> 1:04:22.640 a German company called Heidelberg Materials. Basically, we're talking about 1:04:22.640 --> 1:04:25.919 one hundred or so trucks, which doesn't sound like that much, 1:04:25.960 --> 1:04:28.320 but having seen these trucks in person, they are very 1:04:28.400 --> 1:04:29.000 very large. 1:04:29.080 --> 1:04:33.400 So it's so these are expensive, right, yeah, exactly, And 1:04:33.440 --> 1:04:34.600 that's one of the reasons. 1:04:34.280 --> 1:04:36.120 Why inexpensive I was being sarcastic. 1:04:36.200 --> 1:04:38.680 Yeah, yeah, no, I know, is they are very expensive. 1:04:38.680 --> 1:04:41.560 These are expensive items. And one of the reasons this 1:04:41.600 --> 1:04:45.720 is an appealing area for this technology is because of 1:04:45.800 --> 1:04:48.960 the expense. Like then, adding the sensors isn't such a 1:04:49.000 --> 1:04:49.880 big cost. 1:04:49.960 --> 1:04:52.800 So we don't know exactly how much the sensor kit 1:04:52.920 --> 1:04:53.840 in a way more. 1:04:53.720 --> 1:04:56.920 Costs, but it very likely costs more than the cost 1:04:56.960 --> 1:04:57.960 of the car itself. 1:04:58.800 --> 1:05:01.120 You know, people have asked stimated in the hundreds of 1:05:01.120 --> 1:05:02.440 thousands of dollars. So you're talking. 1:05:02.280 --> 1:05:06.760 About really expensive technology and then a lot of expensive 1:05:06.760 --> 1:05:09.480 technology to support that. So whereas in the dump truck, 1:05:09.520 --> 1:05:13.200 it's the sensor kit is a smaller percentage of the total. 1:05:13.280 --> 1:05:15.600 But Kamatsu and Caterpillar, as you point out in the piece, 1:05:15.680 --> 1:05:18.000 already have this TECHNI I don't want to say this technology, 1:05:18.040 --> 1:05:19.800 but they already have drivelogy. 1:05:19.920 --> 1:05:22.800 I'd say this is an area while yeah, they have 1:05:22.920 --> 1:05:25.880 been really successful and This is the point that Lewandowski 1:05:26.440 --> 1:05:28.960 makes a lot that you know, as much as we've 1:05:29.000 --> 1:05:32.680 seen a lot of headlines about driverless robotaxes, when you 1:05:32.720 --> 1:05:34.720 really get down to it, it's we're not talking about 1:05:34.760 --> 1:05:36.920 that many cars, you know. I haven't looked at the 1:05:37.160 --> 1:05:40.840 Waimo numbers lately, but my guess is in the hundreds, 1:05:40.920 --> 1:05:43.480 maybe maybe around one thousand. I mean, that's kind of 1:05:43.520 --> 1:05:47.439 like similar, and we're talking about like little trips. Those 1:05:47.480 --> 1:05:51.640 are kind of similar numbers to what Komatsu and Caterpillar 1:05:51.720 --> 1:05:55.200 have deployed in terms of these gigantic dump trucks, and 1:05:55.720 --> 1:05:58.720 I think the revenue on the kind of industrial side 1:05:59.000 --> 1:06:00.920 for now is probably a lot greater. 1:06:01.000 --> 1:06:02.760 I mean, obviously, the hope with. 1:06:02.720 --> 1:06:05.240 Weimo and Tesla is that you're going to make it 1:06:05.320 --> 1:06:07.400 up on volume. You're going to find ways to do 1:06:07.440 --> 1:06:11.280 this more inexpensively. Once it's deployed in a mass scale, 1:06:11.720 --> 1:06:13.880 then it's going to change everything. The economics are gonna 1:06:13.880 --> 1:06:15.960 get a lot better. But we haven't seen any of 1:06:15.960 --> 1:06:16.360 that yet. 1:06:16.480 --> 1:06:19.440 Remote controlled versus driver lists, like, what's the kind of 1:06:19.560 --> 1:06:20.400 nuances here? 1:06:20.480 --> 1:06:23.840 So these are these are autonomous in the sense that 1:06:24.000 --> 1:06:27.000 like the computers are making the decisions very very similar 1:06:27.320 --> 1:06:29.919 to what's happening in a WEIMO or something like that. 1:06:30.840 --> 1:06:33.640 With with with Waymo's. 1:06:33.240 --> 1:06:36.160 And with some of these other robotaxi solutions, you do 1:06:36.240 --> 1:06:41.600 have some remote support. Now some people would call that teleoperation. 1:06:41.880 --> 1:06:44.080 The companies, you know, there's a lot of back and 1:06:44.120 --> 1:06:45.240 forth about how. 1:06:45.120 --> 1:06:47.200 Much remote support are they actually doing. 1:06:47.520 --> 1:06:51.080 Part of the the discussions that happened in the wake 1:06:51.120 --> 1:06:54.720 of Cruises collapse where there were reports showing that these 1:06:55.160 --> 1:06:57.960 these people and call centers were intervening very very often. 1:06:57.960 --> 1:06:59.480 So you're talking about a huge amount of support. 1:06:59.600 --> 1:07:02.480 Now on an industrial site, you also have some support, 1:07:02.560 --> 1:07:06.560 right there is somebody monitoring the overall site, and the 1:07:07.400 --> 1:07:10.720 tasks that are being done are incredibly repetitive. So basically, 1:07:10.800 --> 1:07:12.720 and I've been to some of these sites, it sounds 1:07:12.760 --> 1:07:14.640 kind of cool, but then when you experience it, it just 1:07:14.760 --> 1:07:17.320 it's it's very competitive. The truck like starts at a 1:07:17.400 --> 1:07:20.760 rock crusher, it drives to a mining pit, picks up 1:07:20.800 --> 1:07:23.040 some very large rocks and does the same route back 1:07:23.040 --> 1:07:23.440 and forth. 1:07:23.480 --> 1:07:26.120 And the whole point is again the same route back 1:07:26.160 --> 1:07:26.640 and forth. 1:07:26.760 --> 1:07:29.280 There's no risk of a police car coming in, there's 1:07:29.320 --> 1:07:33.440 no risk of a little dog running out there, are pedestrians, 1:07:33.520 --> 1:07:35.640 are people, but all those people are wearing you know, 1:07:35.720 --> 1:07:37.840 bright orange vests, and those people have a lot of 1:07:37.920 --> 1:07:41.680 experience dealing with heavy machinery, whereas when you're talking about 1:07:41.720 --> 1:07:43.880 on a city street, you know, none of that's true. 1:07:43.880 --> 1:07:46.600 You have a ton of people. It's very unpredictable, and 1:07:46.640 --> 1:07:49.280 those people, as we've seen from some of these incidents 1:07:49.280 --> 1:07:52.680 in San Francisco, are not necessarily like their interest is 1:07:52.720 --> 1:07:56.640 not necessarily to allow the robotaxis to operate efficiently. 1:07:56.720 --> 1:07:58.600 You're not going to be hailing a huge dump truck 1:07:58.680 --> 1:08:00.560 or rock crusher on the side of the road to 1:08:01.440 --> 1:08:05.120 drive you somewhere hopefully hopefully not. You know, these jobs 1:08:05.160 --> 1:08:08.240 that typically are the ones who that you're talking about 1:08:08.240 --> 1:08:12.240 that these replaced. Those are pretty high paying jobs, require 1:08:12.240 --> 1:08:15.400 a lot of training. In some cases, they can be unionized. 1:08:15.720 --> 1:08:19.080 Are those impediments to scaling this well? 1:08:19.120 --> 1:08:21.000 And I mean part of the appeal here, frankly, is 1:08:21.000 --> 1:08:24.200 that the operators who operate these dumb trucks are a 1:08:24.200 --> 1:08:26.680 lot harder to find than uber drivers. And one of 1:08:26.680 --> 1:08:30.160 the reasons why Crews and Waimo have lost so much 1:08:30.240 --> 1:08:34.440 money on these robotaxi businesses is that you put a ruber. 1:08:34.200 --> 1:08:36.519 Driver in a Corolla and that is a very low cost. 1:08:36.439 --> 1:08:39.720 Solution, whereas the kind of people who operate these this 1:08:39.800 --> 1:08:42.680 heavy machinery, uh, these are much higher paying jobs that 1:08:42.760 --> 1:08:47.240 require a lot of experience. The response from Anthony Lewandowski 1:08:47.280 --> 1:08:49.520 you talk to other people in the industry is basically 1:08:49.960 --> 1:08:52.000 number one, Look, these. 1:08:51.840 --> 1:08:53.360 Industries have a labor problem. 1:08:53.439 --> 1:08:56.120 This is not it's not like there's a surplus of 1:08:56.479 --> 1:08:59.639 construction workers. Actually, they they're they're struggling to find people 1:08:59.760 --> 1:09:02.280 can operate these dumb trucks and that at these sites. 1:09:02.360 --> 1:09:04.040 It's not like they're losing staff. 1:09:04.080 --> 1:09:06.600 What they're doing is taking somebody who would have been 1:09:06.680 --> 1:09:10.520 driving a dump truck and putting them you know, operating. 1:09:10.200 --> 1:09:13.719 An excavator or something a sort of higher difficulty job. 1:09:13.880 --> 1:09:16.680 You know, even in these loops that are automated, right, 1:09:16.720 --> 1:09:18.840 there's a lot of automation. The crusher, of course, is 1:09:18.880 --> 1:09:21.639 doing its thing without people. Aren't literally crushing the rocks. 1:09:21.800 --> 1:09:24.720 The dump truck is being driven, you know in some 1:09:24.760 --> 1:09:27.200 case by a computer. But the person who's like deciding 1:09:27.240 --> 1:09:29.439 what to put in the back of the dump truck, 1:09:29.840 --> 1:09:30.200 that's a. 1:09:30.120 --> 1:09:31.640 Person operating an excavator. 1:09:31.880 --> 1:09:34.360 So what they're saying is like, yes, this frees up 1:09:34.800 --> 1:09:38.880 humans to work on tests that are like more difficult, 1:09:39.120 --> 1:09:40.920 but maybe also less unpleasant, not. 1:09:40.880 --> 1:09:42.320 Just this repetitive back and forth. 1:09:42.479 --> 1:09:45.080 I think in the long run, of course, as these 1:09:45.120 --> 1:09:48.879 technology you know, like the idea here is to replace 1:09:48.960 --> 1:09:52.960 human labor. For sure, there's a question of if you 1:09:53.120 --> 1:09:56.320 replace one specific job, what does that do? Does that 1:09:56.360 --> 1:09:58.720 actually does that require make mean fewer people on the 1:09:58.800 --> 1:10:01.200 job site or just way more productivity? And I think 1:10:01.200 --> 1:10:03.280 that the truth is we don't know the answer to 1:10:03.320 --> 1:10:04.320 that question yet. 1:10:04.560 --> 1:10:06.880 Is this it or does he see something else down 1:10:06.920 --> 1:10:07.280 the road? 1:10:07.680 --> 1:10:11.519 Yeah, I mean he says we're gonna everything with four 1:10:11.600 --> 1:10:13.960 wheels is gonna be automated. It's just a question of when, 1:10:14.080 --> 1:10:17.160 I mean his basic thinking. And honestly, I think this 1:10:17.240 --> 1:10:19.560 makes a lot of sense when you followed the industry, 1:10:20.560 --> 1:10:24.560 that there's gonna be a lot of sort of interim 1:10:24.680 --> 1:10:28.880 automation going on where either something that's not a robotaxi, 1:10:28.920 --> 1:10:31.519 but you're you're adapting some of the tools that could 1:10:31.560 --> 1:10:34.120 be used for a ROBOTAXI, say in a more narrow 1:10:34.200 --> 1:10:37.519 situation like on an industrial site with a specific kind 1:10:37.560 --> 1:10:41.400 of equipment or even in a very narrowly defined geographic 1:10:41.479 --> 1:10:44.040 range or something like that. But but that we are 1:10:44.080 --> 1:10:47.200 a long way from the just set your robotaxi out 1:10:47.200 --> 1:10:49.000 on the street. And it's kind of interesting to say 1:10:49.000 --> 1:10:50.679 that because, of course, you have a couple of big 1:10:50.720 --> 1:10:54.040 companies that are betting very heavily on this idea just 1:10:54.040 --> 1:10:55.519 sending robotaxis right on the street. 1:10:55.560 --> 1:10:58.640 Yeah. One of those companies, Tesla, of course, headed by 1:10:58.920 --> 1:11:01.880 none other than Elon Q, is spending a lot of 1:11:01.880 --> 1:11:05.120 time in the Capitol. Your story ends in a really 1:11:05.160 --> 1:11:08.120 in a really notable way. It discusses this idea that 1:11:08.360 --> 1:11:11.320 wait a second, is the idea of regulation what's holding 1:11:11.360 --> 1:11:14.160 this technology back? Or is the technology holding us back? 1:11:14.200 --> 1:11:16.160 He argues, it's the tech. It's just not there yet. 1:11:16.240 --> 1:11:16.479 Yeah. 1:11:16.479 --> 1:11:18.719 And Musk has said and has said on these earnings 1:11:18.720 --> 1:11:20.599 calls that oh, he's going to try to figure out 1:11:20.640 --> 1:11:23.040 a way to get the Trump administration to ease the 1:11:23.080 --> 1:11:25.840 regulatory burden. He's implied in all sorts of ways that 1:11:25.920 --> 1:11:28.960 all Tesla needs is the regulatory Okay, that the tech 1:11:29.000 --> 1:11:32.920 is there, And Lewandowski says, listen, if we're talking about regulations, 1:11:32.920 --> 1:11:35.680 that's a distraction. The truth is, and I've heard this. 1:11:35.720 --> 1:11:39.080 We're talking to other people in the av industry. If 1:11:39.120 --> 1:11:42.400 they wanted to deploy these things more widely, they could, 1:11:42.680 --> 1:11:44.960 And the reasons that they are not doing it is 1:11:45.080 --> 1:11:47.400 partly because of the tech and partly because of the cost. 1:11:47.640 --> 1:11:49.840 Now we'll see. I mean, you know, Elon Musk has 1:11:49.960 --> 1:11:51.599 tried very bold things in the past. 1:11:51.640 --> 1:11:54.680 He says he's going to launch a robotaxi service in 1:11:54.800 --> 1:11:56.200 Austin this summer. 1:11:56.840 --> 1:11:57.720 See how quickly that. 1:11:57.680 --> 1:12:00.200 Goes He's I mean, he's been saying that for years. 1:12:00.200 --> 1:12:04.080 Yes, every year since pretty much twenty sixteen, but he 1:12:04.120 --> 1:12:05.479 has said that this will be the time. 1:12:06.160 --> 1:12:09.479 Hey listen before we go, because you know, Peter til 1:12:09.560 --> 1:12:12.880 and Pallenteer and we're gonna do a big discussion in 1:12:12.960 --> 1:12:15.320 just a moment. But I mean, there are some concerns 1:12:15.360 --> 1:12:18.120 about his exposure to Pentagon cuts. How do you see 1:12:18.120 --> 1:12:20.280 it the relationship between he and Trump that we've seen 1:12:20.320 --> 1:12:22.000 in the past. Do you think he needs to be 1:12:22.040 --> 1:12:23.519 worried where his company needs. 1:12:23.400 --> 1:12:25.920 To be I think that Palenteer stock. 1:12:26.680 --> 1:12:29.160 You know, I'm not an equities analyst, but but if 1:12:29.240 --> 1:12:31.200 you look at what equities analysts are saying, I mean, 1:12:31.200 --> 1:12:36.400 it's very highly valued relative to its actual business, So 1:12:36.640 --> 1:12:39.439 I mean, I'm not sure that. I mean, obviously, if 1:12:39.439 --> 1:12:42.120 you're a defense contractor and there are potential defense cuts, 1:12:42.360 --> 1:12:44.799 that is a potential warning sign. It's also a potential 1:12:44.840 --> 1:12:48.000 reminder to investors that hey, it's possible that we've gotten 1:12:48.040 --> 1:12:51.759 over our skis. I do think Palenteer, you know, obviously, 1:12:51.840 --> 1:12:54.160 Peter tele is an important voice at Palenteer. He's the 1:12:54.200 --> 1:12:58.839 single largest individual shareholder. But they do have other folks 1:12:58.880 --> 1:13:02.080 involved with that company who are connected to the Trump administration. 1:13:02.439 --> 1:13:04.599 I do think people who own the stock and are 1:13:04.600 --> 1:13:07.280 close to the company are still optimistic that they are 1:13:07.320 --> 1:13:10.280 going to benefit from this from this period. But yeah, 1:13:10.320 --> 1:13:12.200 you do see some warning signs. 1:13:12.240 --> 1:13:14.200 Hey Max, thank you so much. Max chaff and columnist 1:13:14.240 --> 1:13:16.559 of Bloomberg BusinessWeek, joining us here. He's also co host 1:13:16.880 --> 1:13:19.960 of the Elon Inc Podcast and author of The Contrarian. 1:13:22.000 --> 1:13:25.760 This is the Bloomberg Business Week Podcast. Listen live each 1:13:25.800 --> 1:13:29.120 weekday starting a two pm Eastern on Applecarplay and the 1:13:29.160 --> 1:13:32.000 Android Auto with the Bloomberg Business app. You can also 1:13:32.160 --> 1:13:35.479 listen live on Amazon Alexa from our flagship New York station, 1:13:35.960 --> 1:13:39.519 Just Say Alexa played Bloomberg eleven thirty. 1:13:39.880 --> 1:13:43.000 Doug McMillan has been running Walmart since twenty fourteen. He's 1:13:43.040 --> 1:13:45.639 been now at the company for a long long time. 1:13:46.160 --> 1:13:49.080 He is credited with pushing Walmart into the digital age 1:13:49.360 --> 1:13:52.960 and successfully steering it through the COVID nineteen pandemic. Now 1:13:53.000 --> 1:13:55.960 he's turning his attention to the company's next chapter and 1:13:56.080 --> 1:13:57.439 new challenges ahead. 1:13:57.720 --> 1:14:00.479 He's doing it not in Silicon Valley or Austins, but 1:14:00.560 --> 1:14:04.120 in Bettonville, Arkansas. That's the location of Walmart's new three 1:14:04.200 --> 1:14:07.080 hundred and fifty acre campus that's meant to lure talent 1:14:07.240 --> 1:14:08.839 as the company takes on Amazon. 1:14:09.080 --> 1:14:11.519 This story is the cover of the upcoming new issue 1:14:11.520 --> 1:14:14.040 of Bloomberg Business Week. It is now on the Bloomberg 1:14:14.120 --> 1:14:16.320 terminal and also can be found at Bloomberg dot com 1:14:16.320 --> 1:14:19.960 slash BusinessWeek. Writing about it Devin Leonard. He is senior 1:14:20.000 --> 1:14:23.519 Global business writer for Bloomberg BusinessWeek, and Devin traveled down 1:14:23.560 --> 1:14:26.320 to Bettonville for a sit down with the Walmart CEO. 1:14:27.120 --> 1:14:29.439 He's sort of taken them in his first decade. He's 1:14:29.479 --> 1:14:31.920 sort of turned them from you this internet clueless kind 1:14:31.920 --> 1:14:36.080 of you know dinosaur into this you know, possible Amazon killer, 1:14:36.160 --> 1:14:38.280 you know, with a real like online business all but 1:14:38.320 --> 1:14:39.640 then kind of what do you do and what do 1:14:39.640 --> 1:14:41.920 you do is try to do some of this other 1:14:41.960 --> 1:14:44.599 stuff that you've tried before, you know, and he failed, 1:14:44.600 --> 1:14:46.559 but you didn't have the digital component, which is like 1:14:47.200 --> 1:14:50.920 like a big push for more upscale customers. And you 1:14:50.920 --> 1:14:52.360 know that you know, they have like you know, a 1:14:52.400 --> 1:14:54.679 third party marketplace like Amazon, so they you know, they're 1:14:54.720 --> 1:14:57.040 selling like four thousand dollar Gucci bags and you know 1:14:57.120 --> 1:14:59.760 things like that. You know, that's the thing to ask about. 1:14:59.760 --> 1:15:00.960 What's I won't would think, But. 1:15:02.920 --> 1:15:03.880 So they're in a. 1:15:03.800 --> 1:15:06.120 Position to do that. They're kind of rebooting a lot 1:15:06.160 --> 1:15:08.800 of stores. But I think the idea is like, look, 1:15:08.920 --> 1:15:12.280 there's people who would never go to a Walmart even now, 1:15:12.320 --> 1:15:14.160 and a lot of them have been going during during 1:15:14.160 --> 1:15:16.720 because you know, high inflation. Yeah, you know, and they 1:15:16.720 --> 1:15:19.280 do well in bad times. But you don't have to go. 1:15:19.360 --> 1:15:21.320 You can order online and they have a pretty good 1:15:21.360 --> 1:15:23.760 delivery service. So so that now is the time to 1:15:23.760 --> 1:15:24.439 make that big push. 1:15:24.520 --> 1:15:26.920 What's been so interesting too write that we've talked about 1:15:27.400 --> 1:15:30.680 it's not just folks that are looking to save some 1:15:30.760 --> 1:15:34.360 money in terms of shopping. Walmart has talked pretty openly 1:15:34.600 --> 1:15:37.840 about the wealthier consumer and customer. 1:15:38.439 --> 1:15:39.200 Well, so there's I. 1:15:39.200 --> 1:15:42.439 Mean, the big question is are they there because of 1:15:42.560 --> 1:15:45.120 because of inflation? I mean, I mean, you know, the 1:15:45.160 --> 1:15:47.160 part of their business that's doing really well is the 1:15:47.280 --> 1:15:51.040 so called uh, non discretionary side, which is like the 1:15:51.080 --> 1:15:53.519 food side you know and think you know and things 1:15:53.560 --> 1:15:57.240 like that. The discretionary side, which is you know, home 1:15:57.280 --> 1:16:00.160 appliances and things like that, that's still you know, you know, 1:16:00.200 --> 1:16:01.880 those sales haven't been going up to the question is 1:16:01.920 --> 1:16:04.719 are people that's there, you know, shopping for groceries because 1:16:04.840 --> 1:16:07.040 you know, food prices have gone up so much, or 1:16:07.640 --> 1:16:09.720 are they going to make make the switch and buy 1:16:10.000 --> 1:16:12.439 everything at Walmart? And that's unclear. We'll see what happens 1:16:12.439 --> 1:16:12.840 about that. 1:16:13.240 --> 1:16:15.679 So you know, Walmart's tried to do this in the past. 1:16:15.800 --> 1:16:18.840 With Jet dot Com, Mark Laurie came in. I think 1:16:18.880 --> 1:16:21.280 you point out in the story that he was actually 1:16:21.320 --> 1:16:24.080 paid high paid, more than Doug McMillan at the time. 1:16:24.479 --> 1:16:27.639 That wasn't exactly a resounding success. They had this Jet 1:16:27.640 --> 1:16:30.400 Black membership and I didn't know this, but even earlier 1:16:30.960 --> 1:16:33.080 in his tenure, they tried to bring on sort of 1:16:33.120 --> 1:16:35.920 like higher end consumers. What's different about this time? 1:16:36.520 --> 1:16:41.519 Well, I mean Jet itself, you know, didn't turn out 1:16:41.560 --> 1:16:45.000 to be you know, Walmart's e commerce brand. But I 1:16:45.040 --> 1:16:47.799 think what did work was basically bringing all these people 1:16:47.840 --> 1:16:49.720 in here and you know, you know and and and 1:16:50.000 --> 1:16:51.800 you know, being in there and out of here, you know, 1:16:51.840 --> 1:16:54.280 you know, shaking things up and basically demonstrating kind of 1:16:54.320 --> 1:16:56.120 to the rest of the world, you know, we're willing 1:16:56.160 --> 1:16:58.640 to do this, and historically it's been you know a 1:16:58.640 --> 1:17:00.479 lot of lifers and people who've been to sort of 1:17:00.560 --> 1:17:03.040 change resistance. So just by doing that, you know, you know, 1:17:03.080 --> 1:17:05.720 I think, well, was it worth the three point three 1:17:05.760 --> 1:17:08.680 billion dollars? I don't know. Maybe they I guess they 1:17:08.720 --> 1:17:10.519 had the money, and he had the board behind I mean, 1:17:10.360 --> 1:17:12.840 I mean er the Walton zone, you know, in forty 1:17:12.880 --> 1:17:15.720 percent of the company. But you know, you know what 1:17:15.720 --> 1:17:19.040 they're saying now that him is that fifteen year years 1:17:19.080 --> 1:17:21.320 ago or twenty years ago. You know, they tried to 1:17:21.320 --> 1:17:23.599 do some of the same stuff with designer cloths that 1:17:23.640 --> 1:17:26.200 fell flat. They did a big redesign of the stores 1:17:26.240 --> 1:17:28.639 to make them more more like Target. You know that 1:17:28.640 --> 1:17:32.840 that fell flat. But you know now now they have 1:17:32.880 --> 1:17:36.360 a much more build out sort of digital side, and 1:17:36.400 --> 1:17:39.920 they you know, and they can offer delivery you know, 1:17:39.960 --> 1:17:42.679 you know, and things like that. And then also they 1:17:42.800 --> 1:17:45.120 have that third party marketplace and they can sell all 1:17:45.160 --> 1:17:47.920 kinds of stuff that they didn't before. So there probably 1:17:47.960 --> 1:17:50.680 are in a better position. Is this still going to 1:17:50.840 --> 1:17:53.240 you know, and I don't know. Look at the competition, 1:17:53.360 --> 1:17:56.760 I mean, Target, Target's doing terribly, so I mean, you know, 1:17:57.160 --> 1:17:58.840 is it going to work. It's going to take a 1:17:58.880 --> 1:18:00.439 little bit longer. We probably need to get out of 1:18:00.479 --> 1:18:03.120 the cycle, you know, you know, and see when there's 1:18:03.120 --> 1:18:05.320 an upswing of the economy, do those do those people 1:18:05.400 --> 1:18:07.720 have been shopping there? People do they stay? I mean, 1:18:07.800 --> 1:18:09.639 that'll be that you know, if they do that, that'll 1:18:09.680 --> 1:18:11.719 be the you know, the proof, Devin. 1:18:11.760 --> 1:18:14.960 I think what's interesting is, you know, who is Doug 1:18:15.040 --> 1:18:17.720 McMillan and what he has done at this company, and 1:18:17.760 --> 1:18:20.120 he is someone who's been there for a long long time, 1:18:20.200 --> 1:18:23.880 not just a CEO, but a long long time, you know, 1:18:24.400 --> 1:18:28.080 and really kind of transformed to some extent how people 1:18:28.400 --> 1:18:29.680 look at this retailer. 1:18:30.360 --> 1:18:33.759 He's just he's some guy who you know, his family 1:18:33.800 --> 1:18:36.840 moved to Bentonville, you know, at some point and he's 1:18:36.840 --> 1:18:40.040 in high school and he got a job onloading trucks 1:18:40.400 --> 1:18:42.400 at the warehouse. I mean then he just you know, 1:18:42.560 --> 1:18:44.519 just never left. I mean he went to he went 1:18:44.560 --> 1:18:47.120 to University of Arkansas, got his undergraduate degree, went to 1:18:47.120 --> 1:18:49.679 the University of Tulsa, got his NBA, and they came 1:18:49.720 --> 1:18:54.200 back and you know, became a buyer. But you know 1:18:54.360 --> 1:18:57.680 he he early on became an advocate for you know, 1:18:57.720 --> 1:19:00.639 we got to go harder, you know, in e commerce 1:19:00.640 --> 1:19:01.840 and and and you know, I think that was a 1:19:01.960 --> 1:19:05.599 pretty uphill battle. But he dates back to the Sam 1:19:05.640 --> 1:19:09.920 Walton days and and you know what if interacted, you know, 1:19:09.960 --> 1:19:12.519 it's with Sam Walton. He as a buyer sort about 1:19:12.520 --> 1:19:15.320 you know, back in the early nineties. Sam Walton died 1:19:15.360 --> 1:19:18.559 in nineteen ninety two. But so he has kind of 1:19:18.600 --> 1:19:22.360 one foot in the past and then and then I 1:19:22.479 --> 1:19:24.920 think that that sort of helps him. You know, there's 1:19:24.920 --> 1:19:26.679 other other foot kind of kind of in the future. 1:19:26.720 --> 1:19:28.800 But but but to kind of move the company forward, 1:19:28.800 --> 1:19:31.160 he has this I think has a credibility and incredibility 1:19:31.160 --> 1:19:33.840 with a board, which is what's what's really important. You know, 1:19:34.080 --> 1:19:36.519 you know, the wall. The Walmer family controls the board 1:19:37.240 --> 1:19:40.519 they've they back him, and you know, I just think 1:19:40.560 --> 1:19:43.200 that the fact that he's kind of can you know, 1:19:43.280 --> 1:19:45.519 you know, respects the past, certainly pays lip service to 1:19:45.560 --> 1:19:47.600 the past, and you know, but it's also trying to 1:19:48.160 --> 1:19:50.360 has his vision you know, you know, for the future. 1:19:50.439 --> 1:19:52.880 That that that that that sort of made him kind 1:19:52.920 --> 1:19:54.639 of you know, a winning CEO. 1:19:54.800 --> 1:19:58.880 So there's a pardon your piece that talks about the 1:19:58.920 --> 1:20:03.559 tension between being located in Bentonville and the policies of 1:20:03.920 --> 1:20:07.639 the state versus the coastal folks who they are trying 1:20:07.680 --> 1:20:10.479 to attract to the state take us there and to 1:20:10.640 --> 1:20:13.320 that anti abortion rally and what was going on. 1:20:14.000 --> 1:20:16.439 Well, I mean, that's that's been part of the issues. 1:20:16.640 --> 1:20:19.880 It's just, you know, you need to become more of 1:20:19.920 --> 1:20:22.960 a you know, an internet based company, but you know, 1:20:23.120 --> 1:20:25.479 you're not going to the talent that you need. Isn't 1:20:25.520 --> 1:20:28.080 you know, you know, isn't all sort of a Northwest Arkansas. 1:20:28.040 --> 1:20:29.600 You have to lure people, you know, to bring in 1:20:29.640 --> 1:20:33.160 people from Silicon Valley and you know, you're you're trying 1:20:33.200 --> 1:20:36.240 to talk them into they have offices in you know, 1:20:36.280 --> 1:20:38.680 in Silicon Valley too. But but but ultimately a few 1:20:38.680 --> 1:20:40.400 many part of the leadership. You really have to be there, 1:20:40.479 --> 1:20:43.120 be there in Bentville. And then it's kind of like, well, 1:20:43.960 --> 1:20:47.240 you know, it's it's still a very conservative state. You know, 1:20:47.280 --> 1:20:49.240 it went very very you know, you know, heavy for 1:20:49.240 --> 1:20:54.240 Trump in the last election. And you know, it's Bentonville itself, 1:20:54.479 --> 1:20:57.320 it's definitely you know, you know, a more liberal place, 1:20:57.320 --> 1:21:00.479 and it's it's a much more diverse place probably than 1:21:00.479 --> 1:21:02.720 it was, you know, ten or twenty years ago. But 1:21:02.920 --> 1:21:05.599 you know, there's still it's still in northwest Arkansas. I mean, 1:21:05.640 --> 1:21:08.479 there was a pro life rally on Saturday, but you know, 1:21:08.520 --> 1:21:10.720 before I left, of course, there were counter protesters too. 1:21:10.720 --> 1:21:12.960 There's some some some guy i'd got in a big 1:21:13.040 --> 1:21:16.600 discussion seen listening at the bar who turned out to 1:21:16.600 --> 1:21:19.160 be the next Walmart guy. But sitting at the bar 1:21:19.720 --> 1:21:22.400 at the hotels right a sushi restaurant there, but they 1:21:22.400 --> 1:21:24.600 didn't didn't have that twenty years ago. I can I 1:21:24.640 --> 1:21:28.360 can tell you that, but different yeah, yeah, but he he, uh, 1:21:28.800 --> 1:21:31.160 some some of we got we got to talking about 1:21:31.160 --> 1:21:33.640 politics and any and he you know, started talking to 1:21:33.640 --> 1:21:36.800 me safe full of like assault rifles and and uh, 1:21:37.080 --> 1:21:38.840 well you know because because we're you know, we're talking 1:21:38.840 --> 1:21:40.080 about Trump and I was like, well, I don't know 1:21:40.080 --> 1:21:41.920 about that. In January sixth of that that was the 1:21:41.920 --> 1:21:45.200 best best thing. And he said, uh, you know what insurrection? 1:21:45.320 --> 1:21:47.000 That really was? At an insurrection? I have all these 1:21:47.080 --> 1:21:49.760 kinds of people like me went, you know, went down there. 1:21:49.960 --> 1:21:52.599 There would have been an insurrection, were a real insurrection, 1:21:52.800 --> 1:21:54.200 you know, we might have lost, but it would have 1:21:54.200 --> 1:21:57.920 been an insurrection. And you know, it's it was, Uh, 1:21:58.160 --> 1:22:00.680 you know, you don't have those conversations everday in New York. 1:22:00.680 --> 1:22:02.240 But I don't know. Maybe maybe it depends on where 1:22:02.320 --> 1:22:02.720 you go out. 1:22:02.800 --> 1:22:03.759 I'm just missing. 1:22:03.960 --> 1:22:05.519 I think it's always great, like when you do get 1:22:05.520 --> 1:22:10.160 out right anyway and you realize kind of what is 1:22:10.240 --> 1:22:11.320 the fabric of America? 1:22:11.479 --> 1:22:11.599 Right? 1:22:11.680 --> 1:22:13.960 And I think it's very easy when you live in 1:22:14.040 --> 1:22:16.840 one state or on one of the coasts that you 1:22:16.880 --> 1:22:18.920 think just one thing. And it kind of speaks to 1:22:19.080 --> 1:22:22.120 when you're such a giant in the retail space like Walmart, 1:22:22.720 --> 1:22:24.160 I guess you have to be a little bit careful, 1:22:24.160 --> 1:22:26.439 but you also have to appeal to so many different 1:22:26.479 --> 1:22:30.400 populations across the country and it's really wide and diverse. 1:22:30.920 --> 1:22:33.639 No, And he's you know, Doug McMillan's you know mantras, 1:22:33.760 --> 1:22:36.800 you know, we want to sell to everybody and so 1:22:36.800 --> 1:22:40.080 so so I think there was this moment where CEOs 1:22:40.120 --> 1:22:43.760 were being more outspoken, and he he was one of them. 1:22:43.800 --> 1:22:46.360 And just the fact that the CEO of Walmart was 1:22:46.400 --> 1:22:49.519 doing things like lobbying the state officials in Arkansas not 1:22:49.600 --> 1:22:52.160 to pass you know, a bill that would have restrict 1:22:52.120 --> 1:22:56.400 you know, restricted LGBTQ rights. You know that that was used. 1:22:56.479 --> 1:22:59.000 You know that that main news. But right now, you know, 1:22:59.080 --> 1:23:00.479 you know, things are little different. 1:23:00.520 --> 1:23:04.720 And he was at the inauguration, Yeah, on stage right. 1:23:04.800 --> 1:23:09.840 No, it was right up there, right, But. 1:23:09.800 --> 1:23:12.240 The whole dynamic is kind of funny, right, like who 1:23:12.240 --> 1:23:13.200 got the front row seat? 1:23:13.479 --> 1:23:15.719 He was there, but like, you know, not necessarily hiding, 1:23:15.760 --> 1:23:18.040 but he wasn't as prominently displayed as some of the other. 1:23:18.479 --> 1:23:20.840 And he definitely wasn't really all that. You know, we 1:23:20.880 --> 1:23:23.519 talked to him about anything, Brad asked him about that 1:23:23.560 --> 1:23:27.280 and and and he, uh, Bradstone, the editor that Business Weeek, 1:23:27.320 --> 1:23:29.120 was there with us. But but but I think he 1:23:29.640 --> 1:23:32.960 was you know, he didn't sound you know, super thrilled 1:23:33.000 --> 1:23:36.120 like he was invited and you know, maybe they'd be seeding. 1:23:36.160 --> 1:23:38.400 Maybe they wouldn't because they were moving and around. But 1:23:38.400 --> 1:23:41.200 but but anyway, I mean, you know, he was he 1:23:41.280 --> 1:23:43.200 was trying to put the best face on it. You know, 1:23:43.240 --> 1:23:45.160 he'd gone tomorrow lago, and he was saying, we want, 1:23:45.400 --> 1:23:47.519 we know, we just wanted to say, you know, how 1:23:47.520 --> 1:23:49.320 can we help? And no, I worked with you know, 1:23:49.320 --> 1:23:51.240 Trump during COVID and all that stuff. 1:23:51.240 --> 1:23:53.040 But it's a dance of many CEOs. 1:23:53.120 --> 1:23:55.360 Yeah, yeah, totally, totally. But but but you know, since 1:23:55.400 --> 1:23:58.080 they're so big, the biggest retailer, I mean, you know, 1:23:58.160 --> 1:24:01.320 it's really interesting to watch. It's really important, really important 1:24:01.320 --> 1:24:03.439 to note. It's it's not something like little company or 1:24:03.479 --> 1:24:04.720 you know, you know or you know or something or 1:24:04.720 --> 1:24:06.479 something like that. They can really be affected by a 1:24:06.880 --> 1:24:08.639 Trump administration policies and stuff. 1:24:08.680 --> 1:24:13.280 So and increasingly like Amazon, right in terms of things 1:24:13.280 --> 1:24:15.600 that maybe while it pooh pooed maybe Amazon in the 1:24:15.640 --> 1:24:19.880 early days in the digital marketplace, it's now embracing a 1:24:19.920 --> 1:24:22.360 lot whether it's membership, whether it's ads, whether it's a 1:24:22.360 --> 1:24:25.240 lot of things. Right, increasingly becoming a lot more like Amazon. 1:24:25.360 --> 1:24:28.840 Right, No, totally, I mean they have a ways to go, 1:24:29.120 --> 1:24:31.680 but I mean, no, no, you're right, but you know, 1:24:32.120 --> 1:24:35.880 growing advertising business, growing third party party marketplace. You know, 1:24:36.240 --> 1:24:39.439 you know, they're there. Their membership Walmart Plus is still 1:24:39.560 --> 1:24:43.280 still very small compared to compared to Amazon. We probably 1:24:43.280 --> 1:24:45.599 should have thrown that in, But but they're doing it 1:24:45.680 --> 1:24:49.320 and and and it's growing, and and uh, they have 1:24:49.439 --> 1:24:52.719 to do something because really, really the they haven't built 1:24:52.760 --> 1:24:54.400 lots of new stores in a long time, and for 1:24:54.760 --> 1:24:57.120 decades that was the way they grew it. And as 1:24:57.160 --> 1:24:58.960 a matter of fact, at one point, you know, Mille 1:24:59.120 --> 1:25:03.200 was saying he came in, they were debating internally, are 1:25:03.240 --> 1:25:06.120 the story is going to go away? I mean, which 1:25:06.240 --> 1:25:08.040 which is kind of an amazing thing for people to 1:25:08.040 --> 1:25:11.800 Walmart to be doing. But anyway, so they're in a 1:25:11.840 --> 1:25:13.519 different place now, at a better place. 1:25:13.840 --> 1:25:17.200 The Trump administration question, I think is a really interesting one, Devin. 1:25:17.479 --> 1:25:21.640 It's it's sort of the role that executives such as 1:25:21.720 --> 1:25:25.599 this takes in this administration in the sense of, Okay, well, 1:25:25.600 --> 1:25:28.800 he's not on stage there necessarily, but he still wants 1:25:28.840 --> 1:25:32.120 to make sure that he's not ignoring the President of 1:25:32.160 --> 1:25:34.000 the United States. What is the tension there. 1:25:34.600 --> 1:25:37.840 They have to worry about tariffs, obviously, and you know, 1:25:37.920 --> 1:25:39.920 you know that they could get they could get hit 1:25:40.000 --> 1:25:42.680 with that depending on lots of produce and things like that, 1:25:42.800 --> 1:25:45.360 you know, you know, and you know from from Mexico, 1:25:45.800 --> 1:25:49.599 home goods, appliances and things like that from China. They 1:25:49.840 --> 1:25:51.479 you know, they sort of downplay that and say, well, 1:25:51.479 --> 1:25:53.799 we've been dealing with tariffs since twenty seventeen. 1:25:53.960 --> 1:25:54.559 So wow. 1:25:54.760 --> 1:25:56.439 You know, that was that was why they were saying 1:25:56.439 --> 1:25:59.280 they're not too worried about tariffs. You know, I think 1:25:59.320 --> 1:26:02.160 any big employe have to worry about you know, you know, 1:26:02.200 --> 1:26:05.760 the immigration restrictions you know that are coming down, you know, 1:26:05.800 --> 1:26:09.000 the possiblity of work, workplace raids, and and and also 1:26:09.160 --> 1:26:11.360 just you know, it's going to make it harder him 1:26:11.400 --> 1:26:14.360 to hire people. And then there's the whole business with 1:26:14.360 --> 1:26:16.520 with you know what's gonna happen with Arcade. 1:26:16.240 --> 1:26:18.519 Junior and and UH stamps. 1:26:18.800 --> 1:26:22.120 Yeah yeah, yeah, I mean taking away you know, not 1:26:22.200 --> 1:26:25.680 allowing food stand payments for SODA's and juke food you know, 1:26:25.720 --> 1:26:27.120 which Walmart sews a lot of. 1:26:27.200 --> 1:26:29.640 So I was shocked. Walmart receives an estimate twenty six 1:26:29.720 --> 1:26:33.679 percent of SNAPS Supplemental Nutrition Assistance program spending. 1:26:34.280 --> 1:26:36.680 So yeah, Jaywon told me that I was shocked too. 1:26:36.760 --> 1:26:39.240 Yeah, that's a lot. Hey, listen, we've only got about 1:26:39.240 --> 1:26:41.880 a minute left. And I feel like the way you 1:26:42.000 --> 1:26:46.719 begin it and kind of end this idea of McMillan. 1:26:46.800 --> 1:26:50.120 In terms of Sam Walton's office, it took him a 1:26:50.120 --> 1:26:52.120 while to even once he was, you know, right, to 1:26:52.280 --> 1:26:54.559 kind of sit there and feel like he could be there. 1:26:54.960 --> 1:26:58.840 But now he's kind of a little melancholy about leaving it. 1:26:59.040 --> 1:27:02.280 Yeah, even the so even though you know, when you 1:27:02.320 --> 1:27:04.479 think about it, it's I mean, it's just I mean, 1:27:04.880 --> 1:27:06.200 obviously you. 1:27:06.080 --> 1:27:08.800 Don't describe it in a really it's not an upscale 1:27:09.120 --> 1:27:10.240 corner CEO. 1:27:11.439 --> 1:27:13.400 No, he can do better. He can be in a 1:27:13.560 --> 1:27:16.439 he can be in the higher floor and you have 1:27:16.479 --> 1:27:17.920 a little bit more light. I have a feeling that, 1:27:18.000 --> 1:27:19.639 you know, the new campus is going to suit him 1:27:19.680 --> 1:27:20.040 just fine. 1:27:20.080 --> 1:27:22.720 So so he'll be okay, he'll eventually he'll get over 1:27:22.720 --> 1:27:26.000 the melancholy and leave it. It's an incredible deep dive 1:27:26.040 --> 1:27:29.640 about a company that we talk about so much for 1:27:29.680 --> 1:27:31.760 so many different reasons, certainly in terms of retail, but 1:27:31.800 --> 1:27:33.280 what it tells us about the consumer and what it 1:27:33.320 --> 1:27:36.200 really tells us about a slice of life in America 1:27:36.240 --> 1:27:38.720 in a big way. Thank you for sharing this check 1:27:38.800 --> 1:27:41.080 of time with us. I really appreciate it. Devin Leonard, 1:27:41.080 --> 1:27:44.080 He's senior global business writer a Bloomberg Business Week. This 1:27:44.240 --> 1:27:47.040 is the cover story of the new issue of Bloomberg 1:27:47.080 --> 1:27:50.120 Business Week. We've got it. Some of you maybe don't 1:27:50.120 --> 1:27:52.599 have it yet, but we have it. But it's coming 1:27:52.640 --> 1:27:54.439 your way and it's a great deep dive and you 1:27:54.439 --> 1:27:55.760 can check it out on the Bloomberg and also a 1:27:55.760 --> 1:27:57.200 Bloomberg dot com. Devin, thank you. 1:28:05.280 --> 1:28:08.920 This is the Bloomberg Business Week podcast. Listen live each 1:28:08.920 --> 1:28:12.360 weekday starting at two pm Eastern on Applecarplay and Android 1:28:12.360 --> 1:28:15.400 Auto with the Bloomberg Business app. You can also listen 1:28:15.520 --> 1:28:18.759 live on Amazon Alexa from our flagship New York station, 1:28:19.320 --> 1:28:21.960 Just say Alexa Play Bloomberg eleven thirty. 1:28:23.760 --> 1:28:26.439 Medspas short for medical. 1:28:26.680 --> 1:28:27.760 Count me in, Count me in. 1:28:28.120 --> 1:28:32.400 They offer let's say, let's call them aesthetic enhancements. 1:28:33.000 --> 1:28:33.519 Sign me up. 1:28:33.560 --> 1:28:36.439 Okay. Some of them specialize in lasers to zapp unwanted 1:28:36.439 --> 1:28:39.880 hair or resurface skin. Others offer injections of all kinds botox, 1:28:39.920 --> 1:28:43.280 lip filler, fat dissolver, butt plumper. So this is why 1:28:43.320 --> 1:28:44.880 you got to read this stuff ahead of time and 1:28:44.920 --> 1:28:49.160 say sign I. 1:28:49.080 --> 1:28:52.800 Have not done most of those, okay, including the butt 1:28:52.840 --> 1:28:54.960 plumper okay enough. 1:28:55.200 --> 1:29:00.599 According to data from the American Medspas Association, actually wrote, 1:29:00.640 --> 1:29:01.280 I just copied it. 1:29:01.520 --> 1:29:02.040 That's what I guess. 1:29:02.080 --> 1:29:05.240 How good it is. The industry expanded more than sixfold 1:29:05.280 --> 1:29:08.400 from twenty ten to twenty twenty three, from about sixteen 1:29:08.479 --> 1:29:11.479 hundred locations to more than ten thousand. Average annual revenue 1:29:11.479 --> 1:29:14.439 per spa more than double during that period, reaching almost 1:29:14.439 --> 1:29:18.160 one point four million dollars per spa as Amandimal writes, 1:29:18.600 --> 1:29:20.679 the US is in the middle of a medspa boom, 1:29:20.680 --> 1:29:22.599 and you can see it all over our faces. 1:29:22.760 --> 1:29:24.040 That he was going to say, you could see it 1:29:24.040 --> 1:29:27.160 all over Carol's face, That's not the case. She is 1:29:27.200 --> 1:29:31.200 Bloomberg BusinessWeek senior reporter Amanda mull Is, and she does 1:29:31.320 --> 1:29:34.840 right about this and the boom and medspas for Business Week. 1:29:35.080 --> 1:29:37.320 Check out her story on the Bloomberg and at Bloomberg 1:29:37.320 --> 1:29:39.479 dot com slash BusinessWeek. She joins us from Brooklyn, where 1:29:39.479 --> 1:29:44.680 apparently it's booming and medspas. Yeah, tell us what's going on. 1:29:45.360 --> 1:29:48.559 No matter where our listeners are, if they're in the US, 1:29:48.600 --> 1:29:51.320 they have probably noticed this. In their own town or 1:29:51.400 --> 1:29:55.520 community or neighborhood. Pretty much across the country, almost everywhere, 1:29:56.040 --> 1:29:58.360 there has been a real uptick in the opening of 1:29:58.960 --> 1:30:03.120 storefront businesses in malls and shopping centers, in strip malls. 1:30:02.880 --> 1:30:04.960 There's one in. 1:30:04.760 --> 1:30:08.479 My hometown outside of Atlanta, near the grocery store where 1:30:08.479 --> 1:30:11.240 I went when I when I was growing up, and 1:30:11.640 --> 1:30:13.799 there has been like just this real boom and opening 1:30:13.800 --> 1:30:18.479 these businesses. And they offered just a really wide selection 1:30:18.760 --> 1:30:23.400 of services, everything from off brand weight loss shots to 1:30:23.800 --> 1:30:29.280 botox to laser hair removal, to ivs for if you're hungover. 1:30:29.600 --> 1:30:33.080 There's a lot of money in this stuff. Insurance doesn't 1:30:33.120 --> 1:30:36.719 really cover it. These are cash businesses. What's the training 1:30:36.800 --> 1:30:39.400 of the folks who are doing the injecting? These are 1:30:39.400 --> 1:30:41.400 not doctors we're talking about. 1:30:41.200 --> 1:30:44.400 In most cases in medspas, they're not doctors. What the 1:30:44.439 --> 1:30:47.080 exact training is for your injector is going to vary 1:30:47.080 --> 1:30:51.960 depending on what state you're in. The licenser required is 1:30:52.280 --> 1:30:55.240 going to depend on local laws, But in most cases 1:30:55.240 --> 1:30:59.479 they are going to be nurse practitioners, physicians, assistants, registered nurses, 1:31:00.000 --> 1:31:04.120 nobody who could give you a vaccine injection at your 1:31:04.160 --> 1:31:07.519 doctor's office. Is also allowed to inject other things into you. 1:31:07.600 --> 1:31:08.799 Basically in most places. 1:31:09.120 --> 1:31:11.479 You know what's fascinating too, Yeah, you have kind of 1:31:11.479 --> 1:31:15.320 your typical dermatology offices right where there are doctors who 1:31:15.360 --> 1:31:18.200 do this stuff to cost you. It's kind of coused 1:31:18.240 --> 1:31:22.040 you and it ain't govid. But having said that, you're right, like, 1:31:22.160 --> 1:31:25.080 I feel like I walk into all kinds of offices, 1:31:25.200 --> 1:31:29.760 dental offices everywhere, They're all offering all these kinds of services. 1:31:30.280 --> 1:31:33.960 But I do say these particular medspas, right, it's a 1:31:33.960 --> 1:31:35.720 combination of like a place that you used to go 1:31:35.760 --> 1:31:38.320 maybe for a spot to get a facial and a massage, 1:31:38.520 --> 1:31:41.360 but it's kind of juiced up with all these other things. 1:31:41.920 --> 1:31:42.120 Right. 1:31:42.200 --> 1:31:46.160 A lot of these businesses that are specifically medspas are 1:31:46.200 --> 1:31:50.120 going to offer things like eyelash extensions or massages or 1:31:50.840 --> 1:31:56.120 traditional services provided by estheticians like facials. So you get 1:31:56.120 --> 1:32:00.160 this mix of non medical beauty treatments and these like 1:32:00.280 --> 1:32:03.760 very medical grade, very serious things that you know, our 1:32:03.880 --> 1:32:05.920 things are being injected into you, or these very high 1:32:05.960 --> 1:32:09.360 powered lasers are being or other types of energy tools 1:32:09.360 --> 1:32:11.679 are being used on your your face or your body. 1:32:12.400 --> 1:32:15.040 So it really has like expanded what we think of 1:32:15.120 --> 1:32:17.400 when we think of, like, you know, the old school 1:32:17.439 --> 1:32:21.000 notion of the beauty salon. A lot of these these 1:32:21.080 --> 1:32:25.200 things that people access to change their appearances now are 1:32:25.680 --> 1:32:27.920 are like quite serious, medical grade treatments. 1:32:27.960 --> 1:32:29.599 Yeah, this is so much better than a blowout. I'm 1:32:29.600 --> 1:32:31.000 just going to say in terms of, like, you know, 1:32:31.439 --> 1:32:36.280 our haircut. Hey having said that, if the botox phenomenon, like, 1:32:36.360 --> 1:32:39.200 we know that it's used for medical reasons, but it's 1:32:39.240 --> 1:32:42.600 also used for a lot of cosmetic reasons. If botax 1:32:42.640 --> 1:32:45.800 hadn't come along, might this industry not have taken off? 1:32:46.360 --> 1:32:48.400 I think it probably still would have taken off to 1:32:48.560 --> 1:32:53.000 some extent. Okay, but botox is really the origin point 1:32:53.080 --> 1:32:55.120 for a lot of what we see today. When it 1:32:55.160 --> 1:32:58.240 was approved for esthetic use in two thousand and two, 1:32:58.400 --> 1:33:00.360 there was a huge amount of publicity around, a huge 1:33:00.360 --> 1:33:02.760 amount of interest in it from the general public. And 1:33:02.960 --> 1:33:05.120 you know, anybody who's tried to book a specialist appointment, 1:33:05.160 --> 1:33:07.040 no matter how good your health insurance is, no matter 1:33:07.040 --> 1:33:09.360 how good how willing you are to pay cash, there's 1:33:09.400 --> 1:33:11.599 just not a lot of specialist physicians in the US. 1:33:11.640 --> 1:33:12.879 So it didn't take long. 1:33:12.720 --> 1:33:18.040 Before dermatologists and plastic surgery. Surgery offices were just overwhelmed 1:33:18.040 --> 1:33:20.639 by the number of people looking for you know, relative 1:33:20.680 --> 1:33:24.040 to other services, they provide something that is relatively small, 1:33:24.080 --> 1:33:28.840 relatively quick, relatively non invasive. So that is when a 1:33:28.880 --> 1:33:33.240 lot of you know, eye doctors offices, dentists offices started 1:33:33.280 --> 1:33:38.080 adding botox specifically to their to their offerings, and other 1:33:38.200 --> 1:33:42.000 other types of treatments like laser hair removal and fillers, 1:33:42.560 --> 1:33:46.559 uh had sort of come along and become inexpensive enough 1:33:46.600 --> 1:33:48.719 to be marketed to the general public at the same time, 1:33:49.240 --> 1:33:53.280 and you know, taken together, those those things really just 1:33:53.439 --> 1:33:54.639 exploded this industry. 1:33:54.720 --> 1:33:56.000 I mean, I'm just going to tell you tim is 1:33:56.000 --> 1:33:57.680 related into fillers. I'm just going to tell you that. 1:33:57.720 --> 1:34:01.200 Well, speaking of that, I'm so afraid of needles. I 1:34:01.200 --> 1:34:05.519 assume it involves needles, right, yeah, no, way like needles. 1:34:05.560 --> 1:34:07.759 Not a fan. What's mar A Lago face? 1:34:08.240 --> 1:34:09.920 Well, mar Alago face is. 1:34:12.280 --> 1:34:15.160 It's like upsetting that you know what when you see it. 1:34:17.560 --> 1:34:19.120 This is just on the Supreme Court. 1:34:20.000 --> 1:34:23.799 Yes, this is a term that has has become popular 1:34:23.840 --> 1:34:27.560 recently to describe some of the you know, Kimberly Gilfoyle, 1:34:27.960 --> 1:34:32.960 some of the members of the Trump family Matt Getz 1:34:33.000 --> 1:34:38.080 who have sort of clearly had botox or fillers or 1:34:38.280 --> 1:34:42.519 some laser services or all of the above and have 1:34:42.600 --> 1:34:45.320 a very sort of like Real Housewives look. That is 1:34:45.400 --> 1:34:47.879 like traditionally what I think of it as because I 1:34:47.920 --> 1:34:49.599 am a you know, a Real. 1:34:49.400 --> 1:34:53.559 Housewives fan from late two. But yeah, it is. 1:34:53.520 --> 1:34:58.639 Really this sort of like very tweaked, very plumped, very smooth, shiny, 1:34:59.000 --> 1:35:02.479 like slightly over filled. Maybe some of the filler has 1:35:02.520 --> 1:35:04.559 migrated and you look a little doe or a little 1:35:04.600 --> 1:35:05.120 lumpy in. 1:35:05.040 --> 1:35:07.000 The face like that. 1:35:07.000 --> 1:35:09.759 That sort of combination of lots of lots and lots 1:35:09.760 --> 1:35:12.840 of procedures that have sort of all been sort of 1:35:12.960 --> 1:35:16.080 layered over time is mar Alago face. 1:35:16.160 --> 1:35:18.280 Really it's big business. Though we're having fun with this, 1:35:18.400 --> 1:35:21.599 but it is huge business. And there's also, as most 1:35:21.600 --> 1:35:24.400 things do, have a little private equity component. 1:35:24.840 --> 1:35:28.120 Yes, it is an enormous business. The the companies that 1:35:28.200 --> 1:35:33.760 make botox and fillers, Allergan, et cetera, have had a 1:35:33.840 --> 1:35:37.400 huge windfall from developing these these products that can be administered, 1:35:37.400 --> 1:35:40.680 you know, non surgically in these sort of like not 1:35:40.840 --> 1:35:46.560 quite doctors offices types of businesses, and the business itself 1:35:46.640 --> 1:35:50.360 has exploded with the you know, there's been a sixfold 1:35:50.439 --> 1:35:53.800 increase in the number of MEDSPA locations in the US 1:35:53.840 --> 1:35:59.639 since twenty ten, and naturally, like like any growing business, 1:36:00.360 --> 1:36:03.920 private equity has has come calling, you know some some 1:36:03.960 --> 1:36:06.000 firms have looked to do roll ups. Some firms have 1:36:06.080 --> 1:36:10.280 looked to buy larger chains of medspas. It's been a 1:36:10.320 --> 1:36:14.639 little bit difficult though. Private equity currently only operates about 1:36:14.640 --> 1:36:18.599 three percent of the medspas in the United States. Most 1:36:18.640 --> 1:36:22.800 of them more than seventy percent are you know, one 1:36:22.840 --> 1:36:27.720 off owners, sole proprietors. There's some small chains, so it's 1:36:27.760 --> 1:36:31.200 really been hard for private equity firms who have made such, 1:36:31.400 --> 1:36:34.640 you know, enormous profits in other sectors of healthcare to 1:36:34.720 --> 1:36:38.360 find businesses that are big enough to be efficiently rolled up. 1:36:38.560 --> 1:36:40.480 It is a very mom and pop business. 1:36:40.800 --> 1:36:42.320 I was trying to come up with some sort of joke. 1:36:42.400 --> 1:36:44.880 Are you looking for the like a medspa near you 1:36:45.040 --> 1:36:45.479 right now? 1:36:45.640 --> 1:36:47.840 Well, I mean I feel attacked in this story because 1:36:47.840 --> 1:36:50.400 I live in the neighborhood that she writes about, and 1:36:50.439 --> 1:36:52.240 I'm never going to be able to walk down the 1:36:52.280 --> 1:36:55.680 street from the subway to my home. You'out noticing medspas 1:36:55.720 --> 1:36:56.400 you're among friends. 1:36:56.400 --> 1:36:58.320 It's owner speed dial. Come on, just be cool. 1:36:58.439 --> 1:37:02.440 Yeah, yeah, I'm I'm never going to not notice. 1:37:02.200 --> 1:37:02.800 These things now. 1:37:02.920 --> 1:37:06.080 They are everywhere, and it's pretty well amendimal. This is 1:37:06.120 --> 1:37:07.960 such a great story. We're so glad we could get 1:37:08.000 --> 1:37:10.080 to you on it and share it with our audience. 1:37:10.080 --> 1:37:11.800 I feel like everybody needed the story to kind of 1:37:11.840 --> 1:37:14.040 wrap up the day in the week, have a great weekend, 1:37:14.080 --> 1:37:16.800 Be well, a minimal. She's Bloomberg Business Week senior reporter 1:37:16.920 --> 1:37:18.679 joining us from Brooklyn. 1:37:20.520 --> 1:37:24.240 This is the Bloomberg Business Week Podcast. Listen live each 1:37:24.320 --> 1:37:27.679 weekday starting at two pm Eastern on applecar Play and 1:37:27.680 --> 1:37:30.559 Android Auto with the Bloomberg Business app. You can also 1:37:30.680 --> 1:37:34.000 listen live on Amazon Alexa from our flagship New York station, 1:37:34.479 --> 1:37:37.440 Just Say Alexa played Bloomberg eleven thirty. 1:37:39.040 --> 1:37:40.920 Well med spas in the US. Help us put our 1:37:40.920 --> 1:37:43.880 best face and body forward. Thousands of miles in a 1:37:43.920 --> 1:37:46.880 continent away is beauty that's been shrouded in myth and 1:37:46.920 --> 1:37:48.639 mystery for a very long time. 1:37:48.880 --> 1:37:51.400 It's one of the greatest private troves of antiquities that 1:37:51.439 --> 1:37:53.799 has been hidden away for more than half a century. 1:37:53.800 --> 1:37:57.720 In Rome and Bloomberg BusinessWeek Arts columnist James Tarmi was 1:37:57.760 --> 1:37:59.759 one of the few allowed to peek inside. 1:38:00.160 --> 1:38:04.360 Most even really rich people's collections don't have such incredible 1:38:04.520 --> 1:38:08.320 international importance. And this family, which was sort of a 1:38:08.520 --> 1:38:13.360 pre industrial fortune that was created just before like modernity 1:38:13.400 --> 1:38:15.519 as we think of it. So they were basically so 1:38:15.800 --> 1:38:20.400 rich that they were able to buy everything before like 1:38:20.479 --> 1:38:24.160 the Rockefellers and the Morgans and the Getty's sort of 1:38:24.200 --> 1:38:27.000 came in after them. They were there first, so they 1:38:27.120 --> 1:38:30.080 bought all of these fading aristocratic family stuff and then 1:38:30.120 --> 1:38:33.840 they kept it all. So it's collections of collections, and 1:38:34.320 --> 1:38:39.720 they were able to amass this humongous amount of treasures 1:38:39.880 --> 1:38:43.160 in a very short period of time, and as a result, 1:38:43.520 --> 1:38:47.520 they kind of have a lot of Italian cultural patrimony 1:38:47.600 --> 1:38:50.800 to themselves. So it's a little bit more fraught than 1:38:50.920 --> 1:38:52.639 someone's trophy pictures on the wall. 1:38:52.840 --> 1:38:54.920 I mean there are if you go online check it 1:38:54.920 --> 1:38:56.920 out of the Bloomberg there are a few pictures there. 1:38:56.920 --> 1:38:58.800 But you know, you said, it kind of like blew 1:38:58.840 --> 1:39:00.960 your mind when you walk take us there, like when 1:39:01.439 --> 1:39:03.080 he walked in, and like. 1:39:02.720 --> 1:39:06.320 Like what was this family, which to be clear, still 1:39:06.400 --> 1:39:10.360 is very very well off, has a couple of things. 1:39:10.800 --> 1:39:14.479 One of them is a twenty acre compound in the 1:39:14.520 --> 1:39:18.720 heart of Rome behind very high walls that is not 1:39:19.360 --> 1:39:23.400 really available for the public view and you can't take photographs, 1:39:23.439 --> 1:39:27.160 and they let me inside and it is just mind 1:39:27.200 --> 1:39:32.400 boggling over twelve hundred antique statues there. They also have 1:39:32.439 --> 1:39:37.400 an indoor outdoor pavilion of Egyptian antiquities. It's really something 1:39:37.400 --> 1:39:43.080 else and it's theirs. Then they also have this the 1:39:43.160 --> 1:39:48.360 Torlonia Collection, right, which is in a warehouse in Trusteveray, 1:39:48.720 --> 1:39:52.320 and they have a conservation laboratory there. And then they 1:39:52.360 --> 1:39:55.479 also have a warehouse where everything is stored and there 1:39:55.520 --> 1:39:59.679 are it's literally like an army of statues, but it's 1:40:00.479 --> 1:40:05.240 each statue is an unbelievable, super important work of art. 1:40:05.439 --> 1:40:08.960 And there's just row after row after row busts going 1:40:09.040 --> 1:40:11.639 up to the ceiling and it's all theirs, and they're 1:40:11.760 --> 1:40:14.160 you know, people are aware of it, but people are 1:40:14.160 --> 1:40:18.280 not allowed inside. However, they're beginning to loan these things 1:40:18.320 --> 1:40:21.040 out into museums around the world. 1:40:21.720 --> 1:40:25.680 Why well, the sorry tim I had to ask. 1:40:26.040 --> 1:40:31.360 The patriarch of the family, this man named Alessandra, who's 1:40:31.400 --> 1:40:36.439 the fourth prince Torlonia died and shortly before he died, 1:40:36.560 --> 1:40:40.320 he created a foundation that would manage these things. The 1:40:40.320 --> 1:40:44.000 foundation doesn't own them, it manages them, and his grandson, 1:40:44.040 --> 1:40:46.800 who's a very forward thinking guy named also named Alessandra, 1:40:48.360 --> 1:40:54.200 is basically trying to lend out works to museums around 1:40:54.200 --> 1:40:59.120 the world in exchange for those museums doing conservation. 1:40:58.640 --> 1:41:01.400 Work actually can cost so much money, as you. 1:41:01.360 --> 1:41:04.639 Write, over one hundred thousand dollars to conserve a single statue, 1:41:04.720 --> 1:41:06.120 and so it's amazing. 1:41:06.360 --> 1:41:06.679 Yeah. 1:41:06.720 --> 1:41:10.280 So basically what they're doing is they're letting people sort 1:41:10.320 --> 1:41:11.920 of in. I mean they're not actually letting them in, 1:41:12.720 --> 1:41:15.280 but they're letting people see these works sort of in 1:41:15.360 --> 1:41:21.280 exchange for restoring them to the condition that they should 1:41:21.280 --> 1:41:25.080 be in. And in the process, you know, people everywhere 1:41:25.080 --> 1:41:27.200 going to see them. They did a huge show at 1:41:27.240 --> 1:41:29.800 the Louver. It was the most visited exhibition at the 1:41:29.840 --> 1:41:33.040 Louver in all of twenty twenty four. This is not 1:41:33.080 --> 1:41:35.360 like a niche subject. This is a big deal. 1:41:35.560 --> 1:41:39.360 I don't want to be rude, but I still hope 1:41:39.400 --> 1:41:39.920 you're going there. 1:41:40.000 --> 1:41:40.200 Yeah. 1:41:40.439 --> 1:41:44.960 Good, you say things can be priceless. How much is 1:41:45.000 --> 1:41:46.479 this collection worth? 1:41:46.920 --> 1:41:50.519 So this is a subject of some debate in the 1:41:50.560 --> 1:41:56.599 Italian press. In particular, I can speculate I have no 1:41:57.120 --> 1:42:01.320 official reporting that would back this up. Italian press has 1:42:01.360 --> 1:42:05.160 speculated that it is well over a billion euros. Some 1:42:05.200 --> 1:42:07.960 have put the tune to two or three billion euros 1:42:08.040 --> 1:42:10.960 in their art collection, just in the antiquity collection, Yes, 1:42:11.120 --> 1:42:12.400 just the antiquity. 1:42:12.040 --> 1:42:15.080 Collection, right, So help me out here? 1:42:15.120 --> 1:42:16.040 Is that where you wanted me to go? 1:42:16.200 --> 1:42:16.280 No? 1:42:16.520 --> 1:42:19.400 Absolutely, but I'm so glad you went there. So wait 1:42:20.040 --> 1:42:22.880 the idea, Are they being altruistic or do they need 1:42:22.920 --> 1:42:25.799 the money to help do some of those conservation efforts 1:42:25.880 --> 1:42:28.080 or why don't they just sell off a piece? But 1:42:28.200 --> 1:42:30.000 we know it's to do some of it. So I'm 1:42:30.000 --> 1:42:30.919 just trying to understand. 1:42:30.960 --> 1:42:33.960 Well, so the business of it, they neither need the money. 1:42:34.120 --> 1:42:37.559 They are still a very very rich family, And I 1:42:37.600 --> 1:42:40.400 also don't think it's quite altruistic. I think that there 1:42:40.439 --> 1:42:44.080 has been a lot of controversy over the years because 1:42:44.120 --> 1:42:47.360 everyone's known that they have this collection, which is again 1:42:47.760 --> 1:42:51.720 a collection of very important different collections, and a lot 1:42:51.760 --> 1:42:55.040 of people have wanted to see it. The now deceased 1:42:55.080 --> 1:42:58.000 patriarch was had a sort of antagonistic relationship with the 1:42:58.040 --> 1:43:01.639 Italian government. But this is speculation. There was a lot 1:43:01.680 --> 1:43:04.519 of back and forth different At different points people were 1:43:05.120 --> 1:43:08.040 calling to seize the collection. At different points people were 1:43:08.080 --> 1:43:11.040 saying that the Italian station by the collection. I think 1:43:11.080 --> 1:43:15.799 this solves a lot of problems. Right, They're letting people 1:43:16.560 --> 1:43:21.280 experience this while simultaneously not giving up any of their 1:43:21.320 --> 1:43:25.000 control over the family's own stuff. I also think that 1:43:25.120 --> 1:43:28.680 selling it would be an extremely fraught proposition. Again, this 1:43:28.800 --> 1:43:32.120 is speculation on my part, but it You know, I 1:43:32.360 --> 1:43:34.439 don't think that you can really parcel it off that easily. 1:43:34.439 --> 1:43:36.280 Do you pick up a little something something on your way? 1:43:36.360 --> 1:43:38.439 Oh yeah, I just I flew home with a bust 1:43:38.520 --> 1:43:39.320 in my carry. 1:43:39.040 --> 1:43:40.800 Off finger that had fallen off. 1:43:41.160 --> 1:43:44.000 No, no, that's exactly how how we had Bloomberg. 1:43:43.560 --> 1:43:47.200 Do things caring levity seconds. 1:43:47.200 --> 1:43:49.440 If someone wants to see any part of the collection. 1:43:49.280 --> 1:43:52.840 It is coming to the Art Institute of Chicago. Over 1:43:53.120 --> 1:43:55.680 fifty sculptures more than that from the collection are going 1:43:55.720 --> 1:43:56.160 to be on you. 1:43:56.320 --> 1:43:57.720 I thought you're gonna say, if anybody wants to see 1:43:57.720 --> 1:43:59.280 the piece that James brought. 1:43:59.200 --> 1:44:02.479 Home, that's on my desk, sid Brook friend, thanks to. 1:44:02.479 --> 1:44:06.759 Your Bloomberg statue. Right, how many years. NA, I'm just kidding, 1:44:07.320 --> 1:44:09.800 just kidding, Little Levity. James Tarmy, we love you. 1:44:09.880 --> 1:44:10.719 It's just needed. 1:44:10.760 --> 1:44:14.320 On this Wednesday. He is arts communist for Bloomberg Business Week. 1:44:15.880 --> 1:44:20.720 This is the Bloomberg Business Week podcast, available on Apple, Spotify, 1:44:20.840 --> 1:44:24.559 and anywhere else you get your podcasts. Listen live weekday 1:44:24.600 --> 1:44:28.599 afternoons from two to five pm Eastern on Bloomberg dot com, 1:44:28.640 --> 1:44:32.559 the iHeartRadio app, tune In, and the Bloomberg Business App. 1:44:32.800 --> 1:44:35.599 You can also watch us live every weekday on YouTube 1:44:35.800 --> 1:44:37.960 and always on the Bloomberg terminal