WEBVTT - Bloomberg Businessweek Weekend - June 14th, 2024 0:00:02.440 --> 0:00:06.800 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.400 --> 0:00:12.799 This is Bloomberg business Week Inside from the reporters and 0:00:12.960 --> 0:00:16.520 editors who bring you America's most trusted business magazine, plus 0:00:16.600 --> 0:00:20.760 global business, finance and tech news. The Bloomberg Business Week 0:00:20.800 --> 0:00:25.720 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:28.400 --> 0:00:31.200 Hi, everyone, Welcome to the Bloomberg Business Week weekend podcast. 0:00:31.560 --> 0:00:33.880 Top of mind for us this week well, the Apple 0:00:34.000 --> 0:00:38.320 rally following an event focused on artificial intelligence, which Fueld 0:00:38.360 --> 0:00:40.879 hopes that customers will pay up for the next generation 0:00:40.960 --> 0:00:43.479 of iPhones. The stock by the way, hitting a record 0:00:43.479 --> 0:00:47.320 and overtaking Microsoft and marketcap at one point. We'll have 0:00:47.320 --> 0:00:48.400 more on that in a moment. 0:00:48.640 --> 0:00:51.599 Plus, the FED dialing back rate forecast just won this 0:00:51.680 --> 0:00:55.360 year and still on inflation watch despite encouraging CPI and 0:00:55.560 --> 0:00:58.279 PPI readings this past week. We'll get into one part 0:00:58.320 --> 0:00:59.880 of the Fed's dual mandate job. 0:01:00.320 --> 0:01:03.240 Also, the conversation this week that we just can't stop 0:01:03.280 --> 0:01:06.959 talking about. It involves Henry Ford, Bill Clinton, Toyota, the 0:01:07.080 --> 0:01:12.080 Lean Taliban, McKinsey, and Moore and explains so much in 0:01:12.120 --> 0:01:12.600 our world. 0:01:12.720 --> 0:01:13.160 Peter S. 0:01:13.240 --> 0:01:15.760 Goodman with a deep dive on his new book, How 0:01:15.800 --> 0:01:18.200 the World Ran Out of Everything. He stops by a 0:01:18.240 --> 0:01:20.760 little later all that to come. We begin, though, with 0:01:20.840 --> 0:01:23.840 the FED and the US labor market, vetcher J. Powell, 0:01:23.959 --> 0:01:27.200 noting that broad data suggests the US job market is 0:01:27.280 --> 0:01:30.880 back to pre COVID levels and strong but cooling, and 0:01:30.920 --> 0:01:33.640 that if jobs were to weaken unexpectedly, the FED is 0:01:33.720 --> 0:01:34.640 ready to respond. 0:01:34.800 --> 0:01:37.240 This is against a backdrop where we see fewer people 0:01:37.360 --> 0:01:41.000 quitting their jobs and fewer getting promoted, leaving little room 0:01:41.080 --> 0:01:43.600 for new workers to break through as the ranks of 0:01:43.640 --> 0:01:46.520 employees above them stay in place, and it makes it 0:01:46.600 --> 0:01:48.960 more difficult for young graduates to get their foot in 0:01:48.960 --> 0:01:49.280 the door. 0:01:49.480 --> 0:01:51.760 For more, we caught up with Jane Oates, senior policy 0:01:51.800 --> 0:01:54.640 advisor at Working Nation. It's a media company that focuses 0:01:54.640 --> 0:01:58.040 on the future of work. Also, she's former Assistant Secretary 0:01:58.040 --> 0:02:01.120 of Employment and Training in the Obama administry. We talked 0:02:01.160 --> 0:02:03.080 with her before that Shed decision. 0:02:03.360 --> 0:02:07.040 Look, obviously the economy's tightening slightly. It couldn't stay where 0:02:07.080 --> 0:02:10.799 it was, you know, with three jobs for everybody looking 0:02:11.080 --> 0:02:13.240 so it's tightening a little bit. But you know, I 0:02:13.240 --> 0:02:17.600 think people are not moving and it's creating a real logjam. 0:02:17.880 --> 0:02:20.600 You know, we have four million people leaving college this 0:02:20.680 --> 0:02:24.080 time of year and another million and a half leaving 0:02:24.200 --> 0:02:26.640 high school that want to go right into the workforce. 0:02:26.919 --> 0:02:28.919 It's going to be tough for the next few months. 0:02:29.000 --> 0:02:31.000 I don't get it. It's just kind of wild, right, 0:02:31.080 --> 0:02:34.480 Like we talk about a tight labor market. People need workers, 0:02:34.680 --> 0:02:38.480 and yet right it's just these weird kind of I 0:02:38.480 --> 0:02:41.520 don't know, cross currents. It's hard to make sense to 0:02:41.560 --> 0:02:43.959 some extent about what really is going on in the 0:02:44.000 --> 0:02:44.680 labor market. 0:02:44.960 --> 0:02:47.440 I mean, look, Carol, some of it's geography. There are 0:02:47.480 --> 0:02:49.800 all these jobs open, but they're in places where there 0:02:49.800 --> 0:02:53.840 aren't people looking. Some of it's a skills mismatch, and 0:02:53.919 --> 0:02:55.920 some of it I have to tell you, you know, 0:02:56.040 --> 0:03:00.600 I like to like blame the automated software that's looking 0:03:00.639 --> 0:03:03.839 at resumes. I think that businesses are missing a lot 0:03:03.880 --> 0:03:07.080 of talented people because whatever they forgot to put in 0:03:07.080 --> 0:03:09.720 their cover letter and on their resume isn't matching the 0:03:09.880 --> 0:03:12.960 language in the job description, so they're not getting the job. 0:03:13.120 --> 0:03:15.080 Does it work both ways? I was talking to somebody 0:03:15.080 --> 0:03:17.080 who was doing some hiring ahead of intern seas and 0:03:17.080 --> 0:03:19.320 then she told me this is a shocking number. They're 0:03:19.360 --> 0:03:22.880 basically thirty places for interns. At the organization that she 0:03:22.919 --> 0:03:26.640 works in. They got thousands of applications Jane for those 0:03:26.680 --> 0:03:29.880 thirty spots, and I'm thinking to myself, how are you 0:03:29.919 --> 0:03:33.000 getting so many applicants? Are people just doing this automatically? 0:03:33.040 --> 0:03:34.440 Are they sending how does this work? 0:03:34.760 --> 0:03:38.680 I think people are really interested in this paid internship thing. 0:03:38.760 --> 0:03:42.440 They realize that it's work based learning at its best 0:03:42.760 --> 0:03:45.000 because they don't make a long term commitment like in 0:03:45.040 --> 0:03:48.400 a registered apprenticeship program. But they're able to get in 0:03:48.720 --> 0:03:51.040 see if they like the employer, see if they like 0:03:51.120 --> 0:03:53.600 the work. So it is really hot right now to 0:03:53.600 --> 0:03:56.920 get a paid internship, an internship of any kind. But 0:03:57.000 --> 0:03:59.680 most people need the salary to go along with it. 0:03:59.800 --> 0:04:03.160 But I understand I like business too much to handle 0:04:03.160 --> 0:04:05.920 on them. But I do think, you know, I know 0:04:06.000 --> 0:04:08.360 how conversome they have to keep their business going. They 0:04:08.360 --> 0:04:11.000 don't have time to look at thousands of applications for 0:04:11.080 --> 0:04:14.040 thirty open interns the ships. You're right, Tim, I get that. 0:04:14.320 --> 0:04:17.080 One of the things I keep thinking about the future 0:04:17.160 --> 0:04:21.839 workforce because it seems like globalization has really increasingly gotten 0:04:21.920 --> 0:04:24.520 rid of middle class, well paying jobs. It really allowed 0:04:24.560 --> 0:04:28.280 people to have a good life, buy a home, support 0:04:28.279 --> 0:04:30.680 their family, go on vacation, and that we've kind of 0:04:30.720 --> 0:04:34.400 gotten rid of a lot of those jobs in the 0:04:34.400 --> 0:04:37.560 middle sector, if you will. And I do wonder kind 0:04:37.560 --> 0:04:40.760 of if we're not fertility rates are low people, you know, 0:04:41.560 --> 0:04:43.520 where's the future workforce going to be? Is it going 0:04:43.560 --> 0:04:48.200 to be robotic automated AI? Like I'm trying to understand 0:04:48.279 --> 0:04:50.960 kind of where this all goes Ultimately. 0:04:50.880 --> 0:04:54.119 Well, AI is going to influence every job that's out there, 0:04:54.440 --> 0:04:57.120 and it's also going to influence. 0:04:56.640 --> 0:04:59.520 But how we keep saying like these big broad things 0:04:59.560 --> 0:05:03.080 about a Jane And I'm curious how you see specifically 0:05:03.080 --> 0:05:06.120 that AI, which has been around for decades and already 0:05:06.120 --> 0:05:09.160 impacts our world, how the next generation of AI and 0:05:09.279 --> 0:05:14.359 large language models and so on really change significantly the workforce. 0:05:14.800 --> 0:05:17.080 So there's going to be some media changes that are 0:05:17.080 --> 0:05:20.279 easy to see and some that are less easy to describe. 0:05:20.480 --> 0:05:23.640 But let's look at PR firms, right. PR firms used 0:05:23.640 --> 0:05:26.840 to hire lots of people, junior staff. People would come in, 0:05:27.120 --> 0:05:29.919 they'd write the first draft of something for a customer, 0:05:30.000 --> 0:05:32.920 and then somebody more senior would edit it and finesse 0:05:32.960 --> 0:05:35.159 it because they know the customer better. Right now, people 0:05:35.240 --> 0:05:37.839 are using generative AI to do that first draft. So 0:05:38.279 --> 0:05:41.120 you see real slow down in hiring. You see a 0:05:41.320 --> 0:05:45.440 real problem in coding. You know AI can write code 0:05:45.480 --> 0:05:48.920 faster than any human and basically all those people who 0:05:48.920 --> 0:05:52.000 went to coding camps ten years ago are looking at 0:05:52.040 --> 0:05:54.560 a very limited shelf life right now. Those are too easy. 0:05:54.560 --> 0:05:57.839 Example that was Jane Oates, senior policy advisor at Working 0:05:57.920 --> 0:06:01.120 Nation and former Assistant Secretary of Deployment and Training in 0:06:01.160 --> 0:06:04.120 the Obama administration. For more on the complete FED decision, 0:06:04.120 --> 0:06:06.080 head on over to Bloomberg dot Com. 0:06:06.120 --> 0:06:09.360 Now to another big story this past week, Apple shar 0:06:09.520 --> 0:06:12.320 is hitting a record at one point, overtaking Microsoft during 0:06:12.320 --> 0:06:15.320 the week as the world's largest market cap company. The 0:06:15.360 --> 0:06:18.600 two companies are pretty much neck and neck now. Investors 0:06:18.640 --> 0:06:22.359 pumped up after Apple's annual Worldwide Developers Conference and great 0:06:22.480 --> 0:06:25.640 AI reveal now known as Apple Intelligence. 0:06:26.000 --> 0:06:28.799 For Intel on Apple, we turned to our in house 0:06:28.839 --> 0:06:32.400 go to Bloomberg News chief technology correspondent Mark German. 0:06:32.920 --> 0:06:35.599 They rolled out a bunch of new AI features with 0:06:35.720 --> 0:06:39.600 a privacy stance with deep integration into their applications. They 0:06:39.600 --> 0:06:42.440 didn't bring anything new to the party. But the most 0:06:42.440 --> 0:06:45.240 important part is they showed up to the party, I guess. 0:06:45.279 --> 0:06:48.479 And it took investors in Wall Street sometime to realize 0:06:48.520 --> 0:06:51.080 that Apple is now here, with or without something new. 0:06:51.360 --> 0:06:52.080 They've arrived. 0:06:52.200 --> 0:06:54.160 It was a year and a half for clean effort 0:06:54.360 --> 0:06:56.880 to get Apple Intelligence to market. They had all these 0:06:56.920 --> 0:07:00.720 AI features under development, but no sent the size, no 0:07:00.880 --> 0:07:02.280 integrated package. 0:07:01.920 --> 0:07:03.480 So it took a while to put it all together. 0:07:04.080 --> 0:07:06.520 And they did that, and it's not going to sell 0:07:06.560 --> 0:07:10.440 new iPhones. I believe it may spur a small number 0:07:10.440 --> 0:07:13.760 of upgrades, but more importantly, it's going to lock people 0:07:13.800 --> 0:07:16.440 into the ecosystem. They're going to keep their existing US 0:07:16.480 --> 0:07:19.120 serpace and they're not going to lose people away to 0:07:19.280 --> 0:07:22.360 Android and other AI driven platforms because they did this. 0:07:22.600 --> 0:07:24.200 I do want to ask you, though about the partnership 0:07:24.240 --> 0:07:26.880 with open aii. Right the formal announcement we got that, 0:07:27.240 --> 0:07:29.920 How important is that And is it any different from 0:07:30.200 --> 0:07:33.840 open AI's other partnerships that are out there, And is 0:07:33.840 --> 0:07:36.240 it always different because it's just Apple doing it? 0:07:36.320 --> 0:07:39.360 Oh, the open ai partnership with Apple is incredibly different. 0:07:39.400 --> 0:07:42.480 So let me give you some perspective here. So Microsoft, 0:07:43.040 --> 0:07:45.360 they rolled out a ton of AI features on their 0:07:45.360 --> 0:07:49.840 computers and their other operating systems, the underlying large language models, 0:07:49.840 --> 0:07:52.760 that underlying technology that they're using for nearly all of 0:07:52.800 --> 0:07:56.160 their features is powered by open Ai. Apple's feature set 0:07:56.400 --> 0:07:59.480 ninety percent of it is powered by Apple Large Language models, 0:07:59.560 --> 0:08:03.880 underlying Apple technology, Apple servers, et cetera. Only the chatbot 0:08:03.960 --> 0:08:07.640 portion primarily, and some of the writing assistance tools those 0:08:07.680 --> 0:08:11.440 are powered by open ai Large Language models and chat GPT. 0:08:11.880 --> 0:08:15.200 So the open Ai portion of the overall Apple Intelligence 0:08:15.200 --> 0:08:17.840 story is actually only the very small sliver. All right. 0:08:17.880 --> 0:08:19.160 You know we always talk about the importance of the 0:08:19.240 --> 0:08:21.360 Chinese market to Apple. Is there something here in terms 0:08:21.360 --> 0:08:23.480 of what we're hearing from this event and that kind 0:08:23.520 --> 0:08:26.080 of moves the needle potentially in their sales over in China. 0:08:26.200 --> 0:08:27.200 Yes, good question. 0:08:27.360 --> 0:08:29.480 This is a point that quite frankly, I should have 0:08:29.520 --> 0:08:33.520 made it earlier. Nothing Apple Intelligence, at least the first 0:08:33.559 --> 0:08:39.360 iteration is only available in US or Fish. Yes, in 0:08:39.520 --> 0:08:42.880 the US English, So there's going to be a long 0:08:43.360 --> 0:08:46.199 ramp up here until they're able to get it in 0:08:46.280 --> 0:08:49.440 other languages. Now, I would have to imagine that getting 0:08:49.480 --> 0:08:53.320 Apple Intelligence to work properly outside of the US, outside 0:08:53.320 --> 0:08:56.040 of just US English is going to be very high 0:08:56.080 --> 0:08:59.840 priority for next year, and so I would anticipate China 0:09:00.120 --> 0:09:02.920 next year. It's a priority. So I would imagine AI 0:09:02.960 --> 0:09:04.800 story from Fina was going to get butted up sooner 0:09:04.840 --> 0:09:05.240 than later. 0:09:05.679 --> 0:09:08.320 Is it integrated at the OS level? And you can 0:09:08.360 --> 0:09:11.319 probably guess why I'm asking this mark because I. 0:09:11.280 --> 0:09:14.040 Can guess why you're a few things about that. 0:09:14.160 --> 0:09:16.640 Okay, good, because well I want to introduce it because 0:09:16.679 --> 0:09:18.640 I don't think everybody is totally caught up on this. 0:09:19.120 --> 0:09:21.640 Elon Musk said he would ban Apple devices from his 0:09:21.720 --> 0:09:25.920 companies if openis ai software is integrated at the operating 0:09:25.920 --> 0:09:29.640 system level. He called the tie up a security risk. Okay, 0:09:29.679 --> 0:09:30.760 go ahead, please. 0:09:30.880 --> 0:09:33.880 Something integrated at the OS level. That is a vague 0:09:34.000 --> 0:09:37.320 term that can be interpreted in many different ways, so 0:09:37.440 --> 0:09:40.000 it's not entirely clear what he means by that. If 0:09:40.040 --> 0:09:44.240 you ask me, open Ai is indeed integrated at the 0:09:44.280 --> 0:09:47.400 OS level, and I'm sure Apple would agree, but I'm 0:09:47.440 --> 0:09:49.440 sure there's some other people who would say that it's 0:09:49.440 --> 0:09:52.440 not integrated at the OS level. It's built into Siri, 0:09:52.600 --> 0:09:55.160 it's built into the OS. It's a chatbot. It's not 0:09:55.240 --> 0:09:57.240 just an application. It's not just a layer on top. 0:09:57.480 --> 0:10:00.480 It is fairly integrated into the operating system. So I 0:10:00.480 --> 0:10:03.600 would say, yes, it is integrated, but just because it's 0:10:03.640 --> 0:10:07.120 integrated at the OS level doesn't mean there aren't parameters 0:10:07.240 --> 0:10:11.720 and what's known as sandboxing implemented into the coding infrastructure 0:10:11.960 --> 0:10:15.360 that can separate what goes into chet GPT from the 0:10:16.600 --> 0:10:21.720 deeper core of the iOS foundation. Right, and so the 0:10:21.720 --> 0:10:23.679 burden of proof is on Apple and open Ai to 0:10:23.720 --> 0:10:26.680 show how privacy centric to chat GPT elements are of 0:10:26.679 --> 0:10:30.640 Apple intelligence. Apple did a fifteen out of ten job 0:10:30.800 --> 0:10:35.400 showing how private and secure their artificial intelligence technology is 0:10:35.760 --> 0:10:39.640 for the phone that's the Apple LLLM, how secure their 0:10:39.720 --> 0:10:44.839 their compute cloud is for the LLM that runs inlicloud. 0:10:44.960 --> 0:10:47.560 They did an amazing job on that. What we didn't 0:10:47.559 --> 0:10:49.880 hear a lot about is the privacy protections that open 0:10:49.920 --> 0:10:53.320 ai are implementing. From some standpoints, you can say it's 0:10:53.360 --> 0:10:56.240 just you know what, trust us. Maybe Apple could say 0:10:56.240 --> 0:10:59.760 a little bit more there. Either way, I think that 0:11:00.000 --> 0:11:03.400 Elon Musk is competing with Apple and open Ai here. 0:11:03.440 --> 0:11:09.160 He has grock from Xai. He has a terrible interpretation 0:11:09.480 --> 0:11:12.320 of Apple and feeling towards Apple and their app store 0:11:12.400 --> 0:11:16.280 rules and the fees they take from subscriptions on their platform. 0:11:16.679 --> 0:11:19.760 He clearly does not like Sam Altman. Right, He's embroiled 0:11:19.800 --> 0:11:22.440 in all sorts of things regarding Sam Altman and open Ai. 0:11:22.640 --> 0:11:24.120 He was a co founder of open ai. 0:11:24.520 --> 0:11:25.200 He was a co. 0:11:25.120 --> 0:11:26.040 Founder by falling out. 0:11:26.840 --> 0:11:30.400 They had a falling out, So his perspective isn't exactly 0:11:30.480 --> 0:11:33.680 kosher on this. On this situation, what do you he 0:11:33.760 --> 0:11:36.920 raises real privacy questions regardless. I just think he's way 0:11:37.040 --> 0:11:37.719 overboard on it. 0:11:37.800 --> 0:11:40.880 Okay, that said, Mark, how realistic is it that you 0:11:40.880 --> 0:11:43.560 know he could ban these devices at his companies given 0:11:43.960 --> 0:11:47.120 that they're ubiquitous, And I can't imagine employees, you know, 0:11:47.160 --> 0:11:49.120 putting them in some sort of box or leaving them 0:11:49.120 --> 0:11:51.440 in their cars they walk into work at SpaceX or 0:11:51.440 --> 0:11:52.600 the boring company or Tesla. 0:11:52.960 --> 0:11:56.280 It's a top ten most ridiculous Elon Musk tweet, Right, 0:11:56.400 --> 0:11:59.840 that's not going to happen. I mean imagine like showing 0:12:00.160 --> 0:12:01.720 to work and like all of a sudden, you know, 0:12:01.760 --> 0:12:03.360 you can't bring your Apple devices in. 0:12:03.440 --> 0:12:06.200 You can have to leave your iPhone in a faradakage 0:12:06.320 --> 0:12:09.280 outside the office or leave it in your car. That's 0:12:09.320 --> 0:12:11.439 just not going to happen, right. 0:12:11.559 --> 0:12:14.240 He's already laid off thousands of people from his company, 0:12:14.320 --> 0:12:16.520 or tens of thousands of people from his company. I'm 0:12:16.520 --> 0:12:18.439 not sure he can afford to have people quitting in 0:12:18.800 --> 0:12:21.480 large numbers at this point, but I think that's going 0:12:21.520 --> 0:12:22.560 to upset a lot of people. 0:12:22.679 --> 0:12:26.120 That was Bloomberg News Chief technology correspondent Mark German, by 0:12:26.120 --> 0:12:29.600 the way, speaking of Elon musk and Ai. Elon dropping 0:12:29.600 --> 0:12:32.240 a lawsuit alleging that open Ai and its CEO Sam 0:12:32.320 --> 0:12:36.200 Altman breached a founding promise last year by prioritizing profits 0:12:36.240 --> 0:12:40.679 over humanity without saying why. More. Elon News, including about 0:12:40.679 --> 0:12:43.560 his massive fifty six billion dollar pay package, just dead. 0:12:43.559 --> 0:12:45.319 On over to Bloomberg dot Com. 0:12:45.880 --> 0:12:49.439 You're listening to the Bloomberg Business Week podcast. Catch us 0:12:49.480 --> 0:12:52.720 live weekday afternoons from two to five pm Eastern Listen 0:12:52.760 --> 0:12:56.120 on Applecarplay and the brout Auto with a Bloomberg Business app, 0:12:56.240 --> 0:12:58.640 or watch us live on YouTube. 0:12:59.480 --> 0:13:03.960 Bill and China Entering the wto the rise of globalization, 0:13:04.520 --> 0:13:08.280 McKinsey and the Lean Taliban, the decline of unions in 0:13:08.320 --> 0:13:12.400 the working class, the rise of share buybacks and increasing dividends, 0:13:12.440 --> 0:13:16.880 and monopolistic takeovers, and then the pandemic and the great 0:13:16.880 --> 0:13:18.160 supply chain crisis. 0:13:18.360 --> 0:13:21.160 Covering it all in this complex global system is New 0:13:21.240 --> 0:13:25.400 York Times Global Economics correspondent an award winning journalist, Peter S. Goodman. 0:13:25.760 --> 0:13:28.319 He's the author of the new book Just Out How 0:13:28.320 --> 0:13:31.640 the World ran out of everything inside the global supply chain. 0:13:32.080 --> 0:13:35.520 And to understand the global supply chain, Peter visits seemingly 0:13:35.760 --> 0:13:38.079 every link of it. He spends time in one of 0:13:38.160 --> 0:13:41.440 the largest exporters of amends in California and with the 0:13:41.480 --> 0:13:43.720 dock workers who are supposed to get those amends all 0:13:43.760 --> 0:13:46.360 over the world. He hitches a ride through Kansas with 0:13:46.440 --> 0:13:49.720 a Brahms loving trucker, feeds cows with a third generation 0:13:49.840 --> 0:13:52.760 rancher in Montana, and eats breakfast with the commissioner of 0:13:52.760 --> 0:13:56.160 the Federal Maritime Commission. He visits supports from LA to 0:13:56.200 --> 0:13:58.719 Savannah to explain how the world found itself in the 0:13:58.760 --> 0:14:00.760 greatest supply chain crisis it's ever since. 0:14:00.800 --> 0:14:03.480 All right, He is here in our Bloomberg Interactive Broker studio. 0:14:03.559 --> 0:14:06.240 We wanted to do the setup because it's really comprehensive, 0:14:06.240 --> 0:14:08.040 and I do feel like I think it's safe to 0:14:08.080 --> 0:14:09.880 say that it explains a lot of kind of where 0:14:09.920 --> 0:14:13.120 we are today. So, Peter, you have had such a 0:14:13.120 --> 0:14:16.160 front row seat to so much that is going on 0:14:16.400 --> 0:14:18.320 in the world. Tell us about that front row seat 0:14:18.640 --> 0:14:21.160 and what kind of really you know, stands out for you. 0:14:21.160 --> 0:14:23.240 You know, it's changed the way I look at any 0:14:23.280 --> 0:14:26.680 package that lands at my door, or really any product 0:14:26.680 --> 0:14:29.640 that somebody made somewhere that had to be transported to 0:14:29.720 --> 0:14:31.920 a store or to a home or a business. We 0:14:32.040 --> 0:14:34.360 don't tend to think about the supply chain, you know. 0:14:34.440 --> 0:14:36.160 It's one of those things. It's like the light switch. 0:14:36.160 --> 0:14:37.760 We're not thinking about the internal wiring. 0:14:37.800 --> 0:14:38.400 We flip it on. 0:14:38.440 --> 0:14:42.400 The light's work well, when we needed it most, it failed. 0:14:43.080 --> 0:14:45.800 It buckled, and we had frontline medical workers dealing with 0:14:45.840 --> 0:14:49.200 COVID patients without protective gear. We had families unable to 0:14:49.200 --> 0:14:51.440 find infant formula. I mean, that was an incredible crist 0:14:51.480 --> 0:14:54.240 If we had a toilet paper scare, which turned out 0:14:54.240 --> 0:14:57.000 to not be so much as shortage as a question 0:14:57.080 --> 0:14:59.880 of hoarding. And we all remember these ships, you know, 0:15:00.080 --> 0:15:03.720 fifty sixty seventy ships that were floating off the coast 0:15:03.760 --> 0:15:07.760 of southern California unable to land floating for weeks at 0:15:07.760 --> 0:15:10.640 a time before they could find a slot to load 0:15:10.720 --> 0:15:13.560 and unload all these factory goods coming in from China. 0:15:13.760 --> 0:15:15.840 And I think for all of us in the midst 0:15:15.840 --> 0:15:19.600 of the pandemic, it was so bewildering that it gave 0:15:19.680 --> 0:15:23.240 us this curiosity about these people we never think about. So, yes, 0:15:23.360 --> 0:15:26.480 as you guys pointed out, I climbed into in the 0:15:26.520 --> 0:15:30.360 front of a truck. I visited with rail maintenance workers 0:15:30.400 --> 0:15:32.400 who were away from their families for weeks at a time, 0:15:32.440 --> 0:15:35.880 and I really tried to understand what has gone haywire here. 0:15:36.240 --> 0:15:39.040 Peter, the reason we're talking about such a complex supply 0:15:39.120 --> 0:15:42.280 chain is because of globalization. Your career has kind of 0:15:43.000 --> 0:15:47.160 coincided with the rise of globalization, right, being a reporter 0:15:47.280 --> 0:15:49.960 in South Asia in the nineties and then post dot 0:15:50.000 --> 0:15:52.800 com crash working for the Washington Post. I think it 0:15:52.840 --> 0:15:53.600 was out of Shanghai. 0:15:53.680 --> 0:15:54.120 That's right. 0:15:54.240 --> 0:15:56.480 You visited a lot of these factories at times when 0:15:57.080 --> 0:15:58.960 they weren't what they are today. Talk a little bit 0:15:59.000 --> 0:16:03.840 about how you've seen your career alongside the rise of globalization. 0:16:04.200 --> 0:16:06.000 Yeah, I appreciate you pointing that out. 0:16:06.040 --> 0:16:08.880 So I landed in China in two thousand and one, 0:16:08.960 --> 0:16:10.920 which was the same year that China of course enters 0:16:10.960 --> 0:16:15.320 the World Trade Organization, this landmark, you know, moment for globalization. 0:16:15.840 --> 0:16:20.200 And it was pretty clear then that China had huge 0:16:20.280 --> 0:16:24.160 aspirations and that the world was flocking to China in 0:16:24.240 --> 0:16:28.040 large part because you know, corporate CEOs who are constantly 0:16:28.080 --> 0:16:31.640 looking for ways to cut costs, availed themselves of this 0:16:31.840 --> 0:16:35.880 ultimate opportunity to you know, engage Chinese labor as a 0:16:35.880 --> 0:16:39.480 way of undercutting labor costs at home in the US 0:16:39.680 --> 0:16:41.240 and in Japan, in. 0:16:41.200 --> 0:16:42.880 South Korea, in Europe. 0:16:43.560 --> 0:16:46.560 And it was also clear that the Chinese government had 0:16:46.880 --> 0:16:51.640 very systematically built out the infrastructure that was needed for trades. 0:16:51.720 --> 0:16:55.720 So you know, visited massive ports factories that were capable 0:16:55.720 --> 0:16:59.120 of making you know, enough microwave ovens to supply Walmart 0:16:59.200 --> 0:17:03.160 for a year, you know, and whole towns were you know, 0:17:03.280 --> 0:17:04.760 set up for single industries. 0:17:04.800 --> 0:17:06.800 I remember going to the necktie town. 0:17:06.920 --> 0:17:09.879 There was this one town in one province that was 0:17:09.920 --> 0:17:12.560 suddenly making more neck ties than all of Italy, you know, 0:17:12.600 --> 0:17:15.200 in the course of a decade. So you could feel 0:17:15.280 --> 0:17:20.360 that the scale was available. But what I didn't understand 0:17:20.480 --> 0:17:22.879 and what I've come to understand through this book is 0:17:22.920 --> 0:17:25.119 that all of this was premised on the idea that 0:17:25.480 --> 0:17:30.600 container shipping would be basically free and reliable. And what 0:17:30.640 --> 0:17:32.720 I've come to see is that, you know, we built 0:17:32.720 --> 0:17:36.119 this global economy putting ourselves really at the mercy of 0:17:36.160 --> 0:17:37.720 this international cartel. 0:17:38.280 --> 0:17:41.919 If you had to pinpoint, was it President Bill Clinton? 0:17:41.960 --> 0:17:45.199 Former President Bill Clinton and the push to get everybody 0:17:45.280 --> 0:17:47.760 or to get China in the wto that. That's why 0:17:47.800 --> 0:17:51.080 we're having this conversation. That's why when the pandemic hit, 0:17:51.320 --> 0:17:53.320 we were like, what the heck happened to our global 0:17:53.320 --> 0:17:57.640 supply chain? Isn't that particular moment in time that got 0:17:57.680 --> 0:17:58.160 us to hear? 0:17:58.480 --> 0:18:01.239 I think that's a landmark lot of moments in time, right. 0:18:01.280 --> 0:18:03.159 I mean, I write about four because I was interested 0:18:03.160 --> 0:18:05.960 in the rise of mass assembly. I write about the 0:18:06.800 --> 0:18:10.600 roots of the shipping container because the process of standardizing 0:18:10.680 --> 0:18:13.280 cargo made it possible to go look for the cheapest 0:18:13.280 --> 0:18:16.080 place to make anything. You could go anywhere around the world. 0:18:16.160 --> 0:18:19.280 But if China wasn't accepted on a global scale in 0:18:19.400 --> 0:18:21.399 terms of trade, right, there was a big push. There 0:18:21.400 --> 0:18:23.680 were lots of concerns about human rights. There are still 0:18:23.840 --> 0:18:26.560 lots of big concerns about human rights, and yet there 0:18:26.600 --> 0:18:29.520 they were right in the WTO, something they fought for. 0:18:29.840 --> 0:18:32.639 Well, here's the part that people are generally afraid to 0:18:32.720 --> 0:18:36.639 talk about. You know, China gets into the WTO because 0:18:36.880 --> 0:18:41.440 American retailers lobby like crazy to get China into the WTO, 0:18:41.960 --> 0:18:45.159 and nobody wants to be affiliated with the story of 0:18:45.240 --> 0:18:49.200 labor exploitation. Now, let's remember Chinese labor in American history. 0:18:49.480 --> 0:18:53.080 You know, from the beginning, it's about undercutting wages. Right, 0:18:53.320 --> 0:18:57.040 Chinese workers are systematically brought over from China to build 0:18:57.040 --> 0:19:00.600 the railroads because the mostly Irish laborers say, yeah, this 0:19:00.640 --> 0:19:03.000 is pretty dangerous and we're not getting paid enough. So 0:19:03.400 --> 0:19:05.679 this is a continuation of that story, you know, a 0:19:05.720 --> 0:19:09.159 century later, where now we're bringing the production to China 0:19:09.680 --> 0:19:14.000 and there's this is a sort of seemy, unsavory quality 0:19:14.160 --> 0:19:17.000 to the story because of course China is controlled by 0:19:17.000 --> 0:19:19.800 the Chinese Commedies Party. There's no elections. You can get 0:19:19.840 --> 0:19:24.280 access to land, you can bypass workplace and environmental standards 0:19:24.280 --> 0:19:27.119 by cutting some local party official in on part of 0:19:27.160 --> 0:19:29.280 the sports. Well, this is not a good story for 0:19:29.359 --> 0:19:32.560 Bill Clinton, who you know, only a decade before he 0:19:32.640 --> 0:19:35.359 lobbies to get China into the WTO is running as 0:19:35.400 --> 0:19:38.480 the guy who's you know, disciplining George H. W. Bush 0:19:38.560 --> 0:19:42.320 for coddling the butchers of Beijing. He's very critical of 0:19:42.359 --> 0:19:47.560 the crackdown against the pro democracy demonstrators in Tanneman Square. 0:19:47.640 --> 0:19:49.280 Well, I tell his story in the book. You know. 0:19:49.320 --> 0:19:51.960 It's not even a decade later and Clinton's in Beijing 0:19:52.400 --> 0:19:54.480 at at banquet at the Great Hall of the People 0:19:54.560 --> 0:19:58.080 across the street from Tianeman Square, where he literally picks 0:19:58.160 --> 0:20:03.080 up the baton and conduct the People's Liberation Army Orchestra 0:20:03.200 --> 0:20:05.439 as they played this John Phillips south of March. Now, 0:20:05.440 --> 0:20:09.199 why is Bill Clinton there? He's there because his party, 0:20:09.240 --> 0:20:14.240 the Democratic Party, is pulling in massive campaign contributions from retailers, 0:20:14.480 --> 0:20:18.480 and they're fashioning this story. It's not totally a fairy tale, right. 0:20:18.520 --> 0:20:21.560 I mean, trade has been the lynchpin of American foreign 0:20:21.560 --> 0:20:23.560 policy since the end of the Second World War. But 0:20:23.560 --> 0:20:25.199 there are a lot of reasons to be dubious that, 0:20:25.480 --> 0:20:27.800 you know, this is really about. It's not just about 0:20:27.840 --> 0:20:30.399 selling Chinese people lots of stuff. It's not just about 0:20:30.400 --> 0:20:33.800 buying cheap goods from China. This is about democratizing China 0:20:33.880 --> 0:20:34.639 once well, that was. 0:20:34.640 --> 0:20:37.600 The goal, that thinking that, okay, let's open up trade 0:20:37.760 --> 0:20:40.640 and probably democracy will come and the human rights abuses 0:20:40.680 --> 0:20:43.280 will go away. And yet it didn't necessarily play out 0:20:43.280 --> 0:20:43.600 that way. 0:20:43.720 --> 0:20:46.000 Well, one part of it played out. We got really 0:20:46.119 --> 0:20:49.800 low cost goods from China. The Walton family, the founders 0:20:49.800 --> 0:20:52.320 of Walmart, for a while became you know, the wealthiest 0:20:52.320 --> 0:20:56.639 family on Earth, and anybody who moved production over to 0:20:56.720 --> 0:20:59.560 China at scale and managed to do the right deals 0:21:00.119 --> 0:21:03.879 warded their shareholders handsomely. That part held to form. Also, 0:21:04.320 --> 0:21:09.600 not incidentally, the industrialization of China lifted several hundred million 0:21:09.840 --> 0:21:13.399 people out of poverty, and that's highly significant. But the 0:21:13.440 --> 0:21:16.520 part about once Chinese people get a taste of Kentucky 0:21:16.560 --> 0:21:18.760 Fried chicken, they're going to demand the ballot box, well 0:21:18.800 --> 0:21:21.320 that has not worked out as I think everyone is 0:21:21.359 --> 0:21:24.679 now where you know, we're talking about genocide according to 0:21:24.680 --> 0:21:28.520 the Biden administration in Hinjong, where the wigers are pressed 0:21:28.520 --> 0:21:31.840 into forced labor to produce cotton that ends up in 0:21:32.240 --> 0:21:36.320 lots of apparel. Of course, we still don't have elections. 0:21:36.640 --> 0:21:41.359 The central government has actually strengthened its role in Chinese society. 0:21:41.520 --> 0:21:44.399 So we don't hear that talk anymore. And of course 0:21:44.440 --> 0:21:49.280 now it's become politically fashionable within both parties to attack 0:21:49.359 --> 0:21:50.240 China as our enemy. 0:21:50.359 --> 0:21:53.560 Peter, you mentioned concentration in shipping. I believe you called 0:21:53.560 --> 0:21:56.320 it a cartel, right. I had no idea before reading 0:21:56.320 --> 0:21:58.960 this that it was basically what three companies. 0:21:58.520 --> 0:22:01.280 Three alliances. There were a bunch of companies, but think 0:22:01.280 --> 0:22:02.520 of it like airline alliance. 0:22:02.359 --> 0:22:04.840 Three alliances that control basically all. 0:22:04.760 --> 0:22:08.119 Of shipping ninety five percent of the shipping from China 0:22:08.160 --> 0:22:09.480 to the West coast of the United. 0:22:09.240 --> 0:22:12.280 States, some of the companies owned by China, or like 0:22:12.680 --> 0:22:16.160 our state subsidized organizations. How did it become like that. 0:22:16.520 --> 0:22:20.160 It became like that because there was deregulation pretty much everywhere, 0:22:20.160 --> 0:22:22.440 including in the US, where you know, there used to 0:22:22.520 --> 0:22:25.480 be this anti trust exemption, but there was regulation on 0:22:25.600 --> 0:22:29.280 shipping rates, so you had to post what your rates 0:22:29.359 --> 0:22:32.359 were from one place to another. You couldn't negotiate a 0:22:32.440 --> 0:22:36.240 deal in secret. It was all above board, sort of 0:22:36.280 --> 0:22:39.640 like a utility, right, Like the governments involved because this 0:22:39.720 --> 0:22:43.000 is a vital part of the economy. And then basically 0:22:43.040 --> 0:22:46.440 retailers lobbied. There were a couple of landmarks. The last 0:22:46.440 --> 0:22:49.240 one was in the eighties. There was no Amazon then, 0:22:49.320 --> 0:22:52.280 but there was Walmart target. The big retailers thought, well, 0:22:52.280 --> 0:22:55.000 if we're bringing over lots of these factory goods from 0:22:55.080 --> 0:22:56.919 China to the west coast of the US to the 0:22:56.920 --> 0:22:58.840 east coast of the US, we would like to be 0:22:58.880 --> 0:23:01.480 able to negotiate a better deal than the smaller competitors. 0:23:01.520 --> 0:23:05.520 So essentially we've optimized the supply chain for the biggest companies, 0:23:05.800 --> 0:23:10.280 and the anti trust was essentially deactivated throughout much of 0:23:10.320 --> 0:23:12.400 American life, right you go back to Reagan. 0:23:12.119 --> 0:23:13.800 Although really the story starts with Carter. 0:23:14.280 --> 0:23:17.159 You know, we're steeped in this idea that scale is 0:23:17.200 --> 0:23:20.280 the way to serve consumers and so let's just get 0:23:20.320 --> 0:23:22.560 out of the way of business and let them provide, 0:23:22.760 --> 0:23:25.760 and you know that will deliver innovation. But once you 0:23:25.800 --> 0:23:29.360 take away competition, of course, what we get is pricing power. 0:23:29.760 --> 0:23:32.760 And for a long time, these mostly well they're all 0:23:32.800 --> 0:23:37.520 actually foreign companies. In international shipping. There were like extensions 0:23:37.520 --> 0:23:38.960 of state policy. 0:23:38.520 --> 0:23:41.200 In China's South Korea, Taiwan, so. 0:23:41.160 --> 0:23:43.320 They were content to keep shipping costs low as a 0:23:43.359 --> 0:23:46.600 way to bolster their exports. But once we get a 0:23:46.640 --> 0:23:50.040 shock in the great supply chain disruption during the pandemic, 0:23:50.720 --> 0:23:54.879 we see shipping prices go up tenfold, and we see, 0:23:54.960 --> 0:23:56.480 you know, you guys were alluding to the fact that 0:23:56.520 --> 0:23:59.439 I spent some time with Alman farmers in central California. 0:23:59.560 --> 0:24:03.800 We see common farmers I visited had an entire crop 0:24:04.400 --> 0:24:09.560 sold to Dubai to Japanese purchasers, and they were just 0:24:09.600 --> 0:24:12.440 sitting on all this crop that they couldn't actually get 0:24:12.480 --> 0:24:15.760 on a ship. Because these shipping carriers were making so 0:24:15.960 --> 0:24:19.440 much money sending factory goods from China to the West 0:24:19.440 --> 0:24:21.359 coast of the US, which is the gateway for forty 0:24:21.400 --> 0:24:23.840 percent of American imports, that they didn't even want to 0:24:23.880 --> 0:24:27.359 bother to send empty containers up to the Central Valley 0:24:27.359 --> 0:24:30.159 to load up with farm products like ammonds. They just 0:24:30.400 --> 0:24:34.520 unloaded factory goods in LA and sent empty containers back 0:24:34.560 --> 0:24:37.199 across the Pacific. We're talking about burning diesel fuel to 0:24:37.200 --> 0:24:40.760 send air back across the Pacific. So they can get 0:24:40.800 --> 0:24:44.560 twenty five, twenty seven, twenty eight thousand dollars to move 0:24:44.560 --> 0:24:47.200 a container of factory goods from you know, a place 0:24:47.280 --> 0:24:51.280 like Shanghai to LA. That used to cost like twenty 0:24:51.359 --> 0:24:54.760 twenty five hundred during the pandemic. That's largely the story 0:24:54.800 --> 0:24:55.600 of deregulation. 0:24:55.960 --> 0:24:56.119 You know. 0:24:56.160 --> 0:24:59.879 One thing I think about, though, in particular in your 0:25:00.040 --> 0:25:02.200 book is kind of the role of consultancy here. And 0:25:02.240 --> 0:25:04.200 I don't want to pick pile on anyone in particular, 0:25:04.240 --> 0:25:05.520 but you do single out Mackensey. 0:25:05.680 --> 0:25:06.119 I sure do. 0:25:06.280 --> 0:25:08.800 You do talk about the lean Taliban. You also get 0:25:08.840 --> 0:25:11.320 into a lot of just in time inventory for anybody's 0:25:11.359 --> 0:25:14.199 taken accounting cleanses. Like we've played around with this, right, 0:25:14.600 --> 0:25:17.640 but this idea too that you don't want to have 0:25:17.720 --> 0:25:21.080 big inventories, you want to be lean and mean. Right, 0:25:21.119 --> 0:25:24.600 so because those inventories are costly to store them, to 0:25:24.680 --> 0:25:28.280 have them, and all that thing, And so this financial 0:25:28.359 --> 0:25:32.000 focus on that and this kind of narrative of saying 0:25:32.359 --> 0:25:34.760 be lean and mean that's a good thing. We've all 0:25:34.800 --> 0:25:36.280 played a part of it when we go through the 0:25:36.320 --> 0:25:39.080 quarterly lean and mean this is a good thing for 0:25:39.160 --> 0:25:42.000 a company. How big a role did that play in 0:25:42.080 --> 0:25:45.360 getting us so that when the pandemic hit, nobody had 0:25:45.440 --> 0:25:47.760 excess supply anywhere a huge role. 0:25:48.040 --> 0:25:51.280 We cut inventories to the bone. Publicly traded companies cut 0:25:51.320 --> 0:25:55.160 inventories to the bone over decades now, just in time 0:25:55.280 --> 0:25:58.680 is a sensible idea. It was pioneered by Toyota and 0:25:58.840 --> 0:26:02.600 to World War two devastation, not a lot of capital, 0:26:02.760 --> 0:26:05.400 not a lot of land to develop. Taichi Ono, who 0:26:05.440 --> 0:26:08.399 is running Toyota, pioneers this idea of instead of making 0:26:08.440 --> 0:26:11.000 as much stuff as possible like Henry Ford did at 0:26:11.000 --> 0:26:13.760 Ford and letting salespeople try to figure out how to 0:26:13.800 --> 0:26:17.800 sell it, Let's just make enough to replenish the cars 0:26:17.920 --> 0:26:20.560 that we've already sold. Let's get our suppliers to deliver 0:26:20.600 --> 0:26:22.880 the stuff we need right when we need it, rather 0:26:22.920 --> 0:26:24.360 than waste capital on warehousees. 0:26:24.400 --> 0:26:24.600 Hey. 0:26:24.600 --> 0:26:28.040 That's a good idea, but a long come of publicly 0:26:28.080 --> 0:26:32.359 traded companies guided by consultants like McKenzie who say, listen, 0:26:32.400 --> 0:26:35.680 this should apply to everything, and you should not stop 0:26:36.240 --> 0:26:39.879 until there's basically no inventory. And what you do is, 0:26:39.960 --> 0:26:42.920 instead of wasting capital on sticking you know, auto parts 0:26:43.000 --> 0:26:46.680 in a warehouse as a hedge against trouble, just liquidate 0:26:46.720 --> 0:26:47.399 the warehouse. 0:26:47.640 --> 0:26:48.760 Take the cash, give it. 0:26:48.640 --> 0:26:52.120 To yourselves to reward yourselves corporate executives for being smart 0:26:52.240 --> 0:26:54.720 enough to hire McKenzie, Give it to shareholders and the 0:26:54.760 --> 0:26:58.760 form of dividends and share buybacks, and everybody's happy until 0:26:58.800 --> 0:27:02.120 there's a problem. And this pandemic was not the first 0:27:02.160 --> 0:27:03.719 time we saw a shock to the system. I mean, 0:27:03.760 --> 0:27:05.840 I wrote my first supply chain story back in nineteen 0:27:05.880 --> 0:27:08.560 ninety nine. It was about an earthquake in Taiwan. And 0:27:08.640 --> 0:27:12.320 back then people said, Oh, whoops, we've got computer chip shortages. 0:27:12.359 --> 0:27:15.359 Maybe we shouldn't concentrate all our industry here, Maybe we 0:27:15.359 --> 0:27:16.399 should have a little more difversit. 0:27:16.440 --> 0:27:18.159 If we've learned our lesson with the computer tip industry. 0:27:18.200 --> 0:27:20.120 We sure did not mean. 0:27:20.520 --> 0:27:22.800 I tell the story in the book of Henry Ford, 0:27:22.840 --> 0:27:25.600 who is a problematic figure in history, but knew a 0:27:25.640 --> 0:27:27.680 thing or two about supply chains and never wanted to 0:27:27.720 --> 0:27:28.960 be in a position where he could. 0:27:28.760 --> 0:27:32.160 Be pinched by a supplier constrained. 0:27:32.680 --> 0:27:33.359 Would have been. 0:27:33.240 --> 0:27:35.360 Horrified to see what I saw one hundred years later, 0:27:35.400 --> 0:27:38.639 as on walking the catwalk at his signature River Rouge 0:27:38.680 --> 0:27:42.159 plant outside of Detroit, where they're making these beautiful f 0:27:42.240 --> 0:27:45.720 one fifty pickup trucks their most popular vehicle. They've got 0:27:45.760 --> 0:27:47.560 all the things they need except for the one thing 0:27:47.560 --> 0:27:49.399 that brings it to life, the computer chip. And I 0:27:49.480 --> 0:27:54.240 watched them park these cars in the shadow of Ford's 0:27:54.359 --> 0:27:58.199 corporate headquarters across the street from Henry Ford Elementary School. 0:27:58.400 --> 0:28:01.000 I mean, he would be spinning in his grave over this. 0:28:01.280 --> 0:28:02.520 We did not learn the lesson. 0:28:02.640 --> 0:28:04.399 I think this is the part, and forgive me if 0:28:04.440 --> 0:28:06.560 I've got it wrong, but when I read it, Detroit 0:28:06.600 --> 0:28:09.000 had devolved into a poignant example of what happened when 0:28:09.000 --> 0:28:12.280 middle class factory jobs were replaced by poverty level positions 0:28:12.320 --> 0:28:15.320 at retailers, warehouses, and fast food chains. Next to the 0:28:15.359 --> 0:28:18.840 old Highland Park factory, now forlorn brickshell, a shopping center 0:28:18.880 --> 0:28:22.080 called modelty Plaza was anchored by a dollar store, a 0:28:22.119 --> 0:28:25.920 payday lender, and a plasma collection center awaiting people willing 0:28:25.960 --> 0:28:28.080 to swap blood for cash. The car itself had become 0:28:28.119 --> 0:28:31.080 an instrument of white flight. Like that to me, says 0:28:31.119 --> 0:28:34.000 so much of what's going on across America and explains 0:28:34.000 --> 0:28:35.840 to me politics in a big way. We want to 0:28:35.840 --> 0:28:38.680 bring in Doug Christners here. Doug is like this great 0:28:38.720 --> 0:28:41.800 thinker and like your book just kind of reminds us 0:28:41.840 --> 0:28:43.480 of the things we talk about with Doug. So we 0:28:43.520 --> 0:28:44.880 wanted to bring in one of these. 0:28:44.840 --> 0:28:47.400 Things that's interesting. Tim was going to talk about politics. 0:28:47.400 --> 0:28:51.600 In the nineteen ninety two presidential campaign, Ross Perrot was 0:28:51.640 --> 0:28:55.120 the lone voice who was kind of cautioning against at 0:28:55.120 --> 0:28:58.240 that time, what was the North American Free Trade Agreement Canada, 0:28:58.320 --> 0:29:02.960 the US and Mexico. Stunning is how quickly the conversation 0:29:03.120 --> 0:29:07.000 became about China. Why did that pivot happen so quickly 0:29:07.040 --> 0:29:10.800 in your view, away from North America manufacturing in China. 0:29:11.280 --> 0:29:15.360 Well, China operates on a whole different scale than Mexico, right, 0:29:15.360 --> 0:29:17.760 So Rossboro, of course, yeah, famously warns of the giant 0:29:17.840 --> 0:29:21.080 sucking sound. And we did lose some jobs in the 0:29:21.080 --> 0:29:23.960 industrial Midwest to Mexico, but we picked up a lot 0:29:23.960 --> 0:29:27.680 of jobs because the US and Mexico are economically integrated. 0:29:27.760 --> 0:29:30.320 And I mean, it's ironic now to think about Mexico 0:29:30.360 --> 0:29:32.800 as the solution to some of our supply chain problems. 0:29:32.880 --> 0:29:36.760 But when we import something from Mexico, forty percent of 0:29:36.800 --> 0:29:39.480 the value of that imported good was actually made in 0:29:39.520 --> 0:29:41.719 the United States. So, you know, we bring in a 0:29:41.800 --> 0:29:45.400 car that was made in a Mexican factory, and forty 0:29:45.440 --> 0:29:47.640 percent of the value of that car was built by 0:29:47.680 --> 0:29:53.840 American labor in American factories. The component number for China 0:29:53.960 --> 0:29:57.640 is three percent, So only three percent of the value 0:29:57.760 --> 0:30:01.880 of imports from China have a American value add and 0:30:01.960 --> 0:30:04.640 of course Chinese state policy is really directed at driving 0:30:04.640 --> 0:30:08.040 that as close to zero as possible. But I think 0:30:08.040 --> 0:30:10.400 it's really important to note that a lot of these 0:30:10.520 --> 0:30:16.000 failures that have fueled the backlash originally Mexico now China. 0:30:17.080 --> 0:30:19.000 I argue in the book, I mean this part nobody 0:30:19.000 --> 0:30:22.840 really wants to talk about. These are homemade failures. I mean, 0:30:22.880 --> 0:30:26.160 we have benefited from trade with China. We have benefited 0:30:26.160 --> 0:30:28.080 from trade with Mexico. We've got a lot of low 0:30:28.120 --> 0:30:31.480 cost goods in the case of Mexico again, we've boosted 0:30:31.480 --> 0:30:37.120 our exports. We've got consumers benefiting. A lot of data 0:30:37.160 --> 0:30:41.400 shows that consumer spending has been juiced by trade with China, 0:30:41.480 --> 0:30:43.360 and that money ends up, you know, in the hands 0:30:43.360 --> 0:30:46.920 of American service providers. Our leisure, you know, is more 0:30:47.080 --> 0:30:49.640 robot We have more money here. The problem is we 0:30:49.760 --> 0:30:53.240 haven't cushioned the people who have lost, and we have 0:30:53.400 --> 0:30:58.560 seen whole communities, industries, you know, really hit hard by 0:30:58.560 --> 0:31:01.040 this China shock. That a lot of the data shows 0:31:01.040 --> 0:31:03.760 we're talking one million direct jobs in the space of 0:31:03.800 --> 0:31:06.400 a decade lost to Chinese imports. 0:31:06.360 --> 0:31:08.320 So it's kind of the bad guy, or is it 0:31:08.680 --> 0:31:12.920 investors and companies who constantly were seeking out the low 0:31:12.960 --> 0:31:13.800 cost provider. 0:31:14.200 --> 0:31:18.520 The ultimate winners are the investor class, without any question. 0:31:19.040 --> 0:31:22.760 And there's a lot of labor exploitation in China. So yes, 0:31:23.000 --> 0:31:25.600 the winners are the people who funded the Clinton campaign 0:31:25.640 --> 0:31:26.880 and got Bill Clinton together. 0:31:26.720 --> 0:31:31.080 Saying nothing of environmental regulation of course. Okay, right, go ahead, Peter. 0:31:31.120 --> 0:31:34.880 I want to talk about labor exploitation in the trucking industry, sure, 0:31:35.200 --> 0:31:37.680 because a common thing that we heard over and over 0:31:37.680 --> 0:31:40.200 again during the pandemic and the supply chain disruption that 0:31:40.200 --> 0:31:43.480 we saw was that trucking companies just didn't have enough drivers. 0:31:43.480 --> 0:31:45.040 They needed people to go learn how to drive a 0:31:45.080 --> 0:31:49.320 truck and start driving trucks. You found that that wasn't 0:31:49.320 --> 0:31:51.320 the case. It's just a really really bad job. 0:31:52.000 --> 0:31:54.920 It's a horrible job. I mean, I rode with a 0:31:55.040 --> 0:31:58.160 trucker in the best possible conditions who actually likes his 0:31:58.360 --> 0:32:01.440 job from Kansas City to Dallas and back in the 0:32:01.440 --> 0:32:03.600 middle of the winter. I slept in the cab for 0:32:03.680 --> 0:32:06.959 two nights. I watched this man have to worry about 0:32:07.200 --> 0:32:09.800 caffeinating enough so we wouldn't fall asleep at the wheel, 0:32:10.480 --> 0:32:12.800 and yet not having to pull over to use the restroom. 0:32:13.040 --> 0:32:15.520 Truckers are constantly worried about where they're going to park. 0:32:15.800 --> 0:32:17.960 They're at the mercy of lots of other parts of 0:32:18.000 --> 0:32:20.000 the supply chain they have no influence over. They can 0:32:20.000 --> 0:32:22.880 get stuck at warehouses for hours waiting for somebody to 0:32:23.000 --> 0:32:27.520 load or unload their vehicle because warehouses have shortages of workers. Now, 0:32:27.800 --> 0:32:32.760 this trucking industry shortage, this is an industry talking point. 0:32:32.800 --> 0:32:34.000 There's ten million people in the. 0:32:34.080 --> 0:32:37.560 United States who have licenses to drive long haul trucks, 0:32:37.920 --> 0:32:40.160 and we need roughly a third that number. 0:32:40.400 --> 0:32:41.520 We've run out. 0:32:41.320 --> 0:32:44.840 Of people we can feed into the mill who are 0:32:44.880 --> 0:32:47.880 willing to sign off on these predatory lending arrangements by 0:32:47.920 --> 0:32:51.479 which truckers pay for their certification, by which they end 0:32:51.560 --> 0:32:55.040 up buying these vehicles at wildly inflated prices from the 0:32:55.080 --> 0:32:58.160 trucking companies. Then they're forced to go service these vehicles 0:32:58.440 --> 0:33:01.640 at places that are part of the empires of these 0:33:01.680 --> 0:33:04.240 trucking companies, and so a lot of people, you know, 0:33:04.280 --> 0:33:06.520 they get tired of being away from their families. They 0:33:06.600 --> 0:33:09.760 get tired of hearing that they've missed another chill child's 0:33:09.760 --> 0:33:13.040 birthday party, they miss people's funerals. It's a tough job. 0:33:13.040 --> 0:33:15.440 It's always been a tough job. The difference is it's 0:33:15.480 --> 0:33:17.680 been downgraded to the point that we've run out of 0:33:17.720 --> 0:33:18.960 takers for this tough job. 0:33:19.040 --> 0:33:20.960 What's the remedy in your view? I mean, how do 0:33:21.000 --> 0:33:22.880 we get out of the situation that we're in now. 0:33:23.160 --> 0:33:26.000 I'm listening to the trucking story and I'm thinking of 0:33:26.360 --> 0:33:29.360 robotic vehicles that are going to be creeping into the 0:33:29.400 --> 0:33:32.239 scene pretty soon. So the argument that you're making right 0:33:32.320 --> 0:33:34.400 now may get a remedy, but it's going to be 0:33:35.000 --> 0:33:37.880 at the cost of labor in a major way. But 0:33:37.960 --> 0:33:39.880 what do you think the remedy is longer term? 0:33:40.160 --> 0:33:42.080 I mean, I think for openers, we got to look 0:33:42.080 --> 0:33:45.880 at these predatory arrangements that truckers make with the people 0:33:45.920 --> 0:33:50.360 coming through these educational mills that set up certification with 0:33:50.560 --> 0:33:54.880 taxpayer funding. You know, we are paying to feed people 0:33:55.040 --> 0:33:58.120 into these training programs where they end up getting jobs 0:33:58.160 --> 0:34:00.000 that pay a fraction of what they've been promised. 0:34:00.240 --> 0:34:01.840 So that's the first thing to do. 0:34:02.040 --> 0:34:04.400 Look, automation is inevitable, It's going to happen, But we 0:34:04.480 --> 0:34:07.680 got to have a conversation about how we compensate the 0:34:07.720 --> 0:34:09.719 people who are still in the business. We've got to 0:34:09.760 --> 0:34:12.279 make sure that they can get exercise, that they can 0:34:12.360 --> 0:34:14.080 eat better. 0:34:13.840 --> 0:34:14.480 Than their eating. 0:34:14.560 --> 0:34:18.840 I mean, the food that you see at these truck stops. 0:34:18.880 --> 0:34:21.160 It's just a it's a tough life. The government has 0:34:21.200 --> 0:34:23.400 to get involved in looking at these working conditions. 0:34:23.440 --> 0:34:25.560 What's the bigger solution though, because to me, I'm thinking, 0:34:25.600 --> 0:34:27.440 all right, if we're bringing a lot of stuff home, 0:34:27.560 --> 0:34:29.399 maybe more jobs are going to be created back home, 0:34:29.440 --> 0:34:31.680 but it's going to be more expensive, So get ready 0:34:31.680 --> 0:34:35.000 to continue to pay more money. But if it means 0:34:35.000 --> 0:34:37.960 that workers are actually making more and a real living, 0:34:38.200 --> 0:34:39.680 that's a good thing. So I don't know, I'm just 0:34:39.680 --> 0:34:40.840 trying to figure out what you see is. 0:34:40.880 --> 0:34:43.680 The wait in some cases if we shift production from 0:34:43.800 --> 0:34:46.759 China to other countries where wagers hire, if we bring 0:34:46.800 --> 0:34:48.840 some of it back to the US, that that'll mostly 0:34:48.880 --> 0:34:52.000 be automation. Yeah, the costs for some things are going 0:34:52.040 --> 0:34:53.719 to go up. Some things may go now, some things 0:34:53.800 --> 0:34:56.200 may go up, But what is the cost that we're 0:34:56.200 --> 0:34:59.440 paying now that doesn't get factored into the simple sticker 0:34:59.480 --> 0:35:02.160 price with the Walmart supers. What's the cost of running 0:35:02.160 --> 0:35:04.560 out of medical devices in the middle of a pandemic. 0:35:04.800 --> 0:35:07.799 What's the cost of discovering that we've depended upon a 0:35:07.840 --> 0:35:10.719 single country that we've decided as our adversary that we're 0:35:10.719 --> 0:35:13.440 having a trade war with for you know, personal protective 0:35:13.480 --> 0:35:15.520 gear to give frontline medical When of that's. 0:35:15.360 --> 0:35:18.960 Really changed, right dramatically or has it changed somewhat? 0:35:19.040 --> 0:35:21.400 I mean, I spent a lot of time for the book, 0:35:21.480 --> 0:35:24.640 you know, I went to Guatemala with Columbia Sportswear. They're 0:35:24.680 --> 0:35:27.200 looking to move production closer to their biggest market, which 0:35:27.280 --> 0:35:30.000 is North America. Spent a lot of time in Mexico looking, 0:35:30.160 --> 0:35:32.200 you know, as we've discussed how that could potentially be 0:35:32.480 --> 0:35:35.160 part of this solution to our excessive reliance on China. 0:35:35.200 --> 0:35:38.040 But China is going to be the center of manufacturing 0:35:38.160 --> 0:35:40.480 for a really long time for the simple reason that's 0:35:40.520 --> 0:35:45.040 got this unbeatable combination of infrastructure, low cost efficiency. The 0:35:45.200 --> 0:35:49.120 question is how do we compensate the people who were 0:35:49.160 --> 0:35:52.760 depending on in our own country. And you know, Henry 0:35:52.800 --> 0:35:56.120 Ford again problematic character for all sorts of reasons, but 0:35:56.200 --> 0:35:58.640 he got some things right. You know, he doubled wages 0:35:58.680 --> 0:36:00.719 for his workers in the nineteenth he was called a 0:36:00.760 --> 0:36:03.319 communist by some people. He said, look, I'm just trying 0:36:03.320 --> 0:36:04.880 to sell cars, and I'm trying to sell them at 0:36:04.920 --> 0:36:08.760 low prices. And any business that's built on low wage 0:36:08.800 --> 0:36:10.680 labor is unreliable. 0:36:10.360 --> 0:36:13.080 Away from the government. Is there a role for organized 0:36:13.160 --> 0:36:13.759 labor in this. 0:36:14.040 --> 0:36:16.719 Oh, one hundred percent. I mean we should be embracing 0:36:16.920 --> 0:36:21.760 labor mobilization. I mean it's bumpy, it does involve higher costs. 0:36:21.800 --> 0:36:24.520 If you're running a business, you're not delighted that your 0:36:24.640 --> 0:36:27.840 union is now animated. But first of all, it puts 0:36:28.120 --> 0:36:32.320 spending capacity in people's pockets, right, It boosts consumer power, 0:36:32.520 --> 0:36:35.399 which is good for all businesses. And it's simply more 0:36:35.440 --> 0:36:38.040 reliable if people aren't are at work not worried about 0:36:38.040 --> 0:36:39.680 their ability to put groceries on there. 0:36:39.800 --> 0:36:41.960 I was thinking about that when I read about precision 0:36:41.960 --> 0:36:45.840 scheduled railroading in the book, because those were union guys, right, right, 0:36:45.880 --> 0:36:47.560 But they had a pretty tough gig too, so. 0:36:47.760 --> 0:36:48.719 Well, some of them are union. 0:36:48.920 --> 0:36:51.920 So you wrote about people who missed medical appointments and funerals, 0:36:52.000 --> 0:36:54.279 and like, we're driving so far from their homes in 0:36:54.320 --> 0:36:57.000 that business were the unionized folks who were doing that 0:36:57.080 --> 0:36:59.399 in a much better position than the non unionized ones. 0:36:59.480 --> 0:37:00.719 I mean, that's a tough gig too. 0:37:00.800 --> 0:37:03.400 Look the unions, you know, we're ready to go on 0:37:03.520 --> 0:37:06.279 strike and couldn't go on strike because there's this law 0:37:06.320 --> 0:37:09.000 that says they have to basically get the president's permission 0:37:09.040 --> 0:37:11.279 to strike, and the president didn't grant that permission because 0:37:11.280 --> 0:37:12.880 it would have been a shock to the system. It 0:37:12.880 --> 0:37:15.000 would have uped inflation, and that wasn't something that Joe 0:37:15.040 --> 0:37:18.799 Biden wanted to happen on his watch. But even you know, 0:37:18.920 --> 0:37:21.839 this this powerful union that got right to the edge 0:37:21.840 --> 0:37:24.759 of strike, they couldn't get paid sick leave. You know, 0:37:24.920 --> 0:37:27.799 Biden gave it to them through the bully pulpit, and 0:37:27.840 --> 0:37:30.239 some of the companies then delivered a few days. But yes, 0:37:30.320 --> 0:37:34.120 I talked to people who were missing out. In one case, 0:37:34.160 --> 0:37:38.440 a guy who's who's infant, you know, needed cardiac surgery 0:37:38.640 --> 0:37:41.319 and he was told, sorry, pal, you know, we need 0:37:41.360 --> 0:37:42.520 you on the maintenance crew. 0:37:42.800 --> 0:37:44.440 You can't be home for that. And then he finally 0:37:44.560 --> 0:37:46.920 quit and fired off a letter, Yeah. 0:37:46.719 --> 0:37:48.600 Go ahead, no, but so much for like was it 0:37:48.640 --> 0:37:51.239 a few years ago, the business roundtable stakeholder like, think 0:37:51.239 --> 0:37:53.280 of all the stakeholders, including employees. 0:37:53.320 --> 0:37:54.160 That's my last book. 0:37:54.239 --> 0:37:56.759 We only have I know, twenty seconds left. Are we 0:37:56.760 --> 0:37:58.640 going to run out of things again? At some point? 0:37:58.920 --> 0:38:01.600 Yes, you know, talk to contractors about why they can't 0:38:01.600 --> 0:38:04.000 build more housing. It's part of why housing so unaffordable. 0:38:04.120 --> 0:38:06.360 This was so much fun. So appreciate it. Thank you 0:38:06.440 --> 0:38:09.480 so much, Peter Goodman, Global Economic Correspondent, New York Times, 0:38:09.560 --> 0:38:11.759 this new book, How the World Ran out of Everything? 0:38:11.920 --> 0:38:14.239 And then thanks to our Doug Prisner too, We really 0:38:14.280 --> 0:38:15.480 appreciate you coming in. 0:38:15.480 --> 0:38:24.680 Reading you you're listening to the Bloomberg Business Week Podcast. 0:38:25.000 --> 0:38:27.960 Listen live each weekday starting at two pm Eastern on 0:38:28.080 --> 0:38:31.440 Apple car Play and Android Auto with the Bloomberg Business App. 0:38:31.560 --> 0:38:34.400 You can also listen live on Amazon Alexa from our 0:38:34.440 --> 0:38:38.759 flagship New York station, Just say Alexa play Bloomberg eleven. 0:38:38.520 --> 0:38:41.560 Thirty plenty ahead in our second hour of the weekend 0:38:41.680 --> 0:38:44.640 edition of Bloomberg Business Week, including a check on the 0:38:44.680 --> 0:38:47.279 New York City luxury real estate market, and tim if 0:38:47.280 --> 0:38:49.880 you could believe it, most wealthy buyers they're paying for 0:38:49.920 --> 0:38:51.360 their new properties in cash. 0:38:51.480 --> 0:38:54.000 Yeah, I believe it. I bet you I mean, maybe 0:38:54.000 --> 0:38:56.520 it's no surprise considering that most film mortgage rates are 0:38:56.560 --> 0:38:59.240 still too high. Okay, So if a new condo maybe 0:38:59.239 --> 0:39:01.520 not in your sight. How about taking to the skies 0:39:01.520 --> 0:39:03.279 in your own private jet, Carol, what do. 0:39:03.280 --> 0:39:04.080 You think cut me in? 0:39:04.160 --> 0:39:07.480 Okay, the founder and the president of par Avian stops 0:39:07.480 --> 0:39:09.280 by for a look at the private aviation market. 0:39:09.320 --> 0:39:10.719 You know what they say, It's not the purchase, it's 0:39:10.719 --> 0:39:12.200 the upkey that's really troubling. 0:39:12.440 --> 0:39:12.759 All right. 0:39:12.840 --> 0:39:16.319 Also so excited. Bloomberg Food editor Kate Crater on this 0:39:16.400 --> 0:39:18.880 year's best restaurants in the US and around the world 0:39:19.040 --> 0:39:21.239 and tuna fishing in the Hampton's. 0:39:21.560 --> 0:39:23.759 Oh yeah, it's apparently a thing that's pretty cool. 0:39:23.800 --> 0:39:26.279 It's a story that apparently everyone keeps talking to her about. 0:39:26.360 --> 0:39:27.920 So we're going to get into it a little bit later. 0:39:27.760 --> 0:39:31.239 On First Up, This Hour. Every June nineteenth, now celebrated 0:39:31.280 --> 0:39:33.640 in the United States as June teenth. It's a day 0:39:33.680 --> 0:39:36.440 to commemorate the ending of slavery in the country, and 0:39:36.480 --> 0:39:39.479 despite it being celebrated as early as eighteen sixty six 0:39:39.520 --> 0:39:42.879 by freed slaves, it became a federal holiday just three 0:39:43.000 --> 0:39:43.520 years ago. 0:39:43.800 --> 0:39:46.280 The holiday helps shine a light on ways to address 0:39:46.280 --> 0:39:50.879 barriers experienced by underserved businesses, neighborhoods, and people. One big 0:39:50.920 --> 0:39:54.360 barrier often banking and the financial services sector. On that, 0:39:54.440 --> 0:39:56.920 we talked with Kevin Cohe he's chairman and CEO of 0:39:56.920 --> 0:39:59.680 one United Bank, the nation's largest black owned bank with 0:39:59.719 --> 0:40:01.960 a it's a more than six hundred and fifty million 0:40:02.000 --> 0:40:05.600 dollars and who is safe to say, very very positive 0:40:05.600 --> 0:40:06.240 on the outlook. 0:40:06.600 --> 0:40:11.799 There's never been the economic opportunity that exists today. Take 0:40:11.840 --> 0:40:16.399 one thing, artificial intelligence. That's going to change. That's that's 0:40:16.400 --> 0:40:18.759 going to change the world as we know it. It's 0:40:18.800 --> 0:40:23.239 going to change how businesses operate, to create new opportunities 0:40:23.280 --> 0:40:26.920 for business businesses that we never have had before. I 0:40:27.000 --> 0:40:31.520 believe sitting around worrying about small things that always exist. 0:40:31.600 --> 0:40:34.560 If you've been around at all, you've seen economic despite 0:40:34.840 --> 0:40:40.160 economic psycho so with interest rates up, interest rates down. Look, okay, 0:40:40.200 --> 0:40:43.840 those are just small things that need to be managed. 0:40:44.160 --> 0:40:47.040 But what you can't do is lose sight of where 0:40:47.080 --> 0:40:50.760 we are and the giganta core opportunity that we face 0:40:51.560 --> 0:40:56.000 as a country. Come on, we have artificial intelligence. 0:40:56.040 --> 0:40:59.480 Okay, well but but well, because we you have guys 0:40:59.560 --> 0:41:02.239 that rolled up out right AI tools and to help 0:41:02.480 --> 0:41:05.239 certainly your your client base. And I get it in 0:41:05.360 --> 0:41:07.319 terms of the ability, I guess what we're trying to. 0:41:07.360 --> 0:41:09.839 You know, we are so privileged here to sit here 0:41:09.880 --> 0:41:11.920 and have leaders like yourself come in, And I guess 0:41:11.960 --> 0:41:14.040 we always try to figure out when we are in 0:41:14.200 --> 0:41:16.799 environments where and you know, we're going to go back 0:41:16.800 --> 0:41:18.640 to something like interest rates, Like last year we thought 0:41:18.640 --> 0:41:20.239 there were gonna be a ton of cuts and then 0:41:20.239 --> 0:41:23.319 we've kind of totally rethought like our thinking around that, 0:41:23.480 --> 0:41:26.759 and what are the implications for investment decisions, what it 0:41:26.840 --> 0:41:28.680 costs to buy a home. We keep talking about like 0:41:28.719 --> 0:41:33.279 the American dream for so many Americans being not available 0:41:33.280 --> 0:41:37.040 because it's so expensive. So I guess you sad. You 0:41:37.080 --> 0:41:39.520 seem like it would be an optimistic person a lot, 0:41:39.800 --> 0:41:42.080 but you're optimists. So I'm just is there any like 0:41:42.600 --> 0:41:46.520 are all American consumers that you guys have a vantage 0:41:46.520 --> 0:41:48.760 point on and business is doing really well? 0:41:49.280 --> 0:41:53.640 Yes, it's that you have low unemployment just as a 0:41:53.680 --> 0:41:58.680 starting point things like buying homes. There's a affordability issue, 0:41:59.040 --> 0:42:02.600 but access capital is at a hall time high. I 0:42:02.640 --> 0:42:06.879 see in terms of looking at certainly black owned financial institutions. 0:42:06.880 --> 0:42:08.440 They've never been more prosperous. 0:42:08.560 --> 0:42:11.520 They never had so much capital, they've never had so 0:42:11.600 --> 0:42:14.799 much opportunity, They've never had the kind of opportunity we 0:42:14.880 --> 0:42:18.080 have to partner with Corporate America. I got like, JP 0:42:18.239 --> 0:42:21.520 Morgan is my partner, Okay, they just think about the 0:42:21.560 --> 0:42:24.640 implications of that of having a company of that magnitude 0:42:24.840 --> 0:42:28.759 who's focused and really seriously from Jamie Dimon. I came 0:42:28.800 --> 0:42:31.719 here to meet with Jamie Diamond, who actually will sit 0:42:31.800 --> 0:42:34.560 down with you and talked about how you're doing and 0:42:34.600 --> 0:42:37.000 what kind of things the JP Morgan could do to 0:42:37.080 --> 0:42:39.799 help you as a company to grow and prosper We've 0:42:39.840 --> 0:42:43.800 never had that kind of opportunity this post technology driven, 0:42:44.239 --> 0:42:47.160 post George Floyd environment. 0:42:47.280 --> 0:42:50.120 It's dramatically different, dramatically. 0:42:50.440 --> 0:42:52.239 Why do you think people are so pessimistic? 0:42:52.280 --> 0:42:52.440 Then? 0:42:52.600 --> 0:42:55.200 And we've talked about this on the program lately, but 0:42:55.360 --> 0:42:57.120 there was a Harris Pool a few weeks ago that 0:42:57.200 --> 0:42:59.480 they teamed up with The Guardian and they found that 0:42:59.520 --> 0:43:02.200 nearly and five Americans believe the US is in an 0:43:02.200 --> 0:43:06.479 economic recession, even though we're not. Forty nine percent believe 0:43:06.480 --> 0:43:08.560 the S and P five hundred is down for the 0:43:08.640 --> 0:43:10.799 year it's not even though it's not more than ten 0:43:10.840 --> 0:43:16.120 percent what you were optimistic, You are feeling prosperous. You 0:43:16.120 --> 0:43:19.000 say your customers are too. What are people getting wrong here? 0:43:20.600 --> 0:43:24.440 I think it's just part of the human condition. Is 0:43:24.640 --> 0:43:26.520 want to talk about your challenge? 0:43:26.520 --> 0:43:27.120 Is you face? 0:43:27.440 --> 0:43:30.440 I couldn't say it any better than you just said it. Okay, 0:43:30.680 --> 0:43:34.160 if you look at the actual facts, Okay, I'm talking 0:43:34.200 --> 0:43:37.239 about what's actually happening. And so if you look at 0:43:37.400 --> 0:43:41.279 if you look at where we are from a factual standpoint, 0:43:41.840 --> 0:43:45.239 it's clear that we've never had this opportunity that we 0:43:45.360 --> 0:43:48.040 have today. And I think the most important thing is 0:43:48.360 --> 0:43:52.200 for everyone to get focused on what's important, to take 0:43:52.200 --> 0:43:56.080 advantage of what's in front of you now, the opportunities 0:43:56.120 --> 0:44:00.160 the technology has brought to us to be able to 0:44:00.160 --> 0:44:02.719 deliver products on a worldwide basis. 0:44:02.840 --> 0:44:04.239 Okay, with one United Bank. 0:44:04.280 --> 0:44:08.160 It's in a position where our products now people are saying, 0:44:08.200 --> 0:44:09.800 have worldwide implications. 0:44:09.920 --> 0:44:11.240 Yeah, Now think about that. 0:44:11.080 --> 0:44:14.920 With a company from an urban community that can create 0:44:14.920 --> 0:44:18.520 a product that not only has national implications, but has 0:44:18.560 --> 0:44:23.920 worldwide implications. But we're in a position to create technology 0:44:24.360 --> 0:44:28.080 that allows you to not only participate in local economies, 0:44:28.120 --> 0:44:31.520 but regional, national, and international opportunities. 0:44:31.560 --> 0:44:33.000 We never had this before. 0:44:33.360 --> 0:44:38.080 Yeah, it's a game changers. I feel like we love 0:44:38.160 --> 0:44:39.600 you know, I want to go back for a second 0:44:39.600 --> 0:44:42.680 because when anybody whenever we bring up Jamie Diamond or 0:44:42.719 --> 0:44:45.080 whenever he's in a story or makes comments, it's always 0:44:45.120 --> 0:44:47.239 among our most read stories. So you you talk about, 0:44:47.280 --> 0:44:50.000 you know, conversations with Jamie and meeting with Jamie, you know, 0:44:50.480 --> 0:44:53.440 what is it that you like to talk to him about, 0:44:53.560 --> 0:44:56.160 and like how you even continue kind of the work 0:44:56.160 --> 0:44:57.560 that you guys are already doing. 0:44:58.680 --> 0:45:04.680 He's a financial okay, that's in a position and cares 0:45:04.719 --> 0:45:09.279 about people who cares about certainly cares about md I 0:45:09.400 --> 0:45:12.960 for the comb Minority Depository Institution, and it's willing to 0:45:13.080 --> 0:45:17.239 use this organization to support the growth and prosperity of 0:45:17.320 --> 0:45:23.040 this critical component of society. I mean, nobody's been doing that. 0:45:23.120 --> 0:45:25.600 I've been doing this long enough that I've seen. 0:45:25.800 --> 0:45:27.800 What is real and what's not real. 0:45:28.120 --> 0:45:31.920 In terms of corporate America's willingness to support the growth 0:45:32.280 --> 0:45:35.120 of other companies, it has never been higher than it 0:45:35.160 --> 0:45:35.680 is today. 0:45:35.880 --> 0:45:38.439 Is Jamie Dimon the exception or you're seeing it much 0:45:38.480 --> 0:45:41.640 more across companies in the financial industry. 0:45:41.719 --> 0:45:44.560 Honestly, he's just the best. They are. They are the 0:45:44.560 --> 0:45:47.880 best program, but they're not the It's not the only program. 0:45:48.200 --> 0:45:50.160 City Banks program is a beast. 0:45:50.400 --> 0:45:55.600 Okay, that's another Jane Frazier and what she's done with 0:45:55.640 --> 0:45:59.480 that company and the opportunities they create for MDIs is 0:45:59.560 --> 0:46:03.840 unpressed taking the time to bring their top people together 0:46:04.320 --> 0:46:08.160 with MDIs so we can learn from them and understand 0:46:08.320 --> 0:46:11.320 what kind of products and services that you can offer. 0:46:11.239 --> 0:46:14.359 That we've never been offered before. They care about they 0:46:14.440 --> 0:46:17.759 care about what's going on, and they're devoting the resources 0:46:17.760 --> 0:46:22.000 of their organizations to helping develop minority communities. You have 0:46:22.040 --> 0:46:28.359 those large corporations actually caring about what's happening in the 0:46:28.400 --> 0:46:30.240 minority communities across the country. 0:46:30.400 --> 0:46:32.799 Just explain to listeners and viewers right now who might 0:46:32.840 --> 0:46:36.120 think that, wait a second, wouldn't you know one United 0:46:36.160 --> 0:46:39.200 be a competitor to JP Morgan or to City thirty seconds? 0:46:39.280 --> 0:46:39.920 Explain why not? 0:46:40.400 --> 0:46:40.960 We have? 0:46:41.520 --> 0:46:45.000 We have different products that we served. One United Bank 0:46:45.080 --> 0:46:48.880 deals with people. We deal with people problems. You're driving 0:46:48.920 --> 0:46:51.839 to work, your truck's broke. It's going to cost six 0:46:51.920 --> 0:46:54.799 hundred dollars. You don't have six hundred dollars you need 0:46:54.840 --> 0:46:59.000 to borrow. You need an emergency small balance, short term 0:46:59.080 --> 0:47:02.279 loan in order to solve your problem. That's the one 0:47:02.360 --> 0:47:05.719 United Bank product. You can't get a checking account because 0:47:05.760 --> 0:47:08.080 there's some problem that occurred to your youth, that's the 0:47:08.160 --> 0:47:10.960 one United Bank product. We have different products and serve 0:47:11.040 --> 0:47:12.160 different types of customers. 0:47:12.680 --> 0:47:14.840 We're gonna get to Juneteenth in just a minute, but 0:47:15.320 --> 0:47:17.920 I just want you to explain the asset light or 0:47:17.920 --> 0:47:21.120 the branch light model approach to banking, because I think 0:47:21.120 --> 0:47:23.560 people would be familiar with You have some branches in 0:47:23.600 --> 0:47:26.240 some states, but you also have a huge digital presence, 0:47:26.239 --> 0:47:27.239 and that's mostly where the. 0:47:27.239 --> 0:47:28.680 Group is actually nice. 0:47:28.760 --> 0:47:30.040 Yeah, yeah, exactly. 0:47:30.360 --> 0:47:33.680 Well, okay, we're in a world where now the way 0:47:33.800 --> 0:47:37.799 people expect to receive their financial services, they expect it 0:47:37.840 --> 0:47:39.520 to be with them at all times. 0:47:39.560 --> 0:47:41.560 That those things, those cell phones things. 0:47:41.840 --> 0:47:45.319 People are expecting to have access to banking services seven 0:47:45.400 --> 0:47:47.600 days of week, twenty four hours a day, and to 0:47:47.640 --> 0:47:48.600 be able to spend. 0:47:48.360 --> 0:47:50.080 Money all around the world. 0:47:50.560 --> 0:47:52.880 They they're not going to drive down street and around 0:47:52.880 --> 0:47:55.000 the block and stand in line, no matter how good 0:47:55.040 --> 0:47:59.319 your donuts are. So so one is just pure convenience. 0:47:59.400 --> 0:48:03.200 So we're shifting from this community banking model where you 0:48:03.239 --> 0:48:06.520 had these branches and people would go in them and 0:48:06.640 --> 0:48:10.320 know the tailers and all that, to this technology driven 0:48:10.360 --> 0:48:15.520 model where there's expectations are much higher in the two ways, 0:48:15.800 --> 0:48:19.200 the convenience of getting access to the services, but also 0:48:19.320 --> 0:48:23.000 the products in themselves. You're talking banks are moving from 0:48:23.080 --> 0:48:26.400 an environment where you had what they call utilitarian products. 0:48:26.480 --> 0:48:28.920 That's what a checking or a savings account is. It 0:48:28.960 --> 0:48:31.160 allows you to perform some kind of function. 0:48:31.480 --> 0:48:34.319 But when you look at products like Vice one, technology 0:48:34.440 --> 0:48:38.360 driven products, they actually help you to make money. You 0:48:38.440 --> 0:48:41.920 understand the difference something that facilitates you spend any money 0:48:42.160 --> 0:48:45.160 versus something that's actually giving you information that's gonna make 0:48:45.239 --> 0:48:48.200 you more money. So this is a whole new generation 0:48:48.280 --> 0:48:52.160 of banking products that service unique needs that are outside 0:48:52.160 --> 0:48:56.920 the banking system. Here again, banks, I've never been nothing 0:48:57.000 --> 0:48:59.239 but a banker my whole life, so you know it's 0:48:59.280 --> 0:49:02.800 within that kind of type. But banks serve very different needs. Okay, 0:49:03.400 --> 0:49:06.439 a bank is a corporation that is this to make 0:49:06.480 --> 0:49:09.400 as much money as it can. Now, however, where that 0:49:09.840 --> 0:49:15.799 leads this whole area of the problems and challenges people have, right, 0:49:15.920 --> 0:49:19.239 and what people's needs are, and technology allows you to 0:49:19.280 --> 0:49:21.400 create products to service the people's needs. 0:49:21.400 --> 0:49:23.160 What would you say, though, the importance of you know, 0:49:23.200 --> 0:49:25.920 we've kind of really increasingly gotten away from the community 0:49:25.960 --> 0:49:29.400 bank that understands the community, right, because a banker from 0:49:29.480 --> 0:49:33.760 a high might not understand a community and its needs specifically, 0:49:33.800 --> 0:49:36.600 and something that from up high might look like a risk. 0:49:37.239 --> 0:49:40.040 If you understand the community, you would say, not so much. 0:49:40.120 --> 0:49:43.680 So do we lose something though, Well, that's. 0:49:43.480 --> 0:49:45.279 The beauty of technology. 0:49:45.320 --> 0:49:45.839 Now we don't. 0:49:47.000 --> 0:49:47.879 It's not even close. 0:49:48.000 --> 0:49:51.759 Okay, what data can do, What actual data can do 0:49:51.960 --> 0:49:56.000 as opposed to what you might think, what your hunches, 0:49:56.200 --> 0:50:01.319 the intuition that you have about things. World has advanced 0:50:01.320 --> 0:50:04.719 from that, like I think I understand the need of 0:50:04.760 --> 0:50:07.480 this person to being able to actually understand the needs. 0:50:07.560 --> 0:50:09.360 You would say, the data would be more inclusive. 0:50:10.080 --> 0:50:14.320 I'm saying the data is more important. That we shouldn't 0:50:14.320 --> 0:50:19.799 rely on hunches and intuition and making decisions. That's what 0:50:20.040 --> 0:50:23.239 creates a lot of the problems because that's where biases come. 0:50:23.320 --> 0:50:24.840 But that's where bias come. 0:50:24.680 --> 0:50:28.600 From because people think they understand things that they actually 0:50:28.640 --> 0:50:31.880 don't understand. If you think you understand that the data 0:50:31.920 --> 0:50:35.160 will tell you the real answer. And so once again, 0:50:35.320 --> 0:50:39.080 as an advancement in our ability to make decisions for 0:50:39.200 --> 0:50:41.399 one United that's one of the big things we do. 0:50:41.480 --> 0:50:45.960 We rely on the actual data related to an individual 0:50:46.160 --> 0:50:48.440 to make to make the determination of whether we can 0:50:48.480 --> 0:50:52.120 issue credit about them or not, not some intuition about 0:50:52.120 --> 0:50:53.640 what we think about some broad basics. 0:50:53.640 --> 0:50:55.600 So that doesn't include a credit score. It does include 0:50:55.600 --> 0:50:57.920 a credit score, not in our. 0:50:57.840 --> 0:51:02.200 Case, we use much deeper information than credit scores. Credit 0:51:02.239 --> 0:51:05.960 scores is once again it's stated technology. 0:51:06.040 --> 0:51:07.000 I hate to put it like. 0:51:06.920 --> 0:51:11.359 That, but but there you have their credit models that 0:51:11.400 --> 0:51:14.480 you can use. The companies like us use that allow 0:51:14.560 --> 0:51:18.000 you to be able to evaluate people that aren't in 0:51:18.040 --> 0:51:22.359 your immediate physical proximity. That you can you can do 0:51:22.440 --> 0:51:25.920 business with people on a nation wide basis because you 0:51:26.000 --> 0:51:29.879 have the foundation for being able to understand that individual 0:51:30.000 --> 0:51:33.560 and their performance quickly and and to be able to 0:51:33.600 --> 0:51:37.040 issue credit, as an example, on a nation wide basis, 0:51:37.120 --> 0:51:39.600 as opposed to only being around the corner because you 0:51:39.680 --> 0:51:41.840 think you know how a particular group performs. 0:51:41.960 --> 0:51:44.040 That's an interesting way of thinking about because we've talked 0:51:44.040 --> 0:51:47.080 so much about the biasness and data. So it's interesting 0:51:47.080 --> 0:51:49.360 to hear you say that it's that it's a better, 0:51:49.760 --> 0:51:53.000 potentially a better take at it. We've got about three 0:51:53.000 --> 0:51:55.879 minutes left and we have had a great conversation off 0:51:55.920 --> 0:52:00.120 air with you of talking about Juneteenth, the day that 0:52:00.160 --> 0:52:03.160 we're coming up on our second year or so third 0:52:03.239 --> 0:52:07.680 year of recognizing it. But the point is that a 0:52:07.719 --> 0:52:10.480 lot of people don't even know what it's still about exactly. 0:52:10.560 --> 0:52:13.719 That's the most important thing is to realize Juneteenth is 0:52:13.760 --> 0:52:18.080 a federal holiday. It's not a black people holiday. It's 0:52:18.080 --> 0:52:21.640 a celebration for a It's celebrating one of the best 0:52:21.680 --> 0:52:26.000 decisions that America ever made, which was to free the slaves. 0:52:26.040 --> 0:52:29.120 That helps all of us to move forward. It gives 0:52:29.200 --> 0:52:33.120 us a massive social dividend, if you will, because it's 0:52:33.239 --> 0:52:37.040 slavery institution like that hurts both the person who is 0:52:37.080 --> 0:52:40.240 a slave, but it also equally hurts the person who's 0:52:40.360 --> 0:52:43.560 enslaving the person. Nobody wants to live in a world 0:52:43.600 --> 0:52:48.520 that where people are being cold blooded and brutal towards 0:52:48.600 --> 0:52:51.920 other people. You can't have any position of leadership acting 0:52:52.000 --> 0:52:55.960 in that way. So with that decision, that single decision 0:52:56.000 --> 0:53:00.520 to free the slaves is yielding this massive socialist and 0:53:00.560 --> 0:53:03.720 it's going it heals this massive economic benefit. 0:53:04.040 --> 0:53:07.080 Let's not forget. To end slavery, we had to have. 0:53:07.360 --> 0:53:11.360 Our country had slavery as the backbone of its economy. 0:53:11.840 --> 0:53:14.560 We had to recognize that we could get rid of 0:53:14.600 --> 0:53:19.000 that and create more economic value by getting rid of 0:53:19.040 --> 0:53:22.040 this institution that was so important at that time. And 0:53:22.080 --> 0:53:25.080 that's where we are. Of course, we've been slowed down 0:53:25.280 --> 0:53:28.680 because we went from slavery to Jim Crow. But now 0:53:29.280 --> 0:53:31.960 as we move away from Jim Crow and work on 0:53:32.040 --> 0:53:35.840 solving the last big piece of this, which is financial literacy, 0:53:36.200 --> 0:53:38.480 because if you look at what's happened to our society, 0:53:38.520 --> 0:53:42.200 we now bifurcate. Our society used to be bifurcated based 0:53:42.239 --> 0:53:45.000 on things like race and religion and that kind of 0:53:45.000 --> 0:53:47.880 stuff that we grew up with. It's now bifurcated based 0:53:47.960 --> 0:53:50.600 on the halves are the people who are financially literate 0:53:50.920 --> 0:53:52.000 and have nots are. 0:53:51.920 --> 0:53:53.160 The people who don't. 0:53:53.200 --> 0:53:56.520 So we have to work on this issue of making 0:53:56.560 --> 0:53:59.880 sure that all of our society is financially literate. 0:54:00.040 --> 0:54:01.320 Here again, let's not forget. 0:54:01.360 --> 0:54:04.640 We live in a society that forgot to teach financial literacy. 0:54:05.120 --> 0:54:08.399 So we only have about forty seconds left. We've talked 0:54:08.400 --> 0:54:10.400 about financial literacy. I feel like I've been doing this 0:54:10.400 --> 0:54:13.360 a long time. Tim's been doing this forever. How do 0:54:13.440 --> 0:54:15.440 we do it? How do we do it? And forgive 0:54:15.480 --> 0:54:17.280 us because we only have about thirty forty seconds? 0:54:17.680 --> 0:54:24.240 Make financial literacy a mandatory requirement to graduate from high school. 0:54:24.680 --> 0:54:28.479 Just start, just start with that. You have to take 0:54:28.920 --> 0:54:32.640 a significant course of study in order to graduate from 0:54:32.719 --> 0:54:33.280 high school. 0:54:33.400 --> 0:54:33.800 Period. 0:54:34.280 --> 0:54:38.400 And what's so important about that is your whole life. 0:54:38.719 --> 0:54:41.080 With all due respect, you're going to solve very few 0:54:41.239 --> 0:54:45.400 chemistry problems, very few biology problems, but you're gonna but 0:54:45.480 --> 0:54:49.480 you're gonna be solvy financial problems every single day. So 0:54:49.880 --> 0:54:52.239 that's the bare minimum we could do is make it 0:54:52.280 --> 0:54:55.680 an mandatory requirement. And we have to get the corporations 0:54:55.680 --> 0:54:59.080 involved because we have to teach the teachers in order 0:54:59.120 --> 0:55:01.800 to be able to feel min that mandate. 0:55:01.920 --> 0:55:05.839 Amen, We're in, We're in. We totally a great come 0:55:05.840 --> 0:55:07.200 back again. We would love. 0:55:07.360 --> 0:55:09.880 Please help me back. I we would love the opportunity. 0:55:10.080 --> 0:55:11.920 I enjoy Kevin hanging out with you. 0:55:11.960 --> 0:55:12.320 Guys. 0:55:12.360 --> 0:55:14.680 We enjoyed having you hang with us. Kevin Cohey, Chairman 0:55:14.719 --> 0:55:16.239 and CEO of One United Bank. 0:55:16.320 --> 0:55:20.680 Right here on Bloomberg, you're listening to the Bloomberg Business 0:55:20.680 --> 0:55:24.160 Week podcast. Catch us live weekday afternoons from two to 0:55:24.239 --> 0:55:26.759 five pm Eastern. Listen on Apple car Play and and 0:55:26.920 --> 0:55:29.600 brout Auto with a Bloomberg Business app, or watch us 0:55:29.640 --> 0:55:31.879 Live on YouTube. 0:55:32.480 --> 0:55:35.399 Financial literacy is a crucial life skill, and ever more 0:55:35.440 --> 0:55:39.680 so for disadvantaged adolescence. Tackling that an organization that aims 0:55:39.719 --> 0:55:42.520 to invest in young people was founded about twenty five 0:55:42.560 --> 0:55:44.440 years ago by Grammy Award winning. 0:55:44.480 --> 0:55:47.279 Usher Yes that Usher is you we're talking about, and 0:55:47.320 --> 0:55:50.399 his mom, Janetta Patten. They created the Usher's New Look 0:55:50.440 --> 0:55:53.320 Foundation as a way to help teens from tough backgrounds 0:55:53.480 --> 0:55:57.680 achieve financial success. Bloomberg News Cross Asset reporter Emily Grafeo 0:55:57.719 --> 0:56:01.720 and I spoke with President and CEO of NL Karsha. 0:56:01.320 --> 0:56:04.319 More in nineteen ninety nine. Us Sure was thinking, how 0:56:04.320 --> 0:56:06.880 can I help young people get a new look on life? 0:56:06.920 --> 0:56:09.480 He and his mom they actually sat in the courtroom 0:56:09.480 --> 0:56:12.600 of Judge Glinda Hatchett and observed a court proceeding, a 0:56:12.680 --> 0:56:15.680 juvenile proceeding, and they said, these young people, their leaders, 0:56:15.719 --> 0:56:19.560 they just need mentors, they need some support, they need exposure, 0:56:19.840 --> 0:56:22.160 and so he created Usher's New Look to be able 0:56:22.160 --> 0:56:24.799 to provide that and give youth a new look on 0:56:24.880 --> 0:56:29.360 life through workforce development, but also exploring their spark, their passion. 0:56:29.520 --> 0:56:32.160 He found his passion early on and knew that that 0:56:32.320 --> 0:56:34.440 changed his life, and so to be able to provide 0:56:34.480 --> 0:56:38.200 that to young people twenty five years later is exactly 0:56:38.239 --> 0:56:38.839 what we're doing. 0:56:38.880 --> 0:56:41.000 I want to share with people information about the program 0:56:41.000 --> 0:56:43.600 because I think it's unique in several ways. One is 0:56:43.640 --> 0:56:47.640 that it's a decade long program, but also that it 0:56:47.719 --> 0:56:51.240 starts essentially when these kids are teenagers, so it starts 0:56:51.280 --> 0:56:56.600 relatively late. Take us through what exactly happens to these 0:56:56.640 --> 0:56:58.440 teenagers over that ten year period. 0:56:58.800 --> 0:57:01.279 Right, So from fort teen to twenty four, our young 0:57:01.320 --> 0:57:03.920 people can participate in Usher's New Look, and we have 0:57:04.040 --> 0:57:07.520 standard bearing comprehensive programming that starts with one day training 0:57:07.600 --> 0:57:10.359 that we host in schools. And the unique thing about 0:57:10.360 --> 0:57:12.200 that is that it's peer to peers. So our post 0:57:12.200 --> 0:57:15.480 secondary students are standing in front of their peers fourteen 0:57:15.520 --> 0:57:18.959 year old and teaching them about leadership, about business, about 0:57:19.000 --> 0:57:22.000 financial literacy, and their spark. We also have an after 0:57:22.040 --> 0:57:24.800 school program for high school students in Atlanta as well 0:57:24.800 --> 0:57:26.880 as in New York, where they do a deep dive 0:57:26.920 --> 0:57:30.360 into our four pillars talent, education, career, and service. We 0:57:30.400 --> 0:57:34.280 believe those four pillars help to develop global, passion driven leaders. 0:57:34.600 --> 0:57:37.040 And then once those students graduate high school, which we 0:57:37.040 --> 0:57:39.560 have one hundred percent high school graduation rate for students 0:57:39.560 --> 0:57:42.800 who participate, they go on to post secondary and we 0:57:42.880 --> 0:57:46.680 support them with transition into adulthood by teaching them executive 0:57:46.720 --> 0:57:51.320 function skills but also connecting them with companies, internships, and 0:57:51.400 --> 0:57:54.080 learning about life skills that they need to be amazing 0:57:54.160 --> 0:57:55.240 citizens that they are. 0:57:55.880 --> 0:57:59.240 It's interesting that you start in middle school. Can you 0:57:59.280 --> 0:58:01.440 talk a little bit about, at least for the youngest 0:58:01.520 --> 0:58:04.640 kids in the program, what are the top resources that 0:58:04.760 --> 0:58:05.760 they need right now? 0:58:06.280 --> 0:58:08.320 The top resources that they need, And we just did 0:58:08.360 --> 0:58:10.960 a study actually last year with young people, what do 0:58:11.040 --> 0:58:13.720 you feel is the most prevalent issues facing you and 0:58:13.760 --> 0:58:15.880 your peers? And those top things that came out right 0:58:15.880 --> 0:58:19.680 now are mental health support and strategies to help them 0:58:19.720 --> 0:58:21.600 cope with those things. As we know, we have come 0:58:21.640 --> 0:58:23.880 out of a global pandemic and so that has changed 0:58:23.920 --> 0:58:27.600 a bit. But also learning about financial literacy and exposure 0:58:27.640 --> 0:58:30.440 to various careers. You know, if you can't see it, 0:58:30.480 --> 0:58:32.160 you can't be it, is what we say, and so 0:58:32.280 --> 0:58:35.640 being able to show them various careers where they can 0:58:35.760 --> 0:58:37.919 use their skills and talents is important as well. 0:58:38.480 --> 0:58:41.520 Why is fourteen to twenty four the right age to 0:58:41.600 --> 0:58:45.440 focus on? I was talking with Elizabeth Sedrin, our producer, 0:58:45.480 --> 0:58:49.240 about this earlier and the idea there are a lot 0:58:49.240 --> 0:58:53.280 of nonprofits that focus on essentially college to cradle, right 0:58:53.320 --> 0:58:55.640 the idea are cradle to college excuse me, the idea 0:58:55.640 --> 0:58:58.080 of starting very young and going to college age. Why 0:58:58.080 --> 0:58:59.600 focus on fourteen to twenty four. 0:59:00.200 --> 0:59:03.360 That's the age where they're starting to increase their future orientation. 0:59:03.520 --> 0:59:07.280 They're understanding their you know, their agency, and developing the 0:59:07.360 --> 0:59:09.640 life that they want at that time, and so we're 0:59:09.680 --> 0:59:12.919 able to share and embark upon the in part upon them, 0:59:13.120 --> 0:59:15.760 the skills and strategies that they need to be successful. 0:59:15.880 --> 0:59:17.680 Do you ever get any pushbacks from folks who say 0:59:17.680 --> 0:59:19.920 that's too late, we need programs earlier. 0:59:20.160 --> 0:59:22.439 You know what, No, there are forty two million young 0:59:22.520 --> 0:59:25.400 people here in the United States, and so there are 0:59:25.520 --> 0:59:28.920 organizations that focus on younger and we happen to focus 0:59:28.960 --> 0:59:31.720 on that fourteen to twenty four. It's not a silver bullet, 0:59:31.720 --> 0:59:34.000 it's not just one year, but we stay with them 0:59:34.000 --> 0:59:37.040 for the entire time. As you notice, fourteen to twenty four. 0:59:37.760 --> 0:59:39.320 It's intern season. 0:59:39.640 --> 0:59:42.320 Tim, I'm wonderful I saw I came in yesterday morning 0:59:42.320 --> 0:59:43.400 and said, welcome interns. 0:59:43.520 --> 0:59:44.880 There's a lot of interns. 0:59:44.880 --> 0:59:47.800 There's a lot of kind of early career energy in 0:59:47.840 --> 0:59:51.560 the building right now. Yes, you know, what kind of 0:59:51.600 --> 0:59:54.840 resources are you giving to those older I guess students 0:59:54.840 --> 0:59:58.920 in early career people in the program, what exactly are 0:59:58.920 --> 0:59:59.600 they looking for? 1:00:00.240 --> 1:00:03.600 So we partner with various private and public sector entities 1:00:03.640 --> 1:00:06.440 to help do resume reviews for the students. They do 1:00:06.560 --> 1:00:10.120 mock interviews, they learn about different careers that are out there. 1:00:10.200 --> 1:00:12.800 They also learn about the internship process. You know, we 1:00:12.840 --> 1:00:16.000 don't want to assume that they know exactly how that works, 1:00:16.280 --> 1:00:18.240 and so we start teaching them from the time that 1:00:18.280 --> 1:00:21.040 they are in high school eleventh grade through college what 1:00:21.080 --> 1:00:23.680 they need to do to be ready, but also providing 1:00:23.720 --> 1:00:25.880 them with the skills that they need, especially when you're 1:00:25.880 --> 1:00:28.520 talking about work of now in the work of the future. 1:00:28.840 --> 1:00:31.560 So we have a partnership right now with IBM, where 1:00:31.560 --> 1:00:35.200 our students are having access to IBM skills built so 1:00:35.240 --> 1:00:38.080 that they can learn more about artificial intelligence, but also 1:00:38.200 --> 1:00:40.640 career ready skills so that they're ready to not just 1:00:41.400 --> 1:00:43.439 do the careers of the future, but also lead. 1:00:43.880 --> 1:00:47.000 We're Bloomberg. We love numbers. Yes, you mentioned one hundred 1:00:47.000 --> 1:00:50.720 percent graduation rate, which is just incredible for any program. 1:00:50.760 --> 1:00:52.320 I don't care what program we're talking about here, but 1:00:52.360 --> 1:00:55.280 one hundred percent anything is amazing. What are some other 1:00:55.320 --> 1:00:59.000 metrics that you use as kids get closer to aging 1:00:59.000 --> 1:01:00.720 out of the program, I can't call them kids, actually 1:01:00.720 --> 1:01:03.640 as their young adults, young adults get closer to aging 1:01:03.640 --> 1:01:05.920 out of the program. That is a metric for success, Like, 1:01:05.960 --> 1:01:07.280 how do you know this is working? 1:01:07.760 --> 1:01:07.960 Right? 1:01:08.040 --> 1:01:10.440 So we work very closely with evaluators. We have a 1:01:10.480 --> 1:01:12.880 logic model that focuses on our objectives and what we're 1:01:12.920 --> 1:01:15.760 looking for is change in behaviors and attitudes. So we're 1:01:15.760 --> 1:01:18.200 looking to the fact do they have a physical resume, 1:01:18.440 --> 1:01:21.200 are they ready to go to work? But also do 1:01:21.240 --> 1:01:23.840 they have a change thought about their impact and what 1:01:23.880 --> 1:01:26.200 they can do in their community, how they can lead 1:01:26.240 --> 1:01:28.920 in their community, as well as the skills that they 1:01:28.960 --> 1:01:31.000 have gained do they have a bank account, Do they 1:01:31.080 --> 1:01:33.920 understand what savings and personal budgeting means for them? And 1:01:34.000 --> 1:01:35.760 so those are some of the objectives that we have 1:01:35.880 --> 1:01:36.240 as well. 1:01:36.320 --> 1:01:39.760 We talk about this all the time, these personal finance skills. 1:01:40.520 --> 1:01:43.120 This is not taught in school, right, You only know 1:01:43.160 --> 1:01:46.720 about this stuff if you learn from family, friends, mentors. 1:01:46.760 --> 1:01:47.200 That's right. 1:01:47.800 --> 1:01:51.320 So you leave college or leave high school not knowing 1:01:52.080 --> 1:01:54.320 simple things that look simple to a lot of people 1:01:55.120 --> 1:01:58.240 but are actually kind of tough to do on your own, exactly. 1:01:58.280 --> 1:02:00.800 And we find ourselves busting a lot of myths that 1:02:00.840 --> 1:02:05.120 they may have around credit, around saving, around just earning 1:02:05.160 --> 1:02:07.520 potential and those sorts of things. And what we find 1:02:07.600 --> 1:02:11.440 is that again through our evaluations, that financial literacy scores 1:02:11.480 --> 1:02:13.680 the highest on all of our training. It's what our 1:02:13.720 --> 1:02:17.200 young people say, I didn't know much about that at all, 1:02:17.400 --> 1:02:19.320 and now I know a lot, and I'm able to 1:02:19.320 --> 1:02:21.400 share that with my peers as well as my family. 1:02:21.640 --> 1:02:22.200 So you're right. 1:02:22.280 --> 1:02:23.920 I mean, we don't talk about it a lot. It's 1:02:23.920 --> 1:02:27.600 pretty taboo, but they're learning and they're able to go 1:02:27.720 --> 1:02:30.320 and share and be ambassadors with their community. 1:02:30.440 --> 1:02:34.360 It's really empowering and that's a I'm wondering if you 1:02:34.400 --> 1:02:37.439 have any other examples of kind of a statistic like that, 1:02:38.000 --> 1:02:39.240 so we could end on a high note. 1:02:39.280 --> 1:02:39.920 Absolutely. 1:02:40.040 --> 1:02:43.720 So when you talk about first generation college students about 1:02:43.720 --> 1:02:47.040 fifty one percent in the United States, and we are 1:02:47.120 --> 1:02:50.160 now at about eighty percent of our students and getting 1:02:50.160 --> 1:02:52.920 them on to go on to career, we end up 1:02:52.920 --> 1:02:55.320 with about ninety percent of our students going on to college. 1:02:55.400 --> 1:02:58.840 And so when you have eighty one percent first gen 1:02:59.200 --> 1:03:02.920 and them are going to college and graduating within five years, 1:03:03.480 --> 1:03:06.360 that is something that we are very, very proud of. 1:03:06.600 --> 1:03:09.240 It is a really cool program. Thank you so much 1:03:09.280 --> 1:03:11.600 for joining us during your visit to New York. That's 1:03:11.960 --> 1:03:16.400 Karsha More, President and CEO of Usher's New Look. It 1:03:16.480 --> 1:03:21.200 is the now nonprofit that twenty five years ago to singer, songwriter, dancer, 1:03:21.240 --> 1:03:25.560 superstar Usher Raymon the Fourth started with his own mall. 1:03:27.320 --> 1:03:31.200 You're listening to the Bloomberg Business Week podcast. Listen live 1:03:31.280 --> 1:03:34.479 each weekday starting at two pm Eastern on applecar Play 1:03:34.520 --> 1:03:37.360 and Androyd Auto with the Bloomberg Business App. You can 1:03:37.400 --> 1:03:40.640 also listen live on Amazon Alexa from our flagship New 1:03:40.720 --> 1:03:44.360 York station, Just Say Alexa Play Bloomberg eleven thirty. 1:03:45.520 --> 1:03:47.880 You may have missed this last month. Luxury home prices 1:03:47.880 --> 1:03:51.040 and select Asian cities are soaring, bucking a downward trend 1:03:51.040 --> 1:03:54.280 in more established markets, including New York and London. And 1:03:54.320 --> 1:03:58.000 according to real estate consultancy Night Frank, prime property prices 1:03:58.040 --> 1:04:00.280 defined as the top five percent of the market gift 1:04:00.600 --> 1:04:02.840 fell more than two percent in New York and London 1:04:02.880 --> 1:04:05.200 in the first quarter compared to the same period one 1:04:05.280 --> 1:04:05.680 year ago. 1:04:06.040 --> 1:04:09.080 And that's been prompting wealthy buyers to pull the trigger 1:04:09.160 --> 1:04:11.040 when it comes to a new home. So let's get 1:04:11.040 --> 1:04:13.720 a check on the luxury market with Louise Phillips Forbes 1:04:14.080 --> 1:04:16.520 real estate broker with Brown Harris Stevens here in New 1:04:16.600 --> 1:04:19.120 York City. She's been in the business for wow more 1:04:19.160 --> 1:04:21.240 than three decades, and she sold more than five point 1:04:21.320 --> 1:04:24.560 five billion dollars worth of real estate, specializing in luxury 1:04:24.600 --> 1:04:26.560 residential sales and development projects. 1:04:26.720 --> 1:04:29.600 I think individuals that a month ago they might have 1:04:29.680 --> 1:04:32.960 pulled the trigger that they are still contemplating because I 1:04:32.960 --> 1:04:34.640 think remember at the end of the year, we were 1:04:34.680 --> 1:04:38.439 expecting five great reductions and we haven't seen really any 1:04:38.480 --> 1:04:41.919 of those. In fact, we've had conversations about it coming up. 1:04:42.000 --> 1:04:46.680 So for some of those people it means holding off. However, 1:04:47.200 --> 1:04:49.320 what's right for one person's not always right for another. 1:04:49.800 --> 1:04:53.360 What's surprising for me to hear from you about this 1:04:53.480 --> 1:04:55.040 quarter is this is supposed to be the busy time 1:04:55.080 --> 1:04:57.680 of year, I mean spring ahead of summer, and you 1:04:57.960 --> 1:04:58.880 had a great first quarter. 1:04:59.000 --> 1:05:02.640 I had an record, I mean almost one hundred million 1:05:02.680 --> 1:05:03.240 in sales. 1:05:03.480 --> 1:05:06.280 But that's the most as quiet time, right, No. 1:05:06.080 --> 1:05:09.760 Not, as the cycles are off because of COVID number one, 1:05:10.440 --> 1:05:14.439 number two. You have to realize that people have been 1:05:14.760 --> 1:05:18.680 holding off what decisions that they make since twenty nineteen. 1:05:18.720 --> 1:05:20.560 For a minute, so is that why people finally pulled 1:05:20.560 --> 1:05:21.439 the trigger? Yes? 1:05:21.600 --> 1:05:24.680 And I think I believe my psychologically, I think that 1:05:24.720 --> 1:05:27.680 people believed that the that the interest rates were going 1:05:27.760 --> 1:05:28.440 to follow. 1:05:28.560 --> 1:05:32.520 How many of your buyers are buying with a mortgage versus. 1:05:32.280 --> 1:05:36.600 Very few right now, ironically of the thirty two transactions, 1:05:36.680 --> 1:05:39.640 so the average deal is not first quarter. The average 1:05:39.680 --> 1:05:42.960 deal is not thirty eight million. The average deal is 1:05:43.000 --> 1:05:46.600 you know, three, six, five, two, six hundred. 1:05:46.400 --> 1:05:48.920 Thousand mortgages are mostly cash, all cash. 1:05:49.200 --> 1:05:53.240 All but seven all seven of your sixty three percent 1:05:53.320 --> 1:05:56.720 across my business was a little higher, but across the 1:05:56.720 --> 1:05:59.640 market was sixty three in the first quarter, so percent. 1:06:00.000 --> 1:06:01.000 Why did they pull the trigger? 1:06:01.040 --> 1:06:01.240 Then? 1:06:01.280 --> 1:06:01.480 Then? 1:06:01.680 --> 1:06:03.320 Is it just that they were so for them, the 1:06:03.400 --> 1:06:07.280 rate environment wasn't so much. Wish is always king. It 1:06:07.360 --> 1:06:08.320 is always king. 1:06:08.520 --> 1:06:10.360 And it also You've got to remember some of these 1:06:10.400 --> 1:06:13.200 sellers have been waiting for nine months, twelve months. 1:06:13.200 --> 1:06:15.040 But that's what I'm saying. So it's not like, Okay, 1:06:15.080 --> 1:06:17.800 they thought maybe it had nothing to do with the 1:06:17.880 --> 1:06:20.280 rate environment. I think they were just it held off. 1:06:20.480 --> 1:06:25.240 It's a negotiating tactic. My experience is that if I 1:06:25.320 --> 1:06:27.880 have three offers on a piece of property and one's 1:06:27.880 --> 1:06:32.240 a mortgage, and I'm able to push the cash person 1:06:32.680 --> 1:06:36.000 or even choose to take less because. 1:06:35.640 --> 1:06:39.160 They're cash, it was seller driven. It's seller do them. 1:06:39.280 --> 1:06:42.720 Having a choice was very powerful and important and new. 1:06:43.240 --> 1:06:44.760 They hadn't experienced that in a while. 1:06:45.400 --> 1:06:47.280 Can you talk about I think this is unique to 1:06:47.400 --> 1:06:49.640 New York because there are so many cash deals, but 1:06:49.680 --> 1:06:51.400 can you talk a little bit about why a cash 1:06:51.400 --> 1:06:53.040 deal is so much more appealing to you than to 1:06:53.080 --> 1:06:55.960 deal with financing that could come in at a higher price. 1:06:56.280 --> 1:06:58.760 Not seeing the reality shows where they're like not it's 1:06:58.760 --> 1:07:02.160 a cash down deal. It's even lower and you're closing 1:07:02.320 --> 1:07:06.240 next tuesday and they're closing next tuesday. Done like it's fascinating. 1:07:06.320 --> 1:07:08.800 Yes, yes, and you have like eleven inch heels on 1:07:08.920 --> 1:07:09.600 while you're doing it. 1:07:09.640 --> 1:07:11.800 I know, I know they look perfect. I know it's 1:07:11.880 --> 1:07:13.959 like a little unreal. But anyway, so. 1:07:14.200 --> 1:07:18.920 No, listen, the preference becomes about cleanliness, meaning you know, 1:07:19.280 --> 1:07:22.560 you go to contract and then you don't have an appraisal. 1:07:23.080 --> 1:07:25.720 How would you feel if you had five bids on 1:07:25.760 --> 1:07:27.600 a piece of property, which, by the way, this happened 1:07:27.640 --> 1:07:31.000 all through the new year for myself, right, and then 1:07:31.080 --> 1:07:34.960 you it doesn't appraise. You have no contingency. But how 1:07:34.960 --> 1:07:37.960 do you feel as a buyer? How does a seller feel? 1:07:38.360 --> 1:07:39.360 Does somebody walk? 1:07:39.800 --> 1:07:41.280 So it's just. 1:07:41.440 --> 1:07:45.200 Cleaner if you have the luxury of that choice. Otherwise 1:07:45.480 --> 1:07:47.560 we are it's our job to be able to make 1:07:47.600 --> 1:07:48.400 things appraise. 1:07:48.840 --> 1:07:51.160 How do you then in your world where you're dealing 1:07:51.200 --> 1:07:53.720 obviously where some people who are listening are being like, 1:07:53.840 --> 1:07:56.280 I'm going to throw up because it's like five six 1:07:56.320 --> 1:07:59.280 million dollars all cash, Like it's not a slice of 1:07:59.680 --> 1:08:04.040 total American life. It is a slice, a small slice. 1:08:04.760 --> 1:08:07.440 Having said that, What does it tell you about the 1:08:07.680 --> 1:08:11.440 broader economic environment in a world where we Louise have 1:08:11.560 --> 1:08:13.200 so many conflicting data points. 1:08:13.240 --> 1:08:15.920 Yes, and I don't think that's going to change for 1:08:15.960 --> 1:08:19.839 a while, Carol, Okay, I mean listen, think just remember 1:08:19.880 --> 1:08:22.799 that when interest rates are high, the rental market is high. 1:08:23.280 --> 1:08:24.200 I that's true. 1:08:24.320 --> 1:08:27.200 Have somebody relocating here who got into the New York 1:08:27.680 --> 1:08:31.559 Academy of Arts and they are relocating here, and we 1:08:31.560 --> 1:08:35.080 were looking for nine thousand dollars rental two bedroom. The 1:08:35.160 --> 1:08:38.839 same apartment two years ago went for fifty eight hundred 1:08:39.120 --> 1:08:41.600 and it came on for seventy nine hundred and it 1:08:41.640 --> 1:08:42.080 went for. 1:08:42.080 --> 1:08:44.000 Eighty three in two days. 1:08:44.400 --> 1:08:47.760 So rent that is a forty seven percent increase in 1:08:47.840 --> 1:08:50.320 two years because the cost of money is more expensive. 1:08:50.800 --> 1:08:55.679 And that so when interest rates are up, buyers can't. 1:08:55.720 --> 1:08:58.280 They get on the sidelines and they rent and they 1:08:58.320 --> 1:08:59.080 are affected. 1:08:59.600 --> 1:09:01.960 So so you're saying that people who are not buying 1:09:02.000 --> 1:09:03.320 are driving up the rental market. 1:09:03.520 --> 1:09:07.040 Yes, but you're also safely it's a tougher it's environment 1:09:07.479 --> 1:09:09.040 and says something more broadly macro. 1:09:09.200 --> 1:09:12.920 Right, I'm talking about for the lower end of the market. Right, 1:09:13.040 --> 1:09:15.640 So I have somebody who's contemplating selling a townhouse for 1:09:15.680 --> 1:09:17.920 six and a half million dollars and they're like, the 1:09:17.960 --> 1:09:21.799 cost of my capital, I can rent something for fifteen thousand. 1:09:21.840 --> 1:09:23.639 When he goes to look at what you can pay 1:09:23.680 --> 1:09:25.680 for fifteen thousand dollars, he's like, I'm going to wait 1:09:25.720 --> 1:09:30.719 a year, So to wait to sell, yes, because interesting, 1:09:30.880 --> 1:09:34.440 it's sometimes some of this is a luxury. 1:09:34.960 --> 1:09:35.919 It is a luxury. 1:09:36.000 --> 1:09:39.320 And again I ask the same question, whether it's a 1:09:39.400 --> 1:09:43.080 twenty million dollar buyer or a six hundred thousand dollars buyer, 1:09:43.200 --> 1:09:46.560 do you want to pay your own mortgage or do 1:09:46.560 --> 1:09:48.120 you want to pay somebody else's mortgage? 1:09:48.160 --> 1:09:49.120 Because that's what it is. 1:09:49.520 --> 1:09:52.600 I do think that you can try to time everything, 1:09:53.080 --> 1:09:56.120 but it's really about understanding what I mean. I have 1:09:56.200 --> 1:10:00.360 people that are borrowing money from their grandmother who going 1:10:00.400 --> 1:10:04.840 to inherit ninety two years old, and he's like, I'd 1:10:04.840 --> 1:10:06.920 love to be able to use it while you're alive, 1:10:07.520 --> 1:10:11.160 and that is what they did. So people are getting creative, 1:10:11.240 --> 1:10:14.800 and it is what my recommendation is is whether you're 1:10:14.840 --> 1:10:17.439 borrowing from your sister, you're co owning with your parents, 1:10:17.960 --> 1:10:19.720 you know, I mean, I'm thinking about I have a 1:10:20.080 --> 1:10:21.960 twenty a son that's gonna be twenty one years old, 1:10:22.000 --> 1:10:24.680 who's looking at real estate every day, like I want 1:10:24.720 --> 1:10:26.360 to buy my own apartment. He wants to buy an 1:10:26.400 --> 1:10:28.439 apartment where he can have a roommate. He doesn't think 1:10:28.479 --> 1:10:29.839 he can afford to live by himself. 1:10:29.960 --> 1:10:33.719 Yeah. One last question, does what goes on in office? 1:10:33.960 --> 1:10:36.840 Does it matter? Does it impact you at all? In 1:10:36.920 --> 1:10:39.120 terms of certain neighborhoods are not really. 1:10:38.880 --> 1:10:42.799 Certainly excuse people's They're more cnics that are in that field. 1:10:42.880 --> 1:10:45.759 I mean a lot of my business or commercial brokers 1:10:45.800 --> 1:10:48.920 that I do business with, meaning helping them personally with 1:10:48.960 --> 1:10:49.599 their homes. 1:10:49.800 --> 1:10:52.519 Yeah, and you know, they're they're feeling squeezed. 1:10:52.600 --> 1:10:54.800 They're like, oh my god, how are you holding up? 1:10:54.800 --> 1:10:56.960 We is I'm like, okay, yeah, I don't even want 1:10:56.960 --> 1:10:57.639 to tell them. 1:10:57.720 --> 1:10:59.679 So because they are feeling so squeezed. 1:11:00.160 --> 1:11:00.439 Yees. 1:11:00.560 --> 1:11:03.000 I mean the New York Times that there's a building 1:11:03.040 --> 1:11:07.320 in Time Square that just had a short sale, like 1:11:07.560 --> 1:11:09.400 I don't know, was it sixty two percent? 1:11:09.560 --> 1:11:10.040 Yeah. 1:11:10.120 --> 1:11:13.720 This is the way that that commercial market works, and 1:11:13.760 --> 1:11:16.000 the way lending works, and the way that they use 1:11:16.080 --> 1:11:20.000 the leverage. That is the science of that business, and 1:11:20.400 --> 1:11:23.600 that is always going to find cycles. It's going to 1:11:23.600 --> 1:11:26.200 have cycles, whether it's fifteen years or seven years or 1:11:26.280 --> 1:11:26.960 four years. 1:11:27.400 --> 1:11:30.040 That was Louis Phillips Forbes, real estate broker with Brown 1:11:30.080 --> 1:11:33.240 Harris Stevens. Following our conversation, a report from the appraiser 1:11:33.240 --> 1:11:37.200 Miller Samuel noting Manhattan apartment runs unexpectedly slipped in May, 1:11:37.479 --> 1:11:39.880 a sideways move for the market at the start of 1:11:39.880 --> 1:11:41.600 one of its typically busiest. 1:11:41.200 --> 1:11:44.160 Seasons and tim Speaking of seasons and cycles, we've seen 1:11:44.200 --> 1:11:47.560 private jet ownership go through a few out of the pandemic, 1:11:47.800 --> 1:11:51.519 a surge during the crisis, followed by receiving pandemic driven demand. 1:11:51.920 --> 1:11:54.040 So for what's happening right now, we turn to an 1:11:54.080 --> 1:11:57.720 industry veteran with over thirty five years of aircraft sales experience, 1:11:58.200 --> 1:12:00.880 Janin Janarelli, is the presidency apart. 1:12:00.600 --> 1:12:04.519 Of the business jet market does not like surprises, It 1:12:04.560 --> 1:12:07.920 does not like instability, it doesn't like anything to upset 1:12:07.960 --> 1:12:11.800 the apple cart, and it does happen every four years regardless. 1:12:12.000 --> 1:12:13.920 I wish I could tell you why. It's just that 1:12:14.000 --> 1:12:15.719 I can tell you that the people in the trade 1:12:15.760 --> 1:12:16.439 plan for it. 1:12:16.640 --> 1:12:18.880 So how is it manifesting in your business right now? 1:12:19.120 --> 1:12:21.799 Oh, it's much slower than it was two years ago. 1:12:22.080 --> 1:12:25.160 And even in comparison to last year, I can see 1:12:25.240 --> 1:12:27.920 that the buyers are being much more cautious before they 1:12:27.960 --> 1:12:31.840 actually open their pursues. They're spending a great deal of 1:12:31.880 --> 1:12:36.599 time reviewing the asset, and sometimes they get really close 1:12:36.920 --> 1:12:39.000 and then they back themselves up and we just have 1:12:39.080 --> 1:12:39.800 to wait them out. 1:12:40.080 --> 1:12:43.800 I don't understand because we, you know, fairly regularly talk 1:12:43.880 --> 1:12:46.880 about the wealthier getting wealthy, and I'm not just talking 1:12:46.880 --> 1:12:50.800 about billionaires, but I'm just talking about in general, and 1:12:50.840 --> 1:12:54.680 so I'm trying to understand. Remind us who Janine in 1:12:54.720 --> 1:12:57.000 general is your typical buyer. 1:12:57.680 --> 1:13:01.400 The classic buyer is an entrepreneur made they've built their business, 1:13:01.439 --> 1:13:02.519 they sold their business. 1:13:02.560 --> 1:13:06.120 They're independently wealthy. That's the thing. Both of my personal business. 1:13:06.400 --> 1:13:08.120 A portion of that is also corporate. 1:13:08.439 --> 1:13:11.599 The corporate's perhaps a bit more consistent because they look 1:13:11.640 --> 1:13:14.960 to turn their aircraft over every five to seven years 1:13:15.240 --> 1:13:17.799 because they want to have warranty coverage for the aircraft. 1:13:17.880 --> 1:13:21.120 They don't want any surprises either. But that comes more 1:13:21.120 --> 1:13:23.160 from the operational side. 1:13:23.280 --> 1:13:25.760 And is it American buyers or global buyers? Like I 1:13:25.920 --> 1:13:29.120 love any kind of geographic color you can give us. 1:13:29.439 --> 1:13:32.000 Well, this is I would say more specific to the 1:13:32.120 --> 1:13:34.760 United States. I mean, we're the largest marketplace in the 1:13:34.760 --> 1:13:37.960 world for business aircraft, and the drivers for why people 1:13:38.000 --> 1:13:40.960 acquire aircraft here are a little bit different than the 1:13:40.960 --> 1:13:43.040 rest of the world. We also are one of the 1:13:43.040 --> 1:13:47.360 most friendly environment for operating aircraft privately, and one of 1:13:47.400 --> 1:13:51.200 the big reasons for that is the airspace. The available airspace, 1:13:51.280 --> 1:13:54.559 the ability to fly direct from point to point. The 1:13:54.640 --> 1:13:59.519 airspace is so tightly congested. Let's just take Europe for example, 1:13:59.840 --> 1:14:02.920 or regulated that you have to get a slot for 1:14:03.240 --> 1:14:06.200 arrivals and departures, and most of the airport, particularly at 1:14:06.680 --> 1:14:09.840 very busy times of the year. It's a deterrent to 1:14:10.040 --> 1:14:13.320 operating your aircraft freely. And we are the essence of 1:14:13.720 --> 1:14:15.360 freedom here in the United States. 1:14:15.640 --> 1:14:17.599 Well, in terms of you talked about the typical client, 1:14:17.680 --> 1:14:21.200 you have the entrepreneur person who sells their business, is 1:14:21.240 --> 1:14:25.360 self made, is independently wealthy. What do they then go 1:14:25.439 --> 1:14:28.000 do with that aircraft? The question that I have is 1:14:28.479 --> 1:14:31.960 are they one hundred percent flying on it themselves or 1:14:32.040 --> 1:14:35.679 are they leasing it out or chartering it to other 1:14:35.720 --> 1:14:37.599 folks when they're not using it. 1:14:37.800 --> 1:14:40.320 So I think the perspective that most of the buyers 1:14:40.360 --> 1:14:44.120 today take is what's the easiest way to place the 1:14:44.160 --> 1:14:47.880 aircraft into service and continue that service, And generally that 1:14:47.920 --> 1:14:50.560 would be a management company as opposed to an independent 1:14:50.600 --> 1:14:54.040 flight department. And when you're with the management company, there's 1:14:54.160 --> 1:14:56.800 usually the added benefit of saying, would you like to 1:14:56.880 --> 1:15:00.200 charter the airplane? And I would say that the last 1:15:00.240 --> 1:15:03.799 majority of people who have aircraft undermanaged will certainly agree 1:15:03.840 --> 1:15:04.919 to also chartering. 1:15:05.240 --> 1:15:08.120 Wow, Okay, give us the price range for a small 1:15:08.160 --> 1:15:10.960 to mid size versus the super heavies. 1:15:11.360 --> 1:15:15.320 So the small you're probably looking at three to eight million, 1:15:15.720 --> 1:15:18.160 maybe a little bit more, the newer the aircraft, the 1:15:18.240 --> 1:15:20.599 super mid size, depending on the age of the airplane, 1:15:20.640 --> 1:15:22.880 anywhere from seven to. 1:15:23.400 --> 1:15:27.160 Fifteen, sixteen, seventeen million, and then the large category. 1:15:27.320 --> 1:15:30.600 Again, age is a big influencer in terms of the 1:15:30.640 --> 1:15:31.160 price point. 1:15:31.200 --> 1:15:32.280 But let's talk about. 1:15:32.120 --> 1:15:35.880 Newer aircraft, newer being fifteen years or newer, and we're 1:15:35.920 --> 1:15:37.320 probably twenty million and up. 1:15:37.640 --> 1:15:41.360 That was Janinionarelli, president and CEO of par Avion. 1:15:41.200 --> 1:15:43.840 Still ahead on Bloomberg Business Week. What do a Thai 1:15:43.920 --> 1:15:47.000 restaurant in Portland, Oregon A UK restaurant that grows its 1:15:47.080 --> 1:15:50.120 mushrooms in a closet and a Spanish restaurant that sells 1:15:50.160 --> 1:15:54.280 seafood surrounded by dry ice all have in common. I 1:15:54.320 --> 1:15:54.840 want to go there. 1:15:54.840 --> 1:15:56.840 That's what they think I was going to say. I can. 1:15:56.920 --> 1:15:58.479 I can name several things. I'm not going to give 1:15:58.520 --> 1:16:01.719 it all away. Also, why oh why are Wall Street Bros. 1:16:01.800 --> 1:16:04.760 Leaving the trading desks maybe a little early on Fridays 1:16:04.760 --> 1:16:06.880 and going out to the Hamptons for a little bit 1:16:06.880 --> 1:16:07.639 of tuna fishing. 1:16:07.680 --> 1:16:10.360 Bloomberg pursuits in our own cake crater. They're coming up next. 1:16:10.520 --> 1:16:11.280 This is Bloomberg. 1:16:15.800 --> 1:16:19.639 You're listening to the Bloomberg Business Week podcast. Listen live 1:16:19.720 --> 1:16:22.960 each weekday starting at two pm Eastern ont applecar Play 1:16:22.960 --> 1:16:25.840 and Android Auto with the Bloomberg Business App. You can 1:16:25.840 --> 1:16:29.080 also listen live on Amazon Alexa from our flagship New 1:16:29.160 --> 1:16:32.799 York station, Just say Alexa play Bloomberg eleven thirty. 1:16:34.640 --> 1:16:37.559 So we absolutely love, love love talking food here on 1:16:37.560 --> 1:16:40.120 Bloomberg Business Week, and Tim love love loves eating food. 1:16:40.120 --> 1:16:42.400 He's often eating during broadcasts, which is what. 1:16:44.560 --> 1:16:44.760 I know. 1:16:44.840 --> 1:16:47.439 I always got to give our as secrets. This is 1:16:47.439 --> 1:16:49.320 why a batch of stories on the best places to 1:16:49.320 --> 1:16:51.719 eat in the US, in London, really around the globe 1:16:51.880 --> 1:16:55.000 was something we definitely wanted to sing our teeth into, 1:16:55.360 --> 1:16:57.439 literally wanted to sing our teeth into, to. 1:16:57.439 --> 1:17:00.160 Be fair, And we have the perfect guest here in 1:17:00.200 --> 1:17:02.880 our studio to break it all down. She's usually based 1:17:02.920 --> 1:17:05.559 in London. Lucky for us, she's back in a New 1:17:05.640 --> 1:17:07.839 York so we can catch up with her in at person. 1:17:08.160 --> 1:17:11.000 We welcome back Bloomberg Pursuits Food editor Kate Creator. 1:17:11.160 --> 1:17:14.200 Hi, Hi, Hi, guys, by how are you? 1:17:14.680 --> 1:17:16.519 I am so happy to see you. You guys are 1:17:16.520 --> 1:17:17.479 a site for sore eyes. 1:17:17.760 --> 1:17:18.479 That's what I want to say. 1:17:18.560 --> 1:17:20.360 Ah, well, we are so happy to see you. And 1:17:20.400 --> 1:17:23.479 you've been so busy in London, especially this time of 1:17:23.560 --> 1:17:27.320 year when we're getting best restaurant after best restaurant after 1:17:27.360 --> 1:17:30.200 best restaurant, And that's really where we want to start 1:17:30.280 --> 1:17:33.160 because the one in the UK that was ranked as 1:17:33.200 --> 1:17:37.599 the best restaurant has some really unique qualities. 1:17:38.160 --> 1:17:41.240 In fact, it does it has It has something very 1:17:41.280 --> 1:17:44.400 significant happening in the dining room, which is that they 1:17:44.400 --> 1:17:48.479 grow mushrooms in a glass walled cabinet and then that's 1:17:48.520 --> 1:17:51.120 a dish that's featured on their menu a restaurant called 1:17:51.120 --> 1:17:55.160 the Ledbury one best restaurant in the UK in the 1:17:55.280 --> 1:17:57.960 National Restaurant Awards that were just announced. 1:17:58.560 --> 1:18:02.200 So is the idea here that these mushrooms can grow 1:18:02.280 --> 1:18:04.760 year round? Is that why they're done on display? Or 1:18:04.800 --> 1:18:08.280 is it all about just the patrons actually seeing where 1:18:08.280 --> 1:18:10.360 this food comes from. Is a little bit of a novelty. 1:18:10.439 --> 1:18:10.760 What is it? 1:18:11.000 --> 1:18:12.759 It's a super novelty. I mean it speaks. 1:18:12.760 --> 1:18:15.320 It works on so many levels because you know, if 1:18:15.360 --> 1:18:17.479 you've been to a good New York City steakhouse, you 1:18:17.520 --> 1:18:20.120 can also you can often see the steaks these like 1:18:20.200 --> 1:18:24.160 giant hunks of meat and right there in the locker, 1:18:24.280 --> 1:18:27.720 right hanging in the locker, and so here they're like, no, 1:18:27.840 --> 1:18:30.759 let's put mushrooms front and center, and it's. 1:18:30.640 --> 1:18:31.519 Easy to grow. 1:18:31.640 --> 1:18:33.840 There's actually all these like come Christmas time, if you 1:18:33.880 --> 1:18:35.960 need like a fun gift to give somebody who's got 1:18:36.000 --> 1:18:38.680 a little diy thing going on, there's all these like 1:18:38.720 --> 1:18:41.000 do it yourself mushroom kids. But they grow some really 1:18:41.080 --> 1:18:44.240 beautiful looking mushrooms, like these lions made which look like 1:18:44.240 --> 1:18:47.280 they're from another planet. So it's kind of fun to 1:18:47.320 --> 1:18:49.639 feel like you really can't get more local than that, 1:18:49.760 --> 1:18:51.920 especially in the middle of London, you know, where there's 1:18:51.920 --> 1:18:53.760 not always a lot of opportunity to grow a lot 1:18:53.760 --> 1:18:56.719 of produce. But look, you can grow mushrooms in a cabinet, 1:18:56.840 --> 1:18:58.840 like you said, Tim, it's like a year round thing. 1:18:59.160 --> 1:19:01.439 And then there's early one of the dishes on the 1:19:01.439 --> 1:19:04.519 tasting menu is mushrooms from the cabinet, so you almost like, 1:19:04.600 --> 1:19:05.840 I feel like the next thing is that you just 1:19:05.880 --> 1:19:07.240 go pick them yourself, right, all. 1:19:07.240 --> 1:19:08.840 Right, So if you don't like mushrooms, you still find 1:19:08.840 --> 1:19:09.679 something there to eat. 1:19:09.600 --> 1:19:11.679 Yes, exactly. Yeah, it's not just that, don't worry. 1:19:11.720 --> 1:19:13.519 You know what struck me though, Kate, that this was 1:19:13.560 --> 1:19:15.920 a restaurant that actually, you know, during the pandemic, like 1:19:15.960 --> 1:19:18.040 it was a really hard time. It just reminds me 1:19:18.120 --> 1:19:21.439 that even like established places had a tough time. 1:19:21.600 --> 1:19:23.360 It's such a good no, it's such a smart thing 1:19:23.400 --> 1:19:25.599 to bring up, Carol, because this was a restaurant called 1:19:25.600 --> 1:19:29.840 The Libury and it's been open for about a dozen 1:19:29.960 --> 1:19:34.840 fifteen years, and so in twenty twenty when lockdown started 1:19:34.840 --> 1:19:37.240 in the UK, they announced that they weren't going to open, 1:19:37.280 --> 1:19:39.400 and it sort of sent they weren't going to reopen 1:19:39.720 --> 1:19:41.920 and it did send shock waves not just through the 1:19:42.000 --> 1:19:45.760 UK but around the world because it's a really notable restaurant, 1:19:46.160 --> 1:19:48.559 So it was it was like a good success story 1:19:48.600 --> 1:19:50.439 when they reopened. In the fact that they have now 1:19:50.520 --> 1:19:53.439 jumped to the top of this best restaurant list for 1:19:53.479 --> 1:19:55.200 the UK is awesome news. 1:19:55.240 --> 1:19:56.680 Do we have time for one more on London just 1:19:56.680 --> 1:19:58.920 because Kate spent like the past few years there, Okay, 1:19:58.960 --> 1:20:01.840 as time as we want. Tell us about Io Adami, 1:20:01.920 --> 1:20:03.599 who it was over at A Coco. 1:20:04.360 --> 1:20:07.040 He's he's a really cool That's a good story too 1:20:07.160 --> 1:20:11.320 because he A Coco is sort of an ambitious West 1:20:11.320 --> 1:20:15.920 African restaurant that's also tasting menu and they were a 1:20:15.920 --> 1:20:19.559 couple of years ago when Michelin to Last year, when 1:20:19.600 --> 1:20:25.559 Michelin announced their awards, A Coco was significantly not was 1:20:25.640 --> 1:20:28.559 not given a star and people freaked out. I can't 1:20:28.560 --> 1:20:31.280 remember his name, but will somebody actually went on a 1:20:31.320 --> 1:20:35.080 podcast and ranted about the fact that A Coco wasn't 1:20:35.120 --> 1:20:38.280 on it. And so now the fact that Chef Io 1:20:38.800 --> 1:20:43.920 has been recognized as like upcoming chef just shows shows 1:20:43.960 --> 1:20:47.960 the rising star power that's happening with West African food 1:20:48.160 --> 1:20:50.040 in the UK. You don't see so much to West 1:20:50.040 --> 1:20:52.720 African food here in the US, but it's definitely a 1:20:52.760 --> 1:20:54.799 force to be reckoned with now in London. 1:20:54.880 --> 1:20:56.960 I do wonder with restaurant rankings. I think you get 1:20:57.000 --> 1:20:58.400 into it in one of your stories that we're going 1:20:58.439 --> 1:20:59.680 to talk about. But Kate, I feel like, you know, 1:20:59.720 --> 1:21:02.479 with all the award ceremonies, there's been a lot of pressure, like, hey, 1:21:02.720 --> 1:21:05.000 people who are doing the judging, broaden out in terms 1:21:05.000 --> 1:21:07.479 of what you're looking at, and diversity is obviously an issue, 1:21:07.479 --> 1:21:09.439 But I do feel like there's a there's a thread 1:21:09.479 --> 1:21:11.040 through some of your stories about that. 1:21:11.120 --> 1:21:11.240 Well. 1:21:11.280 --> 1:21:14.000 I just want to say yay for Bloomberg because about 1:21:14.000 --> 1:21:17.760 a year ago or last fall anyway, one of we 1:21:17.800 --> 1:21:20.280 wrote a story about how there were only six black 1:21:20.479 --> 1:21:24.040 Michelin starre chefs around the world, not just in the US, 1:21:24.200 --> 1:21:27.559 not just in Europe, around the world, And within months 1:21:27.560 --> 1:21:29.600 of that story happening, things started. 1:21:29.360 --> 1:21:30.280 Changing a little bit. 1:21:30.400 --> 1:21:34.240 And so this woman, the chef Joke Abakare, who has 1:21:34.280 --> 1:21:37.559 an awesome restaurant in London called Chisheru, got a Michelin 1:21:37.600 --> 1:21:40.400 Star soon after that, and then somebody in New York 1:21:40.439 --> 1:21:42.639 I think, also got a Michelin Star. So the number 1:21:42.720 --> 1:21:45.400 is slowly creeping up, but it's still like a shockingly 1:21:45.439 --> 1:21:47.160 low number. I think you can still count on two 1:21:47.160 --> 1:21:52.599 hands how many how many Michelin star chefs restaurants run 1:21:52.640 --> 1:21:53.639 by black chefs there are? 1:21:53.840 --> 1:21:56.479 Okay, there are one hundred on this list. Be honest 1:21:56.520 --> 1:21:59.200 with us, how many of these have you been able 1:21:59.240 --> 1:21:59.639 to eat at? 1:22:00.160 --> 1:22:02.680 The UK one? Well, let's first be clear to him. 1:22:02.680 --> 1:22:04.920 I'm mostly based in London, and fifty three of them 1:22:04.920 --> 1:22:07.639 were in London, so yay, London. London dominated this list. 1:22:08.479 --> 1:22:12.599 I would say maybe twenty one. Thing that's cool about 1:22:12.640 --> 1:22:14.200 this list I think we get to talk about it 1:22:14.280 --> 1:22:16.800 in a minute. But these lists are all these these 1:22:16.800 --> 1:22:19.920 three big restaurant lists, one worldwide, one US and one 1:22:20.040 --> 1:22:24.240 UK are The way they're voted on is different for 1:22:24.320 --> 1:22:27.240 each one, and some of them you feel like are 1:22:27.280 --> 1:22:30.160 more random or like you're less able to say, like, wow, 1:22:30.200 --> 1:22:32.680 this is the best restaurant. But the UK list is 1:22:32.800 --> 1:22:34.880 kind of great because they have about three hundred people 1:22:35.000 --> 1:22:37.599 voting for it and it really is sort of functions 1:22:37.640 --> 1:22:39.920 as a heat map of what's happening where you would 1:22:39.960 --> 1:22:43.360 tell people to go, and maybe they're not all deserving 1:22:43.400 --> 1:22:45.280 of being on the top one hundred. But you want 1:22:45.320 --> 1:22:47.120 to go and have an opinion, like it's a good 1:22:47.200 --> 1:22:49.519 thing to go and say like, wow, I went here. 1:22:49.560 --> 1:22:51.600 I went to Ledbury. Is it the best restaurant? No, 1:22:51.680 --> 1:22:53.439 but I went and I have an opinion. I got 1:22:53.439 --> 1:22:54.679 I saw my mushrooms growing. 1:22:55.000 --> 1:22:56.479 That's pretty cool. Can I just tell you the first 1:22:56.479 --> 1:22:58.200 time I went to London, Like, I wasn't a frostworth 1:22:58.240 --> 1:23:00.280 the food because it was years ago, and it was 1:23:00.920 --> 1:23:04.160 to go with Cain, my husband, who's not very experimental, 1:23:04.160 --> 1:23:05.920 and we did did a lot of like I don't know, 1:23:06.040 --> 1:23:08.200 roasts and things. But like the last time I was 1:23:08.200 --> 1:23:10.080 and I visited you with my daughter, like I was 1:23:10.160 --> 1:23:12.360 just blown away by the amount of like the food 1:23:12.400 --> 1:23:13.000 that's there. 1:23:12.880 --> 1:23:13.720 It's gotten really good. 1:23:13.720 --> 1:23:15.920 And this is this is probably subject for another for 1:23:15.960 --> 1:23:18.840 another conversation, but dollar for dollar, like if you have 1:23:18.880 --> 1:23:21.840 one hundred dollars to spend in London and New York, 1:23:21.880 --> 1:23:22.840 you'll eat better in London. 1:23:22.840 --> 1:23:23.559 And I would say, all. 1:23:23.560 --> 1:23:24.920 Right, if you can go anywhere in the world, let's 1:23:24.920 --> 1:23:26.720 talk about the best restaurant in the world. Can we 1:23:26.720 --> 1:23:28.000 talk about that Barcelona? 1:23:28.280 --> 1:23:30.679 Let's go see. We have a lot to do. Carol 1:23:31.439 --> 1:23:31.800 we do. 1:23:32.000 --> 1:23:36.080 Yeah, discruitar just Frutara and Barcelona was voted the number 1:23:36.120 --> 1:23:39.120 one restaurant. It didn't there were some people. For people 1:23:39.160 --> 1:23:42.840 who watched these World's fifty Best Restaurant lists closely, it 1:23:42.880 --> 1:23:46.280 wasn't super surprising because last year was number two and 1:23:46.360 --> 1:23:48.840 this list places just sort of creep up. 1:23:48.880 --> 1:23:51.120 It's sort of like your turn. Okay, your turn. 1:23:51.600 --> 1:23:54.519 So if you were betting, if you're betting, I like 1:23:54.680 --> 1:23:57.919 so these awards too. It's like surprise, was not surprised 1:23:57.960 --> 1:24:00.240 the odds this The awards took place in Vain, I guess, 1:24:00.240 --> 1:24:02.600 and if you were, if you were betting there, you 1:24:02.600 --> 1:24:03.880 wouldn't have gotten a big return. 1:24:04.080 --> 1:24:09.680 Here's the problem in my life. I never know. I 1:24:09.720 --> 1:24:11.439 have a lot of problems. I have a lot of 1:24:12.160 --> 1:24:14.680 life when it comes to Restaura. Well, first of all, 1:24:14.720 --> 1:24:17.240 I never got to dinner anymore. That's that's my first problem, 1:24:17.320 --> 1:24:20.240 which is fine. But the other one is that I 1:24:20.479 --> 1:24:22.720 don't I'm not in the right circles to go to 1:24:22.760 --> 1:24:25.720 these restaurants before they're on the list, because once they're 1:24:25.720 --> 1:24:27.360 on the list, forget about it. 1:24:27.640 --> 1:24:30.000 You're you know, if that's an excellent point, Adam Mix. 1:24:30.560 --> 1:24:32.839 The US did not do so well. On the World's 1:24:32.840 --> 1:24:35.160 Best Restaurant list. We only have two in the top fifty, 1:24:35.400 --> 1:24:38.000 but one of them a restaurant called Atom Mix, which 1:24:38.040 --> 1:24:39.479 is actually in New York. So if you get a 1:24:39.560 --> 1:24:42.479 chance to go, please do. It's a cree It's a 1:24:42.520 --> 1:24:47.760 sensational Korean tasting menu restaurant. But after this list came out, 1:24:48.120 --> 1:24:51.360 reservations that Atom Mix became a trending started trending on 1:24:51.400 --> 1:24:54.360 social media. And I wish I could help you, Tim, 1:24:54.400 --> 1:24:55.559 but I don't know if I can help you. 1:24:55.600 --> 1:24:57.639 It's like flixeeing Hamilton before I went to. 1:24:57.560 --> 1:24:59.400 Broadway precise I have a friend who did that. I 1:24:59.400 --> 1:25:01.599 have a friend who that at the public theater. He's 1:25:01.640 --> 1:25:02.160 a legend. 1:25:02.439 --> 1:25:05.000 That's yeah, it's likewise, you would be a legend if 1:25:05.000 --> 1:25:06.320 you can get an ad a mix right now? 1:25:06.560 --> 1:25:09.040 All right, I want to ask you about the best 1:25:09.080 --> 1:25:12.240 restaurant in the United States is in Portland or. 1:25:12.280 --> 1:25:13.360 It's gone Lang Lang Ban. 1:25:13.479 --> 1:25:16.840 Yeah, so this this restaurant, this is like so the 1:25:16.880 --> 1:25:19.280 news for the US wasn't this is a different fifty 1:25:19.400 --> 1:25:22.519 best Yes, So this is so this is like you said, 1:25:22.560 --> 1:25:25.800 it's very much restaurant awards season, and in fact, the 1:25:25.840 --> 1:25:29.200 best restaurants for the UK were announced at five o'clock 1:25:29.280 --> 1:25:33.880 New York time on Monday, June whatever June day that was, 1:25:34.080 --> 1:25:37.080 and the James Bird Awards were announced five hours later. 1:25:37.479 --> 1:25:39.200 So it really take. 1:25:39.160 --> 1:25:41.559 That in London. Yeah, exactly, that's. 1:25:41.360 --> 1:25:42.200 Already old news. 1:25:42.600 --> 1:25:45.880 So yeah, it's called Langban, It's it's I I actually 1:25:45.920 --> 1:25:49.160 haven't been there, but it is, by all accounts, a 1:25:49.160 --> 1:25:52.960 really terrific Thai restaurant where they have you know, they 1:25:53.960 --> 1:25:57.519 their vision of making Thai food. It will be unlike 1:25:57.560 --> 1:26:00.720 any Tai food you've ever had, inspired but homie, and 1:26:00.840 --> 1:26:02.880 it's you know, putting a spotlight on a cuisine that 1:26:02.880 --> 1:26:05.040 people take for granted and things should only cost a 1:26:05.080 --> 1:26:06.080 certain amount of money. 1:26:06.200 --> 1:26:07.920 So it's it's really cool. 1:26:08.320 --> 1:26:10.439 What's really cool about this list is it's regional also, 1:26:10.960 --> 1:26:14.000 so you can go to you know, Washington, d C. 1:26:14.280 --> 1:26:16.200 For example, to find one of the best restaurants or 1:26:16.200 --> 1:26:17.880 at least one of the best emerging chefs. You can 1:26:17.920 --> 1:26:20.120 go to the Rocky Mountain area to find some really 1:26:20.160 --> 1:26:22.280 good restaurants too, at least according to this list. Talk 1:26:22.280 --> 1:26:23.519 about how it's broken down. 1:26:23.640 --> 1:26:25.760 Yeah, they do. It is. 1:26:25.800 --> 1:26:28.000 It is pretty great because for a long time it 1:26:28.080 --> 1:26:32.200 was really dominated by places that you know, like you 1:26:32.280 --> 1:26:35.719 knew like a Thomas Keller per se in French laundry, 1:26:36.080 --> 1:26:39.639 and they ran in some trouble in twenty twenty. They've 1:26:39.680 --> 1:26:42.720 in the in the past couple of years, there have 1:26:42.960 --> 1:26:45.639 been there's definitely been some shake shakeups at the James 1:26:45.640 --> 1:26:49.679 Beards Foundation, And in fact, in twenty twenty they paused 1:26:49.720 --> 1:26:52.479 the awards not just because of the pandemic, but because 1:26:52.479 --> 1:26:57.080 of allegations of bullying and harassment in kitchens, which you've 1:26:57.080 --> 1:26:59.439 probably heard some of those stories, but also because there 1:26:59.560 --> 1:27:02.720 was it was reported that there were gonna be no 1:27:02.800 --> 1:27:05.120 black chefs on the list, and they and they saw 1:27:05.200 --> 1:27:07.479 red flashing lights and more like pause, we're putting pause 1:27:07.520 --> 1:27:10.439 on this. So now they make a big effort to 1:27:10.520 --> 1:27:13.759 be very, very inclusive, and among those things is looking 1:27:13.920 --> 1:27:17.000 all around the country in like every corner of the country. 1:27:17.040 --> 1:27:18.200 So as you said to him, like you can go 1:27:18.200 --> 1:27:20.720 to the Rocky mountains and find a chef. And so 1:27:20.800 --> 1:27:25.400 they award a best chef. They give each region each 1:27:25.520 --> 1:27:29.639 ten they count ten regions across the country and there's 1:27:29.640 --> 1:27:30.719 the best chef in each region. 1:27:30.720 --> 1:27:31.920 I love that they do that, right, It kind of 1:27:31.960 --> 1:27:33.280 runs out. I have to say there was a name 1:27:33.360 --> 1:27:36.559 on this list, David Standridge at the chefs Shatter in Mystic. 1:27:36.880 --> 1:27:38.400 We've been wanting my husband, I've been wanting to go 1:27:38.439 --> 1:27:42.120 because we don't know. We knew his girlfriendly a little 1:27:42.120 --> 1:27:44.559 while ago, like they were I don't know so and 1:27:44.640 --> 1:27:46.000 so we've been like dynas. 1:27:45.760 --> 1:27:47.760 And they were like closer to home here and then 1:27:47.800 --> 1:27:49.679 now he's out where you guys go in the summer. 1:27:49.840 --> 1:27:51.840 Yeah, they were like I don't Yeah, they were living 1:27:51.920 --> 1:27:56.160 above like a boating place and anyway, so that's cross 1:27:56.720 --> 1:27:58.719 the name. I was like, wait, oh my god, it's. 1:27:58.600 --> 1:27:59.960 Closer to home like it used to be. 1:28:00.360 --> 1:28:04.280 The James bird Wards awarded a best restaurant to New 1:28:04.360 --> 1:28:06.760 York City, just New York City, and since then they've 1:28:06.800 --> 1:28:09.720 brought it out to New York State. So this year, 1:28:09.840 --> 1:28:12.559 actually the best chef is I'm Charlie Mitchell at clover 1:28:12.680 --> 1:28:15.080 Hill and Brooklyn. But the fact that there make a 1:28:15.200 --> 1:28:18.440 point of looking outside you go to Brooklyn. 1:28:18.840 --> 1:28:21.479 Can I tell you, like I used to live close 1:28:21.520 --> 1:28:24.120 to this because I'm not cool, never heard of it. 1:28:24.400 --> 1:28:25.880 I looked it up on the map. When I saw 1:28:25.960 --> 1:28:29.000 where it was literally like a twelve minute walk from 1:28:29.040 --> 1:28:29.639 my old apartment. 1:28:29.760 --> 1:28:32.880 I'm pushing back on not cool, tim, but thank you. Look, 1:28:32.920 --> 1:28:36.160 there's still chances cool. There's a lot of public transportation 1:28:36.479 --> 1:28:37.120 and taxis. 1:28:37.800 --> 1:28:39.720 I know, you know, not a lot of ways to 1:28:39.720 --> 1:28:42.519 get reservations apart from buying them on the well. 1:28:42.600 --> 1:28:42.960 That's all. 1:28:43.560 --> 1:28:45.040 That's a different thing, different conversation. 1:28:45.240 --> 1:28:47.599 That's Bloomberg after dark. Okay, what will make you cool 1:28:47.720 --> 1:28:49.920 is maybe fishing for tuna in the Hampton's. 1:28:49.600 --> 1:28:51.639 Depends on who you want to think you're cool. 1:28:51.880 --> 1:28:54.000 Tell us about what's going out out in the Hampton. 1:28:54.280 --> 1:28:55.400 So I am delighted. 1:28:55.880 --> 1:28:59.080 I'm delighted by this trend that's happening this summer, which 1:28:59.160 --> 1:29:02.840 is that the hot the hot activity, especially for people 1:29:02.880 --> 1:29:05.960 who work on Wall Street, it seems, is to get 1:29:06.040 --> 1:29:09.720 on a blade jet or a helicopter or however you 1:29:09.800 --> 1:29:13.160 get out to the Hamptons, go out to Montalk, get 1:29:13.240 --> 1:29:17.040 on a boat and tuna fish and then take your 1:29:17.120 --> 1:29:20.840 tuna to a local sushi chef and have them cook 1:29:20.960 --> 1:29:23.120 and have not cook, have them not cook your tuna, 1:29:23.280 --> 1:29:25.280 but slice it up for you and serve it, take 1:29:25.360 --> 1:29:27.040 pictures and put it out there. 1:29:27.439 --> 1:29:29.720 Okay, So a lot of stuff has happened in recent years, 1:29:29.800 --> 1:29:32.400 some good, some bad that have made it so you 1:29:32.439 --> 1:29:34.960 don't have to spend all day on a charter vessel 1:29:35.160 --> 1:29:36.400 in order to go fishing. 1:29:36.479 --> 1:29:39.040 I mean, yeah, that's actually that's actually the kind of 1:29:39.080 --> 1:29:42.080 great part about this is that for a number of reasons, 1:29:42.160 --> 1:29:45.960 including the boats have gotten faster, and in fact, starlink 1:29:46.040 --> 1:29:48.360 has made it easier to be connected. I think that 1:29:48.439 --> 1:29:50.760 started in twenty twenty two. It's made easier to be 1:29:50.800 --> 1:29:53.760 connected even when you're out there. But also tuna and 1:29:53.840 --> 1:29:56.839 some of those other big game fish are swimming closer 1:29:57.439 --> 1:30:00.200 to the shore than they used to. And I was 1:30:00.200 --> 1:30:02.960 worried it was all about climate change, but in fact, 1:30:03.800 --> 1:30:06.120 both New York State and the federal government have put 1:30:06.160 --> 1:30:08.679 in restrictions on catching some kind of fish. 1:30:09.120 --> 1:30:11.800 So there's all these forage fish. 1:30:11.840 --> 1:30:14.519 They're called they have a name called like mayhyden or something, 1:30:14.880 --> 1:30:18.160 but they're they're much more abundant, and it means that tuna, 1:30:18.439 --> 1:30:20.920 big fish like bluefin and yelf and tuna are swimming 1:30:20.920 --> 1:30:22.720 closer to the shore. So a trip that would have 1:30:22.920 --> 1:30:25.080 used to take ten to twelve hours like round trip 1:30:25.120 --> 1:30:27.080 to go out and try and catch some fish is 1:30:27.200 --> 1:30:29.800 now closer to five or six. So if you have 1:30:29.920 --> 1:30:32.120 flown out to the Hamptons on a Friday night and 1:30:32.160 --> 1:30:36.559 gotten off the little Montauk airport, no, no, you can. 1:30:37.040 --> 1:30:39.639 You can also drive out there, take the train chitney. 1:30:40.400 --> 1:30:42.719 But if you're on the if you're on the docket, 1:30:42.880 --> 1:30:45.599 like sorry, sorry, go ahead. If you're on the dock 1:30:45.640 --> 1:30:48.080 at like five or six am, you're back by like 1:30:48.160 --> 1:30:51.760 eleven or eleven thirty with hopefully some tuna. But there's 1:30:51.760 --> 1:30:54.639 also like sea bass and stripers and bluefish out there, 1:30:55.040 --> 1:30:57.920 and then you can buy coolers. So the guy who 1:30:58.000 --> 1:30:59.880 did this, I should shout him out because he's great. 1:31:00.280 --> 1:31:04.759 His name is Will Kernaki and he has Montalk Angler's 1:31:04.800 --> 1:31:08.240 Club and he used to work Goldman Sacks actually and 1:31:08.320 --> 1:31:10.840 then two and a half it's his family business, the 1:31:10.960 --> 1:31:13.680 Montak Anglers Club, So he joined them about two and 1:31:13.720 --> 1:31:15.960 a half years ago, and since then he's seen a 1:31:15.960 --> 1:31:18.959 lot of his peers like come up and take advantage 1:31:19.000 --> 1:31:19.200 of this. 1:31:19.360 --> 1:31:21.640 And it's I kind of love it. 1:31:21.840 --> 1:31:24.880 Everybody's talking to you, really are They're coming up really 1:31:24.920 --> 1:31:26.160 cool stuff. See, you could do that? 1:31:26.760 --> 1:31:28.439 Should we should do a remote out there on a 1:31:29.120 --> 1:31:31.120 afternoon after spending the morning out fishing. 1:31:31.240 --> 1:31:34.240 There's a great picture of two dudes hold a huge unit. 1:31:34.360 --> 1:31:36.120 It's like really impressive. So you can find that a 1:31:36.160 --> 1:31:39.240 Bloomberg dot Com. Really good stuff. Okay, thank you, thank you. 1:31:39.640 --> 1:31:42.280 Kate creator is a Bloomberg pursuit. It's a food editor 1:31:42.320 --> 1:31:43.960 and she's here, I know in New York City. 1:31:44.000 --> 1:31:45.840 How luck you and you go back to London. I'm 1:31:45.840 --> 1:31:47.360 just going to tell you, Okay, we love having you here. 1:31:47.600 --> 1:31:49.639 That wraps up our weekend edition of Bloomberg Business Week 1:31:49.640 --> 1:31:51.680 from Bloomberg Radio. Thank you so much for joining us. 1:31:51.880 --> 1:31:52.679 I'm Tim Steneveek. 1:31:52.800 --> 1:31:55.080 Time to go do in a fishing Yeah, Carol Messer, 1:31:55.120 --> 1:31:56.880 I have a good and safe weekend, everybody's. 1:31:57.280 --> 1:32:01.880 This is the Bloomberg Business Week podcast, available on Apple, Spotify, 1:32:02.040 --> 1:32:05.759 and anywhere else you get your podcasts. Listen live weekday 1:32:05.760 --> 1:32:09.240 afternoons from two to five pm Eastern on Bloomberg dot Com, 1:32:09.439 --> 1:32:12.720 the iHeartRadio app, tune In, and the Bloomberg Business App. 1:32:12.800 --> 1:32:15.719 You can also watch us live every weekday on YouTube 1:32:16.000 --> 1:32:18.000 and always on the Bloomberg terminal.