WEBVTT - Two Years On 0:00:03.960 --> 0:00:07.080 Welcome to Bloomberg Opinion listeners. I'm Bonnie Quinn. This week, 0:00:07.320 --> 0:00:11.719 it's deeply dysfunctional, has turned antidemocratic, and it's a huge 0:00:11.720 --> 0:00:15.040 problem for the nation. Jonathan Bernstein on echoes of past 0:00:15.160 --> 0:00:18.760 eras for the Republican Party in today's GOP and these 0:00:18.760 --> 0:00:21.320 are the cheapest calories that are at there. David Fickling 0:00:21.360 --> 0:00:25.840 on the food insecurity and worse potentially coming for huge populations. 0:00:26.400 --> 0:00:29.400 First though, it's been two years since George Floyd was 0:00:29.520 --> 0:00:33.720 murdered on twenty and of course the movement towards accountability 0:00:33.760 --> 0:00:36.560 on race in the wake of that moment. This week, 0:00:36.640 --> 0:00:39.680 John Rogers, junior founder of Arial Investments, was a guest 0:00:39.720 --> 0:00:41.559 of the Economic Club of New York and I got 0:00:41.560 --> 0:00:44.239 to speak with him. Rogers will celebrate forty years of 0:00:44.360 --> 0:00:47.440 Ariels founding next year, yet Ariel is still one of 0:00:47.440 --> 0:00:51.120 a tiny fraction of minority run investment firms. I spoke 0:00:51.159 --> 0:00:53.479 with Rogers about change in the industry and I got 0:00:53.479 --> 0:00:56.279 his thoughts on the macro environment. Let's get straight into it. 0:00:56.280 --> 0:00:58.960 It's been a tough time, John, with almost eighteen billion 0:00:59.000 --> 0:01:01.280 dollars in assets on an management how are you looking 0:01:01.280 --> 0:01:04.560 at this market? Itself when we're looking at it as 0:01:04.640 --> 0:01:08.720 a time for opportunity. You know, Warren Buffett always talks 0:01:08.720 --> 0:01:11.360 about the ball at somebody should be your friend. And 0:01:11.440 --> 0:01:14.119 when you have this kind of dramatic shifts in the market, 0:01:14.160 --> 0:01:17.560 and so many companies have changed so dramatically, we think 0:01:17.560 --> 0:01:20.280 there's an opportunity to take advantage of some real, real, 0:01:20.400 --> 0:01:23.080 unique bargains in this environment. So we've been adding to 0:01:23.120 --> 0:01:26.240 our positions each and every week, finding more and more 0:01:26.319 --> 0:01:29.119 areas where again we're excited about putting money to work. 0:01:29.880 --> 0:01:32.680 Is this a major pivot point or is this just 0:01:32.720 --> 0:01:36.480 a resetting of repricing? Well, I think it's In some ways, 0:01:36.560 --> 0:01:40.080 it's a I guess it's a repricing high pe multiples 0:01:40.120 --> 0:01:42.759 have had a multiple compression because you know, with interest 0:01:42.840 --> 0:01:44.520 rates going higher, you don't want to pay a lot 0:01:44.560 --> 0:01:47.520 for future earnings they are gonna be delivered ten twenty 0:01:47.600 --> 0:01:50.520 years down the road. And this ToxS had gone too far. 0:01:50.920 --> 0:01:53.480 I think they were too expensive and people just hadn't 0:01:53.480 --> 0:01:55.320 factored in the higher interest rates and how much it 0:01:55.360 --> 0:01:58.120 can impact how you value these businesses. So we've had 0:01:58.160 --> 0:02:00.680 an array of events contribute to the as well as 0:02:00.720 --> 0:02:04.760 as you say, massive inflation and huge on certainty. Do 0:02:04.840 --> 0:02:07.640 we see more of a sell off? I think we're 0:02:07.640 --> 0:02:09.680 getting You know, you never know. We all know this 0:02:09.760 --> 0:02:12.399 is impossible to predict the markets, and you know we're 0:02:12.440 --> 0:02:14.840 long term investors with a turtle, you know, as a 0:02:14.880 --> 0:02:18.160 logo to remind us the patient's winds. But I do 0:02:18.360 --> 0:02:21.240 feel like the amount of pessimism in gloom in the 0:02:21.240 --> 0:02:24.320 market is so high. Everywhere we go people are talking 0:02:24.320 --> 0:02:26.720 about how afraid that they are, so when there's so 0:02:26.800 --> 0:02:30.040 much pessimism, so much barishness. I do believe you mentioned 0:02:30.080 --> 0:02:32.320 John Templeton earlier. He always said you want to buy 0:02:32.320 --> 0:02:35.480 when there's maximum pessimism. I think we're getting into that 0:02:35.560 --> 0:02:39.040 type of environment that gives me optimism that we're starting 0:02:39.080 --> 0:02:41.680 to bottom here. Let's talk a little bit about the 0:02:41.760 --> 0:02:44.240 economy and what the federalers are is trying to do 0:02:44.320 --> 0:02:47.839 in order to engineer a softish lending. Do we get 0:02:47.840 --> 0:02:50.080 to neutral by the end of the year and roughly 0:02:50.120 --> 0:02:52.720 where is that. One thing I've learned over the thirty 0:02:52.840 --> 0:02:55.040 nine years that i've been an arial is what gets 0:02:55.080 --> 0:02:57.840 you as always the surprises, the things you didn't think about, 0:02:57.840 --> 0:03:00.280 the things you couldn't have worried about. So I think 0:03:00.320 --> 0:03:02.520 when you have all the Federal Reserve and all the 0:03:02.520 --> 0:03:05.760 top economists in the world, and everybody fixated on whether 0:03:05.840 --> 0:03:08.400 we can avoid this recession, whether that can do the 0:03:08.480 --> 0:03:10.600 right thing, I don't think they're gonna be too far off. 0:03:10.880 --> 0:03:13.320 I don't think there'll be some big negative surprise they 0:03:13.320 --> 0:03:15.760 will come from this. It's so well identified, it so 0:03:15.840 --> 0:03:19.400 well talked about, So I don't think we'll get hurt 0:03:19.480 --> 0:03:22.440 by it. So that's a lot of optimism we have 0:03:22.520 --> 0:03:25.000 heard in the last couple of days alone from various 0:03:25.040 --> 0:03:28.200 investors suggesting that it's a very narrow path to avoid 0:03:28.240 --> 0:03:31.800 a recession. What is the likelihood that we can avoid 0:03:31.840 --> 0:03:35.320 that recession. Well, someday we'll have another recession. You know, 0:03:35.360 --> 0:03:38.080 everyone is always predicting many more recessions than ever occur. 0:03:38.520 --> 0:03:40.120 That's sort of one of those cliches that we all 0:03:40.120 --> 0:03:43.280 talk about and here about. So I don't see a 0:03:43.320 --> 0:03:45.960 recession coming anytime soon. As we talk to our management teams, 0:03:45.960 --> 0:03:47.640 you know, we've just gone through the learning season. We've 0:03:47.640 --> 0:03:50.600 been on the phone with CEOs and CFOs of dozens 0:03:50.600 --> 0:03:53.760 of companies in the last several weeks. Everyone is telling 0:03:53.840 --> 0:03:57.600 us they're seeing no signs of a recession. The consumer 0:03:57.640 --> 0:03:59.720 has a lot of money. The consumer has been saving. 0:04:00.120 --> 0:04:03.000 We know the low unemployment rate, so we don't think 0:04:03.000 --> 0:04:05.800 it can be a consumer lead recession. I think it 0:04:05.840 --> 0:04:07.720 will be a ways off. But if it comes a 0:04:07.760 --> 0:04:09.760 little bit early, I means it'll just end a little 0:04:09.760 --> 0:04:12.120 bit earlier. You know, people always think it's like this 0:04:12.240 --> 0:04:14.880 great bookie man out there, we have this great recession. 0:04:15.720 --> 0:04:18.000 But eventually, you know, we all know, once you have 0:04:18.080 --> 0:04:21.000 the recession, we have a recovery. And you know, when 0:04:21.040 --> 0:04:22.920 you go to the annual meeting for Berkshire, Hathaway and 0:04:22.960 --> 0:04:24.720 my you know, my favorite thing is he always talked 0:04:24.720 --> 0:04:27.360 about what the dial did last century, how it started 0:04:27.400 --> 0:04:30.760 at sixty six and ended it over eleven thousand. I 0:04:30.839 --> 0:04:35.240 keep reminding myself that last century we had great depression, 0:04:35.440 --> 0:04:38.599 we had many recessions. We had World War one, World 0:04:38.600 --> 0:04:42.240 War two, we had a pandemic. We get through these. 0:04:42.320 --> 0:04:44.320 You know, he always says, our capitalist democracy is the 0:04:44.360 --> 0:04:47.080 best system ever invented, And so I try not to 0:04:47.120 --> 0:04:50.599 get too troubled by this short term worry of something 0:04:50.640 --> 0:04:53.400 that can commit it. So we do get through them. 0:04:53.440 --> 0:04:55.279 But it's the question of the damage that's done. I 0:04:55.320 --> 0:04:57.760 guess in the getting through them. When you talk to 0:04:58.040 --> 0:05:01.320 all of these CEO, CFO, supply chain managers and so on, 0:05:01.400 --> 0:05:03.200 and I know you do, you speak to them on 0:05:03.240 --> 0:05:07.000 a quarterly basis, at least, what are their main worries 0:05:07.120 --> 0:05:10.120 right now? I think the supply chain issue is a 0:05:10.160 --> 0:05:12.719 worry for a lot of the companies we talked to. 0:05:13.000 --> 0:05:15.120 You know, it's called it's it's it's a headwind. It's 0:05:15.120 --> 0:05:17.520 just you know, it's a problem. But they're working through 0:05:17.560 --> 0:05:19.320 it and for the most part getting through it, and 0:05:20.000 --> 0:05:22.520 with some challenges, some higher expenses they would have hoped, 0:05:22.760 --> 0:05:25.880 but it's not a catastrophe by any means. At the 0:05:25.920 --> 0:05:28.960 same time, I think people are worried about inflation these managements. 0:05:28.800 --> 0:05:31.440 As we know, most CEOs have never lived through an 0:05:31.480 --> 0:05:34.080 inflationary period before. They don't know what to expect, They 0:05:34.080 --> 0:05:36.480 don't know how this can impact them. But so far, 0:05:36.560 --> 0:05:39.120 so good. People are feeling they're able to raise prices, 0:05:39.240 --> 0:05:42.240 and you know, so we're spending a lot of time 0:05:42.279 --> 0:05:44.200 trying to check on that, double check on that, ask 0:05:44.600 --> 0:05:46.400 all these management teams how they're dealing with it, But 0:05:46.520 --> 0:05:51.320 so far they're managing it. So inflation still at an 0:05:51.320 --> 0:05:54.440 eight percent handle. We're not sure exactly how fast it's 0:05:54.480 --> 0:05:57.080 going to come down or what kind of outside factors 0:05:57.120 --> 0:05:58.919 are going to help it come down, because right now 0:05:59.120 --> 0:06:01.800 things are not alleviating all that much when it comes 0:06:01.839 --> 0:06:05.520 to energy prices and frictions in the system. Where do 0:06:05.680 --> 0:06:08.640 you see the FED being able to bring inflation down 0:06:08.680 --> 0:06:10.800 to by the end of the year. I'm not sure 0:06:10.839 --> 0:06:12.279 by the end of the year it will be down 0:06:12.520 --> 0:06:15.240 very much, you know. I still think that they got 0:06:15.240 --> 0:06:18.760 started too late, and they kept saying this was transitory, 0:06:18.839 --> 0:06:22.280 kept saying it was transitory, and they didn't quite get 0:06:22.279 --> 0:06:25.200 it right. So ultimately it's gonna take longer for it 0:06:25.200 --> 0:06:28.360 to get under control. So whether we get there by 0:06:28.360 --> 0:06:30.039 the end of the year, maybe it's the middle of 0:06:30.120 --> 0:06:33.279 next year, but eventually they obtain this beast and things 0:06:33.279 --> 0:06:36.400 will be back on track. So if you could put 0:06:36.400 --> 0:06:38.039 a figure on it, or if you could cite what 0:06:38.160 --> 0:06:40.599 some of your CEOs are telling you, are they seeing 0:06:40.760 --> 0:06:42.719 six percent still at the end of the year four 0:06:42.760 --> 0:06:45.080 to five, I think it will be higher, since nically 0:06:45.160 --> 0:06:47.760 higher than that, that's our view. I would take the 0:06:47.839 --> 0:06:50.840 over on how high inflation will be at the end 0:06:50.839 --> 0:06:54.200 of the year. It's been two years since George Floyd's 0:06:54.279 --> 0:06:58.880 murder on and the movement towards accountability on race. In 0:06:58.920 --> 0:07:01.839 the wake of that moment, I spoke with John Rogers 0:07:01.880 --> 0:07:04.760 on the financial industry and it's race record. We began 0:07:04.839 --> 0:07:06.760 with his own experience and the people that led him 0:07:06.800 --> 0:07:10.000 into finance, starting with his father. I was very fortunate. 0:07:10.040 --> 0:07:13.000 My dad was a Tuskegee airman and you flew over 0:07:13.000 --> 0:07:15.520 a hundred missions in World War Two. And he was 0:07:15.560 --> 0:07:17.760 thirty nine when I was born, so he had a 0:07:17.800 --> 0:07:20.360 lot of time to decide exactly what I was going 0:07:20.400 --> 0:07:23.480 to do. At different ages and certain agents had of 0:07:23.520 --> 0:07:25.720 a checking account, certain age, I had a saving his account. 0:07:25.720 --> 0:07:27.760 I mentioned my being a vendor. I had to have 0:07:27.800 --> 0:07:30.160 a summer job by the time I was sixteen, and 0:07:30.200 --> 0:07:31.760 then by the time I was twelve, I had to 0:07:31.760 --> 0:07:36.360 have a stock market portfolio, and right, yeah, it was 0:07:36.520 --> 0:07:38.800 a great idea. And you know the thing was he 0:07:39.320 --> 0:07:41.080 my parents were divorced when I was three, So I'd 0:07:41.080 --> 0:07:42.720 go visit my dad on the weekends and he'd have 0:07:42.880 --> 0:07:45.480 his newsletters piled up for me to read, and the 0:07:45.480 --> 0:07:48.000 annual reports and the quarterly reports the companies that he 0:07:48.040 --> 0:07:50.280 had invested in for me. He wasn't wealthy. It was 0:07:50.280 --> 0:07:54.120 two hundred fifty dollars here and five dollars there. But 0:07:54.360 --> 0:07:56.320 as the years went on, and you know, and then 0:07:56.320 --> 0:07:59.160 he took me to meet his stockbroker, guy named Stacy Adams, 0:07:59.200 --> 0:08:01.880 who was the first American stockbroker in the South Street. 0:08:02.520 --> 0:08:04.920 You know, he became my role model, he became my mentor. 0:08:04.960 --> 0:08:06.640 I just go and sit with Stacy and watched the 0:08:06.680 --> 0:08:09.520 ticker tape go by, and he was this unique guy. 0:08:09.640 --> 0:08:12.040 He'd been there forever. But to have him there for 0:08:12.240 --> 0:08:15.760 me all the difference, and my father introduced me to him, 0:08:15.800 --> 0:08:18.400 and it just became a labor of love. It came 0:08:18.440 --> 0:08:21.240 fun well and a phenomenal that you had that you know, 0:08:21.320 --> 0:08:23.520 so many people don't know, most people don't you know, 0:08:23.560 --> 0:08:25.400 you're probably the exception that you had a dad that 0:08:25.520 --> 0:08:28.520 was that interested in that, you know, aware of how 0:08:28.560 --> 0:08:30.560 young he should start teaching you, and that you had 0:08:30.600 --> 0:08:34.040 other mentors like that. If you went out there today, 0:08:34.160 --> 0:08:36.920 would there be any more mentors or is the ratio 0:08:37.240 --> 0:08:40.000 still that tiny? It feels to me like, you know, 0:08:40.040 --> 0:08:44.319 I've been in this business years that not that much 0:08:44.360 --> 0:08:46.720 has changed in that time. So what about forty years. 0:08:46.760 --> 0:08:51.319 Has much changed in forty years. Um, it's it's changed. 0:08:51.480 --> 0:08:54.440 It's it's it's you know, and it's accelerating and changed. 0:08:54.440 --> 0:08:59.040 Since the George Floyd murder, there's a much much more 0:08:59.559 --> 0:09:04.080 rigorous and serious efforts to diversify the financial services industry. 0:09:04.760 --> 0:09:06.800 Melody Hops and you know and my co CEO, and 0:09:07.760 --> 0:09:10.680 we're both getting more opportunities to speak to groups like this, 0:09:10.840 --> 0:09:13.400 speak to boards of directors, speaking to different types of 0:09:13.480 --> 0:09:16.800 organizations and political leaders. There really is a push and 0:09:16.840 --> 0:09:19.720 I'm starting to see some real traction and something's happening. 0:09:20.440 --> 0:09:22.000 I think I have to stay here in New York City. 0:09:22.040 --> 0:09:23.559 I have to say, you guys have been way way 0:09:23.559 --> 0:09:26.000 ahead of any other city in the country by far 0:09:26.760 --> 0:09:28.839 with the kind of leadership. You know, we've had from 0:09:29.080 --> 0:09:32.320 you know, the kinchin Alds to the world and others 0:09:32.320 --> 0:09:35.640 and leadership roles, but also the Ray mcguires and Bill 0:09:35.760 --> 0:09:39.240 Lewis's that have been an investment banking, We've had a 0:09:39.280 --> 0:09:42.160 lot of progress in private equity. So New York City 0:09:42.280 --> 0:09:45.280 is one that I think is just really truly making 0:09:45.280 --> 0:09:48.920 a difference. But unfortunately it hasn't been extrapolated throughout the 0:09:49.000 --> 0:09:51.240 United states and the way that it should. Well, there's 0:09:51.400 --> 0:09:54.640 one statistics that I just found absolutely terrifying from one 0:09:54.640 --> 0:09:56.839 of your surveys, and that it's that one point two 0:09:56.840 --> 0:10:00.040 percent of all assets under management are a minority you 0:10:00.080 --> 0:10:05.240 owned firms. Is that still the case? And that's that's 0:10:05.280 --> 0:10:07.640 for all minority firms. I think the data correct, so 0:10:07.679 --> 0:10:11.520 it's not just African American or Latin X. Now the 0:10:11.600 --> 0:10:13.600 numbers are really really bad when it comes to money 0:10:13.640 --> 0:10:16.800 management mutual funds. And what makes that a particularly heartbreaking 0:10:16.840 --> 0:10:18.640 as you all know here again here in New York, 0:10:18.679 --> 0:10:21.160 you know, so much of the wealth and jobs and 0:10:21.200 --> 0:10:24.720 philanthropy comes through Wall Street. That's a part of the 0:10:24.720 --> 0:10:28.120 economy where again it's been so successful. You have the 0:10:28.200 --> 0:10:32.839 high profit margins, and in the past, so many progressive institutions, 0:10:32.840 --> 0:10:34.400 even when they wanted to do the right thing, they 0:10:34.440 --> 0:10:38.439 did it through the term supplier diversity, which implies that, okay, 0:10:38.440 --> 0:10:40.680 if you're gonna work with minority owned business, it's going 0:10:40.760 --> 0:10:45.600 to come through supply chain, construction, catering, janitorial services, office 0:10:45.640 --> 0:10:49.800 supplies the lowest margin part of the spin. And we're 0:10:49.840 --> 0:10:51.800 the least amount of wealth of been creating, and we 0:10:51.840 --> 0:10:55.280 have hard data that shows that you know from Mackenzie 0:10:55.280 --> 0:10:58.560 and BCG showing in the Chicago land spend business and 0:10:58.559 --> 0:11:02.040 professional services is seventy five billion dollars profit margins five. 0:11:03.280 --> 0:11:06.120 Construction is tenth on the list at roughly twenty five 0:11:06.200 --> 0:11:10.360 billion dollars profit margins less than one. So if you 0:11:10.400 --> 0:11:12.240 really want to make difference, you have to get rid 0:11:12.280 --> 0:11:16.360 of this term supplier diversity. The University of Chicago coin 0:11:16.440 --> 0:11:20.120 to term business diversity, and now our Civic Committee is 0:11:20.200 --> 0:11:22.840 used in that terminology. In Chicago are eighty four largest 0:11:22.880 --> 0:11:27.600 businesses the Barack Obama Foundations using the terminology business diversity. 0:11:27.640 --> 0:11:29.240 So I think to make a difference, we have to 0:11:29.320 --> 0:11:31.160 signal to two people you want to be able to 0:11:31.200 --> 0:11:34.559 do business minorities and everything that we do that it's 0:11:34.600 --> 0:11:38.320 kind of a kind of unconscious or implicit bias if 0:11:38.320 --> 0:11:41.320 you only work with minority firms in the commodity parts 0:11:41.320 --> 0:11:43.760 of spend and not in the most lucrative parts of 0:11:43.760 --> 0:11:46.760 our economy. So this that's the reality. And the other 0:11:46.800 --> 0:11:49.520 part I would say, lastly outside it's disappointing, is I 0:11:49.559 --> 0:11:51.400 bet if you look at one point two percent, most 0:11:51.440 --> 0:11:56.800 of that spend is coming from government and Unfortunately, the universities, 0:11:56.880 --> 0:12:00.520 the hospitals and museums, many of the anchorings, tuitions, and 0:12:00.559 --> 0:12:04.240 the foundations have been the least progressive. You would have 0:12:04.280 --> 0:12:07.040 expected the exact opposite, but they have been the least 0:12:07.040 --> 0:12:11.360 for progressive. What changes that? Is it just complacency? Is it? Well, 0:12:11.400 --> 0:12:12.480 this is the way we've been doing it for the 0:12:12.559 --> 0:12:15.000 last twenty thirty four years. Therefore, let's just sign up 0:12:15.000 --> 0:12:17.520 the dotted line again. What gets the fire a lit? 0:12:18.559 --> 0:12:20.800 I think you're right. I think it's partly the fact 0:12:20.840 --> 0:12:23.160 that people done it the same way for fifty years, 0:12:23.360 --> 0:12:26.600 you know, just supply or diversity construction being the focus, 0:12:26.600 --> 0:12:28.720 and everyone just thinks that's the way to do it 0:12:28.760 --> 0:12:31.880 without actually thinking about it. People have this definition of 0:12:31.920 --> 0:12:34.839 small business that hasn't been really thought through in an 0:12:34.880 --> 0:12:39.080 economy where these giant companies that are trillion dollar market caps, 0:12:39.120 --> 0:12:41.160 so the prison with which people look at these things 0:12:41.160 --> 0:12:43.320 they just look at them the same way and having 0:12:43.360 --> 0:12:46.760 to evolved as our economy has evolved into this again 0:12:46.840 --> 0:12:52.520 professional services, capital, light industries, less manufacturing. So that you see, right, 0:12:52.520 --> 0:12:55.280 people have an adjusted People haven't changed in the way 0:12:55.280 --> 0:12:58.320 that the world is. The second thing is because there's 0:12:58.360 --> 0:13:01.480 so few of us in the finance to services industry. 0:13:01.720 --> 0:13:03.800 I was lucky to, you know, learn about the marketscy 0:13:03.880 --> 0:13:06.079 or earlier, he said earlier, but then be on boards 0:13:06.120 --> 0:13:09.000 like a on corporation in Chicago for eighteen years and 0:13:09.240 --> 0:13:13.000 watch Pat Ryan build that into extraordinary enterprise and see 0:13:13.000 --> 0:13:16.920 how a successful financial and professional services business can grow 0:13:17.000 --> 0:13:20.720 and thrive and create all kinds of jobs and philanthropy 0:13:20.840 --> 0:13:24.440 and political empowerment and all aspects. You have, Pats a genius. 0:13:25.720 --> 0:13:27.800 But because there's so few of us in those spots. 0:13:27.800 --> 0:13:29.560 When we sit on a board of a hospital or 0:13:29.520 --> 0:13:31.640 a museum and university, when they put someone who's diverse 0:13:31.720 --> 0:13:34.319 on those boards, it's often people who are not coming 0:13:34.320 --> 0:13:38.400 with a lot of financial services experience, and so they're 0:13:38.400 --> 0:13:41.800 there to think about maybe social justice issues, but not 0:13:41.960 --> 0:13:45.080 as comfortable raising their hand and pushing for economic justice. 0:13:45.800 --> 0:13:48.280 And um, I mean Dr King used to talk about 0:13:48.320 --> 0:13:51.360 that all the time, that many progressive white Americans deplore 0:13:51.480 --> 0:13:55.520 prejudice but except or ignore economic injustice. And so you 0:13:55.600 --> 0:13:58.240 have to have progressive leaders and people of coloring the board. 0:13:58.280 --> 0:14:00.480 We're willing to fight that sort of standard way of 0:14:00.720 --> 0:14:04.239 looking at the world. John Rogers Jr. Of Aurial Investments, 0:14:04.800 --> 0:14:07.720 don't forget to get in touch. All thoughts and opinions welcome. 0:14:07.760 --> 0:14:10.600 I'm at Vonnie Quinn on Twitter or email v Quinn 0:14:10.640 --> 0:14:14.120 at Bloomberg dot net. Bloomberg Opinion is also available, by 0:14:14.120 --> 0:14:17.040 the way, as a podcast on Apple, Spotify or wherever 0:14:17.120 --> 0:14:20.200 you get your podcasts. A review of this week's primaries 0:14:20.200 --> 0:14:24.560 Now with Jonathan Bernstein. Jonathan, we had the extraordinarily interesting 0:14:24.600 --> 0:14:26.520 primary that we knew it was going to be. Obviously, 0:14:26.720 --> 0:14:29.600 not just Pennsylvania happened this week. We had Kentucky, Oregon, Idaho, 0:14:29.640 --> 0:14:31.880 and North Carolina. But what do we learn overall that 0:14:31.960 --> 0:14:36.720 might be applicable to national campaigns. Well, certainly, one of 0:14:36.720 --> 0:14:39.400 the things that we're confirming out of these last set 0:14:39.400 --> 0:14:41.840 of primaries is that, you know, if you look at it, 0:14:41.880 --> 0:14:45.520 in one sense, Republican voters are not zombies who do 0:14:45.600 --> 0:14:49.760 whatever Donald Trump says. We've had a series now of candidates, 0:14:50.400 --> 0:14:54.920 whether it's the Idaho lieutenant governor who Trump endorsed, or 0:14:55.360 --> 0:14:58.920 Dr Oz in Pennsylvania or j d Vance who won 0:14:59.000 --> 0:15:02.680 his Senate nomination, of these candidates are getting about a 0:15:02.680 --> 0:15:04.400 third of the vote. Now, we've had a couple who 0:15:04.440 --> 0:15:07.520 did a little better, and incumbents the Trump endorses are 0:15:07.560 --> 0:15:10.640 doing perfectly well as you would expect because they're incumbents. 0:15:11.000 --> 0:15:14.440 But you know that means that a contested races, two 0:15:14.480 --> 0:15:19.360 thirds of Republican voters are very comfortable ignoring or opposing 0:15:19.760 --> 0:15:22.520 what Donald Trump tells them to do. So that's something 0:15:22.560 --> 0:15:26.360 when people say it's Trump's party, he controls them. It's 0:15:26.440 --> 0:15:31.160 certainly not the case that all Republican voters are sort 0:15:31.160 --> 0:15:33.040 of in a cult of Trump and will do whatever 0:15:33.120 --> 0:15:36.320 he says. At the same time, you point out in 0:15:36.360 --> 0:15:38.640 one of your recent columns that Trump is um is 0:15:38.680 --> 0:15:41.160 not exactly everything Trump says at the moment. It's this 0:15:41.240 --> 0:15:44.800 incarnation of writing radicalism that changes over time. So if 0:15:44.800 --> 0:15:47.880 you were a Republican operative, how much would you be 0:15:47.920 --> 0:15:51.000 paying attention to what Trump is doing and saying? And 0:15:51.000 --> 0:15:52.800 how much would you be paying attention to the two 0:15:52.840 --> 0:15:55.800 thirds of Republican primary voters that are either ignoring some 0:15:55.960 --> 0:15:58.600 of what he says or all of what he says? Well, exactly, 0:15:58.720 --> 0:16:00.920 it's not that the Republican part he has suddenly become 0:16:00.920 --> 0:16:04.680 a functional normal party in some of these cases. The 0:16:04.720 --> 0:16:06.720 reason that Trump's candidates are only getting a third of 0:16:06.760 --> 0:16:10.280 the vote is because even more radical candidates are getting 0:16:10.280 --> 0:16:13.800 a big chunkle of vote. This goes back, as you said, historically, 0:16:14.200 --> 0:16:18.360 to Joe McCarthy to Nixon, to Gingrich to the Tea Party, 0:16:18.480 --> 0:16:21.360 and it's not the same in every incarnation, but there 0:16:21.360 --> 0:16:25.960 are deep connections between that strain of the Republican Party 0:16:26.040 --> 0:16:27.680 all the way going back to the ninety fifties or 0:16:27.760 --> 0:16:32.000 before that, and the strain that is now the dominant 0:16:32.080 --> 0:16:36.400 coalition within the Republican Party, and it's deeply dysfunctional, has 0:16:36.480 --> 0:16:40.360 turned antidemocratic, and it's a huge problem for the nation. 0:16:41.840 --> 0:16:44.640 What happens in the cycle where you see that part 0:16:44.680 --> 0:16:49.040 of the party dominance ebbs. That's a good question and 0:16:49.160 --> 0:16:52.200 I don't have a good answer for that. Um I 0:16:52.240 --> 0:16:54.240 don't really have a good answer for why it comes 0:16:54.240 --> 0:16:56.800 and goes, but where it is now is extremely dangerous. 0:16:56.800 --> 0:17:01.600 You know, the nominee for governor of Pennsylvania, radical candidate 0:17:01.640 --> 0:17:04.280 who Trump endorsed only at the last minute, so he 0:17:04.680 --> 0:17:08.160 really rose to front runner status on his own. His 0:17:08.280 --> 0:17:12.359 campaign is based on that he would if he's governor 0:17:12.400 --> 0:17:17.159 of Pennsylvania certified the Republican candidate as the winner of 0:17:17.160 --> 0:17:22.400 the presidential election regardless of what the voters saying. Yeah, 0:17:22.560 --> 0:17:24.480 and you sort of have to do a double take 0:17:24.560 --> 0:17:26.639 and wait, is that really where they are? And the 0:17:26.680 --> 0:17:29.480 answer is yes, that is really where a number of 0:17:29.520 --> 0:17:34.639 these politicians have found themselves. And you know, the democracy 0:17:34.680 --> 0:17:37.600 can't work if one of the political parties is essentially 0:17:37.640 --> 0:17:41.840 anti democratic. Jonathan, what role did Kathy Barnett fulfill in 0:17:41.880 --> 0:17:48.000 the end um? This is the extremely radical candidate who 0:17:48.880 --> 0:17:52.240 had been in Washington and January six, etcetera, etcetera, and 0:17:52.560 --> 0:17:56.200 ran for Senate and wound up getting quite a bit 0:17:56.200 --> 0:17:58.680 of support in Republican talk radio, but then fell short 0:17:58.760 --> 0:18:03.280 in the actual election, in part because Republican aligned media 0:18:03.920 --> 0:18:06.680 turned against her in the last week. Trump also came 0:18:06.680 --> 0:18:10.040 out against her, but when she gave her post election statements, 0:18:10.080 --> 0:18:13.800 she singled out I believe Sean Hannity for coming after 0:18:13.840 --> 0:18:16.440 her and for interfering in the election. Of course, that's 0:18:16.440 --> 0:18:19.520 not interfering selection. That's how parties work, is there. You know, 0:18:19.760 --> 0:18:23.879 party actors weigh in on on elections. It's unusual to 0:18:23.960 --> 0:18:27.119 have party aligned media at such a central portion of 0:18:27.160 --> 0:18:30.439 the party so important to who picks which candidate. But 0:18:30.560 --> 0:18:32.800 that's essentially where the Republican Party is now, and that's 0:18:32.840 --> 0:18:36.040 one of the reasons that they've become so radical, and 0:18:36.560 --> 0:18:40.280 that they are willing to nominate people like the candidate 0:18:40.320 --> 0:18:44.720 for governor who are probably lousy candidates who may well 0:18:44.920 --> 0:18:48.400 lose an election that Republicans could win, but that as 0:18:48.400 --> 0:18:51.040 long as it's a good product you in the Republican marketplace, 0:18:51.080 --> 0:18:54.399 in the conservative marketplace, that's fine with them. They're making 0:18:54.400 --> 0:18:57.800 money off of it. It's starry telling that the Senate 0:18:57.800 --> 0:19:01.159 primary between Dr Oz David Warmick, obviously Kathy Ornett was 0:19:01.200 --> 0:19:04.240 in there as well, ended up being so close. Does 0:19:04.280 --> 0:19:07.080 it say anything about the amount of money that's being spent. 0:19:07.920 --> 0:19:10.199 It does. Two of the candidates spent a lot of 0:19:10.240 --> 0:19:13.359 money and a lot of very close and the third 0:19:13.440 --> 0:19:16.120 spent a lot less money that probably made her more 0:19:16.240 --> 0:19:19.520 vulnerable to the last minute attacks. One of the reasons 0:19:19.560 --> 0:19:21.600 she had a chance is because the two leading candidates 0:19:21.600 --> 0:19:24.440 spent a ton of money attacking each other, both their 0:19:24.480 --> 0:19:28.840 own campaigns and outside organized groups that played in the race, 0:19:28.840 --> 0:19:30.720 and spent a lot of money attacking the other candidate. 0:19:31.280 --> 0:19:34.040 So money matters, But it's never been as simple as 0:19:34.600 --> 0:19:38.680 money determines the nomination Jonathan Bernstein there and next week 0:19:38.760 --> 0:19:42.080 brings primaries in Georgia, Arkansas, and Alabama. We will be 0:19:42.119 --> 0:19:45.680 back with Jonathan Bernstein for a review. It's known as 0:19:45.720 --> 0:19:48.960 red gold. It's been feeding billions of people in places 0:19:49.000 --> 0:19:53.119 such as India. Indonesia embargoed as export last months, and 0:19:53.160 --> 0:19:56.800 we're seeing that pattern replicate across markets, with India banning 0:19:56.840 --> 0:20:00.920 most exports of feet this week, sending prices of feet skyrocketing. 0:20:01.240 --> 0:20:04.880 I asked David Fickling, what is this mysterious red gold. 0:20:05.160 --> 0:20:07.800 Palm oil which people probably have heard a fair bit 0:20:07.840 --> 0:20:11.359 about from some of the environmental campaigns. Most of the 0:20:11.359 --> 0:20:15.440 world's palm oil is made in Indonesia and Malaysia, and 0:20:15.760 --> 0:20:19.760 palm oil is the core of the global vegetable oil market, 0:20:19.880 --> 0:20:22.120 which is it does not get a lot of attention, 0:20:22.200 --> 0:20:26.240 but vegetable oils are absolutely crucial for multiple ways. Now, 0:20:26.400 --> 0:20:29.960 to be clear, palm oil is about of all vegetable oil. 0:20:30.119 --> 0:20:32.800 So when you hear, for instance, in relation to the 0:20:32.800 --> 0:20:34.760 war in Ukraine, there was a lot of talk about 0:20:34.960 --> 0:20:37.720 Ukraine is the biggest producer of sun flour oil and 0:20:37.840 --> 0:20:40.960 those exports would end and that would be a problem. 0:20:40.960 --> 0:20:43.440