WEBVTT - Why Endorsing Candidates Has Become ‘Terrible’ for Business 0:00:03.120 --> 0:00:17.800 Bloomberg Audio Studios, Podcasts, Radio News. Welcome back to voter Nomics, 0:00:17.840 --> 0:00:21.840 where politics and markets collide. This year, voters around the 0:00:21.880 --> 0:00:25.960 world have the ability to affect markets, countries, and economies 0:00:26.200 --> 0:00:29.600 like never before, so we've created this series to help 0:00:29.640 --> 0:00:32.320 you make sense of it all. I'm Alegri Stratton. 0:00:32.240 --> 0:00:34.760 And I'm Stephanie Flanders, So Steph. 0:00:35.280 --> 0:00:38.240 This week are tackling an issue that I think we 0:00:38.280 --> 0:00:40.640 all think goes to the heart of what voteronomics is 0:00:40.680 --> 0:00:45.160 all about, which is basically boardrooms colliding with election results. 0:00:45.600 --> 0:00:50.000 And the reason it's particularly acute this week is probably 0:00:50.560 --> 0:00:54.400 there's two examples of it. One is what happened at 0:00:54.440 --> 0:00:57.760 the Washington Post over their decision not to endure well, 0:00:57.840 --> 0:01:00.320 their decision not to endorse a candidates at all, and 0:01:00.360 --> 0:01:04.040 whether or not that was complicated by their proprietors business interests. 0:01:04.040 --> 0:01:07.320 And then the second is Elon Musk and his appearance 0:01:07.560 --> 0:01:09.560 not just once on stage for Trump. 0:01:09.520 --> 0:01:12.240 And we had one president who couldn't climb a flight 0:01:12.280 --> 0:01:13.280 of stairs. 0:01:14.360 --> 0:01:17.000 And another who was this pumping. 0:01:16.680 --> 0:01:21.679 After getting shot, fight fight fight. 0:01:22.920 --> 0:01:26.160 Many times over the last last few months. Now, his 0:01:26.280 --> 0:01:30.440 metamorphosis to sort of want to be politician continues to pace. 0:01:31.080 --> 0:01:34.360 Your money is being wasted, and the Apartment of Government 0:01:34.360 --> 0:01:38.880 Divisions is going to fix that make the margin of 0:01:39.000 --> 0:01:44.520 victory so big that you know what can't happen. 0:01:46.680 --> 0:01:48.680 So it's really quite acute this week, isn't it. Steph. 0:01:48.800 --> 0:01:49.000 Yeah. 0:01:49.000 --> 0:01:51.120 I mean we're used to there being lots of big 0:01:51.160 --> 0:01:54.360 corporate money involved in US elections, particularly since twenty ten, 0:01:54.400 --> 0:01:56.120 where there was a sort of big legal ruling that 0:01:56.160 --> 0:01:59.720 made it easier for that to happen, and for just 0:02:00.080 --> 0:02:03.520 asked amounts to go into these campaigns over the years. 0:02:03.560 --> 0:02:06.360 It always makes anyone outside the US there's sort of 0:02:06.400 --> 0:02:10.080 head spin that the billions involved. But I think what 0:02:10.320 --> 0:02:13.280 is obviously distinctive about this season is, on the one hand, 0:02:13.280 --> 0:02:16.080 you have, as you say, the boardroom sort of chief 0:02:16.080 --> 0:02:22.919 executive level people very nervous of engaging even to say 0:02:22.960 --> 0:02:25.680 they support a peaceful transfer of power, which you would 0:02:25.680 --> 0:02:28.880 have thought would not be controversial. And at the same 0:02:28.960 --> 0:02:32.080 time a number of very high prive four billionaires being 0:02:32.280 --> 0:02:36.239 quite you know, quite closely associated with the Trump campaign. 0:02:36.240 --> 0:02:38.400 And we should say there's also been money going on 0:02:38.400 --> 0:02:41.200 the other side, our own founder of Michael Bloomberg and 0:02:41.200 --> 0:02:44.840 also Bill Gates. It turns out very quietly have given 0:02:45.840 --> 0:02:48.720 up to fifty million dollars to Kamala Harris campaign in 0:02:48.720 --> 0:02:52.239 the last in recent weeks. But you know that's sort 0:02:52.280 --> 0:02:55.280 of that's been quite low key in their very large amounts. 0:02:55.280 --> 0:02:57.400 And then you have, as you say, Elon Musk, very 0:02:57.560 --> 0:03:02.639 publicly not just supporting Donald Trump and amplifying some of 0:03:02.720 --> 0:03:08.160 the rhetoric and misinformation that is associated with the Trump campaign, 0:03:08.639 --> 0:03:14.480 but I think also seeming to specifically have corporate interest 0:03:14.680 --> 0:03:18.600 in Trump winning and potentially a future role in a 0:03:18.639 --> 0:03:21.919 Trump administration. I think that is a whole new ball game. 0:03:22.520 --> 0:03:24.679 It does feel like something's changed. Warren Buffett back to 0:03:24.720 --> 0:03:27.440 Barbara in eight twelve and twelve and then Clinton in 0:03:27.520 --> 0:03:30.119 sixteen and this time staying out of the race. There's 0:03:30.160 --> 0:03:32.120 more examples of that that we could cherry pick, but 0:03:32.160 --> 0:03:35.200 that feels a particularly striking one. I think the question 0:03:35.240 --> 0:03:37.480 for later in the podcast is has something changed or 0:03:37.520 --> 0:03:39.840 is this a reversion to what should be normal? In 0:03:39.880 --> 0:03:43.320 a moment, you'll hear our conversation with Charles Elson. He's 0:03:43.320 --> 0:03:46.560 a leading authority on corporate governance issues and the founding 0:03:46.640 --> 0:03:50.400 director of the John L. Weinberg Center for Corporate Governance. 0:03:50.840 --> 0:03:52.560 But before we hear from Charles, we're going to chat 0:03:52.640 --> 0:03:56.320 about one CEO who has zero qualms about sharing his 0:03:56.440 --> 0:04:00.760 thoughts and feelings. Elon Musk, our colleague that the podcast 0:04:00.840 --> 0:04:03.920 eat On Inc. Have created a special series about, you know, 0:04:04.000 --> 0:04:07.720 Musk's meddling in politics. It is called Citizen Elon, and 0:04:07.720 --> 0:04:11.720 we are not going to speak with the host, Max Chafkin. Max, 0:04:12.480 --> 0:04:15.280 did you see this coming, the role that Musk is 0:04:15.320 --> 0:04:16.440 playing in politics? 0:04:16.880 --> 0:04:17.719 Kind of yeah. 0:04:17.839 --> 0:04:21.680 I mean I've been paying very close attention to Elon's 0:04:21.720 --> 0:04:25.279 political evolution over the last couple of years, and with 0:04:25.520 --> 0:04:29.640 the purchase of Twitter now x, he has been trending 0:04:29.640 --> 0:04:33.320 in this direction. I think the surprise to me anyway, 0:04:33.520 --> 0:04:36.320 is just the amount of money that he's spending. You know, 0:04:36.640 --> 0:04:39.320 the latest filings, you know, it's above one hundred and 0:04:39.360 --> 0:04:41.560 thirty million, when when you sort of look at like 0:04:41.640 --> 0:04:43.840 what his pack has spent, the fact that there have 0:04:43.839 --> 0:04:46.120 been some dark money spending as well, that there's other 0:04:46.360 --> 0:04:49.440 potential races, and that there's still time between the last 0:04:49.440 --> 0:04:50.480 filing and election day. 0:04:50.640 --> 0:04:52.720 You know, we're looking at probably. 0:04:52.320 --> 0:04:55.000 Close to two hundred million dollars and that is an 0:04:55.120 --> 0:04:56.600 enormous amount of money. He's going to be one of 0:04:56.640 --> 0:05:00.000 the biggest all time political contributors. And I haven't even 0:05:00.120 --> 0:05:02.799 mentioned the fact that he spent forty four billion dollars 0:05:02.960 --> 0:05:05.839 to buy Twitter now X and that he has essentially 0:05:05.880 --> 0:05:09.720 turned that into a right leaning a sort of campaign 0:05:09.839 --> 0:05:11.839 mechanism for Foreign President Trump. 0:05:12.200 --> 0:05:15.120 Even with those numbers, when you consider the stakes for Tesla, 0:05:15.160 --> 0:05:17.159 for SpaceX and so on, people have called this the 0:05:17.200 --> 0:05:19.039 business opportunity of the century for him. 0:05:19.640 --> 0:05:21.680 That is business, yes, for sure. 0:05:21.800 --> 0:05:24.520 And we've seen this with Foreign President Trump, you know, 0:05:24.600 --> 0:05:27.920 kind of the last go around, like various CEOs attempting 0:05:27.960 --> 0:05:30.920 to kind of leverage the fact that Trump is sort 0:05:30.920 --> 0:05:34.279 of ideologically pretty flexible and that he seems to like 0:05:34.640 --> 0:05:37.600 these sort of CEO types. But you're right, I mean, 0:05:37.640 --> 0:05:40.080 Elon Musk is kind of unique in his position to 0:05:40.080 --> 0:05:43.640 sort of benefit from an association with the former president, 0:05:43.680 --> 0:05:47.080 but also the risks that he faces in terms of regulation, 0:05:47.640 --> 0:05:50.520 you know, from a potential Harris administration. Right he is 0:05:50.640 --> 0:05:54.159 a major defense contractor in SpaceX. He would very much 0:05:54.320 --> 0:05:57.839 like some additional contracts to launch rockets and perhaps develop 0:05:57.920 --> 0:06:02.440 weapons systems or whatever. You have have potential security concerns 0:06:02.480 --> 0:06:05.240 that have been raised at various times. I'm sure he 0:06:05.279 --> 0:06:07.680 would very much like those to go away. You also 0:06:07.760 --> 0:06:11.320 have just like a host of regulatory agencies over the 0:06:11.400 --> 0:06:14.520 last five or so years that have opened investigations or 0:06:14.560 --> 0:06:17.880 have have had investigations, who have been looking into various 0:06:17.880 --> 0:06:19.280 parts of Musk's empire. 0:06:19.480 --> 0:06:22.239 He would of course like to continue to ignore those. 0:06:22.600 --> 0:06:25.280 And then Tesla, his car company. 0:06:24.920 --> 0:06:26.960 Which is, you know, the biggest source of his wealth, 0:06:27.520 --> 0:06:32.120 is very much dependent on regulatory structure that of course 0:06:32.160 --> 0:06:37.000 could change, and is also vuying to launch robotaxis, you know, 0:06:37.040 --> 0:06:40.839 autonomous vehicles, and is hoping to have friendly regulations there. 0:06:41.040 --> 0:06:43.320 So there are all sorts of ways that he's already 0:06:43.320 --> 0:06:45.719 the world's richest person, but that he could become even 0:06:45.800 --> 0:06:47.679 richer if Donald Trump wins in a week. 0:06:47.960 --> 0:06:50.800 Do you think he's expecting a concrete role in the administration? 0:06:51.200 --> 0:06:54.360 I mean, obviously that the President Trump has talked about 0:06:54.480 --> 0:06:59.400 him leading a group to find efficiencies in government, and 0:06:59.440 --> 0:07:02.760 this potential conflict of interests all over that, given the 0:07:02.880 --> 0:07:05.039 amount of contracts he has with the government. But you 0:07:05.040 --> 0:07:07.440 think he's actually expecting to have a role in the government. 0:07:07.600 --> 0:07:10.040 For this is more of a defensive position. 0:07:10.520 --> 0:07:13.600 It's hard to imagine Elon Musk is like a civil servant, 0:07:13.760 --> 0:07:15.200 right Like, I don't know that this is going to 0:07:15.240 --> 0:07:16.720 be a five days a week. 0:07:16.560 --> 0:07:18.480 You can say the saying about Donald Trump being here. 0:07:19.360 --> 0:07:20.840 I don't know that he's gonna be you know. I 0:07:20.840 --> 0:07:22.280 don't know if he's gonna get a badge and show 0:07:22.360 --> 0:07:25.520 up every day to work. But I do think that 0:07:25.680 --> 0:07:29.360 this role that he has announced for himself and that 0:07:29.440 --> 0:07:31.960 Donald Trump has repeatedly on the stump. I was at 0:07:32.080 --> 0:07:34.960 Madison Square Garden on Sunday in New York where Trump 0:07:35.000 --> 0:07:37.480 had this massive rally. Elon played a big role. They 0:07:37.520 --> 0:07:40.160 were both talking about it. Other people were talking about 0:07:40.200 --> 0:07:41.000 it was getting. 0:07:40.800 --> 0:07:41.880 Huge applause lines. 0:07:42.120 --> 0:07:45.160 The way I interpret this is that Elon Musk will 0:07:45.200 --> 0:07:48.720 have a big voice in how Donald Trump seeks to 0:07:48.880 --> 0:07:52.040 reform the executive branch. He's made that a huge part 0:07:52.160 --> 0:07:55.760 of house, of his campaign and his kind of political project. 0:07:56.000 --> 0:07:58.400 So I don't know that we should expect Elon to 0:07:58.440 --> 0:08:00.840 have cabinet post or something like that. I think it's 0:08:00.960 --> 0:08:04.600 much more likely that he will be effectively a senior advisor, 0:08:04.880 --> 0:08:08.880 maybe the most important senior advisor to the former president. 0:08:09.280 --> 0:08:13.600 Unlike many business people, part of His sort of demeanor 0:08:13.640 --> 0:08:15.920 has often been that you get the sense that these 0:08:15.960 --> 0:08:19.680 companies are like train sets for them, toys, you know, 0:08:19.760 --> 0:08:21.720 that he gets to play with. He kind of has 0:08:21.840 --> 0:08:24.000 that air about him, And I just wondered, does he 0:08:24.000 --> 0:08:25.760 think the US government is now going to just be 0:08:25.760 --> 0:08:27.680 another train set for him to play with? Now that 0:08:27.720 --> 0:08:30.360 he's bought his brought his way in with this support 0:08:30.360 --> 0:08:33.440 for Donald Trump and this particular candidate, he might have 0:08:33.440 --> 0:08:35.000 the scope to do that in a way he wouldn't 0:08:35.000 --> 0:08:35.920 with another candidate. 0:08:36.640 --> 0:08:39.520 It seems like he definitely sees it that way now. 0:08:39.679 --> 0:08:42.520 Almost ten years ago or so, SpaceX began selling this 0:08:42.600 --> 0:08:46.120 flamethrower as a kind of a marketing stunt. They and 0:08:46.480 --> 0:08:49.079 when it became clear that you're not supposed to sell 0:08:49.080 --> 0:08:51.920 a flamethrower, he changed the name to not a Flamethrower. 0:08:52.040 --> 0:08:53.560 Was a sort of jab at regulators. 0:08:53.800 --> 0:08:56.880 When people brought up recently that, you know, him being 0:08:56.920 --> 0:09:00.360 the CEO of Tesla and directing federal policy might be 0:09:00.440 --> 0:09:03.200 a conflict of interest, he said, Oh, don't worry, We'll 0:09:03.240 --> 0:09:05.760 just change the name of the Department of Government Efficiency 0:09:05.800 --> 0:09:08.600 to not the Department of Government Efficiency. He clearly thinks 0:09:08.920 --> 0:09:12.200 that he can essentially approach government the same way that 0:09:12.280 --> 0:09:15.360 he's approached business, which is by the seat of his pants, 0:09:15.559 --> 0:09:20.040 ignoring norms and regulations and like being very productive. And 0:09:20.120 --> 0:09:23.560 I think that is the optimistic story that you would tell. 0:09:23.600 --> 0:09:26.600 Like that is part of why Donald Trump is excited about. 0:09:26.800 --> 0:09:29.480 Why the voters and why that the crowds at Madison 0:09:29.480 --> 0:09:32.120 Square Garden and other Trump rallies have given him huge 0:09:32.160 --> 0:09:32.760 rounds of plause. 0:09:32.760 --> 0:09:33.720 That's what they're excited about. 0:09:33.720 --> 0:09:36.920 They think he's gonna bring that kind of crazy Elon Musk, 0:09:37.040 --> 0:09:40.800 you know, super productive, super weird out their business sense 0:09:40.920 --> 0:09:42.360 to politics. 0:09:42.400 --> 0:09:45.439 Going back to sort of boring policy substance for a 0:09:45.520 --> 0:09:48.240 minute and stripping out some of the more colorful aspects 0:09:48.280 --> 0:09:49.839 of this. One of the reasons why a few years 0:09:49.880 --> 0:09:51.680 ago you would have said that this was an unlikely 0:09:51.720 --> 0:09:56.160 combination was that the one thing that Elon was kind 0:09:56.160 --> 0:10:01.200 of politically identified with was action to combat climate change, 0:10:01.520 --> 0:10:05.400 and indeed is put that into action with Tesla with 0:10:06.320 --> 0:10:09.240 a huge investment in electric card That is one of 0:10:09.240 --> 0:10:13.040 the things that one would both the support for electric 0:10:13.120 --> 0:10:19.120 vehicles and the entire stance towards climate change would be 0:10:19.160 --> 0:10:21.800 one of the big changes under a Trump administration that 0:10:21.840 --> 0:10:24.600 we'd expect. How does that work? How is he bridging 0:10:24.640 --> 0:10:25.240 that gulf? 0:10:25.559 --> 0:10:25.839 Yeah? 0:10:25.920 --> 0:10:27.760 I mean, as somebody who's followed Elon Musk for a 0:10:27.760 --> 0:10:29.319 long time, and you know, I first met him in 0:10:29.320 --> 0:10:31.760 two thousand and six. The thing that's weirdest about this 0:10:32.200 --> 0:10:35.679 is watching Donald Trump get on the stump and essentially 0:10:35.760 --> 0:10:38.800 deny that climate change is a real problem, and then 0:10:38.920 --> 0:10:41.360 watching Elon Musk agree with it, Because for such a 0:10:41.400 --> 0:10:45.760 long time that was impossible to imagine. Elon has been 0:10:45.880 --> 0:10:49.240 very closely defined with like sort of green capitalism and 0:10:49.240 --> 0:10:52.760 so on, but he's been pretty ideologically flexible. And that 0:10:53.240 --> 0:10:56.160 definition of Elon as this green capitalist it really started 0:10:56.240 --> 0:10:59.000 during the Obama years, right. He kind of embraced it 0:10:59.160 --> 0:11:02.840 when it was most politically advantageous and has been walking 0:11:02.880 --> 0:11:05.560 away from it as it has become sort of maybe 0:11:05.640 --> 0:11:07.080 less politically advantageous. 0:11:07.200 --> 0:11:09.520 The other thing is Elon Musk. 0:11:09.320 --> 0:11:12.400 At this point has a dominant position in electric vehicles. 0:11:12.720 --> 0:11:15.360 So if Trump were to sort of get rid of 0:11:15.480 --> 0:11:19.480 all subsidies for evs, which would be a problem for Tesla, 0:11:19.600 --> 0:11:22.679 and make no mistake, it would arguably hurt Tesla a 0:11:22.720 --> 0:11:25.880 lot less than a lot of these other automakers who 0:11:25.920 --> 0:11:28.000 are not selling tons of electric cars right now. 0:11:28.400 --> 0:11:28.720 Max. 0:11:29.000 --> 0:11:31.800 The other thing that you, as you've known, been following 0:11:31.840 --> 0:11:33.400 him since twenty or six, then you will have the 0:11:33.440 --> 0:11:36.960 buy below or certainly the kind of almanac on his 0:11:37.080 --> 0:11:40.040 flip flops and his change in positions. For instance, Donald Trump. 0:11:40.120 --> 0:11:42.760 In the Wilter Isaacson biography, it's very clear that when 0:11:42.880 --> 0:11:45.319 Musk first meets him, he doesn't think much of him. 0:11:45.360 --> 0:11:47.679 And now we have the possibility of him having a 0:11:47.760 --> 0:11:50.880 role in a possible Trump second presidency, and there's a 0:11:50.880 --> 0:11:53.240 host of other issues aren't there where he just changes 0:11:53.320 --> 0:11:55.440 his mind, either the facts so different or he's sort 0:11:55.440 --> 0:11:58.480 of evolved. If he were to have a role in government, 0:11:58.559 --> 0:12:01.559 it might be a bit dismal constraining, and he might think, actually, 0:12:01.559 --> 0:12:03.520 I don't want to do this again. But also he 0:12:03.600 --> 0:12:06.480 might decide, actually President Trump isn't doing quite what I won't, 0:12:06.480 --> 0:12:07.160 so I'm gonna go. 0:12:07.880 --> 0:12:12.000 If Kamala Harris wins next week and and becomes a president, 0:12:12.360 --> 0:12:16.000 there are a host of these investigations, various, you know, 0:12:16.080 --> 0:12:19.600 like issues around his security clearance. Like I would expect 0:12:20.000 --> 0:12:23.960 all of those to continue, maybe to even intensify, you know, 0:12:24.000 --> 0:12:25.800 it would be it would be sort of natural to 0:12:25.880 --> 0:12:29.040 think that a new administration is gonna ask some hard 0:12:29.120 --> 0:12:32.480 questions about do we really want one of our largest 0:12:32.480 --> 0:12:35.000 defense contractors to be in regular touch with Latim rip Putin? 0:12:35.040 --> 0:12:37.720 Do we really want one of our largest defense contractors 0:12:37.840 --> 0:12:40.520 smoking pot on the Joe Rogan Show, you know, as 0:12:40.520 --> 0:12:43.600 Elon Musk has done. Now on the other side, Right, 0:12:43.600 --> 0:12:47.080 there's the upside for Elon Musk with Trump is obvious. Right, 0:12:47.360 --> 0:12:49.800 Trump has said on the stump, We're just gonna order 0:12:49.880 --> 0:12:51.960 up some rockets and take him to Mars. Right, He's 0:12:52.000 --> 0:12:54.679 He's essentially like said, we're gonna have like I'm gonna 0:12:54.720 --> 0:12:58.400 give Elon Musk a multi billion dollar contract for for 0:12:58.480 --> 0:13:00.839 a Mars program that doesn't really exist at this point. 0:13:00.920 --> 0:13:02.840 He suggested that he's going to let Elon Musk take 0:13:02.880 --> 0:13:04.480 a red pen to the government, which of course can 0:13:04.559 --> 0:13:08.559 help him. Now, the thing is, though Tesla's customer base 0:13:08.840 --> 0:13:12.160 is largely progressive is liberal, they are on the left, 0:13:12.280 --> 0:13:17.200 and I don't think the customer base has fully processed 0:13:17.400 --> 0:13:20.120 what is happening. And so if Trump is elected, there 0:13:20.160 --> 0:13:22.679 is going to be a lot of talk politically about 0:13:22.679 --> 0:13:25.400 the role that Elon Musk played this historic amount of 0:13:25.440 --> 0:13:27.560 money and support he played, and that I think is 0:13:27.600 --> 0:13:29.640 going to lead to a backlash that is going to 0:13:29.679 --> 0:13:31.360 put Tesla under pressure. There are going to be a 0:13:31.400 --> 0:13:34.040 lot of people who own Tesla's who are I think 0:13:34.040 --> 0:13:36.600 they're already not feeling awesome about them, but are going 0:13:36.679 --> 0:13:39.439 to have to think, you know, is this the political 0:13:39.440 --> 0:13:41.520 statement I want to make? And we've seen this happen 0:13:41.559 --> 0:13:44.480 with the former president before. He is a cultural force 0:13:44.760 --> 0:13:47.120 and it works in both directions and really help companies, 0:13:47.280 --> 0:13:49.800 but it can also create a lot of pressures that 0:13:49.840 --> 0:13:52.400 could put Elon Musk in an uncomfortable position, could make 0:13:52.480 --> 0:13:56.080 him want to walk away. Now, if Trump loses, I 0:13:56.120 --> 0:13:58.000 don't think Elon Musk is going to do a one 0:13:58.080 --> 0:14:01.760 to eighty. I think he is pretty committed to this 0:14:01.760 --> 0:14:02.520 this kind of like. 0:14:03.200 --> 0:14:04.439 You know, right wing positioning. 0:14:04.679 --> 0:14:06.920 If Trump were to lose very badly, like a like 0:14:06.960 --> 0:14:09.640 a sort of humiliating defeat, which doesn't seem likely based 0:14:09.679 --> 0:14:11.959 on the polls, then I don't know. Elan is a 0:14:12.240 --> 0:14:14.679 is a adaptable guy, and I would now be surprised 0:14:14.679 --> 0:14:15.680 if if he evolved again. 0:14:16.080 --> 0:14:18.000 Well, we can certainly expect to see a lot of 0:14:18.160 --> 0:14:21.960 played out on X Twitter, You're gonna be so busy. 0:14:22.720 --> 0:14:25.680 Absolutely, Yeah, that was great, Thank you so much. 0:14:29.200 --> 0:14:32.680 Now we welcome Charles Elson. Charles is the founding director 0:14:32.720 --> 0:14:36.400 of the Weinberg Center for Corporate Governance and a leading 0:14:36.400 --> 0:14:40.200 authority on corporate governance issues. Charles, I mean this is 0:14:40.240 --> 0:14:43.400 real issues, right, This is corporate governance issues. This is 0:14:43.760 --> 0:14:47.880 CEO is trying to navigate what is a very finely 0:14:47.920 --> 0:14:48.840 balanced to your selection. 0:14:49.520 --> 0:14:52.600 Absolutely, this is sort of governance one oh one, and 0:14:52.640 --> 0:14:56.600 it's frankly bord oversight of CEO's one oh one. And 0:14:56.680 --> 0:15:02.400 it's from a CEO standpoint, it's politics one one. It's 0:15:02.400 --> 0:15:04.560 a combo of everything rankly this year. 0:15:04.800 --> 0:15:08.080 So Charles tell us, Okay, what is different this time 0:15:08.160 --> 0:15:10.960 round compared to others. Has something changed in this balance? 0:15:11.600 --> 0:15:15.720 Well, I think when had happened. Traditionally CEO stayed out 0:15:15.760 --> 0:15:18.920 of elections. It just wasn't considered a good idea. You 0:15:18.960 --> 0:15:22.760 alienated too many people by doing it. And the role 0:15:22.800 --> 0:15:25.240 of the CEO is run the company, not to be 0:15:25.920 --> 0:15:30.400 a political figure. That changed a couple of years ago, 0:15:30.680 --> 0:15:34.680 I think really basically during the Trump administration, when there 0:15:34.760 --> 0:15:39.600 was significant opposition to him in parts of the business community. 0:15:40.120 --> 0:15:44.280 And with the two thousand election, which was considered such 0:15:44.960 --> 0:15:48.080 a choice, if you will, between two dramatically ways of 0:15:48.160 --> 0:15:51.720 looking at things, and combined with the summer of George Floyd, 0:15:52.200 --> 0:15:55.560 companies became much more politically active than they had been. 0:15:56.520 --> 0:15:59.840 You saw all kinds of statements where companies were opposing 0:16:00.160 --> 0:16:04.040 changes to the voting rights laws in certain states. You 0:16:04.120 --> 0:16:06.760 heard all kinds of demands for companies to make statements 0:16:06.800 --> 0:16:09.800 on political issues, and a lot of CEOs did and 0:16:09.880 --> 0:16:13.720 felt that it was their role their obligation to do so. 0:16:13.760 --> 0:16:16.840 Some did, I think, based on personal conviction. Others did 0:16:16.880 --> 0:16:19.720 it I think because they felt they were getting enormous 0:16:19.720 --> 0:16:23.680 pressure from their employees. You had the huge controversy at 0:16:23.720 --> 0:16:26.560 Disney where Disney announced it was not taking a position 0:16:26.840 --> 0:16:30.440 on a particular law that it was. The CEO ultimately left, 0:16:30.520 --> 0:16:33.560 and this really started a debate in this country as 0:16:33.600 --> 0:16:36.760 to whether or not the CEOs should really be that 0:16:36.880 --> 0:16:40.120 involved in the political process. They always kind of were, 0:16:40.240 --> 0:16:45.200 because companies did, through packs and whatnot, made contributions well 0:16:45.240 --> 0:16:48.120 through their packs, i should say, to candidates, and there 0:16:48.160 --> 0:16:51.160 were CEOs who personally contributed on both sides of the 0:16:51.240 --> 0:16:55.440 aisle to candidates companies are always accused traditionally of being 0:16:55.800 --> 0:16:59.280 very pro Republican, and a case that came out of 0:16:59.320 --> 0:17:03.760 the Supreme Court that basically allowed corporations to make direct 0:17:03.800 --> 0:17:08.520 political effectively make political contributions, not to campaigns, but to 0:17:08.560 --> 0:17:11.879 make their views known on political issues Citizens United, if 0:17:11.920 --> 0:17:16.240 you recall, it came out during the Obama administration, and 0:17:17.119 --> 0:17:19.919 people on the left at least decried it, saying this 0:17:20.040 --> 0:17:23.439 is going to increase corporate influence over the elections. Problem is, 0:17:23.480 --> 0:17:25.879 it didn't work out that way. It turns out that 0:17:25.960 --> 0:17:30.919 most large corporations ended up supporting democratic causes as opposed 0:17:30.920 --> 0:17:33.760 to Republican causes, and it was the other party who 0:17:33.800 --> 0:17:37.320 got upset about the ruling. So that's where That's kind 0:17:37.359 --> 0:17:40.719 of where we were until now that sets up for now. 0:17:41.040 --> 0:17:43.240 It's very interesting you say that there's obviously been big 0:17:43.280 --> 0:17:47.000 money flowing into politics on both sides thanks to Citizens United. 0:17:47.000 --> 0:17:49.840 That decision, I guess that was in twenty ten. But 0:17:50.800 --> 0:17:53.160 that doesn't put a lot of money on both sides 0:17:53.359 --> 0:17:56.920 of the political argument in the US in a way 0:17:56.960 --> 0:17:59.399 that certainly in the UK and in Europe we would 0:17:59.440 --> 0:18:04.000 find is against our sort of culture of political contributions. 0:18:04.440 --> 0:18:07.280 But the thing that striking this time, I would have 0:18:07.320 --> 0:18:11.199 thought was that even stating that you're in favor of 0:18:11.320 --> 0:18:17.480 free and fair elections has become something that chief executives 0:18:17.520 --> 0:18:20.800 are nervous of doing, and that seems like that takes 0:18:20.800 --> 0:18:22.080 things to a whole different level. 0:18:22.480 --> 0:18:25.639 Oh, I think it does, because what happened was because 0:18:25.680 --> 0:18:30.359 after the significant corporate involvement, it created a blowback. It 0:18:30.440 --> 0:18:32.600 was felt that a number of companies in the stands 0:18:32.640 --> 0:18:35.560 they were taking were very I guess sort of left 0:18:35.560 --> 0:18:39.359 of center as opposed to right of center, and the 0:18:39.480 --> 0:18:43.359 particularly following the abortion ruling of Roe v. Wade, and 0:18:43.600 --> 0:18:47.480 a lot of folks on the right of the divide, 0:18:47.760 --> 0:18:51.960 felt that corporations had become a captive to the left 0:18:52.000 --> 0:18:56.560 the divide. So they threatened, boycott's attacked, and CEOs for 0:18:56.760 --> 0:19:01.280 speaking out, employees got angry, and you created a mess. 0:19:01.760 --> 0:19:05.239 And the mess, frankly, could have been avoided had the 0:19:05.280 --> 0:19:09.120 CEOs not jumped into this thing to begin with, which happened, 0:19:09.160 --> 0:19:13.159 as I said, during the Trump era and after the 0:19:13.200 --> 0:19:16.159 two thousand elections, that's what really blew it up. And 0:19:16.240 --> 0:19:18.560 a lot of people, including me, said, look, you need 0:19:18.600 --> 0:19:21.960 to stay out of this completely because it divides people, 0:19:22.040 --> 0:19:26.440 and companies only work if there's unanimity within the company 0:19:26.480 --> 0:19:30.160 on corporate purpose despite your politics. Now that being said, 0:19:30.200 --> 0:19:32.520 the democracy point I think you make a good one 0:19:32.920 --> 0:19:36.280 is why is it so terrible to support democracy? Because 0:19:36.600 --> 0:19:41.159 it became a politicized term. Trump was viewed as anti 0:19:41.280 --> 0:19:45.520 democratic or complaining about the results of the election. He 0:19:45.680 --> 0:19:49.880 was a threat to democracy, so that term became rather 0:19:49.960 --> 0:19:53.920 than we all are supported democracy, the term became loaded 0:19:54.280 --> 0:19:59.159 and that it was well supporting quote democracy means opposing Trump, 0:19:59.440 --> 0:20:03.960 supporting you know, Joe Biden or Kambella Harris. That's the 0:20:04.040 --> 0:20:05.040 issue now, So. 0:20:05.080 --> 0:20:07.119 Charles, can we just be clear. Do you think what 0:20:07.160 --> 0:20:10.000 we're seeing right now, which is essentially it looks like 0:20:10.040 --> 0:20:12.640 the sort of pedging by CEO sitting on the fence, 0:20:12.680 --> 0:20:14.840 whatever you want to call it, do you think that 0:20:14.840 --> 0:20:18.080 that is because of the very real possibility of retribution 0:20:18.240 --> 0:20:21.000 by a second president Trump or do you think that 0:20:21.080 --> 0:20:24.440 this is a backlash or you know, a swing back 0:20:24.480 --> 0:20:25.080 to the norm. 0:20:25.440 --> 0:20:28.439 Oh, I think it's a return to the tradition. I 0:20:28.480 --> 0:20:31.439 don't think it's based on you know, fear of retribution. 0:20:31.640 --> 0:20:36.720 It's fear of retribution from your customers. That's the problems, 0:20:36.840 --> 0:20:39.439 and that's really what happened. I think they learn the 0:20:39.520 --> 0:20:42.480 lesson that, look, by taking a stance, half the country 0:20:42.520 --> 0:20:45.199 will love you, the other half will hate you, and 0:20:45.240 --> 0:20:47.000 that's terrible way to run a business. 0:20:47.240 --> 0:20:49.120 People would be surprised to hear you say it's sort 0:20:49.119 --> 0:20:51.760 of back to the previous datus quote, because obviously in 0:20:51.800 --> 0:20:56.600 the old days, there wasn't a sort of majority of 0:20:56.640 --> 0:21:02.040 American voters expecting potentially violence on either side of election day, 0:21:02.680 --> 0:21:07.200 and we hadn't had a presidential candidate refused to concede 0:21:07.720 --> 0:21:10.640 an election result. So it does feel like the stakes 0:21:10.640 --> 0:21:11.639 are quite high. 0:21:12.200 --> 0:21:14.840 I think the danger when you get jumped into this, 0:21:15.320 --> 0:21:19.560 whether you're pro or anti Trump or pro or Annie Harris, 0:21:20.040 --> 0:21:24.479