Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: This is Bloomberg Business Week with Carol Messer and Tim
Speaker 2: Steneveek on Bloomberg Radio. Die did you well.
Speaker 3: If others have.
Speaker 1: Did slowly go, Yeah, you're gonna understand maybe what we
Speaker 1: need to be doing with all of our kids that
Speaker 1: are at them. I've got them, Tim's got them, You've
Speaker 1: got them. I'm sure.
Speaker 2: Uh.
Speaker 1: And there's something important when it comes to understanding politics,
Speaker 1: but probably more importantly, how our government works.
Speaker 2: Okay, So here's some numbers that might freak you out, Carol.
Speaker 4: Okay.
Speaker 2: According to a twenty twenty three Annenberg Constitution Day Civic survey,
Speaker 2: nearly one in five Americans cannot name a single branch
Speaker 2: of government.
Speaker 1: You and I can do it. We did a test.
Speaker 2: Before we did a test. It's executive, legislative, and judicial,
Speaker 2: by the way, but yeah, nearly one in five can't
Speaker 2: name a single one of those branches.
Speaker 1: Twenty percent.
Speaker 5: Yeah.
Speaker 2: So perhaps not surprising given the state of civics education
Speaker 2: in the US. Recording to the Committee for Economic Development
Speaker 2: It's the Public policy center of the Conference Board, only
Speaker 2: seven states require a full year of civics or government
Speaker 2: in schools. And thirteen states have no civics course requirements.
Speaker 4: I didn't take a Civics class, did you?
Speaker 5: Not?
Speaker 1: In high school I learned about government.
Speaker 2: Yeah, yeah, yeah, not do it in high school.
Speaker 1: You're right, I don't know.
Speaker 4: I just all right.
Speaker 1: Anyway, a lot at stake. If Americans really don't know
Speaker 1: how their government works, just ask Lindsay Kormack. She is
Speaker 1: Associate professor of political Science and director of the Diplomacy
Speaker 1: Lab at Steven's Institute of Technology, my dad's alma mater.
Speaker 1: By the way, she got a new book out about
Speaker 1: all of this. It's entitled How to Raise a Citizen
Speaker 1: and Why It's up to You to do It? And
Speaker 1: she joins us right here in New York City. Professor Kormack,
Speaker 1: Great to have you here with us. We feel like
Speaker 1: there's so much we want to talk about, including book,
Speaker 1: but we are very interested also because of your background
Speaker 1: in hearing about your thoughts on today's presidential political environment
Speaker 1: and that's all of that's also too been going on
Speaker 1: in the past month. Is this, in your view, democracy
Speaker 1: at work?
Speaker 5: Yeah?
Speaker 4: I really think it is.
Speaker 5: You know, we have systems in place for it doesn't
Speaker 5: go the way that everyone thinks it's going to go,
Speaker 5: and it seems like it's it's working out in the
Speaker 5: selection of a new candidate.
Speaker 2: How do you what do you mean, how's it working
Speaker 2: out in the selection of a new candidate?
Speaker 5: Well, I mean when Biden stepped down and a lot
Speaker 5: of people were like, oh, is there going to be
Speaker 5: an open convention? How are we going to pick someone?
Speaker 5: And really at that point it was already at the delegates,
Speaker 5: and because of our primary system, it's like, well, they're
Speaker 5: deciding it's going to be common one, and that's how
Speaker 5: it's going to be.
Speaker 1: You know, It's funny because it's just I've been listening
Speaker 1: to a lot of podcasts political podcast Tim has too,
Speaker 1: and we've all kind of we've been doing mega deep
Speaker 1: dives just because of everything that's going on. And I
Speaker 1: heard something that said, you know, we're still a young country,
Speaker 1: and other countries have seen a lot of you know,
Speaker 1: the kind of their ups and downs over hundreds and
Speaker 1: hundreds of years or even longer, you know, And I guess,
Speaker 1: you know, we asked the question, and we've seen the Democrats,
Speaker 1: at least President Biden was for a long time while
Speaker 1: he was still in the campaign trail as saying, you know,
Speaker 1: we've got to protect democracy.
Speaker 4: It's really important.
Speaker 1: But democracy isn't necessarily working for everyone who feel like
Speaker 1: they're struggling to put food on their table, make sure
Speaker 1: there's a roof over their heads, just struggling to make
Speaker 1: monthly payments. Is democracy, though, working for everyone?
Speaker 4: I mean, that's a great question. Yeah, that's it's a
Speaker 4: really good question. Isn't working for everyone? It works in
Speaker 4: different ways.
Speaker 5: I think the relevant comparison might be like what a
Speaker 5: life would look like under an autocracy, and I think
Speaker 5: it probably looks worse for people who are having a
Speaker 5: bad time here. And so I think one of the
Speaker 5: problems is we don't really know how to engage in
Speaker 5: our democracy to necessarily make it work for us. And
Speaker 5: that's kind of the research that I'm into and what
Speaker 5: I'm all about.
Speaker 2: That's interesting, Lindsay and Carrol, an interesting thing that you
Speaker 2: brought up. I don't know if you can read my mind,
Speaker 2: but as I was praying for this, I was looking
Speaker 2: at some stats to try to set this up. The
Speaker 2: American Bar Association. Lindsay says that less than one third
Speaker 2: of millennials considered essential to live in a democracy.
Speaker 5: Huh, why see that's what it's slight everywhere. Yeah, I
Speaker 5: mean part of it is we don't have a tradition
Speaker 5: of really talking about this in a very positive way,
Speaker 5: and instead our children get messages from really early ages
Speaker 5: that like, government is bad, it's annoying, it's negative. And
Speaker 5: so it's not surprising to me that people think, like, uh,
Speaker 5: it's not really worth fighting for or worth working towards.
Speaker 5: But I don't think that's true. None of our millennials
Speaker 5: know what it's like to live under an autocracy, and
Speaker 5: I don't think they'd like it that much more.
Speaker 1: So, how do you Yeah, so let's talk about that.
Speaker 1: I mean, I have a twenty one year old and
Speaker 1: has young kids. You know, my daughter will remind me
Speaker 1: of how we've kind of messed up everything for her generation.
Speaker 1: We talk a lot of politics. She is the daughter
Speaker 1: of two journalists and folks who have been in the
Speaker 1: news business, so it comes up a lot. I had
Speaker 1: a family that we talked abound the dinner table about
Speaker 1: a lot of stuff that was going on. But how
Speaker 1: do you think we should be approaching it with a
Speaker 1: younger generation And how early do you start on all
Speaker 1: of this stuff?
Speaker 4: Yeah?
Speaker 5: So you well are lucky, because that's that's atypical. Most
Speaker 5: of our families don't have those sorts of discussions. In
Speaker 5: research that we did for the book, we found that
Speaker 5: only twenty five percent of eighteen year olds report that
Speaker 5: they ever had an intentional discussion about politics or government
Speaker 5: with their parents. And my sort of stance on this
Speaker 5: is you can't start it too early because kids are
Speaker 5: just trying to make sense of the world around them.
Speaker 5: They're soaking it up. So if they hear us talking,
Speaker 5: you know, like saying like politicians are all bad or
Speaker 5: they're negative, they're liars, they're cheaters, they're going to hear that.
Speaker 5: And so it's not that not talking to them doesn't
Speaker 5: give them a message. They sometimes just pick up the
Speaker 5: negative pieces. So it's up to us to kind of
Speaker 5: recast the narrative around this in front of them.
Speaker 1: Okay, and I have a large family, a lot of
Speaker 1: nieces and nephews. What do you do though, when a
Speaker 1: twenty something year old or an early thirties like, yeah,
Speaker 1: all the politicians they're really lousy. What's the right response?
Speaker 1: How do you deal with that? Where they're kind of
Speaker 1: so set in their view.
Speaker 4: Yeah, so when I hear something like that.
Speaker 5: I usually think that people are talking about federal politicians
Speaker 5: and I try to change the conversation and think about
Speaker 5: who their local and state representatives are. Yeah, because for
Speaker 5: the most part, the people who do this work at
Speaker 5: lower levels.
Speaker 4: They're not bad. They're not out there to do ill.
Speaker 5: They're really trying their best, and oftentimes they're not that
Speaker 5: well supported financially. The jobs don't pay that well. People
Speaker 5: yell at them, and so really I think most of
Speaker 5: the people doing our politics are trying their best.
Speaker 2: You know, we hear what you said. We hear a
Speaker 2: lot from the mayors we talk to. We check in
Speaker 2: with mayors around the country quite a bit, and oftentimes
Speaker 2: they are Democrats or Republicans. They're required to have a
Speaker 2: party affiliation, but regardless of what party there and they
Speaker 2: don't really consider themselves members of a certain political party
Speaker 2: because their job is to come up with solutions to
Speaker 2: fixing potholes and making sure that things are running on
Speaker 2: time in a small city or in a metropolitan area.
Speaker 2: And it's an interesting issue because there is this separation
Speaker 2: between the local level versus what happens on the federal level,
Speaker 2: and so much air is taken out by national politics,
Speaker 2: and that's sort of the vibe that people pick up on.
Speaker 4: Yeah, that's absolutely true.
Speaker 5: You know, we talk about federal politics more than anything else,
Speaker 5: despite the fact that local politics is some of the
Speaker 5: most consequential for our quality of life decisions.
Speaker 1: You know, it's funny my husband and I, as I said,
Speaker 1: he's a news guy too, and it just said, you know,
Speaker 1: when he was kind of working his way up, you
Speaker 1: always went to the town hall meetings and local politics.
Speaker 1: And part of it is, you know, the demise of
Speaker 1: local journalism, Like there's just no reporting on it anymore.
Speaker 1: And so it's all kind of the same stuff. As
Speaker 1: you said, a lot of it at the federal level,
Speaker 1: but it's not really getting down to you know, what's
Speaker 1: happening on a different level. I mean, it is why
Speaker 1: I will be Tim's right, like we love talking to mayors,
Speaker 1: We love talking to governors, Like what's going on in
Speaker 1: your state, what's going on in your towns, it's really important.
Speaker 1: All right. So you've got a five year old, how
Speaker 1: do you teach them about government? How do you teach
Speaker 1: them about civics?
Speaker 5: Yeah, I think if you have a five year old,
Speaker 5: the point is just to make sure that you are
Speaker 5: comfortable doing it in front of them, have conversations around them,
Speaker 5: have conversations in front of them. We don't need to
Speaker 5: raise like little government trivia experts, you know. They don't
Speaker 5: need to know all the presidents. They don't need to
Speaker 5: know how.
Speaker 4: Bill becomes a law at that age.
Speaker 5: But it's about giving them the vocabulary, letting them hear
Speaker 5: these words so they can kind of start to make
Speaker 5: sense of it. For every other subject, we start kindergarten
Speaker 5: with little concepts, little vocap and we build. But for government,
Speaker 5: a lot of the times we wait until they're almost
Speaker 5: eighteen and then say like, here, we're going to teach
Speaker 5: you everything right now. And so it's just this idea
Speaker 5: of scaffolding, like we do with every other skill and subject.
Speaker 2: Okay, so parents can't always be the ones who are
Speaker 2: doing this because they're not necessarily the ones who are
Speaker 2: doing this. What's your view on how this should be
Speaker 2: taught in schools?
Speaker 5: So we do need to take an approach that prioritizes
Speaker 5: things younger, like we do with everything else. Well, a
Speaker 5: lot of the ways that we do this is very
Speaker 5: idiosyncratic because states will say here's how we think we
Speaker 5: should do it. But then it gets further devolved down
Speaker 5: to school boards, or it gets devolved down to counties,
Speaker 5: and so we don't have a unified curriculum. We never
Speaker 5: are going to. But the thing that we can do
Speaker 5: is start earlier and start building over time instead of
Speaker 5: just backloading everything in that second semester of senior year
Speaker 5: when kids really aren't that receptive to new information anyhow.
Speaker 2: You know what's interesting, I'm getting some messages from a
Speaker 2: member of our audience who says that the kids aren't
Speaker 2: necessarily the problem. It's the parents who seem to be
Speaker 2: the least educated, the most susceptible to misinformation online. We
Speaker 2: only have thirty seconds left, then we're going to come. Actually,
Speaker 2: we have a little more time with you.
Speaker 4: Those grown up kids.
Speaker 2: What do we do with that?
Speaker 5: Yeah?
Speaker 2: What do we do with those grown ups?
Speaker 5: Yes? You know what. That's one of the reasons I
Speaker 5: wrote this book in the way I did. The first
Speaker 5: half is sort of like, here's the problem, here's what
Speaker 5: our kids need to know, And the second half is
Speaker 5: a primer because I understand that people who are parenting today,
Speaker 5: we are products of systems that were deprioritizing civic education.
Speaker 5: A lot of times we had parents who were not
Speaker 5: comfortable talking about these topics, and so whoever's pointing that
Speaker 5: out to you, I share that viewpoint with the parents.
Speaker 5: We need a little bit more education here too, and
Speaker 5: that's sort of what this effort is about.
Speaker 1: How do you You know, it's interesting because I think
Speaker 1: we've all had conversations with adults where it gets heated,
Speaker 1: and you know, how do you how do you how
Speaker 1: do you have that conversation like, well, wait a minute,
Speaker 1: you don't really understand how this works, Like how do
Speaker 1: you do that in an environment where there's just a
Speaker 1: lot of anger and nobody wants to listen.
Speaker 4: Yeah, I'll tell you the strategy.
Speaker 5: I'm mostly talking with college students, like eighteen to twenty
Speaker 5: year olds, and they get heated too. But instead of
Speaker 5: asking someone what they think or why they believe that,
Speaker 5: the first question I always like to ask is what
Speaker 5: have you heard about that? Because I think when you
Speaker 5: ask someone what have you heard, it removes them from
Speaker 5: having the responsibility of defending or justifying a position. They
Speaker 5: can say, oh, I heard this on Twitter, Oh I
Speaker 5: heard this from my uncle or whatever it is, and
Speaker 5: then you can kind of work with that instead of
Speaker 5: putting it on them to defend whatever it is they're
Speaker 5: trying to think.
Speaker 1: Source matters, right, It's funny that, I mean, I find
Speaker 1: myself doing that to a lot, Like where did you
Speaker 1: hear that it does?
Speaker 2: But I think one challenge now is the polarization that
Speaker 2: we see on these online platforms. So you have, you know,
Speaker 2: a for example, the Elon Musk, the owner of X,
Speaker 2: has endorsed Donald Trump and he has hosted a conversation
Speaker 2: with him on the platform, and he is in complete
Speaker 2: control of that platform. Can you imagine the outrage that
Speaker 2: you'd hear from folks out there if you saw that
Speaker 2: on the flip side of like if it was more
Speaker 2: open you mean, or no if it but if you
Speaker 2: saw the opposite, like on Facebook or something like the
Speaker 2: CEO of.
Speaker 5: Oh, like if Zuckerberg sat down with Kamala Harris.
Speaker 2: Yeah exclusively or endorses her.
Speaker 5: Yeah. Yeah, you know what that might be like a
Speaker 5: pulse on current politics because I imagine that that probably
Speaker 5: would have more outreach than what happened with one point
Speaker 5: two million people listening to Elon Musk and Donald Trump.
Speaker 5: But yeah, it's hard to know, but you're probably right
Speaker 5: your intuition there kind of goes with what I would
Speaker 5: think too.
Speaker 1: Let's get back to our guest. We're talking with Lindsay Kormack.
Speaker 1: She's Associate Professor of Political Science, director of the Diplomacy
Speaker 1: Life at Steven's Institute of Technology. Her new book, How
Speaker 1: to Raise a Citizen and Why It's up to You
Speaker 1: to Do It. She is still with us in New
Speaker 1: York City. Hey, Lindsey, we mentioned that you have got
Speaker 1: basically five rules or five skills that you think kids
Speaker 1: ought to have. Can we go through them?
Speaker 4: Sure?
Speaker 5: Thing, This is the things that you need to go
Speaker 5: over with your kids before they leave your house, so
Speaker 5: before they're gone for college or whatever awaits them after.
Speaker 5: The first one is they need to know how to
Speaker 5: have hard conversations. And one of the reasons that I
Speaker 5: know that that's true is as a college professor, I
Speaker 5: have students who are afraid to upset anyone and they're
Speaker 5: afraid to feel this discomfort themselves, and so that's like
Speaker 5: a big skill that we need to make sure that
Speaker 5: they have. The second one is parents need to make
Speaker 5: sure their kids know how to register to vote, and
Speaker 5: then they have to change it when they move. I
Speaker 5: take our kids just to vote every year when we
Speaker 5: have an election, and without fail, some of them are
Speaker 5: turned away because they thought they were registered and they
Speaker 5: don't realize that if you're registered in one county, it
Speaker 5: doesn't transfer to the other. So make sure that they
Speaker 5: understand how to do this and how they change that
Speaker 5: when they move. The third one is they need to
Speaker 5: understand the difference between primaries and general elections. All too
Speaker 5: often we only focus on general elections when we talk
Speaker 5: about this in schools, and so they really miss out
Speaker 5: on this big piece of power, which is picking someone
Speaker 5: in a primary election. The third thing is they need
Speaker 5: to have an understanding of federalism because we so are
Speaker 5: the fourth thing. Rather, we oftentimes focus on the federal level,
Speaker 5: and then they don't realize that state and local governments
Speaker 5: control so many things. When we think about big policy
Speaker 5: issues like gun licensing, or healthcare or marijuana policy, things
Speaker 5: that matter to young voters, this happens at the state
Speaker 5: level for the most part, and so having an appreciation
Speaker 5: of these different levels it's an important thing for them
Speaker 5: to have. And the fifth one, and this is a
Speaker 5: hard sell, but a lot of parents that I'm talking
Speaker 5: to are pretty receptive to it. Your kids need to
Speaker 5: have read the Constitution at least once before they leave
Speaker 5: your house. It's our charter of government is the rules
Speaker 5: of the game. And once they have an understanding of it,
Speaker 5: they can't be as suayed with bad information or misinformation
Speaker 5: because they'll really just have a rooted understanding of what
Speaker 5: our system is all about.
Speaker 1: And yes, you could start with Hamilton, like it'll get
Speaker 1: you really excited like that. No, seriously, like I think
Speaker 1: about something like that gets people interested, like, oh wait
Speaker 1: a minute, this is really our history in a fun form.
Speaker 1: But there's a lot of information there. What is it
Speaker 1: that the kids that you teach eighteen to twenty one,
Speaker 1: twenty two, you've got a young daughter too. But I
Speaker 1: am curious about the questions that come up the most
Speaker 1: when it comes to government politics. What do they want
Speaker 1: to know? What is it that they're like, I don't
Speaker 1: really understand this. I feel like when there's a piece
Speaker 1: of legislation going through Congress, we all are kind of like, wait,
Speaker 1: where are we in this process? And where are we
Speaker 1: and what vote is this and how does this work?
Speaker 1: Because there's still things, I think the mechanics that don't
Speaker 1: always make sense or don't you know, there's just it
Speaker 1: feels like nuances do it. But anyway, what do kids
Speaker 1: ask you the most?
Speaker 5: I mean, I wish I could tell you that there
Speaker 5: was this one thing that they didn't understand, But truly
Speaker 5: they're lost. Like their understanding of the courts is based
Speaker 5: on like courtroom drama TV. Their understanding of the presidency
Speaker 5: is sort of like whatever they've seen on Instagram or
Speaker 5: TikTok that morning.
Speaker 4: And when it comes to like how the.
Speaker 5: Legislature works, it's really hard and so it's not something
Speaker 5: where we can fix it overnight. But I do think
Speaker 5: that if we start a little earlier, if we're a
Speaker 5: little bit more intentional about it, and we recognize that
Speaker 5: we have a role as families in writing this thing,
Speaker 5: we can get to a lot of their questions because
Speaker 5: they're kind of lost all over the place.
Speaker 2: Do the social platforms have a role too? You mentioned
Speaker 2: Instagram and TikTok just now, how do you see them?
Speaker 5: I mean, they're already here. They're going to be here
Speaker 5: for good, I think, and so we have to understand
Speaker 5: what they are. I think something that parents can do is,
Speaker 5: you know, we're not going to see the same things
Speaker 5: as our kids. We're algorithmically fed different things. We all
Speaker 5: know this, and something that I argue in my book
Speaker 5: is that take a little time with each other and say, like,
Speaker 5: what is it that you're seeing and make sure that
Speaker 5: you kind of have an understanding of what their algorithm
Speaker 5: feeds them, and let them see what you're getting fed
Speaker 5: as well. That way, you can talk about things with
Speaker 5: a better understanding of the background inputs that either side has.
Speaker 1: You know, we talked about education, tim you asked earlier.
Speaker 1: I think let's you some questions. But do we need
Speaker 1: to have mandatory civics classes in school? Do we need
Speaker 1: to have a Civics test before people vote?
Speaker 5: I don't think a civics test is necessarily the way
Speaker 5: to do it. The people who study like education, the
Speaker 5: people who are experts in this field, always come back
Speaker 5: to this idea of action civics, which is like giving
Speaker 5: kids a project so that they can really see how
Speaker 5: the process works. You know, they find like a playground
Speaker 5: and say, oh, our basketball courts are kind of cracked
Speaker 5: and they don't really work. How can we figure out
Speaker 5: how to fix that? And that process is you know,
Speaker 5: figuring out which branch of government is responsible, which level
Speaker 5: is responsible, trying to figure out how you activate to
Speaker 5: talk to those people, and even if you don't succeed
Speaker 5: in getting better basketball courts, you understand a lot more
Speaker 5: about the process. And so the people who study that
Speaker 5: sort of like what can we do in schools, they
Speaker 5: mostly point to action civics versus study for a test,
Speaker 5: get ten answers right and go on with your life.
Speaker 1: The January sixth riot on the Capitol was that, I mean,
Speaker 1: how do you think about that in our political history?
Speaker 1: And I'm just thinking, like, does it make you nervous?
Speaker 1: Like those individuals did they think, well, this is democracy.
Speaker 1: I believe the vote was stolen, you know, like, like,
Speaker 1: how do you kind of teach around that that those
Speaker 1: are citizens to people who may have thought, listen, you know,
Speaker 1: we think things weren't democratic, and so we're protecting our state.
Speaker 5: Yeah, that's a really hard one, and I talk about
Speaker 5: this a little bit in the book. I think one
Speaker 5: of the things that's challenging there is, my guess is
Speaker 5: that people who are storming in the Capitol on January sixth,
Speaker 5: I don't think many of them ever worked as poll
Speaker 5: workers or election workers, because I think if you had,
Speaker 5: you would understand how difficult it is to actually steal
Speaker 5: an election, or how unlikely it is that enough people
Speaker 5: would conspire to do that.
Speaker 4: And so this is.
Speaker 5: All sort of going back to the point of like,
Speaker 5: if we understand our systems better, I think they operate
Speaker 5: in better ways and we're less prone to things like
Speaker 5: misinformation that can incite violence. So I think about January
Speaker 5: six as an ultimate failure of political education more than
Speaker 5: anything else.
Speaker 2: But many Americans do still believe the twenty twenty election
Speaker 2: was stolen and question and again, I'm going to the
Speaker 2: American Bar Association. They write that they question the integrity
Speaker 2: of our election systems, and you actually hear the current
Speaker 2: front runner and Republican nominee still questioning the twenty twenty election.
Speaker 2: How do you view those in positions of power making
Speaker 2: comments like that.
Speaker 5: So I think it's easier to give Donald Trump a
Speaker 5: pass versus seasoned politicians a past, because seasoned politicians, you know,
Speaker 5: they understand these systems, They've interacted with them for a
Speaker 5: longer time. I think what Donald Trump kind of brings
Speaker 5: is more of an infotainment style of things and not
Speaker 5: a deep rooted understanding of how the processes that underlie
Speaker 5: our systems work. I think it's kind of dangerous for
Speaker 5: us to kind of take that as the teaching versus
Speaker 5: going back to basics and saying, you know what, maybe
Speaker 5: I'll go volunteer as a poll worker and go see
Speaker 5: how that actually is. That would be the version of
Speaker 5: doing like your own real research. And I think when
Speaker 5: people do that, they realize it's very hard to steal
Speaker 5: an election. It's very hard to do these sorts of
Speaker 5: things because we have so much redundancy in place in
Speaker 5: the US system.
Speaker 1: Hey, lindsay one last question. We've got to wrap up,
Speaker 1: but got about a minute. I think there are a
Speaker 1: lot of folks there like, this isn't my government, it's
Speaker 1: companies who do lobbying. You worked at a lobbyist in
Speaker 1: Washington for about a year, and I just, you know, how,
Speaker 1: how do they're like, why should I vote because it
Speaker 1: doesn't really matter because my vote doesn't matter because it's
Speaker 1: money that matters. What do you say to them? And again,
Speaker 1: we just got about forty five seconds.
Speaker 5: Yeah, I think that's a hard feeling, and I understand
Speaker 5: it to think that you're inconsequential. The thing is you're
Speaker 5: truly not at all the local and state levels federal government, sure,
Speaker 5: You're a small piece of that, but when you're doing
Speaker 5: things that are understanding local level, you are pivotal. We
Speaker 5: have elections that are decided in fewer than hundreds of votes,
Speaker 5: so I understand that concern.
Speaker 4: I think you should put it away and.
Speaker 5: Still exercise the rights that you have here.
Speaker 1: All right, really cool stuff and very thoughtful as we are.
Speaker 1: How many days are we away? Just over eighty eighty
Speaker 1: days away and people can start voting come September. Lindsay,
Speaker 1: thank you so much. I really enjoy this, Lindsay Cormac.
Speaker 1: She is Associate Professor of Political Science and Director of
Speaker 1: the Diplomacy Lab at Steven's Institute of Technology. Her new
Speaker 1: book out, How to Raise a Citizen and Why It's
Speaker 1: up to You to do It. That book is out
Speaker 1: as we speak.
Speaker 2: Eighty two days.
Speaker 4: Eighty two days.
Speaker 2: Yeah, according to the countdown clock at two seventy to
Speaker 2: win dot com.
Speaker 1: All right, yeah, no, I know, fast and furious. All right,
Speaker 1: you're listening and watching Bloomberg BusinessWeek. One of the big headlines,
Speaker 1: certainly here at Bloomberg we've been talking about it all day,
Speaker 1: is a deal in the package food space today between
Speaker 1: brands we all know We've been talking about it, whether
Speaker 1: it's cheese, it's M and MS, Dove Bars, Pedigree, Original Greenies.
Speaker 1: We mentioned earlier Mars Agreen to buy Kelennova, formerly of Kellogg's,
Speaker 1: for nearly thirty six billion dollars. It included in debt
Speaker 1: in that deal, and it really brought together two major
Speaker 1: food companies and the biggest deal of the year. And
Speaker 1: then we get a lot going on. We've got retail
Speaker 1: sales tomorrow Walmart. So it got us thinking big time, Tim,
Speaker 1: about the consumer.
Speaker 2: There's a voice we turned to again and again on
Speaker 2: the consumer and the retail environment. It's Eric Clark. He's
Speaker 2: portfolio manager at Rational Dynamic Brands. FUN ticker hsut X,
Speaker 2: sixty eight million dollar. FUN top holdings include Amazon Live Nation, Uber, Netflix, Apple, Chipotle,
Speaker 2: and more. Eric joins us from San Diego. Eric, how
Speaker 2: are you.
Speaker 3: I'm great, Tim, how are you?
Speaker 2: We're doing pretty well. Hey, we're gonna get to the
Speaker 2: I want to get to big picture in just a sec.
Speaker 2: But when we were on our planning call this morning
Speaker 2: and our producer Paul Brannan told us that you were
Speaker 2: adding to Chipotle after the news of Brian Nichol's departure.
Speaker 2: We were both like, whoa wait a second, wait, what
Speaker 2: give us your thesis here, given that we saw shares
Speaker 2: fall significantly yesterday after this news was announced.
Speaker 3: Yeah, sure, I mean, listen, Brian has done amazing job
Speaker 3: with Chipotle, and he will do a lot of great
Speaker 3: things at Starbucks. But the reality is he put a
Speaker 3: big team in place, a big formula in place, and
Speaker 3: it's working. And he's a builder and a fixer, and
Speaker 3: you know, psychologically, builders and fixers get bored when things
Speaker 3: are kind of stable, and I think that's where we
Speaker 3: are with Chipotle. They are appealing to lots of demograms, epics,
Speaker 3: traffic is strong, digital was amazing, They've removed all the
Speaker 3: friction from acting, and it's just one of those restaurant
Speaker 3: fast casual brands. It's just very, very popular. And you know,
Speaker 3: for him it's probably less interesting. Then you know, let's
Speaker 3: what can we do to where can we go to
Speaker 3: fix something else? And I'm sure you know the compensation
Speaker 3: at Starbucks was amazing, so the deal was probably too
Speaker 3: good to pack. I do not worry about Chipole at all.
Speaker 1: That's interesting, that's interesting. So having said that, but did
Speaker 1: you buy any Starbucks?
Speaker 3: I didn't you know, it's funny, and we were looking
Speaker 3: at Starbucks as well as you know, I like to
Speaker 3: call them diamonds in the dumpster, and you have you know, Starbucks, Nike, Lululemon,
Speaker 3: sde Lauder. There's a bunch of really amazing brands that
Speaker 3: are just down on their luck. So we ended up
Speaker 3: adding Nike and Lulu back. And we haven't known those
Speaker 3: for a while, thank heavens, because they're down over fifty percent.
Speaker 3: But I think it's a great time to start picking
Speaker 3: up those things. But Starbucks, I certainly wasn't going to
Speaker 3: chase it after twenty twenty five per because I feel like,
Speaker 3: you know, that's the first two years of benefit of
Speaker 3: having Brian come in and assess everything. It gets harder
Speaker 3: from here.
Speaker 2: I think, okay, so let's move on a little bit
Speaker 2: big picture stuff, and then we're going to go smaller
Speaker 2: picture once again and talk about more individual names. Strength
Speaker 2: to the consumer, strong, weak, recession coming? What say you?
Speaker 3: I think without the recession? I think, yes, the consumer.
Speaker 3: I just wrote a report a little note that said,
Speaker 3: is the consumer tapped out or opting out? And it's
Speaker 3: the latter. The consumer has been getting overcharged all of
Speaker 3: us for two plus years. Eventually we get tired of
Speaker 3: it and we push back on brands, and so consumers
Speaker 3: are basically saying, I am going to say no to
Speaker 3: that at least for now until you write size prices.
Speaker 3: I really love that concert, so I'm going to overspend
Speaker 3: on that one. Or I want to go on vacation
Speaker 3: and I know I'm going to have to overspend there,
Speaker 3: so I'm not going to buy some goods. And so
Speaker 3: I see this kind of almost seasonal consumer spending that's
Speaker 3: happening because prices are just too high everywhere and I
Speaker 3: don't buy the inflation is almost back to two percent.
Speaker 3: I don't see it anywhere in the real economy.
Speaker 1: Hey, one thing that's a big holding in your portfolio,
Speaker 1: and I believe has for a while is Alphabet. And
Speaker 1: we talked earlier about the Department of Justice Eric Mulling
Speaker 1: an idea of maybe breaking up Google after a landmark
Speaker 1: antitrust win. Does that depending on how this plays out,
Speaker 1: will that impact your investment thesis for Alphabet?
Speaker 3: You know all of these big techts, and I'll put
Speaker 3: Google and Amazon in particular, if there were any type
Speaker 3: of real breakup, and I don't think the odds of
Speaker 3: that are very high, and they would take multiple years.
Speaker 3: That would be an unlocking of value because there's so
Speaker 3: many great brands inside of these great companies that if
Speaker 3: you set them free on a standalone basis, the sum
Speaker 3: of the parts is much higher than the current market
Speaker 3: cap for Google or Amazon. Amazon in particular, which is
Speaker 3: why it's the biggest holding. But I think it's a
Speaker 3: lot of noise, and certainly it could it could keep
Speaker 3: people away because they don't want to deal with headline risk.
Speaker 3: But I don't think it's anything more than just typical
Speaker 3: DJ stuff and you know, just trying to make waves
Speaker 3: about big companies that are dominant.
Speaker 1: There's a well known brand that just reported earnings, Cisco,
Speaker 1: that is also trying to write it ship and we
Speaker 1: just broke down the numbers and we did see the
Speaker 1: stock actually pop in the aftermarket. How do you think
Speaker 1: about a brand like that? Is it just something when
Speaker 1: you look at the tech universe you're not interested or
Speaker 1: do you see some value there?
Speaker 3: You know, we don't follow Cisco as much because it's
Speaker 3: not kind of direct consumer within our portfolio, you know, Amazon, Apple,
Speaker 3: and then we have some Google and Meta. We're more
Speaker 3: in the communication services, you know, with the Netflix or
Speaker 3: a Live Nation or things like that. So we have
Speaker 3: owned some direct tech, but Cisco isn't isn't part of that.
Speaker 1: That's true because it's not as much consumer consumer focus there.
Speaker 2: Hey, Eric, I look through your holdings in the Rational
Speaker 2: Dynamic Brands Fund and I see a company, a couple
Speaker 2: companies or segment. I should say that it's like kind
Speaker 2: of that old is the is it Sesame Street? One
Speaker 2: of these things does not belong. It's like one of
Speaker 2: these things. Yeah, one of these things is not like
Speaker 2: the other. Gave all these consumer facing companies, and then
Speaker 2: you have private equity Blackstone, KKR, Apollo. You've added to
Speaker 2: Apollo recently on the dip. Why is private equity or
Speaker 2: I guess alts as we they want to be called. Now,
Speaker 2: why is it appealing to you?
Speaker 5: Yeah?
Speaker 3: You know, it's a major theme in the high net
Speaker 3: worth area, money migrating on the margin from public equities
Speaker 3: to and public fixed income over to privates, and very
Speaker 3: few people have any exposure to the private market, which
Speaker 3: is eighty percent of the economy. So it's just that
Speaker 3: little area that I think it shields people from volatility.
Speaker 3: You get out to some of the smartest investors on
Speaker 3: the planet. They can see around corners, they have great
Speaker 3: information kind of advantages, and they've been all of them
Speaker 3: since they're IPOs. They've been monster out performers. And they
Speaker 3: all pay a dividend and they grow that dividend. So
Speaker 3: you know, sometimes they can be a little bit vollable,
Speaker 3: but they are terrific companies, terrific stocks, and they are
Speaker 3: really under owned still even though two of the three
Speaker 3: are part of the S and P and Apollo. I'm
Speaker 3: sure in the next twelve months or less would be
Speaker 3: part of the Oh.
Speaker 2: Interesting, I like a prediction. I like a prediction. Absolutely,
Speaker 2: we'll come back to that in the next twelve months. Yeah, exactly,
Speaker 2: So you're right about that.
Speaker 1: Eric, talk to you about it. Hey, listen, Eric, take care.
Speaker 1: Enjoy the rest of the summer. Eric Clark, portfolio manager
Speaker 1: at Rational Dynamic Brands Fund.
Speaker 2: As we mentioned, it's always summer in San Diego. You
Speaker 2: don't have to say enjoy the summer to somebody who
Speaker 2: lives in San Diego, like three sixty five. It's beautiful there.
Speaker 1: It's a state of mind, it really is.
Speaker 4: You're to date.
Speaker 1: His fund is up to shy of nine percent according
Speaker 1: to Blomberg Rankings, putting it in the seventeenth percentile. One year,
Speaker 1: it's in the seventy fifth percentile.