WEBVTT - How NPR's Former CEO Left the Liberal Bubble and Learned to Love the Right 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Abramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:31.800 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. Well, 0:00:31.840 --> 0:00:35.400 Republicans returning to Washington, they've got to decide whether they 0:00:35.400 --> 0:00:39.960 are going to set aside or support a bipartisan healthcare bill. 0:00:40.440 --> 0:00:44.479 It has gained some acceptance in Congress. Indeed, Senate Minority 0:00:44.560 --> 0:00:48.279 Leader Chuck Schumer said over the weekend that the bill include. 0:00:48.320 --> 0:00:52.120 The bill's support includes all of the forty eight Senate Democrats, 0:00:52.159 --> 0:00:56.320 as well as twelve publicly committed Republicans, enough to overcome 0:00:56.360 --> 0:00:59.240 any filibuster. So is there a chance of some kind 0:00:59.280 --> 0:01:03.000 of bar bi partisan resolution here? To help us understand 0:01:03.040 --> 0:01:07.600 the divide that exists between Republicans and Democrats is Ken Stern. 0:01:07.959 --> 0:01:11.240 He is an author and the former chief executive of NPR, 0:01:11.440 --> 0:01:14.679 and he's the author of the new book entitled Republican 0:01:15.040 --> 0:01:18.319 Like Me, How I Left the Liberal Bubble and learned 0:01:18.440 --> 0:01:20.880 to love the right, and he joins us in our studio, 0:01:20.959 --> 0:01:22.720 can thank you for being here, thanks for having me 0:01:22.760 --> 0:01:25.440 on the show. Well, maybe as a jumping off point, 0:01:25.480 --> 0:01:27.759 this idea that because we're waiting to hear what's gonna 0:01:27.800 --> 0:01:30.880 happen with any kind of health care legislation, I wonder 0:01:30.920 --> 0:01:32.920 if you could kind of take that and then explain 0:01:33.000 --> 0:01:34.800 why you wrote this book and a little bit of 0:01:34.840 --> 0:01:40.039 your experience learning about different perspectives when it comes to 0:01:40.080 --> 0:01:42.600 such important issues like healthcare. Yeah, I think it's actually 0:01:42.600 --> 0:01:44.160 an interesting example. So let me tell you why I 0:01:44.160 --> 0:01:45.959 wrote the book, and then we'll tie it into healthcare. 0:01:46.200 --> 0:01:48.800 So I wrote the book because I've become increasingly concerned 0:01:48.800 --> 0:01:51.840 about the polarization. Um More and more we live in 0:01:51.840 --> 0:01:55.559 our own world. We don't um communicate with the other side, 0:01:55.960 --> 0:02:00.120 and we've continued to think a worse than were to 0:02:00.160 --> 0:02:02.640 the other side. And it actually has relatively little to 0:02:02.720 --> 0:02:05.720 do with issues issue polarization. How much we disagree hasn't 0:02:05.720 --> 0:02:07.800 really changed in this country over the last twenty five years. 0:02:07.960 --> 0:02:10.320 How much we hate the other side has gone off 0:02:10.320 --> 0:02:14.040 the charts. Um So, so my book is really and 0:02:14.200 --> 0:02:16.280 and there's a reason for that. The reason has become 0:02:16.360 --> 0:02:20.520 more divided geographically and demographically. We don't know the other side. 0:02:20.560 --> 0:02:22.200 When you don't know the other side, it becomes easy 0:02:22.240 --> 0:02:25.040 to demonize them. Um. So my book was about me 0:02:25.680 --> 0:02:30.000 leaving my democratic m ward in washing d C. And 0:02:30.080 --> 0:02:32.680 spending as much time as I could with Republicans where 0:02:32.680 --> 0:02:37.280 they work, where they pray, where they where they hunt. Uh. 0:02:37.320 --> 0:02:39.320 And it was an eye opening experience for me. And 0:02:39.360 --> 0:02:41.160 one of the things I learned along the way is 0:02:41.880 --> 0:02:44.040 when it comes when you get polarized like this, it's 0:02:44.080 --> 0:02:46.800 often not about substances, about whether you're winning or losing. 0:02:46.800 --> 0:02:48.720 There's actually a lot of social science around it doesn't 0:02:48.720 --> 0:02:51.960 actually matter that actually underlying merits doesn't matter. It's about 0:02:52.000 --> 0:02:54.480 my side beating your side. And I think that's a 0:02:54.480 --> 0:02:56.519 lot to do with politics and washing d C. Right now, 0:02:56.600 --> 0:02:59.600 you can before we get into what you found as 0:02:59.639 --> 0:03:03.239 you to this trip across the country. I'm wondering whether 0:03:03.760 --> 0:03:07.240 you are saying that as the chief executive officer, the 0:03:07.240 --> 0:03:10.919 former chief executive officer of NPR, you think that NPR 0:03:11.040 --> 0:03:17.640 and other media outlets do perpetuate these ideas well. I 0:03:17.680 --> 0:03:21.160 think so, So let's that's actually two different issues to 0:03:21.200 --> 0:03:25.120 talk about. There um. In the broader scheme of things, 0:03:25.880 --> 0:03:30.120 um um. I think what media, like all people do, 0:03:30.360 --> 0:03:32.880 they live in their own bubble. Uh, they're in a 0:03:32.919 --> 0:03:36.880 place they they they tend to perpetuate themselves. They hire 0:03:36.920 --> 0:03:40.280 people like themselves. Uh, they think like themselves. They have 0:03:40.440 --> 0:03:44.560 a confirmation bias always going on. And it's not a 0:03:44.840 --> 0:03:47.280 necessarily intentional thing, but it's an important thing because it 0:03:47.400 --> 0:03:50.960 terms what's important, who you talk to, what issues you cover. 0:03:51.080 --> 0:03:53.560 And I think that's why a lot of the country 0:03:53.600 --> 0:03:58.080 feels locked out of sort of what's called mainstream media. Um. 0:03:58.400 --> 0:04:00.640 And that's a subtle thing that I think is hard 0:04:00.640 --> 0:04:04.200 to grapple with, but it's real. The issue I think 0:04:04.200 --> 0:04:08.520 we found more recently in the Trump era is that 0:04:08.640 --> 0:04:11.680 media has discovered that conflict play. It's not actually not 0:04:11.760 --> 0:04:14.320 a really new concept. You know, if it bleeds, it leads. 0:04:14.800 --> 0:04:17.560 But you know, the best thing that's happened to the 0:04:17.560 --> 0:04:20.520 New York Times is Trump's attack on the failing New 0:04:20.600 --> 0:04:22.560 York Times. And the best thing that happens that Trump 0:04:22.680 --> 0:04:25.360 is the New York Times attacks on him. Um. And 0:04:25.440 --> 0:04:28.120 there's actually a win win for them and kind of 0:04:28.120 --> 0:04:32.039 a lose lose for democracy and sort of civility. Well, 0:04:32.320 --> 0:04:34.280 let's go back to that, because that's those are not 0:04:34.320 --> 0:04:38.560 things you can legislate. No, I think that's you know, Uh, 0:04:38.600 --> 0:04:41.799 these are tough things. Um, where does it come from? 0:04:41.800 --> 0:04:44.400 Based on your trips and your meeting of people? How 0:04:44.400 --> 0:04:46.719 did what do they say to you in order to 0:04:46.800 --> 0:04:51.239 explain why they feel the way they do? So I think, Um, 0:04:53.080 --> 0:04:55.239 it's a it's a challenging question because I think people 0:04:56.320 --> 0:04:59.480 uh in the flyover states. So let's just be Yeah, 0:04:59.520 --> 0:05:02.360 I was suppose pick an example, maybe an anecdote or too. Yeah, 0:05:02.360 --> 0:05:05.200 in Kentucky when you go down and talk to people 0:05:05.440 --> 0:05:09.560 who are seeing their coal mines closed. Um, you're in Appalachia, 0:05:09.600 --> 0:05:12.360 which has been essentially an internal colony of the East 0:05:12.360 --> 0:05:15.359 coast of the United States for a hundred years, where 0:05:15.560 --> 0:05:20.640 coal mining provided a semblance of of middle class life. 0:05:20.839 --> 0:05:23.320 And they see the their economy going, they see their 0:05:23.320 --> 0:05:25.640 hope going, they see opioid addiction on the rise, they 0:05:25.640 --> 0:05:30.320 see um, their kids, um not having an opportunity. Uh, 0:05:30.440 --> 0:05:32.720 they get angry. They don't see those stories are told, 0:05:33.200 --> 0:05:35.800 they hear things like climate changing. They just see sort 0:05:35.800 --> 0:05:39.680 of their outside clone. The colonial powers from Washington City, 0:05:39.680 --> 0:05:43.080 New York California shutting them down and shutting them down 0:05:43.560 --> 0:05:47.320 without really a concern about um their livelihood, and that 0:05:47.360 --> 0:05:50.040 translates into anger, that translates in the rejection of science, 0:05:50.040 --> 0:05:53.520 that translates into a whole, a whole gestalt of one 0:05:53.560 --> 0:05:55.719 side against the other. And you know, you can argue 0:05:55.720 --> 0:05:58.040 the facts a lot, but the facts matter less than 0:05:58.080 --> 0:06:01.320 the feelings. Okay, So at a time when the facts 0:06:01.400 --> 0:06:03.880 matter less than the feelings and you have these sort 0:06:03.880 --> 0:06:08.000 of increasingly ingrained winner and loser type of mentality that 0:06:08.200 --> 0:06:11.520 is not easy to resolve, even on the issues. As 0:06:11.520 --> 0:06:14.200 you point out, what's the path forward? I mean, I'm 0:06:14.240 --> 0:06:16.000 sure that if you were to sit down with one 0:06:16.080 --> 0:06:18.520 person who thinks differently from you, who's from a state 0:06:18.600 --> 0:06:20.760 that's not in your bubble or in a world, you 0:06:20.760 --> 0:06:23.520 could find commonality because we're human beings. But like from 0:06:23.680 --> 0:06:26.680 a sort of social level, what's the way forward at 0:06:26.680 --> 0:06:28.880 a time when Donald Trump is having a Twitter war 0:06:29.000 --> 0:06:32.360 right now with Bob Quirker, Republican Senator. I don't think 0:06:32.400 --> 0:06:35.520 there's any easy answers, and I will assure you my 0:06:35.520 --> 0:06:39.000 book does not have any conclusions that solves the problem. 0:06:39.160 --> 0:06:42.479 But I think it starts first with um, something I 0:06:42.600 --> 0:06:44.960 realize a long way, which is we're actually an exceeding 0:06:45.000 --> 0:06:49.400 in the era of high discourse and high anger, actually 0:06:49.400 --> 0:06:53.000 an exceedingly moderate people actually talk to people and actually 0:06:53.040 --> 0:06:55.360 look at the data around the most polarizing issues of 0:06:55.360 --> 0:06:59.000 the day. People actually move towards the center on abortion, 0:06:59.080 --> 0:07:02.880 on healthcare, on guns. It's actually an extraordinary amount of commonality. 0:07:03.400 --> 0:07:06.279 And if you actually and actually sort of telling people 0:07:06.320 --> 0:07:09.039 that and trying to translate that into the ideas like 0:07:09.080 --> 0:07:12.200 the other side, or actually, aren't the radicals the other sides? 0:07:12.240 --> 0:07:14.440 Are people telling us where the radical right? But here's 0:07:14.440 --> 0:07:17.120 the problem, because we were just talking about how blood cells, 0:07:17.200 --> 0:07:19.160 you know, and and so if you know, if if 0:07:19.200 --> 0:07:21.240 the conflict is what people want to read, how do 0:07:21.280 --> 0:07:23.720 you you know, tell them over and over again you're moderate, 0:07:23.920 --> 0:07:26.640 You're we're all moderate. We all just want to come ground. 0:07:26.720 --> 0:07:28.720 I mean, what I just I think that that's the 0:07:28.720 --> 0:07:30.880 problem is that you know, in a time when everyone's 0:07:30.880 --> 0:07:36.280 looking for attention, you are seeing you know, increasingly inflammatory rhetoric. Yeah, um, 0:07:36.320 --> 0:07:40.080 you know, I think there's gotta be uh so before again, 0:07:40.360 --> 0:07:43.080 tell you I don't have the answers, um uh And 0:07:43.560 --> 0:07:45.200 you can cook kick me out of the studio for 0:07:45.280 --> 0:07:49.800 being frustrating. Um. It's also the political parties are part 0:07:49.840 --> 0:07:51.200 of the problem. And I think one of the things 0:07:51.480 --> 0:07:54.000 you know, you always hear people complain about the politicians 0:07:54.000 --> 0:07:56.760 Washington political parties. I'm from Washington. I've never really felt 0:07:56.760 --> 0:08:00.800 that until this trip, Uh, and understanding how the political 0:08:00.840 --> 0:08:06.840 parties have actually found progress for themselves fundraising electioneering off 0:08:06.840 --> 0:08:10.920 of conflict UM. And the example I use is UM 0:08:10.960 --> 0:08:14.640 sort of odd when it's abortion. UM an area of conflict. 0:08:14.920 --> 0:08:18.480 But the American opinion and abortion has not changed in 0:08:18.480 --> 0:08:21.840 fifty years. We've tracted since Roe v. Wade UM. And 0:08:21.920 --> 0:08:24.320 yet both of the parties are are trumping in the 0:08:24.400 --> 0:08:26.760 fact that they have the most extreme positions of that. 0:08:27.080 --> 0:08:30.320 So thank you so much, Ken Stern. Fantastic to to 0:08:30.360 --> 0:08:32.160 hear what you have to say. Kencern, author and former 0:08:32.240 --> 0:08:35.760 chief executive officer of NPR, author of the new book 0:08:35.760 --> 0:08:39.080 Republican Like Me, How I Left the Liberal Bubble and 0:08:39.160 --> 0:08:55.000 learned to love the right Well. The Chinese Communist Party 0:08:55.040 --> 0:09:00.240 approved a revised charter enshrining President Jijin Ping's name under 0:09:00.280 --> 0:09:03.040 its guiding principle. This was a departure from the prior 0:09:03.120 --> 0:09:05.720 to leaders of China which did not get their names 0:09:05.760 --> 0:09:08.600 enshrined here. To explain why this is actually a very 0:09:08.640 --> 0:09:12.040 big deal is John from Her, senior executive editor for Business, 0:09:12.120 --> 0:09:14.520 Finance and Energy at Bloomberg News. Thank you so much 0:09:14.559 --> 0:09:17.000 for joining us. So this this is a big deal. 0:09:17.080 --> 0:09:19.760 Why this is a this is a huge deal. This 0:09:19.800 --> 0:09:22.720 is one of the most important political developments in China 0:09:22.960 --> 0:09:26.000 in decades. Essentially, this means that she and Pining, the 0:09:26.040 --> 0:09:29.640 current president, will be in power and will extend his 0:09:29.720 --> 0:09:33.800 influence over over Chinese politics, over the economy of the markets, 0:09:33.960 --> 0:09:36.760 potentially for decades to come. In theory, he was supposed 0:09:36.800 --> 0:09:38.760 to set down in five years time, but the fact 0:09:38.840 --> 0:09:41.439 that he is now elevated at the same level as 0:09:41.760 --> 0:09:46.040 Mout Tongue and Deng Xiaoping in the Chinese constitution means 0:09:46.080 --> 0:09:49.040 that he has the status that goes way beyond that 0:09:49.160 --> 0:09:52.960 of any other politician in China thought for the new 0:09:53.080 --> 0:09:59.480 era of socialism with Chinese special characteristics. That's the phrase, 0:09:59.600 --> 0:10:03.520 at least the translated phrase. Maybe you could explain what 0:10:03.600 --> 0:10:07.360 that means, and also in that context that the Communist Party, 0:10:07.400 --> 0:10:11.080 the party in China sits above the government to a 0:10:11.120 --> 0:10:14.160 certain extent. That's right. I mean, the key animating thought 0:10:14.280 --> 0:10:17.360 for all Chinese leaders always is to is to preserve 0:10:17.400 --> 0:10:20.320 the legitimacy of the party. And it's just it's it's 0:10:20.320 --> 0:10:23.440 hard to imagine this now, but you know, Chinese leaders 0:10:23.440 --> 0:10:26.160 have very long memories. They are obsessed with history, and 0:10:26.200 --> 0:10:27.760 they talk a lot about how if you look at 0:10:27.840 --> 0:10:32.319 Chinese history, there are regular sort of breaks, revolutions, disruptions 0:10:32.320 --> 0:10:34.720 like that are are are a pretty sort of constant 0:10:34.720 --> 0:10:37.880 feature of Chinese history, and they're determined to do everything 0:10:37.920 --> 0:10:40.280 they can to make sure that the Party stays on 0:10:40.360 --> 0:10:42.880 top of all of that. And I think, you know 0:10:42.920 --> 0:10:45.439 what we're seeing now in China, this is she and 0:10:45.520 --> 0:10:48.640 ping himself talks about the third development of communism and 0:10:48.679 --> 0:10:50.760 the third step in communism, but I would say telling 0:10:50.880 --> 0:10:54.920 established it during the revolution. D J. Ping Um sort 0:10:54.960 --> 0:10:58.000 of you know, created the second wave of of of 0:10:58.000 --> 0:11:01.080 the of an economic revolution, and now that he is 0:11:01.120 --> 0:11:04.560 now leading China into a third period where he will 0:11:04.640 --> 0:11:08.160 restore China as a great power, which is something he 0:11:08.200 --> 0:11:10.920 spoke about a lot in his speech. So that's you know, 0:11:10.960 --> 0:11:12.560 you sort of have to parse the language of all 0:11:12.559 --> 0:11:14.439 of these leaders, but that, I think is what the 0:11:14.800 --> 0:11:18.199 key messages from this from this congress. But John, can 0:11:18.240 --> 0:11:21.040 you square the idea that the Communist Party is still 0:11:21.440 --> 0:11:24.520 at the top, ahead of the government at a time 0:11:24.720 --> 0:11:29.720 when now j Ping himself, this charismatic leader, is leading 0:11:29.880 --> 0:11:32.360 the nation. He it seems like he's kind of on 0:11:32.440 --> 0:11:34.760 top of the Communist Party. Now he's on top of both. 0:11:34.800 --> 0:11:36.319 I mean he isn't He is the president if you 0:11:36.360 --> 0:11:38.440 look at his title as the President of China. So 0:11:38.520 --> 0:11:41.079 his title, actually, if you look at Chinese history, is 0:11:41.120 --> 0:11:43.800 one of the lesser titles. He's head of state, whereas 0:11:43.840 --> 0:11:46.920 the really important role is to run the party. So 0:11:47.000 --> 0:11:49.800 he now runs both. He's head of the military as well, 0:11:49.880 --> 0:11:52.079 which is another really key When he controlled this is 0:11:52.080 --> 0:11:54.880 where his power has come from. He controls the three 0:11:54.960 --> 0:11:57.920 or four most important officers in both the party and 0:11:57.960 --> 0:12:00.760 the state himself. And he's also been pretty vocal about 0:12:00.840 --> 0:12:05.600 wanting to be a global economic power and competing and 0:12:06.000 --> 0:12:10.760 how does the concept of competing in a broad capitalistic 0:12:10.760 --> 0:12:16.000 economy mesh with communist values. I think that that argument 0:12:16.040 --> 0:12:18.200 in that debate was probably one one in lass in 0:12:18.240 --> 0:12:21.680 Beijing many many many years ago. Again, but the way 0:12:21.679 --> 0:12:25.719 the Chinese leaders look at it they're all about prosperity 0:12:25.800 --> 0:12:28.320 for the Chinese people. And as then, as Dan Dropping 0:12:28.400 --> 0:12:30.400 himself once said, it doesn't matter if you have a 0:12:30.440 --> 0:12:32.600 black cat or a white cat. The most important things 0:12:32.600 --> 0:12:35.120 that are catch as mice. The way the party leaders 0:12:35.160 --> 0:12:37.280 will look at it doesn't matter what your ideology is, 0:12:37.480 --> 0:12:40.600 as long as you are you are raising the tide 0:12:41.080 --> 0:12:43.520 for the Chinese middle classes, and you are bringing everybody 0:12:43.559 --> 0:12:46.040 in China up to a certain level of prosperity and 0:12:46.080 --> 0:12:48.600 sort of undoing what they see as the great sort 0:12:48.640 --> 0:12:52.600 of economic um sort of backwards steps that China took 0:12:52.600 --> 0:12:55.520 in the nineteenth twente century. Doesn't matter how you get 0:12:55.559 --> 0:12:57.800 their most important part is that all you bring as 0:12:57.880 --> 0:13:00.840 much of society with you as possible. Very important thing 0:13:00.840 --> 0:13:02.440 to bear in mind as well. In the speech, which 0:13:02.440 --> 0:13:05.400 we can talk about more if you like, present, she 0:13:05.559 --> 0:13:08.960 talked a lot about restoring or or addressing imbalances and 0:13:09.000 --> 0:13:13.600 inequalities in Chinese society. Is not just about economic growth anymore. 0:13:14.240 --> 0:13:17.400 He's obsessed now with sort of fixing some of the inequalities, 0:13:17.440 --> 0:13:20.280 both in terms of standards are living and also environmental 0:13:20.280 --> 0:13:23.360 factors that have been a byproduct of China's economic miracle. 0:13:23.400 --> 0:13:26.200 Over the last thirty or forty years. By all means, 0:13:26.200 --> 0:13:27.680 if you if you have other things in the speech 0:13:27.679 --> 0:13:29.040 that you want to highlight, I mean, I was going 0:13:29.080 --> 0:13:31.959 to talk about the vote in the Central Committee and 0:13:32.080 --> 0:13:35.400 how an ally UH, an enforcer really of of j 0:13:35.760 --> 0:13:39.319 Pink's Andy corruption move, is not going to be part 0:13:39.400 --> 0:13:41.280 of this. Well, that's right. So Lankie Shan, there was 0:13:41.320 --> 0:13:43.680 a lot of speculation that he would also he would 0:13:43.679 --> 0:13:46.959 be restored to the to the Standing Committee. UM. That 0:13:47.000 --> 0:13:49.439 would have been controversial because there's an unofficial rule in 0:13:49.520 --> 0:13:51.840 China that once you're over sixty five you need to retire. 0:13:51.920 --> 0:13:55.440 He's now sixty seven. UM. So there was some speculation 0:13:55.480 --> 0:13:58.280 that maybe if she had put him, had kept him on, 0:13:58.320 --> 0:14:01.360 that he would have broken UH with that long standing tradition. 0:14:01.400 --> 0:14:04.680 He didn't do that. You could possibly arguing again, you know, 0:14:04.760 --> 0:14:07.080 China is a very opaque place and the governing structures 0:14:07.080 --> 0:14:09.480 are very opaque. So a lot of this speculation, you 0:14:09.480 --> 0:14:11.760 could argue that one Key Shan his job was done, 0:14:11.920 --> 0:14:14.400 like what his job was to clamp down and corruption 0:14:14.440 --> 0:14:16.560 at the height at the top of the Chinese Party, 0:14:16.840 --> 0:14:18.800 and in a lot of ways it was one key 0:14:18.800 --> 0:14:22.600 Shan was she's battering round. He was his instrumental power. 0:14:22.920 --> 0:14:25.000 It was one key shan that basically put the fear 0:14:25.040 --> 0:14:28.920 of God into all of the top Chinese leaders, and 0:14:28.960 --> 0:14:31.680 that was what allowed she to exercise the power that's 0:14:31.680 --> 0:14:33.680 taken them to the pinnacle of power. Now, thank you 0:14:33.800 --> 0:14:35.680 very much for spending time with us. Has always looked 0:14:35.680 --> 0:14:39.600 forward to future visits. So John freyher is senior editor 0:14:39.760 --> 0:14:43.200 for Senior executivetor for Business, Finance and Energy for a 0:14:43.200 --> 0:14:58.720 Bloomberg Turn. Attention now to the world of food and 0:14:59.080 --> 0:15:03.320 restaurants McDon donald, Hippotle, McDonald's today benefiting from what they 0:15:03.400 --> 0:15:06.480 call their high low menu strategy. Here to tell us 0:15:06.520 --> 0:15:11.160 more about it, Mike Halin, senior restaurant analysts for Bloomberg Intelligence. Mike, 0:15:11.400 --> 0:15:13.360 good to have you. What is it? Tell people? What 0:15:13.480 --> 0:15:15.800 is this high low menu strategy and how's it working 0:15:15.840 --> 0:15:20.720 for McDonald's. UM. So, it's basically offering a lot of 0:15:20.800 --> 0:15:25.000 value items, some lower end items. UM. Also, you know 0:15:25.080 --> 0:15:28.320 the Mike pick two which they do in different combinations. 0:15:28.360 --> 0:15:30.120 It might be two items for two dollars and fifty 0:15:30.120 --> 0:15:33.480 cents or four items for four dollars, but offering value 0:15:33.520 --> 0:15:36.000 and as we know as the you know, largest chain 0:15:36.000 --> 0:15:38.720 in the world. They can source their product cheap, more 0:15:38.800 --> 0:15:41.320 cheaply than everyone else, and offer lower price points their 0:15:41.320 --> 0:15:44.600 customers and still allow their franchisees to make something off 0:15:44.680 --> 0:15:46.920 of it. And at the same time, on the high end, 0:15:46.920 --> 0:15:49.280 they're improving the quality of a lot of their items 0:15:49.320 --> 0:15:53.280 with the signature craft inline of chicken sandwiches and and burgers, 0:15:53.320 --> 0:15:56.920 and so that's also drawing um new customers or lapse 0:15:57.000 --> 0:16:00.080 customers into the chain. Um. You know, it's what we 0:16:00.120 --> 0:16:02.760 call a Barbell strategy kind of in in this fast 0:16:02.760 --> 0:16:05.280 food industry. One day, Wendy's is another chain that's doing 0:16:05.320 --> 0:16:08.920 it pretty well, um and also benefiting from it. You know, Mike, 0:16:09.080 --> 0:16:11.520 I have to confess something. When I see you, I 0:16:11.560 --> 0:16:15.040 think he ate McMuffin this morning. He ate neg McMuffin 0:16:15.080 --> 0:16:18.120 this morning because we had a whole the gym. No no, no, 0:16:18.160 --> 0:16:20.800 not because of that, Because months ago we were talking 0:16:20.800 --> 0:16:24.520 about how the breakfast menu was really bolstering their sales 0:16:24.600 --> 0:16:27.920 and getting them, getting them this momentum. But here we are, 0:16:28.160 --> 0:16:30.560 and it seems like this momentum is here to stay. 0:16:30.600 --> 0:16:33.240 It's not just the egg McMuffin that we talked about, 0:16:33.240 --> 0:16:35.640 which you which you liked? Yeah, which I liked. And 0:16:35.800 --> 0:16:39.160 you know, value was probably the first thing, and operations 0:16:39.160 --> 0:16:41.400 in the stores, and then right after that was was 0:16:41.480 --> 0:16:45.520 the all day breakfast. But um, yeah, they they've attacked 0:16:45.560 --> 0:16:49.240 their problems on a lot of different fronts, um. And 0:16:49.640 --> 0:16:52.080 you know it's the culmination of all these things that's 0:16:52.200 --> 0:16:54.560 leading to this very strow momentum. You know you you 0:16:54.600 --> 0:16:56.400 know I have said it before. You know, you can't 0:16:56.400 --> 0:16:59.920 turn around an aircraft carrier on a dime. Um, you know. 0:17:00.120 --> 0:17:03.200 But they've been really aggressive and it's enabled them to 0:17:03.200 --> 0:17:05.920 to really turn things around a lot faster than anyone expected. 0:17:06.480 --> 0:17:09.800 How is the the ongoing effort to sell off the 0:17:09.920 --> 0:17:13.040 units to franchise, you know, franchisees and then just take 0:17:13.280 --> 0:17:15.600 a percentage of the of the money back. Yeah, they 0:17:15.680 --> 0:17:19.240 hit their goal or a year ahead of schedule. So um, 0:17:19.280 --> 0:17:23.320 you know, they've they've been um aggressive, They've they've been 0:17:23.720 --> 0:17:26.600 um you know, whether it be operations or better food, 0:17:26.960 --> 0:17:30.040 or with the structure of the company and the refranchising. Um, 0:17:30.119 --> 0:17:32.800 they've been able to hit their targets and and achieve 0:17:32.840 --> 0:17:35.199 their goals faster than most expected. So then why are 0:17:35.240 --> 0:17:38.359 are their shares only up one and a quarter percent today, 0:17:38.760 --> 0:17:41.360 stocks up fift in the last year. Trees don't grow 0:17:41.359 --> 0:17:43.320 out of the sky, you know. And I mean there's 0:17:43.359 --> 0:17:46.199 just huge expectations baked in, right and and so the 0:17:46.200 --> 0:17:49.359 sames Our sales were um that you know that the 0:17:49.359 --> 0:17:52.120 strong strange sames Our sales trans across the globe are 0:17:52.160 --> 0:17:55.360 continuing um. But you know, revenue and EPs was kind 0:17:55.359 --> 0:17:59.520 of just in line. So you know, um, you know, 0:17:59.560 --> 0:18:01.399 it's like like I said, stocks don't go off forever, 0:18:01.640 --> 0:18:03.000 you know, you know, they have to take a breather 0:18:03.080 --> 0:18:05.720 at some point. You're not just the egg McMuffin at 0:18:05.760 --> 0:18:07.919 a certain point just can't get any larger for you 0:18:07.960 --> 0:18:11.240 to have for breakfast. Just too much. You never know, 0:18:11.640 --> 0:18:15.520 you never you know. In what you describe it, it 0:18:15.600 --> 0:18:17.359 rings a bell for me. And it it says, you know, 0:18:17.640 --> 0:18:22.840 high price or higher price and customization and personalization that works, right, 0:18:23.000 --> 0:18:25.240 the high end of that high low menu, the low 0:18:25.359 --> 0:18:28.879 end convenience and low cost that works. It's sort of 0:18:29.040 --> 0:18:31.880 like you're describing the retail industry as well. The high 0:18:31.960 --> 0:18:33.760 end does well, the low end does well, in the 0:18:33.800 --> 0:18:37.560 middle just struggles. Yeah, I think that's that's that's a 0:18:37.560 --> 0:18:40.320 good point. I mean, and you don't really talk about 0:18:40.760 --> 0:18:44.119 kind of in the middle much because, um, you know, 0:18:44.280 --> 0:18:47.440 fast casual has kind of destroyed that, right, So like, 0:18:47.560 --> 0:18:50.680 you know, just getting a decent meal for eight bucks, 0:18:51.000 --> 0:18:54.840 you know six bucks is you know, is that that 0:18:54.960 --> 0:18:57.239 doesn't come with table service? No, it's and it's been 0:18:57.240 --> 0:19:00.639 stolen away by a lot of these fast casual names. So, um, 0:19:00.680 --> 0:19:03.760 you know, that's why we're doing deep value, and that's 0:19:03.760 --> 0:19:05.960 why we're trying to improve the high end because we 0:19:06.080 --> 0:19:09.080 have that competition. You know, POSR has that competition from 0:19:09.080 --> 0:19:11.920 Task Causual only have to compete. So let's talk about 0:19:11.920 --> 0:19:14.600 the middle that's suffering. Chipotle, they were for earnings today 0:19:14.600 --> 0:19:18.439 at four ten pm Wall Street time, and uh, you know, 0:19:18.480 --> 0:19:22.000 they've been really suffering with a series of illness scandals 0:19:22.040 --> 0:19:24.960 and others. What are we what are we looking for today? 0:19:25.240 --> 0:19:27.800 We you know, as always, we're looking at the pace 0:19:27.840 --> 0:19:30.719 of the same store sales in the traffic recovery, especially 0:19:30.760 --> 0:19:33.679 since there was another neuro virus outbreak in July in 0:19:33.760 --> 0:19:37.879 a Virginia store. Uh that that's number one, two and three. 0:19:38.080 --> 0:19:40.639 You know, there was a five fifty basic point impact 0:19:40.720 --> 0:19:43.480 for the week following the outbreak. Across the chain. We 0:19:43.480 --> 0:19:46.960 want to see how um that affects the entire quarter. Uh. 0:19:46.960 --> 0:19:49.280 And number two would be restaurant margins because there's kind 0:19:49.280 --> 0:19:52.600 of some conflicting opinions about this. You know, we tend 0:19:52.600 --> 0:19:55.800 to think that there's still room for pretty significant restaurant 0:19:55.800 --> 0:19:59.359 margin expansion. UM. Management was very slow to take labor 0:19:59.359 --> 0:20:02.560 out of the stores. Your sales drop, you have employees 0:20:02.600 --> 0:20:05.280 just sitting around, you know, so they really needed to 0:20:05.280 --> 0:20:07.320 take labor out of the stores, and they weren't aggressive 0:20:07.359 --> 0:20:09.440 about that. So we think we think there's some more 0:20:09.760 --> 0:20:14.040 um low hanging fruit there. Others might disagree on the street, um, 0:20:14.080 --> 0:20:16.480 but that's the other thing that that uh, you know, 0:20:16.560 --> 0:20:18.320 people are gonna look at. And of course Caso and 0:20:18.359 --> 0:20:22.000 the their impact that impact on same road, cheese on 0:20:22.080 --> 0:20:27.479 it and Americans will just come funneling in the door. Yeah, clearly. 0:20:27.520 --> 0:20:29.480 Mike Halin, thank you so much for joining us. Mike 0:20:29.480 --> 0:20:32.840 Halin is seenior restaurant analysts for Bloomberg Intelligence, joining us 0:20:32.840 --> 0:20:48.160 here in our living three studios. Gold prices are down 0:20:48.240 --> 0:20:51.480 today and they've been sort of on a choppy down 0:20:51.640 --> 0:20:55.320 trajectory over the past week or so. And uh, here 0:20:55.359 --> 0:20:58.080 to explain what's driving that is, Mike Judas partner and 0:20:58.119 --> 0:21:03.720 Metals and Mining Analystic Vertical Church Partners based in Stanford, Connecticut. Mike, 0:21:04.000 --> 0:21:06.960 I want to first just get your view on what 0:21:07.080 --> 0:21:10.359 the bigger driver of gold prices is right now. Is 0:21:10.400 --> 0:21:13.960 it the dollar which is starting to strengthen a little bit, 0:21:14.560 --> 0:21:17.560 or is it the sort of risk on environment which 0:21:17.760 --> 0:21:19.959 makes people not go to sort of have in trades 0:21:20.000 --> 0:21:23.320 like gold. Lisa, Good morning, morning pimp. So I would 0:21:23.400 --> 0:21:25.520 argue that I hate to split the baby here, but 0:21:25.560 --> 0:21:29.040 it's probably about fifty fifty, maybe weighted more towards the 0:21:29.119 --> 0:21:32.640 dollar that I would say. Ever since early September when 0:21:32.680 --> 0:21:36.480 gold peake fifty, Lisa, the dollars bounced about two or 0:21:36.520 --> 0:21:40.199 three percent against trade weighted and we've seen gold prices 0:21:40.280 --> 0:21:43.320 retreating kind of in this little a little little near 0:21:43.400 --> 0:21:45.040