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Speaker 1: This is Wall Street Week. I'm David Weston bringing you

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Speaker 1: stories of capitalism. We've heard all about how AI will

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Speaker 1: change our world in ways we have yet to imagine.

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Speaker 1: But we were surprised to find another side of the argument,

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Speaker 1: a leading expert who thinks we may be getting it

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Speaker 1: all wrong. And President Trump hasn't made too many friends

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Speaker 1: in Canada during his second term. We go north of

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Speaker 1: the border to get canadians perspectives on what's happened to

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Speaker 1: America's other special relationship. Plus, Australia has led the way

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Speaker 1: in imposing age limits on social media one hundred days in.

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Speaker 1: How are the country's new restrictions affecting children and families

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Speaker 1: and how big is the risk for social media companies

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Speaker 1: if they lose their younger users. But we start with

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Speaker 1: the FED and how it handled the uncertainties posed by

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Speaker 1: the Iran war when it met this week. Randy Quarrels

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Speaker 1: of Sinischer served as FED Vice chair. We heard from

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Speaker 1: the Federal Reserve and from Chair Palell this week, and

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Speaker 1: maybe the headline is the uncertainty because of the war

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Speaker 1: and run. He was very careful in saying we don't

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Speaker 1: know what the effects will be big smaller in between.

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Speaker 1: How does one make policy in the face of that

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Speaker 1: kind of uncertainty.

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Speaker 2: Well, you know, writ large, that's the job of the FED. Generally.

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Speaker 3: The FED is always in a position of uncertainty. That

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Speaker 3: uncertainty may be greater from moment to moment. It's obviously

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Speaker 3: at a fairly high level now. But that's really what's

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Speaker 3: behind the Fed's regular mantra of will be data dependent.

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Speaker 3: It's the data could be different next meeting than they

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Speaker 3: are today. On the basis of what we know now,

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Speaker 3: this is where we would be likely to go. I think, however,

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Speaker 3: when you're at a level of uncertainty like this, you

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Speaker 3: have to look at what you think the fundamental drivers

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Speaker 3: of the economy are likely to be.

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Speaker 2: As you think going.

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Speaker 3: Forward, and I think that those drivers currently are more

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Speaker 3: inflationary than non inflationary, and will therefore probably argue for

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Speaker 3: probably no change in the Federal reserves monetary policy stance

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Speaker 3: for some time into the future. I don't think that

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Speaker 3: where the economy is going is going to argue for

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Speaker 3: raising interest rates, but I think the argument for lowering

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Speaker 3: interest rates is going to be hard to carry, probably

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Speaker 3: for the rest of this year.

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Speaker 1: On the uncertainty, Just for one more moment on that.

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Speaker 1: At what point does the uncertainty itself start to weigh

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Speaker 1: in the economy because businesses might be reluctant to make investments,

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Speaker 1: consumers may hold off on spending. How long can we

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Speaker 1: go before we start to see you think in the economy.

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Speaker 3: Well, I think you start seeing that relatively quickly in

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Speaker 3: terms of lowered business investment because you don't know exactly

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Speaker 3: what environment you're investing into.

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Speaker 2: We saw that at Liberation Day.

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Speaker 3: There was a significant pause in business and business investment

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Speaker 3: until companies felt that they had their foot on a

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Speaker 3: rock with regard to where terror policy was likely to go.

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Speaker 2: And so you'll see that again. Now.

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Speaker 3: The question is how long does it last before that

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Speaker 3: becomes a sort of a material drag on the economy.

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Speaker 1: Tell us about demand destruction. I'm reading about that a

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Speaker 1: lot these days, which is not something you want necessarily.

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Speaker 1: What are the risks of that? And at what point

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Speaker 1: might we start seeing demand destruction? Given what's going on,

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Speaker 1: particularly with the energy.

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Speaker 3: Markets, again, you're going to start seeing responses pretty quickly

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Speaker 3: to higher energy prices in consumer spending, you know, and

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Speaker 3: again because of the uncertainty about the future macro environment

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Speaker 3: and business investment. If that's relatively short, if we're talking

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Speaker 3: a resolution in a month, even in two months, then

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Speaker 3: that's from the point of view of the FED, which

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Speaker 3: looks over long arcs of time, a blip. If it

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Speaker 3: goes on longer than that, you know, then you'll start

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Speaker 3: to see you'll start to see reaction. But on the

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Speaker 3: flip side of that, which is partly why I think,

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Speaker 3: you're not going to see a a hike in interest rates,

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Speaker 3: but you're not going to see a low lower interest

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Speaker 3: rates either. Those are effects that slow the economy. But

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Speaker 3: higher energy prices feed into higher prices generally, and that's inflationary.

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Speaker 3: I think a lot of the other drivers of the economy.

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Speaker 3: The fiscal stimulus that you have from the One Big

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Speaker 3: Beautiful Bill Act, which I thought was that I thought

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Speaker 3: was excellent legislation. It provides the right incentives for the economy,

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Speaker 3: but it is stimulative and pushing upward on inflation in

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Speaker 3: the short term. So I think the balance over the

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Speaker 3: course the next several months is likely to be in

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Speaker 3: favor of no moves either down or up.

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Speaker 1: One of the things we heard from the FED this

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Speaker 1: week was that the neutral interest rate has ticked up

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Speaker 1: a little bit, I think from three point oher to

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Speaker 1: three point one. What is driving that? Is it some

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Speaker 1: of the factors you said just suggested, or is it

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Speaker 1: some other structural things such as AI investment.

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Speaker 3: I don't think that AI investment is driving a change

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Speaker 3: currently in the neutral interest rate. I think it's too

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Speaker 3: early for us to see that sort of an effect.

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Speaker 3: I think it's more of the factors that I was

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Speaker 3: talking about earlier. And I think part of this, too,

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Speaker 3: is that the FED is beginning to recognize changes in

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Speaker 3: the overall environment that have been pushing upward on the

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Speaker 3: neutral interest rate for some time. I think their sort

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Speaker 3: of institutional estimate of the neutral interst rate has been

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Speaker 3: lower than warranted for some time, and they're catching up

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Speaker 3: to where the actual neutral rate has been for a while.

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Speaker 1: We saw in the FED in the Summary of Economic

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Speaker 1: projections both a slight increase in particularly core inflation, but

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Speaker 1: also in growth. Where does that growth come from? Do

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Speaker 1: you think at this point?

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Speaker 3: I think you'll see growth across the economy. I don't

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Speaker 3: think that the for example, that the soul driver of

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Speaker 3: growth is AI investment or AI changes in business processes. Again,

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Speaker 3: I think we're too early for that. But the economic

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Speaker 3: policies of this administration have been quite supportive of growth,

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Speaker 3: and in particularly the fiscal policy.

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Speaker 2: Of the One Big Beautiful.

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Speaker 4: Bill, and.

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Speaker 3: Those effects will be felt throughout the economy. And the

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Speaker 3: elements of the administration's economic package, economic policy package that

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Speaker 3: at the set of the administration one might have thought

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Speaker 3: could have slowed growth, for example, immigration policy, maybe tariff policy,

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Speaker 3: have ended up to be not as slowing of growth

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Speaker 3: as one to expect it at the beginning. So of

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Speaker 3: the overall administration economic package, which I think was much

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Speaker 3: more coherent and well thought out than a lot of

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Speaker 3: people give it credit for, I think that the stimulative

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Speaker 3: elements are outweighing the potential growth slowing elements, and so

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Speaker 3: as a consequence, we'll see that stimulation across the economy.

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Speaker 1: You mentioned tariffs, and goodness news, there's been a lot

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Speaker 1: of talk about tariffs. What I took away from what

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Speaker 1: Chair Pile and the Fed said was basically, they do

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Speaker 1: increase prices for a time being, but it's usually eight

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Speaker 1: months to year, and that'll be up sometime in the

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Speaker 1: middle of the year. What are you seeing out there

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Speaker 1: in the real world is that consistent with what you're seeing.

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Speaker 3: Yeah, it's very consistent. There's a slightly higher risk that

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Speaker 3: tariffs could feed into over all inflation expectations, just because

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Speaker 3: of how this tariff policy has been rolled out, because

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Speaker 3: it's been up, it's been down, it's been rolled out

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Speaker 3: over a long period of time, as opposed to develop, explain,

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Speaker 3: implemented with a delay for everybody to process it, which

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Speaker 3: would be the typical way to implement tariff policy, and

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Speaker 3: then it would be very clear that you have kind

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Speaker 3: of a one time step change in prices during the

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Speaker 3: period of implementation of the tariff policy that shouldn't feed

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Speaker 3: into overall inflation expectations.

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Speaker 2: There's a slightly higher risk that you push.

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Speaker 3: Up inflation generally for a longer period of time, just

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Speaker 3: because of the way the tariff policy was rolled out.

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Speaker 3: But I don't think it's terribly high, and I think

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Speaker 3: you can expect the FAD can kind of expect to

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Speaker 3: look through tariff policy. The tariffs themselves are not nearly

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Speaker 3: as high as people thought that they might be at

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Speaker 3: the outset of the administration.

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Speaker 1: You mentioned immigration policy, and it did come up in

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Speaker 1: the news conference with Chair Pyle in this sense, he said, look,

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Speaker 1: we still have sort of a low, higher, low fire

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Speaker 1: labor economy right now, and therefore the unemployment rate actually

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Speaker 1: is not going up. But he said, that's not a

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Speaker 1: really great balance. What are the risks in that sort

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Speaker 1: of employment market.

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Speaker 3: So I actually think that people are underestimating the degree

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Speaker 3: to which the labor supply has been changed as a

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Speaker 3: result of immigration policy. You know, the administration hasn't really

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Speaker 3: succeeded in forcibly deporting very many people.

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Speaker 2: That's hard to do.

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Speaker 3: The Eisenhower administration tried to do something similar and had

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Speaker 3: sort of similar.

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Speaker 2: Results, but the.

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Speaker 3: Policy had the effect of almost immediately closing off a

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Speaker 3: very large amount of illegal immigration that there had been

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Speaker 3: during previous years. A certain amount of self deportation and

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Speaker 3: even legal immigration is down materially. So the growth in

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Speaker 3: the labor supply that we had during the Biden administration

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Speaker 3: has been closed off by a very significant amount, really,

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Speaker 3: maybe between one and two million people a year, I think.

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Speaker 3: And so the softness that you see in the labor

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Speaker 3: demand numbers, in the jobs numbers, I think people are

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Speaker 3: underestimating the degree to which that is effectively offset or

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Speaker 3: significantly offset by the trinkage in labor supply. You layer

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Speaker 3: on top of that just the continuing aging of the

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Speaker 3: baby boomers, and.

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Speaker 2: So I am less concerned. And I think the.

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Speaker 3: Data that you described are supportive of that lower level

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Speaker 3: of concern than the FED has been expressing for some

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Speaker 3: time about the state of the labor market. And I

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Speaker 3: think as the data continue to evolve, that will be

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Speaker 3: another sort of support for interest rate policy that is

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Speaker 3: on the higher end rather than the lower end of expectations.

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Speaker 1: Coming up. What if AI isn't as big as inventing

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Speaker 1: the wheel or discovering fire. We look into the other

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Speaker 1: side of the argument. This is a story about right

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Speaker 1: sizing our expectations. Since chat GPT burst on the scene

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Speaker 1: four years ago, all we've heard about is how big

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Speaker 1: AI will be, how it could lead to superintelligence replacing humans,

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Speaker 1: how fast it is coming, and at least for some

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Speaker 1: how dangerous it may be.

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Speaker 5: We have two thousand people doing it, spend two billion

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Speaker 5: dollars a year on it. It affects everything risk, fraud, marketing,

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Speaker 5: idea generation, customer service, and it's kind of a tip

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Speaker 5: of the iceberg.

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Speaker 6: Yeah, AI AI AI AI.

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Speaker 7: So imagine one hundred thousand people, hundred million people than

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Speaker 7: any Nobel Prize winner.

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Speaker 8: Whether AI gets super intelligent, it might just replace us.

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Speaker 1: But what if they're wrong? What if AI isn't taking

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Speaker 1: us toward either utopia or dystopia? What if AI is

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Speaker 1: just normal?

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Speaker 9: I have been surprised by how controversial the statement AI

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Speaker 9: as normal technology is.

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Speaker 1: Arvind Narayanan is a professor of computer science and director

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Speaker 1: of the Center for Information Technology Policy at Princeton. He's

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Speaker 1: also co author of the book AI Snake Oil. What

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Speaker 1: Artificial Intelligence can do, what it can't do, and How

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Speaker 1: to tell the difference.

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Speaker 9: We acknowledge that AI is a powerful general purpose technology

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Speaker 9: compared to electricity, the Internet, I think, even the Industrial Revolution.

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Speaker 9: But like all of those technologies, what we think is

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Speaker 9: happening and will continue to happen, is a gradual integration

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Speaker 9: of this technology into society.

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Speaker 1: If it is gradual, corporate America doesn't seem to be

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Speaker 1: investing that way. The six US firms pouring the most

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Speaker 1: cash into AI are projected to spend over seven hundred

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Speaker 1: and fifty billion dollars on it this year alone, more

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Speaker 1: than the entire GDP of Ireland, and some firms are

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Speaker 1: already claiming significant layoffs are driven by AI. But Narayanan

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Speaker 1: is more circumspect.

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Speaker 9: This is not we think some impending superintelligence that is

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Speaker 9: going to, you know, render obsolete the laws of economics

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Speaker 9: or the limitations of human behavior. There are usual reasons

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Speaker 9: that are given for why AI is going to displace labor,

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Speaker 9: rely on a whole bunch of fallacies. AI developers are

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Speaker 9: looking at these so called capability benchmarks. Oh, you know,

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Speaker 9: AI is as capable as people are at answering customer

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Speaker 9: service questions, So it's surely it's going to replace customer

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Speaker 9: service representatives. Maybe. But what we said was, hey, let's

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Speaker 9: look at reliability separately from capability. Capability is not enough.

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Speaker 9: You have to have reliability, which means doesn't answer the

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Speaker 9: same question reliably every time, or is it giving different

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Speaker 9: answers to different customers. Does it know which tasks it

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Speaker 9: can take on and which ones are out of scope?

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Speaker 9: A second big reason is, even if you do implement AI,

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Speaker 9: does that actually make workers more productive, able to do

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Speaker 9: more work, and therefore actually increase the demand for their work.

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Speaker 1: Drew Mattis, the chief market strategist at MetLife, agrees.

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Speaker 10: I think when you think about what artificial intelligence does

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Speaker 10: and why people are concerned about it. Is there afraid

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Speaker 10: that the knowledge worker is going to become extinct. But

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Speaker 10: the reality of it is is that knowledge workers are

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Speaker 10: constantly using technology to expand the bounds of knowledge. And

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Speaker 10: when they expand those bounds, then they have other questions

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Speaker 10: they need to ask. If I have one hundred questions

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Speaker 10: that I start the day with and technology can help

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Speaker 10: me answer fifty of them very quickly, it's not like

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Speaker 10: I have fifty left. That just created fifty new questions

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Speaker 10: for me to answer. And the more questions I answer,

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Speaker 10: the more valuable I become, and the more valuable I become,

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Speaker 10: the more valuable the company I work for becomes.

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Speaker 1: Some companies are investing hundreds of billions of dollars right

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Speaker 1: now in AI. They have to get a return on

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Speaker 1: an investment from somewhere. Either they have to actually have

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Speaker 1: more revenues and more profits, or they have to cut

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Speaker 1: their cost somewhere. And that's part of the concern I

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Speaker 1: think about employment. Some people say, yeah, you've got to

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Speaker 1: cut employment. How does that pencil out? Do you think?

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Speaker 1: How does a return investment for all that come?

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Speaker 2: Well?

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Speaker 10: So, I think that that's a very short term way

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Speaker 10: of looking at the world, and I think that if

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Speaker 10: we really consider the long term view of what's best

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Speaker 10: for a lot of companies, it's to make the investment

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Speaker 10: and make sure that you understand where the payoff is.

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Speaker 1: Recently, companies have justified layoffs by saying AI can replace workers,

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Speaker 1: but some critics have countered by calling the move AI washing,

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Speaker 1: implying that companies are dressing up old fashioned cost cutting

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Speaker 1: as AI adoption in a bid to satisfy shareholders.

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Speaker 9: What we've seen historically is that as technology advances, people

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Speaker 9: move to higher and higher levels of abstraction of performance

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Speaker 9: work that mops supervising the technology to do the work

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Speaker 9: instead of doing it directly themselves, and what we're seeing

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Speaker 9: with AI so far is consistent with this pattern. So

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Speaker 9: my bet is on not seeing massive labor effects across

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Speaker 9: the economy, but there might be specific jobs and sectors

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Speaker 9: in which there might in fact be quite negative consequences.

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Speaker 9: Software engineering has been the clear leader, I think, in

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Speaker 9: the pace of AI adoption, but also the effects of

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Speaker 9: AI adoption, to the point where going back to a

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Speaker 9: time when all the code was written manually by hand,

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Speaker 9: that almost feels like going back to punch cards before

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Speaker 9: the days of keyboards critically, though, even in companies where

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Speaker 9: AI is being rapidly adopted for software engineering, it's not

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Speaker 9: really clear that it's leading to replacing software engineers with AI.

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Speaker 9: In fact, a number of job postings for software engineers

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Speaker 9: actually continues to increase.

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Speaker 1: Until recently, job postings for software engineers and others had

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Speaker 1: been going down, but last year the need for programmers

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Speaker 1: spiked unlike the rest of the jobs market. One of

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Speaker 1: the things that is said is that although it may

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Speaker 1: be as profound as the internet or electricity, it's coming

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Speaker 1: much faster. Does that make a difference.

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Speaker 9: There are many claims that are being made that AI

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Speaker 9: is the fastest adopted technology and history, But when we

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Speaker 9: looked at those numbers when writing this essay, we weren't

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Speaker 9: really convinced. If you look at something that could really

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Speaker 9: make an economic impact, like replacing customer service representatives with chatbots,

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Speaker 9: for instance. I mean, when chat GPT came out, so

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Speaker 9: many people, including me, thought that that was the first

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Speaker 9: thing that was going to happen in terms of labor effects.

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Speaker 9: Chatbot it's right there in the name. Why is that

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Speaker 9: still not happening? For the most part, it turns out

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Speaker 9: that when you kind of look at the deeper AI

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Speaker 9: integration where there are risks, there are legal liabilities involved,

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Speaker 9: there are structural and organizational changes that companies have to make.

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Speaker 9: It's not so simple. One of the stories we heard

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Speaker 9: was that Air Canada had this kind of customer service

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Speaker 9: chatbot and it made up a non existent refund policy.

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Speaker 9: When a customer was asking about it, the customer Goudia

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Speaker 9: set ensued. It went all the way to the Canadian

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Speaker 9: Supreme Court, and what the court decided was to force

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Speaker 9: the airline to abide by this non existent refund policy.

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Speaker 9: The speed limits in many cases are things like regulatory

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Speaker 9: barriers that have of course been inserted by humans, but

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Speaker 9: for very good reasons. There are you know, there's kind

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Speaker 9: of a saying that every regulation is written in blood,

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Speaker 9: every safety regulation at least. So when you look at

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Speaker 9: why AI can't make rapid inroads into healthcare, for instance,

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Speaker 9: it's because we're not going to let AI autonomously do

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Speaker 9: medical experiments on people right out how to cure cancer.

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Speaker 1: Some Yukta Milanji has seen that firsthand. She's an on

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Speaker 1: collogist who has been hired as vice president of Clinical

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Speaker 1: Strategy at Open Evidence, a medical chatbot that was recently

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Speaker 1: valued at twelve billion dollars and has been called the

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Speaker 1: chat GPT for doctors.

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Speaker 11: I'm a little bit, you know, circumspect when it comes

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Speaker 11: to those sort of grandiose statements around AI tools just

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Speaker 11: replacing physicians entirely. But I do think that there's definitely

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Speaker 11: going to be, you know, a world in which AI

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Speaker 11: tools become a part of clinical practice, and I'm excited

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Speaker 11: to enter that world. To be honest, I certainly do

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Speaker 11: not think that they're going to replace physicians. Every single

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Speaker 11: company founder putting out statements talking about the efficacy of

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Speaker 11: their tool. They'll say something like this tool has outperformed

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Speaker 11: a group of physicians in coming to a diagnosis or

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Speaker 11: solving a clinical problem. And I think what they're trying

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Speaker 11: to do by sort of putting these statements out there

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Speaker 11: entirely is showcase the efficacy of their tool and as

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Speaker 11: well not take any liability for the downside that could

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Speaker 11: happen because the AI tool has hallucinated or provide a

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Speaker 11: biased answer, or provide a false negative. And I think

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Speaker 11: that's a real problem. I think it's actually really inappropriate

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Speaker 11: to sort of make statements like that without kind of

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Speaker 11: realize sort of assigning or taking on responsibility for what

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Speaker 11: happens when your algorithm messes up? What happens if a

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Speaker 11: physician takes on a recommendation that an algorithm has generated

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Speaker 11: and that turns out to be the wrong one who

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Speaker 11: kind of like assumes that responsibility.

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Speaker 1: Like most technology, AI will continue to improve, and even

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Speaker 1: if it doesn't get everything right now, that potential for

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Speaker 1: improvement leads some to worry that it might get too

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Speaker 1: smart for humans to handle. Among those raising concerns is

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Speaker 1: Jeffrey Hinton, a Nobel Prize winning computer scientist known as

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Speaker 1: the godfather of AI.

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Speaker 8: Suppose that some time but seen an alien invasion fleet

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Speaker 8: that was going to get here in about ten years,

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Speaker 8: we will be scared and we'll be doing stuff about it. Well,

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Speaker 8: that's what we have, we constructing these aliens. But they're

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Speaker 8: going to get here in about ten years, and they're

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Speaker 8: going to be smarter than us. We should be thinking very,

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Speaker 8: very hard, how are we going to coexist with these things?

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Speaker 1: What do you say to the people who say there

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Speaker 1: may actually be a greater danger here beyond just losing

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Speaker 1: your job.

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Speaker 9: Where I disagree with people like Hinton is on two

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Speaker 9: big things. One, if we just club a whole bunch

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Speaker 9: of things together as some umbrella category of AI risk

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Speaker 9: and then treat it as an AI problem, we just

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Speaker 9: lose a lot of clarity and we lose a lot

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Speaker 9: of avenues by which we can actually address the problem.

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Speaker 9: So one kind of risk that people are worried about

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Speaker 9: is that AI is very good at hacking, finding new

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Speaker 9: vulnerabilities in software, and maybe taking over critical systems. That

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Speaker 9: is something we should be worried about. But it turns

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Speaker 9: out that specific risk has a very specific solution. But

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Speaker 9: this idea that we should imbue AI with a maternal

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Speaker 9: instinct or in computer science, it goes by the term

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Speaker 9: alignment that AI is going to magically know what is

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Speaker 9: the right thing to do in every possible situation. That

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Speaker 9: seems like a pipe dream to me, because what is

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Speaker 9: the right thing to do in every possible situation? Well,

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Speaker 9: people don't agree on that, so how can we agree

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Speaker 9: on what AI should do in those situations? And so

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Speaker 9: putting all our eggs in this one basket of alignment

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Speaker 9: is going to result in a very brittle scenario, which

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Speaker 9: is that if anyone ever creates a misaligned AI system,

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Speaker 9: then all bets are off, and how are you ever

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Speaker 9: going to stop every kid in the world from creating

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Speaker 9: their own AI system that might not follow your rules

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Speaker 9: or your instinct or whatever it is. Because the trend

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Speaker 9: we've seen is that something that takes a data center today,

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Speaker 9: within a few years is going to be something that

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Speaker 9: you can do in your mom's basement.

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Speaker 1: Whatever this new world of AI makes possible, Noryanan says,

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Speaker 1: there's one thing that it simply will not be able

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Speaker 1: to do predict the future.

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Speaker 9: Once this happens, we will have no choice but to

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Speaker 9: rely on AI in order to figure out, what, let's say,

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Speaker 9: military or geopolitical strategy should be. But when we actually

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Speaker 9: look at the research, the picture that emerges is that

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Speaker 9: the reason people are not that great at predicting the

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Speaker 9: future is not some limitation of our biology. It's because

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Speaker 9: the data that's out there that might allow us to

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Speaker 9: extrapolate to what might happen in the future is pretty limited.

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Speaker 9: But also the future is genuinely unknown.

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Speaker 1: And just because the future is genuinely unknown, none of us,

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Speaker 1: not the experts like Hinton and Narayanan, and not even

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Speaker 1: AI itself, can predict just how big it can get

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Speaker 1: or how fast it can grow up next. It takes

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Speaker 1: a lot to get the Canadians angry, as President Trump

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Speaker 1: managed to do it this time. This is a story

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Speaker 1: about a troubled relationship. For one hundred years, the United

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Speaker 1: States has had close ties with its neighbor to the north.

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Speaker 1: But when President Trump imposed tariffs on Canada last year,

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Speaker 1: Ottawa responded, businesses braced, and the tone between the two

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Speaker 1: neighbors shifted from familiar to fraud. For a lot of Canadians,

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Speaker 1: this wasn't just about prices or profits. It was about

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Speaker 1: trust and whether the US still sees Canada as a

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Speaker 1: partner and ally. Michael McKee takes us to Canada to

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Speaker 1: see how the relationship looks from north of the border.

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Speaker 12: An hour north of the line dividing the US and Canada,

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Speaker 12: in a small town called Knowlton, the cross border relationship

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Speaker 12: feels fragile.

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Speaker 13: We love the American people, but were also defensive about

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Speaker 13: our economy and want to want to support Canadian business,

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Speaker 13: which we feel might be under attack right now.

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Speaker 9: Having family in the United States as well makes things

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Speaker 9: a little precarious right now.

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Speaker 12: Since President Trump imposed new tariffs on imports from Canada,

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Speaker 12: the relationship has soured Canadian imports from the US are down,

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Speaker 12: and the nation slipped from being the largest buyer of

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Speaker 12: US goods to number two, behind Mexico.

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Speaker 14: Canadians know that our old comfortable assumptions that our geography

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Speaker 14: and alliance memberships automatically conferred prosperity and security. That assumption

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Speaker 14: is no longer valid. We are rapidly diversifying abroad. The

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Speaker 14: past few days, we've included new strategic partnerships with China

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00:25:37,720 --> 00:25:38,200
Speaker 14: and Cutter.

442
00:25:38,600 --> 00:25:43,359
Speaker 12: Although Carney is optimistic about Canada's economic agenda, February's jobs

443
00:25:43,400 --> 00:25:46,880
Speaker 12: report paints a bleaker picture. The country shed the most

444
00:25:46,960 --> 00:25:50,399
Speaker 12: jobs in more than four years last month, sending unemployment

445
00:25:50,480 --> 00:25:53,480
Speaker 12: up to six point seven percent from six point five

446
00:25:53,520 --> 00:25:54,639
Speaker 12: percent in January.

447
00:25:54,800 --> 00:25:57,120
Speaker 6: We're all going to lose around two percent of our

448
00:25:57,160 --> 00:26:01,359
Speaker 6: GDP because of the new trade environment, includes the United States.

449
00:26:01,800 --> 00:26:04,280
Speaker 6: When I say two percent, for somebody, it's one hundred

450
00:26:04,280 --> 00:26:05,439
Speaker 6: percent of their livelihood.

451
00:26:05,680 --> 00:26:08,840
Speaker 12: Stephen Polish succeeded Mark Kearney as Governor of the Bank

452
00:26:08,880 --> 00:26:12,240
Speaker 12: of Canada and is now a special advisor at Canadian

453
00:26:12,280 --> 00:26:13,800
Speaker 12: business law firm Ostler.

454
00:26:14,040 --> 00:26:16,760
Speaker 4: Let's talk a little bit more about the about the loss.

455
00:26:17,080 --> 00:26:18,399
Speaker 4: Where do we see it now?

456
00:26:18,840 --> 00:26:20,919
Speaker 6: You see it in autos, you see it in steel,

457
00:26:21,000 --> 00:26:24,000
Speaker 6: you see it aluminum, you see it in copper, and

458
00:26:24,040 --> 00:26:26,600
Speaker 6: you see it in a forestry sector. These are sectors

459
00:26:26,600 --> 00:26:30,280
Speaker 6: that are deemed, you know, really strategically important.

460
00:26:30,520 --> 00:26:33,480
Speaker 12: As US tariffs waited on Canadian exports for much of

461
00:26:33,520 --> 00:26:36,640
Speaker 12: the year. Real GDP contracted in two of the four

462
00:26:36,720 --> 00:26:40,040
Speaker 12: quarters of twenty twenty five and for the year increased

463
00:26:40,080 --> 00:26:43,359
Speaker 12: by just one point seven percent, the slowest pace of

464
00:26:43,400 --> 00:26:47,280
Speaker 12: annual growth since the economy shrink during COVID in twenty twenty.

465
00:26:47,560 --> 00:26:50,800
Speaker 6: Right now, you still encounter that belligerence at the grocery

466
00:26:50,800 --> 00:26:54,119
Speaker 6: store looking for the thing not made, not growing in

467
00:26:54,160 --> 00:26:59,560
Speaker 6: the United States. Well look Mexican vegetable versus US California.

468
00:27:00,040 --> 00:27:01,800
Speaker 6: You know, people are still doing that.

469
00:27:02,119 --> 00:27:05,439
Speaker 12: Some Canadians say they feel betrayed by the US, with

470
00:27:05,520 --> 00:27:08,439
Speaker 12: more than half of respondents in a political poll saying

471
00:27:08,680 --> 00:27:11,359
Speaker 12: the country is no longer a reliable ally.

472
00:27:11,760 --> 00:27:17,679
Speaker 13: Life here before this particular round was wonderful. We had

473
00:27:17,720 --> 00:27:23,880
Speaker 13: great relationship. I guess it was February of last year

474
00:27:23,920 --> 00:27:24,960
Speaker 13: when everything changed.

475
00:27:26,960 --> 00:27:30,240
Speaker 12: Louise Penny is a Canadian journalist turn author. When she

476
00:27:30,359 --> 00:27:33,359
Speaker 12: was on tour last year, Penny decided to redirect her

477
00:27:33,480 --> 00:27:37,120
Speaker 12: US tour dates back to Canada in protest of Trump's tariffs.

478
00:27:37,880 --> 00:27:40,760
Speaker 12: She's also refusing to return to the US until the

479
00:27:40,800 --> 00:27:44,159
Speaker 12: trade war is over, a trend that's becoming increasingly common

480
00:27:44,200 --> 00:27:45,280
Speaker 12: amongst Canadians.

481
00:27:45,640 --> 00:27:51,800
Speaker 13: The decision to not tour in the United States was obvious.

482
00:27:52,680 --> 00:27:56,520
Speaker 13: It wasn't even a decision. There was no way I

483
00:27:56,640 --> 00:27:59,800
Speaker 13: was going to go into a country that had declared

484
00:27:59,800 --> 00:28:02,840
Speaker 13: war on us, any more than I would imagine Americans

485
00:28:02,880 --> 00:28:06,639
Speaker 13: if Canada had done the same thing to you. But

486
00:28:06,680 --> 00:28:10,120
Speaker 13: we still merchandise here and the vast majority of it

487
00:28:10,440 --> 00:28:13,520
Speaker 13: went into the United States. Now no longer, not because

488
00:28:13,560 --> 00:28:16,439
Speaker 13: people don't want it, but because the tariffs are ruinous.

489
00:28:16,920 --> 00:28:21,480
Speaker 13: They can't buy a thirty dollars mug and have fifty

490
00:28:21,520 --> 00:28:25,199
Speaker 13: dollars worth of tariffs put on it. So we've lost

491
00:28:26,040 --> 00:28:28,119
Speaker 13: huge amounts because of the tariffs.

492
00:28:28,520 --> 00:28:30,040
Speaker 2: And we're small.

493
00:28:30,160 --> 00:28:35,040
Speaker 13: I can only imagine what larger corporations in Canada are suffering.

494
00:28:35,200 --> 00:28:38,360
Speaker 4: What are CEOs saying, what are they thinking at this point?

495
00:28:38,520 --> 00:28:43,320
Speaker 6: Well, they remain very cautious, I would say in the

496
00:28:43,480 --> 00:28:48,360
Speaker 6: areas where trade matters the most, they're essentially still frozen,

497
00:28:48,800 --> 00:28:51,480
Speaker 6: and they're the type would be just doing keep the

498
00:28:51,560 --> 00:28:55,800
Speaker 6: lights on, do our maintenance spend, keep our powder dry.

499
00:28:55,960 --> 00:28:58,680
Speaker 15: The truth is we need to be more competitive, we

500
00:28:58,720 --> 00:29:00,760
Speaker 15: need to be more productive. This is not a unique

501
00:29:00,760 --> 00:29:01,920
Speaker 15: problem to Canada.

502
00:29:02,040 --> 00:29:05,440
Speaker 12: Goldie Hyder is the CEO of the Canada Business Council.

503
00:29:05,600 --> 00:29:08,600
Speaker 15: Prime Minister Carney always likes to emphasize that when it

504
00:29:08,640 --> 00:29:11,720
Speaker 15: comes to the marginal effective tax rate, you know the

505
00:29:11,720 --> 00:29:14,520
Speaker 15: Canadian price is the Canadian rate is the lowest in

506
00:29:14,560 --> 00:29:18,200
Speaker 15: the G seven. Those kinds of things inspire confidence for

507
00:29:18,280 --> 00:29:20,640
Speaker 15: businesses to be able to deploy capital. Otherwise you're going

508
00:29:20,680 --> 00:29:23,640
Speaker 15: to see a lot of chilling and freezing of the capitol.

509
00:29:24,280 --> 00:29:28,040
Speaker 12: Although small business owners and some industry CEOs are feeling

510
00:29:28,040 --> 00:29:30,600
Speaker 12: the pinch, some have a more nuanced view.

511
00:29:30,920 --> 00:29:33,960
Speaker 16: All those policies are working, more so than I've ever

512
00:29:34,000 --> 00:29:36,720
Speaker 16: seen in my forty year career. That's why I'd like

513
00:29:36,800 --> 00:29:38,840
Speaker 16: Canada to endorse it and do the same thing.

514
00:29:40,440 --> 00:29:43,760
Speaker 12: Marry Zeckelmann is the chief executive of Zeckelmann Industries, a

515
00:29:43,800 --> 00:29:47,600
Speaker 12: steel pipe and tube manufacturer. He sees the relationship from

516
00:29:47,640 --> 00:29:51,720
Speaker 12: both sides of the border. Having started his business in Windsor, Ontario,

517
00:29:52,240 --> 00:29:56,520
Speaker 12: now having his headquarters in Chicago, and producing his products

518
00:29:56,640 --> 00:30:00,080
Speaker 12: in both countries. How do the tariffs affect your business

519
00:30:00,120 --> 00:30:01,480
Speaker 12: in Canada?

520
00:30:01,520 --> 00:30:02,200
Speaker 2: Tremendously.

521
00:30:02,480 --> 00:30:05,760
Speaker 16: I'm paying massive tariffs to ship product from Canada into

522
00:30:05,800 --> 00:30:06,200
Speaker 16: the US.

523
00:30:06,360 --> 00:30:10,080
Speaker 12: Can you put some kind of a dollar figure or

524
00:30:10,200 --> 00:30:12,560
Speaker 12: percentage figure on what you're having to pay.

525
00:30:12,680 --> 00:30:17,840
Speaker 16: We're having to pay, roughly, you almost two hundred and

526
00:30:17,880 --> 00:30:21,280
Speaker 16: fifty two hundred and seventy five dollars a ton US,

527
00:30:21,720 --> 00:30:24,480
Speaker 16: So you know, I'm paying six seven million dollars a

528
00:30:24,480 --> 00:30:25,320
Speaker 16: month in tariffs.

529
00:30:26,600 --> 00:30:27,360
Speaker 2: It's huge.

530
00:30:27,560 --> 00:30:29,240
Speaker 16: You know, We've got to eat it. I've got to

531
00:30:29,320 --> 00:30:33,280
Speaker 16: keep this plant running. I'm trying my US customers need

532
00:30:33,320 --> 00:30:36,760
Speaker 16: the product. I'm manufacturing more and more in the US.

533
00:30:36,880 --> 00:30:39,600
Speaker 16: We've upped our production there tremendously. I mean, if you

534
00:30:39,680 --> 00:30:43,240
Speaker 16: had to compare Canada to the US, the US is booming.

535
00:30:44,040 --> 00:30:47,640
Speaker 16: I have never seen more robust demand. So the policies

536
00:30:47,680 --> 00:30:48,600
Speaker 16: are working over there.

537
00:30:48,720 --> 00:30:52,360
Speaker 12: So the back and forth on tariffs, even though a

538
00:30:52,360 --> 00:30:56,240
Speaker 12: lot's covered under USMCA, has put a chill on the

539
00:30:56,240 --> 00:30:57,160
Speaker 12: Canadian economy.

540
00:30:57,280 --> 00:31:00,800
Speaker 16: Yeah, we need to resolve it, all right. I understand

541
00:31:01,040 --> 00:31:03,720
Speaker 16: Prime Minister Carney, and he's our Prime minister, so I've

542
00:31:03,720 --> 00:31:08,480
Speaker 16: got to stand behind the leadership of our country. But

543
00:31:09,200 --> 00:31:14,040
Speaker 16: we have to have a healthy trading relationship with the US.

544
00:31:14,360 --> 00:31:17,560
Speaker 16: It is not going to be replaced by other countries.

545
00:31:17,760 --> 00:31:19,760
Speaker 16: We can't just keep poking them in the eye and

546
00:31:19,800 --> 00:31:22,280
Speaker 16: telling them we don't need you and standing there at

547
00:31:22,320 --> 00:31:27,040
Speaker 16: Davos pretending that these mid market or mid mid countries

548
00:31:27,080 --> 00:31:29,560
Speaker 16: are going to band together against the US. Every one

549
00:31:29,560 --> 00:31:31,040
Speaker 16: of them's in the back door trying to sign a

550
00:31:31,080 --> 00:31:33,600
Speaker 16: deal with the US. It's not going to happen. It's

551
00:31:33,600 --> 00:31:36,120
Speaker 16: the greatest economy in the world. It's the market that

552
00:31:36,200 --> 00:31:39,280
Speaker 16: everybody in the world wants to be in, and we're

553
00:31:39,400 --> 00:31:41,880
Speaker 16: right next door to it, with the longest border in

554
00:31:41,920 --> 00:31:44,840
Speaker 16: the world next to it and the biggest trading relationship.

555
00:31:44,840 --> 00:31:46,040
Speaker 1: And we're saying, oh, we're.

556
00:31:45,880 --> 00:31:49,200
Speaker 16: Going to move on. That doesn't work. That doesn't hold

557
00:31:49,240 --> 00:31:51,920
Speaker 16: water when you sit there and you know all, we're

558
00:31:51,960 --> 00:31:54,560
Speaker 16: going to make it the fifty first state. Look, people

559
00:31:54,680 --> 00:31:56,960
Speaker 16: got to relax, and people have to calm down.

560
00:31:57,160 --> 00:32:00,360
Speaker 12: You don't feel insulted by the president as a Canadian.

561
00:32:00,000 --> 00:32:01,840
Speaker 16: Oh I had a thicker skin. I mean, you can't

562
00:32:01,880 --> 00:32:05,280
Speaker 16: get insulted like that and turn that into a global

563
00:32:05,360 --> 00:32:09,360
Speaker 16: trading fight. You know, read in between the lines. I'm

564
00:32:09,400 --> 00:32:12,840
Speaker 16: telling you, I believe with everything in my heart that

565
00:32:12,920 --> 00:32:16,640
Speaker 16: if Donald Trump president Donald Trump had the right relationship

566
00:32:16,680 --> 00:32:20,520
Speaker 16: with Canada, a fair trading relationship and resolve some of

567
00:32:20,560 --> 00:32:24,120
Speaker 16: these issues, he'd put his arms around Canada and hug

568
00:32:24,200 --> 00:32:26,440
Speaker 16: them and welcome them into the family, because he would

569
00:32:26,480 --> 00:32:30,080
Speaker 16: feel secure that we've got a family that's working together

570
00:32:30,400 --> 00:32:34,560
Speaker 16: for the greater good of North America against many bad

571
00:32:34,600 --> 00:32:38,720
Speaker 16: actors who are bad for the US and bad for Canada.

572
00:32:39,320 --> 00:32:41,840
Speaker 12: Like Zecklman, Heider says, it might be hard to separate

573
00:32:41,960 --> 00:32:45,560
Speaker 12: business from personal when it comes to cross border relations,

574
00:32:45,760 --> 00:32:48,040
Speaker 12: but in the long run it might be for the best.

575
00:32:48,280 --> 00:32:51,000
Speaker 15: Canadians have the right to respond the way that they have.

576
00:32:51,640 --> 00:32:55,320
Speaker 15: Look it's emotional response, but I will say this about Canadians,

577
00:32:55,680 --> 00:32:58,280
Speaker 15: we can separate emotion from reason. We ran a survey

578
00:32:58,600 --> 00:33:01,520
Speaker 15: not too long ago which shows that over eighty percent

579
00:33:01,560 --> 00:33:05,040
Speaker 15: of Canadians feel very strongly that this agreement is good,

580
00:33:05,120 --> 00:33:07,400
Speaker 15: that it's working, and that it should be reviewed and renewed.

581
00:33:07,640 --> 00:33:09,640
Speaker 15: I mean, we have, to some extent taken it for

582
00:33:09,720 --> 00:33:12,400
Speaker 15: granted that we share this border with the largest economy

583
00:33:12,400 --> 00:33:14,200
Speaker 15: in the world, and we've been a little bit comfortable.

584
00:33:14,320 --> 00:33:15,040
Speaker 1: I have said this to.

585
00:33:15,000 --> 00:33:18,800
Speaker 15: Many Americans, particularly in the administration, it is not in

586
00:33:18,840 --> 00:33:22,040
Speaker 15: your interest to have a week Canada and a week Mexico.

587
00:33:22,440 --> 00:33:25,840
Speaker 15: Let's be clear, we are a very lucky group of countries.

588
00:33:26,120 --> 00:33:29,440
Speaker 15: This is not India, Pakistan, or China, Taiwan, or North

589
00:33:29,520 --> 00:33:32,600
Speaker 15: Korea or South Korea. We're very fortunate to live in

590
00:33:32,600 --> 00:33:35,760
Speaker 15: a neighborhood where we find a way to work together.

591
00:33:36,040 --> 00:33:39,600
Speaker 12: Half of Canadians believe it's still important to preserve Canada's

592
00:33:39,640 --> 00:33:43,160
Speaker 12: trade agreement with the US and Mexico, the US MCA

593
00:33:43,560 --> 00:33:46,400
Speaker 12: or KUSMA as the Canadians call it. It's up for

594
00:33:46,480 --> 00:33:50,400
Speaker 12: review in July of this year, begging the question what comes.

595
00:33:50,120 --> 00:33:54,600
Speaker 4: Next, as because my guests renegotiated, and as the tariff

596
00:33:54,640 --> 00:33:57,760
Speaker 4: situation goes on, there's been talk of Mexico and Canada

597
00:33:57,880 --> 00:34:01,600
Speaker 4: sort of reaching over the United States and concluding sometimes

598
00:34:01,840 --> 00:34:04,960
Speaker 4: out of their own agreement. Do you see anything like

599
00:34:05,000 --> 00:34:06,160
Speaker 4: that happening right now?

600
00:34:06,200 --> 00:34:08,719
Speaker 6: I think we can both kind of treat as you know,

601
00:34:08,880 --> 00:34:11,800
Speaker 6: you can invest in Mexico and that gives you access

602
00:34:11,840 --> 00:34:15,759
Speaker 6: to the United States market. That's basically what USMCA kind

603
00:34:15,800 --> 00:34:18,520
Speaker 6: of does, and same thing in Canada. And so that's

604
00:34:18,560 --> 00:34:22,440
Speaker 6: where investment comes the platform for trade in North America.

605
00:34:23,760 --> 00:34:26,120
Speaker 6: Could it be the other way around or just as

606
00:34:26,160 --> 00:34:28,520
Speaker 6: you say, go over well, of course again, because that's

607
00:34:28,560 --> 00:34:32,400
Speaker 6: the nature of the current agreement. We'll see how the

608
00:34:33,320 --> 00:34:37,600
Speaker 6: KUSMA or U s Mcare negotiations go. For frankly, that

609
00:34:37,680 --> 00:34:38,480
Speaker 6: could go nowhere.

610
00:34:38,840 --> 00:34:41,960
Speaker 16: I do not like the fact at all that there

611
00:34:41,960 --> 00:34:44,880
Speaker 16: are these trade tensions between Canada and the US. I

612
00:34:44,880 --> 00:34:48,680
Speaker 16: would absolutely love for this temperature to come down. I

613
00:34:48,680 --> 00:34:52,120
Speaker 16: think that these two countries should have a robust trading

614
00:34:52,200 --> 00:34:55,279
Speaker 16: relationship between the two of them. I think that there's

615
00:34:55,360 --> 00:34:58,000
Speaker 16: a lot of things that Canada can offer to the US,

616
00:34:58,040 --> 00:34:59,440
Speaker 16: and I think there's a lot of things that US

617
00:34:59,480 --> 00:35:02,120
Speaker 16: can offer to Canada. And I think that they need

618
00:35:02,160 --> 00:35:05,560
Speaker 16: to get to the issues that are contentious, deal with

619
00:35:05,600 --> 00:35:08,080
Speaker 16: them and move on. I mean, if you talk to

620
00:35:08,120 --> 00:35:12,359
Speaker 16: any Canadian, you know they're upset. Their pride's been herd

621
00:35:12,960 --> 00:35:16,040
Speaker 16: and they feel they're standing up to what they perceive

622
00:35:16,120 --> 00:35:16,680
Speaker 16: as a bully.

623
00:35:16,960 --> 00:35:19,080
Speaker 15: I think it will be an important component of his

624
00:35:19,160 --> 00:35:21,440
Speaker 15: legacy if we're able to review and renew it and

625
00:35:21,480 --> 00:35:24,480
Speaker 15: allow it to continue to bring about the prosperity and

626
00:35:24,520 --> 00:35:26,920
Speaker 15: the growth and the security that it has offered. You

627
00:35:26,960 --> 00:35:30,520
Speaker 15: know for decades now what we cannot have is an

628
00:35:30,520 --> 00:35:33,440
Speaker 15: agreement that some have called a zombie agreement. It exists,

629
00:35:33,440 --> 00:35:35,480
Speaker 15: but it doesn't really mean anything. It just kind of

630
00:35:35,520 --> 00:35:38,480
Speaker 15: perpetuates out there in the abyss. That's not constructive. And

631
00:35:38,560 --> 00:35:40,720
Speaker 15: let me be clear about one thing that your viewers

632
00:35:40,760 --> 00:35:42,800
Speaker 15: have more than anywhere else in the world, would understand.

633
00:35:43,239 --> 00:35:46,399
Speaker 15: Capital doesn't have a heart. Canadians like Americans. I think

634
00:35:46,440 --> 00:35:49,080
Speaker 15: Americans like Canadians. And we'll get through this.

635
00:35:50,960 --> 00:35:54,320
Speaker 1: Coming up putting an age limit on social media users.

636
00:35:54,560 --> 00:35:57,319
Speaker 1: Australia has done it. What wouldn't mean if the rest

637
00:35:57,360 --> 00:36:07,040
Speaker 1: of us followed. This is a story about trying to

638
00:36:07,080 --> 00:36:10,160
Speaker 1: put the genie back in the bottle. It's been one

639
00:36:10,239 --> 00:36:14,480
Speaker 1: hundred days since Australia implemented a world leading policy restricting

640
00:36:14,560 --> 00:36:18,239
Speaker 1: social media for those under the age of sixteen. In

641
00:36:18,280 --> 00:36:21,720
Speaker 1: the months since, other countries have moved towards similar measures.

642
00:36:21,920 --> 00:36:24,400
Speaker 1: But while few argue about the need to do what

643
00:36:24,560 --> 00:36:27,040
Speaker 1: we can to protect the mental health of young people,

644
00:36:27,560 --> 00:36:30,479
Speaker 1: opinion is split on the success of the new rule.

645
00:36:31,800 --> 00:36:36,200
Speaker 1: Long before Australia's social media restrictions took effect, Sidney father

646
00:36:36,320 --> 00:36:39,840
Speaker 1: of five, Danny Aladgi knew his eldest daughter's mobile phone

647
00:36:39,920 --> 00:36:41,880
Speaker 1: was causing more harm than good.

648
00:36:42,840 --> 00:36:46,239
Speaker 17: She constantly would say to us that if we didn't

649
00:36:46,280 --> 00:36:48,799
Speaker 17: give her a phone, she'd be the only child in

650
00:36:48,840 --> 00:36:52,040
Speaker 17: her grade without one. She would lose all her social connection.

651
00:36:52,719 --> 00:36:54,720
Speaker 17: So we did give in and gave her that fue

652
00:36:54,880 --> 00:36:58,160
Speaker 17: Within the space of days, we saw that it ripped

653
00:36:58,160 --> 00:37:02,560
Speaker 17: her away from the family life, completely overwhelmed all her

654
00:37:02,600 --> 00:37:06,400
Speaker 17: spare time. She was no longer reading like she was previously,

655
00:37:06,880 --> 00:37:09,160
Speaker 17: She was no longer engaging with her siblings.

656
00:37:09,520 --> 00:37:11,320
Speaker 4: She wasn't helping with dinner anymore.

657
00:37:11,800 --> 00:37:15,560
Speaker 17: Every spare moment was spent attending to those pings and dings.

658
00:37:16,320 --> 00:37:18,360
Speaker 1: It was enough to prompt the Logie to start a

659
00:37:18,400 --> 00:37:23,200
Speaker 1: community group Heads Up Alliance for Australian parents delaying social

660
00:37:23,239 --> 00:37:26,800
Speaker 1: media and smartphones for their children. So when the Australian

661
00:37:26,840 --> 00:37:29,320
Speaker 1: government announced a landmark new policy.

662
00:37:29,520 --> 00:37:33,040
Speaker 4: This is Australia showing enough.

663
00:37:33,160 --> 00:37:36,400
Speaker 1: Is enough, Elargi was relieved.

664
00:37:36,719 --> 00:37:39,719
Speaker 17: The social media laws that came into effects in December

665
00:37:40,719 --> 00:37:43,840
Speaker 17: was a huge vindication for our movement because for a

666
00:37:43,840 --> 00:37:48,000
Speaker 17: long time we were spreading the word through word of mouth,

667
00:37:48,640 --> 00:37:50,640
Speaker 17: and you know, some people thought that we were just

668
00:37:50,800 --> 00:37:55,440
Speaker 17: being a little bit over the top that perhaps we

669
00:37:55,440 --> 00:37:56,759
Speaker 17: weren't with the times.

670
00:37:57,280 --> 00:37:59,759
Speaker 1: If they weren't with the times, then they appeared to

671
00:37:59,760 --> 00:38:04,280
Speaker 1: be now Across Australia. Pulling from Monash University found around

672
00:38:04,440 --> 00:38:08,720
Speaker 1: four in five adults support the restrictions and countries around

673
00:38:08,760 --> 00:38:12,720
Speaker 1: the world have either implemented or are considering similar rules,

674
00:38:13,360 --> 00:38:16,719
Speaker 1: but the rollout has been uneven, with reports of many

675
00:38:16,800 --> 00:38:21,400
Speaker 1: kids finding ways around the regulations. We canvassed opinions of

676
00:38:21,440 --> 00:38:24,719
Speaker 1: a range of stakeholders to assess the effective rules like

677
00:38:24,760 --> 00:38:28,960
Speaker 1: that in Australia and their impact on the social media business.

678
00:38:29,800 --> 00:38:32,120
Speaker 7: We do not believe that we are within scope of

679
00:38:32,160 --> 00:38:35,360
Speaker 7: the law because we are purely a messaging platform. We

680
00:38:35,480 --> 00:38:36,719
Speaker 7: nonetheless are complying.

681
00:38:36,840 --> 00:38:40,680
Speaker 18: It's displacing their studies, displicing their attention, and it's displaicing

682
00:38:40,680 --> 00:38:41,120
Speaker 18: their sleep.

683
00:38:41,160 --> 00:38:44,520
Speaker 17: When my children are at school, they appreciate that children

684
00:38:44,520 --> 00:38:46,320
Speaker 17: are less on their handheld devices.

685
00:38:46,360 --> 00:38:49,440
Speaker 19: Have always been fifty to fifty with the restriction laws.

686
00:38:50,160 --> 00:38:54,440
Speaker 1: Australia's social media regulation was a long time coming. Concerns

687
00:38:54,440 --> 00:38:57,200
Speaker 1: over youth mental health were growing and the role of

688
00:38:57,239 --> 00:38:59,279
Speaker 1: social media was at the heart of it.

689
00:39:00,040 --> 00:39:03,879
Speaker 18: Oh social media has at least three negative effects on youth.

690
00:39:04,440 --> 00:39:07,960
Speaker 1: Ravi Eyer is the research director for the USC Marshall

691
00:39:07,960 --> 00:39:12,880
Speaker 1: School's Neely Center and helps manage the Psychology of Technology Institute.

692
00:39:13,120 --> 00:39:16,440
Speaker 1: Before that, he led teams at Facebook working to improve

693
00:39:16,520 --> 00:39:18,720
Speaker 1: the societal impact of social media.

694
00:39:19,400 --> 00:39:22,200
Speaker 18: We know that many youth have these negative experiences. They

695
00:39:22,200 --> 00:39:25,600
Speaker 18: see things they're not ready for. They see unwanted sexual content,

696
00:39:26,320 --> 00:39:30,080
Speaker 18: they see graphic content, they're contacted by strangers. Sometimes they're groomed.

697
00:39:30,880 --> 00:39:33,839
Speaker 18: Then there are these displacements of all the other things

698
00:39:33,880 --> 00:39:34,759
Speaker 18: that kids should be doing.

699
00:39:34,840 --> 00:39:35,000
Speaker 2: Right.

700
00:39:35,000 --> 00:39:37,440
Speaker 18: So, kids should be sleeping, they're still growing, they're developing

701
00:39:37,480 --> 00:39:39,759
Speaker 18: their brains. They need to have a good night's sleep

702
00:39:39,800 --> 00:39:42,200
Speaker 18: in order to do well at school the next day.

703
00:39:42,520 --> 00:39:44,840
Speaker 18: And a lot of kids are using these products overnight

704
00:39:45,040 --> 00:39:46,879
Speaker 18: at times when they shouldn't be there, maybe using them

705
00:39:46,880 --> 00:39:47,920
Speaker 18: in schools.

706
00:39:48,480 --> 00:39:53,080
Speaker 1: Ayer is in good company even among teenagers themselves. In

707
00:39:53,160 --> 00:39:56,239
Speaker 1: twenty twenty two, thirty two percent of US teens said

708
00:39:56,360 --> 00:39:59,879
Speaker 1: social media is mostly negative, and that share has gone

709
00:40:00,120 --> 00:40:03,840
Speaker 1: up to forty eight percent. Jennifer park Stout is the

710
00:40:03,880 --> 00:40:08,200
Speaker 1: senior vice president for Global Policy and Platform Operations at Snap,

711
00:40:08,760 --> 00:40:12,480
Speaker 1: best known for its app Snapchat. Do you share some

712
00:40:12,520 --> 00:40:16,040
Speaker 1: of the concerns about social media apart from messaging, which

713
00:40:16,080 --> 00:40:18,600
Speaker 1: is what you identify Snapchat as primarily being.

714
00:40:19,120 --> 00:40:22,120
Speaker 7: Look, I think this is a really complicated topic and

715
00:40:23,000 --> 00:40:26,080
Speaker 7: one that can't be solved by just quick fixes or

716
00:40:26,120 --> 00:40:30,920
Speaker 7: blanket bands. I think individual choice and parent choice plays

717
00:40:30,920 --> 00:40:34,400
Speaker 7: a big role in how young people should be spending

718
00:40:34,440 --> 00:40:38,320
Speaker 7: time on social media and technology. Even though snap is

719
00:40:38,400 --> 00:40:41,680
Speaker 7: primarily a messaging platform. Of course, there are a number

720
00:40:41,680 --> 00:40:44,040
Speaker 7: of choices out there for young people to be on

721
00:40:44,120 --> 00:40:47,719
Speaker 7: platforms where they're consuming content, or they may be interacting

722
00:40:47,719 --> 00:40:51,520
Speaker 7: with strangers. That's not what snapchat is about. Snapchat really

723
00:40:51,640 --> 00:40:54,400
Speaker 7: is a messaging platform where we've built in a tremendous

724
00:40:54,480 --> 00:40:57,799
Speaker 7: amount of protections to make sure that the experience they

725
00:40:57,840 --> 00:41:00,319
Speaker 7: have is safe and that they're connecting with people that

726
00:41:00,360 --> 00:41:01,160
Speaker 7: they actually know.

727
00:41:02,040 --> 00:41:04,719
Speaker 1: Is there research that you think is reliable to really

728
00:41:04,719 --> 00:41:06,640
Speaker 1: give us a sense about what the risk might be

729
00:41:06,760 --> 00:41:09,280
Speaker 1: or not be, whether it's social media generally or something

730
00:41:09,280 --> 00:41:10,040
Speaker 1: more specifically.

731
00:41:10,200 --> 00:41:14,000
Speaker 7: Yeah, I think the research is mixed. There's no research

732
00:41:14,120 --> 00:41:17,200
Speaker 7: yet that has come out that can give really any

733
00:41:17,239 --> 00:41:20,799
Speaker 7: indication that bans are the right approach when dealing with

734
00:41:21,040 --> 00:41:24,680
Speaker 7: teenage well being and mental health. However, I think it

735
00:41:24,719 --> 00:41:27,719
Speaker 7: was the Journal of American Medical Association that came out

736
00:41:27,760 --> 00:41:32,560
Speaker 7: recently that said that you know, complete removal of social

737
00:41:32,600 --> 00:41:36,440
Speaker 7: media for young people as well as excessive use neither

738
00:41:36,800 --> 00:41:40,920
Speaker 7: are healthy for experiences for teens. But somewhere around the

739
00:41:40,920 --> 00:41:45,440
Speaker 7: middle the sweet spot, that's what actually can help young people.

740
00:41:45,480 --> 00:41:48,520
Speaker 7: It makes them feel connected, it makes them feel like

741
00:41:48,560 --> 00:41:49,960
Speaker 7: they belong to a community.

742
00:41:50,920 --> 00:41:54,840
Speaker 1: Australia acted decisively in curbing youth access to social media.

743
00:41:55,320 --> 00:41:58,440
Speaker 1: Shortly after the rules went into effect, close to five

744
00:41:58,640 --> 00:42:02,759
Speaker 1: million accounts across ten different platforms were removed and new

745
00:42:02,840 --> 00:42:06,080
Speaker 1: users have been barred from signing up. But that doesn't

746
00:42:06,120 --> 00:42:09,000
Speaker 1: mean the rollout has been a sweeping success.

747
00:42:09,480 --> 00:42:13,320
Speaker 17: Perhaps unsurprisingly, of the last three months, we've heard overwhelmingly

748
00:42:13,920 --> 00:42:16,200
Speaker 17: that children have managed to find a way back onto

749
00:42:16,200 --> 00:42:20,920
Speaker 17: the platforms, have not had many obstacles placed in their

750
00:42:20,960 --> 00:42:25,400
Speaker 17: path whatsoever. People can just log in under a new account.

751
00:42:25,640 --> 00:42:28,680
Speaker 17: So this is now where we're look into our government

752
00:42:28,719 --> 00:42:32,480
Speaker 17: and to our regulators to wield the stick that is

753
00:42:32,520 --> 00:42:36,439
Speaker 17: written in the legislation itself of significant finds for those

754
00:42:36,440 --> 00:42:37,920
Speaker 17: platforms who don't comply.

755
00:42:38,840 --> 00:42:42,600
Speaker 1: That's also the concern for Paul Litherland, a former police

756
00:42:42,640 --> 00:42:46,160
Speaker 1: officer and prominent e safety advocate in Australia who found

757
00:42:46,200 --> 00:42:50,240
Speaker 1: it surf online safe. He expects the wave of kids

758
00:42:50,280 --> 00:42:53,440
Speaker 1: trying to circumvent the restrictions to be largely confined to

759
00:42:53,480 --> 00:42:57,080
Speaker 1: those that have had existing accounts removed. He believes the

760
00:42:57,120 --> 00:43:00,320
Speaker 1: trend will die down in coming years, but is calling

761
00:43:00,360 --> 00:43:03,240
Speaker 1: for more compliance from social media networks.

762
00:43:04,080 --> 00:43:07,359
Speaker 19: My concern is, once again, time and time again, we've

763
00:43:07,400 --> 00:43:11,360
Speaker 19: seen the networks fail in regards the response from government

764
00:43:11,360 --> 00:43:16,000
Speaker 19: requests and from legislative changes. So my main concern was

765
00:43:16,480 --> 00:43:19,640
Speaker 19: the fact that the networks probably wouldn't respond, and as

766
00:43:19,680 --> 00:43:23,440
Speaker 19: an example, within our legislation, there's two words the networks

767
00:43:23,480 --> 00:43:27,400
Speaker 19: must take reasonable steps to remove or to stop kids

768
00:43:27,400 --> 00:43:30,440
Speaker 19: from joining under that age. So my concern is with

769
00:43:30,520 --> 00:43:33,719
Speaker 19: their determination or their interpretation of reasonable steps.

770
00:43:34,400 --> 00:43:38,040
Speaker 7: We have worked very hard to meet compliance. So what

771
00:43:38,080 --> 00:43:41,600
Speaker 7: that means in practical terms is that we have worked

772
00:43:41,719 --> 00:43:45,799
Speaker 7: very hard to quickly identify the population of users in

773
00:43:45,800 --> 00:43:48,880
Speaker 7: Australia that are under the age of sixteen that we

774
00:43:49,040 --> 00:43:53,400
Speaker 7: had to immediately remove from our platform. That's quite a

775
00:43:53,440 --> 00:43:57,040
Speaker 7: complicated task in a world where age verification and edge

776
00:43:57,080 --> 00:44:01,160
Speaker 7: assurance technologies do not exist in a fool proof way,

777
00:44:01,440 --> 00:44:05,920
Speaker 7: we and our operations team worked very hard to quickly

778
00:44:05,960 --> 00:44:09,439
Speaker 7: identify those that were under the age of sixteen as

779
00:44:09,480 --> 00:44:12,040
Speaker 7: well as those that we may have inferred to be

780
00:44:12,160 --> 00:44:14,960
Speaker 7: under the age of sixteen, and by that we then

781
00:44:15,160 --> 00:44:19,120
Speaker 7: remove those users from our platform and are continuing to

782
00:44:19,200 --> 00:44:22,839
Speaker 7: work to verify the ages of these users to make

783
00:44:22,880 --> 00:44:25,080
Speaker 7: sure that they are not on our platform.

784
00:44:25,560 --> 00:44:28,000
Speaker 1: As you describe it, it is a complicated process that you

785
00:44:28,080 --> 00:44:30,960
Speaker 1: have to go through. But as you've gone through it,

786
00:44:31,000 --> 00:44:34,680
Speaker 1: is that a material portion of your clients or customers

787
00:44:34,840 --> 00:44:35,560
Speaker 1: in Australia.

788
00:44:36,600 --> 00:44:40,800
Speaker 7: I wouldn't say that it's a material portion, right. It's

789
00:44:40,880 --> 00:44:43,279
Speaker 7: those that are on the platform between the ages of

790
00:44:43,320 --> 00:44:47,120
Speaker 7: thirteen and fifteen, So we've been public about those figures.

791
00:44:47,160 --> 00:44:50,920
Speaker 7: It's over four hundred thousand people that fall in that

792
00:44:51,000 --> 00:44:54,960
Speaker 7: age category that we have removed from Snapchat.

793
00:44:55,440 --> 00:44:57,680
Speaker 1: And how many users do you have in Australia overall?

794
00:44:58,239 --> 00:45:04,399
Speaker 7: We have roughly eight million and daily active users in Australia.

795
00:45:04,520 --> 00:45:09,160
Speaker 1: For social media companies, teenagers are an important demographic. Late

796
00:45:09,239 --> 00:45:12,640
Speaker 1: last year, the Washington Post reported on internal memos from

797
00:45:12,640 --> 00:45:16,120
Speaker 1: the head of Instagram telling its teams in twenty twenty four,

798
00:45:16,239 --> 00:45:20,799
Speaker 1: to be quote, Laser focused on teams if we had

799
00:45:20,840 --> 00:45:23,839
Speaker 1: age limits around the world along the lines of what

800
00:45:23,920 --> 00:45:26,800
Speaker 1: Australia has done. How materially would it affect the bottom

801
00:45:26,840 --> 00:45:28,440
Speaker 1: line of the social media companies?

802
00:45:28,800 --> 00:45:31,719
Speaker 18: So, you know, social media companies will say that they

803
00:45:31,719 --> 00:45:34,960
Speaker 18: don't monetize youth that much, now, which is you know,

804
00:45:35,360 --> 00:45:38,120
Speaker 18: I would think is true. I don't know one hundred percent,

805
00:45:38,400 --> 00:45:40,640
Speaker 18: but I think what would happen is that over time

806
00:45:41,080 --> 00:45:43,279
Speaker 18: people would get less than the habit because you get

807
00:45:43,320 --> 00:45:45,840
Speaker 18: developed these habits younger, and so to be less to

808
00:45:45,880 --> 00:45:48,080
Speaker 18: the habit of using social media as they get older,

809
00:45:48,320 --> 00:45:50,960
Speaker 18: you have fewer these network effects. So I think over

810
00:45:51,000 --> 00:45:53,439
Speaker 18: the long term it would be detrimental to the growth

811
00:45:53,440 --> 00:45:56,239
Speaker 18: of these platforms. Now, these companies are widely profitable, they

812
00:45:56,239 --> 00:46:00,480
Speaker 18: could have amazing businesses not doing these things. So in

813
00:46:00,520 --> 00:46:02,560
Speaker 18: the grand scheme of things, just compassily would do fine.

814
00:46:02,600 --> 00:46:05,200
Speaker 18: They'd be wildly profitable, but they wouldn't be the growth

815
00:46:05,200 --> 00:46:07,160
Speaker 18: engines of the drive their stock price, and so they

816
00:46:07,160 --> 00:46:10,640
Speaker 18: would just have to be like regularly profitable companies as

817
00:46:10,680 --> 00:46:14,080
Speaker 18: opposed to be super profitable companies that they are today.

818
00:46:14,880 --> 00:46:19,200
Speaker 1: Does it have a substantial effect on your revenue on advertising?

819
00:46:19,719 --> 00:46:22,680
Speaker 7: You know, we're not focused on revenue or advertisers when

820
00:46:22,719 --> 00:46:25,200
Speaker 7: it comes to the safety and well being of young people,

821
00:46:25,400 --> 00:46:28,360
Speaker 7: and we understand that they are a very sensitive cohort

822
00:46:28,440 --> 00:46:32,399
Speaker 7: and so we care more about their experience online. All

823
00:46:32,440 --> 00:46:35,560
Speaker 7: of the safety protections and measures we've put in place

824
00:46:35,600 --> 00:46:38,719
Speaker 7: to ensure that when they are on Snapchat, those that

825
00:46:38,760 --> 00:46:41,400
Speaker 7: are eligible to be on Snapchat, that they have the

826
00:46:41,480 --> 00:46:44,160
Speaker 7: safest and most positive experience they can have.

827
00:46:45,440 --> 00:46:48,719
Speaker 1: Society has long taken steps to restrict the activities of youth,

828
00:46:49,200 --> 00:46:52,600
Speaker 1: be it watching movies, drinking, or the right to vote.

829
00:46:53,200 --> 00:46:56,680
Speaker 1: Social media may just be the latest extension of that.

830
00:46:57,320 --> 00:47:00,279
Speaker 19: It's important we give that analogy. In regards to alcole

831
00:47:00,600 --> 00:47:05,680
Speaker 19: and driving, there's education, there, there's rules around the release

832
00:47:05,760 --> 00:47:09,319
Speaker 19: of these products to kids and to humans. That's what

833
00:47:09,360 --> 00:47:12,160
Speaker 19: I've been really frustrated and why I left the police,

834
00:47:12,520 --> 00:47:16,200
Speaker 19: because there were no rules. Everything in our physical world

835
00:47:16,280 --> 00:47:20,320
Speaker 19: has rules. Look at a car manufacturer. You can't release

836
00:47:20,320 --> 00:47:24,160
Speaker 19: a car into Australia unless it's a five star rated,

837
00:47:24,320 --> 00:47:25,560
Speaker 19: unless it's got airbags.

838
00:47:26,000 --> 00:47:26,400
Speaker 17: Breaks.

839
00:47:26,480 --> 00:47:30,840
Speaker 19: We need breaks, okay, so, but social media we haven't

840
00:47:30,880 --> 00:47:31,239
Speaker 19: had that.

841
00:47:32,160 --> 00:47:36,440
Speaker 1: Parents like Danny Alaji hope Australia's social media restrictions are

842
00:47:36,480 --> 00:47:42,799
Speaker 1: a step toward doing just that. That does it for

843
00:47:42,880 --> 00:47:45,279
Speaker 1: us here at Wall Street Week, I'm David Western. See

844
00:47:45,280 --> 00:48:00,040
Speaker 1: you next week for more stories of capitalism and