WEBVTT - Boeing CEO’s Comeback Plan for 2024 Takes a Hit Five Days In 0:00:01.360 --> 0:00:05.680 This is Bloomberg business Week inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:18.640 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:20.239 --> 0:00:28.720 Don't call it a come back, all right. 0:00:28.840 --> 0:00:31.720 So we were talking, certainly the risk trade is on, 0:00:31.880 --> 0:00:36.000 and it does feel like we're seeing fairly broad based 0:00:36.040 --> 0:00:38.560 buying in today's trade. But if you take a look 0:00:38.600 --> 0:00:43.560 at Boeing, Tim, it's definitely a different tone. Boeing shares 0:00:43.600 --> 0:00:44.519 are definitely down. 0:00:44.479 --> 0:00:46.960 Yeah, six and a half percent as we speak. Investors 0:00:47.040 --> 0:00:50.920 offloading shares, they're absorbing. The shares are a possible fallout 0:00:50.960 --> 0:00:53.720 from this weekend's accident, bowing stock slumping the most in 0:00:53.800 --> 0:00:56.480 more than a year, this after its seven thirty seven 0:00:56.680 --> 0:01:00.360 Max nine model has been temporarily grounded by authorities following 0:01:00.360 --> 0:01:03.279 a January fifth incident that was Friday night involving a 0:01:03.320 --> 0:01:06.559 recently delivered plane. So, Carol, here's what we know about 0:01:06.560 --> 0:01:09.160 the company and its biggest the biggest US exporter, the 0:01:09.160 --> 0:01:11.600 seven thirty seven Max aircraft is a crucial cash cow 0:01:11.680 --> 0:01:14.400 for Boeing, and we continue to report out and digest 0:01:14.400 --> 0:01:14.920 the details. 0:01:15.000 --> 0:01:16.400 Yeah, we certainly do. So let's get to it with 0:01:16.400 --> 0:01:19.319 Bloomberg News aerospace reporter Julie Johnson. She has been on 0:01:19.360 --> 0:01:22.360 it for us throughout the day, in the morning, all 0:01:22.400 --> 0:01:25.200 of it as it was happening on Zoom from Chicago. 0:01:25.240 --> 0:01:30.000 So Julie, a lot coming out. What's the latest in 0:01:30.080 --> 0:01:32.399 terms of what we know about exactly what happened? 0:01:33.720 --> 0:01:39.800 Okay, so just to review the facts really quickly, super 0:01:40.360 --> 0:01:45.199 close scary call Friday night with the Alaska airplane where 0:01:46.240 --> 0:01:48.240 it's called a door plug, but it's a section of 0:01:48.280 --> 0:01:51.520 fuselage blew out a few minutes after the plane took 0:01:51.560 --> 0:01:55.920 off from Portland. Fortunately nobody was killed, nobody was sitting 0:01:55.960 --> 0:01:59.240 next to the section of bailed or it might have 0:01:59.240 --> 0:02:02.680 been a different store. So what we don't so that's 0:02:02.920 --> 0:02:06.920 we know that, and what we don't know is why 0:02:07.240 --> 0:02:13.720 and how the NTSB is on that case. But it 0:02:13.960 --> 0:02:18.600 has revived all these very damaging narratives around Max, the 0:02:18.639 --> 0:02:22.280 Boeing's but working so hard to put to rest following 0:02:23.440 --> 0:02:28.519 two crashes in twenty eighteen and twenty nineteen and a grounding. 0:02:29.160 --> 0:02:31.920 And this is their prize plane. I mean, it's really 0:02:32.320 --> 0:02:36.200 the driver the engine for the company. And so the 0:02:36.320 --> 0:02:42.680 reputational hit is significant for Boeing and it probably is 0:02:42.760 --> 0:02:45.240 going to be longer lasting with this incident. 0:02:45.919 --> 0:02:48.760 What do you mean by that? Longer lasting than this incident? 0:02:48.919 --> 0:02:51.600 Do you mean that? Because I just got to tell 0:02:51.600 --> 0:02:56.120 you from personal experience. I when we covered as you did, Julie, 0:02:56.200 --> 0:02:59.799 the seven thirty seven Max issues following the two crashes 0:03:01.600 --> 0:03:04.280 just a few years ago, Wow, there were so many 0:03:04.280 --> 0:03:06.680 people who were like, I'm never going to fly on 0:03:06.680 --> 0:03:11.639 one of those things, never ever, ever, And now three 0:03:11.680 --> 0:03:14.519 different variants of the seven thirty seven Max are taking 0:03:14.560 --> 0:03:18.119 many different flights every single day without a consumer seeming. 0:03:17.840 --> 0:03:23.680 To care, right, And so I'm not actually thinking about 0:03:23.720 --> 0:03:27.080 the just to be clear, I'm thinking more from a 0:03:27.160 --> 0:03:32.679 regulatory perspective and customer sales and also Boeings. This is 0:03:32.720 --> 0:03:35.640 a huge year for Boeing in terms of getting its 0:03:35.640 --> 0:03:40.520 factories in order, and this also plays into this damaging 0:03:40.640 --> 0:03:44.320 narrative to customers that Boeing's got a flawed product and 0:03:44.480 --> 0:03:47.360 quality problems that they can't get a handle on. And 0:03:47.440 --> 0:03:50.040 do I really want to go down that path with 0:03:50.160 --> 0:03:52.240 this aircraft? I mean, that's where it's damaging. 0:03:53.520 --> 0:03:56.520 So one more point there, real quick, Julie. Yeah, do 0:03:56.600 --> 0:03:59.720 these airlines really have a choice when it comes to 0:03:59.720 --> 0:04:01.400 the air line they buy. There are two companies that 0:04:01.440 --> 0:04:04.800 make these, right, that make planes like this, Airbus, right, 0:04:04.920 --> 0:04:07.000 and there's Boeing And Airbus has the A three twenty 0:04:07.040 --> 0:04:09.280 family that competes with the seven thirty seven Max. But 0:04:09.640 --> 0:04:13.440 I mean, aren't the switching costs incredibly high, like totally 0:04:13.480 --> 0:04:14.800 training new pilots and everything. 0:04:15.880 --> 0:04:20.320 Yeah, they are, they are. And and also Airbus is 0:04:20.320 --> 0:04:24.000 sold out through the end of the decade by and large. 0:04:24.279 --> 0:04:27.200 Boeing large, you know, has a big backlog on this 0:04:27.240 --> 0:04:29.560 plane as well, So switching is not an easy thing. 0:04:29.960 --> 0:04:32.440 But a lot of airlines have mixed plans, and so 0:04:32.560 --> 0:04:37.440 maybe you start to tilt your orders more to air 0:04:37.480 --> 0:04:40.560 Bus down the line. So that's that's that's the big, 0:04:40.760 --> 0:04:46.760 big unknown. In terms of this actual incident, there are 0:04:46.800 --> 0:04:51.559 some very intriguing clues that the NTSB is sorting through, 0:04:51.800 --> 0:04:55.680 and including a main maintenance visit before the plane went 0:04:55.960 --> 0:05:01.920 into service. So, I mean, and so often with these accidents, 0:05:02.560 --> 0:05:05.479 what we think is the conventional wisdom, you know, a 0:05:05.560 --> 0:05:08.320 day or two afterwards winds up being not the case 0:05:08.360 --> 0:05:14.120 at all. So I the inspections are underway on the 0:05:14.360 --> 0:05:19.080 you know, dis fleet, and they could be back in 0:05:19.480 --> 0:05:22.359 the skies within a day or two. And this is 0:05:22.480 --> 0:05:25.920 and so from that perspective, this could start to receive 0:05:26.080 --> 0:05:27.359 very quickly too. 0:05:27.360 --> 0:05:30.760 But it's the reputational, yeah, which is a huge which 0:05:30.800 --> 0:05:32.720 I want to get into. But help help us be 0:05:32.800 --> 0:05:35.880 smart because you know, you know this world. So we 0:05:35.960 --> 0:05:38.520 hear seven thirty seven Max and you know, the hairs 0:05:38.520 --> 0:05:40.640 of my necho up and I think about, you know, 0:05:40.680 --> 0:05:43.760 the two deadly crashes, the seven thirty seven Max crashes 0:05:43.800 --> 0:05:46.680 about five years ago, right, that totally shook confidence in 0:05:46.720 --> 0:05:48.840 the company. And I think I remember Tim and I 0:05:48.960 --> 0:05:50.960 like when they came back and were like what plane 0:05:51.000 --> 0:05:51.200 is it? 0:05:51.240 --> 0:05:51.360 Like? 0:05:51.440 --> 0:05:53.200 Do we want to be on a seven thirty seven Max? 0:05:53.320 --> 0:05:56.279 This is a Model nine? How big? I mean, this 0:05:56.400 --> 0:05:58.600 is such an important, as we said, a crucial cash 0:05:58.640 --> 0:06:02.160 cow for Boeing. How big is it in terms of 0:06:02.680 --> 0:06:06.039 Boeing's business it's balance sheet? How big is it in 0:06:06.160 --> 0:06:10.040 terms of the airlines that we watch so carefully that 0:06:10.040 --> 0:06:12.680 that need new planes or have new planes of the 0:06:12.800 --> 0:06:14.719 ILK if you will, among their fleet? 0:06:15.880 --> 0:06:19.360 Yeah, And I'm so sorry. I should have those numbers 0:06:19.360 --> 0:06:22.760 at my fingertips, and I don't. But in terms of 0:06:22.880 --> 0:06:25.880 contributing to revenues of profit, I think it's in the 0:06:25.880 --> 0:06:31.280 neighborhood of thirty percent of you know, the companies. The 0:06:31.279 --> 0:06:35.040 money that keeps Boeing running comes through this aircraft. 0:06:34.760 --> 0:06:38.200 And that's for uh yeah, keep going, sorry, but. 0:06:38.480 --> 0:06:41.840 Yeah, anyway, it's far and away Boeing's biggest sellers is 0:06:41.880 --> 0:06:47.800 a really important plane on the consumer perspective. I'm a 0:06:47.800 --> 0:06:52.920 little bit jaded because I've just seen this play out 0:06:53.000 --> 0:06:57.560 time and time again over the years, and everybody says, oh, Max, 0:06:57.640 --> 0:07:00.640 no way, you know. Or before it was the seven 0:07:00.680 --> 0:07:04.840 eighty seventh Dreamliner, for a very brief period, we had 0:07:04.920 --> 0:07:09.840 some some hinky crashes involving some airbus planes, you know, 0:07:09.960 --> 0:07:14.920 before social media really got going. But the fact is 0:07:14.960 --> 0:07:23.200 that you offer people better pricing and they quickly, I 0:07:23.480 --> 0:07:26.000 hate to say it, but the concerns seemed to fade, 0:07:26.720 --> 0:07:30.600 and you're most people cannot tell, you know, Steff on 0:07:31.000 --> 0:07:34.800 board a plane. They can't tell an airbus from a 0:07:34.840 --> 0:07:38.520 Boeing from an old generation seven thirty seven to a manage, 0:07:38.600 --> 0:07:43.080 they all they look and feel verysome If you're a traveler. 0:07:43.560 --> 0:07:46.360 So that's they're not Stanevik who like before we even 0:07:46.360 --> 0:07:48.120 go together, if we're flying somewhere for work is like, 0:07:48.120 --> 0:07:49.760 you know, we're flying a bohl blah blah blah blah, 0:07:49.760 --> 0:07:51.280 and he'll know all the details and it'll be like 0:07:51.280 --> 0:07:53.440 where you want to sit and where you you do 0:07:53.600 --> 0:07:54.320 You're it's. 0:07:54.200 --> 0:07:56.360 Really well, you know, when you're on like a plane 0:07:56.400 --> 0:07:58.280 like this. The airbus is a little wider and if 0:07:58.280 --> 0:08:01.040 you're an economy you can really feel it. Anyway, we 0:08:01.080 --> 0:08:03.440 can get Julie and I can talk about that offline, 0:08:03.640 --> 0:08:06.640 which we do sometimes. So Julie, Uh, when you when 0:08:06.640 --> 0:08:09.560 you think about in all seriousness here, I was really 0:08:09.600 --> 0:08:11.760 surprised to hear you say that this these could be 0:08:11.800 --> 0:08:13.640 back in the skies this week. I mean, Paul Sweeney 0:08:13.720 --> 0:08:15.880 is set to take one of these planes to Aruba 0:08:15.960 --> 0:08:17.640 later this week. He talked about it on air earlier 0:08:17.640 --> 0:08:19.640 today and I said, no way, Paul, there's no way 0:08:19.640 --> 0:08:22.080 they're going to fly this on Friday. Am I going 0:08:22.120 --> 0:08:22.920 to be eating my words? 0:08:23.760 --> 0:08:23.960 Yeah? 0:08:24.000 --> 0:08:25.080 I think so wow? 0:08:25.760 --> 0:08:31.880 He just uh they So the design that's in question 0:08:32.040 --> 0:08:36.479 right now, this door plug or this this component that's 0:08:36.600 --> 0:08:42.480 that's being scrutinized. It's been in Boeing planes since two 0:08:42.480 --> 0:08:46.960 thousand and six and and there's never been a failure 0:08:47.000 --> 0:08:49.160 like this. And there was another plug on the plane 0:08:49.240 --> 0:08:55.800 that was intact. So that's code for an installation problem 0:08:56.320 --> 0:09:01.200 or a maintenance error. And it's if it were a 0:09:01.240 --> 0:09:05.439 design flaw, and the NTSB is looking at everything, by 0:09:05.480 --> 0:09:08.960 the way, So but if it is, if it were 0:09:09.559 --> 0:09:14.880 design flaw, that would be a lengthy grounding and and 0:09:14.920 --> 0:09:19.480 it's not looking that way. FAA, you know, has signed 0:09:19.520 --> 0:09:23.080 off on these maintenance procedures that are only h it's 0:09:23.120 --> 0:09:24.439 like four to eight hours. 0:09:24.600 --> 0:09:25.920 So do you think it do you think it could 0:09:25.920 --> 0:09:28.760 be coincidental that it's on A seven thirty seven Max 0:09:28.760 --> 0:09:30.679 and not if these plugs have been used or these 0:09:30.679 --> 0:09:35.160 plugs only used on seven thirty sevens, they're not. 0:09:35.160 --> 0:09:39.000 Just used on seven thirty seven's. Airbots also has similar 0:09:39.040 --> 0:09:42.880 plugs their own design on the larger A three twenty family. Okay, 0:09:44.400 --> 0:09:48.200 so it's it's not a it's not some crazy new concept, 0:09:48.280 --> 0:09:49.400 but it could be a if. 0:09:49.280 --> 0:09:51.640 It's let's say it is a maintenance issue very briefly, 0:09:51.679 --> 0:09:54.280 a maintenance issue or an installation issue, then then it's 0:09:54.360 --> 0:09:56.560 kind of coincidental that it's on a seven thirty seven 0:09:56.679 --> 0:09:59.920 Max and not on a different plane. 0:10:00.080 --> 0:10:07.280 Yeah, yeah, exactly exactly. And and then the questions are also complicated, 0:10:07.400 --> 0:10:12.080 and it's like, well, Boeing tests all of its aircraft really, 0:10:12.360 --> 0:10:16.199 you know, for everything, and the FAA is right over 0:10:16.320 --> 0:10:19.680 looking over their shoulder. FAA signs off on everything on 0:10:19.720 --> 0:10:22.880 a new plane right now, their inspectors are on site. 0:10:23.440 --> 0:10:27.040 So it's like, well, how on earth did you miss 0:10:27.120 --> 0:10:33.480 something that caused this depress pressurization. And so so if 0:10:33.480 --> 0:10:36.520 it turns out that it's Boeing, they're going to have 0:10:36.559 --> 0:10:39.280 to go back and have a real come to Jesus 0:10:39.360 --> 0:10:44.360 moment and with their procedures. If it's not a bowing moment, 0:10:44.520 --> 0:10:48.080 if it was, you know, happened after the plane left bowing, 0:10:49.080 --> 0:10:53.600 then that's a totally different matter. And it's just a horrible, 0:10:53.800 --> 0:10:54.959 horrible coincidence. 0:10:55.320 --> 0:10:57.480 Well, certainly something I know you'll be all over Bloomberg 0:10:57.520 --> 0:11:00.440 News aerop Aerospace Report. Julie Johnson on ZU from Chicago. 0:11:00.440 --> 0:11:02.800 Shares of Boeing by the way down six point six percent. 0:11:03.080 --> 0:11:04.120 This is Bloomberg Radio. 0:11:07.360 --> 0:11:10.959 You're listening to the Bloomberg Business Week podcast. Catch US 0:11:10.960 --> 0:11:14.320 Live weekday afternoons from three to six Eastern Listen on 0:11:14.400 --> 0:11:18.439 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app, 0:11:18.679 --> 0:11:20.360 or watch US Live on YouTube. 0:11:21.360 --> 0:11:23.280 I feel like we should be playing It's the End 0:11:23.440 --> 0:11:25.240 of the World as we know it, because it. 0:11:25.200 --> 0:11:26.880 Just feels like it might be on the list there. 0:11:27.559 --> 0:11:29.800 The amount of risks that are out there are just 0:11:29.920 --> 0:11:32.280 kind of freaking me out here in this new year. 0:11:32.280 --> 0:11:35.800 And I'm not like someone's like, h chicken little, but 0:11:35.840 --> 0:11:37.800 it just feels like we just talked about climate change 0:11:37.880 --> 0:11:40.440 and it's expected to get hotter than even last year. 0:11:41.040 --> 0:11:41.280 Yeah. 0:11:41.320 --> 0:11:44.160 And then there's, of course the geopolitical concerns that we've 0:11:44.200 --> 0:11:46.800 been highlighting as we closed out twenty twenty three and 0:11:46.920 --> 0:11:49.439 kicked off twenty twenty four. I mean, you know, look 0:11:49.480 --> 0:11:52.719 at shares of Mask today falling because they denied that 0:11:52.760 --> 0:11:55.400 they've reached an agreement with Huthy's to stop attacking ships 0:11:55.440 --> 0:11:56.600 going through the Red Sea. 0:11:56.760 --> 0:11:58.320 The business impact already happening. 0:11:58.440 --> 0:11:58.720 Yeah. 0:11:58.960 --> 0:12:01.520 When it comes to risks over all, engaging and analyzing 0:12:01.880 --> 0:12:03.920 their impact, the Eurasia Group is always a go to 0:12:04.080 --> 0:12:08.079 and the companies report on top risks predictions for twenty 0:12:08.160 --> 0:12:10.640 twenty four puts to a year of grave concern. So 0:12:10.720 --> 0:12:13.200 let's get into it and to some of the risks 0:12:13.200 --> 0:12:16.760 with Eurasia Group Chairman Clip Kupchin. He is at the 0:12:16.800 --> 0:12:19.440 Bloomberg News Bureau in Washington, d C. Cliffs. So nice 0:12:19.440 --> 0:12:21.000 to have you here with Tim and myself. I want 0:12:21.040 --> 0:12:23.160 to say welcome and happy new year, but I feel 0:12:23.200 --> 0:12:25.800 like it might not be a good year. There's lots 0:12:25.800 --> 0:12:28.560 of reasons out there. Is that a fair assessment? And 0:12:28.640 --> 0:12:32.000 is it more than any other year in recent time? 0:12:32.080 --> 0:12:34.760 We just dealt with a global pandemic a few years ago, 0:12:35.440 --> 0:12:37.360 you know, go back in eight we had a global 0:12:37.400 --> 0:12:40.440 financial crisis. We've had some really big things that we've 0:12:40.480 --> 0:12:43.680 had to deal with as an individual, as an American, 0:12:43.720 --> 0:12:44.720 as a global citizen. 0:12:46.280 --> 0:12:50.760 I think what separates this year from recent years is 0:12:50.960 --> 0:12:53.480 the number of wars going on. We have two kinetic 0:12:53.520 --> 0:12:58.599 wars going on Ukraine and Israel Amas and that's a 0:12:58.600 --> 0:13:00.520 lot of wars. I think we have to have ourselves 0:13:00.920 --> 0:13:03.959 why to kinetic wars. But in addition, and the way 0:13:03.960 --> 0:13:05.959 we like to think about this report, there's really three wars. 0:13:05.960 --> 0:13:08.560 It's the two I've mentioned and about to begin is 0:13:08.640 --> 0:13:13.120 the US against itself, which in many many ways will 0:13:13.120 --> 0:13:16.800 be the world's more serious war because it pertains to 0:13:16.880 --> 0:13:21.640 the world's low remaining superpower. Three wars with no guard rails, 0:13:21.720 --> 0:13:24.920 three wars that we think have no leaders that can 0:13:25.000 --> 0:13:28.080 really fix the problem, and three wars where the two 0:13:28.120 --> 0:13:30.679 sides don't even necessarily agree what the war's over. And 0:13:30.679 --> 0:13:34.640 that's really pertains the United States. So yeah, I think 0:13:34.760 --> 0:13:38.080 risk is a thing that we always worry about, but 0:13:38.280 --> 0:13:40.160 this year it's got a real edge to it. 0:13:40.520 --> 0:13:42.840 Does it feel like investors are ignoring the risk out there? 0:13:42.880 --> 0:13:44.520 I mean, we're almost at all time highs on the 0:13:44.559 --> 0:13:45.760 S and P five hundred right now. 0:13:47.880 --> 0:13:52.880 I think on the potential for escalation in the Middle East, 0:13:53.320 --> 0:13:56.040 there's a bit of a head and the sand thing 0:13:56.080 --> 0:13:59.320 going on. I mean, for instance, I would be surprised 0:13:59.360 --> 0:14:01.199 if the US did and hit the Houthi's pretty soon 0:14:01.280 --> 0:14:04.640 in Ena. Wow, how's Iran going to react? You know, 0:14:05.040 --> 0:14:07.120 they'll think they'll do much, but I sure hope they don't. 0:14:08.000 --> 0:14:11.360 I think that's one aspect in which investors have their 0:14:11.400 --> 0:14:13.280 head in the sand. But the bigger one is what's 0:14:13.280 --> 0:14:15.560 about to go on in this country. We're about to 0:14:15.559 --> 0:14:17.920 see President Trump get the nomination in a couple of months, 0:14:17.960 --> 0:14:20.520 and then you know, we're in a new era. We're 0:14:20.520 --> 0:14:22.880 in an era where he gets the media, he controls 0:14:22.920 --> 0:14:27.440 the funding, he controls the TV. You'll pressure on Biden 0:14:27.520 --> 0:14:29.480 to do something on Iran because Trump will be to 0:14:29.520 --> 0:14:31.280 the weight of the right of him on Iran. The 0:14:31.400 --> 0:14:33.040 Ukrainians are going to wonder if they're ever going to 0:14:33.080 --> 0:14:35.000 see another dollar from this country again, which I think 0:14:35.080 --> 0:14:37.880 is a very good question. So I think the main 0:14:38.040 --> 0:14:40.840 risk that at least over the medium term, you US 0:14:40.880 --> 0:14:43.080 isn't going to tank anytime soon. But if we see 0:14:43.080 --> 0:14:45.600 another Trump presidency, I think everybody's going to ask themselves, 0:14:45.600 --> 0:14:48.280 is the US good for its promises? Is the US 0:14:48.360 --> 0:14:50.680 the haven the safe haven for money that has spent 0:14:50.760 --> 0:14:53.040 since the Second World War? Those kinds of questions They're 0:14:53.040 --> 0:14:53.440 going to be. 0:14:53.360 --> 0:14:55.440 Honest, Cliff, I've got to say, you know, this whole 0:14:55.480 --> 0:14:57.840 idea of the US, you know, basically at war with 0:14:57.880 --> 0:15:03.880 itself against itself, and really the division and questioning American democracy, 0:15:04.480 --> 0:15:06.920 And I do wonder what happens on the other side. 0:15:07.040 --> 0:15:09.320 And we're a young nation still, right, and I look 0:15:09.320 --> 0:15:11.880 at some of the older countries, there are oftentimes where 0:15:11.880 --> 0:15:14.880 they're questioning kind of what is going on internally? Is 0:15:14.920 --> 0:15:17.240 there something from history that you think we can draw 0:15:17.320 --> 0:15:20.320 upon to kind of figure out and say, well, this 0:15:20.400 --> 0:15:24.200 is kind of normal in a young country's history, and 0:15:24.280 --> 0:15:26.720 try to figure out and maybe make some conclusions about 0:15:26.720 --> 0:15:27.640 where it goes from here. 0:15:29.120 --> 0:15:33.480 I can't think of a democracy. Look, I mean this 0:15:33.520 --> 0:15:34.800 is kind of unique. You know, we have a guy 0:15:34.880 --> 0:15:39.960 running for president in a democracy who tried to curtail 0:15:40.080 --> 0:15:43.360 to be nice to him democracy. Last time we saw 0:15:43.400 --> 0:15:47.240 this movie, I think the only analogy, and it's not 0:15:47.480 --> 0:15:51.200 from distant history, but what happened to Hungary after Victor 0:15:51.280 --> 0:15:54.320 orbon really got his mits around it? Well, you know, 0:15:54.360 --> 0:15:57.040 he's Hungarian democracy? Ever going to rebound? Polish democracy? Did 0:15:57.120 --> 0:16:01.400 Hungarian democracy? I don't know. I don't know. So there's 0:16:01.400 --> 0:16:05.320 a real question as to how much we can absorb, 0:16:05.400 --> 0:16:07.600 how much damage the US can take the second time around. 0:16:07.880 --> 0:16:09.400 I don't think history is a very good guy, because 0:16:09.400 --> 0:16:12.400 this is really very ahistorical and rather unpresidented. 0:16:12.520 --> 0:16:17.760 What would be your message to politicians because I think 0:16:18.280 --> 0:16:18.600 I don't know. 0:16:18.640 --> 0:16:20.320 I think that people. 0:16:20.000 --> 0:16:25.320 Within Trump's party, I've been very surprised to see the 0:16:25.360 --> 0:16:29.320 way that they've rallied around President Trump after January sixth, 0:16:29.480 --> 0:16:33.360 twenty twenty one. There are many many politicians out there, 0:16:33.480 --> 0:16:35.840 including those running against him, who would support him to 0:16:35.840 --> 0:16:39.600 be the nominee. What would your message be to these 0:16:39.640 --> 0:16:43.360 folks who studied at some of the nations in the 0:16:43.360 --> 0:16:46.720 world's most premier colleges and universities, who have law degrees, 0:16:47.000 --> 0:16:49.160 who see no problem with another Trump administration. 0:16:53.000 --> 0:16:56.400 First, I would say, don't take what you have for 0:16:56.480 --> 0:17:01.240 granted anymore. This is a very fragile democracy that was 0:17:01.280 --> 0:17:03.840 invented by a bunch of geniuses. When you think of 0:17:03.840 --> 0:17:06.440 how they sort of controlled human nature and the greed 0:17:06.760 --> 0:17:08.960 that's within all of us, but set up these hunks 0:17:08.960 --> 0:17:11.040 of balances, and no, we can really get away with it. 0:17:12.320 --> 0:17:14.800 But it's fragile, and it's fragile to a huckster, to 0:17:14.880 --> 0:17:20.280 a really good politician like Donald Trump, who can you know, kirk, 0:17:20.720 --> 0:17:24.200 who can feed, who can feed scared people and make 0:17:24.280 --> 0:17:28.080 them induce them to vote for him. So I would 0:17:28.080 --> 0:17:33.159 tell politicians to to sort of get real and be 0:17:33.359 --> 0:17:36.840 very jealous of what you have, first of all. But secondly, 0:17:37.840 --> 0:17:44.080 I think the rest of us here have to really respect. 0:17:44.119 --> 0:17:46.360 Wouldn't be the word, but be very cognizant of what's 0:17:46.359 --> 0:17:49.480 going on in this country. That you know, I go 0:17:49.520 --> 0:17:51.760 home to Wisconsin. When I go home to central Wisconsin 0:17:52.200 --> 0:17:55.480 and talk to people and of the vote for Donald Trump, 0:17:55.840 --> 0:17:59.359 and these are church going, god fearing, good people. Give 0:17:59.400 --> 0:18:02.000 them their money. I give it all back in the morning. 0:18:02.040 --> 0:18:06.560 They're very honest people. They're scared, they're misguided, they get 0:18:06.560 --> 0:18:11.040 bad information. But I think all of us have to 0:18:11.560 --> 0:18:13.879 sort of see this guy's legitimate and then sort of 0:18:13.880 --> 0:18:15.840 look within ourselves and say, how did we get here? 0:18:15.920 --> 0:18:17.600 Because we're not a very good were not a very 0:18:17.600 --> 0:18:18.000 good place. 0:18:18.119 --> 0:18:22.240 I felt that way about the uprising and the siege 0:18:22.240 --> 0:18:24.359 at the Capitol, Like I want to understand these people, 0:18:24.359 --> 0:18:26.760 Why are they doing this? Why are they I kind 0:18:26.760 --> 0:18:28.520 of want to understand why someone thinks that way. I 0:18:28.520 --> 0:18:30.159 don't walk around in their shoes, and they don't walk 0:18:30.160 --> 0:18:31.600 around in my shoes, but I kind of want to 0:18:31.680 --> 0:18:33.359 understand how do we do that? 0:18:33.400 --> 0:18:33.640 Though? 0:18:33.680 --> 0:18:37.040 Where people in terms of how they get their information, 0:18:37.760 --> 0:18:41.719 it is often a chosen source, one source, which can 0:18:41.840 --> 0:18:44.840 lead to kind of this vacuum, and it can potentially 0:18:44.840 --> 0:18:46.280 be a vacuum of misinformation. 0:18:47.080 --> 0:18:49.199 Well, we all got to make an effort, and I 0:18:49.240 --> 0:18:51.280 didn't you join you today, come on to radio or 0:18:51.320 --> 0:18:53.560 tell stories. But I'm going to share one quick second 0:18:53.560 --> 0:18:56.159 one with you. So I was on vacation during COVID. 0:18:56.480 --> 0:19:00.439 It was in West Virginia, and I called the Central 0:19:00.440 --> 0:19:03.280 Committee of the Republican Party of Xyz County. It was 0:19:03.320 --> 0:19:05.879 a real county and it was a real conservative and 0:19:05.920 --> 0:19:08.080 I kept my fifteen year old son. We met with 0:19:08.119 --> 0:19:10.040 him for lunch and it was the most fascinating three 0:19:10.080 --> 0:19:12.320 hours I think I've had in a long long time. 0:19:12.760 --> 0:19:16.320 These far right Republicans felt like they had succeeded from America, 0:19:16.600 --> 0:19:18.919 felt like nobody in Washington cared what they thought about. 0:19:19.280 --> 0:19:20.919 And they said I was first person in Washington that'd 0:19:20.920 --> 0:19:24.639 ever seen. And I think there's an actual conversation to 0:19:24.680 --> 0:19:29.480 be had somewhere. Nobody's trying. These aren't necessarily bad people, 0:19:29.520 --> 0:19:32.119 they're scared people. But I think there's got to be 0:19:32.160 --> 0:19:34.920 some kind of trust between these two poles that are 0:19:34.960 --> 0:19:37.159 just widening and widening and widening. There's got to be 0:19:37.160 --> 0:19:39.000 someplace in the middle where we can have a conversation. 0:19:39.080 --> 0:19:41.040 Because we all are decent people, we all come from 0:19:41.080 --> 0:19:43.560 the same founding fathers, but nobody's trying right now. We're 0:19:43.560 --> 0:19:45.840 all just getting further and further into our nativistic corner. 0:19:46.680 --> 0:19:49.000 So the trend line's not good. I don't think it's inevitable, 0:19:49.000 --> 0:19:49.640 but it's not good. 0:19:50.200 --> 0:19:52.520 Well, you may have not come on to tell stories, 0:19:52.520 --> 0:19:54.040 but we certainly wish you did, because we feel like 0:19:54.080 --> 0:19:57.720 it's very realistic now in terms of what's going on 0:19:57.920 --> 0:20:01.200 and really resonate in place to some of the risks. 0:20:01.240 --> 0:20:03.280 As you say, the number one risk that you guys 0:20:03.320 --> 0:20:06.440 have identified as the US versus itself, which is just wild, 0:20:07.600 --> 0:20:09.680 come back soon, come back. So do you think we'll 0:20:09.680 --> 0:20:13.520 get twenty seconds come out in a better way or 0:20:13.680 --> 0:20:15.040 it's fifty to fifty at this point. 0:20:16.440 --> 0:20:20.840 Well, let me say that there are really good stories 0:20:20.880 --> 0:20:25.840 out there, and Mexico after O Shinbaum is going to 0:20:25.840 --> 0:20:28.360 be I think a really good president of Mexico, mode's 0:20:28.359 --> 0:20:30.000 going to get re elected. India is headed in a 0:20:30.000 --> 0:20:33.520 good direction. There are good stories, and I think we 0:20:33.560 --> 0:20:36.000 should you know, next time I come back, maybe we 0:20:36.040 --> 0:20:37.720 can do the good news because there's good news. 0:20:37.960 --> 0:20:43.560 All right, Okay, promise, promise you open invitation, so appreciate it. 0:20:43.800 --> 0:20:46.400 You raise your group chairman, Cliff Kupchin joining us from 0:20:46.440 --> 0:20:48.480 our bureau in Washington, DC. 0:20:49.359 --> 0:20:52.919 You're listening to the Bloomberg Business Week podcast. Catch us 0:20:52.960 --> 0:20:57.000 live weekday afternoons from three to six Eastern on Bloomberg Radio, 0:20:57.160 --> 0:21:00.480 the Bloomberg Business App, and YouTube. You can also listen 0:21:00.560 --> 0:21:03.640 live on Amazon Alexa from our flagship New York station, 0:21:04.119 --> 0:21:09.240 Just say Alexa play Bloomberg eleven thirty. Oooh the wear 0:21:09.320 --> 0:21:14.720 that outside is frightful, but the fire is so delightful. 0:21:15.520 --> 0:21:19.840 And since we've no place to go, let it snow, 0:21:20.000 --> 0:21:21.400 let it snow, let it snow. 0:21:21.440 --> 0:21:23.320 Well, De Martin for you, everybody, let it snow, Let 0:21:23.320 --> 0:21:25.399 it snow. You might have played that around the holidays, 0:21:25.480 --> 0:21:29.000 but you know, we thought maybe a storm this past 0:21:29.040 --> 0:21:31.480 weekend might have brought us a little snow. It didn't 0:21:31.720 --> 0:21:33.280 for those of us here in the New York metro. 0:21:33.400 --> 0:21:37.760