Speaker 1: You're listening to the Bloomberg Opinion podcast counts Saturdays at
Speaker 1: one in seven pm Eastern on Bloomberg dot Com, the
Speaker 1: iHeartRadio app, and the Bloomberg Business App, or listen on
Speaker 1: demand wherever you get your podcasts.
Speaker 2: Welcome to Bloomberg Opinion. I'm Amy Morris. This week we
Speaker 2: look at the booming weight loss drug market. You've heard
Speaker 2: of some drugs that are designed to treat diabetes, but
Speaker 2: they have a desirable side effect, significant weight loss. Now
Speaker 2: there are new drugs on the market, with more on
Speaker 2: the way. We'll talk with Bloomberg's Lisa Jarvis. Later. We'll
Speaker 2: look at the upcoming presidential election and what it means
Speaker 2: if it becomes another ballot box battle between President Biden
Speaker 2: and former President Trump. Bloomberg's Clive Crook explains why that
Speaker 2: scenario may prove to be bad for American democracy. And
Speaker 2: then a deeper dive into the little blue check mark.
Speaker 2: Bloomberg's Allison Schraeger explains that Twitter's blue chet, which meant
Speaker 2: that the user is authentic or verified, now might no
Speaker 2: longer be the coveted status it once was. We begin
Speaker 2: with the fed right hikes and banking turmoil this past week,
Speaker 2: fed share J. Powell said they're watching inflation, which has
Speaker 2: cooled somewhat, but not quite enough. Not yet.
Speaker 3: Inflation has moderated somewhat since the middle of last year. Nonetheless,
Speaker 3: inflation pressures continue to run high, and the process of
Speaker 3: getting inflation back down to two percent has a long
Speaker 3: way to go.
Speaker 2: And he touched on concerns over the banking turmoil, which
Speaker 2: regained some momentum after the takeover of First Republic Bank.
Speaker 3: I think that the resolution and sale of First Republic
Speaker 3: is an important step toward drawing a line under that
Speaker 3: period of severe stress.
Speaker 2: Bloomberg Opinion columnist Paul Davies covers banking and finance and
Speaker 2: joins me. Now, Paul, let's talk first about share Powell's
Speaker 2: opening remarks. If you saw them as less hawkish than
Speaker 2: we heard back in.
Speaker 4: March, Yeah, that's right.
Speaker 5: I think that you know, things have changed obviously compared
Speaker 5: to where we were in March. I mean, I think
Speaker 5: you know, inflation numbers are still high and employment is
Speaker 5: still very high, so that the kind of the main
Speaker 5: things that they're targeting aren't necessarily moving in the way
Speaker 5: that they would want them to. But we have had
Speaker 5: this banking turmoil since then, with several banks collapsing, first
Speaker 5: Republic Banks, in the Coon Valley Bank and so on,
Speaker 5: and that brings concerns that there will be a significant
Speaker 5: contraction in lending, in kind of credit provision to the economy.
Speaker 5: And that's kind of, I guess, one of the main
Speaker 5: ways in which sort of monetary policy ultimately feeds through
Speaker 5: into economic activity and employment levels, inflation and all.
Speaker 4: That sort of stuff.
Speaker 5: So, you know, he was expected to be a bit
Speaker 5: less hawkish certainly. I mean, some people might have been
Speaker 5: thinking he was going to be even less hawkish than
Speaker 5: he actually was in the end, really.
Speaker 2: And overall, US markets really want some clarity about what
Speaker 2: may be to come. But Powell gave those conditional answers.
Speaker 2: Who's very nuanced or more nuanced.
Speaker 5: Rather, Yeah, Well, it's a very we're at a very
Speaker 5: tricky point, I guess, in terms of judging what's going
Speaker 5: to happen next. As I say, these bank collapses have
Speaker 5: brought significant worries that will see a major credit crunch,
Speaker 5: and I kind of I wrote a piece back in
Speaker 5: March after Credits Sweet collapsed in Europe and after the
Speaker 5: first bank collapses in the US, where I was saying, essentially,
Speaker 5: you know when you when you put a bunch of
Speaker 5: interest rate rises through, nothing seems to happen for a
Speaker 5: long time, and then suddenly they all can hit at once.
Speaker 5: It's like it's like an elastic band, kind of like
Speaker 5: pinging back towards you. And that's because and what that
Speaker 5: means is you get a sudden kind of tightening of
Speaker 5: financial conditions, a sudden tightening of the amount of credit
Speaker 5: that's available, and that's going to have a big effect
Speaker 5: on what the concern is. That's going to have a
Speaker 5: big effect on demand in the economy.
Speaker 2: There was some conventional wisdom that regional banking turmoil would
Speaker 2: raise the possibility that the FED might pivot toward lower rates.
Speaker 2: Where do you sense that stands at this point?
Speaker 5: Well, I think what they're doing is I mean, he
Speaker 5: signaled a sort of a pause yesterday. He didn't signal
Speaker 5: a pause in quite as certain and as definite a
Speaker 5: way as markets might have wanted. But it's the right
Speaker 5: thing to do at this point, I think is to
Speaker 5: try and is to give yourself some space.
Speaker 4: Is the FED to give it self some space.
Speaker 5: To wait and see what happens with the banks from
Speaker 5: now on what happens with stability in the sector. I mean,
Speaker 5: he said several times that the sector is strong and
Speaker 5: stable and what have you, and sound and bank executives
Speaker 5: that have been reporting results, they have been saying much
Speaker 5: the same thing. Jamie Diamond when they took over. When
Speaker 5: JP Morgan which he runs, took over First Republic, was
Speaker 5: very clear in saying he thought this was the end
Speaker 5: of the banking turmoil.
Speaker 4: But we are still.
Speaker 5: Seeing some smaller banks suffer, you know, terribly in the market,
Speaker 5: and there may well be more you know, failures or
Speaker 5: more kind of takeovers of some kind that need to happen.
Speaker 5: So it's a kind of it's a moment where, like
Speaker 5: I say, inflation is still high, employment is still very high,
Speaker 5: the economy is strong enough, but all of this banking
Speaker 5: turmoil in the background is definitely due to higher rates,
Speaker 5: and it's just sort of trying to you know, it's
Speaker 5: impossible to say exactly how this is all going to unfold,
Speaker 5: and the only thing to do really for a central
Speaker 5: bank is to just kind of try and stand back
Speaker 5: for a bit and just sort of watch the numbers
Speaker 5: and sort of see what happens.
Speaker 2: Can I ask you a Layman's question with this, because
Speaker 2: it seems like throughout this entire process with the banking
Speaker 2: turmoil or regional banking turmoil, you know, we saw what
Speaker 2: happened with Silicon Valley Bank and we heard, oh, this
Speaker 2: is an isolated incident, this is within itself. And we
Speaker 2: saw something similar with Signature Bank and they said, oh no, no, no,
Speaker 2: that's because of something completely different, isolated incident. And then
Speaker 2: of course First Republic Bank, and we're not even talking
Speaker 2: about Credit Sue, but we're seeing all these little isolated
Speaker 2: incidents happening and throughout let's just say throughout the US definitely,
Speaker 2: and not exactly at the same time. But it seems
Speaker 2: domino like, how long before we finally start to connect
Speaker 2: these dots and say, you know what, maybe there's some
Speaker 2: there there.
Speaker 4: Yeah, well, that's a very good question.
Speaker 5: I mean, I think there is definitely a common thread
Speaker 5: to these banking issues, and it's all to do with
Speaker 5: higher rates depositors looking for more attractive returns elsewhere in
Speaker 5: money market funds and even sort of treasury bonds and
Speaker 5: this sort of thing, and the kinds of assets that
Speaker 5: a lot of these banks have invested in which aren't
Speaker 5: necessarily the same assets, but many of them behave the
Speaker 5: same way in the sense that they lose value when
Speaker 5: interest rates rise. So you know, there has been a
Speaker 5: theme to these collapses, and you know the current banks
Speaker 5: that are under pressure most pressure. Packwest for example, doesn't
Speaker 5: seem to have exactly the same sort of issues at all,
Speaker 5: certainly on.
Speaker 4: The asset side.
Speaker 5: But again, if it does get into trouble, and if
Speaker 5: we re look at all the bansheet and everything.
Speaker 4: Else after it, you know, is after it fails.
Speaker 5: If it does fail, then we may well kind of
Speaker 5: see how it fits into the same sort of narrative.
Speaker 5: After all, markets generally have a way of looking for
Speaker 5: the next weakest link in the chain whenever you get
Speaker 5: a series of problems and kind of going after that
Speaker 5: week link and seeing if it falls over. And I
Speaker 5: guess we won't know that this crisis is over until
Speaker 5: the last week link that the market goes after doesn't break.
Speaker 2: And we are talking to Bloomberg opinion columnist Paul Data
Speaker 2: about the FED rate hikes and banking turmoil. I want
Speaker 2: to build on something that you just said about being
Speaker 2: the weak link. Does that then indicate we may be
Speaker 2: bound to see more failures in the regional banking system.
Speaker 2: What sort of risks are we looking at and what
Speaker 2: are you looking for?
Speaker 5: So I guess we're looking for, you know, more deposit
Speaker 5: flight or continued deposit flights from smaller banks to larger banks.
Speaker 4: I guess you know.
Speaker 5: You'd also be looking for any of the smaller banks
Speaker 5: that have a very large share of uninsured deposits in
Speaker 5: the same way that some of these others have done.
Speaker 5: And then the other thing obviously that we will be
Speaker 5: watching and that you'll continue to watch, is you know,
Speaker 5: falling share prices, and you know, the extent to which
Speaker 5: some of these smaller banks have to compete for the
Speaker 5: funding that they get through deposits and other means, you know,
Speaker 5: they have to pay more money for that, and that
Speaker 5: has an impact on profitability, and this can become you know,
Speaker 5: for all of these banks, and especially for smaller banks
Speaker 5: that are less diversified, it can become a.
Speaker 4: Sort of a you know, a really difficult.
Speaker 5: Spiral to get out of, because you know, falling profitability
Speaker 5: leads to a collapsing share price, which worries you know,
Speaker 5: depositors because they see the market saying that their bank
Speaker 5: is weak, so maybe they start pulling their deposits out,
Speaker 5: which means even higher funding costs, which means even greater
Speaker 5: squeeze on profits, which means even more of a problem
Speaker 5: for the share price.
Speaker 4: And it's that kind of it's a circle that keeps.
Speaker 5: Going round around and can keep getting worse, and that
Speaker 5: might be what starts happening to some of these other
Speaker 5: smaller banks next that don't necessarily have exactly the same
Speaker 5: problems that you know, Silicon Valley Bank and First Republic
Speaker 5: Bank had, but can get into these sort of downward
Speaker 5: spirals because of that interaction of funding costs, profitability and
Speaker 5: share price balls.
Speaker 2: Okay, well, then let's put it all together and tie
Speaker 2: it up with a little bow. Any final thoughts on
Speaker 2: the economy, whether we're likely to see a slow down
Speaker 2: or something more substantial in the coming.
Speaker 5: Months, Well, I guess it. It's a very tense, tense
Speaker 5: and quite finely poised moment. In many ways, we just
Speaker 5: have to kind of like, you know, watch and see
Speaker 5: what happens. There's lots of talk about you know, stepping
Speaker 5: in and ensuring many more deposits, or ensuring all deposits, all.
Speaker 4: This sort of thing.
Speaker 5: I personally think that would be a mistake for reasons
Speaker 5: that are probably too lengthy to go into right now,
Speaker 5: and anyway, and if we were going to do something
Speaker 5: like that, it would probably be take too long to
Speaker 5: put it into place to kind of stop, you know,
Speaker 5: this minibanking crisis that we're currently having.
Speaker 4: Anyway.
Speaker 5: So yeah, it's a very tense and finally poised time,
Speaker 5: and it's really uncertain as to exactly how it's going
Speaker 5: to play out.
Speaker 2: Paul, thank you so much for taking the time with us.
Speaker 2: It is always a pleasure. Thank you, Bloomberg Opinion columnist
Speaker 2: Paul Davies. Just ahead, we take a look at one
Speaker 2: sector of the pharmaceutical industry that's got the market's attention,
Speaker 2: weight loss drugs. Bloomberg's Lisa Jarvis joins us. In just
Speaker 2: a few minutes. You're listening to Bloomberg Opinion.
Speaker 1: You're listening to the Bloomberg Opinion podcast Contest Saturdays at
Speaker 1: one and seven pm Eastern on Bloomberg dot Com, the
Speaker 1: iHeartRadio app, and the Bloomberg Business App, or listen on
Speaker 1: demand wherever you get your podcasts.
Speaker 2: You're listening to Bloomberg Opinion. I'm Amy Morris, and by
Speaker 2: now you've heard of these weight loss drugs, they weren't
Speaker 2: really intended to be weight loss drugs. Dominating the obesity market.
Speaker 2: The drug commonly known as ozempic, designed to treat diabetes,
Speaker 2: has become so popular for people trying to lose weight.
Speaker 2: It's getting harder for diabetics to get their hands on
Speaker 2: the drug. And now we're learning that Eli Lilly has
Speaker 2: another drug in the pipeline called Munjaro that helps people
Speaker 2: with diabetes lose a significant amount of weight. Let's get
Speaker 2: more on this. Bloomberg Opinion columnist Lisa Jarvis covers biotech, healthcare,
Speaker 2: and the far parmaceutical industry. She joins us now to
Speaker 2: sort of walk us through all of this. Lisa, always
Speaker 2: a pleasure. I want to thank you for joining us today.
Speaker 2: This drug not Ozambic, but Monjaro is currently marketed for diabetes.
Speaker 2: Is that right? Or is this specifically for weight loss?
Speaker 6: That's right, and thank you for having me Amy. It
Speaker 6: is currently marketed for diabetes. It was approved last summer.
Speaker 6: But we know that this class of drugs, which is
Speaker 6: called glp ones, they mimic hormones in our body and
Speaker 6: essentially make reduce your appetite. They have result in this
Speaker 6: feeling of safety and so people lose a lot of
Speaker 6: weight on them and so they have been developing it
Speaker 6: in tandem for diabetes and for weight loss. There was
Speaker 6: a lot of excitement starting last year in April, like
Speaker 6: Lily came out with a phase three trial in people
Speaker 6: with obesities showing that the drug could help them lose
Speaker 6: over twenty percent of their body weight, which was by
Speaker 6: far the highest we've seen any of weight loss drug
Speaker 6: kind of in history, and you know, is on par
Speaker 6: with bariatric surgery. And so that's one of the reasons
Speaker 6: that there's so much excitement around this class of drugs.
Speaker 2: So would they be willing to test it not only
Speaker 2: for diabetes, because as you say, it was already approved
Speaker 2: for that, but now they have to go through an
Speaker 2: entire new testing process to make sure it's safe for
Speaker 2: weight loss specifically.
Speaker 6: That's right. So they did diabetes first. I think that's
Speaker 6: like a well known FDA kind of trajectory. And in
Speaker 6: the diabetes trial, you know, a side effect is weight loss.
Speaker 6: And they've been running these very large trials, I mean
Speaker 6: thousands of people in weight loss because the market with
Speaker 6: drugs that actually work has the potential to be huge.
Speaker 6: I think some of the forecasts are pretty pretty mind boggling.
Speaker 6: Fifty four billion dollars by twenty thirty is what one
Speaker 6: analyst forecast to the weight loss drug market could be
Speaker 6: for this class. So they are expected to see approval
Speaker 6: by the end of this year for this drug and
Speaker 6: weight loss. There's already one other drug on the market,
Speaker 6: so we hear a lot about ozen Pic that's actually
Speaker 6: a diabetes drug. That same drug at a higher dose,
Speaker 6: the same ingredient in that drug is sold as we
Speaker 6: go Vy, and that has already been kind of going
Speaker 6: like gang busters. And so Eli Lely's drug will be
Speaker 6: formally approved, likely in weight loss, by the end of
Speaker 6: this year and go up against wegov.
Speaker 2: Are there any concerns for people who may be taking
Speaker 2: these drugs? I mean, they're tested, but they're they're also
Speaker 2: kind of untested, you know, out in the right I think.
Speaker 6: I mean, well, my main concern is that a lot
Speaker 6: of people are taking them off label, and by that
Speaker 6: I mean that right now, when they've been in shortage,
Speaker 6: there's this potential for you to go to a telehealth
Speaker 6: provider and get them prescribed to you. You may or
Speaker 6: may not actually fit into the kind of guidelines that
Speaker 6: the FDA has approved them under. Who knows how much
Speaker 6: actual guidance you're getting for how to take them. They
Speaker 6: have side effects, like some people can't tolerate them, and
Speaker 6: really you're supposed to ramp up on them very slowly.
Speaker 6: But you know, if you stop taking them, the weight
Speaker 6: we'll come back. And I think one of the concerns
Speaker 6: is like, you know, what do we know about long
Speaker 6: term use of this. There's been a lot of media
Speaker 6: attention on this class of drugs and what we do
Speaker 6: and do not know, and would really like to know
Speaker 6: if we're going to have people taking them for the
Speaker 6: long term.
Speaker 2: Okay, so then who are these drugs for?
Speaker 6: So right now, they're for people with a BMI above
Speaker 6: a certain level, or a BMI above a certain level
Speaker 6: who have another risk factor let's say they have high
Speaker 6: cholesterol or at risk of having diabetes or have diabetes.
Speaker 6: But I think that you know, we also know from
Speaker 6: TikTok and social media that celebrities are taking them as
Speaker 6: a quick fix. That's the rumor. At least I don't
Speaker 6: want that, but celebrities are supposedly taking them as a
Speaker 6: quick fix to lose weight. For you know, an event
Speaker 6: that they're going to, and I think the regular you know,
Speaker 6: public is interested in them for this type of purpose.
Speaker 6: That is making it hard for people with diabetes to
Speaker 6: get them, which is also a problem because I think
Speaker 6: the companies just didn't anticipate the swell of immediate demand
Speaker 6: and they just in the beginning couldn't make enough of them.
Speaker 2: Lisa, in your column on the Bloomberg Terminal, you talk
Speaker 2: a bit about the sales goals for these drugs. What
Speaker 2: will it take to achieve the goals that they have
Speaker 2: set forth?
Speaker 6: I think really two things. You know, one is convincing
Speaker 6: insurers to cover them. The drugs are not cheap right now.
Speaker 6: They cost over ten thousand dollars a year if you
Speaker 6: were to pay for them out of pocket, and amazingly
Speaker 6: some people are willing to pay that, but you know,
Speaker 6: it's not sustainable for most people, and so some private
Speaker 6: insurers will cover them. It can go take a battle.
Speaker 6: I know that some telehealth companies have emerged almost with
Speaker 6: the intent of being the person that goes to battle
Speaker 6: with your insurance company to try to get them covered
Speaker 6: for you. Right now, Medicare is not covering them at all,
Speaker 6: which there's a lot of you know, controversy over whether
Speaker 6: they should be covered. On the one hand, if it
Speaker 6: does improve health outcomes, that would save our healthcare system
Speaker 6: in the long run, and the other there have been
Speaker 6: some estimates about the incredible burden these trucks can have
Speaker 6: on our healthcare system if Medicare did cover them, stay Medicaid.
Speaker 6: It's been patchwork, and so there's a bill that the
Speaker 6: companies have been trying to put forward around getting these covered.
Speaker 6: But I think the other big thing is really proving
Speaker 6: that when you lose weight it improves your long term health.
Speaker 6: People have that people have fewer heart attacks and strokes
Speaker 6: and live longer, and that's the companies are running very
Speaker 6: big trials right now to try to show that. We
Speaker 6: won't know that answer to those questions for another you know,
Speaker 6: one to three years.
Speaker 2: Though, it seems like this has the potential and set
Speaker 2: me straight if I'm wrong, Lisa, this would have the
Speaker 2: potential for completely redesigning and forgive the term, but disrupting
Speaker 2: the weight loss.
Speaker 6: Market, oh for sure. And we saw that recently when
Speaker 6: we saw weight Watchers acquire a company Sequence that you
Speaker 6: know is a telehealth company that is prescribing these drugs.
Speaker 6: It was an admission for the first time that diet
Speaker 6: is probably diet alone is not enough for many people,
Speaker 6: and that these companies, these dinosaurs like weight watchers, are
Speaker 6: gonna die off if they don't adapt. And so, you know,
Speaker 6: I think it is changing the paradigm, good or bad.
Speaker 6: You know, there's lots of different opinions on whether that's
Speaker 6: you know, we all should be taking medicines or not
Speaker 6: for weight loss.
Speaker 7: But.
Speaker 6: You know it is, it is a sea change because
Speaker 6: we've never seen drugs the kind of closest I think
Speaker 6: are the drugs that could you know, people could lose
Speaker 6: five percent of body weight, which is much different. You know,
Speaker 6: that's a much small amounts. Those still could be an
Speaker 6: amount that could affect your health.
Speaker 2: And we're going to continue to watch it because we
Speaker 2: want to see how the people who are using it
Speaker 2: fair over the next five to ten years, the long gain,
Speaker 2: the long term use of this product. You know, how
Speaker 2: are how are how does their body handle it?
Speaker 6: That's right, I mean, and I think you know, another
Speaker 6: issue is that if you go off the drugs, you're
Speaker 6: likely to lose weight. There's a lot of things that
Speaker 6: are in development coming up behind them, and so I
Speaker 6: think there are questions can you take them less frequently?
Speaker 6: You know, what are ways that we can change, not
Speaker 6: just you know what we already have, but change the
Speaker 6: paradigm going forward so that it feels more accessible and
Speaker 6: more possible for people to be on these for the
Speaker 6: long term. So that's that's There's a lot more to come.
Speaker 6: This is a huge area of investment for pharma. Everyone's
Speaker 6: seeing what's happening with these two first drugs and trying
Speaker 6: to put their own stake in the ground.
Speaker 2: We're going to keep watching it with you.
Speaker 8: Lis.
Speaker 2: Thank you so much for following this, and we want
Speaker 2: to keep in touch with you as there are developments
Speaker 2: in this part of the industry. Thanks so much, Thank
Speaker 2: you for having me. Lisa Jarvis is a Bloomberg Opinion
Speaker 2: columnist who covers biotech, healthcare, and the pharmaceutical industry. Now
Speaker 2: stay with us. Coming up on Bloomberg Opinion, we'll take
Speaker 2: a closer look at how the twenty twenty four race
Speaker 2: for the White House is shaking out and what might
Speaker 2: signal some very real issues with American democracy. And don't
Speaker 2: forget We're available as a podcast on Apple, Spotify, or
Speaker 2: your favorite podcast platform. This is Bloomberg Opinion.
Speaker 1: You're listening to the Bloomberg Opinion podcast. Catch us Saturdays
Speaker 1: at one and seven pm Eastern on Bloomberg dot Com,
Speaker 1: the iHeartRadio app, and the Bloomberg Business App, or listen
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Speaker 2: This is Bloomberg Opinion. I Amy Morris It. I feel
Speaker 2: like the twenty twenty four presidential election is right around
Speaker 2: the corner. But you know, a lot can happen between
Speaker 2: then and now. President Biden has continued to address concerns
Speaker 2: about his age.
Speaker 5: Every bloody running for reelection, and this time has been
Speaker 5: in the same position.
Speaker 1: There's nothing knew about that.
Speaker 5: You're making it sound like Biden's really under.
Speaker 2: What while Republican front runner and former President Donald Trump
Speaker 2: is looking to sink his competitors.
Speaker 6: Sure, I'd love to.
Speaker 1: Have your support, sir.
Speaker 8: I'd love to have your support.
Speaker 6: I'm down at about three. I'd love to have your support.
Speaker 6: All right, let's think about it. And there was like
Speaker 6: a rocket ship after I gave it.
Speaker 8: Otherwise, right now you'd have a lawyer or someplace looking
Speaker 8: for business.
Speaker 2: We could easily see a repeat of the twenty twenty election.
Speaker 2: But if that is the case, what does that say
Speaker 2: about our democracy? And we pose that question now to
Speaker 2: Bloomberg opinion columnist Clive Crook, who is also a member
Speaker 2: of the editorial board covering economics, finance, and politics, and
Speaker 2: he joins us now, Clive, it is a pleasure and
Speaker 2: I loved reading your column about this. What is it
Speaker 2: if we do see a repeat of the twenty twenty
Speaker 2: race for the White House?
Speaker 7: Well, I think that, you know, the main thing it means,
Speaker 7: and the main thing that's been missing in a lot
Speaker 7: of the commentary, is just what a stunning turn events
Speaker 7: this would be. Now, admittedly, you know, a lot can
Speaker 7: happen between now and the election, but let's just suppose
Speaker 7: it is a Trump Biden rematch. Every you know, I
Speaker 7: think most of the country thinks that's bizarre, that's you know,
Speaker 7: are these are these men really the best that each
Speaker 7: party can offer as our next president. Foreigners, I think
Speaker 7: could just completely bewildered by the fact that we're looking
Speaker 7: at this, at this choice. But I'm struck by the fact,
Speaker 7: you know that it were political specialists, analysts and observers
Speaker 7: are just taking this completely in stride, as though you know,
Speaker 7: well of course, Yeah, Trump v. Biden. What could be
Speaker 7: more natural? You know, our reactions should be this is ridiculous.
Speaker 7: These are these two terrible candidates that both unpopular with
Speaker 7: most Americans. What on earth has gone wrong with our system?
Speaker 7: That's my main point.
Speaker 2: Well, you just described a lot of the elections leading
Speaker 2: up to twenty twenty four, and what I mean by
Speaker 2: that is, you know, we saw this sort of legacy
Speaker 2: election with the Bill Clinton and then Hillary Clinton. We saw,
Speaker 2: of course the Bush legacy elections with George Bush Senior
Speaker 2: and then George Bush, George W. Bush, and for a
Speaker 2: while it looked like a Bush versus Clinton dynasty in
Speaker 2: all the elections. Is that where all of this started?
Speaker 7: I don't know if that's I mean, it's a good point.
Speaker 7: I mean, that was a strange phenomenon, and especially you know,
Speaker 7: the I think the Hillary's candidacy was weird because that
Speaker 7: was almost like her main you know, her main claim,
Speaker 7: it's my turn. You know, it was a kind of dynastic,
Speaker 7: almost like a Dynastics succession thing. And voters really didn't
Speaker 7: weren't that interested in that. They didn't want they didn't
Speaker 7: want that. But now I think we have a different phenomenon,
Speaker 7: because I think if you look back to you know,
Speaker 7: the Bill Clinton days and the Bushes, you know that
Speaker 7: we lived although you know there were intense political fights,
Speaker 7: intense political conferences. You don't misunderstand me, but by modern standards,
Speaker 7: you know, there was at least the possibility of a
Speaker 7: more consensual style of politics. And I think that's actually
Speaker 7: what Bill Clinton stood for him. He's an extremely skillful
Speaker 7: politician and he was able to reach out to a
Speaker 7: lot of moderates as well as dents. And actually I
Speaker 7: think Obama had that same kind of talent. You know
Speaker 7: that certainly in eight when he was running, you know,
Speaker 7: the pitch he made was very much along those lines.
Speaker 7: You know, he was he was a progressive Democrat, is
Speaker 7: a progressive Democrat, but he crafted a message that had
Speaker 7: great appeal to the center of the country, stressing unity,
Speaker 7: coming together, fixing problems, and the country like the sound
Speaker 7: of that and wanted it. That's just gone. Now we
Speaker 7: have Biden, who ran as a centrist but has turned
Speaker 7: into not a centrist in my view. He's he's gone
Speaker 7: along with this kind of left left leaning tilt in
Speaker 7: the Democratic Party and he's running as a sort of
Speaker 7: anti maga Republican. His his posture is mainly about, you know,
Speaker 7: sticking it to the enemy. It isn't about reaching people
Speaker 7: in the middle. It's about uh, you know, energizing democrats
Speaker 7: to see the danger on the other side, which of
Speaker 7: course activists democrats already do. And then Trump, of course
Speaker 7: is the quintessential divisive candidate. I mean, for him, is
Speaker 7: all about identifying an enemy and sticking it to the enemy,
Speaker 7: and he does. I don't think he even really cares
Speaker 7: all that much. Who So, what's happened is that we
Speaker 7: have a very very different, angrier, more oppositional, anti consensual
Speaker 7: style of politics that I think is the profound change.
Speaker 7: And what I find so depressing about this forthcoming contest,
Speaker 7: if it happens, is that we just seem to be
Speaker 7: cementing this approach to politics into the country, and I
Speaker 7: think it's profoundly bad, profoundly dangerous for the country.
Speaker 2: Clive, you said something that really struck a chord with me.
Speaker 2: Are we lazy? Are we just not politically motivated or
Speaker 2: civic minded anymore? Are we just I don't know, burned out, tired,
Speaker 2: sick of it, just lazy, just too preoccupied with whatever else?
Speaker 7: Well, I must. I do think that's a that is
Speaker 7: an excellent point because one of the things that I've
Speaker 7: been trying to argue in some recent columns I've written
Speaker 7: on American politics is that the blame for this mess
Speaker 7: wherein lies partly with people like me, as it were,
Speaker 7: the disgusted centrists. But I mean that that's the problem
Speaker 7: that I mean, an awful lot of Americans I think
Speaker 7: are just disgusted with politics, and I would say they
Speaker 7: have every reason to be, and their response is sadly
Speaker 7: to switch off and just you know, so I don't
Speaker 7: even want to talk about this stuff, you know, just
Speaker 7: leave me alone. And the problem, of course, is that
Speaker 7: that leads the field to the true believers on each side,
Speaker 7: you know, the Trump fundamentalists and the you know, the
Speaker 7: progressive fundamentalists, and the middle of the electorate, you know
Speaker 7: where common sense prevails and you know, where people are
Speaker 7: willing to strike compromises. Those people are sort of left
Speaker 7: out of the system. But to respond to your point,
Speaker 7: it is partly their fault. I mean, they've chosen to
Speaker 7: stand aside. And that's partly why I feel, you know,
Speaker 7: I really have a longing for you know, a sort
Speaker 7: of centrist, compromising leader who can channel this disgust with
Speaker 7: the extremes and appeal to the center and will re
Speaker 7: engage the center. But when you look around, where are
Speaker 7: these politicians. There are some in the Republican Party, there
Speaker 7: are some in the Democratic Party, but they aren't speaking
Speaker 7: up very much, are they. I mean, they're completely sort
Speaker 7: of subdued and cowed by Trump on the one side
Speaker 7: and the progressive activists on the other. Biden's fallen in
Speaker 7: with those people, in my view, and so you know,
Speaker 7: the moderates in Congress are sort of they aren't stepping
Speaker 7: forward to represent the middle of the country. That's what's missing.
Speaker 2: So if they're not stepping forward, and you are making
Speaker 2: this point of I would really like to see someone
Speaker 2: more centrist, it is possible that you're not in the minority,
Speaker 2: that you are not alone in this longing what would
Speaker 2: it take to fix this broken system?
Speaker 7: I mean, I don't think I'm in a minority. I mean,
Speaker 7: I think many Americans feel this way, but it's extremely
Speaker 7: difficult to, you know, for them to make an impression
Speaker 7: on the system. And as I say, and I agree
Speaker 7: with the point you were making earlier, that you know
Speaker 7: there is an element of it being our fault. You know,
Speaker 7: the centrists need to be more energetic. I mean it's
Speaker 7: not good enough to say, you know, the system is failing,
Speaker 7: this candidate is terrible, that candidate is terrible, and then
Speaker 7: as it were, you know, have nothing to say about
Speaker 7: your own role in fixing the problem. I mean, we
Speaker 7: have to step up and fix the problem, and we
Speaker 7: aren't willing to do that. But I mean I do
Speaker 7: understand the exhaustion that people feel when they follow politics.
Speaker 7: I mean, wherever they look, it's this dysfunction, this anger,
Speaker 7: this reluctance to apply common sense solutions to problems that
Speaker 7: everybody can see need to be addressed. I mean, it
Speaker 7: is exhausting. What is an is it we're an ordinary
Speaker 7: centrist American to do? I don't know.
Speaker 2: Bloomberg Opinion columnist Clive Krook, thank you very much for
Speaker 2: taking the time with us.
Speaker 7: Thanks for having me. I enjoyed it.
Speaker 2: And if you're a Twitter user, you already know there's
Speaker 2: been this issue over the infamous little blue check mark.
Speaker 2: Never has there been so much uproar from so many
Speaker 2: people over something that seems, if you think about it,
Speaker 2: kind of artificial, but maybe not let's talk this over
Speaker 2: with Bloomberg opinion columnist Alison Schrager. Alison set me straight,
Speaker 2: what's going on with the little blue check mark?
Speaker 8: Well, I mean it's interesting how no matter how much
Speaker 8: we evolve and how much tech we have access to,
Speaker 8: how we're just still these very tribal people couching for status.
Speaker 8: Like people don't change, and the blue check mark has
Speaker 8: just been something to behold because for several years, people
Speaker 8: who had status which was arbitrarily defined or in our
Speaker 8: case just worked for a media company got a blue
Speaker 8: check mark, which meant that you were a public figure,
Speaker 8: and it became a status symbol. It also meant your
Speaker 8: tweets were more visible, more promoted, and more visible in
Speaker 8: people's notifications. And then Elon, you know, rightly, I think
Speaker 8: he had a point of thinking when he took over Twitter,
Speaker 8: how can I monetize this business? It's never made any money,
Speaker 8: And he's like, well, this check mark's valuable, maybe I
Speaker 8: should start charging for it. And then you know, all
Speaker 8: hell broke loose, right because for a while people are
Speaker 8: upset that you had this checkmark, but someone could pay
Speaker 8: to look like they had the same special status you did,
Speaker 8: and then they took away the check marks from the
Speaker 8: status people. And as this, I liken it to like
Speaker 8: an e regency era novel of just British nobility losing
Speaker 8: their status and having these or these pay their way in.
Speaker 8: It's just like, as you said, we are so you know,
Speaker 8: such tribal people obsessed with hierarchies, and that never ever changes,
Speaker 8: no matter what technology we've got access to.
Speaker 2: Now there's something to it because it does give people
Speaker 2: who might want to quote you or might want to
Speaker 2: follow you a little more gravitas. It gives them the
Speaker 2: idea that this isn't just somebody pretending to be someone else. Okay,
Speaker 2: I get that, But then the check mark itself was
Speaker 2: a commodity before Elon Musk tried to monetize it. Did
Speaker 2: he break it?
Speaker 8: I think he did. And I mean, this is the
Speaker 8: larger point of the column. It's not just you know,
Speaker 8: me working out my mixed feelings about losing.
Speaker 2: My check right, it is.
Speaker 8: It is actually I mean, a bigger story about the
Speaker 8: tech economy which really did offer services for people hoping, well,
Speaker 8: if we just have the same network effect, see everyone's
Speaker 8: using it, that's got to be valuable. Somehow We'll figure
Speaker 8: out how it's valuable later. But giving someone something for
Speaker 8: free and then taking it away sort of again sort
Speaker 8: of raises a lot of our tribal like instincts of hey,
Speaker 8: that's unfair, and then it's really hard to move out
Speaker 8: of that model.
Speaker 2: Is this going to be the end of Twitter?
Speaker 8: I don't think so. I mean maybe, I mean, I
Speaker 8: don't know. I'll be the last one there. I mean,
Speaker 8: I mean, the thing is it is just I sort
Speaker 8: of I go through my I said, my own issues
Speaker 8: with it, which is it's so bad for me, but
Speaker 8: I can't quit it. I think everyone keeps trying to
Speaker 8: quit it and trying different social media platforms. But the
Speaker 8: thing is, there is something to the network effect, which
Speaker 8: is everyone is on it, and this is where you
Speaker 8: get all your information and this is where a conversation
Speaker 8: is happening, particularly if you're in media that you feel
Speaker 8: like you have to be part of. And I'm not
Speaker 8: sure if Elon can monetize it. But you know, it's
Speaker 8: got everyone saying it's not the same. But I think
Speaker 8: it's got several notches to fall before anyone will actually
Speaker 8: start leaving.
Speaker 2: What do we do about it? I mean, are we
Speaker 2: just going to watch and see what happens with the
Speaker 2: blue check mark. Are we going to watch and see
Speaker 2: how Twitter develops or doesn't develop? I mean it does.
Speaker 2: As you say, speak to the great tech industry as
Speaker 2: a whole, particularly with social media.
Speaker 7: Well, I think the.
Speaker 8: Tech industry is it is going to have to change.
Speaker 8: I think with rising rates and sort of realizing that
Speaker 8: this way of monetizing this through advertising or even data
Speaker 8: might not pan out the way they want. I mean,
Speaker 8: these tech companies can't keep doing this forever. Elon can't
Speaker 8: as rich as he is, can't fund it forever. So
Speaker 8: I mean, either the something will have to change, and
Speaker 8: maybe that will mean why actually have to pay for
Speaker 8: this stuff? No, I was thinking about it. Eight dollars
Speaker 8: is really not that much to pay for Twitter. Concerning
Speaker 8: how much time I spend looking at it, I mean,
Speaker 8: I spend more time on this than anything I subscribe to.
Speaker 8: But so either but if you do pay for it,
Speaker 8: fewer people are on it, so it is less valuable.
Speaker 8: So I think the tech will change, But I suspect
Speaker 8: my mind is already broken from it, so I don't
Speaker 8: see it coming back.
Speaker 2: Alison Schreeger is a senior fellow at the Manhattan Institute
Speaker 2: and a Bloomberg Opinion columnist. And that does it for
Speaker 2: this week's Bloomberg Opinion. We're produced by Eric mollow and
Speaker 2: you can find all of these columns on the Bloomberg Terminal.
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