Loading summary
Transcript236 lines
- [00:00]
Carol Massar
Pinpointing the genetic changes that predispose us to disease Identifying the roots of mental illness Treating congenital anomalies even before birth At Boston Children's Hospital, we're investing in children's health today to ensure the well being of adults tomorrow. As home to the world's largest pediatric research enterprise and more than 260 specialty programs, Boston Children's is where the world comes for answers. The learn more@bostonchildrens.org.
- [00:32]
Arash Hashemi
Did my card go through?
- [00:33]
Carol Massar
Oh no.
- [00:34]
Arash Hashemi
Your small business depends on its Internet.
- [00:36]
Verizon Business Advertiser
So switch to Verizon Business and you.
- [00:38]
Arash Hashemi
Could get LTE Business Internet starting at.
- [00:40]
Verizon Business Advertiser
$39 a month when paired with select Business Mobile plans.
- [00:44]
That's unlimited data for unlimited business.
- [00:47]
Carol Massar
There we go.
- [00:48]
Verizon Business Advertiser
Get the Internet you need at the price you want.
- [00:50]
Carol Massar
Verizon Business Starting Price for lte Business.
- [00:53]
Verizon Business Advertiser
Internet 25 Mbps Unlimited Data Plan with.
- [00:56]
Arash Hashemi
Select Verizon Business Smartphone Plan Savings Terms.
- [00:58]
Tim Stenovec
App.
- [01:00]
Carol Massar
These days AI can help you adopt better time management, but it can't stop colleagues booking meetings during lunch. But how about being able to easily adopt industrial AI to streamline your business? Siemens xcelerator helps you find the right AI providers and easily understand what they offer so you can use modular solutions to quickly scale up and grow your business. That's AI for real.
- [01:23]
Josh Weinstein
From the global market leader in industrial AI, Siemens. Learn more on USA.siemens.com AI.
- [01:33]
Carol Massar
Bloomberg Audio Studios Podcasts Radio News this is Bloomberg.
- [01:41]
Tim Stenovec
Business Week insight from the reporters and editors that bring you America's most trusted business magazine plus global business, finance and tech news. The Bloomberg Business Week podcast with Carol Massar and Tim Stanweck on Bloomberg Radio.
- [01:57]
Carol Massar
Hi everyone, welcome to the Bloomberg businessweek podcast. This past week, big macro issues certainly on the minds of investors. This as Fed Chair Jay Powell in the latest FOMC meeting, a decision downplayed growth concerns and the impact of President Trump's trade war on prices. Even calling the inflationary effect transitory, the President responded by suggesting the Fed should cut interest rates. Still, the US Central bank said that two rate cuts are on the table this year.
- [02:25]
Tim Stenovec
The war in Ukraine entered a new chapter after Donald Trump's calls with both Russian and Ukrainian presidents led to a 30 day truce preventing strikes on each other's power infrastructure. So this hour we tackle the nearly three year war with the two leading experts on Russia and whether these talks have any merit.
- [02:42]
Carol Massar
Plus all things Elon from SpaceX to Tesla to Doge and X, it's been quite a week for the world's richest person and in our Next hour, a read on the consumer with Carnival CEO Josh Weinstein. Plus the affordability crisis at US Colleges and how some of the nation's top schools are addressing it. Also, we do it all, by the way, in case you haven't noticed. We're going to talk about protein packed, low carb meals with Mediterranean flair from a self taught cook who you probably know from Instagram.
- [03:11]
Tim Stenovec
All that to come. We begin, though, with the latest in the Russia, Ukraine conflict. A voice that we've turned to often is Dr. Angela Sten, a senior fellow at the Brookings Institution and a former national intelligence office for Russia and Eurasia at the National Intelligence Council who also served in the Office of Policy planning at the U.S. department of State. She's the author of the 2019 book Putin's Russia against the West. And with the rest, the way we.
- [03:36]
Dr. Angela Stent
Got here is right that President Trump said during the campaign that he was going to end this war in 24 hours. It would never have started had he been president at the time. It took a little more than 24 hours to get this, this particular phone call with Putin, although we know that he had previous ones after his election. And so he got the Ukrainians by putting pressure on them to agree to a 30 day total cease fire. And that's what he said he wants from the Russians. I've just been reading the Russian readout, the Kremlin's readout of the talks. It's a little different from the one that we got from the US Side. And it mentions that Trump asked Putin for a cease fire on hitting energy and infrastructure targets. And it said that, you know, Putin was favorably inclined to win. It didn't actually necessarily say that he agreed with it. And a lot of it had to do with the restoration of U.S. russian relations. And apparently they're going to organize hockey games between Russia and the United States. But the thing that's most notable in the Russian one, and I think your correspondent already alluded to it, is that Putin saying that they have to get to the fundamental causes, the root causes of why this war broke out. And that's going to go right back to Naito, to Ukraine wanting to be part of the west, and to Putin essentially saying that can't happen. So I will be curious to see how this works out. I'd also like to know how they're going to enforce this very limited but still important cease fire. Don't forget Russia has destroyed 70% of Ukraine's electricity production during this war. How are they going to monitor this? And then what comes after it.
- [05:25]
Tim Stenovec
But Angela, does it seem like to you that it is indeed the beginning of the end of this war?
- [05:30]
Dr. Angela Stent
It may be. I think it's certainly the beginning of the US And Russia establish re establishing relations. And we've heard that from President Trump in is it a big Is it the beginning of the end of this war? I'm still, I think the jury's out on that. I think we have to see how long Putin drags out the negotiations before he agrees to a total cease fire. And again, he hasn't really shown that he's interested in ending this war anytime soon. He's much more interested in restoring these relations with the US and ending his isolation.
- [06:06]
Carol Massar
That's interesting. The other thing I wonder, Angela, and something that we've talked about with you before, I mean, are there ever really any guarantees that President Putin won't try to invade Ukraine or another country again? And how does the outcome of this negotiate, negotiation for an end to the war kind of determine the likelihood of that happening again?
- [06:25]
Dr. Angela Stent
So as President Zelensky, unfortunately for him, pointed out in the Oval Office when he then got the president, the vice president, very angry with him, Russia has violated every cease fire it signed with Ukraine, Ukraine certainly since the annexation of Crimea in 2014. And Russia has also violated every treaty it signed with Ukraine since its independence. So I think one has to be very skeptical. And this is, of course, why President Zelensky, again, unfortunately for him in the Oval Office, wanted to talk about security guarantees, because without very robust security guarantees, there's absolutely no reason to believe that Russia wouldn't try and invade Ukraine again. The best security guarantee we know would be Ukraine joining Naito. That's been taken off the cards now by the Trump administration. But it needs these guarantees. And the Europeans, the French, the British and other European countries have said they're willing to provide security guarantees, boots on the ground to be a stabilizing force, stabilization force once the war ends. But they say they need American backup for this. And that's something which the Trump administration has not committed itself to.
- [07:45]
Tim Stenovec
Angela, let's say this is the beginning of the end of the war, and it does end. What does Russia look like on the other side of this? Is is it stronger or weaker than it was? Is it more? Is Putin more emboldened than he was pre invasion?
- [08:02]
Carol Massar
Yes.
- [08:03]
Dr. Angela Stent
So what it looks like is, I mean, the economy is not in good shape and it's going to get worse the longer this war goes on for Putin. So if the war ends, that would obviously, if the sanctions are removed, which they would be if the war ends at some point, then that would be very beneficial for Putin. But, yes, he comes out of this looking stronger. He invaded another country unprovoked. And presumably, I mean, we have to see if Ukraine has to make territorial concessions to Russia, he will then, you know, have taken 20% of Ukraine. And unless there are these very robust security guarantees, he could invade again. And now he'll be in, you know, he'll be invited back to the United States. Maybe the Europeans won't want to deal with him for any time so soon, but Russia's actually strengthened its international position in many ways while it's been fighting this war.
- [09:01]
Carol Massar
But is there some credibility, Angela, in President Trump trying to create some kind of economic cooperation or more economic cooperation between the US And Russia to create a different future and relationship with Russia going forward? And is there some good to that?
- [09:20]
Dr. Angela Stent
Well, in the 1990s, there were a lot of American firms that were very active in Russia. Energy companies, large firms, small firms. They were making money and they were doing quite well. And yet the political relationship between the US And Russia was very difficult. There were a couple of high points after 9, 11, when the U.S. and Russia with Putin, you know, worked together in terms of the beginning of the US Campaign in Afghanistan. Also, I should point out that there were thousands of American business people in Ukraine when Russia invaded. That didn't stop Russia from invading. So, of course, there are arguments to build up economic ties with Russia. But I think history shows us, and even the experience of the last 30 years, Putin always likes to separate economics from politics. And you can have a good or a strong economic relationship with Russia. And it doesn't seem to have that much impact on what Russia does politically or militarily, particularly under Putin.
- [10:22]
Tim Stenovec
You know, I asked what Russia would look like after this, but what about Ukraine? Because this is a country that three years ago we were talking to you and so many other people thought this war would be over just in a matter of hours, a matter of days, a matter of weeks. But look what Ukraine has been able to do to defend itself. What does Ukraine look like on the other side?
- [10:41]
Dr. Angela Stent
You know, on the good side, Ukraine now has the strongest and largest army in Europe. It's developed very sophisticated tech, technical, technological capabilities. It's been using electronic warfare. It's much more sophisticated than that. On the other hand, of course, its economy has suffered greatly, and, you know, it's had cities and villages obliterated by the Russians. So it's going to need an enormous amount of economic assistance and investment, if it is to recover. It's also lost a large number of soldiers. We don't quite know. But I think for both Ukraine and Russia, it's in the hundreds of thousands. And, and it also has millions of Ukrainians are now living abroad because of the war. They need to come back and they need to help rebuild the country. So economically, it's, it's, you know, in very poor shape. Even though other aspects, militarily, it's better off, but it will still be in a very fragile state at the end of the war.
- [11:46]
Carol Massar
Angela, you know, I was thinking about this a lot, like, what is the relationship between President Putin and President Trump? And I know we've talked with you about this before. And is Russia great power? Is it a great economy? You already referenced that. It wasn't their businesses, their alliances, their leadership. I mean, is it an economic and political model to emulate?
- [12:07]
Dr. Angela Stent
Well, it's not an economic model to emulate because it's essentially a hydrocarbon exporter. It doesn't have a very modern economy. You know, I always, when I teach my students, I say, tell me how many products in your home are from China and how many from Russia? Well, you know the answer to that. There are many of them from China. They're none from Russia, So earns a lot of money by selling hydrocarbons. But it doesn't have really a modern economy. It has a shrinking population. It has a major demographic problem, and it's had that ever since the fall of the Soviet Union and even before that. But militarily, it is a superpower, and that's in history. Russia has always been a great power because of its military, not because of its economy. And so it is, you know, I think, the largest nuclear power. The US And Russia, the two nuclear superpowers, the Russians have more warheads than we do. And so in that sense, it's a great power. And because of the hydrogen carbons and, of course, its location, it's the largest country in the world sitting astride Europe and Asia. So it has many strong endowments, but it economically, it really does need to modernize.
- [13:20]
Tim Stenovec
Hey, just 30 seconds left. Dr. Sten. It does raise the question, though, how the rest of the world keeps Putin in check, given the strength of its military and given his ambitions. How does that happen?
- [13:33]
Dr. Angela Stent
Well, we know that he has ambitions that go beyond Ukraine, and that's why the Europeans are very worried about it. And now you see France offering, you know, a nuclear umbrella to the rest of Europe. You see some European countries, even Poland, talking about should they acquire nuclear weapons. So this is one of the impacts of this, of this brutal war is at least country countries in Europe reminding themselves that they're still vulnerable to a potential Russian invasion. And some of them are talking about the possibility of a war with Russia within the next five years.
- [14:06]
Carol Massar
Bottom line, 10 seconds. This is a good, this is a good move. This is some progress on the call.
- [14:14]
Dr. Angela Stent
Yes, it is. I mean, hopefully if they implement this for a ceasefire, of course it's a good move.
- [14:19]
Carol Massar
All right, my guess is we're going to be coming back to you a lot more still on this and we so appreciate that we can. Angela, thank you so much. Dr. Angela Stant, senior fellow at the Brookings Institution, a member of the Council on Foreign Relations, and her book author of Putin's World. Be sure to check it out.
- [14:35]
Tim Stenovec
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from 2 to 5pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [14:49]
Carol Massar
A new book out notes, when the hammer and sickle came down in late 1991, Russia's new market opened for business. From banking to breweries, sectors emerged out of nowhere. And for the next three decades, this proto capitalism transformed Russian society. But as this book also notes in its own words, everything changed once Russia launched the full scale invasion of Ukraine in 2022.
- [15:13]
Tim Stenovec
Someone with distinct knowledge in the dynamics between Russia and the companies that do business there is Charles Hecker. Charles is a journalist and risk management consultant. He's also the author of the new book Zero Sum the Arc of International Business in Russia. Charles has spent 40 years working in the Soviet Union. And in Russia, I think right now.
- [15:32]
Charles Hecker
Somewhere we're between sort of two steps forward, one step back, or maybe even one step forward, two steps back. I mean, from President Trump and President Zelensky, we can at least draw the conclusion that the two presidents are once again sort of speaking regularly, speaking normally, and without the anger and the hostility that we saw of a couple of weeks ago that really set this process back dramatically. So we have a bit of a victory there in that the two presidents are communicating. As far as the actual peace agreement or the ceasefire between Russia and Ukraine, both sides are already accusing each other of violating that. So there were attacks allegedly from Russia on Ukrainian energy installations. And Russia says that Ukraine is doing the exact same thing back.
- [16:14]
Carol Massar
So when Steve Witkoff says he believes that, I think he said to some extent, well, some of these attacks were already happening or I don't know. I guess the devil and timing is always in the detail. The devil's in the details. He believes that President Putin is acting in good faith. Your knowledge of President Putin and how he does things, do you, do you think he is?
- [16:37]
Charles Hecker
Well, one of President Trump's predecessors in the White House, when talking about Russia, always said, trust but verify. And, you know, there hasn't been a whole lot of verification going on lately. And what we do know is that President Putin has in the past gone back on his word when it comes to holding off on attacking Ukraine.
- [16:55]
Carol Massar
Right.
- [16:55]
Charles Hecker
And so with the fact that the timing, as you suggest, is still incredibly vague on when this is all going to start and when the cease fire will kick off, we still don't know, first of all, what President Putin's word is and when or if he'll start to obey it.
- [17:10]
Tim Stenovec
So I just want to get your thoughts about where we are in your view, if this actually is the beginning of the end of the war. You mentioned that both sides are already not agreeing to what had been agreed upon, but you also said that it's good news that the US Is speaking to both of these parties. Do you actually think this is the beginning of the end of the war?
- [17:32]
Charles Hecker
It might be. I mean, I think if this is the beginning of the end of the war, it's going to take a lot longer than any of us anticipate and a lot longer than any of the actors in these negotiations are telling us. I mean, we know, look at the strategic driver for Putin behind all of this is to keep fighting. So when he says that he's engaged in cease fire negotiations, when he says he's interested in a cease fire, he's really not being entirely genuine with his counterparties. Because really what Putin wants to do is to continue to press on. He thinks he's winning on the ground in Ukraine. His progress has been a little bit better than previously. And right now, there's very little incentive for him to stop.
- [18:11]
Tim Stenovec
So that's the perfect place to sort of transition to business in Russia over the last few decades, something that you've been writing about and that you know a lot about. If we were talking to you three years ago, we'd be talking to you about all the American businesses that have announced that they've stopped doing business in Russia as a result of Russia's invasion of Ukraine. I think a lot of people then would have thought this is going to have huge economic consequences and effects on the country and might cause Russia to think twice about what it's doing militarily. That obviously didn't happen, right?
- [18:45]
Charles Hecker
Well, exactly right. I mean, if we were talking about this precisely three years ago, what we would be talking about is absolute sort of streams of Western executives stampeding towards Moscow's airports, among other places, trying to get out of the country. And this was exactly three years ago, a time when international offices, European and American offices, were physically emptying out of expats and of Russian employees who were desperate to leave the country because the full scale invasion was, was kicking off. And so if we look at it now, you know, the US Business community is looking at the negotiations between Trump and Putin and they sense that sanctions relief is in the air. And there are active conversations now in the companies that left Russia three years ago about going back. Not everyone will do it, but everyone is talking about it.
- [19:43]
Carol Massar
Yet, you know, you write or you note that in like one generation, we saw Russia open its doors and then close them again. So, I mean, what ultimately rules in Russia? Is it money? Is it business? Is it politics?
- [19:57]
Charles Hecker
Well, you're right. I mean, the last generation in Russia was one of the biggest experiments in global capitalism ever. You had this emerging market opening up during a time when companies were, were globalizing rapidly and everyone rushed in to Russia following the collapse of the Soviet Union. You know, for companies to go back, it is partially all about money, but it's about that and a lot more. It's about a change to the risk reward equation. And in the 1990s, just about anything that you did in Russia, almost any kind of Western business activity made money. It was really like, you know, plant any seed and it would grow.
- [20:37]
Carol Massar
Right.
- [20:38]
Charles Hecker
That is no longer the case. Companies that want to go back to Russia or are thinking about going back are not going back to the Russia of the 1990s, not going back to the real go go days of the 2000. It's very different now.
- [20:51]
Carol Massar
Well, talk to us about this, and this is something Tim and I talked about with Angela Stent, who has, understands Putin, understands Russia too. And I said, you know, what is today's Russia? What is Putin's Russia? Is it a great power? Is it a great economy? You know, what are their businesses, their alliances? Like, what do we need to know? And some of it, I asked facetiously, when I said, is it a great economy? But I mean, what is it today?
- [21:13]
Charles Hecker
Well, you know, there were a lot of people, not Angela Stent, who's one of my idols in the field of Soviet and Russian studies from way back in the day, you know, There were people that said that Russia was a gas station with nukes. And you know, that is a vast underestimation of Russia's role in the global economy. And we understood that when Russian gas and oil and all of that came under sanctions, or oil came under sanctions, and when the Europeans tried to chase gas out of their pipelines, we understood what happened to prices. We also understood what happened on global grain markets after the start of the full scale invasion. So Russia is a lot more plugged into the global economy than we ever thought, and perhaps even more than we think, particularly in the area of precious metals, rare earth metals, critical minerals. These are places where Russia has significant strategic deposits that are useful not just to Russia, but to everybody else around the world. So, you know, there is reason to go back in. There are companies that are thinking about it. But look, the war lasted a lot longer and is lasting a lot longer than anybody ever thought. And enormous changes have taken place on the ground, politically and economically in Russia. And if you're thinking of going about going back, you have to be thinking, well, what kind of Russia is waiting for us?
- [22:28]
Tim Stenovec
Well, what kind of, what did Russian businesses, Charles, do to replace American businesses and Western businesses that left. We all saw stories of McDonald's, for example, pulling out. That was such a prominent example because of what happened in the. When the fall of the Soviet Union happened and that first McDonald's opened up in Russia, but we saw this sort of Russian version of McDonald's come in. What has been, what has happened on the ground since American and Western businesses have left?
- [22:55]
Charles Hecker
Yeah, a lot of different things have happened since. Since Western and American companies left. And that is that you're absolutely right to point out that a number of significant western brands, including McDonald's, which everybody loves to look at when we're talking about Russia, but other companies like Starbucks, for example, had a massive presence in Russia. And they're gone too. They've been taken over by local Russian owners. They were sold when those two companies decided that they wanted out. And so what those companies have been doing has been winning, growing and maintaining market share and trying to sort of run businesses. And right now it's very difficult to understand whether the current owners of McDonald's or Starbucks or any of the other companies that left, you know, how keen they are to sell those back to the people that they bought them for just a couple of years ago. The other thing that's happened on the market is that companies from non sanctioning countries have moved in, and that includes countries like Turkey And China, they've taken over market share, they've moved in, and it's going to be difficult for returning companies to dislodge them.
- [24:02]
Tim Stenovec
So it raises the question about initially why the companies left during the invasion. In your view, was it because it was seen as not ethical to do business and support a country that had this invasion. Was it because of American regulations or was it an actual business decision?
- [24:22]
Charles Hecker
There were a few different decisions. In some cases, sanctions made it illegal to do business in Russia, and there were companies that just had to get out because there was no way that they could transact in Russia at all without violating sanctions. Other companies looked at the reputational risk of doing business in Russia, and you had significant external pressure on these companies, saying, why are you still in Russia? You're paying taxes to the Russian government. The Russian government is using that money to buy weapons to kill Ukrainians. So what are you doing there? Companies felt that reputational pressure and they left. And then there were companies that for whom it was easier to leave because maybe Russia wasn't that big a market. Maybe they weren't doing all that well there anyway, and why bother with all of the difficulty of doing business in this kind of environment? And so they also packed up and left.
- [25:11]
Carol Massar
You know, I think we think that introduce capitalism, introduce Western businesses, whether it's China, whether it's Russia, that these countries, these places will become liberal democracies. And here we are again, seeing that it really doesn't work. So is it not going to work if we continue to what's. What's wrong with our thinking or why is it not working?
- [25:36]
Charles Hecker
One of the lessons that we have to have learned on exiting Russia is that the assumption we made, just as you said, Carol, the assumption that we made on the way in, that engaging with Russia economically and commercially and sending Big Macs to Russia would transform the country somehow into a mirror image of the west or into at least a sort of liberal democracy that we could get along with. And, you know, I think we've learned over the years, whether we're talking about Russia or we're talking about China, for example, or other countries that, you know, eating Big Macs doesn't make you a democrat, you know, little D Democrat. And so, you know, if companies once again go back to Russia and think, look, you know, we're going to be. Be on the ground and we're going to give this a chance, and we think that Russia may reform, that's a mistaken assumption. And, you know, we realize that perhaps a little bit too slowly I don't want to be too judgmental about our experience in Russia over the past generation, but it was a flawed assumption.
- [26:37]
Carol Massar
So President Trump seems to want to create economic ties between the US And Russia. Some say, you know, the diplomacy or lack thereof or whatever you want to call it that we've had between the US And Russia and Russia. And President Putin so far has not created a better relationship. So maybe this could, is that even possible with your knowledge of President Putin, how he runs the country, his type of leadership? I mean, is there some good that could come out of this?
- [27:07]
Charles Hecker
I think President Putin is going to remain resolutely hostile to the west going.
- [27:12]
Carol Massar
Forward, United States included.
- [27:13]
Charles Hecker
Yes, absolutely. The west, you know, capital W. Yeah, bold face letters. He is going to remain hostile to the west and the United States and he will see them as enemy nations and he will take a very skeptical view towards companies that come from those countries. And so he certainly doesn't believe that allowing Western companies into Russia or American companies into Russia is, you know, an overwhelming good for the Russian economy or certainly for the Russian political system. And that's something that companies are going to have to manage and overcome and be extremely acutely aware of if or when they go back in.
- [27:52]
Carol Massar
Tim, I know you had a quick one last question real quick.
- [27:54]
Tim Stenovec
Yeah, Charles, would you recommend that companies just don't go back to Russia?
- [28:02]
Charles Hecker
Companies are going to make up their minds about this based on how they view the risk reward decision. And look, there are companies out there, in fact, for example, the energy sector in natural resources, in metals and minerals and mining that have really robust appetites for risk and cast iron stomachs for managing it. They will probably go back and they're going to do it carefully. They've done this before. They're doing business in places like Iraq right now. So they'll go back to Russia and we'll see how they survive.
- [28:31]
Carol Massar
Listen, so love this. Hope we can get you back real soon because we know that this is going to be certainly an ongoing and kind of story that will probably go on for a while. Charles, thank you so much. Good luck with the book.
- [28:41]
Charles Hecker
It's a pleasure. Thank you.
- [28:42]
Carol Massar
A pleasure is ours as well. Charles Heck, our journalist, risk management consultant. Book just out. It is called Zero Sum the Arc of International Business in Russia.
- [28:54]
Tim Stenovec
This is the Bloomberg Businessweek podcast.
- [28:57]
Verizon Business Advertiser
Listen live each weekday starting at 2pm Eastern on Apple CarPlay and Android Auto.
- [29:02]
Tim Stenovec
With the Bloomberg Business app. You can also listen live on Amazon.
- [29:06]
Verizon Business Advertiser
Alexa from our flagship New York station.
- [29:08]
Tim Stenovec
Just say Alexa, play Bloomberg 1130 and.
- [29:13]
Carol Massar
Splashdown Crew 9 back on Earth. Yes, indeed, everybody. Yes. Those two NASA astronauts whose planned short trip to space became one that left them in orbit for nine months. Yes. You know, they are back on planet Earth, Butch Willmore and Suni Williams coming home to United States States, though that is a bit differently or different I should say. It's got a new president, a new Republican controlled Congress and a world that some would say is being turned upside down by new US policies. Now, those two NASA astronauts also returned to Earth in a SpaceX craft which is of course, you know, SpaceX a part of the Elon Musk empire. So too is Doge, the entity that is tasked with an ever widening mission to seemingly remake the US Government and that includes cuts in spending and in the federal workforce. So we thought it was time to do kind of a check on all things Elon and Tesla and Space X and Doge and more. To do that we have back with us Bloomberg Businessweek columnist Max Chaffkin. He is co host of the Elon in podcast, author of the Contrarian, Peter Thiel and Silicon Valley's Pursuit of Power. Max is here in our Bloomberg Interactive Broker studio, of course, Tim out there in our San Francisco bureau. Max, good to have you here. We were going on, well, you know, we find we were thinking about Elon today and like he's in this kind of funny spot. He finally brings these two astronauts that I know NASA doesn't want us to use the word stranded, but we're stranded up in space. They were safe. But Space X brings him home. At the same time, you've got a judge, a federal judge ruling that must likely exercise unconstitutional power in the Trump administration's efforts to shutter the US Agency that manages foreign aid. I mean, there's so much going on, the highs and lows that seem to be Elon Musk, how do you, because you continually have to kind of put it all together, makes sense. How do you put it all together?
- [31:01]
Verizon Business Advertiser
Well, I think, of course, this SpaceX mission is a, is a demonstration of all that that company has achieved. They are the main way that America gets its astronauts to and from and cargo to and from the International Space Station. There was this, there is this competing effort that the Boeing craft that is going slower and Elon Musk, as you said, stepping in. Now, I think the problem here is Musk, I think in his mind, and when you look at like some of the things he said about what he wants out of the Trump administration, he just sort of expects Trump to essentially give a bunch More contracts to Space X. I think in these court rulings and in some of the pushback, we're seeing political push pushback as well as pushback from consumers, like some of this, these vandal, then, you know, vandalistic acts on Tesla stores and so on. We're seeing that that may prove to be more difficult than I think maybe the Elon Musk, you know, super fans would have believed.
- [32:03]
Tim Stenovec
What do you mean by that, Max? How is that more difficult?
- [32:05]
Verizon Business Advertiser
Well, I think there's political. Well, sort of a couple of things. One is we're starting to see sustained political opposition not just to Donald Trump, right, whose poll numbers have dipped a little bit in most polls since he took office, but also, but even more so to Elon Musk. Elon Musk has gone from being a very popular public figure to being an unpopular public figure, even, even more unpopular than Donald Trump or like a typical Republican politician. And so, so that is going to be a challenge. That's a challenge because, you know, Democrats and Republicans are consumers. And if people are generally mad at Elon Musk, they may not buy Teslas. We're seeing that show up in some of the Tesla sales data. I think it's also a chall if we're talking about some sort of effort to hand SpaceX another contract. Now, of course, NASA did use SpaceX to bring these astronauts back, but as you said, Carol, they didn't really have an option. And what Elon Musk is going to be talking about and is talking about to some extent are contracts where there are other options. So this rural broadband program where Musk and his supporters would very much like the emphasis to go away from fiber optic to satellite, that is going to have political opposition. We're seeing opposition in Italy where Giorgio Maloney, who's of course a Musk ally, there have been, there's been talk of giving Space X Starlink, the satellite division of Space X, a big contract. We're seeing opposition there. And then I think you're even starting to see little hints of opposition to, you know, what you might see as a more transactional thing in the US where if Elon Musk were to get what he wants, he would get like a giant Mars contract. Now, I think that is going to be, as I said, it's going to be difficult. They're going to be senators, congressmen who are, who, who are in the States where these other legacy aerospace contractors are, who are not going to be happy about that.
- [33:56]
Tim Stenovec
There's also business challenges too, Max, and I'm curious about your thoughts on this. We got news this week that show me is actually raising its target for a number of vehicles that it plans to deliver this year. BYD comes out with this five minute charging essentially equivalent of going into a gas station, filling up your gas tank. Tesla doesn't have that technology. In the US you can't get these Chinese autos, but around the world you certainly can. It seems like there are some real business realities that the Tesla empire is running into.
- [34:25]
Verizon Business Advertiser
Yes, I mean we would be talking about these challenges even if the politics were working perfectly for Elon Musk. You talked about China. We've seen Chinese automakers make huge strides. And you're right, Tesla is protected to some extent because these Chinese companies are not in the US but Tesla gets about 40% of its sales from China, so, so this is like a direct threat to its business. Also these companies are operating in other regions where Tesla, you know, collects a percentage of its sales. So, so even today this is a problem. And then the other thing you're seeing is a lot of these Chinese automakers are offering basically their own versions of what Tesla calls full self driving. This is a advanced driver assistance software suite and they're effectively giving this software away. The Tesla bulls had been expecting that they would be able to charge huge sums of money for, for Tesla, full self driving right now cost about 100 bucks a month now. And when Musk has talked about, he said it's going to get even more expensive because if you could, you know, take a nap in your car, that would be worth even more what we're now, I think there are reasons to be skeptical. I wouldn't, you know, if you're driving down the highway right now, I wouldn't take any sleeping pills and trust the, the Tesla. But, but that said, even if that technology were to pan out, even if it were to do exactly what Elon Musk says it's going to do, there are potentially other companies doing the same thing for less money. And that's a challenge.
- [35:47]
Carol Massar
I feel like the million, billion, trillion dollar question though, Max, is is there information that Elon Musk is getting working within the government that is going to give him this incredible advantage or access to data? I think about, you know, the AI, you know, startup that he's involved in and like all this stuff, is there stuff or do we not even know that he is getting access, that even if he leaves tomorrow that he has an advantage in some way?
- [36:13]
Verizon Business Advertiser
I mean he has, I think that in theory, yes, you know, AI systems rely on huge Sums of data. If Elon Musk were able to like funnel a bunch of, if data were to leak from the federal government into Grok, you know, Elon Musk's large language model, that could in theory help grok, but I think there are a number of reasons, not that I don't know that that's the most likely scenario or the most concerning scenario. There would be ethical issues, legal issues, issues of personal privacy. And also I just think that the political advantages he has by being close to Trump probably vastly outweigh whatever incremental data. There are a lot of data sets, a lot of financial data sets out there. I do think some of these agencies that are being, you know, as you know, the Trump administration and supporters see it reformed, as its critics would say gutted, were agencies that were investigating Elon Musk were holding Elon Musk companies backs. You know, X Elon Musk's, you know, the new name for Twitter, has been trying to launch these payment services, effectively mobile banking through the company that you use to send memes. And the CFPB has been one of the barriers there, like CFPB has been. It's in the courts now, but the Trump administration is essentially attempting to shut it down. Nitsa, the highway regulators, they have been investigating Tesla. There are ways in which Musk could sort of clear a path in terms from a regulatory perspective. But again, all these things are going to create political consequences, downstream political consequences. And, and that those, it's going to be primarily Democrats. That's who we're seeing protesting in front of Tesla stores. But I would not be surprised if you also see some Republicans with concerns about this stuff as well.
- [38:06]
Tim Stenovec
Well, it seems like now, Max, the courts are really, as Carol mentioned, not reined in. But they've certainly said that some of what Elon Musk has done is, is not allowed, especially with regard to usaid. You know, there are questions whether or not these employees can actually go back to work and if they're going to be reinstated full time. We don't know the answer to that yet. But are the courts reining him in?
- [38:33]
Verizon Business Advertiser
Yes, the courts are reining in Doge and or at least maybe creating situation where the, the what Musk is doing is not going to have a huge long term effect or even that it may end up costing more money. Because of course if you have to, if you lay a bunch of people off, you spend a bunch of people, spend a bunch of money laying people off and then you have to spend a bunch of money bringing them back online. That that ends up costing more money. So there is a. There is a way in which some of the, Some. Some of this stuff that's working its way through the courts ends up sort of blunting the impact of Doge. I mean, it's important to remember Musk is not the only actor within the Trump administration who's. Or within the Republican Party who's trying to rein in parts of the federal government. And so. So Trump is trying to do this as well. Congress will certainly, I think, at least attempt to put some of this into law. So there will be, you know, Musk will have some support. It's not just going to be Musk versus the courts.
- [39:29]
Carol Massar
Should we assume that as long as Elon's deep pockets are around to support the Republicans and Trump's doings, that he's going to stick around? I think there's a lot of discussion about, you know, when does the president get tired of Elon? Right.
- [39:44]
Verizon Business Advertiser
Yes, that's the conventional wisdom is at some point Trump will get tired of seeing Elon Musk's, you know, face, you know, on TV or newspapers, hearing people talk about it when, when they should be talking about all the great things he's done, get frustrated, he'll get sort of iced out. I think that is not very likely. And it's for the exact reason you just said, Carol. Musk is a major donor to Republican campaigns. He will be a major force by his own account anyway, in the midterm elections. And really, he is a very important ally for President Trump, because if Trump is trying to do something and there's opposition from Congress, he has this very, very, very, very wealthy friend, Elon Musk, who, Who can fund a primary challenge. The other thing is, we saw this infomercial at the White House where Trump talked about all the wonderful things about Tesla and in fact, bought a Tesla on the South Lawn of the White House. Potentially very helpful to Tesla. That seemed to be the goal. Around the same time, the New York Times reported that Musk had promised to put $100 million into Trump's own packs. So Musk is still donating money on top of the roughly 300 million he put into the 2024 cycle. He said he's going to put more into his own PACs. He, in fact, is funding this Wisconsin State Supreme Court race.
- [41:04]
Dr. Angela Stent
Right?
- [41:04]
Verizon Business Advertiser
There are going to be more races, and he's giving Trump money. I mean, he is a very, very important ally. I think the real question is, does Musk get tired of this? Does Musk start to wonder Do I really want to have a day to day role and how much is that day to day role hurting my companies? Because you look at the stock price, investors are not super happy.
- [41:22]
Carol Massar
All right. Always a lot going on and so appreciate it. Keeps us busy. I'm always confused how many more headlines is it Trump versus like we get in any given day? Max Chapkin, thank you so much. Columnist with Bloomberg Business. We co host of the Elon Inc. Podcast which you can find wherever you get your podcast. Also on the bloomberg and@bloomberg.com and Max, also the author of the Contrarian Peter Thiel and Silicon Valley's book Pursuit of Powermax. Thank you.
- [41:46]
Tim Stenovec
You're listening to the Bloomberg Businessweek podcast. Catch us live weekday afternoons from 2 to 5pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [42:00]
Carol Massar
Well, Carnival reported earnings and the stock at one point sold off more than 6% on the news. This after a key quarterly earnings forecast trailed estimates, adding to worries that a travel slow slowdown has spread to even the most robust corner of the market. However, Carnival did boost full year profit expectations, beating Wall Street's view, suggesting any slowdown may prove transitory. Do you want to point out too, the stock is down about 15% so far here in 2025? Let's get some context and more detail around the company's quarterly update. Great to have back with us, Josh Weinstein. He's president, CEO and chief climate officer of Carnival Corporation and he joins us from Carnival's headquarters in Miami. Josh, great to be talking with you. How are you?
- [42:43]
Josh Weinstein
I'm very well, thank you. How are you doing?
- [42:45]
Carol Massar
Doing okay. Trying to keep up with everything that's coming at us on a daily basis. And I kind of want to start there because there is a lot coming at anyone who's running a big company like yours today, whether it's out of Washington, whether it's out of how the consumer is feeling. How would you describe the cruise business and how it compares from your last quarterly update? What has changed at all? Because I know you have been very optimistic and it seems like you're still optimistic about the business based on the releases.
- [43:14]
Josh Weinstein
Yeah, yeah, absolutely. So the thing that's changed from December to today is, well, we just completed our first quarter and instead of yields being up 4.7% which is what we guided to, they were up 7.3%. And so, so clearly things went very, very well in the first quarter. Consumers love to cruise and we've got eight brands that are purposely tied to particular demographics, particular national markets. And it serves us very, very well. And so what we see is enough strength in that first quarter that we can raise our yields for the year, for our, for our full year guidance. And that's basically saying that we're, we're content to keep 4% plus yields for, for the remaining 3/4 of the year, despite the fact that there is, you know, geopolitical and macroeconomic uncertainty, which certainly wasn't on the radar when we came up with our guidance to begin with in December.
- [44:09]
Carol Massar
And yet investors seem to be at least initially disappointed over your second quarter EBITDA forecast. Your forecast was 1.32 billion in the second quarter. Analysts had expected 1.35 billion. Should they be disappointed?
- [44:25]
Josh Weinstein
You know what, I guess I'll answer by saying our December guidance was basically saying we're going to be about, was it a buck 70, give or take for the year on EPS. We just came out with guidance at buck 83. We outperformed on revenue yields onboard, Onboard trends are really, really healthy with our, with our consumers. So I would argue that we should be higher than where we were in December since our results are better than where we were in December. But that's really up to, up to the street. Our job is to deliver and hopefully over deliver, which is what we did in the first quarter.
- [44:59]
Tim Stenovec
So, Josh, let's talk a little bit more about that consumer because in the press release you noted that Carnival is not completely immune from heightened macroeconomic and geopolitical volatility. And you're still taking up earnings expectations for the year. You remain on track to have another stellar year across the entire brand of cruises. Why are we hearing then from airlines that consumers are pulling back? Why are we not seeing that in your business?
- [45:24]
Josh Weinstein
Well, I think there's a couple of things to, to, to differentiate. First of all, airlines aren't just for holidays. Airlines are business travel. It is holidays. It's conferences, it's government travel. We are really holidays. We are, we are vacation. So, so we're in a, we're in a different bucket than where, than where airlines are. You know, we came in to 2025, the best book position we've ever been in at higher prices. We came out at the end of the first quarter still being in line with, with record occupancy percentage and prices still nicely higher. We, we're, we're 80% booked for the year. And so we have relatively limited inventory to sell when it comes to 2025. At the same time, our, our guests and Our brands aren't just focused on in year. You know, we just came out of the first quarter, the wave period, which is considered the traditional big push for, for selling. And we set a record for the most volume we've ever done during wave for future years out. So people aren't just thinking about the short term, they're thinking about the long term, which is exactly what we're doing as a company.
- [46:30]
Tim Stenovec
But are you noticing any change in the tone of the bookings, the pace of the bookings, or perhaps even people canceling because of their own uncertainty? I understand there's this difference between discretionary spend and, and business spend, but after all, discretionary is discretionary and that's often the first thing to go if people are feeling uncertain.
- [46:46]
Josh Weinstein
Yeah, you know, we haven't seen any noticeable change in trends on cancellations. Certainly, as we mentioned on the call, you know, there were ups and downs over the first quarter. There's ups and downs all the time. But we, we got through our period exactly at pretty much the highest point that you can get at, at least for us, in our history. And we feel, we feel good about the position that that puts us in. Like I said, onboard spending, you know, is up about 10% year over year in the first quarter. That's an acceleration of year over year performance versus where we were in the fourth quarter and at least into the first couple of weeks of March with cruises that have ended, we really haven't seen a slowdown in that consumer behavior, that onboard spending. And so, you know, at the end of the day, people in good times and bad times, they take holiday, they take a break, they need a break. You could argue in bad times, they need that break even more than they do in the good times. And that's what cruising is. It's a break. It's a way to relax, to get away from things, enjoy time with friends and family. That's what people pay for now. And when you line up cruise versus other vacation alternatives, frustrating as it is for me as a CEO of a cruise company, we're a great value. And the fact is, if people are getting concerned, if there's uncertainty, if there's noise in the background, people are searching for more value for their money. And that's exactly what we do. So it plays very well into our strength.
- [48:09]
Carol Massar
So just for the record, I could go on a cruise for about a month right now because I need a break. But having love to have you.
- [48:15]
Josh Weinstein
We'd love to have you.
- [48:16]
Carol Massar
Having said that, what about in terms of pricing? Are you Guys able to maintain pricing. Nothing changing in that regard either for the first quarter or even for the outlook for the second quarter.
- [48:29]
Josh Weinstein
Yeah, you know, so, so like I said, the first quarter, you know, our yields year over year were up over 7%. And over a two year period, we're talking about 24% higher yields for the first quarter. When we look at the rest of the year, QS2 through 4, we're projecting a little bit over 4% yield improvement year over year for that, for that nine month period, remainder of the year. So, you know, look, it's hard going, right? It's not like anything is easy. And we got to work hard, our brands work hard to make that become a reality. And they do it through good revenue management techniques, through the great advertising that they're doing, and then ultimately delivering onboard experiences that people want to pay for. And then they get off of our ships and they tell their friends and family how amazing it is and we get more.
- [49:15]
Carol Massar
Hey, one of the things we wanted to ask you is something that in late February, the US Commerce Secretary, Howard Lutnick, he made some comments about how US Based cruise companies. Josh. Should be paying taxes even on ships that are registered abroad. We saw your stock, along with everybody in the major cruise space, sell off on his words. Even though analysts indicated the worry may be overblown, they said, we've heard this before over the years. Is it overblown? Are you talking with the Trump administration about this? And if there was a US Registration change, what would that mean for you guys?
- [49:47]
Josh Weinstein
So clearly we're operating in the confines of US Law, as well we should. Shipping, international shipping is based on very specific tax regimes that are set up in the US and all over the world. And effectively it's based on reciprocity. So we feel like we're in a good place, we're doing what we should be doing. Having said that, anything out of the administration, including Secretary Lutnick, we certainly take seriously and we're working hard to understand what the concerns are and how we can address them, if any. There's really nothing, there's nothing to report on from my perspective as far as, you know, what that means or where things could be going. But we'll, we'll, we'll stay on our guard and do whatever we need to do to, to make sure we're staying on the right side of, of policy.
- [50:33]
Tim Stenovec
Josh, why don't you register in the US Is it regulatory reasons? Is it tax reasons? Is it labor reasons? Is it all of the above? Why don't you register in the U.S.
- [50:44]
Josh Weinstein
Yeah, it's just not that simple. You don't just take a ship and all of a sudden you can't just switch to US Registry. It's just not that simple. And really, it's a, it's a, it's a people to go to school for classes for this.
- [50:57]
Carol Massar
Right.
- [50:57]
Josh Weinstein
About international shipping and what, what it means, how it works. And it's been in place for much longer than I've been alive. And so, you know, we can, we can do a separate session on that. But, but suffice it to say, it's a regime that is, that is well founded and it's where we are right now.
- [51:16]
Carol Massar
All right, so it's not something that we should think about. I mean, it can be done though, right?
- [51:23]
Josh Weinstein
What, what is the it in terms.
- [51:25]
Carol Massar
Of registering in the United States?
- [51:28]
Josh Weinstein
It's honestly not that simple. Based on how US Law works. It's just not that simple.
- [51:33]
Carol Massar
Okay, would that be a conversation, though, then, to have with the Trump administration, Josh, and say, listen, guys, if it was simpler, I mean, they're all about making things simpler. Right? Efficient. Is there a conversation to be had?
- [51:46]
Josh Weinstein
We're happy to talk to the administration, truly.
- [51:48]
Carol Massar
Okay. Okay. Hey, listen, one of the things we wanted to talk to you about in a big way, and I've seen it firsthand, is the island destinations that you guys have. And it seems to be a continued, you know, move for you guys in expansion. You open Celebration Key this July. This is in Grand Bahama Island. How do these island destinations, we've talked to you about it, but it continues to be something we find really interesting. How does it fit into the North American cruise strategy and how important it is? I always think about to the top line, the profitability picture.
- [52:18]
Josh Weinstein
Yeah. So. So for us, what we're doing with Celebration Key, which opens in July, it's a bit of a first for us. Even though we have a wonderful footprint around the Caribbean, we really, we've built and created these destinations really as a service to our brands and something that's supportive of and really supplemental to what brands are doing and leading with the cruise experience that makes them so loved. What we're doing with Celebration Cay, which doesn't even exist yet, and yet it's captivated the audience and captivated the imagination of Carnival cruisers and others, is we want to also lead with destination as a driver of consideration of a driver for people saying, I need to go on Carnival Cruise Line because I'll get to go to Celebration Key or because I'll get to go to Relax away Half Moon Cay because it's the only way to get there. And so we believe that there's a tremendous amount of untapped value there in revenue generation as well as the fact that these destinations are built close to the United States. Hence we consume less fuel in order to get there, which saves money, is obviously good for the planet.
- [53:25]
Carol Massar
Hey, listen, 20 seconds left here. What is your most popular destination? Where do most people want to go and what kind of trip?
- [53:31]
Josh Weinstein
Well, we carry 13 million people last year. They want, they want to go to a lot of places. I'd say if you're going to ask me what's my top that I've ever been to, I got to say you got to go on a cruise to Alaska and you got to go with Princess Holland America or Carnival because they do it in an amazing way. And Cunard for those who are looking for the, for the luxury end. But if you want to see the great state, the only way to do it is with a great brand that can take you on both sea and with our land experiences because we've got hotels and motor coaches and glass domed rail cars and you name it, we got it up in Alaska.
- [54:01]
Carol Massar
I just want to go somewhere where I get a cocktail with like a little umbrella in it. I just, I'm that we also serve.
- [54:06]
Josh Weinstein
Cocktails with umbrellas when we go to Alaska.
- [54:09]
Carol Massar
Josh, thank you so much. Always appreciate the time you give us. Be well, be well. Josh Weinstein, President, CEO and Chief Climate Officer of Carnival Corporation, joining us from Carnival's headquarters in Miami.
- [54:25]
Tim Stenovec
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from 2 to 5pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [54:39]
Carol Massar
Harvard University this past week announced that students whose families earn $200,000 or less annually will be able to attend the college tuition free, while at the same time, some of America's most prestigious colleges are issuing bonds at a record pace.
- [54:55]
Tim Stenovec
As public opinion on higher education continues to sour and the Trump administration threatens huge spending cuts, American universities are facing some serious challenges.
- [55:04]
Carol Massar
Bloomberg Businessweek editor Brad Stone sat down with some university presidents to hear how they are navigating a potential funding crisis while also selling the value of a degree. He talked with Tim and Bloomberg's Emily Graffeo.
- [55:16]
Verizon Business Advertiser
We actually interviewed five. We brought together five university presidents at the end of February. And that was one week before the federal government, before the Trump administration threatened to withdraw $400 million in funding from Columbia University. So yes, in some ways the timing was great because there was this, these, these clouds were on the horizon. In other ways, this, this publishing, this package on higher education has, is like trying to jump onto a moving horse. Things are moving very quickly.
- [55:45]
Tim Stenovec
Yeah, I mean the news is happening very quick. The decision makers you spoke to at these top universities, they were public and private schools, they were large schools and small schools, they were liberal arts schools and state schools. It really runs the gamut. Who are these people?
- [56:01]
Verizon Business Advertiser
And they're the brave few. We put out the call far and wide. And look, I mean, this is a tough time for university presidents, maybe the hardest job in America right now. Not only the pre Trump factors of rising tuition costs, dropping male enrollment, the ambiguity around test scores, protests in 23 and 24, and then the kind of post Trump factors, the specter of an endowment tax, NIH cutting funding, and now the threats around DEI and anti Semitism. But really it's the administration viewing universities as a source of elitism and something of the enemy. So yes, we got the presidents of New York University, Marist University, Grinnell College, the University of Colorado at Boulder, and the University of Rhode island all together in a room room in New York City to hash out these issues.
- [56:51]
Carol Massar
Brad, I found it interesting that this word crisis came up multiple times in your article. I mean, how much of the job of being a college president is now a job of crisis management?
- [57:07]
Verizon Business Advertiser
I don't think historically it was one. I mean, I think this was, you know, this used to be the statesman role. I don't know if we could say it was ever particularly easy. But the thing that has really happened, I think probably starting with October 7, 2023 and the attack on Israel from Hamas, there have been a set of constituencies at universities that are all whose interests are all diametrically kind of opposed. You have students, particularly at some of these elite universities, particularly at my alma mater Columbia, inheriting the mantle of student activism and protest. And then you have alumni that are very much against this on campus activism, that feel like the college community experience has been co. Opted. You've got the federal government now with its agenda, saying that the campus has moved too far left. These are places of liberal thought and anti conservative thought. Take those arguments or leave them. But if you're a university president right now, you're kind of buffeted by all these different wins. And I think it was on display when the presidents of Harvard and Yale and eventually Columbia were asked to testify in 2024 and basically ended up all losing their Jobs, because there's really not an easy way out of all this conflict.
- [58:26]
Tim Stenovec
Yeah, it's been. It's been pretty remarkable to watch. And I guess when you explain it that way, it makes sense as to why university presidents were a little reticent to get in a room and speak with the editor of Bloomberg Businessweek. It goes beyond, though, protests, Brad, because there are questions you raise in here about shifting demographics, things that have been playing out over the long term, but also recently of funding losses for these schools and the importance of these universities providing employees and leaders for the next generation of American business businesses. And there seems to be this tension right now that's playing out with maybe a lack of understanding of the importance of, of that federal funding going into training those people who make the next innovations.
- [59:11]
Verizon Business Advertiser
And that's where I think the Roundtable really, really was an excellent exercise. I mean, they came together and they really made the argument that universities matter, that these are drivers of scientific and medical research, that this is a magnet bringing the best and brightest from around the world to the United States and making the case for knowledge, for research, and saying this strengthens the United States and why would you ever kneecap it? And, you know, so, yes, there was also the private industry argument, Justin Schwartz, the chancellor of University of Colorado at Boulder, saying that business needs a supply, human capital, supply chain, and that is the role of universities. And then if you undermine that, talent gets cut, and you handicap the US in its direct competition with China and other countries. They also made the point that, you know, the US Is already kind of lagging a little bit. We used to lead in patents, in the number of research papers published. We're not number one anymore. So they're making the argument this should be a time of reinvestment and not curtailing for political reasons. The financial foundation of these universities.
- [60:21]
Carol Massar
You asked a very short and pointed question. Is college too expensive? What did the presidents have to say to that question?
- [60:29]
Verizon Business Advertiser
I think they all agreed, you know, that there are investments that they have had to make to keep up with rising expenses and the quality of life for students. They also make the point, maybe somewhat sheepishly, that this is still a great roi, that college is one of the best investments a young person can make. But they talked about alternative things they're trying to do, like no loan financing for students and making sure their students aren't graduating with a load of debt that weighs them down in their careers. But I think. I think it's sort of an unsolved problem, and it's a, you know, Interesting to me that these are the best minds in the country and the challenge of rising tuition is one that is yet to be solved.
- [61:14]
Tim Stenovec
Linda Mills, when asked about the increasing number of people questioning the value of college, she referred to the college as a whole and universities as a whole as an industry. And I'm wondering how you view that word. Is higher education an industry?
- [61:28]
Verizon Business Advertiser
So, yes, Linda Mills is the president of nyu. It is an industry, right? I mean, these are massive, massive institutions with incredible endowments and investment arms and particularly in New York City, great real estate holdings. And they are corporations unto themselves. They operate with a very unusual set of circumstances. They're generally nonprofit institutions. And as we've been really finding out, they get an enormous amount of their income from the federal government. And I think in some cases it's almost like one, one third. And so they're also, they have, they serve a high profile public purpose and they're quite politically vulnerable in this environment. And so I think what we're seeing now is a lot of these universities really try to get on the right side of the Trump administration, as many companies are doing. Perhaps that's the best evidence that it is an industry. Just like many companies, companies are scrubbing their websites and their, all their public communication of the phrase dei. You know, a lot of universities are doing that as well.
- [62:32]
Carol Massar
Brad, what were the presidents hopeful about? They are obviously working with, you know, the future generations of America. What jumped out to you in their responses?
- [62:41]
Verizon Business Advertiser
Yeah, we did, we did ask that. But look, I'm not going to pull any punches here. I think that, you know, this is a tough time for them. You know, there were things that we talked to them about like declining male enrollment that they, you know, it's 60, 40 on some college campuses that they just don't have an answer to right now. They say, you know, these problems are starting in early education, that men lack role models right now. You know, the political situation is becoming increasingly difficult for them. You know, we did ask them what they were hopeful about. The fact that you, you know, they still have, you know, dynamic campuses and tens of thousands of students engaged in, you know, cancer research and finding the next drug and understanding, you know, maternal health and all those topics that are so important that that keeps them going. But, you know, by, by and large, their attention has, have had to be diverted to some of these much more difficult issues.
- [63:39]
Tim Stenovec
Brad Stone, he's the, the editor of Bloomberg Businessweek. Check out everything in Bloomberg Businessweek@Bloomberg.com Businessweek and of course on the Bloomberg terminal, you're listening to and watching Bloomberg Businessweek. This is the Bloomberg Businessweek podcast.
- [63:55]
Verizon Business Advertiser
Listen live each weekday starting at 2pm Eastern on Apple CarPlay and Android Auto.
- [64:01]
Tim Stenovec
With the Bloomberg Business app. You can also listen live on Amazon.
- [64:04]
Verizon Business Advertiser
Alexa from our flagship New York station.
- [64:07]
Tim Stenovec
Just say Alexa, play Bloomberg 1130.
- [64:10]
Carol Massar
As we just heard, university presidents are finding college degrees a bit of a tough sell. Throw on top of that skyrocketing tuition costs and artificial intelligence in the classroom, and college will likely not be the same in the years to come.
- [64:23]
Tim Stenovec
Kathleen Dulaski has thoughts on the future of college. She's founder of the nonprofit Education Design Lab. She's also the author of the book who Needs College Anymore? Imagining a Future Where Degrees Won't Matter.
- [64:35]
I
The problem even for 18 year olds right now is that they really see still a kind of college or bust narrative going on in the country. We say college is too expensive, it's maybe not worth it. And so we have a lot of people, you know, enrollment is down in the degree form and it's dropped pretty quite a lot since 2010. It's starting to, it's starting to shift up a little bit. But what's interesting is the, the way that enrollment is improving right now is because of short term certificates and other forms of enrollment that colleges are starting to offer. They're competing with the boot camps and apprenticeships that are having trouble getting to scale. And colleges themselves are starting to offer alternatives. And so I wrote the book really to raise the argument that we need to better fund and remove the stigmas from alternatives to College because only 38% of Americans have a four year degree. And yet we tell all of our kids, you know, that they have to either go into debt or figure out how to get that four year degree. That's starting to change. It hasn't changed yet. So I still, you know, I think you have to give a lot of caveats when you're giving advice today.
- [65:53]
Verizon Business Advertiser
So can you speak a bit more to those alternatives in terms of, we think about a traditional four year university.
- [65:58]
Charles Hecker
Or maybe a two year community college.
- [65:59]
Verizon Business Advertiser
Can you just dive a bit deeper.
- [66:01]
Carol Massar
Into what those alternatives could look like.
- [66:02]
Verizon Business Advertiser
And what that could mean, like for.
- [66:03]
Carol Massar
Could mean for the future?
- [66:05]
I
Absolutely. And I describe in the book that probably the two most successful alternatives right now, I mean if you're looking to go for a professional pathway career, would be apprenticeships and industry certifications. And the problem with these two wonderful alternatives to a four year degree is that they are not, not evenly available like you can find them in some Cities and states in some professions, but not, not widely. But they are being looked to as the models that we need to create, that we need to create more of. And either colleges can develop and offer them or you know, independent organizations. A lot of entrepreneurs have been, you know, looking in these spaces too. But we have to, we have to get off this idea that, that the government should only fund the degree programs for people who are going, you know, at least half time into a degree program. That's how the funding follows you.
- [67:03]
Tim Stenovec
Now, how disruptive do you think AI is going to be?
- [67:06]
I
That's a great question. There's already reports coming out that AI is starting to impinge on and shrink the number of entry level white collar jobs. Right. Because expertise that you can, you know, use ChatGPT or other, other options to, to try to get answers to questions that may not be your realm of expertise, those that it tends to wipe out an entry level white collar job, you know, that doesn't, that doesn't require a physical interaction. And so we're already seeing some of that. New reports are coming out. But on the flip side, for a college student or a learner or a job applicant, there's also, they're also able to use AI to find out about more jobs, to help them write their resume, to potentially learn, learn the bits of expertise that they need to even sound good in their job interview. So, you know, it's a, there's a, there's a positive and negative side to AI from the standpoint of, of, of the future of work. But you know, probably the nature of jobs and the speed at which they'll change will continue to accelerate.
- [68:16]
Verizon Business Advertiser
I really want to just keep an eye on. There's been this conversation about AI picking up plagiarism. What is your standpoint as a teacher as to how to actually figure out.
- [68:26]
Carol Massar
If students are plagiarizing using AI?
- [68:28]
Verizon Business Advertiser
But there's also been some situations where.
- [68:31]
Carol Massar
I falsely detects plagiarism from students.
- [68:34]
I
Falsely detects? Yeah, I have heard a little bit, a little bit about that. There are apps that, that, you know, usually most colleges and schools are, are, you know, where you can, you know, run, you run the kids papers through these, these applications? Yes, I mean, I think that's happening maybe a little bit. But I mean you can usually tell without the, without the apps whether, whether the students came up with the argument.
- [69:00]
Tim Stenovec
Right.
- [69:00]
I
Not necessarily the supporting facts. I mean, I don't, I don't hear my colleagues having much trouble in that regard. But, but yeah, I mean you can, you can go back to the student and use prompts, checking prompts to figure that out.
- [69:14]
Verizon Business Advertiser
We have a lot of students who.
- [69:15]
Carol Massar
Are sitting here, you know, everyone's looking at chatbots.
- [69:18]
Verizon Business Advertiser
But it's also a really good tool for teachers and people in the education.
- [69:22]
Carol Massar
Field to utilize AI to better, you know, educate.
- [69:25]
Verizon Business Advertiser
What has been your take on AI and just what the implications can be.
- [69:29]
Carol Massar
From a teaching perspective?
- [69:32]
I
Yeah, I teach at the college level at George Mason University here in Virginia, and I, you know, I've tried to. It's interesting. We haven't been given a lot of, you know, policies about how we're supposed to, you know, whether. Whether we're supposed to allow students to use it to write their papers, for example. And so a lot of us are just kind of, you know, we're just kind of forging into our own territory and deciding how to use it. And I've. I have been treating it as my friend, right, to say to. To have students use it to basically, like, pressure test the ideas that we might come up with in the classroom. I teach design thinking, and so I have the students use it to pressure test the ideas that we do live in the classroom, and then they're supposed to go and see what does the rest of the landscape say about this point. That's one example. But it does mean that we can't really assign papers in the way that we used to. We have to figure out how to projectize things that create unique responses from the students or require unique responses from the students. And that's been really difficult, but exhilarating, really.
- [70:38]
Tim Stenovec
Yeah, I mean, I just. I might be old or a Luddite or.
- [70:44]
Carol Massar
I don't know. I don't know.
- [70:46]
Tim Stenovec
I just. I worry about what this does to critical thinking. I mean, I remember when I was in college and I would be working on a paper and I would have some sort of breakthrough with the thesis, and it would have required me to sort of go through all the notes and really come to a conclusion and distill an argument. And I don't. And I learned so much by doing that. And it required me exercising a part of my brain that I don't know would need to be exercised if I had chatgpt.
- [71:15]
I
Right. I mean, it's the same. I mean, I'm old enough to remember when the calculator came out and we were worried about, you know, that doing the math problem, and if you're not doing it yourself, like, do you learn? Do you learn enough? And I think the, you know, the argument now is okay, the calculator. Like, yes, we don't have to know long division anymore, but you still, you know, so you have to use math in different, you know, you have to learn it in different ways and, or learn the applied version of it. So what I try and do in my classroom is force those aha moments that you had writing your paper. I force them in a live setting in a, you know, where we're creatively problem solving together. And that, that does help. I mean, it doesn't work for a history paper, but it works if you take the history lesson and try to apply it to a real world situation that you have your students work on together because they want, you know, this today. They want, they want school or college to be an engaging experience, not a, you know, not if it's something they can read and learn or even write a paper about. They, they want to be able to get that at the, you know, drop of a hat. So learning has to become a whole lot more of an engagement practice experience for students to even care or stay engaged. That's what I'm seeing in my classroom and many of my colleagues too.
- [72:33]
Tim Stenovec
Kathleen, we got to get you back, we got to go everywhere with you at the end of our program and we do really appreciate it. Kathleen Delasky, she's the founder of the Education Design Lab. This is the Bloomberg Business Week podcast.
- [72:50]
Verizon Business Advertiser
Listen live each weekday starting at 2pm Eastern on Apple CarPlay and Android Auto.
- [72:55]
Tim Stenovec
With Bloomberg Business app. You can also listen live on Amazon.
- [72:58]
Verizon Business Advertiser
Alexa from our flagship New York station.
- [73:01]
Tim Stenovec
Just say Alexa, play Bloomberg 1130.
- [73:05]
Carol Massar
Well, our next guest is a self taught cook who you may know from Instagram Shred Happens, where he has more than 4 million followers. It's there that he's documented his journey from being out of shape and unhealthy to losing over 100 pounds which he attributes to cooking and eating healthy food. Now he's got a food company and a cookbook. Arash Hashemi is a creator and the co founder of Kazen Food company which makes low carb but high protein rice and pasta. Pasta. Pasta. It's like I'm from New Jersey or something, which I am. Pasta. He's also the author of the new cookbook Shred Happen. So Easy, so good. He joins us here in the Bloomberg Interactive Broker Studio. A beautiful book. Did I say your food company correctly?
- [73:45]
Arash Hashemi
Kaizen.
- [73:46]
Carol Massar
Yes, Kaizen. I had a feeling that. How are you? I'm doing great. How are you? I'm good. Good. Everybody always has a journey. I feel like to get to something. This is your first cookbook, your first book. Tell us a little bit about the journey and how you did get to this.
- [74:01]
Arash Hashemi
Yeah, well, I mean, the story starts from a young age. My parents immigrated to this country, and I was always focused on success and chasing a better life and making them proud. And so for the majority of my life, I was really professionally driven, and I was doing really, really great in the corporate world. But in late 2017, I just kind of looked at my wife, Madeleine. I'd always struggled with my weight, and at one point, I was over 330 pounds. I was pre diabetic. I had high cholesterol, high triglycerides, and.
- [74:35]
Carol Massar
If you're listening on radio, you're in, like. You don't look like somebody who is £300.
- [74:38]
Arash Hashemi
Oh, thank you.
- [74:39]
Carol Massar
But anyway, go ahead. Go ahead.
- [74:41]
Arash Hashemi
Yeah. And so I knew I needed to do something to kind of change things up, otherwise this was going to get too late. And so I looked at my wife Madeleine, at the time, and we decided that, you know, I was going to leave my corporate career. It wasn't an easy transition, but we made certain sacrifices. We adjusted our. Our lifestyle, and I set out to. To kind of change the direction of my life and refocus my relationship with food.
- [75:05]
Tim Stenovec
How were you able to do it? Arash, as Carol mentioned, everybody has different stories. Yeah, but you did it through cooking yourself, through eating differently. Yeah, we talk a lot about GLP1s on the program and the business opportunity there and the way people are using them. But how specifically were you able to do this?
- [75:27]
Arash Hashemi
Yeah, look, I think similar to many Americans, I was eating the wrong foods and the wrong quantities, and over time, that just kind of, you know, I couldn't outrun that. I always had a gym membership. I had personal trainers. But, you know, you can very quickly, you know, eat the 500 calories that you're going to burn with an hour at the gym. And so for me, I really needed to shape, focus on making foods that I was actually excited about eating. You know, I tried every single diet out there, from Weight Watchers, Jenny Craig, the Zone, Atkins, you name it, I've tried them all. And, you know, I think they. They're great for people, depending on whatever their circumstances are. For me, they felt a little bit more restrictive. I wasn't really excited about what.
- [76:09]
Carol Massar
You want to count points?
- [76:11]
Arash Hashemi
Hey, that could be useful.
- [76:12]
Carol Massar
Not judging. I'm not judging, but.
- [76:14]
Arash Hashemi
And I did for a while, and.
- [76:15]
Carol Massar
Actually, it has worked for some people, right?
- [76:18]
Arash Hashemi
Absolutely. And fun fact, I was on Weight Watchers for a number of years. And I always remember, you know, there was a 4pm weekly weigh ins. And so starting Tuesday was always trying to figure out how do I game the system so I can actually, you know, show a loss for the week. And so. But look, I think for me it was really, you know, all those diets, while they didn't work in many respects, they did work in the sense that they helped me understand what I needed and for me was I love food and I wanted it to be an adventure. I wanted to be mentally stimulated as I was eating. I really enjoy the process of food. And so, you know, I had to figure out how to do that for myself.
- [76:54]
Carol Massar
I think what's interesting too is your book is so much like Mediterranean food.
- [76:59]
Arash Hashemi
Yeah.
- [77:00]
Carol Massar
And was that because that's what kind of got you to a healthier place, a better weight, just a better kind of relationship and existence with food.
- [77:09]
Arash Hashemi
Yeah, I think the big thing for me was, you know, I'm Persian and so we use a lot of spices in our, in our home cooking and in our culture. And so those played a huge part in adding flavor to the different types of meals that I was making for myself. You know, we use a lot of fresh herbs that add just a burst of flavor in every bite, you know, whether that's fresh mint, dill, parsley, tarragon. And so, you know, I started kind of experimenting with those things. And the great thing is they also don't have a lot of calories. And so, you know, I was adding a ton of those to my meals. I was using a lot of citrus and I was able to get a lot of flavor out of those very simple changes. And that got me excited about eating. It was more calorically friendly. And, you know, kind of started from there.
- [77:51]
Tim Stenovec
Did you have to be really precise about measuring out ingredients, counting calories and really. Or could you be more, could you be less formal about it? Could you be more relaxed about it?
- [78:05]
Arash Hashemi
I am, I'm much more relaxed now. But at the beginning, yeah, I absolutely had to take inventory of what I was eating. And one of the first things that I did was actually I started just documenting what I was eating just, just on a sheet of paper at the time because I didn't really realize how many times throughout the day I was actually reaching for something. And for me, those little nibbles, those little bites, licks, the snacking really caught up to me. And that was really an opportunity in of itself for me. I was cutting out about 500 calories a day just by kind of monitoring that or if I knew that I had to actually, you know, write something down, it gave me a second to kind of just pause and question, do I really want to be eating this right now? Is this the right choice? And that helped me be much more mindful because before that I was just eating without really any sort of, you know, concern for the ramifications or the consequences.
- [78:53]
Tim Stenovec
How does physical activity play a part in your journey?
- [78:57]
Arash Hashemi
For me, it's played a role. I'd say the bigger thing for me has been changing the dynamic with food and eating foods that keep me satiated, keep me full, deliver a ton of protein with the right levels of fiber to kind of keep me going throughout the day. One of the biggest, bigger things that I set out to do at the beginning of my journey was, you know, I didn't really know how to swim or run really a mile, but, you know, I said, hey, I'm going to do a half Ironman and train for a triathlon. And so, you know, that was an interesting process. And so I actually ran in two half marathons. I completed one. I ran in two half marathons, completely completed two half triathlons or half Ironmans, and then did a full marathon as well. But for me, the bigger opportunity was really around food because, you know, as they say, you know, you really can't outrun a bad diet. And that's where I really struggled previously.
- [79:48]
Carol Massar
How did you think about. I mean, I think there are a ton of cookbooks out there, as you know, but how do you like the balance of creating something that's really tasty and appetizing and. And kind of attractive looking?
- [80:03]
Arash Hashemi
Yeah.
- [80:03]
Carol Massar
And then. But not making it so complicated that people, like, forget this, you know. Let me just order in. So, like, how did you think about it when you put this book together?
- [80:11]
Arash Hashemi
Yeah, I think for me, the biggest thing, again, was I, you know, through all the diets that I had done, you know, they were either boring. And so I knew I didn't want to do the typical, you know, brown rice, boiled chicken and broccoli because I always. That led to me kind of falling off because I was always chasing excitement.
- [80:26]
Carol Massar
Yeah.
- [80:26]
Arash Hashemi
And so for me, the biggest thing was finding ways to incorporate flavor and simple ways to doing, you know, to what I'm eating in order to be able to kind of be excited about it, be mentally stimulated and look forward to eating. And so, you know, I achieve that through the spices, through the herbs. I also have a full chapter of sauces because that's really, what helps elevate really any dish. And so as long as you've got different flavors and textures going on and colors in your meal. Because we also eat with our eyes. And so for me, the biggest thing was taking time to really plate things instead of just standing up, putting something together and eating at the kitchen counter. For me, actually taking the time to plate it up in a beautiful way really made a difference.
- [81:05]
Carol Massar
I just have to tell you, if Tim was here in studio, this is when he usually breaks out his sandwich. Right. Or it would have been. Right, it would have been probably the break beforehand. Tim.
- [81:13]
Tim Stenovec
Yeah, I got. Don't worry. I got my banana and my carrots right here.
- [81:17]
Carol Massar
It's usually a full on sandwich.
- [81:20]
Charles Hecker
But anyway, I would.
- [81:22]
Tim Stenovec
Hey, I do want to ask you. I'm getting a, an urgent email from a colleague, Emily Griffeo. She anchored with me yesterday when Carol was out. I'm so jealous. I miss Shred happens by one day. Omg. I like his content a lot. I've made his recipes.
- [81:37]
Arash Hashemi
Oh, that's amazing.
- [81:38]
Tim Stenovec
Raises. It raises the question, though, about this. It's not a side hustle for you anymore. This is. This is what you're doing now?
- [81:45]
Arash Hashemi
Yeah, it was corporate finance and accounting.
- [81:47]
Josh Weinstein
You.
- [81:47]
Tim Stenovec
So you said you scaled back on your Lifestyle back in 2017 as a result of your health. Yeah. You made some adjustments to your lifestyle. Have you been able to offset and more the salary you earned in the corporate world by doing what you're doing now?
- [82:01]
Arash Hashemi
Yeah, I have. And I think, look, in the corporate world, obviously it's a salary. You don't have overhead, you don't have expenses. You're not investing for the future. So, you know, it took me a while. When I initially set out, I was begging companies to send me, you know, a free jar of peanut butter. And many of them wouldn't. And, you know, it took me almost two, three years to monetize on the content that I was making, you know, and I was in corporate finance before at a pretty large company, GE at the time. And so, you know, when I left, it was a sizable gap in our income. We put our house on the market. I started renting my car out on Turo and app. I started selling and flipping things on ebay. So I was trying to figure out how to make it work for me. At the beginning, it wasn't really about making money. It was really about changing my life. And a few years in, I was able to to completely offset the income that I was making with my corporate job. Now I did create a high protein, low carb pasta and rice company, Kaizen. And so to develop that, you know, that required a lot of capital. And so at some point I did have to go back to the corporate world to kind of fund the R and D of that. But yeah, it was tough. But now I've been able to completely offset it.
- [83:11]
Carol Massar
Just got about 30 seconds. So what's your focus to build that Kaizen or what's your next step?
- [83:16]
Arash Hashemi
Yeah, I think, you know, continue to share content. You know, nothing makes me prouder than seeing families around the world enjoy my meals and make my recipes. And with Kaizen, we're able to deliver people a high protein, low carb pasta. So we're going to continue on that trend and hopefully allow people to eat a healthier version of their favorite meal without the calories, without the carbs, with much more protein.
- [83:34]
Carol Massar
I'm starving. If you were cooking for Tim and me, what would you cook tonight?
- [83:36]
Arash Hashemi
Middle Eastern chicken and rice bowl, no question.
- [83:39]
Carol Massar
All right, deal, Deal, deal. We get dessert too.
- [83:41]
Arash Hashemi
I see there's a whipped Greek fat whip, whipped Greek yogurt and berries. It's delicious.
- [83:47]
Carol Massar
Oh my God, I'm starving. Good luck. Stay in touch. Love to hear how things are going. Marissa Shemi, creator and co founder of Cousin food company. And of course his new book, Shred Happens so easily. Easy, so good. 100 plus protein packed Mediterranean favorites with a low carb twist. Good luck. All right, you're listening and watching Bloomberg Business Week.
- [84:05]
Dr. Angela Stent
This is Bloomberg.
- [84:10]
Tim Stenovec
This is the Bloomberg Business Week podcast available on Apple, Spotify and anywhere else you get. Your podcasts listen live weekday afternoons from 2 to 5pm Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg terminal.