Bloomberg Businessweek Weekend: November 14th, 2025

Summary

Bloomberg Businessweek Weekend: November 14th, 2025

Hosts: Carol Massar & Tim Stenovec
Air Date: November 15, 2025

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Episode Overview

This episode of Bloomberg Businessweek Weekend takes listeners through major stories shaping the week in business, economics, and culture. The highlights include an in-depth look at the end of the record-breaking 43-day U.S. government shutdown, the pervasive reality and implications of the "K-shaped" American economy, conversations with industry leaders about business trends and challenges, health and food policy, as well as an investigation into the impact of social media algorithms on youth mental health. Later, the show travels to Provence with a regenerative wine producer.

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Key Segments and Insights

1. The Longest US Government Shutdown Ends

[03:26 – 11:18]
Guest: Josh Green, Bloomberg Businessweek National Correspondent

Key Points:

• The 43-day shutdown ended unexpectedly when eight Senate Democrats crossed party lines, sparking grassroots anger and confusion within the party.
• Grassroots Democrats (and some prominent Party leaders like Elizabeth Warren and Governor Gavin Newsom) criticized this as a failure, believing it gave Republicans a win and squandered Democratic leverage.
• The shutdown was less "blame game" than usual due to President Trump's distraction with personal projects (e.g., White House ballroom construction, parties), which led to diffuse messaging and accountability.
• There was notable political harm to Republicans as images of White House luxury events contrasted with stories of everyday Americans losing food stamp access.
• A potential long-term impact is the spotlight on rising ACA premiums, which, not addressed during the shutdown, may drive public pressure on Republicans when rates rise.
• While Democrats negotiated a procedural agreement to vote on extending Obamacare subsidies, it is expected to fail in a Republican-controlled Congress.
• Ultimately, the responsibility for resolving the fallout rests with the GOP:

  "Republicans control Congress, they control the White House. The buck stops with them." – Josh Green (11:09)

Memorable Quote:
"I think there's another, kind of quieter realist wing of the party that looked in the mirror and said, look, there's really no clear winning exit strategy. We've got to pull the plug at some time." – Josh Green [04:14]

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2. America’s K-Shaped Economy: Winners, Losers, and A Fading Dream

[12:16 – 21:16]
Guest: Peter Atwater, Financial Insights President & College of William & Mary Lecturer

Key Discussion Points:

• Atwater reflects on five years discussing the “K-shaped economy,” marked by a financial boom for the top and persistent, deepening struggle for those at the bottom.
• The “ladder” promising upward economic mobility is gone; U.S. is moving towards a “caste system” with entrenched disadvantage at the bottom.
• Consumer sentiment split: the affluent quickly regained confidence post-COVID, while the lower half has faced accumulating hardship in food, childcare, housing, and credit.
• The upper "K" segment is now tightly interwoven with financial markets, yielding overconfidence and fragility.
• The “meritocracy” no longer functions; with first-time homeownership occurring much later, wealth accumulation for younger generations has stalled.
• Urgent policy recommendations: policymakers must recognize widespread, bipartisan rage and address “stacked vulnerabilities” (education, healthcare, opportunity), not with handouts, but with expanded access to job training and real economic participation.
• Historical precedent warns:

  "When it becomes widespread, those with nothing to lose will gladly go after those with everything to lose." – Peter Atwater [17:59]

Memorable Quote:
"I would describe it, yeah, as a handful of folks who feel invulnerable in a mounting sea of despair." – Peter Atwater [13:30]

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3. Industry Health Check: Magna International’s CEO on Tariffs, Trade, and EVs

[24:11 – 34:50]
Guest: Swami Kotagiri, CEO, Magna International

Key Insights:

• Tariffs have added ~$200 million in annualized costs, but aggressive cost restructuring (across 40 divisions) and partnership with customers has offset most of the impact.
• Demand destruction was predicted but hasn't been as severe; North American car production volumes are stable (15–16 million units), with Magna’s growth coming from increased content per vehicle and diversification.
• North American trade tensions have strained but not broken the longstanding US-Canada auto supply chain; CEO remains optimistic for longer-term policy clarity.
• EV retrenchment (delays and cuts by major U.S. automakers) is a challenge in North America, but Magna’s global footprint (notably in China and Europe where EV adoption continues) and propulsion-agnostic products provide resilience.
• Signs of macroeconomic “stress” are visible, yet automotive demand appears robust because of high fleet age and normal inventories.

Notable Quote:
"It's definitely been strained, right? But... I’m still hopeful that policy is going to get to a point where it’s mutually beneficial to everyone." – Swami Kotagiri [30:22]

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4. Axon Enterprise: Growing Pains Amid Surging Value

[36:48 – 47:43]
Guest: Rick Smith, CEO, Axon Enterprise

Discussion Highlights:

• Despite a 3,300% run-up in share price since 2015, Axon’s latest results disappointed investors due to higher costs (tariffs, stock compensation) and two rapid acquisitions.
• Smith urges focus on long-term growth, not quarterly stock volatility; company continues investing in AI, cloud-based voice solutions, and sees strong bookings ahead.
• Axon’s core Taser business is mature in the U.S., but new products may unlock growth overseas, especially in Europe.
• Software/services now account for 61% of revenue – a flip from 2017 – and offer higher margins; the “magic” for customers is the integration of hardware and software.
• Addresses concerns over surveillance tech and responsible data use: Axon consults with an ethics advisory council and opts for open data sharing standards with competitors.
• On government partnerships: Axon enables local choice in data sharing, not imposing company standards on agencies.

Memorable Quote:
"If Instagram can figure out that I want a lawnmower before I know I want a lawnmower... it can figure out how not to send content that promotes suicide to children." – Rick Smith [60:14]

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5. Spotlight: The Dangers of Social Media Algorithms

[53:08 – 62:07]
Guests: Perry Peltz & Matt O’Neill, Directors/Producers, Can’t Look Away: The Case Against Social Media

Investigation Themes:

• Bloomberg Originals documentary exposes how social media algorithms drive engagement at the expense of youth mental health, fueling addiction, suicidal ideation, and dangerous behavior.
• Section 230 of the 1996 Communications Decency Act is central: it protects platforms from being held liable for user content, treating them as passive “bulletin boards.” But, say the filmmakers, algorithms are not neutral—they are “company-driven.”
• Legal innovation: Product liability law is being used to challenge platforms (rather than content liability), with early court progress allowing families' lawsuits to proceed against tech giants.
• International comparison: TikTok’s Chinese equivalent is much more restrictive, promoting educational content and enforcing usage shutoffs for kids, suggesting the U.S. could regulate differently if incentives changed.
• Urge to parents: Delay social media access until high school, keep communication open, and advocate for regulatory change.
• Peltz, drawing parallels with tobacco and opioid litigation, calls this crisis uniquely “cataclysmic”:

  "These companies are targeting our children, and that is different than what was happening in a lot of these other [crises]." – Perry Peltz [61:49]

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6. Ultra-Processed Foods and America’s Diet Crisis

[65:39 – 75:34]
Guest: Dr. Julia Wolfson, Associate Professor, Johns Hopkins Bloomberg School of Public Health

Key Takeaways:

• Government study: Ultra-processed foods account for 62% of calories in children's diets and 53% in adults.
• Ultra-processed foods are industrial products with ingredients and processes (extrusion, additives, sweeteners, emulsifiers) not found in home kitchens.
• The rise is driven by the demands for affordability, shelf stability, convenience, and mass marketing.
• FDA policy tweaks (e.g., food labeling, school meal standards) could help, but Dr. Wolfson warns that eliminating food assistance programs (SNAP) is counterproductive.
• Not all processed foods are equally concerning, but most supermarket bread, mass-produced pizza, and snack foods fit the “ultra-processed” label.
• Strategies for families include providing easy, fresh options, but the system’s deep incentives and convenience make broad change hard.
• Overconsumption of protein is also a risk—Americans already consume ample protein.

Quote:
"We have really dominated our food supply [with ultra-processed foods] for decades now. So it will be really difficult to make that switch at a large scale, but it's worth considering how we can do it." – Dr. Julia Wolfson [74:47]

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7. Living the Dream (Responsibly): Regenerative Wine in Provence

[82:48 – 94:54]
Guest: Stephen Cronk, Founder & CEO, Maison Mirabeau

Highlights:

• Cronk and his family left London sixteen years ago to found a Provence wine estate, now pioneering regenerative agriculture in French wine.
• The U.S. market, particularly California, is at the forefront of the regenerative wine movement; Mirabeau’s new One Day is the first regenerative certified French wine on U.S. shelves.
• Regenerative viticulture restores soil health, enhances biodiversity, and is being adopted at scale—growers are encouraged to convert one block to regenerative methods for one year.
• The cost is comparable or even favorable over time due to reduced need for external inputs; restored land rapidly yields more flavorful, nutritious crops.
• Cronk emphasizes that “basic” organic, especially monocultures, may still damage soil—regenerative organic is the gold standard, integrating crop diversity and natural processes.

Memorable Quote:
"Nature owes us no favors, but she'll come back if you create the right environment, wean yourself off synthetics, and get yourself back into [the] natural." – Stephen Cronk [89:39]

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Notable Quotes With Timestamps

• Josh Green on Dems ending the shutdown:
  "There's another, kind of quieter realist wing of the party that looked in the mirror and said, look, there's really no clear winning exit strategy. We've got to pull the plug at some time." [04:14]

• Peter Atwater on inequality:
  "I would describe it, yeah, as a handful of folks who feel invulnerable in a mounting sea of despair." [13:30]
  "When it becomes widespread, those with nothing to lose will gladly go after those with everything to lose." [17:59]

• Rick Smith on social media targeting & AI:
  "If Instagram can figure out that I want a lawnmower before I know I want a lawnmower... it can figure out how not to send content that promotes suicide to children." [60:14]

• Perry Peltz on the public health crisis:
  "These companies are targeting our children, and that is different than what was happening in a lot of these other [crises]." [61:49]

• Dr. Julia Wolfson on processed food:
  "If you look at that ingredient list and you see even one, but certainly a bunch of ingredients where you think, I don't know what that is... that's a signal. That's an ultra-processed food." [68:40]

• Stephen Cronk on regenerative farming:
  "Nature owes us no favors, but she'll come back if you create the right environment, wean yourself off synthetics, and get yourself back into [the] natural." [89:39]

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Timestamps for Major Segments

• [03:35] – Josh Green: The end of the government shutdown & political consequences
• [12:16] – Peter Atwater: The rise and consequences of the K-shaped economy
• [24:11] – Swami Kotagiri: The auto industry, tariffs, and technology transitions
• [36:48] – Rick Smith: Axon’s growth, products, and handling controversy
• [53:08] – Perry Peltz & Matt O’Neill: Social media's harms and legal responses
• [65:39] – Dr. Julia Wolfson: Ultra-processed food and American health
• [82:48] – Stephen Cronk: Regenerative wine and farming’s global future

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Tone & Language

The exchange between Massar and Stenovec is conversational, curious, and often self-reflective, creating a relatable atmosphere even during policy-heavy topics. Guests are engaged directly and thoughtfully, with hosts sharing personal anecdotes or questions that ground complex issues in everyday experience.

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Conclusion

This lively, information-packed episode spans the direct aftermath of a historic political impasse, sobering economic trends, evolving business resilience amid global trade shifts, the public health ramifications of diet and digital life, and ends on an uplifting note of sustainable entrepreneurship and environmental hope. Each segment is anchored in expert voices and practical detail, delivering nuanced context for listeners seeking to understand the people, policies, and trends shaping today’s economy and society.

Transcript

[Carol Massar]

Bloomberg businessweek is brought to you by Evolving Money, a podcast that explores how cryptocurrency is the next logical evolution of the financial system. Follow the podcast, which is sponsored by Coinbase. Wherever you get your audio programs. When you own your own business, you own every decision. Now own the card that rewards you for it. Chase Sapphire, Reserved for Business is a painful card that elevates your travel experience and offers premium benefits that can take your business to the next level. Sapphire, Reserved for business, offers 8x points on all purchases through Chase Travel, 3x points on social media and search engine advertising, airport lounge access, and more. With over $2,500 in annual value, it's the card that gives back all you put in. Learn [e-mail] ReserveBusiness Chase for Business make more of what's yours. Accounts subject to credit approval restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank, NA member FDIC in business, a thoughtful gift does more than say thank you. It recognizes achievement, builds loyalty and shows someone they are genuinely valued. With four imprint, you can choose from thousands of high quality products, apparel, drinkware, tech and more. Designed to leave a lasting impression and with expert support, dependable Service and their 360 degree guarantee, your gift will arrive exactly as intended, on time and on brand. Explore gifting with [e-mail] for Imprint for certain Bloomberg Audio Studios Podcasts Radio News.

[Tim Stenovec]

This is Bloomberg businessweek Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus global business, finance and tech news as it happens, the Bloomberg Business Week.

[Peter Atwater]

Daily Podcast with Carol Massar and Tim.

[Tim Stenovec]

Stenovec on Bloomberg Radio.

[Carol Massar]

Hi everyone. Welcome to the Bloomberg Businessweek Week Weekend podcast. This week, the longest recorded U.S. government shutdown finally came to an end after 43 days that included disrupted flights across the country and delayed food aid for millions. In fact, one in eight Americans, Congressional Democrats, eight of them in the Senate, crossed the aisle to end the federal shutdown, a move some cried as the Democrats caving to Republicans. We get into that a little later.

[Tim Stenovec]

On then as we await the first drop of US Government economic data as things get back to normal in Washington D.C. what's become normal in the US is a K shaped economy where those at the top are doing well and those at the bottom are not. And for those struggling Americans, they are already in recession. That's according to Peter Atwater, who started talking about the K shaped economy five years ago. He's the subject of a Bloomberg Big Take this week we're going to hear from him a little later this hour.

[Carol Massar]

Also, we get reads on the consumer, the business environment, the global economy and more as we catch up with a few members of the C Suite, including the CEO at Magna International.

[Tim Stenovec]

And plus, in our second hour, the case against social media and its dangerous algorithms determining which ultra processed foods are actually bad for you. Spoiler alert. It's most. And then Carol sips on some wine, the responsible way, courtesy of the CEO of Maison Mirabeau.

[Carol Massar]

Very nicely said, by the way.

[Tim Stenovec]

Thank you. One year of French.

[Carol Massar]

It's actually high school paid off.

[Tim Stenovec]

Well, thank you, miss Halsey.

[Carol Massar]

So sweet. All of that to come. We begin with Washington, the nation's capital and the longest government shutdown on record finally, finally coming to an end.

[Tim Stenovec]

Writing about the actions by some Democrats to give Republicans the votes to bring it all to an end, why the vote was surprising and why it wasn't for the Democrats is Josh Green, Bloomberg Businessweek national correspondent. Josh is the author of a couple books, including the New York Times bestseller Devil's Bargain, Steve Bannon, Donald Trump and the Storming of the Presidency. Democrats, Josh, crossing the aisle to end the shutdown. Was it a, quote, terrible mistake, as Senator Elizabeth Warren told reporters? Governor Gavin Newsom called it, quote, pathetic or is this smart ahead of the midterms? This is kind of a narrative that's emerging now. Republicans will own the ACA premiums going up. That'll affect a lot of their constituents. What's the chatter?

[Josh Green]

Well, I think the overwhelming sentiment at the Democratic grassroots is anger and confusion that, you know, Democrats who've just come off the sweeping election election victory, who polls showed were not being blamed for a shutdown that they in fact had caused. Why they would suddenly decide to throw in the towel without really much, much warning, I think has upset an awful lot of people, mostly at the grassroots level, but also from a lot of the politicians, especially ones like Gavin Newsom, who maybe have their eye on the White House and are especially attuned to grassroots sentiment. But I think that there's another kind of quieter realist wing of the party that looked in the mirror and said, look, there's really no clear winning exit strategy. We've got to pull the plug at some time. So let's do it now before things get really bad for federal workers, before the entire US Airline industry grinds to a halt, maybe on Thanksgiving weekend and just turn around and decided to kind of rip off the band aid. Now, that's caused a lot of anger, but it's not necessarily Clear that long term that this is going to be the wrong move.

[Carol Massar]

What's that, like, thinking or strategizing about? Like, okay, what party gets blamed? And, you know, I was thinking about this when I was on a TSA line amid the government shutdown, and I look up at those scream screens, and who do I see? Kristi Noem, you know, playing over and over on a loop, And I just wonder, the general public, like, who do they blame? And so was it. Was there a feeling that it was the Republican shutdown? Was it both the parties? How did, how was it playing out?

[Josh Green]

I mean, it's an interesting dynamic over the last, like, three or four government shutdowns. What's happened in pretty short order is that services start shutting down, national parks start shutting down, you have a problem with airlines. Everybody says, well, gee, who's to blame? And it's pretty clear whichever party shut down, the government gets blamed by the other party, because everybody in that party is on the same page. They can kind of point to the same bad guy. I think the tricky thing this time around was that President Trump didn't really seem to be all that interested in the shutdown for, like, the first two or three weeks. He was much more interested, interested in knocking down the east wing of the White House, building up his new ballroom. And so you had this kind of mixed message from Republicans where some Republicans in Congress were trying to run the ordinary playbook of blaming Democrats, but Trump wasn't really on that page, wasn't really doing that. And it's a much more interesting, exciting story to write about this grand new ballroom that's apparently going up in the White House. And so nobody really focused on who was to blame. And when things started going wrong, they just kind of naturally blame the president and the party that controls Congress.

[Carol Massar]

You know, Josh, I do wonder, like, did things like, you know, tearing down the ballroom, showing off a new marble bathroom at the White House, that the president has, having a great Gatsby party for Halloween.

[Rick Smith]

Exactly.

[Carol Massar]

That was really over the top, if you saw some of the images. And I'm not, I don't want to be political, but I do wonder. This is a president who said, like, I am here for you, and I'm going to take actions that are here for more Americans. That's, you know, at the same time, we're talking about one in eight who aren't going to get food stamps because of the government shutdown. So I'm just curious how that plays politically. Was that getting noticed, that kind of gap?

[Josh Green]

It definitely was. I think it does two things. I mean, going back to sort of that, you know, how a party deals with a shutdown. If all Republicans had been unified from day one, including President Trump, saying, look, the Democrats did this. It's their fault, blame them, I think things would have ended much earlier. But, like, as we said, that didn't happen. Trump was more concerned with other things. And when he did begin to get upset about the shutdown, instead of blaming Democrats, he started getting angry at Republicans and told him they ought to eliminate the filibuster, which would be another way to open the government. But it's not something that Republicans wanted to do. And so as this fight was going on, you do see these images on tv, on social media of, you know, the redecorations in the White House, of these glitzy parties at Mar a Lago. Meanwhile, you know, food stamps are being frozen. The White House is out saying, no, we don't want to pay these. During the government shutdown, Democrats and states are having to take them to court. So it really did create a political problem that polls show pretty clearly was hurting President Trump's approval rating and hurting Republicans in Congress. And that's one reason why Democratic, kind of grassroots and a lot of lawmakers were so upset that moderates in their caucus decided to pull the plug and end the shutdown early, because they didn't think it was hurting Democrats, they thought it was hurting their opponents.

[Tim Stenovec]

I think it was Mike Allen in Axios who wrote a commentary about how it could be a challenge for the Trump administration to present themselves as fighting for the little guy or fighting for the middle class or the working class if they're not focused on the ACA subsidies or on funding SNAP during this time. I wonder if that message will resonate with voters going into the midterms in 26.

[Josh Green]

Yeah, I think that's a really smart point. I think it might resonate even sooner. I did a BusinessWeek newsletter, just kind of my gloss on the shutdown and what was and what it was. What? And I do think that one of the things that Democrats accomplished, even though so many of them are unhappy about the way things ended, are they've added real salience to this issue of rising Obamacare premiums. Originally, Democrats said, we're only going to reopen the government if Trump and Republicans agree to fund these provisions that will help extend subsidies, keep insurance affordable. Republicans don't want to do that. They didn't do that. So even though Republicans or Democrats weren't able to win that as a concession to reopen the government. It's been on the front pages of newspapers. It's been in the news. I think the American public is very aware that these premiums are about to rise. And I think partly because of the spotlight that the shutdown shown on this issue, if and when those premiums do rise, the American people are largely going to blame Trump and Republicans. And essentially it's going to be up to them to kind of find the solution, which isn't exactly how Democrats wanted things to end. But it could turn out to be that public pressure in the event of these rising premiums actually does produce some sort of solution that Democrats could get behind.

[Carol Massar]

So, you know, Josh, when the Republicans and the Democrats that went over to the other side or basically, you know, broke away and got this Republican promise to vote on extending Obamacare insurance premium credits by mid December. So politically it will happen or could Republicans back out?

[Josh Green]

I think it's very unlikely to happen. I mean, Republicans have been adamant that they're not going to vote to support these things. You can have a vote, the vote will lose and that will probably be the end of it, at least in the short term. If the vote were to win in the Senate, it would go to the House. House is controlled by Republicans and they've said they might not even take it up. But eventually, if insurance premiums do go up and just ordinary people begin to react badly to that, including Republican districts, that could put pressure on Republicans and Trump to finally have to do something about it.

[Carol Massar]

And there's a record, right, of people of how they voted?

[Josh Green]

Absolutely. Yeah. And ultimately, look, Republicans control Congress, they control the White House. The buck stops with them. If there needs to be a solution, they're ultimately going to have to come through and deliver one.

[Tim Stenovec]

That was Josh Greene, Bloomberg Businessweek National Correspondent.

[Carol Massar]

Now with the government reopened this past week, all eyes now on the Bureau of Labor Statistics and other statistical agencies and when they will release key economic data. Some information on that, Tim, definitely started to come out throughout the past week about, you know, when and what we might be getting.

[Tim Stenovec]

In the absence of that data, we've relied on a lot of private data for reads on the US Economy. Meantime, we've also seen earnings and revenue growth for many US Companies, wealthy consumers shopping and US Consumer sentiment that tumbled to near the lowest on record as the government shutdown weighed on the economic outlook and high prices soured views about personal finances.

[Carol Massar]

It's that K shaped economy, right? Of some doing well and some not. I mean, just this past week, car loans have gone from the safest consumer credit products to among the riskiest over the last 15 years, as delinquencies rose more than 50%. 50%, driven by soaring car prices and rising interest rates. So that is one of the troubling signs, Tim, in this economy.

[Tim Stenovec]

Yeah, it's the K shaped economy that we've been talking about for years. Also talking about it for years, Peter Atwater, president of Financial Insights and adjunct lecturer of economics at the College of William and Mary, he started talking about the K shaped economy. That was during the pandemic.

[Carol Massar]

Long time, five years ago at least.

[Peter Atwater]

So, Carol, it's been more than five and a half years since I first started writing about the K shaped economy. And I think what's happened is that for those at the top, the financial markets have been extraordinary. Meanwhile, for those at the bottom, things have just continued to deteriorate and now compounded by the cumulative effect of inflation on particularly food. You referenced the car loan delinquencies, and that's another sign. And you know, I think that those at the bottom have this heavy weight, whether it's child care, education, housing, it feels, it feels mighty heavy to those at the bottom. And I think at this point, we really don't have a single economy in America. We have two very distinct experiences.

[Carol Massar]

So are we becoming, Peter, an economy, a country where there are a few rich people who are living in a poor country?

[Peter Atwater]

I would describe it, yeah, as a handful of folks who feel invulnerable in a mounting sea of despair.

[Tim Stenovec]

Hasn't it been like that for years, though? What's different about right now? I mean, I remember having the same discussion, not with the same data, but in graduate school in a class about how in the developing world you start to see economies such as this. And that was what the professor was arguing where we were headed in the U.S. it's been like this for quite some time.

[Peter Atwater]

The gap has existed, but not to this extreme. And remember, Tim, there used to be a sense that there was a ladder, a way to progress from the bottom up through the middle class and into the upper middle class and then into the truly wealthy. And for those at the bottom, that ladder's gone. There are no more rungs that enable them to go up. And I think we have fallen into more of a caste system that, to your point, looks less like the America that many were promised and more like a lot of the developed nations around the world.

[Carol Massar]

So when does it show up, Peter? Because those who are at the lower economic rung, if you will, when it comes to The US Economy are having, are having troubles. And so they're not going to Chipotle or they're not going to Carbon and a few other places. But when does this really start to show up in our economy, in the financial markets? Just curious.

[Peter Atwater]

So in terms of consumer sentiment, it showed up almost immediately after Covid. When those white collar workers were able to pivot to work from home, their confidence was restored. They also got boosts from monetary and fiscal policy. And for those at the bottom, those, those stimulus checks really just went through them to their lenders, to their landlords. And so this has been ongoing for a long time. And I wouldn't underestimate the compounding effect that time has for those at the bottom. And I think it's showing up in the affordability message that you're seeing now politically.

[Carol Massar]

All right, the other part I want to get to is ask you about is the upper part of the K. When you look at this economy, is it kind of fragile even perhaps potentially for those who are even wealthier in this economy?

[Peter Atwater]

I think so. And I think that what there's been lots of discussion about the circularity within the AI system.

[Carol Massar]

Right.

[Peter Atwater]

I think that circularity exists more broadly between the wealthy AI and you see that in first class travel. You see that in a lot of the, the luxury experiences. And we used to say that the, the economy is not the markets, but at the upper end, the markets and the economy are now indistinguishable and we need to appreciate the fragility of overconfident financial markets. If I look at the amount of speculation going on through options and the, the price to price to earnings multiples, there are lots of signs that this is a market that feels extraordinarily confident. And ironically that's where the fragility ultimately rests.

[Tim Stenovec]

What about this idea of the meritocracy or the idea that people actually in this day and age have a harder time moving in and out of social strata? The American dream is this idea that anyone can come to the United States and succeed regardless of where they start. You argue that that doesn't exist as much anymore. Why is that?

[Peter Atwater]

So wealth accumulation happens more slowly. You look at, for example, the fact that it now takes to age 40 to be a first time homebuyer. It wasn't that long ago when that age was 25. And so the wealth accumulation potential for this new generation is far less than the generation before, assuming that housing is a means for accumulating wealth. And so what you're seeing is particularly with things like child care and health care, the burden on those families starting out is substantially higher than the one certainly I experienced and likely the one you started with.

[Carol Massar]

All right, so how do we fix this? Because it does feel like you have three minutes. Peter Fix the problems that. Alice?

[Peter Atwater]

No, I think that policymakers need to be really attuned to this. I think they shouldn't ignore the message of affordability that came out of the New York mayoral election. What we're seeing is not a movement to, to the left as much as a movement down. And I think policymakers really don't appreciate how purple the bottom of our economy is, and it's increasingly purple with rage. So we need to address their shared vulnerability, their despair, because ultimately history shows that that when it becomes widespread, those with nothing to lose will gladly go after those with everything to lose.

[Tim Stenovec]

Do policymakers actually have the tools in a divided country to fix this?

[Peter Atwater]

I think they do. I think it requires them to recognize that it is in the best interest of both political parties to address this, because we know that anti establishment candidates become more popular, we know the progressive candidates become more popular. And so it behooves them to pay attention to this and to address it. And to be clear, those at the bottom are not looking for a handout. They're looking for a hand. They want to see job training. They want to see opportunities that allow them to move up, as we saw from the soybean farmers and the ranchers. They don't want a government handout. They want their products sold. They want to have a real meaningful purpose in this economy.

[Carol Massar]

Peter I'm thinking of the big take that you did with Sarah Holder that's on the Bloomberg right now. And I guess they were asking, she was asking along with Katerina Sareva, talking about this K shaped economy, not just being kind of the same thing as like measuring inequality. And I'm just thinking about a response that you gave and you said it's not just inequality in terms of an economic sense. It's inequality in multiple dimensions at once. Because for those at the bottom, they have scarcity in education, in health care, in childcare, in job opportunity. They have what you termed stacked vulnerability, where the economic piece is just one more thing. And at the same time, those at the top have an overabundance in everything. Power, money, influence. And so it's become very difficult for those at the bottom to ignore what's happening around them. It's also something that has accumulated over years. It feels like whether they were Republicans or Democrats in the White House are in charge in Congress. So is it going to take time for us to get this fixed or do the people like, I don't know. You know, I had a Brit say to me, you're a young nation, you're going to have some kind of uprising or revolution. Like, I don't know how do you. I understand policymakers going at this, but it seems like it's a big task.

[Peter Atwater]

Yeah, I think those at the top ignore the impatience at the bottom. Time moves very slowly when you lack confidence. And I also think that those at the top are largely blind to the human experience at the bottom. And at the same time, those at the bottom are all too aware of the abundance that exists above them.

[Tim Stenovec]

Our thanks to Peter Atwater, President of Financial Insights and Adjunct Lecturer of Economics at the College of William and Mary.

[Carol Massar]

Coming up, how one auto parts manufacturer is faring under the President's tariffs the.

[Tim Stenovec]

CEO of Magna International is next to listening to Bloomberg Business Week. This is Bloomberg.

[Carol Massar]

Bloomberg Businessweek is brought to you by Evolving Money, a podcast that explores how cryptocurrency is the next logical evolution of the financial system. The program investigates how traditional finance firms are integrating crypto into their operations now that Washington has begun to pass much needed regulations. Follow the podcast, which is sponsored by Coinbase. Wherever you get your audio programs.

[Peter Atwater]

Support for the show comes from public.com you're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic option plays on the side. The point is, you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On Public, you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto. It's all there plus an industry leading 3.6% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing. All investing involves the risk of loss including loss of principal. Brokerage services for U.S. listed registered securities, options and bonds in a self directed account are offered by Public Investing Inc. Member FINRA and SIPC. Crypto trading provided by Zerohash Complete disclosures available at public.com disclosures the Chase Inc.

[Carol Massar]

Business Premier card is made for business owners who make things happen. Designed for high spend and limitless cash back Inc. Business Premier is a painful card with built in flexibility. Get the buying power you need to make large purchases, cover unexpected expenses and help your business grow. Earn a total of 2.5% cash back on every purchase of $5,000 or more, plus earn unlimited 2% cash back on every other purchase, giving you unlimited earned potential to invest cash back into your business. From innovation and technology to everyday expenses, Inc. Business Premier is the only business credit card with 2.5% cash back on every purchase of $5,000 or more and is part of a suite of credit cards from Chase for Business designed to meet your needs every step along the way. Learn [e-mail] businesscard Chase for Business make more of what's yours Accounts subject to credit approval restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank NA member FDIC.

[Tim Stenovec]

You're listening to the Bloomberg Business Week Daily 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.

[Carol Massar]

When Magna International reported earnings on Halloween, shares of the auto parts manufacturer rallied as much as 7% intraday in response to third quarter sales and adjusted EPS Beats. Magnum Management also raised its fiscal year sales forecast thanks to strength in North America and China. There was a lot going on. Company based in Canada, biggest automotive supplier in North America. Everything from automated driving control modules, powertrains, lighting, mirrors, complete engineering systems. So much you it is a great, great great read on the auto economy.

[Tim Stenovec]

Back with us is Swami Kodagiri, President and CEO of nearly $14 billion market cap auto parts maker Magna International. The stock up close to 18% so far this year. I want to start with kind of where we left off when we spoke to you back in April. This was just after the President's so called Liberation Day tariffs. You liken them and the additional cost to drawing upon the playbooks from past rotating UAW strikes, Covid, the great financial crisis, the chip crisis all rolled together. We were pretty shocked about those comments because you said it was big. Is it still that big of an impact? Has it been that big of an impact?

[Swami Kotagiri]

Yes, there has been a lot of dynamic challenges in the industry as you know and when you spoke to me last it was fresh. You know, at that time as we sit here and look at it, I think our annualized our tariff impact is roughly in the range of 200 million. But we continue to work with our team, with our customers, with our supply base in mitigating as much as possible. You know, adhering to the USMCA compliance. All in all I think we have been able to with A lot of self help, a lot of work with our customers. We've been able to bring down that impact to roughly 10 basis points, which means about 30 million for Magna this year.

[Carol Massar]

So I will say our BI team reacted to our Bloomberg Intelligence team. Swami reacted and they said they believe that your company's continuous cost cutting and operational excellence could further release margin gains in 2026. And they talk about in the US major customers are benefiting from a more profitable sales mix with higher sales of pickups and SUVs offsetting lower EV production, which should enhance Magnus program economics for upcoming 2026 launches. Do they have it right?

[Swami Kotagiri]

Yes, they do. There's a lot of hard work and thanks to the team, there's been a lot of traction in our operational activities, including some of the activities that you mentioned mentioned. Cost restructuring, optimizing our operations. We have really worked through about 40 divisions in terms of restructuring, consolidation, bringing things together. And when the mix and the volume becomes stable and it comes through, you see profitability going to the bottom line. And that has been our focus. Cost reduction, margin expansion and free cash flow generation. We have talked about 150 basis points over the last three years and I'm glad to say we have an additional visibility of 35 to 40 basis points going into 2026. So this is a journey. It's never going to stop you. And in an industry that we need to constantly work on improvements, we call them continuous improvements and we are starting to see the result of that.

[Carol Massar]

But you did talk about demand destruction in the short term when we talked with you in April, right after Liberation Day. Has it played out as bad as you expected? And where are we today? Your top customers are who's who of the global auto industry. So where are we today in that demand destruction? Are we done?

[Swami Kotagiri]

I wish I could have that crystal ball, but you know, the way I look at it is we peaked out as our industry in North America, about 17 and a half million units. Interestingly, I was looking at the data, go back 20 years in 2004, 2006 time frame, North American production volumes were somewhere between 15 to 16. We are still at 15 to 16 million units today. I think the volumes held up this year, but I always like to stand back a little and see where was Magna. Magna 20 years ago was a $20 billion company. Today we are a $40 billion company. And it's the result in the efforts of the team to continue to gain CPV and to diversify our customer base. And that's where our focus is. Right. And to your point though, I hope this is the trough. If you look at the average age of the fleet, it's pretty high. The inventories are pretty normal. So I like to say there is elasticity of demand that's going to come back looking forward if there is no more externalities like we have had in the last four years.

[Tim Stenovec]

Your company is based in Ontario. We are curious about the US and Canada trade negotiations or lack thereof. Given the impasse between the US and Canada, how is that affecting your industry and you specifically?

[Swami Kotagiri]

Yeah, as you know, auto industry is very interdependent ecosystem and it's pretty complex in North America. So it has been challenging. But I would like to look at Magna really as a global company. We have tens of thousands of people in Mexico, in Canada and in U.S. and obviously we are following the footprint of our customers, looking at the economics, looking at transportation, looking at logistics, and that is the competitiveness that ultimately lets you be the player that you are. Right. So the focus has been on it. Whatever the policy is, if there is certainty and visibility to the policy going forward, I think it's just going to be a tailwind to everybody, the OEMs and the supply base, you know.

[Carol Massar]

But Swami, is it broken? The us, Canada, I mean, it's been so intertwined, really the North American, you know, global auto supply chain. But is it especially the US and Canada, is it changed forever?

[Swami Kotagiri]

Again, I'm not an international trade policy expert speaking from.

[Carol Massar]

But you have a great vantage and a great window on how it has worked and how it feels today.

[Swami Kotagiri]

It's definitely been strained, right? There's no question about that. But I've lived in this industry for 26 years and what we're talking today is going to impact maybe 27 or 28. So we are always looking at what we are doing today impacts three or four years down the road. What we are doing today has been planned and decided three or four years ago. So I tend to think a little bit in longer cycles. You know, I'm still hopeful that the policy is going to get to a point where it's mutually beneficial to everyone.

[Tim Stenovec]

The President in the past, the President of the US has talked about his back and forth in his conversations with executives at North American auto companies. Have you had conversations with the president or his team?

[Swami Kotagiri]

We have had obviously a seat at the table in being able to communicate facts that possible impacts the challenges of the industry and what could benefit. I always say we are able to give an opinion. One of the opinions, I hope it's A dot on the chart. And definitely we have talked to all three regions. Right. Expressing what is the jobs that we have, what is the investments that we have made and how it could impact. Right? Definitely that is the conversation that's always ongoing.

[Carol Massar]

Hey Swami, one thing we wanted to ask you. The EV retrenchment that we continue to talk about here at Bloomberg, how is it affecting your business and the auto industry in general? You've got Ford considering killing the F150 Lightning, Stellantis killing the Ram EV, and GM taking a 1 $2.6 billion impairment charge on its EV assets. That feels pretty chilling. How is that impacting you guys?

[Swami Kotagiri]

In the past we've always looked at ev and if you look at some of the comments that we made, I think we were a little bit conservative. But definitely the North American EV penetration has had an impact on us. We came back and talked about the impact of our revenue going forward in the August, I think of 2024. But the key thing has been how we have been able to pivot. We had our peak CapEx spend in 2322. We got back to the sales to CapEx ratio. Shows our agility and being able to get back and you know, look at optimizing how we can reuse some of the capital with the help of the customers and so on and so forth. But overall EV I think in other regions continues and as a global company, we see that continuing in China and Europe. But when it does come back, and we still believe is a secular trend, the take rate is very different than what we all expected a couple of years ago. But with the investments already there, with the development that's behind us and our ability to hit, whether it's an internal combustion engine or above or a hybrid, that flexibility in our product line has helped us weather the storm pretty well. And you know, I think that's what we need to continue to do going forward.

[Tim Stenovec]

I know that the decisions you make now are decisions for four years from now. So are you changing product plans to develop more gas powered vehicles or to help make supplies for more gas powered vehicles?

[Swami Kotagiri]

Yes, Tim, I think we have had a lot of content in obviously the internal combustion engine platforms. Right. And as some of these programs are delayed or pushed out, we continue to get leverage on the existing programs and we continue to win. The other thing to note is a lot of our products, almost 80% of our product is propulsion agnostic. That means whether I make a mirror or a door or a structure or a seat, we'll make it for whatever Propulsion it is. Right. So as far as we are flexible and continue to do that in our processes, we've been able to take advantage of that, of that flexibility and gain market and continue to grow our revenues.

[Carol Massar]

Swami, just 30 seconds here. Any signs of a US recession, a global recession? What's the word that you would use to describe the marketplace right now? Just quickly.

[Swami Kotagiri]

Yeah, I think there is signs of stress, I would say, and obviously that, you know, puts us all on a cautionary foot. But like I said from our auto industry, the inventories seem normal. The average age of the fleet is pretty high. So we are looking for auto demand not to be impacted that much, but we still remain very cautious.

[Tim Stenovec]

That was Swami Kotagiri, president and chief executive officer of Magna International.

[Carol Massar]

I really do love talking with him, Tim, because we get a great read on the global supply chain. I mean, Otto, if you think about how many different countries have been involved, how many times they're, you know, different parts might be crossing borders, it's really complicated. It involves a lot of pieces. And he really gets into it and understands it.

[Tim Stenovec]

Yeah. He also understands that in order to make decisions for the next, you know, few years, he has to do them now. So he talks a lot to us about, okay, if this is what we're going to do in 2030, this is the decision we need to make right now. And one area that I think has sowed a lot of confusion, not just for automakers, but for the parts suppliers, is the fate of EVs.

[Carol Massar]

At least here in the love that you went there. Right?

[Tim Stenovec]

Because this, you know, five years ago, they couldn't make EVs fast enough. Fast forward to today. It's like, okay, well, what does demand look like? What does adoption look like? And how does that reset what these auto companies are doing in terms of what they're offering to consumers and when they're offering it.

[Carol Massar]

But what's interesting is, right, he is taking the longer term perspective. And if you look outside the United States, I mean, China or elsewhere, EV people are buying electric vehicles. I think he's going on the assumption that that's the future. Love getting his perspective.

[Tim Stenovec]

Always love getting his perspective. We also love getting the perspective of the CEO of Axon Enterprise. He's going to join us next.

[Carol Massar]

Yeah, it's the company best known for tasers. His stock has been on fire over the past decade, but it recently, I got to say, the company did catch investors off guard with earnings and another acquisition.

[Tim Stenovec]

This is Bloomberg. This is the Bloomberg Business Week daily podcast. Listen live Each weekday starting at 2pm Eastern on Apple CarPlay and Android Auto with the Bloomberg business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa. Play Bloomberg 11:30.

[Carol Massar]

Earlier this month, Exxon Enterprise, it's a company known for making Tasers missed analyst estimates for third quarter profit after it reported higher costs resulting from the implementation of tariffs. Now that sent its shares slumping 20% in extended trading despite reporting record revenues. So investors definitely turned sour on that report.

[Tim Stenovec]

On top of that, Exxon agreed to buy emergency tech company Carbine. That's a deal valuing the company at $625 million. Still, it is worth noting that stock up more than 3,300% since the end of 2015. That was when Axon was just $17.

[Carol Massar]

Yeah, it's not a $17 stock anymore. In fact, you know, when you look at it on the Bloomberg, this is a stock that now trades at about $570 a share. So as we said, it's been on fire. But investors a little bit of a rethink. For more. We caught up with the CEO of Axon, Rick Smith. He is still feeling optimistic.

[Rick Smith]

Yeah, I'd say the business is the strongest it has ever been. You know, I've been a public CEO for like 24 years now and this is the fifth time we've come in, reported the business with really strong operating results and then the stock drops. So I just tell our people, don't even look at the stock price. Like it's going to move around for a bunch of factors. Where we stay focused is building the long term business and every previous time it's recovered and we're going to stick with that playbook. And if you look at where we're growing from some of our new investments, you know, from counter drone and fuses, real time crime centers and artificial intelligence, our bookings in those areas are up almost triple year over year. And then we just announced two new acquisitions. That is our entry into the mission critical voice space which we think is going to be a huge opportunity over the next decade.

[Tim Stenovec]

So what are you guys seeing that investors and analysts are not seeing? Because the narrative that you have and, and your tone doesn't necessarily match the reaction from the street.

[Rick Smith]

Yeah, I mean part of this, excuse me, was we did have a gap operating loss, a tiny one. But that's largely because we have this very unique stock incentive program we call the Exponential Stock plan. And all of our employees participate and when, when the stock does really well and we're Hitting our operating targets, stock comp goes up. And so paradoxically, the better the operating business does, the more stock comp goes up. And that was the biggest mover. But if you look at the adjusted ebitda, if you take that noise out, you know, we managed to turn in, we've got like seven consecutive quarters over 30% top line growth. And we turned in right at 25% or 24.9% adjusted EBITDA while maintaining the growth rate. And if you listen to our president who used to be the head of sales is very close with customer. He, you know, he was pretty bullish on our conference call telling people we think the fourth quarter is going to be a monster from a bookings perspective. So we're feeling really good.

[Carol Massar]

All right, I want to come back to that monster for the fourth quarter in terms of bookings. But I want to say that, you know, Rick, you get this. You've been a CEO for a long time. When you're kind of priced for perfection, you know, investors can be like, well, wait a minute, citizens. An investor there, Trevor Walsh, said the company had little room for error in its report. It made investors concern concerns about valuations stock trades at 398 times current earnings or nearly 94 times future earnings. You've got a $47 billion market cap with projected 2025 earnings of 2.7 billion. So your price to sales or at least in terms of your market, you know, expectations, I mean there's, there's a lot there that they expect everything to kind of just hit perfectly. There's also concerns about tariffs in the government shutdown. There's also concerns that you just did a second acquisition here less than two months after you did that agreement to acquire Prepared, which was an AI powered emergency communications platform. So why is that valuation or why is that, you know, market cap versus sales justified?

[Rick Smith]

Well, first I'd probably get a note from my general counsel telling me not to use words like monster when talking about future performance.

[Carol Massar]

Is your phone going off right now next to you?

[Rick Smith]

Yeah, yeah, probably is. But look, the core business is really strong gap EPS is a really hard way to value the business because I talked about, you know, the stronger the operating business, the more gap EPS gets punished with stock compensation expense. So I think something like looking at a multiple of revenue is probably a little more like going to, going to be a little more instructive. But look, yes, we are valued as a growing company that's got to continue to deliver. And we've been delivering, I think we've had like I said, seven quarters of over 30% growth. And it's our job as a management team to keep delivering on that. And you know, if the stock takes a breather, you know, that's kind of outside our control. And you know, I'm an optimist. It creates a great entry point for some of our long term investors and we're just going to keep chugging away working on the business to make sure we keep growing. And those two new acquisitions, they're a big piece of it. We, we made a very strategic move to move into mission critical voice. We could think AI plus voice. Now is a very magical moment and there's a lot of AI hype out there. But look, 10% of our core business bookings this year are going to be on our AI services. So we're really delivering value to our customers. And we see doing that in 911 call centers and then extending across, you know, any sort of mission critical voice communication is going to be a huge business. And we found two very complimentary businesses prepared allows us to go fast into any 911 call center and then carbine allows those customers to then go deep and get out of the business of running all the hardware and move their entire 911 infrastructure to the cloud. And those two together we think are like chocolate and peanut butter. It's going to be, it's going to be a great combo.

[Carol Massar]

Well, I do want to ask you about those monster bookings for the fourth quarter, but having said that, tell us about you said 10% of the bookings this year are going to be on air services. You know how much is still Tasers like give us an idea of what the business is today and kind of where you guys are positioning it, especially as you take on these acquisitions.

[Rick Smith]

Got it. Well, I'm terrible at details, but I can tell you the Taser business is, it continues to grow even though it is a fairly mature business in the US where the real opportunity is our new Taser 10. For the first time, we have a weapon that some of our customers in Europe were saying is a better weapon for their officers than even a handgun. And if we can prove that out this winter we'll be testing it above the Arctic Circle and heavy, you know, cold conditions with heavy clothing, which is our historically been our Achilles heel. If we succeed there, we could see Taser really become a driving force across Europe and the rest of the world outside of the US So even though it's been our core business from the beginning, Taser we think could be the growth engine that pulls body cameras, drones, AI and all our other services right along with it.

[Tim Stenovec]

Well, let's talk about those other services, because if I go back into your earnings and look at 2017, connected devices accounted for close to 70% of your total revenue. Software and services was just over 30% of revenue. If we fast forward to just in recent years, last year that pretty much flipped where connected devices was 40% and software and services is now close to 61% of your business. How, how big does software and services get? What's the ultimate goal there?

[Rick Smith]

Well, that's sort of like asking me which of my children is my favorite. I love them all, but I mean.

[Tim Stenovec]

One of those has a higher margin, right?

[Rick Smith]

Oh, yeah, one has a higher margin. But when you can do hardware and software together, when you can do body cameras, drones in car cameras, and the software layer, you can just do so much more magical things for the customer than if you're a pure software play. So investors love the software revenue and margins, and so do we. But the hardware is also growing and really contributing. And it's when you bring it all together that we think the magic happens, and that's our real competitive advantage.

[Carol Massar]

Hey, one of the things I want to ask you about is there's been a bunch of reporting. There was a story about Flock Safety, which is one of your competitors, to be fair. And what's interesting is, I guess you. You guys are all doing deals with the Amazon ring and this camera and, you know, footage is certainly being shared with law enforcement, whether it's ICE and others. Again, there's a lot of reporting that's being done about this and at the same time, some community backlash. So are you concerned about community pushback as we have more and more surveillance that is out there, and that is a big part of your business.

[Rick Smith]

So that's one reason we're really proud of the approach we take. We have an equity and ethics advisory council that is comprised of people from communities of concern, particularly black and brown communities. Right. If we're really talking about over policing, I think that's the communities of most concern. And so all of our approaches, we run through this ethics review up front with people that are naturally very concerned and skeptical on these issues. And we build safeguards in that help minimize the risk of abuse while maximizing the opportunity. Look, when a private consumer buys a camera to keep their home safe, they're buying it not to watch their dog when they're at work. They want to stop criminals from stealing their stuff, breaking into Their house. I actually had a vehicle stolen years ago and it took me days to get the video from my home security system to the police. What we're doing with Ring, and by the way, we encourage open sharing standards like Ring is sharing with our computer competitors. We openly share on a reciprocal basis with our competitors. We think this is like doing the right thing with all these cameras out there. We should be using them to deter crime and criminal activity. And we think you can do that without having to track everybody, you know, where they go to in their personal lives. We're talking about detecting dangerous criminal acts and deterring those acts in the first place.

[Tim Stenovec]

So that's with a lot of local law enforcement agencies. I'm curious about the conversations that you have at the federal level with the Department of Homeland Security, for example, and the way that their officers do or do not use your products. What are the conversations that you have at the federal level with dhs?

[Rick Smith]

Yeah, we certainly work with the federal agencies as well. And I think where there is some controversy is like, look, people have different perspectives in different states and in different cities. And our system is built. So they're like, hey, if you are, you know, a city in a very deep, progressive area, you can choose who and how you share your data. And look, if you're a, in a border town in a red state and you want to be more collaborative with those federal agencies, one thing I'll tell you, we don't. It's not our position to try to dictate how government customers, and that's who we sell to. A private corporation shouldn't be telling government how to, how to use their own data. But what we do is we enable them to, to make decisions so those elected officials can be responsive to their voters and we can be responsive to their communities.

[Carol Massar]

One last question. Two acquisitions in as many months. Is there more to come?

[Rick Smith]

We're probably going to take a little breather here. We were not expecting when we went into this, we thought we would make one acquisition, but we found that these two were, were really so complementary that, you know, sometimes you got to move quickly when opportunity knocks. And so, yeah, this was unexpected, but we're really excited about it.

[Tim Stenovec]

That was Rick Smith, the founder and CEO of Axon Enterprise.

[Carol Massar]

And that wraps up our first hour of the weekend edition of Bloomberg Businessweek Daily from Bloomberg Radio. Heading our next hour, the dangers of social media and the urgent need to protect its youngest users.

[Tim Stenovec]

It's all in can't look Away. The case against social media. A Bloomberg original investigation produced and directed by an Emmy award winning film duo. Plus many Americans are getting their calories from ultra processed foods. Not just adults but kids too. How bad is that? And can RFK Jr do anything about it?

[Carol Massar]

And he gave up a career in a London office, moved his family to France to make Rose and do it in a way that is good for the climate. Mother Earth. We'll be joined by the owner of Maison Mirabeau. This is Bloomberg Businessweek. I'm Carol Massar.

[Tim Stenovec]

And I'm Tim Stanwick.

[Peter Atwater]

Support for the show comes from public.com you're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic option plays on the side. The point is you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On Public, you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto. It's all there plus an industry leading 3.6% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing. All investing involves the risk of loss including loss of principal. Brokerage services for U.S. listed registered securities, options and bonds and a self directed account are offered by Public Investing Inc. Member FINRA and SIPC. Crypto trading provided by ZeroHash complete disclosures available at.

[Carol Massar]

The Chase Inc. Business Premier card is made for business owners who make things happen. Designed for high spend and limitless cash back Inc. Business Premier is a painful card with built in flexibility. Get the buying power you need to make large purchases, cover unexpected expenses and help your business grow. Earn a total of 2.5% cash back on every purchase of $5,000 or more plus earn unlimited 2% cash back on every other purchase and giving you unlimited earned potential to invest cash back into your business. From innovation and technology to everyday expenses, Inc. Business Premier is the only business credit card with 2.5% cash back on every purchase of $5,000 or more and is part of a suite of credit cards from Chase for Business designed to meet your needs every step along the way. Learn [e-mail] businesscard Chase for Business Make More of what's Yours Accounts subject to credit approval restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank NA member FDIC in business, a well chosen gift does more than say thank you. It acknowledges effort, strengthens relationships and shows someone they're genuinely seen and appreciated. That's why so many marketing and brand leaders turn to four Imprint because the right gift creates a lasting impression and reflects your brand in a way people remember. With thousands of of customizable products like premium apparel, branded drinkware, smart tech bags, and carefully selected office items, 4imprint helps your brand deliver recognition with meaning and professionalism. You can personalize every detail from your logo and message to the way the gift is presented. And with 4imprint's expert support, dependable service, and with thousands without a setup fee, it's easy to create thoughtful experiences that align with your budget and your brand standards. Every order is backed by 4imprint's 360 degree guarantee, so you can be 4imprint certain it arrives on time, exactly as intended and handled with care. Explore gifting with purpose and [e-mail] for Imprint for Certain.

[Tim Stenovec]

You're listening to the Bloomberg Business Week daily 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.

[Carol Massar]

Plenty ahead in our second hour of the weekend edition of Bloomberg Business Week, including the family who moved from the UK to Provence to live out the dream of owning a vineyard and being on a mission as well to make wine, but in a very environmentally responsible way. Stephen Kronk, he's the founder and CEO of Maison Mirabeau. He was back to talk wine, regenerative farming and so much more and more. And well, we may have sampled a little bit.

[Tim Stenovec]

Hey, nothing wrong with that.

[Carol Massar]

Nope. It was Friday, wasn't it?

[Tim Stenovec]

It was. I think it was. It was definitely Friday. Well, okay, so the wine not ultra processed, but we also did speak about ultra processed foods. This is a danger to our bodies and it's what the majority of Americans eat. Yet not all are unhealthy.

[Carol Massar]

Wait, what?

[Tim Stenovec]

Yeah, we're gonna explain.

[Carol Massar]

All right, I'm glad we're gonna do that. Hey, first up this hour, we do wanna highlight a Bloomberg Original investigation that exposes the real world consequences of harmful science social media algorithms. It is Can't Look Away the Dangers of Social Media. It is a documentary that follows a team of lawyers taking on the big tech giants advocating for families whose children have been deeply impacted by social media. Now, the original reporting of Bloomberg News investigative reporter Olivia Carville is throughout this film. But there's a lot more reporting too as well. The Bloomberg Original investigation exposing the real world consequences of harmful social media algorithms. These companies have been gaslighting us for Years. This is all about money.

[Peter Atwater]

The purpose of all commercial ventures is.

[Carol Massar]

To create a demand. Our children are the casualties.

[Dr. Julia Wolfson]

We need to take back the power from these companies.

[Carol Massar]

They created a dangerous situation and then manipulated these kids. They know the levels of addiction, sexual abuse. They know the levels of suicide. They're not showing, showing our kids what.

[Matt O'Neill]

They want to see.

[Carol Massar]

They're showing you what they can't look away from. And that is the Bloomberg original investigation can't look away the case against social media, which is now available across Bloomberg platforms. Perry Peltz and Matt o' Neill are the directors and producers of the documentary and they join us here in studio. Welcome. Welcome to both of you. I gotta say, we've talked to Olivia a lot about her reporting. We know you did as well. Perry, let me start with you. When you guys decided, I don't know, I guess when you first started reading her reporting, what struck you? What struck us? And first of all, thank you both for having us. We really appreciate it. What struck us is that what's happening is these companies are looking at families, at kids and parents, and putting the blame on them. This is actually a public health crisis and there's nothing short of that. And I think that Olivia's reporting really speaks to the fact that this is an algorithm problem. It's not a bad parenting. It's not a bad kids issue.

[Swami Kotagiri]

Yeah.

[Tim Stenovec]

The big question that I have as, as a parent and in a world where we're surrounded by this stuff, Matt, is what is the solution here? Because these companies don't necessarily have the incentive to get us to look away. Well, I think the first part of.

[Matt O'Neill]

The solution is exactly what we're doing, which is starting a conversation because a.

[Tim Stenovec]

Lot of these things, when we started this reporting, we had no idea. I had this vague sense that social media was bad. I'm a parent, I have two young boys.

[Carol Massar]

We talk about it so much like we understand, like, the problems of social media.

[Matt O'Neill]

But what I didn't realize was that.

[Tim Stenovec]

Social media algorithms were feeding suicidation to children, body dysmorphia to children, that kids are being targeted with the absolute worst.

[Matt O'Neill]

Things on the Internet and it's relentless.

[Carol Massar]

Unpack that. What do you mean by that?

[Tim Stenovec]

Well, what happens is that these algorithms start off in a way. If someone lingers on a sad moment because they broke up with a girlfriend.

[Matt O'Neill]

Or a boyfriend, the algorithm catches that and it goes into what some people.

[Tim Stenovec]

Have called a TikTok hole, where it continues to feed more and more sad content that goes deeper and deeper. There's a whistleblower in the film that actually explains this in more detail who used to work at TikTok.

[Carol Massar]

Well, this is what's interesting, Perry.

[Tim Stenovec]

Right.

[Carol Massar]

It's not just about what you search on. It's basically what you linger on. And the social media companies, and we, you know, we're so careful when we talk about this because it's alleged and alleged, but. But this is where the whistleblowers come in and provide some insight about what the companies actually knew, the whistleblowers, as well as internal documentation from these companies. What they're prioritizing is having kids stay on these platforms. Engagement. They're not prioritizing safety. So what happens is they bring in neuroscientists, they bring in behavioral scientists to actually program these algorithms so that kids stay on as long as possible. And thus the title can't look away from. They're being fed the material that they.

[Tim Stenovec]

Actually can't look away from because that's good for business. Like I said, the incentives are not aligned with getting kids not to look at this stuff. If you show them what they don't want to see, they're going to do something else. We live in an attention economy. So is there a solution in a world where the incentives don't match? From a public health perspective, the incentives.

[Carol Massar]

Have got to change because we right now, unfortunately have a legal system in section 2:30 that protects these companies in a profound way. It treats them as passive pipelines. They are not passive pipelines. Algorithms are company driven.

[Tim Stenovec]

So what that essentially says section 230 is that companies, these social media platforms, are not responsible for the content that's on their platforms.

[Carol Massar]

That's exactly right. They are treating them like bulletin boards, which is if you go back historically to 1996, before social media was even around, and you had these sites that were more bulletin board driven, they would say, it's okay, you can post what you want. The company is not responsible. But that's not what our lawyers would argue. The lawyers that we follow in this film is what's happening here. Matt, talk to us about the lawyers, because they really are. You know, when you go up against big tech, you're talking about high powered, expensive lawyers. This group of lawyers, it's hard not to be impressed by them. And what they ultimately figured out was the argument to do here.

[Matt O'Neill]

It's an incredible collection of lawyers led by Matt Bergman, also Laura Marquez Garrett.

[Tim Stenovec]

Who was that corner office, big firm lawyer who left because of what she.

[Matt O'Neill]

Saw happening with social media and her.

[Tim Stenovec]

Concern for her own children. What Matt and Laura and the other lawyers of the Social Media Victims Law center came up with is a novel.

[Peter Atwater]

Legal approach which holds the companies responsible.

[Tim Stenovec]

Under product liability law instead of under the idea of Section 230, where it's. The content is that promising? Well, it's made its way through the courts. Snap in the case that's followed in the film, tries to get it dismissed with Section 230, and they successfully argue and give these families a victory, the.

[Matt O'Neill]

First of its kind, that they can.

[Tim Stenovec]

Be held responsible under product liability law.

[Matt O'Neill]

And they've moved to discovery, and that.

[Tim Stenovec]

Case is making its way through California.

[Carol Massar]

So when we talk about product liability, you know, Perry, I think of things like the tobacco losses. And this is what you can think about, right? And I think about so many products that are out there right now that are facing a lot of scrutiny. Well, let's go back to tobacco to your point. How about opioids? It is another page out of the same playbook, which is basically to blame in this case, the parents and the kids. And to not hold these companies and the companies to say they're abusing good products. That is not what we are. At least that's not what the report is suggesting. This is very, very different. These are algorithms that need to be changed. I want to just mention, because when you do a documentary and we're at the high level and sometimes we have headlines, you have to remember that there are people, right? And you guys tell these stories. Olivia told these stories. Whether it's Alexander Neville who died because of taking a pill laced with fentanyl that he got on Snapchat. England Roberts died after she copied a strangulation video she saw on Instagram. It was in her feed. Jordan Demay, six hours from initial contact by who he thought was a young man, woman, but wasn't, but rather a sextortionist. He killed himself. I mean, telling these stories. I mean, in the film, you're in the bedrooms, you're talking to the parents. Matt, there's a lot of people that were impacted, and there are thousands of cases.

[Matt O'Neill]

These.

[Tim Stenovec]

This is just the tip of the iceberg. And I appreciate what you were doing.

[Matt O'Neill]

There because you're saying their names.

[Tim Stenovec]

I'll add Mason Eden to that. A boy who died by suicide after a breakup because he went down one of these things, TikTok holes where he.

[Matt O'Neill]

Was being fed content that actually told.

[Tim Stenovec]

Him to blow his brains out with a shotgun. Actually, these are the shocking sorts of.

[Matt O'Neill]

Things that many of us adults don't.

[Tim Stenovec]

Know are happening on social media and these parents are taking the most incredible tragedy in their lives and turning it into change. Yes, they're holding these companies liable and suing them. What they're looking for is not necessarily monetary damages. It's for real changes to how these companies work.

[Matt O'Neill]

You asked about a solution before.

[Tim Stenovec]

If Instagram can figure out that I want a lawnmower before I know I want a lawnmower or that I need a hair cream to try to grow my hair back, it can figure out how not to send content that promotes suicide to children.

[Carol Massar]

Because you know what my understanding and I know you and I, we did a panel here, we did a discussion what does is it TikTok in China.it's.

[Tim Stenovec]

A great question because TikTok, owned by ByteDance, the similar app in China, has a shut off time at night so the children can't access it. Instead of promoting whatever the kids are.

[Matt O'Neill]

Lingering on, it actually promotes practicing your.

[Tim Stenovec]

Musical instrument and doing math problem sets.

[Carol Massar]

Perry, what do you hope people, you know, run with after this film? We've only got about a minute or so left. What do you hope they do? They ask either their co. Their kids are. I don't know. What do you hope they do? It's a really important question because we don't want to scare everybody and not give them anything that's solutions oriented. And when Matt's talking about these other, these families, these families want people to be informed so that they don't have the same thing happen to them. And the answer is talk to your kids, tell them about what's going on. Keep social media, phones and apps away from them until at least high school. It's the best thing that we can do and change needs to happen at a regular regulatory level.

[Tim Stenovec]

Perry, one last one for you. You've got a really interesting background in journalism, but also in documentary filmmaking, but also in public health. Your documentaries have included subjects such as the opioid epidemic, excessive drinking. Is this as big of an epidemic in your view?

[Carol Massar]

I think this is a cataclysmic epidemic in my opinion because now these companies are targeting our children and that is different than what was happening in a lot of these other. None of them is good, but this one is particular.

[Tim Stenovec]

A public health crisis.

[Carol Massar]

A public health crisis. Question about it. Layer AI on top of it and it's just terrifying.

[Tim Stenovec]

Our thanks to Perry Peltz and Matthew o', Neill, directors and producers of Can't Look Away, the Case Against Social Media. The Bloomberg Original investigation is now available on all Bloomberg platforms.

[Carol Massar]

I have to say, Tim, you know, I actually did a panel with Matt o' Neill a couple of weeks ago here at Bloomberg for another. We did a viewing of the film, had an audience, and then talked with the audience. But you and I have done so many interviews about social media misinformation that's out on the platform. You know, we can go back to elections and political misinformation, but just so much stuff that's out there. And for a lot of people, you know, they see it as a truth, a reality. And I think, you know, there's been real push on social media companies to be responsible for what's on the platform with this film. This documentary reminded us that there is. You go back to a ruling that basically made these companies not responsible for the content on their platform.

[Tim Stenovec]

Yes. Section230 is what you're referring to. Perry Peltz talks about it a lot.

[Carol Massar]

Right. The Communications act, was it 1996, I think. And so what's interesting is that in an environment where we are inundated by a digital world and people spending a lot of time on social media, when it comes to something like kids, children, teenagers, what can possibly happen as a result of that content, it does open up a big question, who is responsible for that?

[Tim Stenovec]

Well, how would the world be different right now if these platforms were held.

[Carol Massar]

Good question.

[Tim Stenovec]

Responsible for what was actually on their platforms?

[Carol Massar]

Well, and what they like, too, is too tobacco. Right. And when tobacco was kind of being marketed to kids and trying, the whole idea is get them hooked early. And the same thing with social media. Get them at least allegedly, from some of the inside documents I had at companies about this idea of kind of, you know, targeting kids because you get a customer when they're young, they kind of tend to stay with you until they're older.

[Tim Stenovec]

Well, I think what a big takeaway for me from this conversation was misaligned incentives. You know, we report on these companies each and every day and quarterly. We talk about the metrics that investors look closely at, the ones that actually move the company's stock price.

[Carol Massar]

Right.

[Tim Stenovec]

It's time spent on the platform. Right. It's users on the platform. It's not. How little did you get young people to actually use this platform? That's not what investors are judging them on.

[Carol Massar]

Well, and it's exactly.

[Tim Stenovec]

So they're doing everything they can to get people to spend more time on the platforms.

[Carol Massar]

And what's interesting is what they found is that, you know, kids will search for stuff, and what happens is it's not necessarily what you search on that you get targeted for. It's what you linger on, how much time you spend on an individual post and then the algorithms seem to kick in and then target with you. So you might have been searching something that was optimistic and all of a sudden you get something that's kind of dark and you spend a little bit more time because our brain is kind of wired to go to those dark things. And then all of a sudden you're getting a lot more dark content. I'm making it very simplistic, but that's kind of it.

[Tim Stenovec]

You know, here in the US the safeguards that are put on them by the companies versus in China and how the Chinese companies are required or at least what they do when it comes to the content on the platforms.

[Carol Massar]

Yeah, that part.

[Tim Stenovec]

Check out the film.

[Carol Massar]

Exactly. Check it out. You can find it on Bloomberg platforms. It's definitely a must watch. If you have kids, schools are watching it. They're doing viewing sessions, if you will. Anyway, it's really something that is a must viewing. All right, you're listening to Bloomberg Business Week. Coming up. From junk on social media to junk on supermarket shelves. Another addiction worth paying attention to. Ultra processed foods.

[Tim Stenovec]

People want to avoid them, but experts are struggling to define them. That's next. This is Bloomberg. This is the Bloomberg Business Week daily podcast. Listen live each weekday starting at 2pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa. Play Bloomberg 11:30. Here's a stat that may shock you. Americans get more than half of their daily calories from ultra processed foods, with salty and sugary items accounting for an even bigger portion of kids plates. This according to a government study that was released back in August. This government study ran from 2001, 2021 to 2023, and it said that about 62% of childhood diets come from highly processed foods. Think burgers, pastries, snacks and pizza. This According to the U.S. centers for Disease Control and Prevention's nutrition study. The same foods have a similar grip on adults, making up about 53% of the calories that they consumed.

[Carol Massar]

That's a lot.

[Tim Stenovec]

Yeah. The question I have is whether or not Health and Human Services Secretary Robert F. Kennedy can actually make some headway on this. He said that the US Food supply is poisoning children. It's a question that I'll pose to Dr. Julia Wolfson, Associate professor in the International Health Department at the Johns Hopkins Bloomberg School of Public Health. Her research focuses on how ultra processed food affects our bodies. The Johns Hopkins Bloomberg School of Public Health that is supported by Michael R. Bloomberg, founder and majority owner of Bloomberg LP, parent company of Bloomberg TV and Radio. Dr. Wolfson, good to have you back with us. It's been about a year since we last spoke. I just want to start with the definition of ultra processed foods. I was kind of surprised to see pizza and burgers on that list. How do you define it?

[Carol Massar]

Yeah.

[Dr. Julia Wolfson]

So thanks for having me back. And ultra processed foods are defined by the list of ingredients that they're. That are included in them. So these are foods and beverages that are industrial produced using processes that you wouldn't have in a home kitchen and ingredients that you also wouldn't have in a home kitchen. So these are industrial produced products used by processing techniques like extrusion fractioning where you break down the pieces of the food into different things and then put it back together again. They contain things like additives, emulsifiers, sweeteners, thickeners, artificial flavors and colorings and other kinds of substances. Substances again that you wouldn't use in a home kitchen. And so the most common definition we have is called the Nova classification system, which actually uses the ingredient list on a product to look for these kinds of ingredients that signal that a food or beverage has been through this industrial processed thing.

[Carol Massar]

So if we turn around, which I think increasingly we have a population that is doing that, and especially I've got a daughter who's 22, younger generation, looking at stuff, who. But if there are a ton of ingredients and ingredients you don't understand, should you assume that that's ultra processed?

[Dr. Julia Wolfson]

Yeah, that is what we recommend as the way to know if a food or beverage you're considering purchasing or eating is ultra processed. You flip over that package and if you look at that ingredient list and you see even one, but certainly a bunch of ingredients where you think, I don't know what that is. That's not something I would cook with. I don't even know how to pretend pronounce that. That's a signal. That's an ultra processed food.

[Carol Massar]

So do we fix it by just infusing everything with protein and then it's.

[Tim Stenovec]

All okay, but it's still ultra processed, like even a protein.

[Carol Massar]

Are you picking on the pop Tart?

[Tim Stenovec]

Yeah, protein packed pop tart. We talked about this on our editorial call this morning.

[Carol Massar]

It sounds great. Protein with some glaze.

[Tim Stenovec]

Dr. I'm let you weigh in.

[Dr. Julia Wolfson]

Yeah. So I mean, thinking about what are. That's a strategy the food industry uses Maybe to signal that something is healthier for us by you know, saying, oh, this is protein rich or whole grain rich, or this has vitamins or minerals.

[Peter Atwater]

Right.

[Dr. Julia Wolfson]

But if it still has these other ingredients, it's still an ultra processed food. And so, you know, the addition of, you know, other nutrients that we might think are beneficial does not change that food into something that is not an ultra processed food. It's still ultra processed.

[Tim Stenovec]

So just really shocking to see 62% of childhood diets come from highly processed foods. That was wild to see. But at the same time, I'm thinking about my own family and how difficult it is to get my kids, who are six and two to eat food that we would consider not ultra processed. What is the best way to do that? What are strategies that work for kids? I think a lot of parents struggle with this.

[Dr. Julia Wolfson]

Yeah, I mean, I think it's a struggle for all of us. Right. You know, it's not just kids, it's adults as well. You know, it's over half of adult diets. And I think there's a lot of reasons for that. It's, you know, our taste preferences are shaped very early and there's a lot of marketing, particularly to children for these products. And they're easier to, they're easier to grab and go.

[Rick Smith]

There are.

[Dr. Julia Wolfson]

A lot of them are ready to eat and, you know, they're snacks, they save time and a lot of them are more affordable too. So that's something to consider. I think it is the more snacks that you can have out that are not process, that are easy to grab and go. You know, that is one strategy to help kids have more, say, fresh fruits and vegetables to snack on or healthy snacks that are made ahead so that they can reach for easily. But again, that is extra work for parents and sometimes extra cost for parents as well. So it's there. There are really good and intractable reasons why these foods comprise so much of our diets and particularly our children's diets.

[Carol Massar]

So, you know what's interesting? This stat that Tim mentioned from the US Centers for Disease Control and Prevention, their nutrition survey, when they talked about highly processed food, they said pizza. So this, but not the pizza that.

[Tim Stenovec]

You get and I get on Friday nights.

[Carol Massar]

That's what I want to ask you.

[Tim Stenovec]

Right?

[Carol Massar]

So like, I go to a place where I know they are making their homemade crust from special wheat.

[Tim Stenovec]

It's been featured in the New York.

[Carol Massar]

Times, you know, and it's no, no, no, I hear you're having fun, but I have been, but I mean it's like, you know, fresh tomatoes, fresh basil, I guess maybe there's obviously some like, homemade cheese there. But like what? Like how do we distinguish really, really bad processed food versus stuff that maybe isn't so bad?

[Dr. Julia Wolfson]

Yeah, I think that, you know, that kind of pizza that you're describing, or let's think about bread, even pizza or bread might make at home. Like you're combining wheat and flour and salt and yeast, and you have your fresh tomato sauce. That's not an ultra processed food, but that is not the majority of the pizza that people are eating. So when we talk about things like pizza, it really could be those frozen pizzas that you get in the grocery store or maybe more mass produced pizzas that are made at scale and therefore have some sorts of preservatives or other kinds of ingredients. Ingredients that, you know, change the, say, the softness of the, the dough or something like that. Those are the ultra processed things. So not all ultra processed foods, though, are equally concerning, I would say. You know, I mentioned bread. So, you know, the bread that we might make by ourselves at home, like if we were some of the people who started making sourdough bread during COVID for example. Yeah, that's not processed bread you might get at the bakery in your neighborhood that is made by scratch is not ultra processed. But most of the bread that we see on our supermarket shelves is ultra processed. That sliced bread that you see. And so, but that includes even whole wheat bread. So, you know, there are some ultra processed products that are by definition ultra processed because they might contain those buyers or things that turn them into that product, but they might still be. Some are less of a concern than others, I would say.

[Tim Stenovec]

So just in the last two minutes that we have with you, the Health and Human Services Secretary, Robert F. Kennedy Jr. Has vowed to go after these food companies. So Americans do eat healthier thus far. How is he doing?

[Dr. Julia Wolfson]

Well, I mean, I think it's good that he's focusing on this as an issue. I think there are, as I mentioned, you know, there's a lot of reasons why we eat these foods. And one of them, a big one, is they're more affordable. They tend to be more affordable than scratch ingredients. They save time and they're more accessible. And so I think some of the policies of the administration say cutting or even eliminating SNAP benefits is not helpful for people to be able to avoid ultra processed foods. But thinking about labeling or getting ultra processed foods out of, of sorts, schools in a way that also balances with giving schools the resources they need. To source and prepare less processed food would be a step in the right direction.

[Carol Massar]

Why do we just real quickly, 30, 40 seconds here. Why do we have so much ultra processed food? Is it about keeping shelf life or like, what is it? Or is it just cheaper, mass production food? I don't know. Just quickly.

[Dr. Julia Wolfson]

Yeah, I mean, it's the majority of the foods in our grocery store shelves. Right. They make food or shelf stable. They're oftentimes more affordable, and they're in high demand because they save people time and they save people mental energy as well. You know, it's a lot easier to say, have a frozen dinner than it is to make all the components of the frozen dinner yourself. So there's demand for it. And, you know, they've really dominated our food supply for decades now. So it will be really difficult to make that switch at a large scale. But it's worth considering how we can do it.

[Carol Massar]

One Last quick question. 25 seconds. Can we eat too much protein?

[Dr. Julia Wolfson]

I think it is possible to eat too much protein and Americans do eat a lot of protein, so we are not suffering from a shortage of protein in the US as a whole.

[Tim Stenovec]

Our thanks to Dr. Julia Wolfson, Associate professor in the International Health Department at the Johns Hopkins Bloomberg School of Public Health. Her research focuses on how ultra processed foods affect our bodies.

[Carol Massar]

All right, so you have little kids. My daughter's older. I know we were obsessed. I know you are too, with organic and.

[Josh Green]

Yeah.

[Tim Stenovec]

But I mean, I can only do so much. Truly.

[Carol Massar]

It's hard.

[Tim Stenovec]

You know what's really hard for us?

[Carol Massar]

What?

[Tim Stenovec]

What they eat when they're out of the house.

[Carol Massar]

I was just going to say, like when they go elsewhere. Right?

[Tim Stenovec]

Yeah. And, you know, it's. I'll tell you, New York City public schools do not make it easy. Grateful that they offer food at these schools, breakfast, lunch and dinner at this point, which is a little crazy.

[Carol Massar]

Yeah.

[Tim Stenovec]

It's not the healthiest stuff, though.

[Carol Massar]

I know.

[Tim Stenovec]

Granted, they do have, you know, my kids love apples and they have like New York apples, which we love, but it's the other stuff. And oftentimes in the after school programs, he comes home and he's like, oh, yeah, I got, you know, Doritos or whatever. I got, you know, candy from this after school and it's like, ugh, you can only do so much.

[Carol Massar]

I remember in high school, like, we used to take our own lunches in grade school and I lived close enough in grade school that we could go home for lunch and stuff. But I remember in high school, you Couldn't. And I remember, like, you could eat some fruit or there was this, like, great cake, and we would all, like, get it. And it's like, that was the choice we made. And I'm sure it was ultra process.

[Tim Stenovec]

Wait, I was gonna say, was it in, like a package or was it.

[Carol Massar]

Actually, it wasn't in a package. So maybe they had a bakery that maybe they were making it in their kitchen, but I don't know.

[Tim Stenovec]

You got to go home for lunch.

[Peter Atwater]

In.

[Carol Massar]

In grade school, we lived really close. It was like a little town. And it was like, that's pretty cool.

[Tim Stenovec]

The teachers just like, let the kids walk home by themselves.

[Carol Massar]

Yeah. I mean, I was literally a couple minutes away, so I could. I could go home and make dinner. Not dinner, but make.

[Tim Stenovec]

Did you make the lunch yourself or was.

[Carol Massar]

I did. I made it for myself and my little brother. No, my mom was working.

[Tim Stenovec]

That's pretty cool.

[Carol Massar]

Especially when we got a little bit older. That was through eighth grade.

[Tim Stenovec]

Different world.

[Carol Massar]

It is, right?

[Tim Stenovec]

Yeah, that's pretty cool.

[Carol Massar]

But high school wasn't like we had a.

[Tim Stenovec]

That's the opposite.

[Carol Massar]

Were you closer in your high school?

[Tim Stenovec]

Well, I went to boarding school, so.

[Carol Massar]

Kind of one of those.

[Tim Stenovec]

Impossible to really relate here.

[Carol Massar]

But was boarding school healthy?

[Tim Stenovec]

Yeah, I mean, it was real food, which is good. We did have one thing. We did have.

[Peter Atwater]

What?

[Tim Stenovec]

Well, two things that we had, which were crazy. One, chocolate milk. Okay, so that was pretty good. Two, I love chocolate milk. I used to a frozen yogurt machine.

[Carol Massar]

And do you have a cappuccino maker?

[Swami Kotagiri]

No, no, no, no.

[Tim Stenovec]

So we could just go into the dining hall and just get frozen yogurt. Frozen yogurt. Whenever we wanted. Which was a little nuts. I don't know if they still have that. And one thing you do as a seniors, you're allowed to, like, be out late. We'd all break into the dining hall and just eat whatever we wanted there late at night. It's kind of like.

[Carol Massar]

I'm sorry.

[Tim Stenovec]

Allowed to do that.

[Carol Massar]

Wait, wait, you broke in?

[Swami Kotagiri]

Yeah.

[Carol Massar]

Was it like a lock on the door?

[Tim Stenovec]

The locks that were meant to be.

[Carol Massar]

Did you pull out, like, those big, like, fire things?

[Tim Stenovec]

They were just like little, like, I don't know, like u shaped things that they put over, like horseshoe kind of things.

[Carol Massar]

You know, those things you learn about your co host.

[Swami Kotagiri]

Yep.

[Carol Massar]

Very, very interesting. Hey, we should point out that as a one little, I wasn't a bad kid.

[Tim Stenovec]

Okay. I just want to let you know I didn't get sent away.

[Carol Massar]

I'm gonna bring it back to the news.

[Tim Stenovec]

I was kind of a bad kid.

[Carol Massar]

We do also want to mention a story that has come come out and kind of associated, if you will, the Trump administration's deal with Eli Lilly and Novo Nordisk to lower the cash price of weight loss drugs is putting pressure on employers and insurers to negotiate better costs. But let's just talk about those GLP1s are, no doubt about it, people are eating less. There's kind of this healthier thing going on. I don't know if you want to call it healthy, but it is making people lose a lot of weight. And so you do wonder how this plays into food consumption and what they really want to eat. So just kind of out there.

[Tim Stenovec]

Also on the GLP1s, did you see the news this week? ELI Lilly dropping CVS's drug benefit plan. Its employers okay this after CVS stopped covering its blockbuster weight loss drug in favor of a rival medication from Novo Nordisk. This according to people familiar with the matter. So oh my God. Eli Lilly was like, we're not going to use CVS's drug plan because you guys are not actually covering our product.

[Carol Massar]

Sounds like a negotiating tactic. I mean they're dropping the whole plan.

[Tim Stenovec]

Hey, costume, right?

[Carol Massar]

All right, all right. A lot of stuff this week. Hey. Still ahead on Bloomberg Business Week, how one family left the London suburbs for a small village in France. Actually Provence. All for the love of wine.

[Tim Stenovec]

More on the other side with the owner of Maison Mirabeau. This is Bloomberg.

[Peter Atwater]

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[Matt O'Neill]

You'Re.

[Tim Stenovec]

Listening to the Bloomberg Business Week Daily 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. It's the stuff of fantasies.

[Carol Massar]

Carol, we about talked talked about this.

[Swami Kotagiri]

Yeah.

[Tim Stenovec]

You quit your corporate job in London.

[Carol Massar]

Okay.

[Tim Stenovec]

You move to the south of France with your three kids, your wife. You make rose.

[Carol Massar]

It sounds magical.

[Tim Stenovec]

It does. Well, it wasn't a fantasy for Steven Kronk, the founder and CEO of Maison Mirabeau. He and his wife did exactly that. It was 1616 years ago. It was.

[Matt O'Neill]

Yeah.

[Tim Stenovec]

Wow. At the height of the global financial crisis, Talk about timing. Steven's with us right now here in the Bloomberg Interactive broker studio, and he brought Rose. First of all, it's been a little while since we last spoke.

[Carol Massar]

Is it like two years?

[Matt O'Neill]

Yes, yes.

[Tim Stenovec]

How's business been since then?

[Peter Atwater]

It's.

[Matt O'Neill]

Well, this interesting question. It's been up and down, I would say. I mean, I think Provence Rose is still the benchmark for around the world, so we're very lucky we've got that. But there've been a lot of headwinds, as I'm sure you're aware.

[Tim Stenovec]

Yeah.

[Rick Smith]

Is it?

[Tim Stenovec]

Look, there's the climate change headwind, but there's also the consumer changing consumer tastes headwinds as well as tariffs.

[Matt O'Neill]

Exactly.

[Tim Stenovec]

Which is the. Which is the thing that is the biggest headwind.

[Matt O'Neill]

They all combine together. This is the perfect storm. So there's a health kick. There's the cannabis movement, there's the no and low alcohol movement, there's the zympic movement, because that suppresses people's desire to have a drink. So it's like everything. And then you load on top of that, the tariffs, it's like, yeah, what has happened?

[Carol Massar]

So what does that mean for you guys? Like, how do you pivot? How do you adjust around that?

[Matt O'Neill]

Well, there's a lot of things we can't change, but what we try and do is, is with the tariffs, for example, we've tried to swallow as much as we can. We don't want Mirabeau to be much more expensive in the store, so we've tried to swallow that.

[Carol Massar]

That's hard.

[Matt O'Neill]

Which is. It's hard. But we're keeping our fingers crossed that maybe this is going to change.

[Tim Stenovec]

Remind everybody the price range in the United States. So you don't want the price to go up in the U.S. so we.

[Matt O'Neill]

Have generally between 20 and $30.

[Tim Stenovec]

Okay.

[Matt O'Neill]

I mean, to try and keep below $30, because that's a price point.

[Tim Stenovec]

So then how does that hit your margins?

[Matt O'Neill]

Yeah, it's not great, but, you know, I'd rather build the brand and, you know, I'd rather people carry on drinking Mirabeau especially. You know, we're coming out of Thanksgiving, and Provence rose is just so good with the turkey. So, you know, I'm just trying to hope this goes away and just carry on pushing my wines here.

[Carol Massar]

Yeah, well, you know, and I've said I wasn't a big rose drinker, but I've got to say, yours is pretty. Pretty magical, and I've really enjoyed it. We're going to taste it. I know. Tim is. Is is sniffing it out. You're in the United States. Talk to us about the US Market specifically.

[Matt O'Neill]

So I've started farming regeneratively for some of my wines.

[Carol Massar]

Right.

[Matt O'Neill]

And the regenerative movement seems to be centered mainly around California now.

[Carol Massar]

Yeah.

[Matt O'Neill]

So, I mean, I'm selling my wines in 40 countries, but California is the epicenter of the regenerative movement. The California Department of Food and Agriculture has been the first state to. To. To define the words regenerative agriculture. And meanwhile, we've got, you know, the wine regions there. So Paso Robles, Napa, Sonoma, they are the most regenerative wine areas in the world.

[Tim Stenovec]

So what does that mean for one of Salem County?

[Carol Massar]

I know where Tim is from Paso Robles, but what does that mean that you. Would you do more here in the United States?

[Matt O'Neill]

I'm just trying to sell more wine here.

[Carol Massar]

You're just.

[Matt O'Neill]

And so the retailers say, like A1 and Sprouts and Bristol Farms and Hagans, they're really getting behind the regenerative movement. They're looking to seek out regenerative farm.

[Carol Massar]

Products because there's an awareness of it. Right.

[Matt O'Neill]

Because they know what it means for farmers. They know what it means for people, too.

[Tim Stenovec]

Not everybody knows what regenerative farming means and especially how that is applied to farming the grapes that go into wine, that go into. So for people who don't know what it is, explain regenerative farming in the context of viniculture.

[Matt O'Neill]

So regenerative, as the name suggests, is about regenerating soil fertility and regenerating nature in simple terms. So, you know, it's the opposite if you think about it. What was organic farming called before the First World War?

[Tim Stenovec]

Farming.

[Matt O'Neill]

Right. But then there was a huge amount of pressure. Everyone was worried about industrial farming.

[Carol Massar]

Right.

[Matt O'Neill]

So the heavy tillage and in particular, heavy use of chemicals. So there's been a move, certainly since the First World War and the Second World War as well. We've seen a lot of nitrogen being used in farms, a lot of heavy tillage, a lot of chemicals, pesticides, and so on. And that's just been killing our soils. And this is a catastrophe. You know, we were worried about famine at the end of the Second World War, so rightfully, we were worried about feeding our population. But we haven't been measuring food in the right values. We've measured by calories rather than nutrient density.

[Carol Massar]

So I didn't mean to interrupt, but it was just interesting. We just came off a discussion of talking about the cost of meat and just what's going on in that world. But I do think about like, is our soil going globally? How tortured is it or how bad is it because of the industrial farming?

[Matt O'Neill]

A lot of it. Most of it I would say is on life support. It's really, it's catastrophic. So when I was going to say, when I drive up from, from L A to Paso robles, which is one of the most regenerative regions in wine.

[Carol Massar]

Yeah.

[Matt O'Neill]

Up the i5 and you see thousands of acres of fruit trees and nut trees that are on life support. It's like the moon's surface. And so it's kept. They're kept alive by these external inputs and what you end up with a product. But they're not very tasty and they're not very nutritionally dense.

[Carol Massar]

Right.

[Matt O'Neill]

So we need to actually start restoring soil health globally. And regenerative is a way of doing that.

[Carol Massar]

So you can do that in terms of all that soil, how long does it take, the process of getting it back?

[Matt O'Neill]

It can happen quite quickly. And that's one reason why we. So I run a non profit as well called the regenerative viticulture foundation. So viticulture is agriculture for vines. And we're launching these initiatives called one block challenges. So we did one in Paso, we've done one, we're doing one in Napa. Opus 1, in fact, great winery, also.

[Carol Massar]

A nice wine and winery.

[Matt O'Neill]

So we're doing one there on the 18th of November and we're challenging the growers in Napa and as we did in Paso, to just transition one block of their vineyard to regen for a year and then come back and see the difference. It's incredible how generous mother nature is coming back.

[Tim Stenovec]

You said you've driven up California on the 5, but if you go a little west, you could drive up on Highway 1 or the 101 and then go on San Marcos pass through Los Olivos, where there is a lot of agriculture and a lot of vineyards as well. Is the movement expanding throughout the state of California and beyond the state of California?

[Matt O'Neill]

Yeah, absolutely. And that's the point of my nonprofit is to really encourage farmers, give them the reasons to do it. Everything around regen, as far as we're concerned, is using science. So, you know, if we can rebuild soils and rebuild the soil organic matter, rebuild soil carbon, they end up with much better tasting wines. But also, you see nature coming back. Mother nature owes us no favors, but she'll come back. But you've got to create that right environment, wean yourself off the synthetics and get yourself back into natural.

[Carol Massar]

You know, it's kind of. I always think about, Stephen, what happened during the pandemic and the skies got bluer and the animals came out and just. And quickly. And it's just a reminder when we see the impact of climate change and it feels so devastating, it feels like there's no way back. I always go back to the pandemic and how the world seemed so much better so we can do better. How expensive is it to do regenerative farming and the ROI on something like that, the return on investment?

[Matt O'Neill]

Well, we're working a little bit with UC Davis and we're working with other growers to see the data points coming out of it, because basically we think, and certainly I'm evidenced on my farm, is once you've made that transition, your input costs drop. So, you know, you're not buying as many external inputs, fewer tractor passes. You're letting nature kind of get everything back into balance. So we think actually costs will be more or less the same as they are with regular farming.

[Carol Massar]

All right, so we're talking with Stephen Kronk. He's founder and chief executive officer of Maison Mirabeau. He's here in our Bloomberg Interactive Brokers studio. So that leads us to your product. There's three bottles that I'm looking at in front of me, and there's one that we know we've opened up. Tell me what we're going to sample here.

[Matt O'Neill]

So this is One Day by Mirabeau.

[Carol Massar]

Is this new?

[Matt O'Neill]

This is new.

[Carol Massar]

I thought so.

[Matt O'Neill]

This is why I'm here.

[Tim Stenovec]

So this is.

[Carol Massar]

I know the bottles.

[Matt O'Neill]

So we're the first certified regenerative organic winery in France.

[Carol Massar]

Tim and I are competing for the bottles.

[Tim Stenovec]

I know. I'm taking.

[Matt O'Neill]

Well, this is.

[Carol Massar]

No, no, no, no.

[Matt O'Neill]

So One Day. One Day by Mirabeau. We call it One Day because one Day, all vineyards will be farmed like this.

[Carol Massar]

Oh, I love that.

[Matt O'Neill]

And it's the first regenerative certified wine to come out of France, to come out of Provence. And it's something that we're really, really proud of because rather like our estate wine, which is also the first certified regenerative organic wine, this is us certifying our growers. So we have to make this work at scale.

[Carol Massar]

Right.

[Matt O'Neill]

You know, you can't just have little niche boutique wineries enjoying the benefits of regen.

[Carol Massar]

And it can be done at scale.

[Matt O'Neill]

It can be done at scale. And my growers in Provence are just, just absolutely crazy about getting involved, you know, because organic is, I would say, Flat growth.

[Carol Massar]

Right.

[Matt O'Neill]

But a lot of basic organic isn't. Also isn't good for soil, you know, so. So we have to use copper.

[Carol Massar]

Why is that? So that makes me nervous because I think there's an assumption.

[Matt O'Neill]

Well, so organic is the best kind of farming you can, you can do when you're doing it properly, when you're doing it regeneratively. So regenerative organic is, is the gold standard.

[Carol Massar]

Okay.

[Matt O'Neill]

But if you are a lot of, A lot of organic farms, certainly in the wine world can still be monocultures. So you don't want any weeds in the vineyard, you want it to look immaculate. So if a wheat, the weeds come in, then, you know, plow them away. Yeah, but actually that's wrong. You know, you need to let nature into the vineyard. You can't have these, these monocultures. It's funny, I was with somebody the other day and they were saying, yeah, my husband's a real germaphobe and he's sanitizing his hands and everything is just so. So I do not.

[Carol Massar]

I know this one over here. I do not do that.

[Matt O'Neill]

I said, okay, tell me, how often does he get sick? And she said, all the time. And we need to rummage around in the dirt. We need, we need to have those bugs and we need to be healthy and build our resilience. And that's what regenerative does. You know, monoculture is the same thing as sanitizing a farm.

[Carol Massar]

Well, I will say with kids, they say, like, introduce pets and dogs. It's a good thing for them to be around. So.

[Tim Stenovec]

Cheers.

[Carol Massar]

Stephen, I just want to try this. Cheers. Cheers.

[Matt O'Neill]

Thanks for having me in.

[Tim Stenovec]

Carol is drinking the wine as we speak. That's what it's for, the rose.

[Carol Massar]

That's nice. So this is the one day.

[Matt O'Neill]

This is one day.

[Josh Green]

Yeah.

[Tim Stenovec]

Yeah.

[Carol Massar]

And I mean, it varies, right?

[Matt O'Neill]

Like, it varies. But the good thing about Provence rose, it's always dry. So. So because you can get some roses that are quite high in residual sugar and you can. That's not very food friendly and not very healthy. But Provence rose is always, always bone dry.

[Tim Stenovec]

So I always associate with warm weather in the summer. But you argue that it's the perfect thing to drink at Thanksgiving dinner.

[Matt O'Neill]

Right.

[Tim Stenovec]

Why is that?

[Matt O'Neill]

Because it's just such a food, versatile wine.

[Tim Stenovec]

That's great.

[Matt O'Neill]

It's got a little bit of acidity that cuts through the sort of, the sweet flavours, the cranberry sauce or. But it cuts through the gravy. It's just a refreshing mouthfeel. Once you've had a great big fork of potato or something.

[Tim Stenovec]

That's Stephen Kronk, the owner of Maison Mirabeau.

[Carol Massar]

I have to say this is the second time that we've talked with Stephen, and we're hoping actually to get his wife back soon because they have a book out, too, about their experience, and it's all about food and recipes and cooking. I mean, Provence is a very, very special place. But it's interesting what he's trying to do with regenerative farming. We have done several segments on this. This concept where you basically don't strip the soil. And I think farmers used to kind of try and do that way back when of maybe like rotating crops and so on and so forth.

[Tim Stenovec]

But, yeah, pre the great wars.

[Carol Massar]

Pre the great wars. But, like, what we do now in terms of industrial farming and chemicals, it's a whole different ball game.

[Tim Stenovec]

But it's such a big story because, you know, Post World War II, as Stephen explained to us, there was such a demand for feeding a growing number of people here in the US and around the world.

[Carol Massar]

Right.

[Tim Stenovec]

You also had industrialization, so you had fewer people actually living on farms, farming for themselves and farming for a great number of people. So you had to figure out how to do more with less. And I wonder if the regenerative movement will grow beyond sort of a niche or small number of players that don't cater to a whole host of people.

[Carol Massar]

I mean, check out Chipotle's history way back when, when the original founder was there, Steve Ells. But, like, that was kind of their mission of trying to do regenerative farming, farming responsibly. The other thing I would say, Tim, that's always crazy, is when you and I do any kind of food story and we talk about how difficult it is to kind of move beyond industrial farming, how much food is wasted and ultimately thrown out at the same time. So many people don't have food, but this idea of if we were maybe smarter in our food production and consumption, maybe we wouldn't have. We could. Regenerative farming could be easier to do.

[Tim Stenovec]

I don't know. We're a little guilty of it. I know you end up finding something in the back of the fridge. It's like a little shriveled up, and you're like, can't eat this now.

[Carol Massar]

Smaller fridge. Smaller. You know, refrigerators are smaller. I have heard now over in, like, Europe and stuff, like, they shop every day. We listen. I had two refrigerators and a freezer growing up.

[Tim Stenovec]

Yeah, but there were. How many of you. Nine.

[Carol Massar]

I know. But still, it was a lot of space.

[Tim Stenovec]

Yeah.

[Carol Massar]

I'm just saying. No, judge.

[Tim Stenovec]

All right. How do we get there from wine?

[Carol Massar]

I don't know. The wine was good. I'm going to just put that out there. Full disclosure. Hey, that wraps up the weekend edition of Bloomberg Businessweek from Bloomberg Radio. Thank you so much for joining us.

[Tim Stenovec]

Be sure to tune in to Bloomberg Businessweek Daily Monday through Friday starting at 2pm Wall Street Time on Bloomberg TV, Bloomberg Radio and on Sirius XM Channel 121. Also listen to us on Apple CarPlay and Android Auto Free in the Apple App Store or on Google Play.

[Carol Massar]

You can also watch our daily broadcast on YouTube. Just search Bloomberg podcasts. We're simulcast on Bloomberg originals, available at bloomberg.com originals and streaming platforms including Roku, Amazon, Fire T TV, Samsung TV plus and more.

[Tim Stenovec]

Find our Bloomberg Businessweek Daily podcast at bloomberg.com apple or wherever you get your podcasts. The latest edition of the magazine. It's available on newsstands [e-mail] and always on the Bloomberg Terminal. I'm Tim Stanbeck.

[Carol Massar]

And I'm Carol Massar. Have a good and safe weekend, everyone.

[Tim Stenovec]

This is the Bloomberg Business Week Daily 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.

[Carol Massar]

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