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The economist.
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Hello and welcome to the Intelligence from the Economist. I'm Rosie Blore.
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And I'm Jason Palmer.
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Today on the show, could Red Bull have its wings clipped? And trophy wives may finally be going out of fashion. But first. Today, Lebanese President Joseph Aoun will visit the White House. It's the first such presidential summit in nearly two decades and it comes at a challenging moment for Lebanon. The country faces a deep financial crisis, an ongoing power struggle against Hezbollah, the Iran backed Shia militia, and a conflict between Hezbollah and Israel that's wreaked enormous damage and continues to wreck lives across the whole country. Lebanon certainly needs help, but what will it get?
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The past seven years have been by far Lebanon's worst period since the end of its Civ in 1990.
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Greg Karlstrom is a Middle east correspondent.
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It's been through one of the worst financial crises in modern history, an enormous explosion and almost three years of war with Israel, just to name a few. And it endured most of that without even having a proper government in place. Now it finally has one. There's a new president and a new prime minister and they are trying to enlist help from Donald Trump and from other allies around the world to get Lebanon back on its feet.
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B
Greg, before we get to the details, why is Lebanon so important?
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I think you can make a couple of arguments. One is geopolitical. If things go well in Lebanon, you can imagine it's an enormous blow to Iran's influence in the region. It's already lost influence in Syria with the fall of the Assad regime. If it no longer had Hezbollah, the Iranian backed Shia militia in Lebanon, as a heavily armed cat's paw, then its clout in the region would be diminished. Conversely, if things don't go well in Lebanon, the risks include more war with Israel, an emboldened Iran, perhaps internal conflict, and a migration crisis. So that's one piece of it. And then you can also make an argument around Lebanon itself. This is a diverse country that churns out lots of well educated, entrepreneurial, talented people, but it ends up exporting most of that human capital because Lebanon itself is so dysfunctional and corrupt that most people can't make a decent L there. So I think people should also want it to succeed on its own merits. It could be a very important business hub for the entire region.
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You mentioned dysfunction there. Lebanon for a while lacked a proper government. Who was in charge during that time?
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In effect, no one. If you go back to late 2019 when the economic crisis started and there were mass anti government protests, Saad Hariri who was the prime minister at the time, resigned, but stayed on in a caretaker capacity. And then he was followed by two additional caretaker prime ministers. So there was no empowered pm, no empowered cabinet that could take decisions. And then you had a stretch of more than two years where the presidential palace was vacant, which is not uncommon in Lebanon. The president is selected by Parliament and often MPs can't agree on a president and so you end up with a vacancy. But this was one of the longest in Lebanon's history. The vacuum finally ended did at the beginning of last year, under very strong international pressure, Parliament chose Joseph Aoun, the former army chief, as president. And then shortly afterwards, Noef Salem, a former head of the International Court of Justice, was named as the country's new prime minister. They look like an odd pairing. Aun is this former soldier who spent his whole life in the army. Salem is bookish. He's an academic and a diplomat. He's been outside of Lebanon for most of his life. He was also the country's ambassador to the UN at one point. So they're both political outsiders in a country where politics has long been dominated by the same set of ex warlords who ran militias during the civil war. They both promised to come in and tackle some of the country's long standing problems, but they came in in a very difficult situation.
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You've been reporting across Lebanon recently. You used to live there. What are the key problems the country's facing?
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There are two big challenges right now. The first one is the issue of Hezbollah's weapons and the war that it has dragged Lebanon into with Israel. And the cost of that war has been enormous. You have the human toll, more than 4,000 people killed, including plenty of civilians, medics, journalists, ordinary people in the south. But for Hezbollah itself, quite a striking death toll. I drove through one Shia village in the Baqa Valley in eastern Lebanon. 1500 people lived there, counted at least a dozen posters announcing the deaths of Hezbollah fighters. And that's an undercount. Some of the bodies haven't been identified. Some families have been told not to mourn in public. So we're probably talking 1 to 2% of the population of this very small village. And then along with the human cost, you have the economic cost of the war. I met with Amr, the economy minister, who estimated the total damage is around 40% of Lebanon's GDP. Also thinks the country is going to be pushed into a recession this year because of a slowdown caused by the war. And this is where it links to Lebanon's second Big problem, the economy. The aftermath of this unresolved economic crisis. I lived there when it began back in 2019 and 20, and it was a dizzying time, that currency was dropping to new lows every week. The banks were effectively closed. Nobody could get money out of a bank. Things feel a bit more stable now, but it's only because they have really, really bottomed out. Currency is worth 2% of what it used to be worth. Inflation is still quite high by global standards, but less than the hyperinflation of a few years ago. And ordinary people have been impoverished.
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And, Greg, what is the current state of the conflict between Israel and Hezbollah?
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It hasn't stopped, but it has slowed down for the moment. Last month in June, Israel and Lebanon signed a deal in Washington. It's the first diplomatic agreement they've signed in decades that was meant to impose a ceasefire. It calls for the Lebanese army to start deploying in southern Lebanon. And then, as the Lebanese army does that, Israel is meant to withdraw its troops. It continues to occupy a swath of territory. Now, there's a lot that's vague about this agreement. For example, at what point will Israel be forced to withdraw the deal? Doesn't say. It doesn't lay out criteria. Israel continues periodic airstrikes in Lebanon. Again, the war hasn't stopped, but there is meant to be diplomatic movement towards ending it.
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It's a very long list of very deep problems. Can they be fixed?
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They're difficult to fix. On the issue of Hezbollah, someone close to the president explained their thinking to me, which is we want to present the Shia community, Hezbollah's constituents, with two images we want to show them. On the one hand, Hezbollah has dragged this country into a war on Iran's behalf that has killed thousands of your sons. It has started a war that led to your villages being destroyed. On the other hand, we have a Lebanese state that is going to come in and secure the south and rebuild. Really, the mechanism here is to try and drain Hezbollah's support by stepping in and providing the services that the government has long failed to provide in southern Lebanon. But again, this is where the two problems come together. Because to rebuild the south, you need resources. And this government, seven years into an economic crisis, doesn't have those resources. So they also need to tackle the economic side of it. They need to make a deal with the imf. They've been talking about that for years. It hasn't happened because they haven't passed the reforms that the IMF insists on as a precondition. Noef Salem's Government has passed some of those reforms, but they haven't figured out how to apportion the $80 billion losses in the banking sector between depositors and shareholders in the state. And they haven't done it in part because the banks still have a lot of political power and their shareholders don't want to see their equity wiped out. So they need to move faster on that. They need to move faster on administrative reforms, from strengthening the judiciary to trying to trim the enormous civil service. There's a lot that they need to be doing on the economic front so that donors and investors will finally step in, give money to Lebanon, and then allow the government to start this process of reconstruction.
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Joseph Aoun is going to the White House today. Where does enlisting Trump's help come into any of this?
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Almost made it through an interview without talking about Trump at length. But we can never do that these days. I think President Aun wants three big things from Trump. One is support for the Lebanese army is underfunded. It needs better equipment. It needs money. The second thing is this deal between Israel and Lebanon. Because it is so vague on the question of withdrawal, the Lebanese will need American pressure on Israel to ensure that it does withdraw. Now it's started pulling out, it says, from what are called pilot zones, two areas that are meant to be a proof of concept to show that this deal can work. But if you're going to secure any further reaching Israeli withdrawal, that's going to require pressure from Washington. And then the third thing that Alan and his advisors want is investment from the us They've put together these glossy presentations about how firms in America could benefit from investing in ports, telecommunications. I think they're cognizant that Donald Trump's America doesn't really do foreign aid. So instead of asking for donations, they're looking for ways to make an investment case to the President. I think those are going to be the three big things that Alan wants to focus on in this meeting at the White House.
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Greg, thank you very much.
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Thank you, Rosie. Here we have the biggest ski jump in the world.
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In both America and Europe, the brand Red Bull is known almost as much for its sponsored sport teams and events as it is for its sweet, sweet energy drink. It's a league of daredevils as well as big names like football manager Jurgen Klopp.
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We have assembled a team of elite football players to take on a series
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of football challenges all around the world. And all that high adrenaline marketing, it works.
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Red Bull was founded in 1984 by Dietrich Mateschitz, an Enterprising Austrian who had discovered a Thai energy tonic on a business trip. And he thought, this is something that Europe needed.
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Wendelin von Bredo is our senior Germany correspondent.
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He decided to launch it in Europe, adapt it to European taste. So he made it carbonated and a bit less sweet. And initially, the reaction was a lot of skepticism. People said, this is not going to work. There's not a market for this. Nobody wants this. You're going to fail. But he did it anyway. He was Austrian, so he launched in Austria and it became this huge global success.
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How did it become so successful?
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Well, Mr. Mateschitz had a rare genius for marketing. He had so many ideas, and really many of them worked. So he came up with slogans and stunts that made Red Bull the world's leading seller of. For instance, Red Bull gives you wings, you know, with lots of eyes. That was his idea. In German, it's Red bullfalleitie fl. It's very catchy and everyone knows it. And then he really branched out into sponsoring sports of all sorts, but in particular, extreme sports. So it was his idea to sponsor the Austrian skydiver Felix baumgartner, who in 2012 jumped to Earth from a helium balloon in the stratosphere. But most of all, Mateschitz built a media powerhouse. And they have their own TV channel, they have their own magazines, they have their own studio. So his TV channel is the number two broadcaster in Austria, after the public broadcaster after the of. And it's hugely influential, and it's a big part of Red Bull's success. And so when he died in October 2022, many Austrians fear that Red Bull would fall as quickly as it has risen to the biggest maker of energy drinks in the thought without Mateschitz, it just cannot survive, even without him at the helm.
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So who is at the helm?
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So now it's interesting, there are three people at the helm, so he doesn't have one successor, and they all keep an extremely low profile. I mean, most people don't even know their names, and they basically continue to do what Mateschitz did. They haven't really changed the pillars of success of Red Bull. So Red bull today has 28% of the global market, much ahead of Monster, its main rival, which has about 17% of the market. And last year, it sold 14 billion cans of its energy drink, up by 10% from the previous year. And it has 22,000 employees in 178 countries. So it's basically sold nearly everywhere in the world.
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And you say that continued success is just down to, well, not changing the formula.
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Not really changing the formula. So Red Bull is unusual in that they have very little capex because they mainly do the marketing for the brand. They spend a third of their revenue on marketing, which is much higher than its rivals. I mean, Monster spends 7% of sales on marketing. So that is really essentially what they do is marketing. But the filling of the cans, the distribution, all of that is outsourced. And even the cans are produced by the Bull Corporation. So an American, they are debt free. They've never taken on any debt because they outsource all the manufacturing and production. They pay for the marketing. That's what they do. And they've done extremely well with that strategy.
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But having said all of that, there are some health concerns around Red Bull, aren't there?
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Well, Redbud is made of carbonated water, taurine, caffeine and sugar, all of which, except for maybe the carbonated water, is not good for children. So Red Bull themselves say it's safe to consume in moderation for adults, but it's not recommended for children. But the problem is their savvy marketing. You know, the extreme sports, the Formula one, the football makes it very attractive to children. Children, including my own son, think Red Bull is super cool. And of course, if they get the opportunity to have Red Bull, they will for sure try it and maybe even get used to drinking it on a regular basis. So some countries have decided to ban the sale of red bul under 18. Latvia is an example, Lithuania, Poland and a few others. And this month, Britain has said it's planning a ban of high caffeine energy drinks such as Red Bull for those under 18 too. The ban will take effect next year, so not immediately, and it's been discussed for a long time, but now it's really happening.
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So putting aside the very young end of the market, the rest of the market looks fairly healthy for Red Bull.
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Yes, it does. It continues to be very successful with young men and the party crowd. It's popular all over the world. But it does have rivals. I mean, there's Celsius, an American brand that really taps into the health and wellness trend and markets itself, in particular to women who are not very avid Red Bull drinkers. And Celsius has done incredibly well, has become the number three after Red Bull and Monster in America. So there are some challenges to the crown that Red Bull has had ever since it was conce. Red Bull has been the market leader for the last quarter century at least. But I think the future is bright for Red Bull. They've grown and grown and they continue to grow. And I don't see that changing anytime soon. And it's really down to this formidable marketing machine, the sponsoring of extreme sports, of Formula One, of football. It is the most successful marketing machine for fizzy drinks in the world and they've done incredibly well with that.
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Thanks very much for joining us, Wendelin.
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It's always a pleasure, Jason.
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Having a trophy wife has long been a mainstay of American popular culture. Culture. Just think of the cigar smoking ad execs of Mad Men or Daisy Buchanan in the Great Gatsby. Wealthy men wanted to adorn themselves with young, glamorous women. But change may be on its way.
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The age of the trophy wife seems to be over.
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Doug Dowson is a data journalist.
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So we looked at a sample of married couples in the census data, and we actually only looked at heterosexual married couples because the data just aren't available for these kinds of historical analyses. We saw that in 1980, about 8% of the top earners, so those are people in the top 1% of the income, married someone at least a decade younger, compared to just 5% of men earning typical wages. By 2024, that gap had closed. So the richest group behaved just like the rest of us.
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That's big news, Doug. Let's just get the historical record straight. First of all, what did the age gap used to be?
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One of the interesting papers that I came across was done a few years ago. It looked specifically at the men at the very high end, the very wealthiest men in America, the Forbes 400 list. And what they found was wealthiest men were on average seven years older than their wives. This was significantly higher than the typical two to three year gap found in the general population. Even more striking was when they looked at men who had remarried so, you know, they married somebody and then they split, and then when they're much older, they remarried again. And that gap was significantly higher that that gap was 22 years. So really striking finding there about the sort of men at the very top of the income scale.
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Why the change?
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I mean, I'm sure there's all sorts of cultural factors at play. I think one of the interesting explanations is education. People who spend more time in education, so going to university, grad school, et cetera, professional degrees, they often earn higher salaries as a result. And they also tend to spend a lot of their sort of prime dating years socializing with their classmates. So those are gonna be people who are closer to their own age. So education seems to be like a very clean, very tight explanation for at least some of the change.
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Diplomatic answer there. What about trophy husbands?
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Are they a thing?
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So I went into this project thinking that I would see something on the female side. So looking at basically as the income of the wife goes up, how does that change the age gap relationship? And it's funny cause I really didn't see very much. Kind of read lots of stories about high earning women having boy toys, you know, younger men. And that may be the case when these women are dating. But as far as who they marry, the data seem to show that there's really not that many. Only about 1 in 5 high earning women tend to marry men who are younger than them. And that's basically the same proportion that you see across the income scale. Funnily enough, historically women who earn a lot have tended to have slightly older husbands, which could be that hiring women want to be with hiring men and those men, you know, want to be with with women who are like a little bit younger. So yeah, basically it's when you really dig into the data, there isn't that much to that story.
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Doug, thank you for talking to me.
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Thank you, Rosie.
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That's it for this episode of the Intelligence. We'll see you back here tomorrow.