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Fed Funding Freeze Causes Chaos & Indie Book Site Takes On Amazon
00:29:05
Trump freezes all federal funding & a savior for local bookstores?
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What's the best time of day to get a deal? All day with Jack in the box's all day. Big deal meal. You get to choose from four entrees like the supreme croissant and five tasty sides, plus a drink starting at $5. So hurry in or take your time. You've got all day at Jack. Every bite's a big deal. Good morning, Brew Daily Show. I'm Neal Freyman.
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And I'm Toby Howell.
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Today, the Gulf of Mexico is bec the Gulf of America. At least on Google Maps.
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Then the Trump administration's vague directive to halt $3 trillion in federal funding has hit a bit of a roadblock. It's Wednesday, January 29th. Let's ride.
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Happy Lunar New Year. If you're one of the more than 1 billion people celebrating the arrival of the year of the sun snake, the wood snake this year, to be precise. Sounds a little spooky, but it isn't. Unlike in Western culture, snakes aren't considered the manifestation of evil and temptation in China. Instead, the slithery animals are associated with spirituality, charisma, intelligence, and art, but also cunning and mystery. Some people you may have heard of who were born in the year of the snake. Mahatma Gandhi, Bob Dylan, and Taylor Swift. Toby. Obviously, this had me checking my Chinese zodiac sign, and turns out I. I was born in the year of the goat, which is no surprise because, well, I'm the goat. What's your sign?
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B
I am the year of the oxnail. Which is unfortunately, really bad news for the podcast because apparently, according to the Chinese zodiac, ox and goat are not compatible at all and should, in fact, avoid each other wherever possible. So it might be time for me to pack it up. And you need to go out and find a pig or a rabbit, because apparently that is what you are compatible with. Now, a word from our sponsor, Yahoo. Finance. Neal. A bit of a bounce back day in the market yesterday.
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Well, that was the weird thing. Monday's slump was mostly isolated to big tech firms and AI related companies. And a majority of S&P 500 stocks actually ended the day higher.
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Oh, so it was really a concentrated sell off. Neil, you know what? You're always on it. Where do you even come up with all these facts?
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Well, I usually just give Yahoo Finance a peruse.
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Oh, so I was giving you too much credit? You derive your power from perusing Yahoo Finance?
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Hey, it's right there. There for you to access to. I'm just a better peruser than you.
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If you want to up your perusing game to Neil Levels. Head to yahoo.finance.com on Monday, the Trump administration directed all federal agencies to pause hundreds of billions of dollars in grants and loans, creating deep uncertainty among those who rely on federal funding. But yesterday evening, a federal judge played an UNO reverse card and temporarily froze Trump's freeze until February 3rd. The administration spent most of yesterday clarifying their memo, saying it wasn't a blanket pause and it wouldn't affect programs offering direct payments to individuals like Social Security or Medicare. The goal of the pause was to take stock and make sure programs align with the President's priorities and also rein in government spending on grant programs and federal assistance, which hit $3 trillion last fiscal year. That is nearly half of the $7 trillion the government is expected to spend in fiscal year 2025. The pause also likely sets up a constitutional fight over spending powers. The executive branch is only allowed to spend money allocated by Congress and signed by the president. And many see Trump's order as an unconstitutional attack on Congress's power of the purse. Already, states are pushing back. A coalition of attorneys generals filed a suit yesterday to block the order. So, Neal, not only does this order affect a lot of cash and a lot of people, but it will no doubt also find its way to the courts.
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A
This was absolute chaos yesterday. It was very similar to a self imposed federal government shutdown where Congress is stymied by the fact that they can't spend any money because the government has shut down. There's no budget was very similar to that where there's just no money flowing from the government. As you mentioned, there's tens of hundreds of billions of dollars going from D.C. out to programs all around the country, nonprofits, school lunches, states and local jurisdictions. Anything that you could think of was touched by federal spending. And they spent the day yesterday fielding hundreds of calls from their constituents being like, what is going on? Am I going to be able to pay my rent? Because this is, this is financed by federal government. Am I going to be able to pay my payroll? What am I going to do? So it was absolute chaos. It seemed like the the government or the Trump administration wanted to pause spending in order for those, to make sure those spending things complied with these executive orders, which aimed to root out diversity inclusion initiatives. But instead it was very haphazard. They didn't even know what was going on. One of the biggest focuses of yesterday was Medicaid, which is the largest grant program for the federal government. It provides health care for 72 million lower income individuals. The portals for all 50 states for Medicaid, reimbursements went down. So people are like, what's going on here? They asked the press secretary in her first press conference what, what the deal with Medicaid was. And she replied, I'll check in on that and get back to you. It sparked a huge uproar about the lack of organization, the lack of thought that went into a federal funding freeze.
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B
And then let's talk about some of the legal issues that this might face. So there was this law passed back in 1974 that was aimed to rein in what at the time Congress saw as abuses of power by Richard Nixon when he was in office. So that law requires the executive branch to spend money that is only allocated by Congress. And so now a lot of people are. Are contending that all the money in these programs that were approved by President Biden cannot be, you know, now blocked without an act of Congress. They say that that would be unconstitutional. You cannot usurp the power, the legislative branch's power to, you know, allocate funds. So that is the main sort of constitutional fight that we could see filtering down through the court system.
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And that was the only sort of shake up to the federal workforce that happened yesterday, our attempt to it. Last night, the Trump administration sent out a email to 2 million federal workers, subject line fork in the road, telling them that they would. It's essentially a buyout. They would pay you eight months until September 30th, as long as you resign by February 6th. And that's if you don't want to come back to work, come back to the office for five days a week. So they're offering 2 million people buyouts, which is part of this greater purge of the federal workforce. The goal is to reduce the number of federal employees by 5 to 10%. That would mean hundreds of thousands of people would be leaving the federal workforce, and they would work in everything from TSA to, you know, staffing museums and working at the IRS. I mean, the implications are profound if you have 10% of the federal workforce leaving.
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And if you are an eagled ear listener, you might have remembered that subject line because it resembles the same exact one that Elon Musk sent to Twitter employees back in 2022 giving them a similar ultimatum. So clearly, he and Trump are running the exact same playbook here to try to, you know, purge some employees from the federal government as well.
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Next time you open Google Maps to plan a beachy spring break trip, you might notice something a little different. The app said it will change the name of Gulf of Mexico to Gulf of America. After the Trump administration's executive order announcing the switch. It won't happen just yet. Google's waiting for the US Government to update its official maps before modifying its own. But it said applying name changes to reflect local labels has been a long standing practice. However, if you're not living in the United States and you use Google Maps, it will now have multiple labels, Gulf of Mexico as the main one, then Gulf of America in parentheses. Users in Mexico will continue to just see Gulf of Mexico, which is how that country refers to the body of water. Google Maps is also making another switch to accommodate another part of Trump's order. It will change the name of Denali, the tallest mountain in the US to Mount McKinley, which had been the Alaskan peaks, namely before Obama changed it in 2015, out of consideration for how native Alaskans referred to it. Toby, this might all seem a little silly, but Google Maps has 2 billion users, and its labels shape perspectives on geography and geopolitics and really how we just view the world.
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Right? It's decision making on maps is very important, and it's also pretty shrouded in secrecy. These are decisions that are made within Google themselves. They do try to, you know, listen to history and listen to local laws. In the case of the mountain, it is definitely something that Trump has the authority to do. You can rename anything on U.S. federal lands. When it comes to the Gulf of Mexico, when it comes to the Gulf of America, now, it's a lot more complicated because obviously that body of water borders more than just the U.S. it borders Mexico, borders Cuba, and it's had that name since the 17th century. So none of those other countries are, are under any obligation to call it the Gulf of America going forward, even though that now Trump and the US Will recognize it as such.
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This isn't the first time that Google's had to wade into thorny geopolitical debates about what to name which bodies of water. So if you think about the body of water between Saudi Arabia and Iran, you might think, okay, that's the Persian Gulf. But in fact, in Arab countries, they refer to that body of water as the Arabian Gulf. So if you're in one of those countries and you open Google Maps, you will see Arabian Gulf. If you open it in any other country now, you will see, I did this yesterday, I actually checked. You will see Persian Gulf, and then in parentheses, Arabian Gulf, which is very similar to what is happening with Gulf of Mexico, Gulf of America, similar thing to that body of water between the Korean Peninsula and Japan. In Korea, they refer to it as the East Sea. In Japan, they refer to it as the Sea of Japan. So you have that double moniker as well. And all of these decisions, yes, are made within Google. So it's a very interesting exercise whenever these examples come up, to see how, you know, a few engineers in Silicon Valley are really shaping our worldview of how we conceive of the globe.
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I think this is good for the map making business, at least within America's borders, because you got to order new maps for a classroom. So maybe if you're a map maker, you're looking at this as, as a, as a good thing for business. If you happen to find yourself strolling through the Mojave Desert in California yesterday, you may have heard a big boom above your head. No, it wasn't the Costco guys rating a double chocolate chunk cookie. It was the X B1 prototype plane built by Boom Supersonic. The XB1 is a smaller scale demonstration version of what will eventually be a larger airliner that Boom wants to turn into a commercially viable supersonic plane. Yesterday was its 12th test flight, but the first time it was slated to go full Concorde and break the sound barrier, which it did successfully three times. After takeoff, it climbed to an altitude of 34,000ft before the pilot, Tristan Geppetto Brandenburg, let her loose and hit a top speed of Mach 1.1, about 760 miles per hour. The XP1 now holds the distinction of becoming the first civil aircraft built by a private company to have gone supersonic. Neil this was but a taste of Boom's long term vision of Transporting up to 80 passengers on supersonic international flights. But what a compelling taste it was.
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And shout out, Geppetto. I mean, what a performance from our boy. You said it was smooth, it was predictable, it felt great. Felt like I was climbing a roller coaster. He hit that gas pedal, went above Mach 1. But obviously, yes, the question is, is this commercially viable? We haven't had a supersonic flight since Concorde's last flight in 2003. This aircraft that was flown yesterday gracefully by Geppetto was just a small prototype. They want to build an 80 seater, but they do say they have some orders on the books already, 130 from airlines like United, American and Bank of, not bank of Japan, Japan Air, bank of Japan, always in my mind, Japan Airlines. So they expect to have commercial flights going by the end of the decade. Obviously that's ambitious. There's a lot, lot of regulatory issues that come up with supersonic flights. Basically the fact that you can't fly over Mach 1 over land because they'll all be waking us up with sonic booms. And it also has a limited range of 4,200 nautical miles. So the amount of routes that they can actually fly is limited. You can't really go from L A or the west coast to over the Pacific to Asia. You can only go kind of transatlantic flights. So we'll see whether this is commercially viable. But for people who are excited about airplanes like I am, it's a very, it's a very cool thing.
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B
One of the issues also with supersonic flight is that there's engineering problems. You have to have a very long nose and you have to have a very high angle of attack when taking off and landing, which if you are a pilot that interrupts your view of the Runway. If you have a big old nose in front of you and you're, you're coming in really steeply. So the Concorde had dealt with this by having this movable droop nose as it was described. But Boom has had the luxury of having technology advance over the decades since Concorde flew. So now it has this augmented reality system that allows you to see the Runway, see in quotation marks because without all that extra weight that a droop knows, you know, brought in. So this digital engineering, this rise of digital engineering has allowed some advancements to be made, which is why people are a little bullish on Boom Supersonic three.
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And a half hours between London and New York City. It sounds like, it sounds like I'm going to have to pay a lot for that. That's what that sounds.
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It sounds like you're going to pay a lot. But also the, you know, the grand vision here is if we have faster planes, you technically need less. You need less of them because they can do more trips. So maybe in the grand scheme of thing, it does end up lowering prices because you just don't need to make as many airplanes because they're going faster. Up next, a feel good story about indie booksellers.
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It's definitely coming for Amazon's neck here. Hunter, the founder of bookshop.org blames Amazon for the fact that e books are not more popular. He goes all the way back to kind of the advent of e books more than a decade ago. Remember Publishers were very scared that the Internet revolution would just completely break publishing as we know it. They looked at the music industry and say, look at what happened there. We don't want that to happen here. We don't want our books to start getting pirated left and right. And so Amazon came and soothed their fears and they said, hey, we will keep your books safe from privacy. But it also locked these publishers into deals that were a little more advantageous to Amazon, less advantageous to the publishers. And Hunter says that that left the E book industry to kind of wallow away at around 20% of the overall book market. But now he's saying that, wait a second, E books are one of the most level playing fields we can actually compete with Amazon on. Because remember, publishers do require consistent prices across store, so Amazon can't go and undercut on price. Also, there's no logistics to delivering an E book. There is no, you know, Amazon can't have faster shipping times. You're just downloading a file. So he does think that of all the playing fields you could possibly compete with Amazon on, E Books is the most level.
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And one feature that seems most intriguing is something called quote share. We know that TikTok and virality has been huge for book sales over the past few years. And bookshop.org also wants to implement a, a feature of sharing into its E book. So it has this quote share feature where you can select a quote, say you're reading something and you see a quote, you're like, I need to share this with the world. This is the most profound thing I've ever read. You can post that on social media and that and then people who see that, they like the quote as well, they can click through and it'll go to that E book's page. And that, you know, maybe increases the the level of share ability, virality that is not inherent to E books now. But maybe with Bookshop's feature, it will be able to and allow the spread of books and hopefully generate more sales overall.
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B
This reminds me too of the story of the rise of Barnes and Noble recently. Remember, Barnes and Noble has been having a great last few years because they started kind of copying indie bookstores. They started letting store managers recommend books and make it feel more like a neighborhood bookstore. This is the same thing Bookshop. Org wants to elevate these indie bookshops. If you go to an indie Bookshops page, you will see, even though you're buying an E book, their recommendations, their staff picks, and just make the whole online buying Experience more reminiscent of going to one of those indie bookshops. So I do think we're seeing a rising tide of support for these places that used to be kind of centers of communities, got a little eaten up by Amazon, but are now making a comeback.
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A
The problem is Amazon has Kindle and so I think this hardware is going to be a problem. I don't think Amazon will take kindly to bookshop.org asking to get their app on the Kindle. Amazon does have this very powerful e book system where it can sell you the book and then you can read it on its hardware as well. So either way, something to be, something to know about in the reader space. I'm not an E reader myself. I know Toby loves his Kindle, so something to know about. All right, let's sprint to the finish with some final headlines. The Mona Lisa is ditching her roommates. The Louvre in Paris announced it would move da Vinci's masterpiece to its own room in a newly created exhibition space as part of a major renovation to the world's most visited and biggest museum. Anyone who's been to the Louvre knows it's become a zoo to get into. And the crowds don't get any better once you enter the gallery home to the Mona Lisa. So the museum is embarking on an overhaul to better accommodate the art loving masses, which will include a dedicated space for the Mona Lisa and a new entrance on its eastern facade near the Seine River. Toby, 9 million people visit the Louvre each year and an estimated 80% of them come specifically just to see the Mona Lisa. That's wild.
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I was in Paris a few years ago and just never did the Louvre because it is a zoo. I mean, it is just insane how long the lines are. And we're like, do we really want to see the Mona Lisa over the backs of a clamoring crowd? They say that the current design is this very large room that is very loud, it's cacophonous.
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I was there last year, like you just go to the back and you peer over and you see this very experience, right?
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Yeah. And they're saying, well, yeah, I guess maybe if you really like art, it's a good experience. But they're also saying, the museum's curators say it, it causes all the other paintings from these famous Venetian painters to go unnoticed as well. So just giving the Mona Lisa her own room, it seems like a logical conclusion. What is tough though, is that they need to accommodate more visitors. Because when the museum underwent its last renovation in the 1980s, it was designed to receive 4 million annual visitors. Now, that's up to 8 million. So overcrowding is just an issue that is tough to deal with. But they think that maybe this new kind of renovation will help alleviate some of those pains. The spice maker McCormick is back with its flavor of the year declaration. And it's part sweet, part spicy. After crowning tamarind as a flavor of the year in 2024, McCormick has given the 2025 title to AJI amarillo, which comes from a yellow orange chili pepper with some fruity tropical notes commonly used in Peru. The pepper isn't going to set your hair on fire. It comes in at 30,000 to 50,000 on the Scoville scale, which corresponds to moderate heat, thanks to those fruity hints. But McCormick thinks it's about to set restaurants on fire, anticipating 59% menu growth over the next four years. Neil never tried it, never even heard of it, but I'm intrigued.
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Well, have you been to a Peruvian restaurant recently? Because apparently it's huge in Peruvian cuisine. And McCormick cited the growth of Peruvian restaurants in the past few years, jumping 22% over five years, according to Yelp. And that proliferation of Peruvian cuisine maybe has put this spice on a little more people's radar, but sounds good to me. I got to say, the. The fruity mango aspect, dash, if he I can get, I can get on board with this way more so than tamarind, which I do not like. So I'm happy to have tamarind be. In the past, we were trying to.
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Just come up with dishes we've had with tamarind even in the last year or so. So maybe it whiffed on 2024, but I am. I also encourage you guys to go and look this up because it is this very vibrant yellow color. So I do think that McCormick also said that you can add it to the glass of a margarita. Rim of glass. So you might be seeing it not just seasoning foods, but as just accents to, you know, drinks and fun dishes like that.
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Finally, there's a huge day ahead, and we want to give you a heads up on the events to look out for. In the morning is perhaps the most highly anticipated hearing for a nominee for Health and Human services secretary in U.S. history. Robert F. Kennedy, Jr. Will testify before a Senate committee as he faces a storm of question marks about his ability to lead agencies that oversee $1.7 trillion each year.
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One person who certainly does not want him nominated is Caroline Kennedy, RFK's cousin. She urged the Senate in a letter to reject the nomination of her cousin. She called him a predator who is addicted to power.
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Then, in the afternoon, the Federal Reserve is going to announce its first interest rate decision of the year, which is expected to result in no changes to rates, followed by a closely watched Jerome Powell press conference.
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Yeah, the goal here, if you are Jerome Powell, is to not make any news at all. Remember, the Fed set the stock market spiraling back in December after it said, we're going to take a little bit more cautious approach to interest rates going forward. So this time he is most likely leaving rates untouched, and he hopes to leave headlines untouched as well.
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And then after Powell's press conference ends, you can bet we'll be changing the channel to soccer, which is about to experience its most chaotic afternoon ever. 18 matches in the Champions League. The European club tournament will be played simultaneously, all at the same time, under a revamped format. This year, I'm expecting something, something like the soccer equivalent of the first weekend of March Madness, or it's just NFL.
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B
Red zone happening right in front of our faces, like there are going to be goals galore. I think that it's been very tough on the players to have this expanded Champions League format. It's more games that they're playing, but man, has it been good for the fans.
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So if your coworker dips out at like 245, says they're taking an early day, they're probably going to their local soccer bar to watch an absolute feast of football. That is all the time we have. Thanks so much for starting your morning with us, and have a wonderful Wednesday, also referred to as Hump Day. For any questions, comments, or feedback, send an email to Morning Brew daily at Morning Broadcom. And if you're loving the show, join hands. Start a love train. Tell people all over the world about your favorite morning podcast. That may sound a little intimidating, so here's Toby with a more specific sharing idea.
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I want you to share the podcast with someone the Chinese zodiac says you are not compatible with. I just want to prove that I Opposites can coexist and even thrive. So go out there, get me some successful data points by recommending MBD to your supposed opposite.
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A
Let's roll the credits. Emily Milian is our executive producer. Raymond Lu is our producer. Olivia Graham is our associate producer. Eugenia Ogu is our technical director. Scoops Garderas is on audio. And a new credits legend has been born. Hair and makeup's got that Mona Lisa smile. Devin Emery is our chief content officer. And our show is a production of Morning brew.
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B
Great show today, Neil. Let's run it back tomorrow.