Industries React to Trump Tariffs & Drake-Kendrick Beef Goes to Court

Summary

Morning Brew Daily: Episode Summary Title: Industries React to Trump Tariffs & Drake-Kendrick Beef Goes to Court
Release Date: November 27, 2024
Hosts: Neal Freyman & Toby Howell

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1. Trump’s Proposed Tariffs and Industry Implications

Overview: In this segment, Neal and Toby delve into former President Donald Trump’s announcement to impose new tariffs on major U.S. trading partners—Mexico, Canada, and China. The proposed 25% tariffs on Mexico and Canada, alongside an additional 10% on Chinese goods, have significant repercussions across multiple industries.

Impact on Key Industries:

• Energy Sector:

  • Neal Freyman highlights, “[Canada] accounted for 60% of US crude imports last year” ([02:59]). The energy sector is vulnerable as Canada is a primary source of crude oil for the U.S., making any tariffs potentially disruptive.

• Automobile Industry:

  • Major automakers like GM, Stellantis, and Ford are heavily reliant on Mexican exports. Neal notes, “more than 255,000 cars were shipped into the U.S. from Mexico just in October” ([02:59]).
  • Toby Howell adds, “GM, Chrysler, Ford, all plunged on the news that Trump was thinking about levying these tariffs” ([05:29]), indicating immediate market reactions.

• Agriculture and Food Products:

  • Mexico is a top exporter of fruits such as raspberries, tomatoes, strawberries, and avocados. Toby states, “A ton of produce that you see in American supermarkets does come in from Mexico” ([03:49]).

• Chinese Goods:

  • The breadth of Chinese imports, from electronics to furniture, means tariffs could affect a wide array of products. Neal mentions, “from electronics to furniture, it's hard to choose just one category that would be affected” ([02:59]).

Economic Analysis:

• Neal cites Goldman Sachs’ report predicting that the tariffs could raise U.S. inflation by 1% ([05:29]). The overarching consequence would be either reduced profit margins for importers or increased consumer prices.

Political and International Reactions:

• Canada’s Prime Minister Justin Trudeau engaged in constructive talks with Trump ([05:29]).
• Mexico’s President Claudia Sheinbaum threatened retaliatory tariffs, potentially sparking a broader trade conflict.

Conclusion: The proposed tariffs by Trump have far-reaching implications, threatening to disrupt established trade relationships and impacting a variety of sectors from energy to automotive and agriculture. While some economic indicators suggest potential inflationary effects, the actual implementation remains uncertain amid ongoing international negotiations.

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2. Biden Administration’s Initiative on Obesity Drugs

Overview: The hosts discuss President Joe Biden’s proposal to expand Medicare and Medicaid coverage to include obesity medications like Wegovy and Zepbound. This policy aims to address obesity as a chronic health condition rather than a cosmetic issue.

Key Points:

• Policy Details:

  • The initiative seeks to cover expensive weight loss drugs, potentially benefiting over 7 million patients ([06:28]).
  • Neal explains, “While Medicaid covers poor and disabled Americans under existing rules, Medicare doesn't cover drugs that are explicitly for weight loss” ([05:29]).

• Financial Implications:

  • The proposal is estimated to cost the government $36 billion over the next decade, with Medicare contributing $25 billion and Medicaid $11 billion ([09:19]).
  • Toby points out significant hurdles, including budgetary concerns and opposition from RFK Jr., the incoming nominee to lead Health and Human Services ([09:19]).

• Support and Opposition:

  • Public opinion is largely favorable, with over 60% of Americans supporting Medicare coverage for these drugs, according to a Kaiser Family Foundation survey ([10:20]).
  • Pharmaceutical companies like Eli Lilly and Novo Nordisk are in favor, advocating for broader access to their medications ([11:39]).

• Political Challenges:

  • RFK Jr.’s stance against obesity drugs prioritizes healthy nutrition over pharmaceutical interventions.
  • The incoming Trump administration may oppose the initiative based on its broader agenda to reduce federal spending ([10:20]).

Conclusion: Biden’s initiative to cover obesity medications under Medicare and Medicaid represents a significant shift in healthcare policy, aiming to treat obesity as a chronic condition. While the proposal garners substantial public and industry support, it faces financial and political challenges that may determine its ultimate fate.

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3. Drake vs. Kendrick Lamar: Legal Battles Escalate

Overview: The podcast covers the intensifying legal conflict between rap superstars Drake and Kendrick Lamar, centered around allegations of streaming manipulation and defamation.

Details of the Legal Disputes:

• Streaming Manipulation Allegations:

  • Neal explains, “Drake made a court filing this week alleging that Universal Music Group considered conspired to artificially inflate Kendrick Lamar’s summer banger Not Like Us on music streaming services using bots and other tactics” ([12:56]).
  • Toby adds specifics, including claims that UMG engaged in practices like paying gate agents to manipulate streaming numbers ([14:07]).

• Defamation Claims:

  • Drake’s legal team filed an additional suit accusing UMG of defamation for falsely accusing him of being a sex offender through the promotion of Kendrick’s track ([12:56]).

• UMG’s Position:

  • As the parent company of both artists’ labels, UMG finds itself at the center of the dispute, raising concerns about internal conflicts within the music industry.

Implications:

• Impact on Artists:

  • Neal notes the significant success of Not Like Us, with over 900 million streams and five Grammy nominations, which underscores the high stakes in the legal battles ([12:56]).

• Industry Repercussions:

  • The allegations, if proven, could have broader implications for how streaming platforms and record labels manage and manipulate artist popularity and revenue.

Conclusion: Drake’s escalation of his feud with Kendrick Lamar through legal channels highlights the intense competition and high stakes within the music industry. The outcome of these lawsuits could set precedents for artist-label relationships and the integrity of streaming metrics.

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4. Neal’s Numbers: Fascinating Statistics

A. Airline Extra Legroom Fees

• Revenue Generation:

  • U.S. airlines accrued $12.4 billion from customers opting for extra legroom seats between 2018 and 2023 ([17:14]).
  • Neal states, “United charged as much as $319 for an extra legroom seat” ([17:14]).

• Industry Response:

  • Senator Richard Blumenthal criticized dynamic pricing tactics, while airlines defend their practices as offering more choices ([17:14]).

B. AI Adoption Among Gen Z Workers

• High Usage Rates:

  • A Google survey reveals that 93% of Gen Z knowledge workers use generative AI tools like ChatGPT and DALL-E ([19:27]).
  • Neal adds that millennials are also significantly engaged, with 79% using at least two AI tools weekly ([19:27]).

• Applications:

  • Common uses include revising emails, taking meeting notes, and generating creative ideas ([19:27]).

C. New York City Hotel Prices

• Record Highs:

  • The average hotel room in New York City reached $417 in September, the highest monthly rate ever for the city ([21:44]).
  • Occupancy rates remained high at 91%, nearly pre-pandemic levels ([21:44]).

• Tourism Resilience:

  • Despite soaring prices, tourism remains robust with an estimated 65 million visitors expected this year ([22:47]).

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5. Final Headlines

Walmart’s Policy Reversal on DEI:

• Neal reports that Walmart is scaling back its Diversity, Equity, and Inclusion (DEI) policies amidst conservative pressures and consumer boycotts led by anti-DEI activist Robbie Starbuck ([24:45]).
• This move aligns with other corporations distancing themselves from DEI initiatives following recent Supreme Court decisions and societal pushes against “wokeness.”

Intel’s CHIPS Act Funding:

• Intel received $7.8 billion from the CHIPS Act to enhance its manufacturing operations, slightly reduced from the initially earmarked $8.5 billion ([25:44]).
• This funding is pivotal for bolstering U.S. semiconductor manufacturing capabilities.

O2’s AI "Grandma" Bot:

• British telecom company O2 introduced Daisy, an AI-driven chatbot designed to engage and waste scammers’ time ([26:29]).
• Early results show Daisy can occupy fraudsters for up to 40 minutes per call, offering a novel approach to combating phone scams ([26:29]).

Weather Forecast and Travel Tips:

• The extended weekend will feature heavy snow in the western mountainous regions, rain in New York City’s Thanksgiving Day Parade area, and an Arctic blast freezing the Midwest and Eastern U.S. ([27:15]).
• TSA advisories on carrying Thanksgiving leftovers highlight restrictions on liquid items like cranberry sauce and gravy ([28:57]).

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Conclusion

In this episode of Morning Brew Daily, Neal Freyman and Toby Howell provide insightful analyses on significant economic policies, high-profile legal battles in the music industry, and intriguing statistics that shed light on consumer behavior and technological trends. From the potential upheaval caused by Trump’s proposed tariffs to the innovative use of AI in everyday problems, the hosts deliver a comprehensive overview of the day's most pressing issues. Additionally, the episode touches on corporate policy shifts and emerging technologies combating fraud, ensuring listeners are well-informed and prepared for the holiday season.

Notable Quotes:

• Neal Freyman ([02:59]): “More than $1.5 trillion in goods is exchanged every single year between the United States, Canada, and Mexico.”
• Toby Howell ([05:29]): “Tesla stock weirdly rose yesterday, which is, I don't know, Tesla is a little bit divorced from the wider auto market sometimes.”
• Neal Freyman ([05:29]): “Putting a tariff of 25% on every single good that is shipped into the US from those countries will have massive, massive ramifications for businesses and consumers.”

For more insights and detailed discussions, tune in to Morning Brew Daily on your preferred podcast platform or YouTube.

Transcript

[Walmart Ad]

Want to shop Walmart Black Friday deals first Walmart plus members get early access to our hottest deals. Join now and get 50% off a one year annual membership. Shop Black Friday deals first with Walmart plus see [e-mail] Good morning, Brew Daily Show.

[Neal Freyman]

I'm Neal Freyman.

[Toby Howell]

And I'm Toby Howell.

[Neal Freyman]

Today, Drake takes his rap beef with Kendrick Lamar into the courtroom.

[Toby Howell]

Then another trade war is brewing after Trump threatened tariffs against Mexico, Canada and China. It's Wednesday, November 27th. Let's ride. Well, you all made it. It is the Wednesday before Thanksgiving. Soak it in because this is the Friday feeling Wednesday you'll get all year. Hope you're taking some time off this week to spend with family. And you finally get to try out that maple glazed turkey recipe you saw on TikTok.

[Neal Freyman]

Toby and I are going to be off, but we did jump in the studio earlier this week to record a special Thanksgiving episode for you, so definitely tune in tomorrow morning. We covered everything from turkey trots to how much it would cost for MBD to get a balloon in the Macy's Thanksgiving Day parade. Then on Friday, if you want an MBD fix as you recover from your food coma, we got another episode coming your way. An interview with a Shark Tank legend himself, Kevin O'Leary, aka Mr. Wonderful.

[Toby Howell]

And if you're listening to today's episode while traveling home, may the traffic be light and your overhead bin space be empty. Enjoy the break, but first, a word from our sponsor, Yahoo Finance. One of the most frustrating parts about investing is having an inkling of an idea but then not really having the tools necessary to act on it.

[Neal Freyman]

Oh, I remember one of my friends started drinking all these energy drinks and I knew there was an investment opportunity there, but I didn't know what stock to actually put money toward.

[Toby Howell]

Same I hate when you know there is something brewing but you're just not sure how to act on your hunch.

[Neal Freyman]

If only I was a Yahoo Finance user at the time. Not only do they have news so you can spot trends in real time, but they also have a research tab where you can go to compare stocks, get investment ideas from experts and read research reports.

[Toby Howell]

Was your friend really early on the monster energy train? He's more of a Celsius guy, a man of taste. Don't let your next investing hypothesis go to waste. Head to Yahoo. Finance.com today. Donald Trump took aim at three of America's biggest trading partners this week, posting on True Social his plans to impose 25% tariffs on all goods from Mexico and Canada as a retaliation for the flow of drugs and migrants into the U.S. he's also eyeing a 10% tariff on goods from China on top of an existing 15% import duty that has been in place since 2018. Those three nations Trump mentioned traded with the US more than the kid who showed up with fruit by the foot at the middle school lunch tables. The three North American countries alone exchanged about $1.8 trillion worth of goods. Meanwhile, annual US trade with China is about 6 billion. But which goods and companies are set to be the most affected should these tariffs come down the pipeline?

[Neal Freyman]

Well, the first big industry that is sweating is certainly energy. Canada is the top supplier of crude oil to the US and accounted for 60% of US crude imports last year. Automobiles are another huge one. GM, Stellantis, and Ford are among Mexico's biggest exporters to the U.S. more than 255,000 cars were shipped into the U.S. from Mexico just in October alone this year. And Canada also ships a lot of vehicles and car parts our way. And then on the Chinese front, we get so many things from our geopolitical rival, from electronics to furniture, it's hard to choose just one category that would be affected. But Trump's approach likely doesn't bode well for those Chinese linked marketplaces like Shein and tmu, which we'll see. Their import costs go up to the dealer's choice on where to start here, because there are so many industries that are going to be affected.

[Toby Howell]

I mean, let's start by just continuing down the list, Neal. Fruits in Vegas, veggies are also going to be hugely affected as well. A ton of produce that you see in American supermarkets does come in from Mexico. Mexico is a number one exporter of raspberries, tomatoes, strawberries, and obviously avocados into the United States. Then if you head north, the meat and dairy industry is also going to be affected. Canada sends tons, actually millions of cows for dairy and beef our way, as well as a bunch of hogs across their southern border. So it really doesn't matter which industry you want to look at. Since trade is so big between the North American countries as well as China, pretty much everything is going to be affected by these tariffs.

[Neal Freyman]

It is. I mean, this. They. You know, there was an interview with a leader in the auto industry in Canada, and he said something like this. He's like, we are beyond partners. We are almost inseparable as family. More than $1.5 trillion in goods is exchanged every single year between the United States, Canada, and Mexico. And that is in part because of a free trade agreement that Trump himself signed in his first term, USMICA, or the US Mexico Canada Agreement. And now the US receives 83% of Mexico's imports and 75% of Canada's exports last year. So the bulk of what they make and ship abroad comes into the United States. Everything you buy, mostly everything you buy, either has in part or in full, some part that was made in Canada or Mexico. So putting a tariff of 25% on every single good that is shipped into the US from those countries will have massive, massive ramifications for businesses and consumers.

[Toby Howell]

I think one industry that we do have to drill in on a little bit more is the automaking industry as well, because it is just a huge part of Mexico at this point. A lot of factories that we mentioned before are set up there. And if you look at the stock market yesterday, gm, Chrysler, Ford, all plunged on the news that Trump was thinking about levying these tariffs because a lot of the auto parts are made in Mexico and become more expensive with these tariffs. Tesla stock weirdly rose yesterday, which is, I don't know, Tesla is a little bit divorced from the wider auto market sometimes, despite the fact that Tesla does have plans to build a gigafactory down there in Mexico. And then even if you go across to European indexes, they fell too, because they are another potential prime tariff target. Trump has said in the past that he wants to kind of normalize trade relations between Europe and the United States, particularly when it comes to European automakers. So this is one industry that is going to be heavily affected by Trump's plan to lever these tariffs.

[Neal Freyman]

Let's just talk about what happens when tariffs, tariffs come down the pipeline. Basically, it's a tax on the companies that import these, these, these goods. So what they can do is either eat the 25% and harm their margins, or they can raise prices and pass those costs along to the consumer. And that's what Goldman Sachs expects. They. The bank issued a report yesterday saying that all of these, all of these tariffs, if they were implemented, would raise inflation by 1%. So that's what perhaps you can expect. The question here is whether the, whether the tariffs are actually going to come to pass in. Historically, Trump has used tariffs as a negotiating tool to extract concessions from countries. Here, he wants a crackdown on the border and fentanyl coming into the United States. So we'll see how leaders from other countries respond to that. This may just kickstart a negotiation. We saw Justin Trudeau is the Prime Minister of Canada immediately stop what he was doing yesterday, get on the phone with Trump and said they had a constructive conversation. Mexico's president was a little less accommodating. Claudia Sheinbaum. She wrote a letter to Trump suggesting that she would retaliate with tariffs on of their own on the United States goods, which would harm American companies that would export abroad. So it set off a massive scramble by the companies that were targeted, by the countries that were targeted yesterday to sort of start negotiations. So these will not come to pass and at least investors broadly do not think that these tariffs will actually happen because if you look at the broader stock market, it did go up yesterday. All three major indexes, automakers did go down, but overall stocks did pretty well. The Biden administration announced an initiative yesterday that would massively expand access to weight loss drugs. The government proposed that Medicare and Medicaid cover obesity drugs like Wegovy from Novo Nordisk and Zepbound from Eli Lilly, which would extend access to the super popular but expensive medications for more than 7 million patients. As a refresher, Medicare is the federal health insurance program for people age 65 and older. While Medicaid covers poor and disabled Americans under existing rules, Medicare doesn't cover drugs that are explicitly for weight loss, since it was considered a cosmetic treatment. But Biden's health officials are getting around those rules by claiming that the growing scientific consensus is that obesity is a chronic health condition. Whether this proposal becomes actual policy remains an open question. It would need to be approved by the incoming Trump administration and the nominee to lead Health and Human Services, RFK Jr. Is no fan of obesity drugs. Plus covering the medication would be pricey and is estimated to cost the government $36 billion over the next decade. Toby, if it clears those hurdles, this plan would be a game changer.

[Toby Howell]

It would be a game changer. But let's drill into those two hurdles because they are rather large. This would run Medicare about $25 billion, Medicaid about $11 billion over 10 years. The government officials do say that they don't expect it to increase out of pocket premiums, but that is definitely at odds with the incoming administration's general plan to cut federal spending. So that is one big issue. And then the second issue you mentioned is RFK Jr. He is not a fan of these drugs at all. He instead wants to prioritize access to healthy nutrition rather than doing it through Big Pharma, which he has been a pretty, yeah, pretty anti Big pharma so far. So I do think that those are pretty, pretty decent sized hurdles. One thing going in its favor, though, is the fact that this is going to be very popular with a lot of seniors, a lot of people who are covered by Medicare and Medicaid. So maybe Trump just looks at that and says, hey, a lot of people do want this, so maybe we can actually push this through despite the increased cost that it's going to run the government. Yeah.

[Neal Freyman]

And generally public opinion is in favor of this. A recent survey by the Kaiser Family foundation, which is a health policy group, found that over 60% of Americans support Medicare coverage for these drugs. And the guy who's going to be leading Medicare and Medicaid who will serve under RFK Jr. Dr. Oz is a big fan of these drugs. He said, we have, we need all the tools in the toolkit in order to combat obesity, which affected 40% of all Americans last year. But I just want to drill down on the scope of this, how many more people it's going to cover. Because a 2020 study by Brown researchers found that to these two programs covered 40% of Americans with obesity and 46% with related health problems. So a lot of people are suffering under these conditions. But these, these drugs are so expensive. I mean, they can top $1200 a month for semaglutides like Zepbound and WeGovy. So it's just been out. It's hard to pay out of pocket if you don't have, if you don't have insurance. So if Medicare and Medicaid were to cover this, it would expand access very, very much. And the pharma companies are totally behind this. Eli Lilly and Novo Nordisk, which make these are fully in support. They want more coverage to get their drugs and more people's drug cabinets.

[Toby Howell]

And honestly, they're going to be fine no matter what. Yes, increased coverage means it will inevitably lead to wider adoption. But also, even if they don't get this coverage, like they are charging very high premiums for these drugs and a lot of people do use them. So they're kind of winning no matter what here. It's just a, a matter of how much they might win. Well, Drake is still big mad about losing his rap battle to Kendrick Lamar. So he's taking the second round of their beef to the courtroom. Drake made a court filing this week alleging that Universal Music Group considered conspired to artificially inflate Kendrick Lamar's summer banger Not Like Us on music streaming services using bots and other tactics. Now, the ironic part about this allegation is that UMG is the Parent of both Kendrick and Drake's record labels. Given their affiliations, people have dubbed this spat Raps Civil War. On top of the inflated streaming suit, Drake's legal team also filed another action against umg, alleging defamation for releasing Not Like Us, knowing it was falsely accusing him of being a sex offender. According to the suit, the suit says that UMG's plan was to turn Not Like Us into this viral mega hit and drive consumer hysteria and of course, massive revenues. So now you have two suits rekindling this mega beef with a UMG at the center of all. Neil Drake brought a lawyer to a rap battle.

[Neal Freyman]

He did. And there's no question that Not Like Us was a massive hit. I mean, that is understand, but understood by everyone across this legal battle it had. It currently has more than 900 million streams on Spotify. It was nominated for five Grammys, including record of the Year and Song of the Year. The question that Drake is raising, and there is not a lot of evidence so far that he's put forward, is whether Universal conspired with people to create bots and inflate these streaming numbers. He also is alleging that Universal charged Spotify a 30% lower licensing rate for Not Like Us. In order to get that. In order to get that song in front of more people. There wasn't a lot of evidence that was. That was named in this petition. And we should say this was a petition. It is maybe the precursor to a lawsuit. It is something you file with the court in order to gather evidence and prepare yourself for a lawsuit. So that hasn't happened completely yet, but it does cite an unnamed whistleblower who said he was paid by Lamar's label to use bots to help not like us get 30 million streams on Spotify in its first days of release.

[Toby Howell]

Some other specifics of the suit is that UMG had this financial agreement with Apple to have Siri. When users said Play Certified Lover Boy, which was the name of Drake's album, it would play Not Like Us instead because there is a lyric within Not Like Us that does say Certified Loverboy. So Drake was probably. I want to imagine he was sitting at home and he goes, siri, play Certified Lover Boy. And it plays Not Like Us. He goes, calls his lawyer up and goes, we need to sue UMG right now because they are playing Kendrick song instead of my album. But you are right, a lot of it is a little bit. No, no smoking gun has emerged as of yet. But you. You might expect that if Drake did feel the need to file this initial suit, then he has something that he's sitting on. Because if not, it's just a pretty bad look in the court of public opinion. Because again, I said he's bringing a lawyer to a rap battle. That is not something that gives you a ton of street cred when you are trying to battle someone. So maybe he's got something, maybe he doesn't. But it's clear that he's still not over. Not like us. Up next I know it's Wednesday, but we have a special early edition of Neil's numbers coming up next.

[Neal Freyman]

It's almost time to break out the lights, wreaths and jingling bells.

[Toby Howell]

And with Sonos, you'll be able to hear the crystal clear, highest quality sound for all the festive music and movies this holiday season.

[Neal Freyman]

Sonos is the perfect gift for both yourself and your family and friends. Whether you're in charge of the holiday party or in search of a gift that will really impress the in laws, Sonos has got you covered.

[Toby Howell]

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[Neal Freyman]

Deck your halls with a Sonos smart speaker and enjoy the cinematic sound right from your couch.

[Toby Howell]

Sonos has great gifts for everyone on your list. Visit sonos.com brew to wrap up your holiday shopping. That is sonos.com brew if you had to pin one state as the backbone of the US which would it be?

[Unknown Speaker]

Hmm, tough and good question. You know, probably have to go to the center of it all Ohio.

[Toby Howell]

Oh yeah, Goaded state. And a lot of people don't know that. It's pretty big league for business to Google, ge, Health Care and Honda are all setting up shop in Ohio.

[Neal Freyman]

Yep, the secret sauce is Jobs Ohio.

[Unknown Speaker]

Ohio's private economic development corporation.

[Neal Freyman]

They've got this crazy fast private operating.

[Unknown Speaker]

Model and they work with seven regional partners to hook businesses up with local experts who can get things done on their behalf.

[Toby Howell]

Sounds like a win win to me big time.

[Neal Freyman]

Plus they've also got construction ready sites.

[Unknown Speaker]

Workforce development programs and a world class innovation ecosystem.

[Toby Howell]

Yeah, huge stuff. And with industries like health care, manufacturing and technology all booming there, I totally get it.

[Neal Freyman]

Like I said before, Ohio really is.

[Unknown Speaker]

The center of the us.

[Neal Freyman]

Are you ready to boost your biz?

[Toby Howell]

It's time to grow with a partner you trust. Head over to jobs ohio.com Morning Brew to learn more about growing your business in the heart of it all. That's jobs ohio.com/morning Peru.

[Neal Freyman]

Welcome to Neal's Numbers, the segment where I share three stats from the week's news that will make you the most interesting person at your Thanksgiving meal tomorrow. My first number is how much your last minute splurge for a couple of inches of extra legroom is making airlines. It's a lot. A Senate investigative panel found that U.S. airlines American, Delta, United, Spirit and Frontier made $12.4 billion alone from customers choosing seats on planes from 2018 to 2023. According to the report, United charged as much as $319 for an extra legroom seat, Spirit as much as 299 and Delta up to 264. The subcommittee chair, Senator Richard Blumenthal, was highly critical of those algorithmic seating fees, saying these confusing, dynamic pricing tactics burden travelers and boost airline revenue. The airline industry didn't appreciate getting smacked around like a pinata by lawmakers. Spirit Airlines shot back. We are transparent about our products and pricing. Our airport policies ensure guests are treated fairly and equally. The lobbying group Airlines for America argued the increased choice has democratized air travel to the point where 90% of Americans have flown on a plane. Senators and airlines will have the opportunity to duke it out on December 4th when execs from the companies called out in the report will testify at a hearing on Capitol Hill.

[Toby Howell]

I want to drill into some other parts of this report though, because this report said that some airlines have these bounty programs at that they pay gate agents to cash incentives to identify customers who are trying to avoid fees for carry on bags. We've all been there before where you probably didn't pay for a carry on bag, where you're trying to like sneak it by and then a gate agent calls you out. Frontier had a big one where they were charging they were giving gate personnel up to $10 for each bag a passenger is forced to check out the gate because they want to reap these extra bag fees. I have been there before too. I've had a horrible experience where I got nabbed for trying to carry on a tuxedo and they consider that an extra bag. And I was like I'm just going to hang it up. And so I'm still a little bitter about this. But seeing just how much money these airlines are making off of all these extra fees that they, that they just get you for is definitely something that I think a lot of people can relate to.

[Neal Freyman]

For my second number, a new survey revealed how many highly motivated Gen Z knowledge workers use generative AI tools like Chat, cbt, Dall E or other products. Think you have a guess. The answer is basically all of them. Or if you Want to get specific about it? 93%. That finding came from a Google survey of more than 1000 full time knowledge workers who are either in leadership positions or aspire to be in one. And while virtually all Gen Z workers use generative AI, millennials are not that far behind, with 79% of respondents aged 28 to 39 saying they use at least two AI tools a week. So what do they use it for? Revising emails and documents, taking notes during meetings, and generating ideas when you have writer's block and need that light bulb moment, Google said. Toby, there's reason to be a little skeptical of this data since it's coming from Google, which has invested tens of billions of dollars into making generative AI a thing that people use and spend money on. Still, it does mesh with my experience of talking to friends about whether they use AI at work. And the answer is almost always yes.

[Toby Howell]

Yes, I do think that is good. Consider the source here, because there was another survey earlier this year commissioned by Slack, that talked to a more broad group of people, 17,000 workers across multiple different countries and continents, and they actually found that overall AI adoption was stalling out. Nearly half of workers says they weren't even comfortable admitting they use the technology. But then you contrast it with this survey From Google where 93% of Gen Z said that they were using these tools. And it could just be a generational divide that we're looking at here. It does seem like younger people are much more transparent about the tools they are using. I think that has tracked a little bit. Some of the older people I talked to. It's like a secret that they want to keep hidden away that they're using this thing, whereas young people are like, yeah, I either use it or I don't use it. So maybe it's generational, maybe it's something that is just specific to this group of people that Google specifically surveyed, which.

[Neal Freyman]

Are like leaders and aspiring leaders. So pretty highly motivated people, quote, unquote overachievers. But it's clear that they're using AI and they think AI will help them get ahead.

[Toby Howell]

Right? 52% of that group did say of Gen Z said that they frequently discuss their AI tools with colleagues. So again, that is what I'm saying, that they are more transparent about their usage.

[Neal Freyman]

For my final number, if you're thinking about traveling to New York City to see the Rockefeller Center Christmas tree, let me know if you want to crash on my couch because hotel prices are getting absurd. The average price of a hotel room in New York in September was $417, the city's highest monthly rate ever, according to real estate company CoStar. In fact, the only place with more expensive hotels that month was Maui. We've come a long way since peak, Covid, when an empty Times Square looks straight out of I Am Legend. Tourism has bounced back to pre pandemic levels and hotels have increased their prices due to strong demand. A night at a mid scale hotel in Manhattan has risen more than 50% since fall 2020, according to CoStar. But that hasn't dissuaded people from booking rooms. In September, when The average was $417 to stay the night, 91% of rooms were occupied right about where they were before COVID Toby I bet a lot of people are coming into New York this holiday season, are going to take one look at hotel prices and then immediately open up their phones to call their friends and ask to stay with them.

[Toby Howell]

Yeah, you definitely got to have a couch to crash on if you want to come. But people are still coming to the city. One organization that promotes tourism in New York City said that they had not seen any indications that rising room prices were actually dissuading people from coming to visit. They estimated that about 65 million people will visit the city year down a little bit from 66 million people that visited in 2019, but still a very healthy number. You look at occupancy rates too. Across the city, 91% of rooms were occupied in September. So I don't know who these people are coming, but they clearly have some deep pockets because clearly these ultra high places, the highest they've ever been, is not dissuading travelers from actually coming to visit this.

[Neal Freyman]

I think eventually they're going to get expensive where people are just going to say I can't do this, or they're going to go to stay in Jersey City, Hoboken, Fort Lee and come into the city or Long island or parts of the outer boroughs. You're probably going to see that a little bit more near train stations to come in. But it's, it's kind of insane that getting a hotel in Manhattan, which luckily I haven't had to do in a while, is, is so ridiculous, especially if you have a family. I mean, there's, you know, there's one person versus four people which, which hikes up the cost the most.

[Toby Howell]

And then plus you probably have to pay extra to get your seats together from the airline. So all the Neil's numbers are numbering right now.

[Neal Freyman]

Let's bring to the finish with some final headlines Walmart became the latest and biggest US corporation to dial back policies related to div diversity, equity and inclusion, or dei following conservative pressure. Facing a consumer boycott led by anti DEI activist Robbie Starbuck, the world's largest retailer confirmed a number of reversals including barring third party merchants on its website from selling some LGBTQ themed products marketed to children and stopping the use of the terms DEI and Latinx. In official communications, the company said some of those changes were already in the works, but it's clear that external pressure accelerated those moves. Toby, significant that Walmart is walking back dei.

[Toby Howell]

Yeah, I mean Starbuck, as well as some decisions handed by the Supreme Court this year blocking affirmative action in higher education have pushed a lot of American corporations, companies like John Deere, Harley Davidson, Lowe's, Ford's among others, to move away from quote wokeness, as Robbie Starbuck puts it. So Walmart is the latest and the biggest company to do so. So yeah, I do think it is pretty significant. Intel needs a serious side of guac to go along with all the chips it will be making because the government just granted them $7.8 billion to build out its manufacturing operation via the Chips Act. Because it's intel. And intel has been on the struggle bus recently. The government actually cut its funding to under 8 billion from the original 8 and a half billion it had earmarked it for. But still it's the biggest recipient of money under the CHIPS Act. One thing that might have also led to the funding drop is a $3 billion contract that intel has been offered to produce chips for the US military. But Neil, I kind of feel like intel just fails upwards these days.

[Neal Freyman]

It does. But you know, there are last best hope for making chips here in the United States because they do have the know how. They do have a lot of capital now to spend on building factories. And this has been a huge initiative of the Biden administration and just like they're doing with Wegovy and and Zepbound to get those covered by Medicare. This is the Biden administration its last few months making sure that some of their big, biggest initiatives are going to be spent before the Trump administration comes. And a lot of these big programs are a big question mark about whether they will be, whether they will be extended. So that's exactly what the administration is doing here. Just getting, you know, that, that gif where it's like take them, take my money and go. The Netflix CEO. That's exactly what's happening here.

[Toby Howell]

A new chat bot from a British phone company is here to help you Combat those phone scammers blowing up your phone. Dubbed Daisy, the so called A grandma, works much like your own sweet grandmother you haven't caught up with in a while. The bots maker, O2 says that Daisy's mission is to, quote, talk with fraudsters and waste as much of their time as possible with human like rambling to keep them away from real people. Daisy was actually trained on hours of recorded conversations with one of her creators, real life grandma. So you know it's accurate. And according to early results, Daisy has kept bad actors on the phone for up to 40 minutes at a time. Daisy doesn't intercept any calls, but she does have multiple phone numbers out there that O2 has worked to get into circulation as bait for the scammers. And Neil, I just love story.

[Neal Freyman]

I love this. We talk about a lot of uses of AI as a way of, you know, scaling up things that humans could do but take a lot of time. And I think this is the perfect example because there are scambaiters out there where they get on the phone with scammers. I don't know why they do it exactly, but they just love to keep them on the phone. You know, the official advice is just hang up. But there's human scambaiters out there and they worked with O2 to create this AI granny that just rambles on forever about her grandkids and her inability to use tech and her pets and her cats and her birds. So this is just a hilarious story. I don't think it's going to going to impact the massive amount of phone scams that are happening because those are, you know, the average American gets eight phone call scams a month. And globally they've stolen over $1 trillion from people. So this is the scale of this is, is too much for as much for AI Granny. I know Granny is doing a lot of work, but the scale is absurd. Finally, before we sign off for the holiday, here's your weather forecast for the extended weekend, the busiest stretch of the year for travel in the United States. It's going to be mostly okay, but definitely a few trouble spots. Today a storm is forecast to dump heavy snow on mountainous areas of the west. While tomorrow rain is going to drench Snoopy at the Macy's Thanksgiving Day Parade in New York City. Then the cold comes and Arctic Blast is going to freeze the Midwest and Eastern US into the weekend with the coldest temps of the year so far. And finally, here is a PSA from the tsa. If you're flying home with Thanksgiving leftovers. Turkey and stuffing are okay to carry on a plane, but cranberry sauce and gravy are I guess considered liquids and are limited to 3.4 ounces.

[Toby Howell]

That is actually great to know, but I don't know who is going to be taking Thanksgiving leftovers on the plane. I was traveling last Thanksgiving flying home and I'm not kidding. The vouchers to get people to skip this flight and go to another one reached over $2,000. So maybe if you run into some travel issues your loved ones might understand if you come bearing $2,000 in flight vouchers as a gift.

[Neal Freyman]

Let's wrap it up there. Thank you so much for listening. Have a wonderful Thanksgiving and safe travels. Don't forget to tune in tomorrow and Friday for some special episodes. But more importantly, we hope you are able to get in some quality time with family and friends. For any questions, comments or feedback, send an email to Morning Brew daily at Morning Broadcom. And speaking of being thankful, we'd be thankful if you shared the podcast with someone you know. Maybe there's that awkward extended silence during your meal that you can fill with a hey, have you heard about this podcast? Toby? Any other ideas?

[Toby Howell]

Yeah, I gotta keep it simple today. Just share the podcast with someone you are grateful for. This is what Thanksgiving is all about. So give the gift of MBD and send a nice note letting them know why you are happy to have that person in your life.

[Neal Freyman]

Let's roll the credits. Emily Milian is our Executive producer. Raymond Lu is our producer. Olivia Graham is our Associate producer. Uchena Ogu is our Technical director. Billy Menino is on audio, hair and makeup has begun to brine the turkey. Dry brine, of course. Devin Emery is our Chief Content Officer and our show is a production of Morning Brew.

[Toby Howell]

Great show today Neil. Let's run it back tomorrow.