Examining Trump’s Economy, Takeaways from Corporate & Government Mistakes, Sweden’s Modular Homes

Summary

Wall Street Week (Bloomberg)

Episode: Examining Trump’s Economy, Takeaways from Corporate & Government Mistakes, Sweden’s Modular Homes
Date: February 27, 2026
Host: David Westin

---

Episode Overview

This episode of Wall Street Week, hosted by David Westin, explores three interconnected stories at the heart of contemporary capitalism. The first segment dissects the economic impact and legal battle over President Trump's tariff policies, featuring analysis from Harvard economist Jason Furman and CFR senior fellow Jennifer Hillman. The second segment dives into learning from high-profile mistakes, focusing on the reflections and new book by Michael Linton (former head of Sony Pictures) and Josh Steiner (former Treasury chief of staff), with psychological insights from Dr. Allison Papadakis. Finally, contributor Christia Freeland travels to Sweden to investigate the promise and challenges of modular, factory-built housing as a potential solution to global affordability crises.

---

1. The Trump Tariffs: Economy and Supreme Court Clash

Main Discussion

• President Trump’s State of the Union focused on tariffs as central policy, despite Supreme Court pushback ([03:00–03:42]).
• David Westin interviews Jason Furman on the real economic impact.

Key Points

• Economic Assessment

  • The US economy under Trump in the past year was “very similar to the year before he was president…It’s not the horror Democrats might have predicted, but it’s certainly not any sort of turning point that Donald Trump was trying to brag about either.” (Jason Furman, 04:13)
  • Growth and unemployment both showed continuity rather than radical improvement.

• AI Investments

  • AI significantly boosted demand-side spending in 2025 with data center construction and energy, but productivity benefits are still just beginning to register. (Jason Furman, 05:08)

• Tariffs: Economic Effects

  • Tariffs have “subtracted a bit from growth and added a meaningful amount to inflation… Furniture, consumer electronics…you see those prices rising, and normally you would have expected them to be stable.” (Jason Furman, 05:54, 06:00)
  • The predicted economic apocalypse from tariffs hasn’t happened, but the costs are non-trivial, amounting to "tens of billions of dollars." (Jason Furman, 06:16)

• Uncertainty and Investment

  • “It leads to some delay of investment, some desire to do things overseas rather than in the United States… If he wants to have high tariffs, we’re going to have high tariffs. He can’t quite change them on a whim.” (Jason Furman, 06:54–07:26)

• Trade Deals and Fiscal Policy

  • Recent trade deals are “relatively minor… repackaging stuff that probably already would have happened anyway.” (Jason Furman, 08:00)
  • Replacing income tax with tariffs is “ludicrous. Income tax collects over $10 trillion over the next decade. Tariffs are in the hundreds of billions per year; there’s no comparison.” (Jason Furman, 08:33)

• Tariffs Revenue and Future

  • Tariffs do raise revenue, but “there are so many other ways to do it that would be less harmful.” (Jason Furman, 09:04)

Notable Quote

“Replacing the income tax with tariffs is ludicrous. Income tax collects over $10 trillion over the next decade...tariffs are in the hundreds of billions per year.”
– Jason Furman (08:33)

The Supreme Court Decision ([09:31])

• Jennifer Hillman explains that unlawful tariffs must be refunded — $88 to $100 billion to importers, a process that could be simple or arduous depending on administrative choices.

“It’s going to be those small businesses...that have the most difficulty if this process is difficult. They don’t know exactly what paperwork to file. If the Trump administration would decide to try to fight all of this and make everyone challenge in individual lawsuits…the question will come whether all these small businesses have enough money to pay the legal fees…”
– Jennifer Hillman (11:53)

---

2. Learning From (and Owning) Major Mistakes

Guests: Michael Linton, Josh Steiner, Dr. Allison Papadakis
Topic: Their book, “From Mistakes to Meaning: Owning Your Past So It Doesn’t Own You”

The Importance of Mistake Reflection ([14:05-16:23])

• Distinction: Mistakes vs. Failures

  • “Mistakes are something that you do without self-awareness, without understanding the context in which you’re operating and that you end up regretting.”
    (Josh Steiner, 14:47).
  • Success and failure are intentional; mistakes are more about context and self-awareness.

• Personal Motivations

  • Both authors had personally significant, long-unspoken mistakes that prompted the book.
  • “When you came up with the idea and said to me, we should write a book about mistakes, it really landed because I myself had been living with something for a long time that I really did not want to address.” (Michael Linton, 16:23)

Michael Linton’s Sony Pictures Mistake: The North Korea Hack ([17:25–25:45])

Three Acts Model: Prelude, Mistake, Postlude

• Prelude:

  • Professional process existed for "green-lighting" movies — usually a team-based, objective evaluation.
  • “I was typically the person in the room who was. Mr. No...the adult in the room.” (Michael Linton, 18:57)

• Mistake:

  • Chose to go along with "The Interview" production for emotional reasons, abandoning established process.
  • “In that moment, I said, okay, let's go. Let's make this movie. And threw all those careful processes out the window.” (Michael Linton, 19:37)
  • Influenced by childhood experiences of loneliness and wanting to fit in (19:45).

• Consequence: Sony Hack

  • “70% of our laptops were knocked out… emails started coming out… movies started coming out up on our systems.” (Michael Linton, 21:26)
  • Felt public shame: “I imagined...every time I walked into a room…on my forehead is 'Sony hack.'” (Michael Linton, 24:43)

• Airing and Processing the Mistake

  • The mistake’s real damage was compounded by not reflecting on it: “I really took the attitude, okay, that's over. Let's not reflect on it. Let's not consider why I did that in the first place…which I can honestly say…was a mistake.” (Michael Linton, 24:43)

Quote

“Surely that was a mistake. And on reflection, and in that moment, I suddenly realized, he's right here, identified the mistake, and that was actually a mistake.”
– Michael Linton, recounting President Obama’s phone call (24:20–24:36)

• Spotlight Effect:

  • “We worry that our colleagues, friends, family, that they’re thinking about these things when in fact usually it’s just us.” (Allison Papadakis, 25:51)

• When to Move On vs. Reflection:

  • For large, meaningful mistakes, “you can’t really move on until you really do get an understanding of it.”
    (Allison Papadakis, 26:17)

Josh Steiner’s Washington Mistake: The Whitewater Diary ([28:42–33:57])

• Act 1: Context

  • “One of the things that we discovered about mistakes was you really need to understand the context in which you’re operating.” (Josh Steiner, 30:37)

• Mistake:

  • Wrote about sensitive investigations in a personal diary; then, under subpoena, handed it over, “a pretty toxic combination.” (Josh Steiner, 29:43)
  • Lost credibility and self-confidence, but stands by complying with the law.

• Learning:

  • “If the inclination of that loan officer and that investor is to hide that mistake, to not talk about the mistake, they're making a whole new mistake. The real premise of our book is...acknowledge we’re all going to make mistakes…and that the way to make fewer…and to carry less shame, less guilt, less regret is just to talk about them.”
    (Josh Steiner, 36:30)

Quote

“I have no regret about complying with the subpoena.”
– Josh Steiner (31:33)

Insights and Tools ([34:00–37:14])

• The "Cheetah Pause": Stopping to assess emotion before reacting.

  • “Before you react to something, you take a breath and you actually try and understand what your emotional state is and what your real thinking is before you actually commit yourself to that action.” (Michael Linton, 34:00)

• Approach/Avoidance: Mistakes often stem from unresolved tension between attraction and fear—a lesson for investors and leaders.

• Spotlight Effect: Most people overestimate how much others notice their mistakes.

Host’s Own Mistake ([37:27–38:52])

David Westin, for the first time, publicly shares his own professional regret with the audience about putting Leonardo DiCaprio at the center of an ABC News Earth Day special and being publicly roasted by President Clinton.

“You may not be America's news leader, but you’re king of the world.”
President Clinton, as recounted by David Westin (38:16)

• The Book’s Goal: Not to eliminate mistakes, but to foster understanding and reduce shame.

---

3. Sweden’s Modular Home Revolution and the Search for Housing Affordability

Contributor: Christia Freeland
Key Interviews: Linbecks (Swedish prefab builder), Beata Caranchi (TD Bank), Elizabeth Svantesson (Swedish finance minister), Sharmi Saban (JP Morgan)

The Swedish Factory-Built Model ([41:05–43:06])

• Swedish Approach:

  • “Houses aren’t built piece by piece. They roll off an assembly line.”
    – Narrator, 41:54
  • Lindbecks factory in northern Sweden: 40 units/week, with nearly 50% of single-family homes built this way.
  • International interest: “They say the price is too high…it’s too costly to buy a home, to rent…They come to us to see if our way…is the solution.” (Linbecks, 42:26)

• US Housing Crisis:

  • “Buying a home in the United States hasn’t been this difficult since the 1980s… In 2010, the median age of all US homebuyers was 39. Today it’s 59… first-time buyer is 40.” – Narrator, 43:06

• Productivity Issues:

  • Unlike most sectors, “to build a home, it actually takes more resources today than…10 years ago.”
    (Beata Caranchi, 44:28)
  • Small company dominance, regulatory issues, and inertia hamper innovation.

Modular’s Advantages and Obstacles ([45:12–49:09])

• Cost and Timeline Benefits:

  • “Potentially lowering the cost of housing by 20–30%.”
    (Beata Caranchi, 45:35)
  • Modular process defers payment until later and reduces interest costs (Linbecks, 46:21).

• Stigma and Skills Challenges:

  • Lingering stereotype: “Oh, you want everyone to live in a trailer park.”
    (Freeland recounting House of Commons reaction, 47:24)
  • Quality concerns, buyer perceptions, and design limitations; “It’s breaking through that mentality of what prefab meant.” (Beata Caranchi, 47:24)

• Cyclical Demand and Business Model:

  • Factory builders need steady, year-long backlog and must adapt to demand shifts.
  • Market downturns require finding alternative products to maintain production. (Linbecks, 48:15)

Political and Regulatory Perspective ([48:45–50:01])

• Regulatory Burden:
  • “One of the largest problem in the housing market, it is overregulated… all the rules make it very expensive to build.” (Elizabeth Svantesson, 49:11, 49:38)
  • Sweden allows less-regulated small houses to expand access.

Wall Street’s View ([50:11–51:54])

• Affordable Housing as Opportunity:

  • JP Morgan invested $10B in 2025 for 60,000 units, including modular construction. (Sharmi Saban, 50:11–50:39)
  • “When something is cheaper to build, it's going to be more affordable…with modular housing, for example, units are built in weeks, they're put online in months.” (Sharmi Saban, 50:39)

• Systemic Complexity:

  • All factors—manufacturing cost, rates, zoning, codes—are interlinked.

• No Silver Bullet:

  • Modular construction’s advocates do not see it as a panacea—“If everybody would do the same, where would the challenge be then?” (Linbecks, 52:12)
  • The homebuilding industry’s resistance to productivity gains stands out in an era of shortages.

---

Key Quotes & Memorable Moments

• “Replacing the income tax with tariffs is ludicrous. Income tax collects over $10 trillion over the next decade…tariffs are in the hundreds of billions per year.”
  Jason Furman (08:33)

• “If the tariffs are illegal, refunds should be paid.”
  Jennifer Hillman (12:28)

• “Mistakes are something you do without self-awareness, without understanding the context in which you’re operating and that you end up regretting.”
  Josh Steiner (14:47)

• “I so wanted to shed my suit, so to speak, and be part of the gang…let’s go.”
  Michael Linton (20:15–20:43)

• “The real premise of our book is…we're all going to make mistakes. The way to make fewer of them and to carry less shame, less guilt, less regret is just to talk about them.”
  Josh Steiner (36:30)

• “Prefab housing…has some clear advantages and potentially lowering the cost of housing by 20 to 30%.”
  Beata Caranchi (45:35)

• “One of the largest problem in the housing market: it is over regulated…that's why we are really trying to do…Swedish house, small house. It's not so regulated at all."
  Elizabeth Svantesson (49:09–49:38)

---

Timestamps for Major Segments

• [03:00] Trump's Tariff Policy and Economic Claims — David Westin, Jason Furman
• [09:31] Supreme Court Tariffs Decision, Refund Logistics — Jennifer Hillman
• [14:05] Reflecting on High-Profile Mistakes — Josh Steiner, Michael Linton, Dr. Allison Papadakis
• [17:25] The Sony Hack — Michael Linton
• [28:42] The Whitewater Diary — Josh Steiner
• [34:00] Emotional Self-Regulation and "Cheetah Pause" — Michael Linton, Dr. Papadakis
• [37:27] David Westin Shares His Own Mistake
• [41:05] Sweden’s Modular Homes — Christia Freeland
• [45:12] Modular Construction’s Promise and Challenges — Linbecks, Beata Caranchi
• [48:45] Regulatory and Political Context — Elizabeth Svantesson
• [50:11] Wall Street’s Investment and Perspective — Sharmi Saban

---

Concluding Thought

The episode interweaves macroeconomic policy, personal growth through confronting mistakes, and practical innovations from abroad. Whether addressing national economies or private failures, the central message is the necessity—on both a personal and systemic scale—to question habitual practices, learn from missteps, and remain open to unfamiliar solutions. As Christia Freeland sums up Sweden’s lesson: in times of scarcity, the real risk may be refusing to change how we build.

---

Transcript

[David Westin]

This is Special Agent Riegel, Special Agent Bradley Hall.

[Michael Linton]

The time is approximately 11:15am about to

[David Westin]

start consensual telephone call with Dr. Daiwu Sang.

[Narrator/Reporter]

China's Ministry of State Security is one

[Michael Linton]

of the most mysterious and powerful spy agencies in the world.

[Narrator/Reporter]

But in 2017, the FBI got inside.

[Michael Linton]

Wait. I'd never seen that much evidence in my entire career, and I don't think we'll ever see that much evidence again.

[David Westin]

I now have several terabytes of an

[Josh Steiner]

MSS officer, no doubt, no question of his life. And that's a unicorn.

[David Westin]

This is a story of the inner workings of the MSS and how one man's ambition and mistakes opened its vault of secrets. Listen to the Six Bureau from Bloomberg Podcasts starting on February 13th on the iHeartRadio app, Apple Podcasts or wherever you get your podcast.

[Michael Linton]

Safeway and Albertsons have made saving easier than ever with great savings on family favorites this week. 16 ounce sweet strawberries are two for $5 member price. And don't miss the incredible deal on Signature select boneless skinless chicken breast value packs for 2.97 per pound limit. One plus medium avocados or mangoes are

[Josh Steiner]

five for $5 member price.

[Michael Linton]

Fresh and delicious savings for every meal. Hurry in. These deals won't last. Visit Safeway or albertsons.com for more deals and ways to save.

[Jennifer Hillman]

Bloomberg Audio Studios Podcasts Radio News.

[David Westin]

This is Wall Street Week. I'm David Westin bringing you stories of capitalism. With all the talk about housing affordability, is there anything we can do to make houses cheaper instead of just helping people pay more? Our new contributor Christia Freeland travels to Sweden to see how it works when we manufacture houses instead of building them. And we all make mistakes, whether we like to admit them or not. Two people well known to Wall Street, Josh Steiner and Michael Linton, have come clean about their big, embarrassing mistakes. One at Sony Pictures, the other at the Treasury Department. In their new book, From Mistakes to Meaning, they show us why learning from our mistakes is both harder and more important than we thought. But we start with that big story of a duel between the Supreme Court and President Trump.

[Michael Linton]

In a few moments, I will sign a historic executive order instituting reciprocal tariffs on countries throughout the world. Reciprocal. That means they do it to us and we do it to them. They're all coming in over the next week. We're making deals with all of them, and I said if we don't make a deal, then we're going to tariff them an extra 5, 6, 7, 8% whatever the difference is, and we'll take it that way, the Supreme Court's ruling on tariffs is deeply disappointing. And I'm ashamed of certain members of the court, absolutely ashamed for not having the courage to do what's right for our country.

[David Westin]

That played out this week when the president gave his State of the Union address with the members of the court right up front. Jason Furman of Harvard takes us through the ramifications of the conflict for the economy and what likely comes next. So, Jason, we heard from President Trump this week in the State of the Union address, and he sort of gave a State of the economic Union, and among other things, he said, we have plunging inflation, we have rapidly rising incomes, and the economy is roaring like it's never roared before. Is he right?

[Jason Furman]

To a first approximation, the year since Donald Trump became president economically was very similar to the year before he was president. It's actually been a perfectly good year. It's not the horror that Democrats might have predicted, but it's certainly not any sort of turning point that Donald Trump was trying to brag about either.

[David Westin]

As an economist looking at the US Economy right now, what are the strong points?

[Jason Furman]

You know, we've had steady growth. It continued in 2025 at the same pace it was in 2024, which was a pretty good pace. There's some tentative signs that maybe productivity growth is picking up a little. It's only a smidge, but hopefully it's a hint of what's to come. The unemployment rate has basically stabilized.

[David Westin]

How much of that good news in the economy do you think is because of AI, Both the investment in AI and the promise of AI.

[Jason Furman]

I think some of it is I was a big factor on the demand side in the economy in 2025. It could be an even bigger factor in 2026. That's all the money that's spent building data centers, the energy to supply them and the like. We're only just starting to see the first hints of AI showing up on the supply side of the economy. Productivity growth in 2025 looks like it'll be maybe a little bit above the pace we had in the previous cycle, but only a little bit above. So, you know, early days on supply, but a lot of demand when it

[David Westin]

comes to tariffs, President Trump, in his remarks, made it clear he's sticking with tariffs. Whatever the Supreme Court sitting right in front of him thinks about tariffs, he's going to go ahead with them. What has that really done to the economy? Has it had a lot of effect?

[Jason Furman]

I think it is subtracted a bit from growth and added a meaningful amount to inflation. The inflation one is easier to prove. You can just look through the different types of goods and, you know, furniture, consumer electronics. You see those prices rising, and normally you would have expected them to be stable at a time like this. So it really is showing up. Is it a dramatic recession or an apocalypse? Definitely not. In fact, the models never predicted that you would have something that dramatic. But that doesn't mean that we should be blase about what might be tens of billions of dollars of damage to the economy.

[David Westin]

Business leaders often talk about uncertainty and how that is really a dampener on growth for them. Whatever the tariff rate is, tell me what it is and I'll deal with it. As opposed to. I'm not sure. There's been a lot of uncertainty, both in the way the tariffs were imposed and now with the Supreme Court decision. Can you approximate what that might mean for the economy? Is it having an effect on the economy?

[Jason Furman]

Probably it leads to some delay of investment, some desire to do things overseas rather than in the United States. The Supreme Court decision, I think, ultimately will give us more certainty because the IIPA tariffs that the president had been doing before, he'd been constantly changing them at a drop of a hat. He didn't like the tone of voice, didn't like a television ad in another country. You know, tariffs go up. The new authorities that he's still going to have, like Section 301, take more time and effort. They're hard to change them on a dimension. And so if he wants to have high tariffs, we're going to have high tariffs. He can't quite change them on a whim in the way he was doing before under the new legal regime.

[David Westin]

Over and above the direct effect on trade from tariffs. There are also these agreements that the Trump administration has been entering into or trying to enter into, and they involve investment in the United States and other sort of concessions. How much could they help the economy or in their absence, hurt the economy?

[Jason Furman]

Most of those agreements are relatively minor. They're repackaging stuff that probably already would have happened anyway. Or maybe you get more investment coming from Japan or Korea in one form, but then they buy fewer Treasuries and you get less investment in some other form, and it all washes out on the other end. So I don't see very much upside for the US Economy from those. Those agreements.

[David Westin]

In his State of the Union address, President Trump suggested once again that maybe tariffs could replace income tax. How feasible is that?

[Jason Furman]

That's ludicrous. Income tax collects over $10 trillion over the next decade. And the tariffs are in the hundreds of billions per year that there's no comparison between them.

[David Westin]

Even if the tariffs cannot replace income tax, it is money coming into the treasury at a time that, goodness knows, the United States could use money coming to treasury, no matter who gets to be president. Do you think we can ever take these tariffs back off from a fiscal side?

[Jason Furman]

The one respect in which tariffs are working is they are raising revenue. It's just that there are so many other ways to raise revenue that would be less harmful to the US Economy. So I would much rather we not frame the discussion around do we want tariffs or nothing? I'd rather the conversation be, do we want tariffs or do we find another way to replace that revenue? Maybe also do some spending cuts. That's much more economically sensible.

[David Westin]

The Supreme Court struck down President Trump's tariffs, something the President called unfortunate, but the justices left it to the lower courts to decide on appropriate remedies. Before the decision, we went over the options with Jennifer Hillman, a senior fellow for Trade and International Political Economy at the Council on Foreign Relations.

[Jennifer Hillman]

So if the court rules that the tariffs were illegal from the get go, then the tariffs must be refunded to those that have paid them. And if we look, you know, to date through at least the end of August, that means about 88 to $100 billion worth of tariffs would need to be refunded to the importers that paid those tariffs in the first instance. Because if they're unlawful, then everyone is entitled to a refund with interest.

[David Westin]

Is there a mechanism for doing that? That sounds like an enormous undertaking.

[Jennifer Hillman]

There is a mechanism, but you are correct, it is an enormous undertaking. And it basically splits out into whether or not the particular import of this particular item in this particular shipment, whether or not all of the paperwork that Customs has to do about those has closed or not. You know, in customs parlance, we say the entries have been liquidated. So for all of the entries that have closed out, everyone can go back in and say, I made a mistake, in essence, on my. On my import declaration. I don't owe any tariffs. Under iepa, I'm going to change my declaration, and I don't owe any of these tariffs, and you owe me a refund for all of the entries that have already closed out. Then there is a 180 day period in which you can file, effectively, a protest that in essence says to the Customs Service, you overcharged me and you owe me a refund. But again, the Trump administration could make This a very easy, straightforward process. Everybody that applies automatically gets their refunds. Or they can make it a very difficult process if they want to challenge each and every entry, if they want to say, you need to provide more information, you haven't given us everything that we need, they could make this a very difficult process, you know, and again, for the big importers that have all of the paperwork readily available, they are likely to again go ahead and move to process all of their refunds. It's going to be those small businesses and they're the ones that have been hurting the most from these tariffs. They're going to have the most difficulty if this process is difficult. They don't know exactly what paperwork to file. If the Trump administration would decide to try to fight all of this and make everyone challenge in individual lawsuits, the question will come whether all these small businesses, do they have enough money to pay the legal fees, do they know how to go through the process and whether or not, again, this is going to be a requirement that you have to do this entry by entry, or whether there's going to be a much broader ability to process refunds more, you know, again, on a group and on a sort of nationwide basis. So again, it's going to depend. But as a matter of law, if the tariffs are illegal, refunds should be paid.

[David Westin]

Up next, coming to terms with our most embarrassing mistakes in a new book on authors Michael Linton and Josh Steiner. Come clean and teach us something about how we can truly learn from those mistakes we'd rather forget.

[Jason Furman]

The news doesn't stop on the weekends.

[Narrator/Reporter]

Context changes constantly, and now Bloomberg is the place to stay on top of it all.

[Jason Furman]

Hi, I'm David Gura. Join us every Saturday and Sunday for the new Bloomberg this Weekend.

[Christina Raffini]

I'm Christina Raffini.

[Narrator/Reporter]

We'll bring you the latest headlines in depth analysis and big interviews, all the

[Michael Linton]

stories that hit home on your days off.

[Narrator/Reporter]

And I'm Lisa Mateo. Watch and listen to Bloomberg this weekend for thoughtful, enlightening conversations about business, lifestyle, people and culture.

[Michael Linton]

On Saturday mornings, we put the past

[Jason Furman]

week's events into context, examining what happened

[Michael Linton]

in the markets and the world.

[Narrator/Reporter]

Then on Sundays, we speak with journalists, columnists and key political figures to prepare

[Michael Linton]

you for the week ahead.

[Narrator/Reporter]

Join us as soon as you wake up and bring us with you wherever your weekend plans take you.

[Jason Furman]

Watch us on Bloomberg Television, listen on

[Michael Linton]

Bloomberg Radio, stream the show live on the Bloomberg Business app, or listen to

[Christina Raffini]

the podcast that's Bloomberg this Weekend.

[Narrator/Reporter]

Saturdays and Sundays starting at 7am Eastern, make us part of your Weekend routine on Bloomberg Television, Radio and wherever you get your podcasts.

[David Westin]

This is a story about not letting bygones be bygones. We like to say that we can learn from our mistakes, but when it's a big, truly embarrassing mistake, we sometimes do everything we can not to revisit it. Now, two names well known to Wall street have decided to write a book unpacking what went wrong for them and why. For Michael Linton when he ran Sony Pictures, and for Josh Steiner when he was chief of Staff to the Treasury Secretary in the Clinton administration, their book is from mistakes to meaning, Owning your past. So it doesn't own you. Words matter and it's mistakes to meaning, not failures to meaning. That's an important distinction.

[Josh Steiner]

Yeah, it's a really important point for us. There have been great books written about success and about failure, and we think of success and failure as siblings. You know, in both cases, you have a group of people, they come together, they're trying to do something meaningful, they have a plan to do it. In one case it turns out well, in the other case it doesn't. But they're both intentional. One way to think about, at least the way we thought about it, was there's a reason we say marriages fail and that if you get married at 3am in Vegas after a couple of cocktails, that's a mistake. In the case of marriage, people come together, they want to do something meaningful, it doesn't work out, so it failed. But mistakes are something that you do without self awareness, without understanding the context in which you're operating and that you end up regretting.

[Michael Linton]

And the other thing is that maybe with the exception of marriage, not that many people have the opportunity to have failures. You know, it does require a pretty substantial or significant decision to be made. Mistakes, everybody makes them and they make them all day long. So we knew that it was fertile ground.

[Josh Steiner]

And the surprising part is no one talks about them. As soon as we go on Amazon or Barnes and Noble, we're going to find 18 books on the subject, and we couldn't find one good book about the concept of mistakes. We found a gazillion books about success, lots of books about failure, and not one about mistakes.

[David Westin]

Was there a magic moment for this book between the two of you?

[Michael Linton]

There was. It involved a walk on the beach and Josh coming up with this idea. Josh could probably tell the story the best because he was the one who actually thought of the idea in the first place.

[Josh Steiner]

Both of us had a mistake that we'd been living with and had Never spoken about. And in my case, I had suppressed it ineffectually for many, many years.

[Michael Linton]

When you came up with the idea and said to me, we should write a book about mistakes, it really landed because I myself had been living with something for a long time that I really did not want to address.

[Allison Papadakis]

Michael has this nice saying about mistakes are windows into ourselves.

[David Westin]

And that's where Allison Papadakis came into the picture. Papadakis is a professor of psychology who studies stress and coping at Johns Hopkins University.

[Allison Papadakis]

So Josh and Michael started off with wanting to look at mistakes, and they really started off more on their own with it. And then they realized that they wanted a little bit more input, so they brought me in. But a lot of what came across in the book is their own ideas about things, and then they were sort of wanting to check it out. Does this really align with the psychological literature and research? And that's where I came as try to help them to see this really does actually make sense. And it's not bunk. You guys are coming up with good ideas. And then around their stories, I helped them to just go a little bit deeper and then started to recognize patterns in their lives over time that got reflected.

[Michael Linton]

Everybody has a lot of mistakes. I had a few myself, most of them having to do with my professional career. And I wrote up one or two before that. And then I realized I was avoiding the main event, which was, you know, the cyber attack that happened to Sony 10 years ago, and that there was a mistake at the core that caused the events that led ultimately to the cyber attack. The FBI is investigating that destructive cyber attack at Sony Pictures.

[Narrator/Reporter]

This is costing Sony hundreds of millions of dollars. Ten minutes ago now, the FBI announced it's formally accusing North Korea of hacking Sony Pictures.

[David Westin]

So at the core, what do you look back and think was your mistake involved in the Sony situation?

[Michael Linton]

At the core core, it was agreeing to make the movie, the interview.

[Josh Steiner]

You want us to kill the leader of North Korea?

[Christina Raffini]

Yes.

[Josh Steiner]

Whaaaat?

[Michael Linton]

And in retrospect, it was definitely a bad decision, and it was definitely one that put the company in jeopardy.

[David Westin]

You talk about three acts, right to the mistakes. There's the prelude, what led up to it. There's the mistake itself, and then there's the postlude you describe in the book. You had put in place a rigorous process for green lighting movies.

[Michael Linton]

Yeah, we had a very, very strong process that had been in place for many years before that. We didn't suddenly get emotionally connected to an idea or a project and say, let's Go. But as opposed to that, you get people around the table from different disciplines, and they give their voice to whether, you know, the marketing folks telling you whether it's a good idea, the production folks. That was not the case when we agreed to make or I agreed to make the interview.

[David Westin]

Which leads to the question, why? Why on that one?

[Michael Linton]

I had been in the job for a while, over a decade, and I was typically the person in the room who was. Mr. No, I was the. I was actually the guy in the suit. You know, everybody else around the table, for the most part were people who were either directly creative executives or interacting a lot with creative executives. And I was the person who was expected to be the adult in the room. There was a moment where I really did not want to play that role. I really want. Wanted to be on the other side of the table, so to speak, with the creative community. And I, in that moment, I said, okay, let's go. Let's make this movie. And threw all of those careful processes out the window.

[Josh Steiner]

I think it took us a while in Michael's case to figure out what the three acts were. And the first act for Michael was actually your childhood.

[Michael Linton]

I had grown up in Westchester, I'd grown up in Scarsdale, and I was upended in the late 60s and more, moved to Holland. And, you know, my parents themselves were immigrants, so they weren't very sympathetic to my sister and my situation. We were very lonely. And that existed for a number of years, and it had a big effect on me. And I think Josh is right. That's ultimately what played a part in my decision to do this in Act 2.

[David Westin]

One of the things that struck me in reading the book about what happened in that room at the table, reading.

[Michael Linton]

Yeah.

[David Westin]

Was the hydraulic pressure.

[Michael Linton]

Yeah. So what the circumstances were was everybody at that point really wanted to make that movie. We'd had great success with Seth Rogen comedies in the past. This was it. Read funny on the page. Everybody wanted to do it. And there was an added circumstance which was there was a competitive studio, Universal, which also had a relationship with Seth Rogen, and they wanted to make the movie. So it had all come down to this moment to make that decision. And I sat there and you're right, the entire room was raring to go. And I got caught up in the moment. You know, by the time the read through was finished, everybody was high fiving, clapping. It was hilarious. You know, there were things in the script I should have been paying attention to, not least of which that we assassinated the leader of a Hostile nation, Kim Jong Un. But in that moment, I was so caught up in it. I so wanted to shed my suit, so to speak, and be part of the gang. Then I said, sure, let's go.

[David Westin]

So you made your mistake, green lighting. It went into production, went along, and at some point you basically lost your computer system and even lost the information in it which could be misused. Give us a sense of how large those consequences were in your world.

[Michael Linton]

So we say, yes, the thing goes into production. And then at the June of that year, we put out a trailer to say the movie's coming in the Christmas season. And at that point, the North Korean government, through the envoy in New York, sort of sent us a warning that something bad could happen. We checked with the State Department, we checked with Rand Corporation. No, these guys are all bark, no bite. Don't worry about it. Nothing can ever happen. As it turns out, they were referring to Kim Jong Il, not Kim Jong Un. He was new on the scene. They didn't really understand what he was capable of. We're now in the fall and all of a sudden I'm driving to work and, and I get a panicked call from my cfo, Dave Handler, and he says, everything is down, all of our systems are fried. And when I finally got to the studio and we started looking at it, 70% of our laptops were knocked out. And, you know, in the weeks following this is all well known, the email started coming out. It was like ground zero for the news. Everybody was looking at Sony, by the way, nobody was helpful. Everybody else ran for the hills because all of these emails started coming out. And by the way, movies started coming out up on our systems. We had the Karate Kid that suddenly was available for people to watch online, all because our systems got hacked. Plus we couldn't operate the studio for at least a week because there was no way of moving material around.

[David Westin]

So you had the distinction of having President of the United States call you out on your mistake.

[Michael Linton]

I was going on Fareed Zakaria show to try and explain what was happening at that moment at the studio. It was sort of. We were a quarter way through the whole series of events, and at that point they had not yet identified with, with absolute certainty that it was the North Koreans who had done it. So just before I went on the show, Fried Zakaria said to me, oh, the president, they've just announced that it was the North Korean. And the President is going to do a quick press conference.

[David Westin]

Hello, everybody.

[Michael Linton]

The President was taking some questions from reporters and the reporters said, A, what are you going to do about the North Koreans? And B, what are you going to. What do you think of what Sony has done?

[David Westin]

Sony suffered significant damage.

[Josh Steiner]

There were threats against its employees.

[David Westin]

I am sympathetic to the concerns that they faced. Having said all that, yes, I think they made a mistake.

[Michael Linton]

What he didn't fully comprehend and which I sort of laid out in the interview with Reed Zakaria, was that it wasn't our decision at that point because the theaters had declined to show the movie. Streaming didn't exist in that moment, so we had no way of getting the movie out. So I, in a funny way, the President misunderstood what we were trying to do, and that, in and of itself was a mistake. Having said that, he, in a very gracious act, about 10 days later, called me, a, apologizing for saying what he said, which was not necessary. But secondly, he did say, but what were you thinking making a movie where you assassinate the leader of a hostile nation? Like, surely that was a mistake. And on reflection, and in that moment, I suddenly realized, he's right here, identified the mistake, and that was actually a mistake.

[David Westin]

Would it have been different if you'd had all the time in the world to think it through, to talk to Josh about it? Would it have come out differently?

[Michael Linton]

I think my life would have been different, yes. I think had I, at an earlier moment, reflected on it, understood what the root cause was, understood really how I felt about it emotionally, I would have been able to keep my head up, upright in a much better way than I. Than I did. Instead, what I wound up doing was I am. The minute it was behind me, I really never wanted to look at it again. I really took the attitude, okay, that's over. Let's not reflect on it. Let's not consider why I did that in the first place. Let's just move forward. And I can honestly say that was a. That in and of itself was a mistake. I imagined for a long time, time that every time I walked, years after the event, that every time I walked in the room of any event, any dinner, a party, just a group of people, my own family, what they see on my forehead is Sony hack. That's what I imagined. When, of course, for 99% of the population, it was completely in the rearview mirror. It never came to their mind.

[Josh Steiner]

And this is an example of where Allison was super helpful because Alison educated us about something called the spotlight effect.

[Allison Papadakis]

I mean, many of the mistakes in the book were public ones, so of course it's going to happen more in those kinds of situations. But even for people who aren't making public mistakes or talking about them in a public sort of way, it still happens on a day to day basis. We worry that our colleagues, our friends, our family, that they're thinking about these things when in fact usually it's just us.

[David Westin]

Is there ever a time that it actually may be healthier simply to move on rather than to dwell on your mistakes?

[Allison Papadakis]

I think for some people with some mistakes, if it's a minor thing or if they actually have a pretty good understanding of it, then it's easier to do that and just move on. But if it's something like the kinds of mistakes that are in the book, where it really was very meaningful to folks, it really was a watershed moment in their lives, I think you can't really move on until you really do get an understanding of it. And for most folks, it takes pausing and unpacking it a bit to really get to that level of understanding to be able to move on.

[David Westin]

Next we turn to Josh Steiner's mistake, one very different from the one Michael Linton made and what we can all learn from it.

[Josh Steiner]

This isn't like the World Series where people are like, oh great, I went to the World Series twice. Once is plenty. You don't need to do it twice. Trust me,

[Michael Linton]

You can get the news whenever you want it with Bloomberg News Now. I'm Amy Morris.

[Narrator/Reporter]

And I'm Karen Moscow, here to tell you about our new On Demand news report delivered right to your podcast feed. Bloomberg News now is a short 5 minute audio report on the day's top stories. Episodes are published throughout the day with the latest information and data to keep you informed.

[Michael Linton]

Yes, there are other products like this from a variety of news organizations, but they usually rerun their radio newscasts throughout the day. That's not what we do. We create customized episodes that can can only be heard on Bloomberg News Now.

[Narrator/Reporter]

And we don't wait an hour to publish breaking news. When news breaks, we'll have an episode up in your podcast feed within minutes. So you're always getting the latest stories and developments.

[Michael Linton]

Get the reporting and the context from Bloomberg's 3,000 journalists and analysts. We're all over the world. Listen to the latest from Bloomberg News now on Apple, Spotify or anywhere you listen. We see you and you.

[Josh Steiner]

And yes, you. You want to start your education, further your career? Try something new.

[Michael Linton]

But what's the first? The University of Cincinnati has flexible online

[Josh Steiner]

options helping you balance the have to DOS with the want to dos.

[Michael Linton]

And with over 100 degrees to choose from, we're pretty sure you'll find something you love to do.

[Josh Steiner]

So take the first step.

[Michael Linton]

You'll be glad you did at UC WECU.

[Josh Steiner]

Succeeding visit WECU UC.edu to take the first step.

[David Westin]

All of us make our share of mistakes, but not all of us are in the public eye the way that Michael Linton was when he ran Sony Pictures and incurred the wrath of the North Korean regime. Or the way that Josh Steiner was when he was in the Clinton Treasury Department and got wrapped up in the Whitewater investigation. Take us through your mistake in Washington.

[Josh Steiner]

At the age of 27, I became the chief of staff at the treasury department in the 1990s. The beginning part of the Clinton administration was a little bit fraught with scandals, the most notable of which was the Whitewater investigation. And like many senior officials, I got subpoenaed. I actually turned over all the documents that were relevant, one of which, unfortunately, was my personal diary. And in that personal diary, I had written things about Whitewater. And keeping a personal diary in Washington is not necessarily a mistake. Writing about sensitive investigations and your diary, that's a mistake, and it was a big one.

[David Westin]

So again, it's important to identify exactly what the mistake is. It was not keeping the diary, in your view, looking back at it now.

[Josh Steiner]

Yeah, I was a history major. I have a graduate degree in history. You couldn't write history if people who had been involved in public policy and government didn't keep diaries. That's not a mistake. But they were experienced enough, wise enough, mature enough to know that you're not supposed to write things about investigations because there was an independent counsel involved. And my diary include references to sensitive conversations. And worse still, it was the worst combination of a personal diary, therefore not particularly accurate. And about things which are highly sensitive. That's a pretty toxic combination. I made no effort to check the accuracy of my diary because this was never intended to be a precise narrative or a verbatim account of what took place. It was more than anything, a way to reflect on events and draw lessons from my personal and professional experiences. I wish that my diary was more accurate.

[David Westin]

What's your Act 1 look like? What led to you that decision?

[Josh Steiner]

One of the things that we discovered about mistakes was you really need to understand the context in which you're operating. And I had started to keep a diary when I was traveling through Asia at the age of 23, and it was totally appropriate. You're in Bali, you know, you're in Malaysia, and you're writing down your notes. Probably a little bit of terrible Poetry. You meet someone and you're keeping a recollection of the person you met. That's appropriate in that context. I then had a series of jobs, ultimately at Treasury. It was fine to keep a diary, but it would be better if I kept a diary that was appropriate for Washington, not backpacking through Asia. And that contextual question keeps coming up over and over again, like, know your context, apply the right rules and processes and systems, decision making skills to the context in which you're operating.

[David Westin]

One of the things I admire but maybe was a little surprised at doesn't appear you ever thought about just not giving them the diary.

[Josh Steiner]

Yeah, I received a fair amount of criticism at the time for being naive enough to think that I needed to turn it over. And my view was that the subpoena was very clear and the law is the law. And I really, really regretted writing what I did in my diary. I have no regret about complying with the subpoena.

[David Westin]

So what was the price you paid personally or within the larger context in the Clinton industry? You were still working in the Clinton administration, right?

[Michael Linton]

Yeah.

[Josh Steiner]

First of all, Secretary Benson was unbelievably gracious to me. I tendered my resignation and he said, no. He said, no, you're doing a good job. This wasn't so awesome. That's a little bit of an understatement. And he said, nevertheless, you got to keep going. So the price I paid was certainly I lost some credibility with my colleagues. Appropriately enough, I had made some bad decisions and I think they questioned my judgment over it and that was appropriate. The bigger price was I'd lost some self confidence and sense of self. And I thought of myself as someone who had good judgment, who was able to operate at a senior level within the government. And I questioned whether this was evidence of the fact that I was in fact, too young for my job. There's no question I carried with me embarrassment and shame as a result of what happened.

[David Westin]

Again, if you had the time to reflect on it, the three acts at the time, would you have done anything differently?

[Josh Steiner]

Yes, I think in hindsight I tried to massage it too much and I shouldn't have been as concerned about whether it all lined up perfectly and just should have said, look, I wrote what I wrote. You can interpret it the way you want to interpret it.

[David Westin]

There are a number of other chapters in this book with different people, some of whom we all know very well, some we may not know quite as well. What were the ones that either surprised you or stood out for you?

[Michael Linton]

Michael Malcolm Gladwell. So If I were to tell you that Malcolm Gladwell considers it to have been a mistake that he decided to become a writer, that that was the professional path that he chose, given his success, I dare say you'd be surprised.

[Josh Steiner]

Every person we asked had a mistake that they'd been carrying with them for a long period of time that they were eager to get off their chest. And they were very moving. Some of them related to family dynamics, some of them related, as Michael said, to career choices. And their willingness to talk was very generous.

[David Westin]

Having gone through this process, Unpeeled the onion as you describe it, does it make you better at what you do today?

[Josh Steiner]

You'd have to ask Michael what he does today first. It's not obvious to me.

[Michael Linton]

It's not clear to me either, frankly. So I wouldn't answer it that way. Yeah, I think it does. I think, you know, one of the ideas in the book is something called a cheetah pause, which means that before you react to something, you take a breath and you actually try and understand what your emotional state is and what your real thinking is before you actually commit yourself to that action.

[Josh Steiner]

I spent a lot of my career in the environment, investing community, and you grew up in the investing community. And you always think about the balance between fear and greed. Which is it? You know, you think to yourself, every position size is either too big or too small. The work that we did on this book helped me understand that a lot of things in life are sort of like this. It's approach avoidance. It's both. We're really attracted to something, and we're really scared about something, and one of the ways to make fewer mistakes. And I think one of the things that we discovered is a willingness to recognize that both can be true. You're attracted to it, you're afraid of it. And how do you balance fear and greed? It's not all one or the other. It's finding that path.

[Allison Papadakis]

There's the making a decision in the moment. Right. And I think sometimes we get overwhelmed by emotion or we get so focused in on the rational decision making that we forget to kind of take a step back.

[David Westin]

Johns Hopkins psychology professor Allison Papadakis says one tried and true way to avoid mistakes is taking a pause before.

[Allison Papadakis]

So there's a great example in the book with Irv Gotti, who is a music producer who really blew up his relationship with J. Lo by allowing his emotion in one situation to move over into another one. Had he. For totally legitimate reasons, he had a lot of emotion response to the situation, but had he been able to take a moment and not answer the phone that then led to this major mistake that he made. I think he might have made a different decision in it. And it's that kind of allowing yourself the time, the space to do it. Now, not all decisions allow that.

[Josh Steiner]

Right.

[Allison Papadakis]

But if we can do what's called a cheetah pause. So cheetahs run incredibly fast, but they can also decelerate and stop very quickly too. So if we can, if we've got the cheetah running right or the train going right, we've got to make a decision. If we can figure out how to make a little pause in there to allow ourselves to use our wise minds to make these rational decisions that include both emotion and our rationality, that can be very helpful.

[David Westin]

One thing I've had in my mind for a long time, which is if you're not making some mistakes, you're not trying enough risky things. But is the real lesson here, it's not a question of taking the risk, it's how you take the risk.

[Josh Steiner]

I think our book is less about not taking the risk or taking the risk per se. One way to think about it to your point is if you're a loan officer and you're so risk averse you never make a loan, you're unlikely to be a successful loan officer. And if you approve every loan, you're unlikely to be successful. Our book is slightly different, which is loan officers are going to make bad loans, investors are going to make bad decisions. If the inclination of that loan officer and that investor is to hide that mistake, to not talk about the mistake, they're making a whole new mistake. And the real premise of our book is acknowledgement that we all are going to make mistakes and that it's a natural part of life. And that the way to make fewer of them and to carry less shame, less guilt, less regret is just to talk about them.

[David Westin]

This is a lot of work you've gone through with Alison. If it works perfectly, 100%, what does the reader take away? What have you accomplished?

[Josh Steiner]

What did you take away?

[David Westin]

Well, I have my own mistake.

[Josh Steiner]

Okay, let's hear it.

[David Westin]

When I was president of ABC News, we had Leonardo DiCaprio front an earth Day special for us because he was the chair of the organization at that time. And it was a decision I made on the spur of the moment. I was relatively new in the job. I wanted acceptance from the journalists. I was trying to do something I thought was noble. It was environmental. And my team decided to have him go into the White House and interview President Clinton, and I got killed. I mean, it was brutal. And it built up to President Clinton at a big black tie dinner with a thousand people in Washington getting up and doing the whole talk about me.

[Michael Linton]

But I just want to say this to David Westin. You know, I've been in a lot of tough spots. Don't let this get you down. You may not be America's news leader,

[Josh Steiner]

but you're king of the world. Have you talked about that on television before?

[David Westin]

No, I've never heard this. First time.

[Josh Steiner]

Well, so this is the hope.

[David Westin]

I've talked about it.

[Josh Steiner]

Okay. This is really the hope. No, but this is exactly the hope that someone who's been super successful across a whole stage of different careers, seriously, as a lawyer, as an executive, as someone who's done really interesting television, this book hopefully has given you permission for the first time to talk about something publicly which had stayed with you for a long time. And that's our aspiration, that more people have that sense that it's okay, that you don't just have to talk about the success. You don't have to suppress the mistake, that it's okay to go public.

[Michael Linton]

I don't think what people should take away from this is by reading this book, you're never going to make another mistake. That is naive and that's actually not what we're hoping for. Will you reduce the number of mistakes you make?

[David Westin]

Maybe.

[Michael Linton]

Hopefully. Will you understand better why you made those mistakes and perhaps over time make fewer? Probably. In fact, I think most likely. And equally importantly, and this is the big fact that after you've made that mistake and by examining that mistake, you can get rid of the shame. You don't have to live with that burden the way that I lived with it, the way that Josh lived with it, the way that lots of people live with it all the time, by actually trying to examine why you did it, to understand what your emotional state was, you can live with yourself in a better way. And that, to me, would be 100% successful.

[David Westin]

Up next, getting the cost of housing down. We travel to Sweden to see how manufacturing our house rather than building it may be part of the answer.

[Josh Steiner]

This is Tom Keene inviting you to join us for the Bloomberg Surveillance podcast. It's about making you smarter every day. Business Day.

[Michael Linton]

I'm Paul Sweeney. We bring you complete coverage of the US Market open. We cover stocks, bonds, commodities, even crypto. All the information you need to excel. And I'm Alexis Christophers.

[Narrator/Reporter]

Bloomberg Surveillance also brings you the analysis behind the headlines.

[Michael Linton]

We do that through conversations with the smartest names in economics, finance, investment and international relations.

[Josh Steiner]

We do all this live each and every weekday, then bring you the best analysis in our daily podcast. Search for Bloomberg Surveillance on Apple, Spotify, YouTube or anywhere else you listen.

[Michael Linton]

On the east coast, listen at lunch and on the west coast, listen as soon as you wake up. That's the Bloomberg Surveillance Podcast with Tom Keene, Paul Sweeney and me, Alexis Christophorus.

[Narrator/Reporter]

Subscribe today wherever you get your podcasts.

[Josh Steiner]

Bloomberg Surveillance Essential listening each and every business day.

[David Westin]

Home ownership has long been a key part of the American dream, but today it's further out of reach than it's been in decades. Our new contributor, Christia Freeland, former finance minister and deputy prime minister of Canada, has firsthand experience with this from her time in government where her party promised to expand prefab housing. She travels to Sweden to take a closer look at how homes are built and how rethinking that process could mean less expensive houses rather than helping people pay higher and higher prices.

[Narrator/Reporter]

In the far north of Sweden, the marvels of modern manufacturing are on full display. This looks more like a factory than a housing site.

[Linbex Representative]

I hope so, otherwise we would have been failing.

[Narrator/Reporter]

Here at Linbecks, 500 miles north of Stockholm, houses aren't built piece by piece, they roll off an assembly line. The company produces roughly 40 units a week, a rarity in an industry known for drawn out timelines. In Sweden, nearly half of single family homes and about 20% of the of all residential buildings are built this way. International visitors when they come to talk to you, what do they say about their own situation? What brings them here?

[Linbex Representative]

They say the price is too high, it's too costly to buy a home, to rent an apartment. And they come to us to see if our way of doing it is the solution or part of the solution.

[Narrator/Reporter]

Housing affordability It's a growing concern that unites Americans on both sides of the aisle.

[Michael Linton]

America will not become a nation of renters. We're not going to do that. You don't have to be in Congress to understand how badly we need to

[Narrator/Reporter]

bring down the cost of housing and people on both sides of the Atlantic.

[Michael Linton]

This is more than a housing crisis. This is a social crisis.

[Narrator/Reporter]

Apollo's Housing Affordability Index shows that buying a home in the United States hasn't been this difficult since the 1980s. Over the past decade alone, home prices have doubled and those who can afford to buy are significantly older. In 2010, the median age of all US homebuyers was 39. Today it's 59. The median age of a first time homebuyer has also climbed to 40. It's a dynamic that Beata Caranchi, chief economist at TD Bank Group, has spent much of her career analyzing. Housing. A huge preoccupation. How important is it?

[Christina Raffini]

It's important on a couple of levels. It's a large share of the economy in terms of workers it employs, in terms of output. So it's a large contributor. And then it's important because it's probably the most important thing people think about when they think about affordability, lifestyle, ability to pay for rent or home ownership. So I know myself when I'm out speaking with our clients, I think it's like the same. The second or third question that comes up is about whether their children will be able to afford a home and what that outlook looks like.

[Narrator/Reporter]

When it comes to housing affordability. The issue comes down to a familiar equation. Supply versus demand. Purchasing power on one side, production constraints on the other. You have pointed to astonishing lack of productivity in the construction sector. What's going on there?

[Christina Raffini]

Yeah, it's beyond lack of productivity, it's regressing. What we find is it's contracting. So to build a home it actually takes more resources today than it would have taken 10 years ago. And so that's the disturbing aspect. Some of that is being related to the regulatory environment, the difference in standards and fees and permitting. So there's definitely a factor there. Then the other factors that are being attributed to is in the residential sector. It's largely a small company game, which means they often have 50 employees or less. And from that perspective they're going to be slower to adopt innovation. And there's a very high reliance on doing things the same old way, manual processes.

[Narrator/Reporter]

One innovation that could help break that pattern is what Linbex is doing in Sweden, building homes in factories instead of on site. And while modular housing production does exist in the United States, it still makes up only about 3% of new single family home construction. So to what extent is modular housing, prefab housing, a solution to productivity challenges in the housing sector?

[Christina Raffini]

Yeah, it's been cited as having some clear advantages and potentially lowering the cost of housing by 20 to 30%.

[Narrator/Reporter]

That productivity advantage shows up more most clearly in multi family housing, Lynn Beck's specialty.

[Linbex Representative]

It's pretty much like if you go to automotive industry, you see machinery, you see people, you see processes and you see computers and robotics and material and so on. So we produce housing very like other organization produces cars. We do it Indoors year round, eight hours per day.

[Narrator/Reporter]

If I'm a potential client of yours, what are the financial benefits of buying a home from you rather than having someone build my building on site?

[Linbex Representative]

The first thing is cost for money. With our process, you pay very late in the process, so the interest cost is lower. Traditional build, you pay for the foundation, you pay for the structure, they pay for the roof and blah, blah, blah. So you end up with having quite high cost for, for the interest and you pay very late with our method. The second thing is the engagement as a customer in the process. You don't need to supervise car manufacturing, you don't need to supervise housing done in a factory.

[Narrator/Reporter]

For all the cost advantages that come with manufactured housing. It has also met with resistance, something I myself encountered when advocating for its use while serving in the Canadian government. One of the parts, one of the policies the Prime Minister campaigned on was building modular housing. That is a way to get more homes built faster. I've had people heckling me in the House of Commons in Canada saying, oh, you want everyone to live in a trailer park. Is there sort of a stigma about prefab housing?

[Christina Raffini]

I think so. And there's like some factors like, you know, prefab, you need wood frames, for example. And so the, some people will be, oh, the quality of the construction isn't as good, or, you know, I want to put my personal stamp on it, which you can in prefab, especially with 3D printing and other factors. In terms of technology, it's not like it was 10, 15 years ago. So part of it is the stigma and part of it is making sure you have the right skills to do this, right to make these design changes and to do it in an economical way so that people don't feel like it's all a cookie cutter factor coming through. Right. So, you know, it's breaking through that mentality of what prefab meant.

[Narrator/Reporter]

It's not just buyer resistance that can be a challenge for manufactured housing. It's also the need for steady demand. In an industry that is notoriously cyclical,

[Linbex Representative]

we try to maneuver to have a backlog that is about one year. We can be one year ahead of what's happening. And one year is for us, it's a good time to have the backlog that long. But you need to take into consideration customers who have to wait for one year before we can hand over the next project. And if we see market going down, we need to address other kind of products so we can fill the production flow with projects.

[Narrator/Reporter]

And then there's the issue of regulation something not unique to North America when it comes to home building. Elizabeth Svantesson is finance minister of Sweden. Everywhere you go in, certainly in the western industrialized world, housing especially the ability of young people to afford a home is a pressing political issue. It's something you and I talked about as finance ministers.

[Michael Linton]

Yeah.

[Narrator/Reporter]

How big an issue is it here in Sweden?

[Michael Linton]

It's a big issue, especially in bigger cities. Many young people feel they don't really can afford to move quite early. But it's difficult to afford it because the prices have risen so much. One of the largest problem in the housing market is it is over regulated. So rules added rules added new rules all the time and that makes it difficult and very expensive to build.

[Narrator/Reporter]

Tell me a little bit about what you've done on cutting red tape.

[Michael Linton]

Many rules have been added and probably good purpose for every rule. But all the rules make it very expensive to build. So that's why we are really trying to do like now you can build like a Swedish house, a small house. It's not so regulated at all. It's small, but you can live one or two in the house so you can come in so you can have your own home.

[Narrator/Reporter]

And governments aren't alone in grappling with how to build more and build faster. Wall street is too. It's increasingly seeing affordable housing as both a need and an opportunity.

[Sharmi Saban]

JP Morgan plays a really big role in affordable housing. It is part of our mission. Just to give you some statistics, I think in 2025 we lent and invested 10 billion towards the new construction or preservation of about 60,000 units nationwide.

[Narrator/Reporter]

Sharmi Saban leads community development banking at JP Morgan, overseeing investments aimed at scaling affordable housing solutions. And increasingly that includes modular construction.

[Sharmi Saban]

Time is money when it comes to construction. It costs money to build, it costs money to carry a loan. And if there's ways to make it shorter, you're going to save money. And when something is cheaper to build, it's going to be more affordable for the person that is ultimately renting or going to own the building. I mean with modular housing, for example, units are built in weeks, they're put online in months. I think when you're doing ground up bricks and mortar, it takes months or years to get a building online, depending on where you are.

[Narrator/Reporter]

But the cost of building or manufacturing housing is only one part of what goes into making a home affordable or not.

[Sharmi Saban]

They're all linked. The cost is one piece. The interest rates are one piece, the regulations, the local zoning codes. If you're allowed to build multifamily here versus just single family. All of that leads to the constraints. I think what is great right now is that there is a lot more focus on this at the federal level and at the state level. I know they're looking more closely at how to ease some of those supply constraints and look at more streamlining of building. Creating a national building code. Building a code for modular housing to help chip away again at some of these challenges that make it harder to bring units online.

[Narrator/Reporter]

Modular construction could reshape parts of the industry. But even its most vocal advocates caution against viewing it as a silver bullet. 10 years from now, 20 years from now. Do you think most homes are going to be built in factories?

[Linbex Representative]

No.

[Narrator/Reporter]

Should they be?

[Linbex Representative]

No, I don't think so. Maybe 50 to go. 100%. I think we would lose so much of the building organization skills. And I think we need to see in different products, different way of producing things. We need the challenge to be better. If everybody would do the same, where would the challenge be then?

[Narrator/Reporter]

Modular construction may never fully replace building houses one at a time on site Traditional building but few maintenance. Major industries have changed so little over the past half century. While manufacturing, logistics, even farming have reaped enormous productivity gains from automation and technology, home building largely hasn't. In a moment defined by shortages and a lack of affordability, the debate may be less about finding a perfect solution and more about whether an industry under this much pressure can afford to keep building the way it always has.

[David Westin]

That does it for us here at Wall Street Week. I'm David Westin. See you next week for more stories of capitalism.