August 29, 2025 • 33 mins
This week on Everybody’s Business from Bloomberg Businessweek, Editor Brad Stone and Stacey Vanek Smith talk Fed independence, Cracker Barrel, as well as the upcoming wedding that’s already moving markets.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:12):
This is Everybody's Business from Bloomberg BusinessWeek. I'm Brad Stone
Felling in for Max Chafkin.
Speaker 3 (00:17):
And I'm Stacey Bannocksmith. And this week, Brad, I feel
like the theme is the end of an era.
Speaker 2 (00:23):
Well, it might be. It might be the end of
the US independent Fed era. And we're going to talk
to Scanda Amarnath, a former analyst at the Federal Reserve
Bank of New York, about that.
Speaker 3 (00:34):
Also the end of a new logo, the Curious Case
of Cracker Barrel. We've got the great Amanda Mole about that.
Speaker 2 (00:41):
And for our underrated story this week, There's no such
thing as a free tariff, not even for the little guy, Stacy.
The Deminimus tariff exception is ending.
Speaker 3 (00:51):
Yes, indeed, pour one out for Deminimus. Now, Brad, we
cannot talk about the end of an erow without talking
about the airas queen herself, Taylor Swift.
Speaker 2 (01:08):
Yes. Now, this might be news to some of our listeners.
I don't know if they've heard this, but after Taylor's
appearance on the Travis Kelsey podcast, the couple announced their engagement.
Speaker 3 (01:19):
They did, although I feel like We could almost call
this a merger because the two of them are such moguls.
Taylor Swift apparently worth one point six billion dollars, Travis
Kelsey worth ninety million, which is still pretty good.
Speaker 1 (01:35):
It's quite good.
Speaker 3 (01:36):
So, Brad, as you know, I am in Idaho right now,
and I thought I would go out onto the mean
streets of Boise and ask people what they thought about
the Taylor Travis engagement and if they had any advice
for the couple. Here's what they said. Do you know
that Taylor Swift and Travis Kelsey got engaged?
Speaker 4 (01:56):
Yes? How did you find out? On Instagram? Do you
think I think it's cute?
Speaker 5 (02:02):
My wife told me.
Speaker 3 (02:03):
Are you a fan of the Chiefs or of Taylor Swift?
Speaker 5 (02:08):
I despise the Chiefs and I think Taylor Swift's fine.
Speaker 3 (02:12):
Did you know that Taylor Swift and Travis Kelsey got engaged?
Speaker 2 (02:15):
Nope, I did not.
Speaker 3 (02:16):
Oh you didn't know? Yeah, so I'm just telling you now.
Speaker 2 (02:20):
Yeah, I know, quite surprising.
Speaker 3 (02:22):
What do you think about the engagement.
Speaker 1 (02:23):
I think they'll be happy. I think it's a lovely thing.
Speaker 6 (02:28):
Oh you know, I really don't much care.
Speaker 4 (02:33):
Do any advice for the couple?
Speaker 2 (02:35):
I do make the compromises that you have to make
in order to be married.
Speaker 5 (02:40):
You're in positions of great privilege and influence and wealth,
and please use that to help others.
Speaker 2 (02:48):
I think together maybe they could create something really amazing
and that it'll have a good influence over her fans
and kids.
Speaker 3 (02:57):
Any final thoughts for the happy couple.
Speaker 6 (03:01):
Well, I certainly wish so many years of happy marriage.
Speaker 2 (03:04):
What a range of commentary, Stacey.
Speaker 3 (03:07):
I know people were less enthusiastic than I thought they
would be, especially like you said, Brad, that these are
two of kind of the most powerful economic forces in
the country right now.
Speaker 2 (03:17):
Yeah, I mean this is a business story, I think.
I mean, you saw what the Aras tour did for
local economies. People are talking now about the Taylor trade,
how there were bets about this engagement on polymarket. People
talk about Swift and nomics and the spending that might
associate this event. So even the President weighed in right then.
(03:37):
He has generally not had nice things to say about
Taylor Swift, and yet he complemented the couple.
Speaker 5 (03:43):
I think he's a great player, I think he's a
great guy, and I think that she's a terrific person.
So I wish them a lot alone.
Speaker 3 (03:51):
Well, I mean, Taylor Swift's Eras tour did make a
noticeable economic impact all over the country. So imagine Brad,
what this is going to do for the wedding industry.
Speaker 2 (04:01):
I thought it was interesting that President Trump complimented the couple,
even though he's had some words for Taylor Swift in
the past. Clearly he's delighted that maybe this will be delivering,
if not a distraction, a little bit of an economic bump.
Speaker 3 (04:13):
He is everywhere, he is everywhere.
Speaker 2 (04:28):
One place President Trump has definitely been spending a lot
of time is on the Federal Reserve, and earlier this week,
of course, Stacy, he declared he was firing Federal Reserve
Governor Lisa Cook. Yeah.
Speaker 3 (04:40):
Doctor Cook has filed a restraining order saying the President
does not have the authority to dismiss her. She's also
suing the President over his decision to fire her.
Speaker 2 (04:49):
And this is unprecedented. She was appointed in twenty twenty two.
Her term does not end until twenty thirty eight. A
president has never fired a central Bank governor since the
FED was found at a century ag go. While the
laws as a president can remove members for cause. It
does not define what type of cause could satisfy that standard.
Speaker 3 (05:09):
And to be clear, right now, although the President has
named a replacement for doctor Cook, things are tied up
in court, so we will just have to see what happens.
Speaker 2 (05:19):
Right. And there are a lot of issues at play here,
political issues, legal issues, but they revolve around the big one,
which is the independence of the Federal Reserve, the US
Central Bank.
Speaker 3 (05:30):
Yes, and here to talk about FED independence with US
is Sconda Aubernaff, a former analyst at the Federal Reserve
Bank of New York and now the executive director of
the think tank Employe America. Hi, Skanda, Hi there, Thanks
for having me.
Speaker 2 (05:43):
Skanda. I imagine this has been a very busy week
for you. When did you first hear about the attempt
to fire Lisa Cook?
Speaker 1 (05:51):
Oh?
Speaker 6 (05:52):
I was trying to wrap up my work that evening.
I did the terrible move of checking my Twitter timeline
and it came upon my feed that President Trump announced
on truth Social that he was going to fire Lisa Cook.
And yeah, and obviously kind of delayed my plans for
wrapping up work and plans for my vacation.
Speaker 3 (06:12):
You were like getting ready to go on vacation.
Speaker 6 (06:14):
Yeah, so there's so clearly President Trump managed to put
a little bit of a span of the works there.
Speaker 3 (06:20):
Now, you have worked at the Federal Reserve Bank, you
have a legal background. What went through your head when
you saw this news.
Speaker 6 (06:30):
I think we kind of had an idea that this
was going to come at some point. You had heard
some rumblings about trying to make moves like this. They're
trying to right now rush through the nomination of Stephen
Myron to the Federal Reserve Reporter. And they're doing that
pretty aggressively and expeditiously. And these are all moves that
are clearly a concerned attempt to just get his people
(06:51):
in the building as quickly as he possibly can.
Speaker 1 (06:53):
That's the move.
Speaker 6 (06:54):
I think there are two things that are simultaneously true.
It is an attack on the FED, on FED independence,
and just a desire for more presidential control.
Speaker 1 (07:06):
It's also not clear like where this will go. The
SIOS try to try and fight this out in court.
Speaker 3 (07:10):
Yeah, she has said, she has said she's fighting it.
Speaker 1 (07:13):
Yeah.
Speaker 6 (07:13):
Yeah, so she's gonna fight it out in court. And
also the implications for other members of the FED, who
I must ad we have currently not just J. Powell,
but also Chris Waller Michelle Bowman. Those are three appointees
from the past Trump administration from twenty seventeen to twenty twenty,
and they are also people who I think generally get
(07:36):
along with their colleagues. One thing that has distinguished the FED,
maybe on a cultural level, is that it has a
relatively non partisan or a partisan culture. Obviously there's always
some whiffs of bias and political interest, but people try
to leave that stuff at the front door when they
enter the building. And when the FED has made a
(07:58):
lot of these decisions, if been done my consensus, you
don't typically see a lot of descents.
Speaker 1 (08:02):
You don't see partisan splits.
Speaker 6 (08:04):
Where the Biden appointees voted one way and the Trump
appointees vote another way. The FED culturally has maintained a
less than partisan culture, and that's remarkable in the stage
of polarization. And I do think that the more that
President Trump tries to really push on this, the risk
is obviously it becomes the more partisan institution.
Speaker 1 (08:23):
So basically, every FED decision, whether it.
Speaker 6 (08:25):
Be monetary policy or regulatory policy, if you thought that
stuff was supposed to.
Speaker 1 (08:29):
Be stable over a long periods of time that stability
is going to be put more into question.
Speaker 2 (08:34):
And Skanda, the President is trying to achieve these aims
through controlling the FED Board. Now, these FED Board members
serve a fourteen year term. Lisa Cook has just started hers.
He says he has the right to fire her for cause,
and the cause, presumably is that she listed two homes
as her primary residences on more gagage applications. Is there
(08:57):
a cause here and is that Do you think that's
even the right question to ask.
Speaker 6 (09:02):
I'm not sure it really is the right question to ask,
But what I will say there is there are clearly
some accusations of misconduct. What we do not have is
clearly set forth to judicial interpretation of what counts as
valid cause. So far the courts have not had to
address this a question or have dodged it, and so
(09:24):
that's still some legal jeopardy there. Obviously, Lisa Cook has
signals she will seek to block this attempt at removal,
and we're gonna have to find out the court's what
comes of all of this.
Speaker 2 (09:35):
What do you think it's really going on here? I mean,
he's talking about renovation expenses for Chairman Jerome Powell. He's
talking about mortgage applications for Lisa Cook. What is really
at stake here and why is it so important to
the president?
Speaker 6 (09:48):
I think the word you're looking for is pretextual, right,
that the real reason for wanting to remove Lisa Cook
is not because the grave sin of whatever she did
on her mortgage applications. We are clearly seeing that there
is a concerted attempt to remove people who are not
seen as not even just allies on interest rates, because
I would argue Lisa Cook is probably one of the
(10:10):
more rubbish members, but rather it's about loyalty. I think
that's pretty clear that the president has put a premium
on filling the government with people who he feels he
can trust, people who are more directly loyal and accountable
to him. And Lisa Cook obviously was an appointee from
the Biden administration, and so there's some sets of well,
even if she does align on policy currently maybe not
(10:30):
in the future, that might be part of the goculus involved.
But I think they want an outcome and they're going
to try and find every means available to them to
achieve it.
Speaker 3 (10:39):
Is that a bad thing? I mean, I can see
an argument that the FED does not necessarily answer to voters.
It does not answer to politics, and I think people
sort of talk about that as if it is a
good thing, like what's so bad about the fedor Reserve,
the central bank of the country being politicized.
Speaker 6 (10:58):
I think that the risk what's going down the road
of just pure president will control is you're effectively saying
everything's valid for turnover every four years, and so that
means like, if you're president, you're making along the timeline
of how well is your term gonna play out, So
that for year time horizon is probably pretty important, and
it probably makes sense for a lot of things. It
(11:19):
probably doesn't make sense for things like managing short term
interest rates to solve long term problems. So take, for example,
right now, we have about four to five interestrate cuts
over the next twelve months, call it, and yet long
term treasury yields have remained unchanged, and they've been roughly
on four point two to four point three five percent.
(11:39):
And when you make short term interest rate decisions that
don't have as much bearing on long term interstrates, it's
basically reflecting the fact that the institution doesn't have as
much credibility in what it's doing I think that is
like the real issue here. When you make promises in
the short term that you're willing to reverse on, or
you're putting yourself in a position to reverse on, then
you're into problems. So let's say the FED cuts rates
all the way to one percent tomorrow because President has
(12:01):
managed to fill the Federal Reserve Board one If that's
not really being driven by data and objective analysis, who's
to say in the future, like those rates won't have
to come up a lot. Or let's say maybe because inflation,
Maybe because the political constellation pushes people to say I
want higher rates, Maybe because the Democrats are the president
and I don't know Trump's appointees are not aligned with
(12:26):
a future Democratic president. Or else Let's take the situation
where just it causes a lot of inflation, or if
it just coincides with a lot of inflation, then the instinct.
Speaker 1 (12:35):
Will be to raise interest rates.
Speaker 6 (12:37):
It's a notion of hey, the Fed could do something
today and it matters less than it otherwise. Would the
Fed could cut rates four or five times because he
replaces Jerome Powell, he replaces all these other people. But
the more that you see people doing things because they're
just following some narrow presidential instinct. So, for example, you
have the current Ceachair who's up for nomination the Federal Reserve,
(13:00):
bored Stephen Meyer. He seems to have pretty strong views
now that interestrates.
Speaker 1 (13:04):
Should be cut.
Speaker 6 (13:05):
If you go back like a year ago, he was
probably one of the most had some of the most
hawkish views out there. He thought that even though the
federal funds rate was five point through three percent, even
though the uneployment was going up, inflation was just too
high and financial conditions were too accommodative for the FED
to cut rates. Twelve months later, he seems to be
of a very different view, even though interest rates are
already lower by one hundred basis points, inflation is a
(13:27):
little higher on the FEDS gauges than it was last year.
It seems to be that he's clearly had to change
his heart, and that might be for a lot of
valid reasons, but I do think it also kind of
raises some questions about if the views of the Fed
are really going to be determined by just like what
kind of political instincts are guiding the present. You can
easily end up in a situation where interest rates can
move all over the place short term, and then if
(13:48):
you're a long term investor, you're gonna have to price
in some of the risk that interest rates either might
have to go up in the future or else inflation
is a good enough reason to demand more compensation.
Speaker 2 (13:59):
Kinda I can imagine a world where markets would have
really recoiled from the White House's intervention in the inner
workings of the Fed. It kind of hasn't happened this week,
other than some key bond prices moving higher. What do
you make of this? Like apparent Insussians to what's happening
right now?
Speaker 6 (14:18):
Yeah, I mean, I think this is probably where there
is like a certain kind of conventional wisdom that is
coming under more pressure, right, which is that central bank
independence was sort of something so holy that it could
not possibly be questioned. If you look across other countries, right,
there are other countries with varying arrangements on central bank
(14:40):
independence and attacks on central banks, and the movement of
different acid prices, I would argue has generally underwhelmed.
Speaker 3 (14:50):
Acid price is meaning like what happens with the markets.
Speaker 6 (14:53):
What happens with their stock market, what happens with government
bond deals, what happens with exchange rates. Now, obviously there
are some extreme example if you take like the current
leader of Turkey has some pretty interesting views about how
how the central bank should use interest rates to fight
inflation and removed the central.
Speaker 1 (15:09):
Bank chief at one point.
Speaker 6 (15:10):
That had some effects on the Turkish leer at Turks
there sold off a lot.
Speaker 3 (15:14):
Well, they have horrible economic crippling inflation, which I think
is the worry here, right that if the interest rate
keeps getting cut because it boosts the economy in the
short term, could do a lot of damage.
Speaker 6 (15:24):
It could do a lot of damage. I think the
question is that the initial conditions matter a lot too, Right,
So currently we are dealing with inflation a little closer
to three percent than two percent, but like that's three percent,
not thirty percent. We were born on third base here, right,
We have a lot of things in terms of what's
going well for the US economy. That doesn't mean like
changing the central bank central bankers is inevitably going to
(15:46):
lead to a market crash. But I think it's also
the case that it's going to be a more conflicted institution.
And it's not obvious that just because Lisa Cook they
are attempting to fire her. Then it will have repercussions
that are built through financial markets. Broadly, doesn't mean financial
disaster or overnight, but I do think we're probably flirting
with some deeper tail risks that may not be relevant today.
Speaker 1 (16:06):
But maybe in a few years time, or maybe maybe
a little sooner. Hopefully that we don't get to that point, but.
Speaker 6 (16:11):
That's probably how markets have to react on some level,
because markets can't just explore every doomsday scenario. That's like
maybe five years and a whole set of other events away.
Speaker 3 (16:21):
All right, Well, Skanda Amarnath, former analyst with the Federal
Reserve Bank of New York, now executive director of Employee America,
thank you for talking with us, especially on your vacation.
Speaker 6 (16:31):
Thank you for having me.
Speaker 2 (16:32):
Thank you, Scanda.
Speaker 3 (16:39):
So Brad. This week, President Trump was weighing in a lot,
not only on the Central Bank of the United States,
but on corporate logos. I don't know if you caught this.
Speaker 2 (16:49):
I did.
Speaker 3 (16:51):
Now.
Speaker 2 (16:51):
Logos are important, right, They convey strategy, a company's identity,
the way they present themselves to the world. When I
think of famous logos, I think of Donald's, the Golden Arches, Amazon,
that arrow pointing from A to Z. But logos don't
often show up in the news, and you're right, like
President Trump made headlines this week when Cracker Barrel tried
(17:13):
to revamp its logo and drew some criticism.
Speaker 3 (17:17):
Yes, a lot of people felt like the new logo
was kind of woke. The traditional cracker barrel logo. The
old one just has sort of an older man sitting
in a chair leaning on a barrel I guess, like
a cracker barrel, and the new logo just took that
graphic away and was just the words cracker barrel. But
apparently people felt like this was like a not great
(17:39):
departure from tradition and even yeah, President Trump was tweeting
about it along with a lot of people.
Speaker 2 (17:46):
Yeah, the old guy's name is Uncle Herschel. Apparently he's
somewhat iconic. And President Trump said that the company would
get a billion dollars worth of free publicity and emerge
a winner if they backtracked. And they did backtrack, and
so we want to talk about it, and we knew
exactly who we wanted to talk to.
Speaker 3 (18:02):
Yes, we did. Amanda mal she's a senior reporter at
BusinessWeek Rights the excellent Buying Power column. Hi, Amanda, I okay,
So Amanda, let's start very basically, why do people care
about the logo of a regional restaurant.
Speaker 4 (18:18):
Well, that's a complicated question because you have to figure
out both why people care and exactly how much people
do care. This is sort of slipped into the outrage
cycle online, which is like a purposeful thing you could
see in this case, right wing political influencers sort of
(18:38):
testing the waters to see if people would pick up
on this, to see if it would play, which is
something that influencers of all types do about like all
kinds of different subjects every day. You have to chum
the waters to see exactly what's going to bring you
engagement when engagement is your business. In this case, it
seems to have played okay with a lot of conservative adioudiences,
(19:01):
and it seems like among them, these these sort of
like outrage influencers have been able to gin up a
little bit of genuine controversy, of genuine outrage. Why that
is is like not entirely clear to me. Like we
sort of go through these same beats with these outrage
cycles over and over and over again, and it seems
(19:22):
like we're getting to the point where the beats themselves
are satisfying. People are excited to go through those beats
in and of themselves, whether or not it makes like
a great deal.
Speaker 3 (19:31):
There's like a life cycle of outrage now, yes.
Speaker 4 (19:34):
And people who are responding to the the sort of
like bids for attention that are put out by these
influencers know what they're supposed to do. They know the
reaction that they're supposed to have if they want to
get their way. And I think that the sort of
like cycle itself and going through the motions itself is
satisfying to a lot of people at some point because
(19:55):
nobody that I have seen online has really articulated why
this is woke, why it is like worthy of outrage.
I think that the logo rebrand is like sort of
bad on a design level. I think it's sort of generic,
like it's not cool, doesn't really have any personality. Like
I get why people would be like, oh, this is
just more of making everything the same, but I don't
(20:19):
get exactly why it is woke, and nobody has really
articulated why it's woke.
Speaker 3 (20:24):
Is it because the man sitting in the chair is
like a white older man? I mean, they feel like
that's sort of like not not very inclusive.
Speaker 4 (20:32):
He is not like explicitly raised one way or the
other in the logo.
Speaker 1 (20:35):
He is yellow in fact.
Speaker 4 (20:38):
So it's I don't know, it feels like a reach
even more than like things in the past have been
a reach to me.
Speaker 2 (20:44):
Well, here here's what I think we have to sort
of discuss this in its context. And this follows the
banishment of an Chemaima by Quaker, which you know, there
was some racial stereotyping there, the mascot of the Cleveland
Indians Chief wa who of the rebrand of the Washington
Redskins into the Washington Commanders. Of course, Trump has had
(21:04):
some things to say about that, and while Uncle A Herschel,
I guess doesn't necessarily fall into that category. I think
there are culture warriors out there that have turned logos
and mascots into another battlefield. And so this is they
feel like maybe they've been defeated in these past battles,
and so they picked on Cracker Barrel. I don't know
what do you think, Amanda, because I don't I don't
(21:25):
see the racial dynamics to Uncle Herschel, but I think
it follows with these other logo changes.
Speaker 4 (21:31):
So I think that, like there is this lineage of
making brand marks and brand mascots and advertising campaigns and
things like that the subject of culture warring, and I
think that that sort of primes people to be upset
about them, especially because that means that we're talking about
brands that like, people interact with. I think that so
(21:52):
often advertising and marketing becomes fodder for the culture war
because the general population does have some sort of emotional
tie to these brands. In this case, I think that
like where there is genuine outrage among regular people, I
think it is more of the variety of just you know,
people who want to like stand athwart history and yelp stop,
(22:15):
people who just want things to be like they were
when they were kids. People who have, you know, maybe
an imagined past they'd like to return to. I think
that's like a really huge proportion of the American population,
and those people may envision those imagined pasts differently.
Speaker 2 (22:30):
Do you think this was a good week for Cracker Barrel?
I mean, people have at least I've thought more about
this company.
Speaker 4 (22:38):
It's sort of hard to say because how how any
of these controversies will impact like the underlying brand and
like it's business once people move on. Depends a lot
on like what the controversy is and what the brand
is for Cracker Barrel. You know, they've got locations in
like forty three states, but this is a Southern chain.
This is a chain that like I associate with driving
(22:59):
from Atlanta to Orlando on vacations as a kid, and
we would stop in Valdosta, which is approximately halfway and
have lunch at Cracker Barrel to get the kids out
of the car, you know. So I think that because
Cracker Barrel's audience is probably disproportionately conservative, having the president
and having these influential internet conservatives mad at the company,
(23:21):
even if they do acquiesce like could potentially, like actually
make a meaningful difference in their business. Online conservatives getting
mad at a business that serves primarily, you know, city dwelling,
affluent consumers for being too woke probably doesn't hurt those businesses.
Probably helps those businesses in some sense. But because of
Cracker Barrel's positioning and their like customer profile, I think
(23:44):
this is probably not like a clear win for them
in any way.
Speaker 3 (23:47):
It's interesting, Amanda, you have a column out this week
about kind of the power of brands and brands in general.
But this is not the first brand that we've seen
get politicized recently. In fact, it seems to be happening
all over the place. There was very recently the American
Eagle ads with Sidney Sweeney being criticized as maybe like
a coded eugenics message, but there's also been bud Light
(24:11):
target It seems like so many brands are kind of
becoming politicized or becoming kind of dragged into a political fight.
What do you think is going on here? It does
seem in a certain way strange that brands, companies, products
are being given a political affiliation.
Speaker 4 (24:30):
Well, I think that these are all examples of like
a situation where you should be careful what you wish for,
because companies over the past several decades have really endeavored
purposefully to insert themselves in more and more and more
parts of American life, American culture, into larger roles in
our personal identities, in our group affiliations. And that was
(24:52):
an effort to goose sales, to make brands more relevant,
to make them more salient for people, to make them
something that people want to be even more loyal to.
And even more supportive of. But when you sort of
worm your way further and further into people's identities, in
people's understandings of culture in society, and then culture in
society get very very splintered, get very very combative, then
(25:17):
you sort of put yourselves in the crosshairs. And if
you want to be culturally relevant in a fractious time,
then you were going to be part of those fractures.
So I think that brands have sort of wished themselves
into a very difficult position.
Speaker 2 (25:32):
I mean, what's so interesting about a lot of these
recent examples is that the companies haven't necessarily been overly political.
I mean, it's hard to look at this Cracker Barrel
rebrand and say they were coding one way or the other.
I mean, if anything, brands I think have been timid
recently and cautious about inserting themselves into the divisive political climate.
(25:52):
And yet they keep getting pulled back against their will.
And it's everything. It's advertising, its logo changes, it's how
an artist expresses themselves on stage. I guess it's a
divided world, and we just look at it through that.
Speaker 4 (26:05):
Lens, right right, Once brands have sort of wormed their
way that far into culture and into people's identities. It
is very hard to undo that. It is very hard
to move back from that. And we're in a place
culturally right now where there is no real way to
avoid politics because the cultural war has been such an
(26:27):
effective tool at sort of whipping support in most recent
cases for conservative causes. So you can't make yourself a
part of culture and then entirely avoid cultural conflict, even
if you try to tow the line as best you
can there. I think that Cracker Bail is a great
example of a brand not doing anything particularly political and
(26:47):
still being unable to avoid politics.
Speaker 3 (26:51):
Is our relationship with brands now similar to our relationship
with political parties? I mean, are those relationships becoming more similar?
Speaker 1 (27:00):
I think so.
Speaker 4 (27:00):
I think that everything is becoming more like fandom. Everything
is becoming more like cheering for a particular team. And
that team might be a retailer, it might be a
restaurant chain, it might be a brand of clothing. It
might be a political party. It might be a specific politician,
it might be your favorite musical act. Like our culture
(27:20):
has sort of conflated our interactions with all of those
things in a way that makes it very very difficult
to sort of exists in a different way in interaction
with a significant size of audience.
Speaker 2 (27:34):
Amanda, last question, Cracker Barrel is not the only company
that's listening to the White House. Coke introduced the real
sugar version. Apple moved iPhone production back to India, then
apparently back to the US, Intel selling a ten percent
stake to the US government. Is Donald Trump now the
chief marketing officer at every US company? I mean, what
(27:57):
is going on right now?
Speaker 4 (27:58):
Well, Donald Trump, like throughout his life and especially throughout
his online life even before the presidency, was always very
interested and very like concerned with inserting himself in how
different brands or different public figures sort of associate with
their audiences and talk about themselves publicly and market themselves.
So I think that this is sort of just Trump
at his trumpiest, you know, sort of indulging his most
(28:20):
basic instincts about how you think about the public and
how you think about interacting with the public. And he
has an incredible amount of power, which means that a
lot of these companies are sort of being forced to
try to anticipate what those whims will.
Speaker 3 (28:33):
Be Brad, Amanda, it is time for the Underrated Story
of the Week, and Brad, you brought this one to us.
What is your underrated story of the week.
Speaker 2 (28:53):
Yes, well, Stacy, as you know, I'm kind of an
e commerce nerd Yes, And for a long time Street
has talked about something called the deminimous exception. Now it
sounds a little wonky, but it's really this Latin Yeah,
this hundred year old loophole that was originally meant for
kind of tourists bringing home souvenirs from abroad. They didn't
(29:14):
want the post office or the customs department to have
to crack open folks' suitcases and charge them tariffs, and
so it basically said, I think that the current limit
was eight hundred dollars. Under that threshold, you would not
charge a customs duty. Well through a loophole, businesses drive
(29:34):
and lots of you know, Chinese exporters, companies like Timu
and Shean use that exception to basically ship without customs
duties from Chinese factories to American consumers. I mean, even
Amazon use it quite a bit. So that exception ends
today on Friday, the day this podcast is coming out,
(29:55):
and it's really going to reorder the e commerce landscape.
Speaker 3 (30:00):
Ever heard of dominimus? But I guess it just means
the companies. As long as you're shipping like a little
bit on eight hundred dollars or under which I guess
for companies nothing you could not pay a tariff. But
now you will have to pay a tariff. What does
this mean?
Speaker 2 (30:14):
I mean, let me take a shot, and then I'm
curious what Amanda thinks. So basically, Timu and she and
these e commerce upstarts who have built their business models
basically on taking advantage of this exception, they're going to
have to start probably marketing much more heavily in South America,
in Europe. Their businesses in the US will constrict. They'll
probably advertise less, but they'll also probably ship more in
(30:37):
mass to warehouses in the US, ship in bulk and
then distribute from there. That's something that Amazon does, and
I think for the US Post Office, for the custom service,
it's a logistical nightmare and nobody really knows how it's
going to play out. But suddenly they've got a way
through all these small parcels and figure out how much
tariff to charge. So it's really going to have an
(30:58):
impact I think across the board.
Speaker 4 (31:00):
Logistically, this is going to be a mess. Like the
tariff situation that we've already had over the past few
months has already sort of given border officials and shippers
like a real issue with figuring out how much tariff
should be charged on anything, and like who is actually
going to pay it When you're checking millions of packages
that are that are coming in per year. That just
(31:20):
creates a huge workload for customs agents and it's a
confusing type of work. There are not like a ton
of great guidelines about a lot of these tariff policies
and how to charge them yet, and then you're going
to put like millions of packages on top of that.
Beyond the logistics though, I think it also creates a
situation for a lot of overseas sellers that are smaller businesses.
(31:43):
You're going to see a lot of problems with sellers
on Etsy. Is the first thing that comes to mind
for me, because a lot of those sellers overseas that
maybe specialize in one type of good or another will
ship directly to you, and in the past, as long
as it wasn't something super expensive, they could ship it
to you, you know, slowly, cheaply, and no tariff. Now
all of those sort of like very small business owners
(32:05):
overseas are going to have to deal with these with
these issues, it's going to I think drive a lot
of them out of business or drive a lot of
them out of business in the US. And because the
US is such a large consumer market, it's a market
that a lot of these businesses have sort of constructed
their livelihoods around. So for a lot of them, I
don't think pivoting is going to be possible or going
(32:25):
to happen cleanly. So you're going to see a lot
of hardship for people that sell caftans or wallets or
you know, other small goods on Etsy. Two individuals in
the US.
Speaker 2 (32:38):
You know, if you're a US seller who's found your
market kind of undercut by Chinese goods, if you're a
dollar tree store or hobby lobby, you know, you're probably
looking at this with a little bit of optimism and saying,
maybe the playing field is no longer tilted against you.
Speaker 4 (32:52):
Right, this does definitely favor US retailers that do a
more traditional type of business.
Speaker 3 (32:57):
All Right, thank you so much Amanda for joining us US.
And yeah, the caftan economy seems like we're all in
for a lot of change.
Speaker 2 (33:06):
Thank you, Amandel Sia for lunch at the Cracker Barrel
on Friday.
Speaker 4 (33:09):
See you on Friday.
Speaker 3 (33:16):
The show was produced by Stacy Wong. Magnus Henrickson is
our supervising producer and Amy Keane is our editor. We
get engineering from Blake Maples and Dave Purcell, factchecks, Sage
Bauman heads Bloomberg Podcasts Special thanks to Jeff Muscus, Julia Rubin,
and Maria Ling. If you have a minute, please rate
and review the show. It means a lot to us,
and if you have a story that should be our business,
(33:38):
email us at Everybody's at Bloomberg dot net. That is
Everybody's with an s at Bloomberg dot net. Thank you
for listening and see you next week.
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:12):
This is Everybody's Business from Bloomberg BusinessWeek. I'm Brad Stone
Felling in for Max Chafkin.
Speaker 3 (00:17):
And I'm Stacey Bannocksmith. And this week, Brad, I feel
like the theme is the end of an era.
Speaker 2 (00:23):
Well, it might be. It might be the end of
the US independent Fed era. And we're going to talk
to Scanda Amarnath, a former analyst at the Federal Reserve
Bank of New York, about that.
Speaker 3 (00:34):
Also the end of a new logo, the Curious Case
of Cracker Barrel. We've got the great Amanda Mole about that.
Speaker 2 (00:41):
And for our underrated story this week, There's no such
thing as a free tariff, not even for the little guy, Stacy.
The Deminimus tariff exception is ending.
Speaker 3 (00:51):
Yes, indeed, pour one out for Deminimus. Now, Brad, we
cannot talk about the end of an erow without talking
about the airas queen herself, Taylor Swift.
Speaker 2 (01:08):
Yes. Now, this might be news to some of our listeners.
I don't know if they've heard this, but after Taylor's
appearance on the Travis Kelsey podcast, the couple announced their engagement.
Speaker 3 (01:19):
They did, although I feel like We could almost call
this a merger because the two of them are such moguls.
Taylor Swift apparently worth one point six billion dollars, Travis
Kelsey worth ninety million, which is still pretty good.
Speaker 1 (01:35):
It's quite good.
Speaker 3 (01:36):
So, Brad, as you know, I am in Idaho right now,
and I thought I would go out onto the mean
streets of Boise and ask people what they thought about
the Taylor Travis engagement and if they had any advice
for the couple. Here's what they said. Do you know
that Taylor Swift and Travis Kelsey got engaged?
Speaker 4 (01:56):
Yes? How did you find out? On Instagram? Do you
think I think it's cute?
Speaker 5 (02:02):
My wife told me.
Speaker 3 (02:03):
Are you a fan of the Chiefs or of Taylor Swift?
Speaker 5 (02:08):
I despise the Chiefs and I think Taylor Swift's fine.
Speaker 3 (02:12):
Did you know that Taylor Swift and Travis Kelsey got engaged?
Speaker 2 (02:15):
Nope, I did not.
Speaker 3 (02:16):
Oh you didn't know? Yeah, so I'm just telling you now.
Speaker 2 (02:20):
Yeah, I know, quite surprising.
Speaker 3 (02:22):
What do you think about the engagement.
Speaker 1 (02:23):
I think they'll be happy. I think it's a lovely thing.
Speaker 6 (02:28):
Oh you know, I really don't much care.
Speaker 4 (02:33):
Do any advice for the couple?
Speaker 2 (02:35):
I do make the compromises that you have to make
in order to be married.
Speaker 5 (02:40):
You're in positions of great privilege and influence and wealth,
and please use that to help others.
Speaker 2 (02:48):
I think together maybe they could create something really amazing
and that it'll have a good influence over her fans
and kids.
Speaker 3 (02:57):
Any final thoughts for the happy couple.
Speaker 6 (03:01):
Well, I certainly wish so many years of happy marriage.
Speaker 2 (03:04):
What a range of commentary, Stacey.
Speaker 3 (03:07):
I know people were less enthusiastic than I thought they
would be, especially like you said, Brad, that these are
two of kind of the most powerful economic forces in
the country right now.
Speaker 2 (03:17):
Yeah, I mean this is a business story, I think.
I mean, you saw what the Aras tour did for
local economies. People are talking now about the Taylor trade,
how there were bets about this engagement on polymarket. People
talk about Swift and nomics and the spending that might
associate this event. So even the President weighed in right then.
(03:37):
He has generally not had nice things to say about
Taylor Swift, and yet he complemented the couple.
Speaker 5 (03:43):
I think he's a great player, I think he's a
great guy, and I think that she's a terrific person.
So I wish them a lot alone.
Speaker 3 (03:51):
Well, I mean, Taylor Swift's Eras tour did make a
noticeable economic impact all over the country. So imagine Brad,
what this is going to do for the wedding industry.
Speaker 2 (04:01):
I thought it was interesting that President Trump complimented the couple,
even though he's had some words for Taylor Swift in
the past. Clearly he's delighted that maybe this will be delivering,
if not a distraction, a little bit of an economic bump.
Speaker 3 (04:13):
He is everywhere, he is everywhere.
Speaker 2 (04:28):
One place President Trump has definitely been spending a lot
of time is on the Federal Reserve, and earlier this week,
of course, Stacy, he declared he was firing Federal Reserve
Governor Lisa Cook. Yeah.
Speaker 3 (04:40):
Doctor Cook has filed a restraining order saying the President
does not have the authority to dismiss her. She's also
suing the President over his decision to fire her.
Speaker 2 (04:49):
And this is unprecedented. She was appointed in twenty twenty two.
Her term does not end until twenty thirty eight. A
president has never fired a central Bank governor since the
FED was found at a century ag go. While the
laws as a president can remove members for cause. It
does not define what type of cause could satisfy that standard.
Speaker 3 (05:09):
And to be clear, right now, although the President has
named a replacement for doctor Cook, things are tied up
in court, so we will just have to see what happens.
Speaker 2 (05:19):
Right. And there are a lot of issues at play here,
political issues, legal issues, but they revolve around the big one,
which is the independence of the Federal Reserve, the US
Central Bank.
Speaker 3 (05:30):
Yes, and here to talk about FED independence with US
is Sconda Aubernaff, a former analyst at the Federal Reserve
Bank of New York and now the executive director of
the think tank Employe America. Hi, Skanda, Hi there, Thanks
for having me.
Speaker 2 (05:43):
Skanda. I imagine this has been a very busy week
for you. When did you first hear about the attempt
to fire Lisa Cook?
Speaker 1 (05:51):
Oh?
Speaker 6 (05:52):
I was trying to wrap up my work that evening.
I did the terrible move of checking my Twitter timeline
and it came upon my feed that President Trump announced
on truth Social that he was going to fire Lisa Cook.
And yeah, and obviously kind of delayed my plans for
wrapping up work and plans for my vacation.
Speaker 3 (06:12):
You were like getting ready to go on vacation.
Speaker 6 (06:14):
Yeah, so there's so clearly President Trump managed to put
a little bit of a span of the works there.
Speaker 3 (06:20):
Now, you have worked at the Federal Reserve Bank, you
have a legal background. What went through your head when
you saw this news.
Speaker 6 (06:30):
I think we kind of had an idea that this
was going to come at some point. You had heard
some rumblings about trying to make moves like this. They're
trying to right now rush through the nomination of Stephen
Myron to the Federal Reserve Reporter. And they're doing that
pretty aggressively and expeditiously. And these are all moves that
are clearly a concerned attempt to just get his people
(06:51):
in the building as quickly as he possibly can.
Speaker 1 (06:53):
That's the move.
Speaker 6 (06:54):
I think there are two things that are simultaneously true.
It is an attack on the FED, on FED independence,
and just a desire for more presidential control.
Speaker 1 (07:06):
It's also not clear like where this will go. The
SIOS try to try and fight this out in court.
Speaker 3 (07:10):
Yeah, she has said, she has said she's fighting it.
Speaker 1 (07:13):
Yeah.
Speaker 6 (07:13):
Yeah, so she's gonna fight it out in court. And
also the implications for other members of the FED, who
I must ad we have currently not just J. Powell,
but also Chris Waller Michelle Bowman. Those are three appointees
from the past Trump administration from twenty seventeen to twenty twenty,
and they are also people who I think generally get
(07:36):
along with their colleagues. One thing that has distinguished the FED,
maybe on a cultural level, is that it has a
relatively non partisan or a partisan culture. Obviously there's always
some whiffs of bias and political interest, but people try
to leave that stuff at the front door when they
enter the building. And when the FED has made a
(07:58):
lot of these decisions, if been done my consensus, you
don't typically see a lot of descents.
Speaker 1 (08:02):
You don't see partisan splits.
Speaker 6 (08:04):
Where the Biden appointees voted one way and the Trump
appointees vote another way. The FED culturally has maintained a
less than partisan culture, and that's remarkable in the stage
of polarization. And I do think that the more that
President Trump tries to really push on this, the risk
is obviously it becomes the more partisan institution.
Speaker 1 (08:23):
So basically, every FED decision, whether it.
Speaker 6 (08:25):
Be monetary policy or regulatory policy, if you thought that
stuff was supposed to.
Speaker 1 (08:29):
Be stable over a long periods of time that stability
is going to be put more into question.
Speaker 2 (08:34):
And Skanda, the President is trying to achieve these aims
through controlling the FED Board. Now, these FED Board members
serve a fourteen year term. Lisa Cook has just started hers.
He says he has the right to fire her for cause,
and the cause, presumably is that she listed two homes
as her primary residences on more gagage applications. Is there
(08:57):
a cause here and is that Do you think that's
even the right question to ask.
Speaker 6 (09:02):
I'm not sure it really is the right question to ask,
But what I will say there is there are clearly
some accusations of misconduct. What we do not have is
clearly set forth to judicial interpretation of what counts as
valid cause. So far the courts have not had to
address this a question or have dodged it, and so
(09:24):
that's still some legal jeopardy there. Obviously, Lisa Cook has
signals she will seek to block this attempt at removal,
and we're gonna have to find out the court's what
comes of all of this.
Speaker 2 (09:35):
What do you think it's really going on here? I mean,
he's talking about renovation expenses for Chairman Jerome Powell. He's
talking about mortgage applications for Lisa Cook. What is really
at stake here and why is it so important to
the president?
Speaker 6 (09:48):
I think the word you're looking for is pretextual, right,
that the real reason for wanting to remove Lisa Cook
is not because the grave sin of whatever she did
on her mortgage applications. We are clearly seeing that there
is a concerted attempt to remove people who are not
seen as not even just allies on interest rates, because
I would argue Lisa Cook is probably one of the
(10:10):
more rubbish members, but rather it's about loyalty. I think
that's pretty clear that the president has put a premium
on filling the government with people who he feels he
can trust, people who are more directly loyal and accountable
to him. And Lisa Cook obviously was an appointee from
the Biden administration, and so there's some sets of well,
even if she does align on policy currently maybe not
(10:30):
in the future, that might be part of the goculus involved.
But I think they want an outcome and they're going
to try and find every means available to them to
achieve it.
Speaker 3 (10:39):
Is that a bad thing? I mean, I can see
an argument that the FED does not necessarily answer to voters.
It does not answer to politics, and I think people
sort of talk about that as if it is a
good thing, like what's so bad about the fedor Reserve,
the central bank of the country being politicized.
Speaker 6 (10:58):
I think that the risk what's going down the road
of just pure president will control is you're effectively saying
everything's valid for turnover every four years, and so that
means like, if you're president, you're making along the timeline
of how well is your term gonna play out, So
that for year time horizon is probably pretty important, and
it probably makes sense for a lot of things. It
(11:19):
probably doesn't make sense for things like managing short term
interest rates to solve long term problems. So take, for example,
right now, we have about four to five interestrate cuts
over the next twelve months, call it, and yet long
term treasury yields have remained unchanged, and they've been roughly
on four point two to four point three five percent.
(11:39):
And when you make short term interest rate decisions that
don't have as much bearing on long term interstrates, it's
basically reflecting the fact that the institution doesn't have as
much credibility in what it's doing I think that is
like the real issue here. When you make promises in
the short term that you're willing to reverse on, or
you're putting yourself in a position to reverse on, then
you're into problems. So let's say the FED cuts rates
all the way to one percent tomorrow because President has
(12:01):
managed to fill the Federal Reserve Board one If that's
not really being driven by data and objective analysis, who's
to say in the future, like those rates won't have
to come up a lot. Or let's say maybe because inflation,
Maybe because the political constellation pushes people to say I
want higher rates, Maybe because the Democrats are the president
and I don't know Trump's appointees are not aligned with
(12:26):
a future Democratic president. Or else Let's take the situation
where just it causes a lot of inflation, or if
it just coincides with a lot of inflation, then the instinct.
Speaker 1 (12:35):
Will be to raise interest rates.
Speaker 6 (12:37):
It's a notion of hey, the Fed could do something
today and it matters less than it otherwise. Would the
Fed could cut rates four or five times because he
replaces Jerome Powell, he replaces all these other people. But
the more that you see people doing things because they're
just following some narrow presidential instinct. So, for example, you
have the current Ceachair who's up for nomination the Federal Reserve,
(13:00):
bored Stephen Meyer. He seems to have pretty strong views
now that interestrates.
Speaker 1 (13:04):
Should be cut.
Speaker 6 (13:05):
If you go back like a year ago, he was
probably one of the most had some of the most
hawkish views out there. He thought that even though the
federal funds rate was five point through three percent, even
though the uneployment was going up, inflation was just too
high and financial conditions were too accommodative for the FED
to cut rates. Twelve months later, he seems to be
of a very different view, even though interest rates are
already lower by one hundred basis points, inflation is a
(13:27):
little higher on the FEDS gauges than it was last year.
It seems to be that he's clearly had to change
his heart, and that might be for a lot of
valid reasons, but I do think it also kind of
raises some questions about if the views of the Fed
are really going to be determined by just like what
kind of political instincts are guiding the present. You can
easily end up in a situation where interest rates can
move all over the place short term, and then if
(13:48):
you're a long term investor, you're gonna have to price
in some of the risk that interest rates either might
have to go up in the future or else inflation
is a good enough reason to demand more compensation.
Speaker 2 (13:59):
Kinda I can imagine a world where markets would have
really recoiled from the White House's intervention in the inner
workings of the Fed. It kind of hasn't happened this week,
other than some key bond prices moving higher. What do
you make of this? Like apparent Insussians to what's happening
right now?
Speaker 6 (14:18):
Yeah, I mean, I think this is probably where there
is like a certain kind of conventional wisdom that is
coming under more pressure, right, which is that central bank
independence was sort of something so holy that it could
not possibly be questioned. If you look across other countries, right,
there are other countries with varying arrangements on central bank
(14:40):
independence and attacks on central banks, and the movement of
different acid prices, I would argue has generally underwhelmed.
Speaker 3 (14:50):
Acid price is meaning like what happens with the markets.
Speaker 6 (14:53):
What happens with their stock market, what happens with government
bond deals, what happens with exchange rates. Now, obviously there
are some extreme example if you take like the current
leader of Turkey has some pretty interesting views about how
how the central bank should use interest rates to fight
inflation and removed the central.
Speaker 1 (15:09):
Bank chief at one point.
Speaker 6 (15:10):
That had some effects on the Turkish leer at Turks
there sold off a lot.
Speaker 3 (15:14):
Well, they have horrible economic crippling inflation, which I think
is the worry here, right that if the interest rate
keeps getting cut because it boosts the economy in the
short term, could do a lot of damage.
Speaker 6 (15:24):
It could do a lot of damage. I think the
question is that the initial conditions matter a lot too, Right,
So currently we are dealing with inflation a little closer
to three percent than two percent, but like that's three percent,
not thirty percent. We were born on third base here, right,
We have a lot of things in terms of what's
going well for the US economy. That doesn't mean like
changing the central bank central bankers is inevitably going to
(15:46):
lead to a market crash. But I think it's also
the case that it's going to be a more conflicted institution.
And it's not obvious that just because Lisa Cook they
are attempting to fire her. Then it will have repercussions
that are built through financial markets. Broadly, doesn't mean financial
disaster or overnight, but I do think we're probably flirting
with some deeper tail risks that may not be relevant today.
Speaker 1 (16:06):
But maybe in a few years time, or maybe maybe
a little sooner. Hopefully that we don't get to that point, but.
Speaker 6 (16:11):
That's probably how markets have to react on some level,
because markets can't just explore every doomsday scenario. That's like
maybe five years and a whole set of other events away.
Speaker 3 (16:21):
All right, Well, Skanda Amarnath, former analyst with the Federal
Reserve Bank of New York, now executive director of Employee America,
thank you for talking with us, especially on your vacation.
Speaker 6 (16:31):
Thank you for having me.
Speaker 2 (16:32):
Thank you, Scanda.
Speaker 3 (16:39):
So Brad. This week, President Trump was weighing in a lot,
not only on the Central Bank of the United States,
but on corporate logos. I don't know if you caught this.
Speaker 2 (16:49):
I did.
Speaker 3 (16:51):
Now.
Speaker 2 (16:51):
Logos are important, right, They convey strategy, a company's identity,
the way they present themselves to the world. When I
think of famous logos, I think of Donald's, the Golden Arches, Amazon,
that arrow pointing from A to Z. But logos don't
often show up in the news, and you're right, like
President Trump made headlines this week when Cracker Barrel tried
(17:13):
to revamp its logo and drew some criticism.
Speaker 3 (17:17):
Yes, a lot of people felt like the new logo
was kind of woke. The traditional cracker barrel logo. The
old one just has sort of an older man sitting
in a chair leaning on a barrel I guess, like
a cracker barrel, and the new logo just took that
graphic away and was just the words cracker barrel. But
apparently people felt like this was like a not great
(17:39):
departure from tradition and even yeah, President Trump was tweeting
about it along with a lot of people.
Speaker 2 (17:46):
Yeah, the old guy's name is Uncle Herschel. Apparently he's
somewhat iconic. And President Trump said that the company would
get a billion dollars worth of free publicity and emerge
a winner if they backtracked. And they did backtrack, and
so we want to talk about it, and we knew
exactly who we wanted to talk to.
Speaker 3 (18:02):
Yes, we did. Amanda mal she's a senior reporter at
BusinessWeek Rights the excellent Buying Power column. Hi, Amanda, I okay,
So Amanda, let's start very basically, why do people care
about the logo of a regional restaurant.
Speaker 4 (18:18):
Well, that's a complicated question because you have to figure
out both why people care and exactly how much people
do care. This is sort of slipped into the outrage
cycle online, which is like a purposeful thing you could
see in this case, right wing political influencers sort of
(18:38):
testing the waters to see if people would pick up
on this, to see if it would play, which is
something that influencers of all types do about like all
kinds of different subjects every day. You have to chum
the waters to see exactly what's going to bring you
engagement when engagement is your business. In this case, it
seems to have played okay with a lot of conservative adioudiences,
(19:01):
and it seems like among them, these these sort of
like outrage influencers have been able to gin up a
little bit of genuine controversy, of genuine outrage. Why that
is is like not entirely clear to me. Like we
sort of go through these same beats with these outrage
cycles over and over and over again, and it seems
(19:22):
like we're getting to the point where the beats themselves
are satisfying. People are excited to go through those beats
in and of themselves, whether or not it makes like
a great deal.
Speaker 3 (19:31):
There's like a life cycle of outrage now, yes.
Speaker 4 (19:34):
And people who are responding to the the sort of
like bids for attention that are put out by these
influencers know what they're supposed to do. They know the
reaction that they're supposed to have if they want to
get their way. And I think that the sort of
like cycle itself and going through the motions itself is
satisfying to a lot of people at some point because
(19:55):
nobody that I have seen online has really articulated why
this is woke, why it is like worthy of outrage.
I think that the logo rebrand is like sort of
bad on a design level. I think it's sort of generic,
like it's not cool, doesn't really have any personality. Like
I get why people would be like, oh, this is
just more of making everything the same, but I don't
(20:19):
get exactly why it is woke, and nobody has really
articulated why it's woke.
Speaker 3 (20:24):
Is it because the man sitting in the chair is
like a white older man? I mean, they feel like
that's sort of like not not very inclusive.
Speaker 4 (20:32):
He is not like explicitly raised one way or the
other in the logo.
Speaker 1 (20:35):
He is yellow in fact.
Speaker 4 (20:38):
So it's I don't know, it feels like a reach
even more than like things in the past have been
a reach to me.
Speaker 2 (20:44):
Well, here here's what I think we have to sort
of discuss this in its context. And this follows the
banishment of an Chemaima by Quaker, which you know, there
was some racial stereotyping there, the mascot of the Cleveland
Indians Chief wa who of the rebrand of the Washington
Redskins into the Washington Commanders. Of course, Trump has had
(21:04):
some things to say about that, and while Uncle A Herschel,
I guess doesn't necessarily fall into that category. I think
there are culture warriors out there that have turned logos
and mascots into another battlefield. And so this is they
feel like maybe they've been defeated in these past battles,
and so they picked on Cracker Barrel. I don't know
what do you think, Amanda, because I don't I don't
(21:25):
see the racial dynamics to Uncle Herschel, but I think
it follows with these other logo changes.
Speaker 4 (21:31):
So I think that, like there is this lineage of
making brand marks and brand mascots and advertising campaigns and
things like that the subject of culture warring, and I
think that that sort of primes people to be upset
about them, especially because that means that we're talking about
brands that like, people interact with. I think that so
(21:52):
often advertising and marketing becomes fodder for the culture war
because the general population does have some sort of emotional
tie to these brands. In this case, I think that
like where there is genuine outrage among regular people, I
think it is more of the variety of just you know,
people who want to like stand athwart history and yelp stop,
(22:15):
people who just want things to be like they were
when they were kids. People who have, you know, maybe
an imagined past they'd like to return to. I think
that's like a really huge proportion of the American population,
and those people may envision those imagined pasts differently.
Speaker 2 (22:30):
Do you think this was a good week for Cracker Barrel?
I mean, people have at least I've thought more about
this company.
Speaker 4 (22:38):
It's sort of hard to say because how how any
of these controversies will impact like the underlying brand and
like it's business once people move on. Depends a lot
on like what the controversy is and what the brand
is for Cracker Barrel. You know, they've got locations in
like forty three states, but this is a Southern chain.
This is a chain that like I associate with driving
(22:59):
from Atlanta to Orlando on vacations as a kid, and
we would stop in Valdosta, which is approximately halfway and
have lunch at Cracker Barrel to get the kids out
of the car, you know. So I think that because
Cracker Barrel's audience is probably disproportionately conservative, having the president
and having these influential internet conservatives mad at the company,
(23:21):
even if they do acquiesce like could potentially, like actually
make a meaningful difference in their business. Online conservatives getting
mad at a business that serves primarily, you know, city dwelling,
affluent consumers for being too woke probably doesn't hurt those businesses.
Probably helps those businesses in some sense. But because of
Cracker Barrel's positioning and their like customer profile, I think
(23:44):
this is probably not like a clear win for them
in any way.
Speaker 3 (23:47):
It's interesting, Amanda, you have a column out this week
about kind of the power of brands and brands in general.
But this is not the first brand that we've seen
get politicized recently. In fact, it seems to be happening
all over the place. There was very recently the American
Eagle ads with Sidney Sweeney being criticized as maybe like
a coded eugenics message, but there's also been bud Light
(24:11):
target It seems like so many brands are kind of
becoming politicized or becoming kind of dragged into a political fight.
What do you think is going on here? It does
seem in a certain way strange that brands, companies, products
are being given a political affiliation.
Speaker 4 (24:30):
Well, I think that these are all examples of like
a situation where you should be careful what you wish for,
because companies over the past several decades have really endeavored
purposefully to insert themselves in more and more and more
parts of American life, American culture, into larger roles in
our personal identities, in our group affiliations. And that was
(24:52):
an effort to goose sales, to make brands more relevant,
to make them more salient for people, to make them
something that people want to be even more loyal to.
And even more supportive of. But when you sort of
worm your way further and further into people's identities, in
people's understandings of culture in society, and then culture in
society get very very splintered, get very very combative, then
(25:17):
you sort of put yourselves in the crosshairs. And if
you want to be culturally relevant in a fractious time,
then you were going to be part of those fractures.
So I think that brands have sort of wished themselves
into a very difficult position.
Speaker 2 (25:32):
I mean, what's so interesting about a lot of these
recent examples is that the companies haven't necessarily been overly political.
I mean, it's hard to look at this Cracker Barrel
rebrand and say they were coding one way or the other.
I mean, if anything, brands I think have been timid
recently and cautious about inserting themselves into the divisive political climate.
(25:52):
And yet they keep getting pulled back against their will.
And it's everything. It's advertising, its logo changes, it's how
an artist expresses themselves on stage. I guess it's a
divided world, and we just look at it through that.
Speaker 4 (26:05):
Lens, right right, Once brands have sort of wormed their
way that far into culture and into people's identities. It
is very hard to undo that. It is very hard
to move back from that. And we're in a place
culturally right now where there is no real way to
avoid politics because the cultural war has been such an
(26:27):
effective tool at sort of whipping support in most recent
cases for conservative causes. So you can't make yourself a
part of culture and then entirely avoid cultural conflict, even
if you try to tow the line as best you
can there. I think that Cracker Bail is a great
example of a brand not doing anything particularly political and
(26:47):
still being unable to avoid politics.
Speaker 3 (26:51):
Is our relationship with brands now similar to our relationship
with political parties? I mean, are those relationships becoming more similar?
Speaker 1 (27:00):
I think so.
Speaker 4 (27:00):
I think that everything is becoming more like fandom. Everything
is becoming more like cheering for a particular team. And
that team might be a retailer, it might be a
restaurant chain, it might be a brand of clothing. It
might be a political party. It might be a specific politician,
it might be your favorite musical act. Like our culture
(27:20):
has sort of conflated our interactions with all of those
things in a way that makes it very very difficult
to sort of exists in a different way in interaction
with a significant size of audience.
Speaker 2 (27:34):
Amanda, last question, Cracker Barrel is not the only company
that's listening to the White House. Coke introduced the real
sugar version. Apple moved iPhone production back to India, then
apparently back to the US, Intel selling a ten percent
stake to the US government. Is Donald Trump now the
chief marketing officer at every US company? I mean, what
(27:57):
is going on right now?
Speaker 4 (27:58):
Well, Donald Trump, like throughout his life and especially throughout
his online life even before the presidency, was always very
interested and very like concerned with inserting himself in how
different brands or different public figures sort of associate with
their audiences and talk about themselves publicly and market themselves.
So I think that this is sort of just Trump
at his trumpiest, you know, sort of indulging his most
(28:20):
basic instincts about how you think about the public and
how you think about interacting with the public. And he
has an incredible amount of power, which means that a
lot of these companies are sort of being forced to
try to anticipate what those whims will.
Speaker 3 (28:33):
Be Brad, Amanda, it is time for the Underrated Story
of the Week, and Brad, you brought this one to us.
What is your underrated story of the week.
Speaker 2 (28:53):
Yes, well, Stacy, as you know, I'm kind of an
e commerce nerd Yes, And for a long time Street
has talked about something called the deminimous exception. Now it
sounds a little wonky, but it's really this Latin Yeah,
this hundred year old loophole that was originally meant for
kind of tourists bringing home souvenirs from abroad. They didn't
(29:14):
want the post office or the customs department to have
to crack open folks' suitcases and charge them tariffs, and
so it basically said, I think that the current limit
was eight hundred dollars. Under that threshold, you would not
charge a customs duty. Well through a loophole, businesses drive
(29:34):
and lots of you know, Chinese exporters, companies like Timu
and Shean use that exception to basically ship without customs
duties from Chinese factories to American consumers. I mean, even
Amazon use it quite a bit. So that exception ends
today on Friday, the day this podcast is coming out,
(29:55):
and it's really going to reorder the e commerce landscape.
Speaker 3 (30:00):
Ever heard of dominimus? But I guess it just means
the companies. As long as you're shipping like a little
bit on eight hundred dollars or under which I guess
for companies nothing you could not pay a tariff. But
now you will have to pay a tariff. What does
this mean?
Speaker 2 (30:14):
I mean, let me take a shot, and then I'm
curious what Amanda thinks. So basically, Timu and she and
these e commerce upstarts who have built their business models
basically on taking advantage of this exception, they're going to
have to start probably marketing much more heavily in South America,
in Europe. Their businesses in the US will constrict. They'll
probably advertise less, but they'll also probably ship more in
(30:37):
mass to warehouses in the US, ship in bulk and
then distribute from there. That's something that Amazon does, and
I think for the US Post Office, for the custom service,
it's a logistical nightmare and nobody really knows how it's
going to play out. But suddenly they've got a way
through all these small parcels and figure out how much
tariff to charge. So it's really going to have an
(30:58):
impact I think across the board.
Speaker 4 (31:00):
Logistically, this is going to be a mess. Like the
tariff situation that we've already had over the past few
months has already sort of given border officials and shippers
like a real issue with figuring out how much tariff
should be charged on anything, and like who is actually
going to pay it When you're checking millions of packages
that are that are coming in per year. That just
(31:20):
creates a huge workload for customs agents and it's a
confusing type of work. There are not like a ton
of great guidelines about a lot of these tariff policies
and how to charge them yet, and then you're going
to put like millions of packages on top of that.
Beyond the logistics though, I think it also creates a
situation for a lot of overseas sellers that are smaller businesses.
(31:43):
You're going to see a lot of problems with sellers
on Etsy. Is the first thing that comes to mind
for me, because a lot of those sellers overseas that
maybe specialize in one type of good or another will
ship directly to you, and in the past, as long
as it wasn't something super expensive, they could ship it
to you, you know, slowly, cheaply, and no tariff. Now
all of those sort of like very small business owners
(32:05):
overseas are going to have to deal with these with
these issues, it's going to I think drive a lot
of them out of business or drive a lot of
them out of business in the US. And because the
US is such a large consumer market, it's a market
that a lot of these businesses have sort of constructed
their livelihoods around. So for a lot of them, I
don't think pivoting is going to be possible or going
(32:25):
to happen cleanly. So you're going to see a lot
of hardship for people that sell caftans or wallets or
you know, other small goods on Etsy. Two individuals in
the US.
Speaker 2 (32:38):
You know, if you're a US seller who's found your
market kind of undercut by Chinese goods, if you're a
dollar tree store or hobby lobby, you know, you're probably
looking at this with a little bit of optimism and saying,
maybe the playing field is no longer tilted against you.
Speaker 4 (32:52):
Right, this does definitely favor US retailers that do a
more traditional type of business.
Speaker 3 (32:57):
All Right, thank you so much Amanda for joining us US.
And yeah, the caftan economy seems like we're all in
for a lot of change.
Speaker 2 (33:06):
Thank you, Amandel Sia for lunch at the Cracker Barrel
on Friday.
Speaker 4 (33:09):
See you on Friday.
Speaker 3 (33:16):
The show was produced by Stacy Wong. Magnus Henrickson is
our supervising producer and Amy Keane is our editor. We
get engineering from Blake Maples and Dave Purcell, factchecks, Sage
Bauman heads Bloomberg Podcasts Special thanks to Jeff Muscus, Julia Rubin,
and Maria Ling. If you have a minute, please rate
and review the show. It means a lot to us,
and if you have a story that should be our business,
(33:38):
email us at Everybody's at Bloomberg dot net. That is
Everybody's with an s at Bloomberg dot net. Thank you
for listening and see you next week.
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