July 3, 2025 • 29 mins
Happy 4th of July! The U.S. turns 249 this year and there are plenty of economic fireworks to ring in the birthday. After a long and winding road through Capitol Hill, the “Big Beautiful Bill” is poised to be signed by President Trump. The bill is largely an extension of Trump’s 2017 tax cuts, and it will have big — and not entirely beautiful — implications for U.S. businesses.
In this week’s episode of Everybody’s Business from Bloomberg Businessweek, hosts Stacey Vanek Smith and Businessweek Editor Brad Stone (filling in for Max Chafkin) break down the bill, which will add an estimated $3.4 trillion to US deficits over the next decade. It’s a mixed bag for businesses: It will save them billions in taxes, but it is also likely to make borrowing money and expanding a lot tougher. Cuts to entitlements included in the bill could also mean US companies have to step in and provide more services for their workers.
After 249 years, the economy is due for a check-up. Dr. Allison Schrager, an economist with the Manhattan Institute and Bloomberg Opinion columnist, joins the podcast to discuss the new and very positive unemployment numbers. In June, the US added 147,000 jobs and the unemployment rate fell to 4.1% — a very clean bill of health. Schrager says the US economy is in its middle-aged man era: generally healthy and strong, but perhaps in need of some lifestyle tweaks (get that ballooning deficit under control).
Finally, it’s time for the underrated story of the week: Media is looking a little less independent this Independence Day. Paramount has settled a lawsuit with President Trump, who accused CBS (which is owned by Paramount) of bias and deceptively editing the 2024 presidential debate. In spite of the fact the suit was almost universally deemed frivolous, Paramount paid out $16 million to make it go away.
See omnystudio.com/listener for privacy information.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:11):
This is Everybody's Business from Bloomberg BusinessWeek. I'm Stacey Bannocksmith
and I'm Brad Stone.
Speaker 3 (00:17):
Stacy, Happy Independence Day.
Speaker 2 (00:19):
Thank you, Brad. Happy Independence Day to you. It has
been a short week for business, but action packed.
Speaker 3 (00:26):
Yes. As we speak here on Thursday, the big beautiful
bill is on the verge of passing the House, and
we're going to talk about the impact that this monumental
bill could have on business.
Speaker 2 (00:37):
We also got some unemployment numbers, and in spite of
feeling like maybe the economy starting to soften a little bit,
the numbers looked really good.
Speaker 3 (00:47):
And our underrated story this week a big payout to
President Trump from CBS over what he called a biased
presidential interview. Media might become a little less independent.
Speaker 2 (01:02):
Bradstone, it is great to have you in this week.
You were filling in for me last week and this
week you're back filling in for Max Chafkin, who is
out on vacation.
Speaker 3 (01:12):
Hi Stacey, great to be here.
Speaker 1 (01:13):
Now.
Speaker 3 (01:13):
You've just gotten back from some world tours. Right you
were in China, you were in Canada.
Speaker 2 (01:19):
It's true, it was kind of a world tour But
this week I was lucky enough to be in Canada
for Canada Day. That is on July first. It's Canada's
version of the fourth of July Independence Day. It was
interesting to be there now because, of course Canada has
been in the news a lot lately, you know, between
(01:39):
the sort of drama with the trade deals and the tariffs,
and then of course the kind of ongoing Trump talk
about making Canada into the fifty first state. So I
thought this would be a golden opportunity to ask our
fellow Canadians how they felt about Canada Day and about
Trump's dreams of fifty first statehood. What does Canada do
(02:03):
mean to you?
Speaker 1 (02:03):
It means another year of this great country.
Speaker 2 (02:06):
What do you like about Canada? I love everything. I mean,
some people don't like the weather, but I'm okay with it.
Speaker 1 (02:12):
I love the diversity, and I don't know, I just
love the freedom.
Speaker 2 (02:17):
They really welcome everyone like you're here means that you
are a Canadian. We're newcomers to Canada. We've just moved here.
It's the first time for Canaidate, so we're just seeing
what's like happening in the streets, the culture, the people.
You're Canadian and American. I am both. I love both countries.
Canadians are more, yeah, more flexible and more open. How
(02:40):
do Canadians feel about the US right now? I have
nothing against you, guys, very unfortunately the whole situation. They
just hope the situation goes away.
Speaker 1 (02:50):
I mean, we're definitely gonna be independent for a while.
Speaker 2 (02:53):
I hope, I mean hope.
Speaker 3 (02:55):
No.
Speaker 2 (02:55):
Fifty first state, no, no, Stacey.
Speaker 3 (02:58):
Canadians are so good.
Speaker 2 (03:01):
I know, I know, I mean I was a little
worried about bringing up the fifty first state thing on
Canada Day in Canada for obvious reasons. People could not
have been nicer. They just kept wishing me a happy
Fourth of July and saying that they liked the US
and it was it was very moving. I love Canada.
Speaker 3 (03:18):
Well, here in San Francisco, we remember when Trump threatened
to turn Alcatraz back into a jail, and so maybe,
like US, Canadians are just waiting to see whether Trump
was serious about his threats.
Speaker 2 (03:32):
So Alcatraz might be the canary in the Canadian fifty
first state coal mine exactly.
Speaker 3 (03:44):
Stacey is a me or is every major piece of legislation,
the stage three words all starting with the letter B.
Speaker 2 (03:52):
Like build back better, And you're talking about the big,
beautiful bill, which is right now as we speak, on
the very cusp of passing in the House. It looks
like it is largely an extension of President Trump's twenty
seventeen tax cuts with some other things added on there.
Speaker 3 (04:10):
The bill is massive, very controversial, more than a thousand pages,
with a lot packed in and a lot to talk about.
But we wanted to focus on how the bill is
likely to affect businesses, and it's kind of a mixed bag. Yeah.
Speaker 2 (04:24):
We picked out a few kind of key things we
thought would be the most impactful on businesses of all sizes,
small businesses, medium businesses, giant corporations, to take a look
at kind of what the fallout would be. Brad took
the You took the first thing right, tax cuts, Yeah,
the big one.
Speaker 3 (04:41):
And this was the kind of underlying rationale for Trump's
signature bill in twenty seventeen, the Tax Cut and Jobs Act.
It lowered the corporate tax rate in the US from
thirty five percent to twenty one percent. This was just
a massive boon for large companies. Stacy. Just as an example,
I looked into Apple it lowered it tax bill from
about sixteen billion in twenty sixteen all the way down
(05:04):
to ten point four billion in fiscal twenty nineteen, according
to its ten k oh my gosh, yeah, if you remember,
Trump also gave companies a tax holiday to repatriate the
cash held overseas, and Apple saved about fifty billion dollars there.
So just a huge windfall for large companies. And then
I should add the Senate, in its negotiations reinstated a
(05:26):
provision from the original bill that allows small companies like
sole proprietorships to deduct twenty percent of their business income
from their taxable income. So you know, again this bill
is really favoring businesses and large companies. And we can
look back to twenty eighteen, by the way, to see
what the impact was of the original bill. Not surprisingly,
(05:50):
it was a good earnings year for corporations, but it
also contributed to inflation. The Fed raised interest rates four
times that year. It was a terrible year for the
S and P. Five hundred and Finally, and here we
can get into our second factor. The deficit boomed a
seven hundred and seventy nine billion in twenty eighteen, about
a seventeen percent increase compared to the previous year's deficit.
Speaker 2 (06:12):
Yes, this has been one of the big Democratic talking
points about the tax cut extensions, and it's going to
add to the deficit an estimated almost three and a
half trillion dollars over ten years. It's a lot to
add to the deficit. And I actually think this will
affect businesses as well, even though it's not quite as
obvious an impact, I think it could be one of
(06:34):
the biggest impacts that this bill has on businesses. So
right now, our debt is just it's huge. It's mine
blowingly huge. It's thirty six trillion dollars. Sometimes these numbers
they get so big you can't even process them. But
one thing you can process is just how much of
our budget it's taking up. So we are spending almost
(06:58):
a trillion dollars a year just service our debt. That's
interest payments and things like that. That is the size
of the defense budget. And within the next ten years,
it's estimated that our debt servicing our debt will be
the biggest item in our budget. I mean, that is
a real possibility.
Speaker 3 (07:13):
So how does increase borrowing and increase borrowing costs. How
is that likely to kind of boomerang back on companies
and on individuals?
Speaker 2 (07:22):
Well, a few reasons. So, first of all, when the
debt gets that big, it kind of can destabilize a country.
Just like if you were a person and you were
in a ton of debt, you're in a pretty precarious situation.
If an emergency comes up, you can't really cover your bills.
And if there's an economic shock, that's going to affect
all the companies in the country, right, I mean, the
economy is an ecosystem, and so if the ecosystem starts
(07:44):
to get unhealthy, it affects all of the companies and
the ecosystems. And we've already seen this happen a little
bit with the US debt getting downgraded, largely because of
the sort of the growing debt and all the instability
that it could create. Also just makes the US and
US companies by proxy a less attractive investment for international investors,
(08:06):
just like a less safe place to put money. That
can have an impact on businesses. But I think one
of the big things here is interest rates, because the
US government is going to have to be issuing lots
of debt basically government bonds, which are essentially little loans
that the government is taking out from anyone who will
buy the bonds. The more debt it puts out, generally speaking,
(08:28):
it has to offer higher interest rates on that debt
to make it attractive for investors. Well, that basically means
raising interest rates, and that trickles out through the whole economy.
That makes interest rates higher on almost all loans across
the economy. That just makes it more expensive for businesses
to borrow money, which means they can't expand as quickly,
(08:51):
they can't hire as quickly. And you know, businesses expanding
and hiring, that's how the economy grows. So it shrinks
the economy. It hamstrings businesses. I think that's like one
of the biggest impacts that we can expect the bill
to have.
Speaker 3 (09:04):
Okay, so we've talked about tax cut extensions, We've talked
about an increase in the deficit, and then the third
factor of this bill impacting businesses is going to be
the cuts to major social programs like medicaid, food assistants,
the so called SNAP program, and student loans, and the
new work requirements and funding changes could result in millions
(09:26):
potentially losing health insurance and food aid, which may in
turn increased costs and instability for companies whose employees and
customers rely on these programs. And by the way, the
historic charge against companies like Walmart and Amazon is that
they put their workers in precarious situations where they are
forced to rely on government benefits. So as those government
(09:47):
benefits go away, the companies might be forced to either
shrink their payrolls or take on some of those costs themselves.
Speaker 2 (09:55):
Which will be even less money for them to use
for expanding and hiring.
Speaker 3 (10:00):
So, Stacey, these are the factors that we think are
going to impact companies, and can we just acknowledge you know,
Donald Trump here has been dealt a pretty strong hand
in terms of Republican majorities in both houses of Congress.
But the way that he has been able to strong
arm the fiscal hawks, the members of his own party,
(10:21):
who otherwise you would imagine would have allergic reactions to
this tax cut and spending bill, bring them into line,
you know, offer carveouts to to Senators like Murkowski and Alaska.
Some pretty isn't there.
Speaker 2 (10:36):
A whaling tax cut or something for whalers?
Speaker 3 (10:40):
I was thinking of getting into whaling considering and like
it's almost you know Johnsonian a little bit, and the
way he has been able to wield you know, threats
and personality to bring members of his own party into line.
I mean, look, he's passing this massive bill, a lot
of promises like no tax on tips that he made
(11:01):
during the campaign. You have to just sort of watch
in awe as Republicans push this through.
Speaker 2 (11:07):
Traditionally, you're so right, like the Conservatives, at least the
old school Conservatives have been the party of financial responsibility, right.
They always want, you know, small deficits, small government, less spending.
I think the issue we're looking at now is that
nobody wants that, which kind of makes any kind of
trying to tackle the deficit seem really difficult. You know,
(11:28):
we've got Republicans wanting to spend in the form of
like stimulus and tax cuts, and you've got Democrats wanting
to spend in the form of social programs, and our
debt keeps getting bigger and bigger.
Speaker 3 (11:40):
And I don't know, I think we've all known since
the age of Ronald Reagan the deficits are just not
a political winner. Americans don't understand it. They don't care
about it. We're a one it now society. And by
the way, there is an interest group that should be
very concerned about deficits, and that is kids and unborn
(12:01):
children who will have to pay this bill in decades
and in generations. And of course that is not a
very strong political interest group.
Speaker 2 (12:18):
So Brad, the US economy is turning two hundred and
forty nine years old. It's pretty solid run so far,
and it is a strange time to be covering the economy.
I know that you've covered this a lot of Business Week,
and I've covered this a lot, but there is this
kind of dissonance between how the economy feels and the
(12:39):
numbers that come out every month.
Speaker 3 (12:42):
And this is why when you have this dissonance, you
go to the doctor for your checkup. And we got
one today from the Labor Department in the form of
the jobs report, and the patient, Stacy, looks healthy. I
know the unemployment report for June, the economy added one
hundred and forty seven thousand jobs. The unemployment rate clogged
(13:02):
in at four point one percent, near historic lows. This
is what amounts to a clean bill of health if
you're a country.
Speaker 2 (13:08):
It really is. I was very surprised by this report.
I was expecting, between Doge and tariffs and everything, to
see some softness. I guess, maybe a kind of a
negative jobs report. But of course this data is what
the government uses to set policies, and this data looks good.
But we thought we would bring in an expert to
(13:29):
help us kind of parse through this particular patient's bill.
A real doctor, A real doctor, actually, yes, doctor Allison
schreg Or. She's an economist with a Manhattan Institute and
an opinion columnist here at Bloomberg. Welcome, Allison, thanks for
having me. What do you see when you look at
this report? I mean it looks like really good news.
It's a good report.
Speaker 1 (13:50):
You can throw some water on it if you see
that most of the job gains were in the government,
particularly local government. Were not quite sure why less job
gains in the private sector, although also not terrible in
the private sector. But you know what, the unemployment rate
still low. I think we keep expecting the shoe to
drop because there's so much uncertainty with the tariffs and everything.
Speaker 2 (14:11):
Yeah, but you know, it's a good economy.
Speaker 3 (14:14):
What can I say, Allison. One aspect of this report,
wages rose three point seven percent in the past year.
That's well above the inflation rate. How do you think
it factors into the decision making at the Fed? How
is Jerome Powell looking at this report?
Speaker 1 (14:30):
I think it's really hard to justify a rate cut.
Not only that, the justification for a rate cut is
that we increased rates a lot when inflation went up,
and there's still well above where they were pre inflation.
So there's this idea that the UA increased interest rates
and it's contractionary and when things go back to normal,
rates go back.
Speaker 2 (14:49):
Down contractionary like, you increase interest rates, the economy shrinks,
and then inflation goes away.
Speaker 1 (14:54):
Then you go back to normal we call normalization. But
the thing is, this is a pretty good economy. It
might not be like outrageously booming, but it certainly doesn't
seem to be shrinking. And the fact that interest rates
are relatively high relative what we're used to and it
doesn't seem to be having a dampening effect on the
economy really isn't just g We're not going to cut
(15:16):
rates this summer. I think it really forces the Fed
to think maybe what we consider neutral the interest rates,
where it doesn't harm the economy maybe are higher than
they used to be, and even if we think about
cutting rates once or twice later in the year, we
don't have that many rate cuts to go.
Speaker 2 (15:33):
It doesn't feel like the economy is doing as well
as the data seems to indicate that it is. It
feels like the job market is in kind of rough shape.
There are headlines about layoffs all the time. There was
just a big one from Microsoft. I mean, as someone
who looks at data but also lives in the world,
how do you reconcile these two things. I know, it's
(15:54):
like the Vibe session. Everybody's been talking about it for
a while, but this report really kind of surprised me.
Speaker 1 (16:01):
I think there's the Jobs report, which is right now
in the longer term outlook for employment, which is more
say structural what we call like the economy's natural rate
of employment, that is more worrying, and we're starting to
see signs that might be changing. So one thing that
concerns me is employment rates for recent college grads Okay,
(16:24):
not very good. And in fact, usually recent college grads
tend to find jobs fairly quickly.
Speaker 2 (16:30):
Because they're cheap.
Speaker 1 (16:31):
Yeah they're cheap. They fill all these entry level jobs
that you need. And also they're well educated and learn
things quickly, so you know how to use AI. Yeah
maybe too well, but yeah they do, and they are
not finding jobs like they used to. In fact, their
employment rates are like recession levels. So I think this
is really concerning because it might point to the idea
(16:53):
that entry level jobs are the ones AI can do.
There's no hard evidence this is why factoring in to
employment decisions. Employers insist it's not, but it is very
worrying that this segment is not doing that well, and
that might suggest that there are all these structural changes
that will change the labor market and particularly be hard
for young workers. Your first job out of college is
(17:15):
actually important. There's evidence certainly we visited this in the
Great Recession, and a lot of millennials are still feeling this.
If you graduate during our recession, it compack to your
earnings for decades. So we might be seeing this big shift,
which is actually, in a lot of ways more important
than one jobs report.
Speaker 3 (17:32):
It's interesting how we can see these trends in something
like the job's report. So AI is one, but another
one I'm curious about is immigration. I mean, Alison, when
you look at this report. Do you see the impact
of high levels of deportation by the Trump administration or
declining immigration numbers, particularly at the southern border. Is it
contributing to what seems to be a kind of robust
(17:54):
hiring environment.
Speaker 2 (17:56):
Not yet.
Speaker 1 (17:56):
I mean, I just read a report from AI and
Brookings that anticipates we'll be seeing very low hiring numbers
in the fall. But this is quite high. Some people
are speculating that a lot of the people who came
and the Biden wave of immigration are still just finding
their way into labor force, so it looks quite high now,
but they estimate it could fall a lot in the fall.
(18:18):
But the thing to keep in mind with that is
it represents growth of the labor force. So even if
we end up with very sort of small hiring numbers
in the fall, the unemployment rate would actually still be
quite low because it wouldn't represent more people looking for jobs,
and in which case that still wouldn't cause the FED
to cut rates because they're actually concerned about the unemployment rate.
Speaker 2 (18:39):
One of the things that I've read about the reason
for the VIBE session is that the jobs that are
lost tend to be in industries that are quite high visibility,
like the service sector like tech, like media, whereas the
jobs being added are in sectors like government and healthcare
that are less visible. Is there truth to that? Is
that possibly why there's this discrepancy, or yes, like there is, I.
Speaker 1 (19:03):
Mean not only is it in the data for this
report that is a long running trend in the economy
that job growth for the last decade has largely been
in government, health care, and education, and even still with AI,
these sorts of service jobs largely can't be automated, so
I think we can expect a lot more of that.
Speaker 2 (19:20):
How are we adding government jobs? What about DOGE? I
thought those jobs were supposed to be going away.
Speaker 1 (19:26):
It's a bit of a mystery. It's largely in local
government now. It could be that DOGE fired a bunch
of people and then they're like, oh no, we actually
need those people, so maybe they're coming back.
Speaker 2 (19:35):
I'm not sure.
Speaker 1 (19:36):
I mean that's a possibility, or maybe instead of working
with federal government, people are not working for local government.
It is a bit of a mystery. At the very least,
we kept expecting from DOGE this huge drop in employment, and.
Speaker 2 (19:48):
That's of thousands of jobs.
Speaker 1 (19:50):
At the very least that never seemed to show up
in the data. And I'm not sure if it's because
these people found out their jobs quickly. They tend to
be fairly well educated and highly skilled, and people like
that tend to shorter spells of unemployment, So because of
the people who had other options, or maybe they're working
for the local government now, but it is a bit
of a mystery.
Speaker 3 (20:08):
So Allison Stacy and I were just discussing the big
beautiful bill. You know, the US government seems poised to
deliver a massive stimulus in the form of tax cuts,
increased military spending, adding three and a half trillion dollars
to the federal deficit. If legislators were working with perfect
information and they saw the state and the health of
this economy, like, how should they rethink or redesign this
(20:32):
bill considering these job numbers.
Speaker 1 (20:34):
You know, it's a tricky one because you know, we
say three and a half trillion dollars from tax cuts,
but most of that is just extending the DGCA, the
tax cuts people got in twenty seventeen, So it would
be a four and a half trillion dollar tax increase
if we didn't do that. So I don't think either
party is really.
Speaker 2 (20:51):
Prepared to do that.
Speaker 1 (20:53):
There are things that are unnecessarily stimulative or not great
tax policy in there, like no tax on tips and
tax in overtimes, writing off auto loans, increasing the salt deduction.
There's some stuff in there that certainly doesn't add anything
to the party and just adds to the debt. But
a bulk of this is just really extending the existing
tax levels that we have, and you know, I'm not
(21:16):
sure either party is really prepared to do that. And
to be honest, with the uncertainty and sort of precariousness
the economy feels, I'm not sure it's even wise to.
Speaker 2 (21:23):
Get rid of that.
Speaker 1 (21:24):
But if we really did want to think about reducing
the debt, which we're going to have to, I think
both parties really have to face some really hard truths here,
which is Republicans have to get used to the idea that,
you know, we're all going to pay higher taxes. We
might need a consumption tax, or just increase corporate.
Speaker 2 (21:42):
Assumption taxes like a sales tax or a value added tax.
Speaker 1 (21:45):
Or just increase income taxes and take that economic hit.
But Democrats too, you know, they're very intensive about the debt.
Speaker 2 (21:52):
I welcome that.
Speaker 1 (21:53):
I want everyone to be upset about the debt, but
they're also completely freaked out by medicaid cuts. Now, there's
certainly a case to be made aid that medicaid is
not the place to cut services. But the fact is
we are going to have to cut services somewhere. Both
parties are gonna have to come to terms with the
fact that we're gonna have higher taxes and less services
if we're really gonna get the dead down.
Speaker 2 (22:13):
So if the US economy came to you as a
patient and you were looking over all the data, the jobs, inflation,
all of it, like, what would you tell this economy?
What kind of checkup does it get?
Speaker 1 (22:28):
The economy is like a middle aged man who's really
smart and well earning and has a lot of good
years ahead of him, but maybe could lose ten pounds
or maybe even fifteen.
Speaker 3 (22:41):
Or twenty pounds. That's hitting very close to home, Alison Jeeves.
Speaker 1 (22:44):
I'm sorry you don't need to lose any weight, though.
Speaker 3 (22:48):
I think you know.
Speaker 1 (22:50):
It's like you got a lot of potential. There's still
a lot of great things you're gonna do. You're pretty
much like running the world, but you got some fat
you need to trim.
Speaker 2 (22:59):
What specifically would you be looking at or keeping your
eye on for this particular middle aged patient.
Speaker 1 (23:06):
Well, obviously, debt levels. There's some policy things undermining fed
independence which you could increase inflation, as could the high
debt levels. You know, the fact that we're doing more
policy that's less focused on growing the economy and more
focused on our political objectives, things like the tariffs and immigration.
All of that, you know, is sort of causing us
(23:29):
to have a bit of a belly, and you know
we don't need to do that. It's not good for
your heart, but it probably also won't kill you anytime soon.
Speaker 2 (23:37):
Alison Schrager is an economist with the Manhattan Institute. She's
also an opinion columnist here at Bloomberg. All right, we
are to the segment of the show where we talk
about our underrated story of the week, and Brad, this
was yours. You brought the underrated story. What did you find?
What should we be paying more attention to?
Speaker 3 (23:58):
Well, Stacey Summer reporting from Bloomberg's own Hannah Miller. You
may have heard Paramount Global reached a settlement with President
Donald Trump over his lawsuit that alleged election interference by
the company that owned CBS News when it showed two
different versions of a sixteen minutes interview with then Vice
President Kamala Harris. Paramount agreed to pay sixteen million dollars,
(24:22):
including plaintiff fees. What's left will go to a future
presidential library. Trump's legal team called the settlement of victory
and said it reflected the strength of the case, but
in fact states it was precisely the opposite. Most legal
experts thought the case was ridiculous, frivolous. But Paramount is
being sold to a company called Skydance Media. It needs
(24:44):
approval from federal regulators, and most insiders, including apparently Sherry Redstone,
who owns a controlling interest in Paramount, believe the FCC
was withholding approval pending the outcome of this case.
Speaker 2 (24:58):
I mean, as the ed of a news magazine, how
do you feel about that?
Speaker 3 (25:06):
It's a tragedy and this is sixty minutes. This is
the gold standard for news, a show I grew up
watching with my parents. Bending the knee and paying a
bounty to a sitting president. It's appalling, and as part
of this larger trend of the president attempting to intimidate
the media. The campaign includes threatening the New York Times
and CNN for reporting on the Iran bombing, defunding NPR
(25:30):
and PBS, removing news wires like AP from the White
House press pool, and on and on. It's appalling, and
it sets a terrible precedent, you know.
Speaker 2 (25:40):
I mean, I obviously have a lot of emotion for
the media. I spent most of my career in public media,
which is, as you said, in a big existential crisis
over this moment. I have a lot of sympathy, I
guess for a paramount in this situation. I'm just like
not sure what you do if you are running a
(26:01):
media organization, because I'm thinking of like the universities dealing
with the Trump administration right now. I mean, Harvard just
announced that they have a billion dollar budget deficit because
of taking on Trump, and that has not gone well
for it. You know, if you're running one of these
big organizations, you have all these jobs on the line.
(26:21):
You're supposed to be protecting your people. I'm honestly not
sure what I would do if I were running this company.
But I deeply believe in media too.
Speaker 3 (26:32):
The individual incentive is to settle right is to bend
the knee and move on. But then the collective impact
is disastrous. So it's really incumbent upon the large, wealthy
institutions like Harvard, like big media companies, and yes, like
Paramount and the Redstone family to stand up and act,
(26:54):
maybe not in their own short term narrow self interest,
but for the long term for the health of democricy
and independent institutions. And that's why I thought this story
was underrated and kind of a tragedy.
Speaker 2 (27:07):
I mean, I think one of the things that is
so interesting to me about media, which I work in
but also cover, is that I feel like the soul
of journalism and like the economics of journalism come in
clash all the time, and I feel like sometimes the
best journalism is not great business, and the best business
is not great journalism.
Speaker 3 (27:26):
Stacey couldn't agree with you more. You know what we
need right now? You know what would help a poem?
Speaker 2 (27:34):
Yeah, maybe it's time to pivot to poetry, which is
always a good idea. In fact, we have some poetry
news here at Everybody's Business. For people who've listened to
the show, you might remember that I challenged Max at
one point to write haikus for people who reviewed the show.
Because we're a new show, we're trying to get reviews,
and so this was our incentive. And Max has been
(27:56):
writing haikus. But now we've started getting haikus from list
about other things, which has been such a delightful surprise.
We got one from a listener, Bill Lapp. He wrote
in a haiku about one of our shows that involved
Elon Musk, Taylor Swift and the deficit. Here's what he.
Speaker 3 (28:16):
Wrote, four trillion debt.
Speaker 2 (28:18):
Wow, how can we afford this much? Just ask Musk
or Swift?
Speaker 3 (28:24):
Is this?
Speaker 2 (28:25):
I feel like that is a beautiful That's a beautiful.
Speaker 3 (28:28):
I hope this starts a trend. I want to hear more.
Listener submitted haikus business poetry.
Speaker 2 (28:35):
I feel like business poetry is an underrated category of
poetry and maybe the best thing to deal with this
moment that we're in. Maybe we should all write poems
to the US economy for its two hundred and forty
ninth birthday. In fact, if you do feel inspired or
moved to write a poem for the US economy on
its birthday, send it to us in an email. We
(28:57):
would love to hear from you at Everybody's at Bloomberg
dot net. That is, Everybody's with an S at Bloomberg
dot net. We would love to read your poetry. This
show is produced by Stacy Wong. Magnus Hendrickson is our
supervising producer, Amy Keen is our editor, and Brendan Francis
(29:18):
Neonam is our executive producer. We get engineering support from
Blake Maples and Dave Purcell, factchecks, Sage Bauman Heads Bloomberg Podcast,
and a very special thanks to Jeff Muscus. If you
have a minute, please rate and review the show. It
means a lot to us, and Bradstone has agreed to
come in with his own haikup. If you write a review,
(29:39):
and if you have a story that should be our business,
send us an email 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 (00:11):
This is Everybody's Business from Bloomberg BusinessWeek. I'm Stacey Bannocksmith
and I'm Brad Stone.
Speaker 3 (00:17):
Stacy, Happy Independence Day.
Speaker 2 (00:19):
Thank you, Brad. Happy Independence Day to you. It has
been a short week for business, but action packed.
Speaker 3 (00:26):
Yes. As we speak here on Thursday, the big beautiful
bill is on the verge of passing the House, and
we're going to talk about the impact that this monumental
bill could have on business.
Speaker 2 (00:37):
We also got some unemployment numbers, and in spite of
feeling like maybe the economy starting to soften a little bit,
the numbers looked really good.
Speaker 3 (00:47):
And our underrated story this week a big payout to
President Trump from CBS over what he called a biased
presidential interview. Media might become a little less independent.
Speaker 2 (01:02):
Bradstone, it is great to have you in this week.
You were filling in for me last week and this
week you're back filling in for Max Chafkin, who is
out on vacation.
Speaker 3 (01:12):
Hi Stacey, great to be here.
Speaker 1 (01:13):
Now.
Speaker 3 (01:13):
You've just gotten back from some world tours. Right you
were in China, you were in Canada.
Speaker 2 (01:19):
It's true, it was kind of a world tour But
this week I was lucky enough to be in Canada
for Canada Day. That is on July first. It's Canada's
version of the fourth of July Independence Day. It was
interesting to be there now because, of course Canada has
been in the news a lot lately, you know, between
(01:39):
the sort of drama with the trade deals and the tariffs,
and then of course the kind of ongoing Trump talk
about making Canada into the fifty first state. So I
thought this would be a golden opportunity to ask our
fellow Canadians how they felt about Canada Day and about
Trump's dreams of fifty first statehood. What does Canada do
(02:03):
mean to you?
Speaker 1 (02:03):
It means another year of this great country.
Speaker 2 (02:06):
What do you like about Canada? I love everything. I mean,
some people don't like the weather, but I'm okay with it.
Speaker 1 (02:12):
I love the diversity, and I don't know, I just
love the freedom.
Speaker 2 (02:17):
They really welcome everyone like you're here means that you
are a Canadian. We're newcomers to Canada. We've just moved here.
It's the first time for Canaidate, so we're just seeing
what's like happening in the streets, the culture, the people.
You're Canadian and American. I am both. I love both countries.
Canadians are more, yeah, more flexible and more open. How
(02:40):
do Canadians feel about the US right now? I have
nothing against you, guys, very unfortunately the whole situation. They
just hope the situation goes away.
Speaker 1 (02:50):
I mean, we're definitely gonna be independent for a while.
Speaker 2 (02:53):
I hope, I mean hope.
Speaker 3 (02:55):
No.
Speaker 2 (02:55):
Fifty first state, no, no, Stacey.
Speaker 3 (02:58):
Canadians are so good.
Speaker 2 (03:01):
I know, I know, I mean I was a little
worried about bringing up the fifty first state thing on
Canada Day in Canada for obvious reasons. People could not
have been nicer. They just kept wishing me a happy
Fourth of July and saying that they liked the US
and it was it was very moving. I love Canada.
Speaker 3 (03:18):
Well, here in San Francisco, we remember when Trump threatened
to turn Alcatraz back into a jail, and so maybe,
like US, Canadians are just waiting to see whether Trump
was serious about his threats.
Speaker 2 (03:32):
So Alcatraz might be the canary in the Canadian fifty
first state coal mine exactly.
Speaker 3 (03:44):
Stacey is a me or is every major piece of legislation,
the stage three words all starting with the letter B.
Speaker 2 (03:52):
Like build back better, And you're talking about the big,
beautiful bill, which is right now as we speak, on
the very cusp of passing in the House. It looks
like it is largely an extension of President Trump's twenty
seventeen tax cuts with some other things added on there.
Speaker 3 (04:10):
The bill is massive, very controversial, more than a thousand pages,
with a lot packed in and a lot to talk about.
But we wanted to focus on how the bill is
likely to affect businesses, and it's kind of a mixed bag. Yeah.
Speaker 2 (04:24):
We picked out a few kind of key things we
thought would be the most impactful on businesses of all sizes,
small businesses, medium businesses, giant corporations, to take a look
at kind of what the fallout would be. Brad took
the You took the first thing right, tax cuts, Yeah,
the big one.
Speaker 3 (04:41):
And this was the kind of underlying rationale for Trump's
signature bill in twenty seventeen, the Tax Cut and Jobs Act.
It lowered the corporate tax rate in the US from
thirty five percent to twenty one percent. This was just
a massive boon for large companies. Stacy. Just as an example,
I looked into Apple it lowered it tax bill from
about sixteen billion in twenty sixteen all the way down
(05:04):
to ten point four billion in fiscal twenty nineteen, according
to its ten k oh my gosh, yeah, if you remember,
Trump also gave companies a tax holiday to repatriate the
cash held overseas, and Apple saved about fifty billion dollars there.
So just a huge windfall for large companies. And then
I should add the Senate, in its negotiations reinstated a
(05:26):
provision from the original bill that allows small companies like
sole proprietorships to deduct twenty percent of their business income
from their taxable income. So you know, again this bill
is really favoring businesses and large companies. And we can
look back to twenty eighteen, by the way, to see
what the impact was of the original bill. Not surprisingly,
(05:50):
it was a good earnings year for corporations, but it
also contributed to inflation. The Fed raised interest rates four
times that year. It was a terrible year for the
S and P. Five hundred and Finally, and here we
can get into our second factor. The deficit boomed a
seven hundred and seventy nine billion in twenty eighteen, about
a seventeen percent increase compared to the previous year's deficit.
Speaker 2 (06:12):
Yes, this has been one of the big Democratic talking
points about the tax cut extensions, and it's going to
add to the deficit an estimated almost three and a
half trillion dollars over ten years. It's a lot to
add to the deficit. And I actually think this will
affect businesses as well, even though it's not quite as
obvious an impact, I think it could be one of
(06:34):
the biggest impacts that this bill has on businesses. So
right now, our debt is just it's huge. It's mine
blowingly huge. It's thirty six trillion dollars. Sometimes these numbers
they get so big you can't even process them. But
one thing you can process is just how much of
our budget it's taking up. So we are spending almost
(06:58):
a trillion dollars a year just service our debt. That's
interest payments and things like that. That is the size
of the defense budget. And within the next ten years,
it's estimated that our debt servicing our debt will be
the biggest item in our budget. I mean, that is
a real possibility.
Speaker 3 (07:13):
So how does increase borrowing and increase borrowing costs. How
is that likely to kind of boomerang back on companies
and on individuals?
Speaker 2 (07:22):
Well, a few reasons. So, first of all, when the
debt gets that big, it kind of can destabilize a country.
Just like if you were a person and you were
in a ton of debt, you're in a pretty precarious situation.
If an emergency comes up, you can't really cover your bills.
And if there's an economic shock, that's going to affect
all the companies in the country, right, I mean, the
economy is an ecosystem, and so if the ecosystem starts
(07:44):
to get unhealthy, it affects all of the companies and
the ecosystems. And we've already seen this happen a little
bit with the US debt getting downgraded, largely because of
the sort of the growing debt and all the instability
that it could create. Also just makes the US and
US companies by proxy a less attractive investment for international investors,
(08:06):
just like a less safe place to put money. That
can have an impact on businesses. But I think one
of the big things here is interest rates, because the
US government is going to have to be issuing lots
of debt basically government bonds, which are essentially little loans
that the government is taking out from anyone who will
buy the bonds. The more debt it puts out, generally speaking,
(08:28):
it has to offer higher interest rates on that debt
to make it attractive for investors. Well, that basically means
raising interest rates, and that trickles out through the whole economy.
That makes interest rates higher on almost all loans across
the economy. That just makes it more expensive for businesses
to borrow money, which means they can't expand as quickly,
(08:51):
they can't hire as quickly. And you know, businesses expanding
and hiring, that's how the economy grows. So it shrinks
the economy. It hamstrings businesses. I think that's like one
of the biggest impacts that we can expect the bill
to have.
Speaker 3 (09:04):
Okay, so we've talked about tax cut extensions, We've talked
about an increase in the deficit, and then the third
factor of this bill impacting businesses is going to be
the cuts to major social programs like medicaid, food assistants,
the so called SNAP program, and student loans, and the
new work requirements and funding changes could result in millions
(09:26):
potentially losing health insurance and food aid, which may in
turn increased costs and instability for companies whose employees and
customers rely on these programs. And by the way, the
historic charge against companies like Walmart and Amazon is that
they put their workers in precarious situations where they are
forced to rely on government benefits. So as those government
(09:47):
benefits go away, the companies might be forced to either
shrink their payrolls or take on some of those costs themselves.
Speaker 2 (09:55):
Which will be even less money for them to use
for expanding and hiring.
Speaker 3 (10:00):
So, Stacey, these are the factors that we think are
going to impact companies, and can we just acknowledge you know,
Donald Trump here has been dealt a pretty strong hand
in terms of Republican majorities in both houses of Congress.
But the way that he has been able to strong
arm the fiscal hawks, the members of his own party,
(10:21):
who otherwise you would imagine would have allergic reactions to
this tax cut and spending bill, bring them into line,
you know, offer carveouts to to Senators like Murkowski and Alaska.
Some pretty isn't there.
Speaker 2 (10:36):
A whaling tax cut or something for whalers?
Speaker 3 (10:40):
I was thinking of getting into whaling considering and like
it's almost you know Johnsonian a little bit, and the
way he has been able to wield you know, threats
and personality to bring members of his own party into line.
I mean, look, he's passing this massive bill, a lot
of promises like no tax on tips that he made
(11:01):
during the campaign. You have to just sort of watch
in awe as Republicans push this through.
Speaker 2 (11:07):
Traditionally, you're so right, like the Conservatives, at least the
old school Conservatives have been the party of financial responsibility, right.
They always want, you know, small deficits, small government, less spending.
I think the issue we're looking at now is that
nobody wants that, which kind of makes any kind of
trying to tackle the deficit seem really difficult. You know,
(11:28):
we've got Republicans wanting to spend in the form of
like stimulus and tax cuts, and you've got Democrats wanting
to spend in the form of social programs, and our
debt keeps getting bigger and bigger.
Speaker 3 (11:40):
And I don't know, I think we've all known since
the age of Ronald Reagan the deficits are just not
a political winner. Americans don't understand it. They don't care
about it. We're a one it now society. And by
the way, there is an interest group that should be
very concerned about deficits, and that is kids and unborn
(12:01):
children who will have to pay this bill in decades
and in generations. And of course that is not a
very strong political interest group.
Speaker 2 (12:18):
So Brad, the US economy is turning two hundred and
forty nine years old. It's pretty solid run so far,
and it is a strange time to be covering the economy.
I know that you've covered this a lot of Business Week,
and I've covered this a lot, but there is this
kind of dissonance between how the economy feels and the
(12:39):
numbers that come out every month.
Speaker 3 (12:42):
And this is why when you have this dissonance, you
go to the doctor for your checkup. And we got
one today from the Labor Department in the form of
the jobs report, and the patient, Stacy, looks healthy. I
know the unemployment report for June, the economy added one
hundred and forty seven thousand jobs. The unemployment rate clogged
(13:02):
in at four point one percent, near historic lows. This
is what amounts to a clean bill of health if
you're a country.
Speaker 2 (13:08):
It really is. I was very surprised by this report.
I was expecting, between Doge and tariffs and everything, to
see some softness. I guess, maybe a kind of a
negative jobs report. But of course this data is what
the government uses to set policies, and this data looks good.
But we thought we would bring in an expert to
(13:29):
help us kind of parse through this particular patient's bill.
A real doctor, A real doctor, actually, yes, doctor Allison
schreg Or. She's an economist with a Manhattan Institute and
an opinion columnist here at Bloomberg. Welcome, Allison, thanks for
having me. What do you see when you look at
this report? I mean it looks like really good news.
It's a good report.
Speaker 1 (13:50):
You can throw some water on it if you see
that most of the job gains were in the government,
particularly local government. Were not quite sure why less job
gains in the private sector, although also not terrible in
the private sector. But you know what, the unemployment rate
still low. I think we keep expecting the shoe to
drop because there's so much uncertainty with the tariffs and everything.
Speaker 2 (14:11):
Yeah, but you know, it's a good economy.
Speaker 3 (14:14):
What can I say, Allison. One aspect of this report,
wages rose three point seven percent in the past year.
That's well above the inflation rate. How do you think
it factors into the decision making at the Fed? How
is Jerome Powell looking at this report?
Speaker 1 (14:30):
I think it's really hard to justify a rate cut.
Not only that, the justification for a rate cut is
that we increased rates a lot when inflation went up,
and there's still well above where they were pre inflation.
So there's this idea that the UA increased interest rates
and it's contractionary and when things go back to normal,
rates go back.
Speaker 2 (14:49):
Down contractionary like, you increase interest rates, the economy shrinks,
and then inflation goes away.
Speaker 1 (14:54):
Then you go back to normal we call normalization. But
the thing is, this is a pretty good economy. It
might not be like outrageously booming, but it certainly doesn't
seem to be shrinking. And the fact that interest rates
are relatively high relative what we're used to and it
doesn't seem to be having a dampening effect on the
economy really isn't just g We're not going to cut
(15:16):
rates this summer. I think it really forces the Fed
to think maybe what we consider neutral the interest rates,
where it doesn't harm the economy maybe are higher than
they used to be, and even if we think about
cutting rates once or twice later in the year, we
don't have that many rate cuts to go.
Speaker 2 (15:33):
It doesn't feel like the economy is doing as well
as the data seems to indicate that it is. It
feels like the job market is in kind of rough shape.
There are headlines about layoffs all the time. There was
just a big one from Microsoft. I mean, as someone
who looks at data but also lives in the world,
how do you reconcile these two things. I know, it's
(15:54):
like the Vibe session. Everybody's been talking about it for
a while, but this report really kind of surprised me.
Speaker 1 (16:01):
I think there's the Jobs report, which is right now
in the longer term outlook for employment, which is more
say structural what we call like the economy's natural rate
of employment, that is more worrying, and we're starting to
see signs that might be changing. So one thing that
concerns me is employment rates for recent college grads Okay,
(16:24):
not very good. And in fact, usually recent college grads
tend to find jobs fairly quickly.
Speaker 2 (16:30):
Because they're cheap.
Speaker 1 (16:31):
Yeah they're cheap. They fill all these entry level jobs
that you need. And also they're well educated and learn
things quickly, so you know how to use AI. Yeah
maybe too well, but yeah they do, and they are
not finding jobs like they used to. In fact, their
employment rates are like recession levels. So I think this
is really concerning because it might point to the idea
(16:53):
that entry level jobs are the ones AI can do.
There's no hard evidence this is why factoring in to
employment decisions. Employers insist it's not, but it is very
worrying that this segment is not doing that well, and
that might suggest that there are all these structural changes
that will change the labor market and particularly be hard
for young workers. Your first job out of college is
(17:15):
actually important. There's evidence certainly we visited this in the
Great Recession, and a lot of millennials are still feeling this.
If you graduate during our recession, it compack to your
earnings for decades. So we might be seeing this big shift,
which is actually, in a lot of ways more important
than one jobs report.
Speaker 3 (17:32):
It's interesting how we can see these trends in something
like the job's report. So AI is one, but another
one I'm curious about is immigration. I mean, Alison, when
you look at this report. Do you see the impact
of high levels of deportation by the Trump administration or
declining immigration numbers, particularly at the southern border. Is it
contributing to what seems to be a kind of robust
(17:54):
hiring environment.
Speaker 2 (17:56):
Not yet.
Speaker 1 (17:56):
I mean, I just read a report from AI and
Brookings that anticipates we'll be seeing very low hiring numbers
in the fall. But this is quite high. Some people
are speculating that a lot of the people who came
and the Biden wave of immigration are still just finding
their way into labor force, so it looks quite high now,
but they estimate it could fall a lot in the fall.
(18:18):
But the thing to keep in mind with that is
it represents growth of the labor force. So even if
we end up with very sort of small hiring numbers
in the fall, the unemployment rate would actually still be
quite low because it wouldn't represent more people looking for jobs,
and in which case that still wouldn't cause the FED
to cut rates because they're actually concerned about the unemployment rate.
Speaker 2 (18:39):
One of the things that I've read about the reason
for the VIBE session is that the jobs that are
lost tend to be in industries that are quite high visibility,
like the service sector like tech, like media, whereas the
jobs being added are in sectors like government and healthcare
that are less visible. Is there truth to that? Is
that possibly why there's this discrepancy, or yes, like there is, I.
Speaker 1 (19:03):
Mean not only is it in the data for this
report that is a long running trend in the economy
that job growth for the last decade has largely been
in government, health care, and education, and even still with AI,
these sorts of service jobs largely can't be automated, so
I think we can expect a lot more of that.
Speaker 2 (19:20):
How are we adding government jobs? What about DOGE? I
thought those jobs were supposed to be going away.
Speaker 1 (19:26):
It's a bit of a mystery. It's largely in local
government now. It could be that DOGE fired a bunch
of people and then they're like, oh no, we actually
need those people, so maybe they're coming back.
Speaker 2 (19:35):
I'm not sure.
Speaker 1 (19:36):
I mean that's a possibility, or maybe instead of working
with federal government, people are not working for local government.
It is a bit of a mystery. At the very least,
we kept expecting from DOGE this huge drop in employment, and.
Speaker 2 (19:48):
That's of thousands of jobs.
Speaker 1 (19:50):
At the very least that never seemed to show up
in the data. And I'm not sure if it's because
these people found out their jobs quickly. They tend to
be fairly well educated and highly skilled, and people like
that tend to shorter spells of unemployment, So because of
the people who had other options, or maybe they're working
for the local government now, but it is a bit
of a mystery.
Speaker 3 (20:08):
So Allison Stacy and I were just discussing the big
beautiful bill. You know, the US government seems poised to
deliver a massive stimulus in the form of tax cuts,
increased military spending, adding three and a half trillion dollars
to the federal deficit. If legislators were working with perfect
information and they saw the state and the health of
this economy, like, how should they rethink or redesign this
(20:32):
bill considering these job numbers.
Speaker 1 (20:34):
You know, it's a tricky one because you know, we
say three and a half trillion dollars from tax cuts,
but most of that is just extending the DGCA, the
tax cuts people got in twenty seventeen, So it would
be a four and a half trillion dollar tax increase
if we didn't do that. So I don't think either
party is really.
Speaker 2 (20:51):
Prepared to do that.
Speaker 1 (20:53):
There are things that are unnecessarily stimulative or not great
tax policy in there, like no tax on tips and
tax in overtimes, writing off auto loans, increasing the salt deduction.
There's some stuff in there that certainly doesn't add anything
to the party and just adds to the debt. But
a bulk of this is just really extending the existing
tax levels that we have, and you know, I'm not
(21:16):
sure either party is really prepared to do that. And
to be honest, with the uncertainty and sort of precariousness
the economy feels, I'm not sure it's even wise to.
Speaker 2 (21:23):
Get rid of that.
Speaker 1 (21:24):
But if we really did want to think about reducing
the debt, which we're going to have to, I think
both parties really have to face some really hard truths here,
which is Republicans have to get used to the idea that,
you know, we're all going to pay higher taxes. We
might need a consumption tax, or just increase corporate.
Speaker 2 (21:42):
Assumption taxes like a sales tax or a value added tax.
Speaker 1 (21:45):
Or just increase income taxes and take that economic hit.
But Democrats too, you know, they're very intensive about the debt.
Speaker 2 (21:52):
I welcome that.
Speaker 1 (21:53):
I want everyone to be upset about the debt, but
they're also completely freaked out by medicaid cuts. Now, there's
certainly a case to be made aid that medicaid is
not the place to cut services. But the fact is
we are going to have to cut services somewhere. Both
parties are gonna have to come to terms with the
fact that we're gonna have higher taxes and less services
if we're really gonna get the dead down.
Speaker 2 (22:13):
So if the US economy came to you as a
patient and you were looking over all the data, the jobs, inflation,
all of it, like, what would you tell this economy?
What kind of checkup does it get?
Speaker 1 (22:28):
The economy is like a middle aged man who's really
smart and well earning and has a lot of good
years ahead of him, but maybe could lose ten pounds
or maybe even fifteen.
Speaker 3 (22:41):
Or twenty pounds. That's hitting very close to home, Alison Jeeves.
Speaker 1 (22:44):
I'm sorry you don't need to lose any weight, though.
Speaker 3 (22:48):
I think you know.
Speaker 1 (22:50):
It's like you got a lot of potential. There's still
a lot of great things you're gonna do. You're pretty
much like running the world, but you got some fat
you need to trim.
Speaker 2 (22:59):
What specifically would you be looking at or keeping your
eye on for this particular middle aged patient.
Speaker 1 (23:06):
Well, obviously, debt levels. There's some policy things undermining fed
independence which you could increase inflation, as could the high
debt levels. You know, the fact that we're doing more
policy that's less focused on growing the economy and more
focused on our political objectives, things like the tariffs and immigration.
All of that, you know, is sort of causing us
(23:29):
to have a bit of a belly, and you know
we don't need to do that. It's not good for
your heart, but it probably also won't kill you anytime soon.
Speaker 2 (23:37):
Alison Schrager is an economist with the Manhattan Institute. She's
also an opinion columnist here at Bloomberg. All right, we
are to the segment of the show where we talk
about our underrated story of the week, and Brad, this
was yours. You brought the underrated story. What did you find?
What should we be paying more attention to?
Speaker 3 (23:58):
Well, Stacey Summer reporting from Bloomberg's own Hannah Miller. You
may have heard Paramount Global reached a settlement with President
Donald Trump over his lawsuit that alleged election interference by
the company that owned CBS News when it showed two
different versions of a sixteen minutes interview with then Vice
President Kamala Harris. Paramount agreed to pay sixteen million dollars,
(24:22):
including plaintiff fees. What's left will go to a future
presidential library. Trump's legal team called the settlement of victory
and said it reflected the strength of the case, but
in fact states it was precisely the opposite. Most legal
experts thought the case was ridiculous, frivolous. But Paramount is
being sold to a company called Skydance Media. It needs
(24:44):
approval from federal regulators, and most insiders, including apparently Sherry Redstone,
who owns a controlling interest in Paramount, believe the FCC
was withholding approval pending the outcome of this case.
Speaker 2 (24:58):
I mean, as the ed of a news magazine, how
do you feel about that?
Speaker 3 (25:06):
It's a tragedy and this is sixty minutes. This is
the gold standard for news, a show I grew up
watching with my parents. Bending the knee and paying a
bounty to a sitting president. It's appalling, and as part
of this larger trend of the president attempting to intimidate
the media. The campaign includes threatening the New York Times
and CNN for reporting on the Iran bombing, defunding NPR
(25:30):
and PBS, removing news wires like AP from the White
House press pool, and on and on. It's appalling, and
it sets a terrible precedent, you know.
Speaker 2 (25:40):
I mean, I obviously have a lot of emotion for
the media. I spent most of my career in public media,
which is, as you said, in a big existential crisis
over this moment. I have a lot of sympathy, I
guess for a paramount in this situation. I'm just like
not sure what you do if you are running a
(26:01):
media organization, because I'm thinking of like the universities dealing
with the Trump administration right now. I mean, Harvard just
announced that they have a billion dollar budget deficit because
of taking on Trump, and that has not gone well
for it. You know, if you're running one of these
big organizations, you have all these jobs on the line.
(26:21):
You're supposed to be protecting your people. I'm honestly not
sure what I would do if I were running this company.
But I deeply believe in media too.
Speaker 3 (26:32):
The individual incentive is to settle right is to bend
the knee and move on. But then the collective impact
is disastrous. So it's really incumbent upon the large, wealthy
institutions like Harvard, like big media companies, and yes, like
Paramount and the Redstone family to stand up and act,
(26:54):
maybe not in their own short term narrow self interest,
but for the long term for the health of democricy
and independent institutions. And that's why I thought this story
was underrated and kind of a tragedy.
Speaker 2 (27:07):
I mean, I think one of the things that is
so interesting to me about media, which I work in
but also cover, is that I feel like the soul
of journalism and like the economics of journalism come in
clash all the time, and I feel like sometimes the
best journalism is not great business, and the best business
is not great journalism.
Speaker 3 (27:26):
Stacey couldn't agree with you more. You know what we
need right now? You know what would help a poem?
Speaker 2 (27:34):
Yeah, maybe it's time to pivot to poetry, which is
always a good idea. In fact, we have some poetry
news here at Everybody's Business. For people who've listened to
the show, you might remember that I challenged Max at
one point to write haikus for people who reviewed the show.
Because we're a new show, we're trying to get reviews,
and so this was our incentive. And Max has been
(27:56):
writing haikus. But now we've started getting haikus from list
about other things, which has been such a delightful surprise.
We got one from a listener, Bill Lapp. He wrote
in a haiku about one of our shows that involved
Elon Musk, Taylor Swift and the deficit. Here's what he.
Speaker 3 (28:16):
Wrote, four trillion debt.
Speaker 2 (28:18):
Wow, how can we afford this much? Just ask Musk
or Swift?
Speaker 3 (28:24):
Is this?
Speaker 2 (28:25):
I feel like that is a beautiful That's a beautiful.
Speaker 3 (28:28):
I hope this starts a trend. I want to hear more.
Listener submitted haikus business poetry.
Speaker 2 (28:35):
I feel like business poetry is an underrated category of
poetry and maybe the best thing to deal with this
moment that we're in. Maybe we should all write poems
to the US economy for its two hundred and forty
ninth birthday. In fact, if you do feel inspired or
moved to write a poem for the US economy on
its birthday, send it to us in an email. We
(28:57):
would love to hear from you at Everybody's at Bloomberg
dot net. That is, Everybody's with an S at Bloomberg
dot net. We would love to read your poetry. This
show is produced by Stacy Wong. Magnus Hendrickson is our
supervising producer, Amy Keen is our editor, and Brendan Francis
(29:18):
Neonam is our executive producer. We get engineering support from
Blake Maples and Dave Purcell, factchecks, Sage Bauman Heads Bloomberg Podcast,
and a very special thanks to Jeff Muscus. If you
have a minute, please rate and review the show. It
means a lot to us, and Bradstone has agreed to
come in with his own haikup. If you write a review,
(29:39):
and if you have a story that should be our business,
send us an email 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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