July 31, 2025 • 34 mins
It was a packed week for the US economy: jobs numbers, an interest rate announcement from Federal Reserve Chair Jerome Powell, consumer confidence data and a tariff deadline. Topping the list was gross domestic product, the sum total of goods and services the economy produces—generally considered the measure of growth. After months of tariffs (and Donald Trump’s constantly shifting positions on them), many economists were predicting the US economy would be showing signs of strain. It turns out, that wasn’t necessarily the case when it comes to GDP (though jobs numbers unveiled Friday may give some pause). After falling a bit during the first few months of the year, this quarter, economic growth clocked in at a 3% annualized rate.
But there’s more to this number than meets the eye—or perhaps less. This week on Everybody’s Business, we talk GDP with Ken Rogoff, Harvard economist and author of Our Dollar, Your Problem. His take: the numbers may have been distorted by some of the panicked importing that US businesses were doing earlier in the year in anticipation of Trump’s latest (and now extended again) deadlines. However, he also leans into some chess metaphors (he is, after all, a grandmaster) to address those Trump fans who contend the president is playing four dimensional chess. His verdict? Trump is a “coffee house player.” That’s someone who’s better than you think—but not as good as he himself thinks.
Later in the show, we talk with Evan Ratliff about his feature in Bloomberg Businessweek, detailing how workers in North Korea are taking US tech jobs while posing as remote-working Americans. They’ve allegedly managed to infiltrate some of the biggest and wealthiest companies in the country—and their paychecks go to fund North Korea’s nuclear program.
Finally, the underrated story of the week is a canned spirit drink was mislabeled as an energy drink.
See omnystudio.com/listener for privacy information.
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Transcript
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 Stacy Bannocksmith.
Speaker 3 (00:15):
And I'm Max Chafkin and Stacy.
Speaker 4 (00:18):
This week, secrets Secrets is the theme.
Speaker 3 (00:22):
Yeah, the US economy. Is it secretly good? Is it
secretly bad? We'll try to find out.
Speaker 2 (00:27):
Yeah, we got some big economic data, a really positive
about economic growth which surprised a lot of people. And
we've got economist Ken Rogoff here to do a data
deep dive with us.
Speaker 3 (00:38):
Also, is your coworker secretly working for the North Koreans?
Speaker 4 (00:44):
I don't know, is he Well, we'll find out. Max.
Is there something that you need to just slow?
Speaker 3 (00:49):
And one final secret, Stacy, is your energy drink secretly.
Speaker 5 (00:54):
Filled with vodka?
Speaker 4 (00:55):
I mean, if it is, it's a secret.
Speaker 3 (00:57):
Ques. I actually right now, I.
Speaker 2 (00:59):
Have noticed, you know, my writing is really loosened up lately,
feeling really good, loving this energy drink.
Speaker 4 (01:05):
Is that a thing that's happening in the world.
Speaker 3 (01:07):
You'll have to wait till the.
Speaker 2 (01:09):
Energy drinks that seems dangerous. So, Max, we've been talking
about the numbers, a lot of data coming in about
the economy. Most of us looking pretty good this week.
And also people are apparently feeling good about the economy.
Speaker 3 (01:25):
Yeah, consumer confidence numbers were out this week, and we
found that people were feeling better about things the direction
of the economy. Just a note, Stacy, consumer confidence different
from consumer sentiment, which we talked about a couple episodes earlier.
We are still waiting on those numbers, yes, so you know,
we'll keep you updated though.
Speaker 2 (01:42):
A lot of people trying to measure other people's feelings.
So I thought like I should get out in the
field and do the same thing, right, because.
Speaker 4 (01:49):
Of course, the economy it's not just numbers, it's not
just data.
Speaker 2 (01:52):
We live in it, right, we have we all of
our own economic indicators that we watch in our lives.
So to that end, I thought I would go to
as sort of an economically iconic spot here in.
Speaker 4 (02:04):
New York, Okay, thirty fourth Street, Macy's.
Speaker 3 (02:07):
Yeah, I mean, what could be more indicative of a
personal economic indicator then? And I love this, By the way,
I can't wait to see what people say. I think
they're gonna come up with some ideas that maybe better
than what the economists have.
Speaker 4 (02:20):
I was very surprised. Here's what they said.
Speaker 1 (02:23):
So an hour ago. We've been to a Papele ressroom
which was super clean, So it seems.
Speaker 4 (02:28):
Like a good economic indicator.
Speaker 1 (02:30):
Yeah, so we can the still AFLD to have clean
public ressrooms are fantastic.
Speaker 4 (02:35):
How do you feel like the economy is doing right now?
Speaker 6 (02:37):
Terrible?
Speaker 3 (02:38):
Really?
Speaker 5 (02:39):
The job market like, it's hard.
Speaker 4 (02:40):
What field do you work in?
Speaker 5 (02:42):
Mostly rita.
Speaker 6 (02:43):
I was working at See matt In a couple months
ago and I got laid off and I have been
trying to find a job since. But it's hard.
Speaker 4 (02:50):
Like how many jobs have you applied to? A lot?
Speaker 1 (02:53):
Like?
Speaker 4 (02:53):
I can't really like baby a lot?
Speaker 6 (02:55):
Maybe like twenty five plus.
Speaker 3 (02:57):
Generally on the security of my job?
Speaker 4 (03:00):
Are you worried?
Speaker 3 (03:02):
Twenty percent?
Speaker 4 (03:03):
Worried eighty percent?
Speaker 3 (03:06):
Note, yes, you feel pretty stable right now.
Speaker 4 (03:09):
You know the subway is really.
Speaker 3 (03:13):
It's not really.
Speaker 1 (03:16):
We've been targeted. Just two bags of groceries, nothing fancy,
two hundred bucks, Like what did you buy?
Speaker 6 (03:23):
The cost of living is going up, and mind you,
the wage is barely going up. You know, you gotta
pay bills, but you gotta have money to eat. It's
hard out here being in New York. You know what
I'm saying?
Speaker 3 (03:35):
All Right, So the restroom index.
Speaker 4 (03:37):
I know, I mean I kind of loved that.
Speaker 3 (03:39):
Now look at this.
Speaker 4 (03:41):
You gotta send some restmen look at the.
Speaker 3 (03:43):
Restrooms, and if they're too clean, I don't think he
can cut.
Speaker 2 (03:47):
Counterpoint the subway index not looking so good.
Speaker 3 (03:51):
And you have a personal economic indicator, Stacey.
Speaker 2 (03:55):
My personal economic indicator is a little bit at the
grocery store, like when the checker rings everything up. If
the total makes me feel like there's been a mistake,
that is my economic indicator. I've been feeling that way
for years now. I'm like, there's some I got charged
twice for something.
Speaker 3 (04:12):
What I've started to do to feel better about that
When I go to Costco and it's like four hundred
and fifty dollars for like a week and a half's
worth of groceries, and I feel bad. I have three children,
so a lot of groceries. But and I feel bad.
I say, oh, maybe we'll set a record.
Speaker 2 (04:28):
Oh that's good, just kind of silver lining. Ex not
that any of us can afford silver right now, but yes,
I love that.
Speaker 4 (04:37):
I love that.
Speaker 2 (04:43):
So Max, there's a lot of big economic news this week.
One of the big ones is I think gross domestic
product a GDP. Yeah, yes, which is we should say,
the sum total of all the goods and services the
country produces.
Speaker 4 (04:58):
There's some controversy around it.
Speaker 2 (04:59):
But generally it's considered to be, you know, the measure
of economic growth for an economy, and that measure came
out this week looking really good.
Speaker 3 (05:08):
Yeah, the between April and June, the economy grew at
a rate of three percent. That's pretty solid, right, Stacey.
Speaker 7 (05:14):
This is after negative growth exactly, Cambu, months after not
only amid all of the sort of crazy economic back
and forth of tariffs, all these warnings from a lot
of smart people that this is not going to be
good for the economy, and like you said, the previous quarter,
the US economy shrink, so so good news.
Speaker 8 (05:33):
Yeah.
Speaker 3 (05:33):
I mean the percent.
Speaker 2 (05:34):
Growth on an economy, the size of the US economy
is is really strong.
Speaker 4 (05:39):
But you know, sometimes these numbers can be a little deceiving.
Speaker 2 (05:42):
So I wanted to bring in someone who could do
kind of a deep dive into the data with us,
and we're very lucky to have Ken Rogu off with us.
Ken an economist at Harvard, former chief economist at the
International Monetary Fund, author of the new book Our Dollar
your problem.
Speaker 5 (05:57):
Welcome Ken, Hey, thank you ca S and Max for
having me.
Speaker 2 (06:02):
So this three percent number. When you saw the three percents,
what went through your head?
Speaker 8 (06:07):
Well, I was surprised that it was as high as
it was. But on the other hand, you know, these
numbers get revised constantly. This is a first reading and
we don't really know what it'll looked like at the end.
The earlier number, which is actually negative in the first quarter,
was mostly because everyone was importing like crazy ahead of
(06:28):
the tariffs, and this time they imported less and imports
get subtracted off from exports. Yeah, I mean consumption I
think was I'm remembering right. One point four percent is
probably you know, more capturing what's going on. Business investment
was soft. The economy is slowing, and I think something
(06:50):
to bear in mind is we started with a very
strong economy.
Speaker 2 (06:54):
Wait, the economy is slowing, but it looks like it's growing.
The number says growing, but.
Speaker 8 (06:59):
It's You really need to average the first two quarters
to sort of get a feel of what's going on. Yeah,
I mean, you have to remember, you know, we started
with a very strong economy at the beginning of the year.
It was the Endviya of the world. There's the old
joke about you know, what's the easiest way to make
a small fortune, and the answers to start with a
(07:22):
large one. And so, you know, our economy was really good,
and I.
Speaker 3 (07:26):
Thought it was to become a movie producer.
Speaker 4 (07:28):
I thought it was crypto.
Speaker 8 (07:31):
All right, I'm older than you, but yeah, no, I mean,
I think in general the economy has not slowed as
much as one would think, not given the terrorists, but
the chaos it did hold back business investment, and business
investment was soft, and in the long run that's what's
(07:51):
driving growth. But it doesn't seem to hold back the
consumer that much.
Speaker 3 (07:56):
Yeah, and the chaos continues stasy, And I was it
two weeks ago we talked about copper tariffs, these fifty
percent copper tariffs. I believe it was yesterday recording this.
On Thursday, Trump came out and says actually exempting refined copper,
which is the most widely traded version of this. So
like all of a sudden, you have this huge amount
of copper that's now sitting in the US and is
(08:18):
just you know, tanking the prices. I mean, there's so
much chaos, Ken, why do you think that has proven
less of a drag than we would have expected.
Speaker 8 (08:28):
Well, I mean, okay, just to be fair to Trump,
he's a wild man, but he's also a kragmacusque, and
so you know, one of his better qualities is when
he sees something not working, he changes it, which has
been an increasingly rare thing in Washington. I mean, that's
something he does well. So things do seem to be
(08:48):
settling down. I have to tell you that if you
pull academic economists on what tariffs would do, we were
all talking about ten percent a while ago. Now it's
settled at fifteen is the norm I think everybody would
have set. Not the greatest idea, but not the end
of the world. We're a relatively closed economy. If you
(09:09):
have the ten percent on imports, you can cut taxes
somewhere else. It's a terrible idea. Let's be clear. It's
not the end of the world. We have a lot
of bad taxes.
Speaker 2 (09:20):
But closed economy. You mean that like we can kind
of produce a lot of what we need.
Speaker 8 (09:24):
Oh yeah, I mean you compare us to New Zealand
or you know, Canada, our fifty first state according to Trump,
or Australia or Latin America, they have to import a
lot of things. We are unique, not only that we
make stuff for ourselves. We have a lot of natural resources.
We're still a bread basket to the world. We have
(09:44):
an amazing piece of land, we have water and everything.
So our economy is very diverse. It's very resilient. But
I think I think the long run is yet to
come here. The verdict was Trump right about everything, meaning
it's not such a big deal, or where the economists
right that undermining institutions, closing ourselves off to trade are
(10:07):
going to hurt us in the long run. I think
it's going to take as years for that to sort out.
Speaker 3 (10:12):
Ken you said that economists had sort of and a
lot of people write I think a lot of people
on Wall Street as well, we're sort of expecting a
tariff of around ten to fifteen percent, like something that
would be maybe that would seem tough, not maybe not
ideal from the point of economists, but like not disastrous.
That's what you were just saying. Where is the number right?
(10:32):
Like this feels dumb to ask, but like how crazy
is it right now? Because like there's been so much
back and forth and changes and revisions, and Trump is
tacoing one minute and coppers are terrified, like, where is
it right now? Is it's higher than that? I guess right.
Speaker 8 (10:48):
So before I answer your question, I just want to
say I consider myself as a I am a Harvard professor.
I do not have Trump derangement syndrome. I think he's
right about some things. But what I'm about to say
is an area where you know, I think he's a problem,
which is he has a very mercurial personality. So we
(11:08):
have a tariff quote unquote deal now with Europe. I mean,
I'll take two years to work out with Japan, with Korea,
do we I mean he's signed an agreement with Canada
and Mexico in twenty eighteen, and then he decided he
didn't like it Brazil. He just said, fifty percent tariff
on Brazil because I don't like your politics. We actually
(11:30):
run at surplus with Brazil, oddly enough, because his whole
rationale for this was to reduce our deficits. But that's
not that's an aside. He's mercurial. Also, he's having the
time of his life. I mean, look at him, he's
so happy, and all the world leaders are being sycophantic
(11:51):
to him, and the tariffs is half of it. If
he just says, okay, everybody, fifteen percent, we're done, just
don't think about it, He's not going to be happy
with that. He's going to wake up on the wrong
side of the bed and you know, suddenly have a
terrify on.
Speaker 5 (12:07):
Sweden or whatever.
Speaker 8 (12:09):
So no, I think I think we're still in the
thick of this. I have to say things have gotten
better than most predictions. The inflation's been significant, but the
big one hasn't come through. I think it will. I
think we'll get more inflation, but all in all, he's
probably feeling pretty terrific about how his first six months
(12:31):
have gone.
Speaker 2 (12:31):
So one thing I did want to kind of dig
into that you mentioned earlier in our conversation was businesses
are not expanding. I feel like that potentially is big
economic implications. Will you talk about like what that means
and like on a like what the definition of that is,
and then also like why that's such a big deal.
Speaker 8 (12:51):
Well, they're not invest there waiting because they don't know
what's going on. And one of the my Ben Bernanke
was my classmate at MIT and the says was about
if there's a lot of uncertainty, investment will go down.
Speaker 2 (13:04):
People are weight they're not going to build a new factory.
They're not going to hire more people. They're not gonna.
Speaker 8 (13:08):
Yeah, why build a new factory you don't know what
the terrorist is going to be. Should you build it
in Canada? Should you build in the United States? So
they've been holding back. Now maybe there'll be a gusher
of investment now, but there's been uncertainty. I mean the
stock market obviously really has been having a good time.
They are back to all time highs. I just want
(13:30):
to say, I think part of that is not growth.
It's the realization they can get rid of a lot
of their workers and have a lot more profits thanks
to AI. So we I don't think we can look
at the stock market and say that's an a plus
for the economy. No, it's I think something more malign.
Speaker 2 (13:49):
But when businesses aren't growing, I mean that means the
economy can't expand because when businesses grow, they hire, they
expand that grows the economy. So I feel like that
number is particularly worrying because if businesses stop expanding, that
means the economy is going to stop expanding.
Speaker 8 (14:07):
Well, you've put that very well, Sacey. I can't add
to that except that we need years for this to
take place. Let's say you decide to build a new factory.
I mean that takes years just to get the permits,
you know, to make it all happen. The effect of
these policies will take a long time to see in
many cases.
Speaker 2 (14:27):
Okay, So, Ken, in addition to being an economist and
an author and a professor at Harvard.
Speaker 4 (14:32):
You are also a chess player.
Speaker 3 (14:34):
A grand master.
Speaker 4 (14:35):
Yeah, of like a big deal chess player.
Speaker 8 (14:38):
Yeah. I represented the US and the World championships a
long time ago, if you can believe that. But that
was I was a sort of more or less did
nothing else during my high school years.
Speaker 3 (14:48):
We'll mostly probably played three D chess, right Ken, not
forty chess. Yeah.
Speaker 2 (14:53):
When we found this, we were like, we've got to
ask Ken what he thinks of the thing that people
are often seeing about President Trump, which is that he's
playing for D chess.
Speaker 4 (15:03):
As someone who may have actually played for D chess,
what is the fourth D time? Maybe you go backwards
in time. I don't know.
Speaker 8 (15:13):
I actually have a view Trump as a chess player
in some ways. Really we have this phrase called coffeehouse
chess players, which are they typically are better than you think,
but not as good as they think. And I sort
of feel that describes a lot of Trump's analysis and philosophy.
(15:33):
And they also tend to be very good at beating
week players, but have trouble when they get to playing
strong players. But he has a lot of common sense ideas,
and even I know he says a lot of if
you take every word he says, it's pretty easy to
find a lot of crazy things. But he has a
lot of common sense things. But some things like tariffs
(15:54):
that he has just messy on it conviction about he
It's almost as if his life was saved so he
could bring carabs to the world.
Speaker 3 (16:02):
He's just wrong.
Speaker 8 (16:03):
I mean, it is not a great idea.
Speaker 4 (16:05):
Excellent well.
Speaker 2 (16:06):
Economists, author, professor and chess grandmaster Ken Rogoff, thank you
for talking with us.
Speaker 8 (16:12):
Thank you for having me.
Speaker 5 (16:20):
Stacy.
Speaker 3 (16:21):
Did you know that if you are running a tech company,
or if you work at a tech company, there is
a danger of a potential even a national security risk.
I'd say that one of your colleagues or one of
your employees, or maybe even many of your colleagues or
employees could be secret agents in North Korea posing as
American IT workers.
Speaker 2 (16:44):
I can honestly say that has never actually crossed my mind,
but maybe that explains some things in my working history.
Speaker 3 (16:52):
So I actually I'd followed this story a tiny bit
because it's so weird. And then amazingly, Bloomberg Business published
this story by Evan Ratliffe, who's a freelance writer who's
a contributor of BusinessWeek, created the podcast about AI that
I love called shell Game, which everyone should check out.
He dug deep into this story for this for a
(17:13):
piece in Business Week that just came out. It's called
Confessions of a Laptop Farmer, how an American helped North
Korea's wild remote worker scheme and Stacy Evan is here
with us now.
Speaker 4 (17:23):
Hey, Evan, welcome.
Speaker 5 (17:25):
Hey, thank you. I'm very happy to be here.
Speaker 3 (17:27):
So, Evan, before we get to the specifics of the
story you wrote, give us a quick overview of this phenomena.
Speaker 5 (17:34):
Well, most people will know that North Korea is under sanctions,
global sanctions, particularly sanctions, very stringent sanctions from the United
States many other countries because of its government's behavior in
a variety of ways, but particularly around nuclear weapons and
ballistic missiles. So North Korea is really not allowed to
transact with a lot of countries, especially the United States,
(17:55):
and as a result of that, they have come up
with all these creative ways to evade those sanctions over
the years, stealing money. For a while, they were making
meth and distributing it internationally, right, a lot of hacking, hacking, cryptocurrencies, theft.
Recently last five years and a little bit more, they've
come up with this plan which is basically to have
(18:17):
their workers, it workers that they train, get jobs in
the United States and collect the salaries. Like that's the scheme.
Speaker 3 (18:25):
It's so funny. You go from like meth, ransomware, like
doing all these like super nefarious things, and like what
if we just had these people just get like work
at Facebook or work at Google, or work at Amazon
or something.
Speaker 5 (18:39):
Right, it's just remote work. They're just doing remote work.
And now it takes a lot, including a number of
illegal steps for them to do this, but fundamentally they're
doing something quite boring, which is just get the jobs,
collect the salary.
Speaker 2 (18:51):
And it probably like there are thousands of workers doing
this outside North Korean there's a quote from your story
which I really loved that said quote. Sometimes the workers
turn to extortion, threatening to reveal sensitive secrets if they
aren't paid a ransom. But security researchers have found that
most of the workers raise money for the North Korean
government simply by striving to do average work and collect
(19:12):
their pay. I mean, that's they're just doing jobs. They're
just doing remote jobs in the US and getting US
paychecks to raise money for the North Korean government.
Speaker 5 (19:23):
That's the plan, yes, and trying to keep their heads down,
you know, so they don't get fired, do enough work
to keep the job. Sometimes they do a really good job.
But then the money and we're talking hundreds of millions
of dollars each year, Like the UN estimates two hundred
fifty million to six hundred million dollars each year from
these jobs, that goes straight into the munition's program, which
(19:43):
is ballistic missiles and nuclear weapons. So basically they're doing
these it jobs to fund nuclear weapons.
Speaker 4 (19:48):
They're just getting a paycheck to fund North Korea's nuclear
missile program.
Speaker 5 (19:53):
That's right, Evan.
Speaker 3 (19:54):
Can you just talk about what you did in this piece,
because this was pretty new. You you basically found one
of the people in the US that the North Korean,
these North Korean agents basically need American intermediaries to set
this up to help them facilitate their jobs or whatever.
And you basically ended up spending time with this woman,
(20:17):
Christina Maria Chapman, who's like one of these intermediaries, and
the stories told through her. I'm just kind of curious,
first of all, how you came across her and kind
of what she was like or what her experience was.
Speaker 5 (20:29):
Well. I came across her because she was being prosecuted
by the Department of Justice. And what happens in these
cases is companies uncover these North Korean workers. Sometimes they
reported to the FBI, they don't always have to, and
then the FBI starts investigating them. But the problem is
that people they really want are in North Korea or
in China and they really can't get to them. So
(20:51):
that people they can get to are what they call facilitators,
which include laptop farmers, people that keep laptops in their houses,
in their apartment that will be on all the time
such that North Korean workers can use those laptops remotely
and work American jobs.
Speaker 2 (21:07):
Yeah, explain how that works, Like, why do they need
a laptop that is based in the US. Why did
Christina have like her I think it was like her
RV was full of like dozens of laptops at one.
Speaker 5 (21:17):
Point, dozens of laptops. Yes, they need the laptops because
let's say one of them gets a job at Google,
and we can say Google because Google definitively hired one
of these North Korean workers. So they get a job
at Google, a remote job, and then Google says, Okay,
we're going to send you a work laptop, and they
can't say, well, send it to me in this town
on the border of North Korea and China. Instead, they
(21:40):
recruit someone in the United States to be their laptop farmer,
and that the laptop gets sent to that person's address,
so they claim, well, that's my address, or maybe it's
my sister's address, or it's my roommate's address. The laptop
gets sent there, but then they have to use it
to work, so they're basically using remote access software to
log in remotely to that laptop and then work on
that laptop for Google. But then someone has to maintain
(22:03):
that laptop, and that is the role of someone like
Christina Chapman is keeping the laptops functional so that all
of these workers can pretend to be in America, so
of Google looks, they'll see an IP address from an
American location rather than from a foreign location.
Speaker 3 (22:19):
It's so crazy because a big part of her job,
as I remember from the story, is basically just like
restarting people's computers, and she gets like frantic messages from
various workers that she's managed to turn the laptop on
or whatever. There's also the thing that happens if Evan
you talk about this, like sometimes you're expected to show
up on a video call, which creates kind of problems
(22:40):
for these these secret North Korean workers. If they did
have a backdrop, it would just be like a room
full of North Korean operative secretly working at Facebook or whatever,
be like a barracks or something.
Speaker 5 (22:52):
Yeah. So, I mean nobody loves a video call really
or a lot of video calls, but the North Koreans
like them even less because it's a way to get
found out. They have very clever First of all, they
can use software so that it looks like they're turning
on the camera on the work laptop that's actually in
let's say Christina Chapman's house, and then they will do
the occasional video call, you know, with a blank wall
(23:13):
behind them. Sometimes they'll intentionally reduce the bandwidth so it
gets fuzzy, so they could say, oh, well, I don't
have a very good connection and therefore I'm gonna have
to go camera off. But they do get found out
that way. Christina Chapman even said that sometimes they accidentally
would turn on their camera and she would see a
room full of North Koreans, although she didn't know they
were North Koreans. She thought they were Chinese working out
(23:34):
of an apartment.
Speaker 2 (23:36):
You see in the article that if you are an
American company that's hired contract it workers, you've probably hired
a North Korean. You found evidence that Google and Nvidia, Amazon,
NBCUniversal all hired North Korean workers. But there was something
in your story that stuck out to me, which was
this idea that a lot of the customers say, like,
who cares. I mean, if it is people from North
(23:58):
Korea and they're just doing the job and trying to
pick up a paycheck, it's not that different from other workers.
So what exactly is the problem here? I mean, other
than the existential like nuclear proliferation.
Speaker 4 (24:12):
Is this really an issue?
Speaker 5 (24:14):
I mean some of the companies, like you say, one
of the security research in particular, said he ran into
this a lot where companies would say, hey, this guy's good,
like do I have to let this guy go? I
mean there are a few issues there. One is, of course,
as you say, the ballistic missile and nuclear weapons issue.
That's where the money is going.
Speaker 2 (24:33):
And is a horrible regime. I don't think it should
be supported. But you know, just from the company's point.
Speaker 5 (24:37):
Of view, it is by US law, it's illegal for
these companies to even transact with North Korean agents, so
they are technically in violation of the law if they
knowingly hire a North Korean And then there's all sorts
of other laws that get broken, like they have to
fake their I nine forms and things like that.
Speaker 4 (24:55):
But that's not the company's problem if they don't know.
Speaker 5 (24:57):
The company's biggest problem is embarrassment, which this is something
I encountered when I said that I was going to
out many of these companies who had never been outed
before as having hired North Koreans, like they're worried about
their stock.
Speaker 4 (25:10):
Price and who were these companies.
Speaker 5 (25:12):
Amazon, Google, Boeing, Hyatt, Mass Mutual Insurance, NBCUniversal, Nike, Nvidia.
Speaker 3 (25:20):
How do these.
Speaker 4 (25:21):
Companies not know?
Speaker 2 (25:21):
I mean, these are like tech companies that deal with
tech security all the time.
Speaker 4 (25:25):
It's a little worrisome that they did this.
Speaker 5 (25:28):
There is a lack of due diligence. I think you
could say it'd be safe to say what happens a
lot of times is these companies they hire so many
IT workers and remote workers that they hired them through
these third party staffing companies, and they assume that the
staffing companies have done the due diligence, so they don't
actually do any They just the staffing company sends them
someone and they say, oh, okay, they're good. But the
staffing company they may have not done any due diligence,
(25:51):
and so just down the line, like no one's actually
doing a very good job of checking these people out.
Speaker 3 (25:55):
There's also, we should say, there's an additional problem which
the story mentions, which is and that list of companies
you just read off hints at it, like there's the
risk of North Korea like xfiltrating information from one of
these companies, right, like one of the weird mysteries of this,
and Evan mentions this as in the story is that
so far these workers seem to be just doing their jobs,
(26:17):
but of course there is a risk they could try
to steal data. But I want to just get to
kind of maybe a bigger question, Evan, which is like,
are these jobs just like bs, Like like the fact
that you mentioned this in the story, like some of
these North Korean operatives are holding multiple jobs at the
(26:38):
same time, doesn't it kind of just make you think
like maybe these tech firms are overpaying for this work
or something, or like like what is it about this
work that makes it so vulnerable to this kind of thing.
Speaker 5 (26:49):
I mean, I would never cast aspurseons on the companies
and they're hiring policies, but I will say, like they're
pretty well trained to many of these IT workers. They're
not just sluves who have never done it IT work,
Like the North Green government has trained them up quite well.
And then the other issue is like it's hard to
find good IT workers, Like there's a lot more jobs
maybe than there are people trained for many of these roles,
(27:12):
and so you go on the open market and you
find who you can find, and especially I mean the
tech companies should know better. But some of these other
companies you take, like Hyatt Hotels or these other companies,
they may be not experts in hiring tech workers in
the first place, and so that's why it's a little
bit easier for them to get in. But I mean
it's hard. It is a phenomenon that actually American tech
(27:35):
workers do a thing called job stacking sometimes where they
have more than one job and they collect the salaries
from both.
Speaker 3 (27:41):
Yeah, you all probably saw this, but earlier this month,
this tech worker I think his name was so ham Peric.
He it went viral because like basically every tech company
in Silicon Valley discovered they'd hired this guy and he
was doing some kind of extreme form of jobs stacking,
and it was this kind of like viral moment. Hey,
(28:04):
even before we let go, I mean, has this changed
the way you think about work in general, especially this
kind of like white collar remote work a little bit?
Speaker 5 (28:13):
I mean, even with all the problems we've described, like
there are real consequences to this scheme, it still can
sort of make you think, like what is work? Like
We've got people in North Korea who were not supposed
to be doing these jobs. But all they did was say, like,
I don't know, these jobs are available, like we can
do them as well as anyone else, so like let's
(28:34):
do them. And it's sort of like a product of
globalization more than anything else, and so it doesn't make
me think less of the jobs in any way. It
just makes me think, well, this is one of these
sort of unforeseen, underground consequences of globalization, and we've kind
of seen larger ones, and this is kind of like
a weird, quirky one that you don't really think about
(28:55):
until it shows up.
Speaker 3 (28:56):
Evan Ratliffe, thank you for being here.
Speaker 5 (28:58):
My pleasure, Thanks for having me.
Speaker 2 (29:08):
Okay, Max, it is time where we talk about our
underrated story of the week, and this one's all you.
I don't actually know that much about your story, So
what did you find?
Speaker 5 (29:18):
All?
Speaker 3 (29:18):
Right? So this is in in in retail news or
consumable goods news. I don't know consume anyways news. Yeah,
we got news on Wednesday of a recall high noon,
which makes a very popular I think it's the most
popular hard Seltzer brand ion.
Speaker 4 (29:36):
Like it's shootout at the Okay Corral is the name.
Speaker 7 (29:40):
It's like you never had this, I have never had
High News, so this is very popular.
Speaker 4 (29:45):
I'm too white strung already. Energy drink. I don't even
know what it is.
Speaker 3 (29:48):
Not an energy drink, it's it's a well and that
Stacey is the problem. It's a it's an alcoholic beverage.
It's a spirit in a with a fresh juice. It
sounds very refreshing, kind of type thing you might want
to have at the end of the day at the
beach or whatever. Unfortunately, a bunch of High Noons were
sold in a bunch of states marketed as Celsius, which
is an energy drink that people normally drink in the
(30:10):
morning when they're trying to get stuff done. Let's see Florida, Michigan,
New York, Ohio, Oklahoma, South Carolina, Virginia, and Wisconsin. Assumedly,
some people cracked open a nice can of Celsius, hoping
to maybe focus get ready for the.
Speaker 4 (30:26):
Day, and instead look at economic data.
Speaker 3 (30:29):
We're transported to you know, the relaxation tap. So they
had to Anyway, this happened because of a bottling mishap
or a canning mishap. It comes in a canon and
Celsia is actually totally different companies. High noon. Fun fact
is owned by E and J. Gallo, which actually makes
the yellow one. Yeah. Yeah, like the delicious boxed wines
(30:51):
that you and I know love and.
Speaker 4 (30:52):
Enjoy the words delicious wines and.
Speaker 3 (30:56):
Seltzer. And I guess the company that was doing canning
got them mixed up.
Speaker 4 (31:02):
Maybe they got into the product a little bit.
Speaker 3 (31:04):
Maybe I don't know. Sample and the thing it was
like Celsius, which you know, naturally you'd kind of want
to blame Celsius for this, like they had nothing to
do with it. They didn't make these cans. They just,
like the cannon company, just took their design and put
it on some hard seltzer.
Speaker 4 (31:19):
Wow.
Speaker 3 (31:20):
I think this is fun though, because if you just
do how is this fun? Like if I accidentally drank
a hard seltzer instead of an energy drink, I think
like nine times out of ten, unless I didn't have
to drive or operate.
Speaker 2 (31:34):
Huge site, it'd be like finding like a bonus toy in.
Speaker 4 (31:38):
Your cereal box exactly. Yeah, this is the thing.
Speaker 2 (31:40):
If I dre accidentally drank alcohol in the morning, like
my week would be done all right.
Speaker 3 (31:46):
Well, The funny thing is, like I don't think I've
ever had like you I don't think I've ever had
a high Noon or a Celsius. I don't know if
you've ever had a Celsius. But those are like the
two most popular products in their categories. Those are hot categories.
So like I, I guess I could conceivably like not
know until secret collaboration. All right, before we go we
(32:11):
got Sacey, I wanted to read an email we got
from Tim t about the ex CFPB episode. So, okay,
so this came up during the episode. Remember I think
Nick mentioned the sixth hand. Yeah, I mentioned, like one
of these investigations with Capital One. This was like where
Capital One had been promising very high savings account rates
(32:33):
and not giving those rates. And the explanation was a
customers had not opted in. There had been a CFPB investigation,
and I believe a settlement in that is now done.
Speaker 4 (32:44):
I think it's no.
Speaker 3 (32:44):
Yeah, So anyway, Tim appreciate the episode. He said that
he opened one of these three sixty savings accounts when
rates are rising their own pandemic, but he missed out
on the advertised higher interest rates because he didn't understand
that you had to like go in and change your
accoun he wrote. Anyhow, Hopefully the Capital Want execs and
the Trump administration are enjoying some wine and cheese on
(33:06):
a yacht somewhere and laughing it up, maybe drinking some
of these high news.
Speaker 4 (33:11):
Yes.
Speaker 3 (33:13):
Anyway, thanks Tim, We really appreciate the note. Listeners. Let
us know how you're sort of experiencing in the economy
if you've got a personal economic indicator, because frankly, talking
about GDP is no fun, but talking about the personal
the restroom cleanliness indicator, I think.
Speaker 4 (33:30):
There's something there. Although I did have a lot of
fun talking with Ken Rogoff about GDP. What's more fun
than that?
Speaker 3 (33:35):
All right, that's fair. Everybody's at Bloomberg dot net. That's
everybody's with an s at Bloomberg dot net. Also, keep
the reviews coming. We've seen a lot of them and
they're awesome. And don't worry poetry fans out there. We
will be back with Haikus very soon.
Speaker 4 (33:55):
This show is produced by Stacy Wong.
Speaker 2 (33:57):
Magnus Hendrickson is our supervising producer, Amy Keene is our editor,
and Brendan Francis Neonham is our executive producer. We get
engineering from Blake Maples and Dave Purcell factchecks, Sage Bauman
heads Bloomberg Podcast Special thanks to Jeff Muscus, Julia Rubin,
and Maria Ling. If you have a minute, please rate
and review the show.
Speaker 4 (34:15):
It means a lot to us.
Speaker 2 (34:16):
And if you have a story that should be our business,
send us an email. Everybody's at Bloomberg dot net.
Speaker 5 (34:21):
Let us.
Speaker 2 (34:21):
Everybody's with an ass at Bloomberg dot net. Thank you
for listening, and we'll see you next week.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:11):
This is Everybody's business from Bloomberg BusinessWeek. I'm Stacy Bannocksmith.
Speaker 3 (00:15):
And I'm Max Chafkin and Stacy.
Speaker 4 (00:18):
This week, secrets Secrets is the theme.
Speaker 3 (00:22):
Yeah, the US economy. Is it secretly good? Is it
secretly bad? We'll try to find out.
Speaker 2 (00:27):
Yeah, we got some big economic data, a really positive
about economic growth which surprised a lot of people. And
we've got economist Ken Rogoff here to do a data
deep dive with us.
Speaker 3 (00:38):
Also, is your coworker secretly working for the North Koreans?
Speaker 4 (00:44):
I don't know, is he Well, we'll find out. Max.
Is there something that you need to just slow?
Speaker 3 (00:49):
And one final secret, Stacy, is your energy drink secretly.
Speaker 5 (00:54):
Filled with vodka?
Speaker 4 (00:55):
I mean, if it is, it's a secret.
Speaker 3 (00:57):
Ques. I actually right now, I.
Speaker 2 (00:59):
Have noticed, you know, my writing is really loosened up lately,
feeling really good, loving this energy drink.
Speaker 4 (01:05):
Is that a thing that's happening in the world.
Speaker 3 (01:07):
You'll have to wait till the.
Speaker 2 (01:09):
Energy drinks that seems dangerous. So, Max, we've been talking
about the numbers, a lot of data coming in about
the economy. Most of us looking pretty good this week.
And also people are apparently feeling good about the economy.
Speaker 3 (01:25):
Yeah, consumer confidence numbers were out this week, and we
found that people were feeling better about things the direction
of the economy. Just a note, Stacy, consumer confidence different
from consumer sentiment, which we talked about a couple episodes earlier.
We are still waiting on those numbers, yes, so you know,
we'll keep you updated though.
Speaker 2 (01:42):
A lot of people trying to measure other people's feelings.
So I thought like I should get out in the
field and do the same thing, right, because.
Speaker 4 (01:49):
Of course, the economy it's not just numbers, it's not
just data.
Speaker 2 (01:52):
We live in it, right, we have we all of
our own economic indicators that we watch in our lives.
So to that end, I thought I would go to
as sort of an economically iconic spot here in.
Speaker 4 (02:04):
New York, Okay, thirty fourth Street, Macy's.
Speaker 3 (02:07):
Yeah, I mean, what could be more indicative of a
personal economic indicator then? And I love this, By the way,
I can't wait to see what people say. I think
they're gonna come up with some ideas that maybe better
than what the economists have.
Speaker 4 (02:20):
I was very surprised. Here's what they said.
Speaker 1 (02:23):
So an hour ago. We've been to a Papele ressroom
which was super clean, So it seems.
Speaker 4 (02:28):
Like a good economic indicator.
Speaker 1 (02:30):
Yeah, so we can the still AFLD to have clean
public ressrooms are fantastic.
Speaker 4 (02:35):
How do you feel like the economy is doing right now?
Speaker 6 (02:37):
Terrible?
Speaker 3 (02:38):
Really?
Speaker 5 (02:39):
The job market like, it's hard.
Speaker 4 (02:40):
What field do you work in?
Speaker 5 (02:42):
Mostly rita.
Speaker 6 (02:43):
I was working at See matt In a couple months
ago and I got laid off and I have been
trying to find a job since. But it's hard.
Speaker 4 (02:50):
Like how many jobs have you applied to? A lot?
Speaker 1 (02:53):
Like?
Speaker 4 (02:53):
I can't really like baby a lot?
Speaker 6 (02:55):
Maybe like twenty five plus.
Speaker 3 (02:57):
Generally on the security of my job?
Speaker 4 (03:00):
Are you worried?
Speaker 3 (03:02):
Twenty percent?
Speaker 4 (03:03):
Worried eighty percent?
Speaker 3 (03:06):
Note, yes, you feel pretty stable right now.
Speaker 4 (03:09):
You know the subway is really.
Speaker 3 (03:13):
It's not really.
Speaker 1 (03:16):
We've been targeted. Just two bags of groceries, nothing fancy,
two hundred bucks, Like what did you buy?
Speaker 6 (03:23):
The cost of living is going up, and mind you,
the wage is barely going up. You know, you gotta
pay bills, but you gotta have money to eat. It's
hard out here being in New York. You know what
I'm saying?
Speaker 3 (03:35):
All Right, So the restroom index.
Speaker 4 (03:37):
I know, I mean I kind of loved that.
Speaker 3 (03:39):
Now look at this.
Speaker 4 (03:41):
You gotta send some restmen look at the.
Speaker 3 (03:43):
Restrooms, and if they're too clean, I don't think he
can cut.
Speaker 2 (03:47):
Counterpoint the subway index not looking so good.
Speaker 3 (03:51):
And you have a personal economic indicator, Stacey.
Speaker 2 (03:55):
My personal economic indicator is a little bit at the
grocery store, like when the checker rings everything up. If
the total makes me feel like there's been a mistake,
that is my economic indicator. I've been feeling that way
for years now. I'm like, there's some I got charged
twice for something.
Speaker 3 (04:12):
What I've started to do to feel better about that
When I go to Costco and it's like four hundred
and fifty dollars for like a week and a half's
worth of groceries, and I feel bad. I have three children,
so a lot of groceries. But and I feel bad.
I say, oh, maybe we'll set a record.
Speaker 2 (04:28):
Oh that's good, just kind of silver lining. Ex not
that any of us can afford silver right now, but yes,
I love that.
Speaker 4 (04:37):
I love that.
Speaker 2 (04:43):
So Max, there's a lot of big economic news this week.
One of the big ones is I think gross domestic
product a GDP. Yeah, yes, which is we should say,
the sum total of all the goods and services the
country produces.
Speaker 4 (04:58):
There's some controversy around it.
Speaker 2 (04:59):
But generally it's considered to be, you know, the measure
of economic growth for an economy, and that measure came
out this week looking really good.
Speaker 3 (05:08):
Yeah, the between April and June, the economy grew at
a rate of three percent. That's pretty solid, right, Stacey.
Speaker 7 (05:14):
This is after negative growth exactly, Cambu, months after not
only amid all of the sort of crazy economic back
and forth of tariffs, all these warnings from a lot
of smart people that this is not going to be
good for the economy, and like you said, the previous quarter,
the US economy shrink, so so good news.
Speaker 8 (05:33):
Yeah.
Speaker 3 (05:33):
I mean the percent.
Speaker 2 (05:34):
Growth on an economy, the size of the US economy
is is really strong.
Speaker 4 (05:39):
But you know, sometimes these numbers can be a little deceiving.
Speaker 2 (05:42):
So I wanted to bring in someone who could do
kind of a deep dive into the data with us,
and we're very lucky to have Ken Rogu off with us.
Ken an economist at Harvard, former chief economist at the
International Monetary Fund, author of the new book Our Dollar
your problem.
Speaker 5 (05:57):
Welcome Ken, Hey, thank you ca S and Max for
having me.
Speaker 2 (06:02):
So this three percent number. When you saw the three percents,
what went through your head?
Speaker 8 (06:07):
Well, I was surprised that it was as high as
it was. But on the other hand, you know, these
numbers get revised constantly. This is a first reading and
we don't really know what it'll looked like at the end.
The earlier number, which is actually negative in the first quarter,
was mostly because everyone was importing like crazy ahead of
(06:28):
the tariffs, and this time they imported less and imports
get subtracted off from exports. Yeah, I mean consumption I
think was I'm remembering right. One point four percent is
probably you know, more capturing what's going on. Business investment
was soft. The economy is slowing, and I think something
(06:50):
to bear in mind is we started with a very
strong economy.
Speaker 2 (06:54):
Wait, the economy is slowing, but it looks like it's growing.
The number says growing, but.
Speaker 8 (06:59):
It's You really need to average the first two quarters
to sort of get a feel of what's going on. Yeah,
I mean, you have to remember, you know, we started
with a very strong economy at the beginning of the year.
It was the Endviya of the world. There's the old
joke about you know, what's the easiest way to make
a small fortune, and the answers to start with a
(07:22):
large one. And so, you know, our economy was really good,
and I.
Speaker 3 (07:26):
Thought it was to become a movie producer.
Speaker 4 (07:28):
I thought it was crypto.
Speaker 8 (07:31):
All right, I'm older than you, but yeah, no, I mean,
I think in general the economy has not slowed as
much as one would think, not given the terrorists, but
the chaos it did hold back business investment, and business
investment was soft, and in the long run that's what's
(07:51):
driving growth. But it doesn't seem to hold back the
consumer that much.
Speaker 3 (07:56):
Yeah, and the chaos continues stasy, And I was it
two weeks ago we talked about copper tariffs, these fifty
percent copper tariffs. I believe it was yesterday recording this.
On Thursday, Trump came out and says actually exempting refined copper,
which is the most widely traded version of this. So
like all of a sudden, you have this huge amount
of copper that's now sitting in the US and is
(08:18):
just you know, tanking the prices. I mean, there's so
much chaos, Ken, why do you think that has proven
less of a drag than we would have expected.
Speaker 8 (08:28):
Well, I mean, okay, just to be fair to Trump,
he's a wild man, but he's also a kragmacusque, and
so you know, one of his better qualities is when
he sees something not working, he changes it, which has
been an increasingly rare thing in Washington. I mean, that's
something he does well. So things do seem to be
(08:48):
settling down. I have to tell you that if you
pull academic economists on what tariffs would do, we were
all talking about ten percent a while ago. Now it's
settled at fifteen is the norm I think everybody would
have set. Not the greatest idea, but not the end
of the world. We're a relatively closed economy. If you
(09:09):
have the ten percent on imports, you can cut taxes
somewhere else. It's a terrible idea. Let's be clear. It's
not the end of the world. We have a lot
of bad taxes.
Speaker 2 (09:20):
But closed economy. You mean that like we can kind
of produce a lot of what we need.
Speaker 8 (09:24):
Oh yeah, I mean you compare us to New Zealand
or you know, Canada, our fifty first state according to Trump,
or Australia or Latin America, they have to import a
lot of things. We are unique, not only that we
make stuff for ourselves. We have a lot of natural resources.
We're still a bread basket to the world. We have
(09:44):
an amazing piece of land, we have water and everything.
So our economy is very diverse. It's very resilient. But
I think I think the long run is yet to
come here. The verdict was Trump right about everything, meaning
it's not such a big deal, or where the economists
right that undermining institutions, closing ourselves off to trade are
(10:07):
going to hurt us in the long run. I think
it's going to take as years for that to sort out.
Speaker 3 (10:12):
Ken you said that economists had sort of and a
lot of people write I think a lot of people
on Wall Street as well, we're sort of expecting a
tariff of around ten to fifteen percent, like something that
would be maybe that would seem tough, not maybe not
ideal from the point of economists, but like not disastrous.
That's what you were just saying. Where is the number right?
(10:32):
Like this feels dumb to ask, but like how crazy
is it right now? Because like there's been so much
back and forth and changes and revisions, and Trump is
tacoing one minute and coppers are terrified, like, where is
it right now? Is it's higher than that? I guess right.
Speaker 8 (10:48):
So before I answer your question, I just want to
say I consider myself as a I am a Harvard professor.
I do not have Trump derangement syndrome. I think he's
right about some things. But what I'm about to say
is an area where you know, I think he's a problem,
which is he has a very mercurial personality. So we
(11:08):
have a tariff quote unquote deal now with Europe. I mean,
I'll take two years to work out with Japan, with Korea,
do we I mean he's signed an agreement with Canada
and Mexico in twenty eighteen, and then he decided he
didn't like it Brazil. He just said, fifty percent tariff
on Brazil because I don't like your politics. We actually
(11:30):
run at surplus with Brazil, oddly enough, because his whole
rationale for this was to reduce our deficits. But that's
not that's an aside. He's mercurial. Also, he's having the
time of his life. I mean, look at him, he's
so happy, and all the world leaders are being sycophantic
(11:51):
to him, and the tariffs is half of it. If
he just says, okay, everybody, fifteen percent, we're done, just
don't think about it, He's not going to be happy
with that. He's going to wake up on the wrong
side of the bed and you know, suddenly have a
terrify on.
Speaker 5 (12:07):
Sweden or whatever.
Speaker 8 (12:09):
So no, I think I think we're still in the
thick of this. I have to say things have gotten
better than most predictions. The inflation's been significant, but the
big one hasn't come through. I think it will. I
think we'll get more inflation, but all in all, he's
probably feeling pretty terrific about how his first six months
(12:31):
have gone.
Speaker 2 (12:31):
So one thing I did want to kind of dig
into that you mentioned earlier in our conversation was businesses
are not expanding. I feel like that potentially is big
economic implications. Will you talk about like what that means
and like on a like what the definition of that is,
and then also like why that's such a big deal.
Speaker 8 (12:51):
Well, they're not invest there waiting because they don't know
what's going on. And one of the my Ben Bernanke
was my classmate at MIT and the says was about
if there's a lot of uncertainty, investment will go down.
Speaker 2 (13:04):
People are weight they're not going to build a new factory.
They're not going to hire more people. They're not gonna.
Speaker 8 (13:08):
Yeah, why build a new factory you don't know what
the terrorist is going to be. Should you build it
in Canada? Should you build in the United States? So
they've been holding back. Now maybe there'll be a gusher
of investment now, but there's been uncertainty. I mean the
stock market obviously really has been having a good time.
They are back to all time highs. I just want
(13:30):
to say, I think part of that is not growth.
It's the realization they can get rid of a lot
of their workers and have a lot more profits thanks
to AI. So we I don't think we can look
at the stock market and say that's an a plus
for the economy. No, it's I think something more malign.
Speaker 2 (13:49):
But when businesses aren't growing, I mean that means the
economy can't expand because when businesses grow, they hire, they
expand that grows the economy. So I feel like that
number is particularly worrying because if businesses stop expanding, that
means the economy is going to stop expanding.
Speaker 8 (14:07):
Well, you've put that very well, Sacey. I can't add
to that except that we need years for this to
take place. Let's say you decide to build a new factory.
I mean that takes years just to get the permits,
you know, to make it all happen. The effect of
these policies will take a long time to see in
many cases.
Speaker 2 (14:27):
Okay, So, Ken, in addition to being an economist and
an author and a professor at Harvard.
Speaker 4 (14:32):
You are also a chess player.
Speaker 3 (14:34):
A grand master.
Speaker 4 (14:35):
Yeah, of like a big deal chess player.
Speaker 8 (14:38):
Yeah. I represented the US and the World championships a
long time ago, if you can believe that. But that
was I was a sort of more or less did
nothing else during my high school years.
Speaker 3 (14:48):
We'll mostly probably played three D chess, right Ken, not
forty chess. Yeah.
Speaker 2 (14:53):
When we found this, we were like, we've got to
ask Ken what he thinks of the thing that people
are often seeing about President Trump, which is that he's
playing for D chess.
Speaker 4 (15:03):
As someone who may have actually played for D chess,
what is the fourth D time? Maybe you go backwards
in time. I don't know.
Speaker 8 (15:13):
I actually have a view Trump as a chess player
in some ways. Really we have this phrase called coffeehouse
chess players, which are they typically are better than you think,
but not as good as they think. And I sort
of feel that describes a lot of Trump's analysis and philosophy.
(15:33):
And they also tend to be very good at beating
week players, but have trouble when they get to playing
strong players. But he has a lot of common sense ideas,
and even I know he says a lot of if
you take every word he says, it's pretty easy to
find a lot of crazy things. But he has a
lot of common sense things. But some things like tariffs
(15:54):
that he has just messy on it conviction about he
It's almost as if his life was saved so he
could bring carabs to the world.
Speaker 3 (16:02):
He's just wrong.
Speaker 8 (16:03):
I mean, it is not a great idea.
Speaker 4 (16:05):
Excellent well.
Speaker 2 (16:06):
Economists, author, professor and chess grandmaster Ken Rogoff, thank you
for talking with us.
Speaker 8 (16:12):
Thank you for having me.
Speaker 5 (16:20):
Stacy.
Speaker 3 (16:21):
Did you know that if you are running a tech company,
or if you work at a tech company, there is
a danger of a potential even a national security risk.
I'd say that one of your colleagues or one of
your employees, or maybe even many of your colleagues or
employees could be secret agents in North Korea posing as
American IT workers.
Speaker 2 (16:44):
I can honestly say that has never actually crossed my mind,
but maybe that explains some things in my working history.
Speaker 3 (16:52):
So I actually I'd followed this story a tiny bit
because it's so weird. And then amazingly, Bloomberg Business published
this story by Evan Ratliffe, who's a freelance writer who's
a contributor of BusinessWeek, created the podcast about AI that
I love called shell Game, which everyone should check out.
He dug deep into this story for this for a
(17:13):
piece in Business Week that just came out. It's called
Confessions of a Laptop Farmer, how an American helped North
Korea's wild remote worker scheme and Stacy Evan is here
with us now.
Speaker 4 (17:23):
Hey, Evan, welcome.
Speaker 5 (17:25):
Hey, thank you. I'm very happy to be here.
Speaker 3 (17:27):
So, Evan, before we get to the specifics of the
story you wrote, give us a quick overview of this phenomena.
Speaker 5 (17:34):
Well, most people will know that North Korea is under sanctions,
global sanctions, particularly sanctions, very stringent sanctions from the United
States many other countries because of its government's behavior in
a variety of ways, but particularly around nuclear weapons and
ballistic missiles. So North Korea is really not allowed to
transact with a lot of countries, especially the United States,
(17:55):
and as a result of that, they have come up
with all these creative ways to evade those sanctions over
the years, stealing money. For a while, they were making
meth and distributing it internationally, right, a lot of hacking, hacking, cryptocurrencies, theft.
Recently last five years and a little bit more, they've
come up with this plan which is basically to have
(18:17):
their workers, it workers that they train, get jobs in
the United States and collect the salaries. Like that's the scheme.
Speaker 3 (18:25):
It's so funny. You go from like meth, ransomware, like
doing all these like super nefarious things, and like what
if we just had these people just get like work
at Facebook or work at Google, or work at Amazon
or something.
Speaker 5 (18:39):
Right, it's just remote work. They're just doing remote work.
And now it takes a lot, including a number of
illegal steps for them to do this, but fundamentally they're
doing something quite boring, which is just get the jobs,
collect the salary.
Speaker 2 (18:51):
And it probably like there are thousands of workers doing
this outside North Korean there's a quote from your story
which I really loved that said quote. Sometimes the workers
turn to extortion, threatening to reveal sensitive secrets if they
aren't paid a ransom. But security researchers have found that
most of the workers raise money for the North Korean
government simply by striving to do average work and collect
(19:12):
their pay. I mean, that's they're just doing jobs. They're
just doing remote jobs in the US and getting US
paychecks to raise money for the North Korean government.
Speaker 5 (19:23):
That's the plan, yes, and trying to keep their heads down,
you know, so they don't get fired, do enough work
to keep the job. Sometimes they do a really good job.
But then the money and we're talking hundreds of millions
of dollars each year, Like the UN estimates two hundred
fifty million to six hundred million dollars each year from
these jobs, that goes straight into the munition's program, which
(19:43):
is ballistic missiles and nuclear weapons. So basically they're doing
these it jobs to fund nuclear weapons.
Speaker 4 (19:48):
They're just getting a paycheck to fund North Korea's nuclear
missile program.
Speaker 5 (19:53):
That's right, Evan.
Speaker 3 (19:54):
Can you just talk about what you did in this piece,
because this was pretty new. You you basically found one
of the people in the US that the North Korean,
these North Korean agents basically need American intermediaries to set
this up to help them facilitate their jobs or whatever.
And you basically ended up spending time with this woman,
(20:17):
Christina Maria Chapman, who's like one of these intermediaries, and
the stories told through her. I'm just kind of curious,
first of all, how you came across her and kind
of what she was like or what her experience was.
Speaker 5 (20:29):
Well. I came across her because she was being prosecuted
by the Department of Justice. And what happens in these
cases is companies uncover these North Korean workers. Sometimes they
reported to the FBI, they don't always have to, and
then the FBI starts investigating them. But the problem is
that people they really want are in North Korea or
in China and they really can't get to them. So
(20:51):
that people they can get to are what they call facilitators,
which include laptop farmers, people that keep laptops in their houses,
in their apartment that will be on all the time
such that North Korean workers can use those laptops remotely
and work American jobs.
Speaker 2 (21:07):
Yeah, explain how that works, Like, why do they need
a laptop that is based in the US. Why did
Christina have like her I think it was like her
RV was full of like dozens of laptops at one.
Speaker 5 (21:17):
Point, dozens of laptops. Yes, they need the laptops because
let's say one of them gets a job at Google,
and we can say Google because Google definitively hired one
of these North Korean workers. So they get a job
at Google, a remote job, and then Google says, Okay,
we're going to send you a work laptop, and they
can't say, well, send it to me in this town
on the border of North Korea and China. Instead, they
(21:40):
recruit someone in the United States to be their laptop farmer,
and that the laptop gets sent to that person's address,
so they claim, well, that's my address, or maybe it's
my sister's address, or it's my roommate's address. The laptop
gets sent there, but then they have to use it
to work, so they're basically using remote access software to
log in remotely to that laptop and then work on
that laptop for Google. But then someone has to maintain
(22:03):
that laptop, and that is the role of someone like
Christina Chapman is keeping the laptops functional so that all
of these workers can pretend to be in America, so
of Google looks, they'll see an IP address from an
American location rather than from a foreign location.
Speaker 3 (22:19):
It's so crazy because a big part of her job,
as I remember from the story, is basically just like
restarting people's computers, and she gets like frantic messages from
various workers that she's managed to turn the laptop on
or whatever. There's also the thing that happens if Evan
you talk about this, like sometimes you're expected to show
up on a video call, which creates kind of problems
(22:40):
for these these secret North Korean workers. If they did
have a backdrop, it would just be like a room
full of North Korean operative secretly working at Facebook or whatever,
be like a barracks or something.
Speaker 5 (22:52):
Yeah. So, I mean nobody loves a video call really
or a lot of video calls, but the North Koreans
like them even less because it's a way to get
found out. They have very clever First of all, they
can use software so that it looks like they're turning
on the camera on the work laptop that's actually in
let's say Christina Chapman's house, and then they will do
the occasional video call, you know, with a blank wall
(23:13):
behind them. Sometimes they'll intentionally reduce the bandwidth so it
gets fuzzy, so they could say, oh, well, I don't
have a very good connection and therefore I'm gonna have
to go camera off. But they do get found out
that way. Christina Chapman even said that sometimes they accidentally
would turn on their camera and she would see a
room full of North Koreans, although she didn't know they
were North Koreans. She thought they were Chinese working out
(23:34):
of an apartment.
Speaker 2 (23:36):
You see in the article that if you are an
American company that's hired contract it workers, you've probably hired
a North Korean. You found evidence that Google and Nvidia, Amazon,
NBCUniversal all hired North Korean workers. But there was something
in your story that stuck out to me, which was
this idea that a lot of the customers say, like,
who cares. I mean, if it is people from North
(23:58):
Korea and they're just doing the job and trying to
pick up a paycheck, it's not that different from other workers.
So what exactly is the problem here? I mean, other
than the existential like nuclear proliferation.
Speaker 4 (24:12):
Is this really an issue?
Speaker 5 (24:14):
I mean some of the companies, like you say, one
of the security research in particular, said he ran into
this a lot where companies would say, hey, this guy's good,
like do I have to let this guy go? I
mean there are a few issues there. One is, of course,
as you say, the ballistic missile and nuclear weapons issue.
That's where the money is going.
Speaker 2 (24:33):
And is a horrible regime. I don't think it should
be supported. But you know, just from the company's point.
Speaker 5 (24:37):
Of view, it is by US law, it's illegal for
these companies to even transact with North Korean agents, so
they are technically in violation of the law if they
knowingly hire a North Korean And then there's all sorts
of other laws that get broken, like they have to
fake their I nine forms and things like that.
Speaker 4 (24:55):
But that's not the company's problem if they don't know.
Speaker 5 (24:57):
The company's biggest problem is embarrassment, which this is something
I encountered when I said that I was going to
out many of these companies who had never been outed
before as having hired North Koreans, like they're worried about
their stock.
Speaker 4 (25:10):
Price and who were these companies.
Speaker 5 (25:12):
Amazon, Google, Boeing, Hyatt, Mass Mutual Insurance, NBCUniversal, Nike, Nvidia.
Speaker 3 (25:20):
How do these.
Speaker 4 (25:21):
Companies not know?
Speaker 2 (25:21):
I mean, these are like tech companies that deal with
tech security all the time.
Speaker 4 (25:25):
It's a little worrisome that they did this.
Speaker 5 (25:28):
There is a lack of due diligence. I think you
could say it'd be safe to say what happens a
lot of times is these companies they hire so many
IT workers and remote workers that they hired them through
these third party staffing companies, and they assume that the
staffing companies have done the due diligence, so they don't
actually do any They just the staffing company sends them
someone and they say, oh, okay, they're good. But the
staffing company they may have not done any due diligence,
(25:51):
and so just down the line, like no one's actually
doing a very good job of checking these people out.
Speaker 3 (25:55):
There's also, we should say, there's an additional problem which
the story mentions, which is and that list of companies
you just read off hints at it, like there's the
risk of North Korea like xfiltrating information from one of
these companies, right, like one of the weird mysteries of this,
and Evan mentions this as in the story is that
so far these workers seem to be just doing their jobs,
(26:17):
but of course there is a risk they could try
to steal data. But I want to just get to
kind of maybe a bigger question, Evan, which is like,
are these jobs just like bs, Like like the fact
that you mentioned this in the story, like some of
these North Korean operatives are holding multiple jobs at the
(26:38):
same time, doesn't it kind of just make you think
like maybe these tech firms are overpaying for this work
or something, or like like what is it about this
work that makes it so vulnerable to this kind of thing.
Speaker 5 (26:49):
I mean, I would never cast aspurseons on the companies
and they're hiring policies, but I will say, like they're
pretty well trained to many of these IT workers. They're
not just sluves who have never done it IT work,
Like the North Green government has trained them up quite well.
And then the other issue is like it's hard to
find good IT workers, Like there's a lot more jobs
maybe than there are people trained for many of these roles,
(27:12):
and so you go on the open market and you
find who you can find, and especially I mean the
tech companies should know better. But some of these other
companies you take, like Hyatt Hotels or these other companies,
they may be not experts in hiring tech workers in
the first place, and so that's why it's a little
bit easier for them to get in. But I mean
it's hard. It is a phenomenon that actually American tech
(27:35):
workers do a thing called job stacking sometimes where they
have more than one job and they collect the salaries
from both.
Speaker 3 (27:41):
Yeah, you all probably saw this, but earlier this month,
this tech worker I think his name was so ham Peric.
He it went viral because like basically every tech company
in Silicon Valley discovered they'd hired this guy and he
was doing some kind of extreme form of jobs stacking,
and it was this kind of like viral moment. Hey,
(28:04):
even before we let go, I mean, has this changed
the way you think about work in general, especially this
kind of like white collar remote work a little bit?
Speaker 5 (28:13):
I mean, even with all the problems we've described, like
there are real consequences to this scheme, it still can
sort of make you think, like what is work? Like
We've got people in North Korea who were not supposed
to be doing these jobs. But all they did was say, like,
I don't know, these jobs are available, like we can
do them as well as anyone else, so like let's
(28:34):
do them. And it's sort of like a product of
globalization more than anything else, and so it doesn't make
me think less of the jobs in any way. It
just makes me think, well, this is one of these
sort of unforeseen, underground consequences of globalization, and we've kind
of seen larger ones, and this is kind of like
a weird, quirky one that you don't really think about
(28:55):
until it shows up.
Speaker 3 (28:56):
Evan Ratliffe, thank you for being here.
Speaker 5 (28:58):
My pleasure, Thanks for having me.
Speaker 2 (29:08):
Okay, Max, it is time where we talk about our
underrated story of the week, and this one's all you.
I don't actually know that much about your story, So
what did you find?
Speaker 5 (29:18):
All?
Speaker 3 (29:18):
Right? So this is in in in retail news or
consumable goods news. I don't know consume anyways news. Yeah,
we got news on Wednesday of a recall high noon,
which makes a very popular I think it's the most
popular hard Seltzer brand ion.
Speaker 4 (29:36):
Like it's shootout at the Okay Corral is the name.
Speaker 7 (29:40):
It's like you never had this, I have never had
High News, so this is very popular.
Speaker 4 (29:45):
I'm too white strung already. Energy drink. I don't even
know what it is.
Speaker 3 (29:48):
Not an energy drink, it's it's a well and that
Stacey is the problem. It's a it's an alcoholic beverage.
It's a spirit in a with a fresh juice. It
sounds very refreshing, kind of type thing you might want
to have at the end of the day at the
beach or whatever. Unfortunately, a bunch of High Noons were
sold in a bunch of states marketed as Celsius, which
is an energy drink that people normally drink in the
(30:10):
morning when they're trying to get stuff done. Let's see Florida, Michigan,
New York, Ohio, Oklahoma, South Carolina, Virginia, and Wisconsin. Assumedly,
some people cracked open a nice can of Celsius, hoping
to maybe focus get ready for the.
Speaker 4 (30:26):
Day, and instead look at economic data.
Speaker 3 (30:29):
We're transported to you know, the relaxation tap. So they
had to Anyway, this happened because of a bottling mishap
or a canning mishap. It comes in a canon and
Celsia is actually totally different companies. High noon. Fun fact
is owned by E and J. Gallo, which actually makes
the yellow one. Yeah. Yeah, like the delicious boxed wines
(30:51):
that you and I know love and.
Speaker 4 (30:52):
Enjoy the words delicious wines and.
Speaker 3 (30:56):
Seltzer. And I guess the company that was doing canning
got them mixed up.
Speaker 4 (31:02):
Maybe they got into the product a little bit.
Speaker 3 (31:04):
Maybe I don't know. Sample and the thing it was
like Celsius, which you know, naturally you'd kind of want
to blame Celsius for this, like they had nothing to
do with it. They didn't make these cans. They just,
like the cannon company, just took their design and put
it on some hard seltzer.
Speaker 4 (31:19):
Wow.
Speaker 3 (31:20):
I think this is fun though, because if you just
do how is this fun? Like if I accidentally drank
a hard seltzer instead of an energy drink, I think
like nine times out of ten, unless I didn't have
to drive or operate.
Speaker 2 (31:34):
Huge site, it'd be like finding like a bonus toy in.
Speaker 4 (31:38):
Your cereal box exactly. Yeah, this is the thing.
Speaker 2 (31:40):
If I dre accidentally drank alcohol in the morning, like
my week would be done all right.
Speaker 3 (31:46):
Well, The funny thing is, like I don't think I've
ever had like you I don't think I've ever had
a high Noon or a Celsius. I don't know if
you've ever had a Celsius. But those are like the
two most popular products in their categories. Those are hot categories.
So like I, I guess I could conceivably like not
know until secret collaboration. All right, before we go we
(32:11):
got Sacey, I wanted to read an email we got
from Tim t about the ex CFPB episode. So, okay,
so this came up during the episode. Remember I think
Nick mentioned the sixth hand. Yeah, I mentioned, like one
of these investigations with Capital One. This was like where
Capital One had been promising very high savings account rates
(32:33):
and not giving those rates. And the explanation was a
customers had not opted in. There had been a CFPB investigation,
and I believe a settlement in that is now done.
Speaker 4 (32:44):
I think it's no.
Speaker 3 (32:44):
Yeah, So anyway, Tim appreciate the episode. He said that
he opened one of these three sixty savings accounts when
rates are rising their own pandemic, but he missed out
on the advertised higher interest rates because he didn't understand
that you had to like go in and change your
accoun he wrote. Anyhow, Hopefully the Capital Want execs and
the Trump administration are enjoying some wine and cheese on
(33:06):
a yacht somewhere and laughing it up, maybe drinking some
of these high news.
Speaker 4 (33:11):
Yes.
Speaker 3 (33:13):
Anyway, thanks Tim, We really appreciate the note. Listeners. Let
us know how you're sort of experiencing in the economy
if you've got a personal economic indicator, because frankly, talking
about GDP is no fun, but talking about the personal
the restroom cleanliness indicator, I think.
Speaker 4 (33:30):
There's something there. Although I did have a lot of
fun talking with Ken Rogoff about GDP. What's more fun
than that?
Speaker 3 (33:35):
All right, that's fair. Everybody's at Bloomberg dot net. That's
everybody's with an s at Bloomberg dot net. Also, keep
the reviews coming. We've seen a lot of them and
they're awesome. And don't worry poetry fans out there. We
will be back with Haikus very soon.
Speaker 4 (33:55):
This show is produced by Stacy Wong.
Speaker 2 (33:57):
Magnus Hendrickson is our supervising producer, Amy Keene is our editor,
and Brendan Francis Neonham is our executive producer. We get
engineering from Blake Maples and Dave Purcell factchecks, Sage Bauman
heads Bloomberg Podcast Special thanks to Jeff Muscus, Julia Rubin,
and Maria Ling. If you have a minute, please rate
and review the show.
Speaker 4 (34:15):
It means a lot to us.
Speaker 2 (34:16):
And if you have a story that should be our business,
send us an email. Everybody's at Bloomberg dot net.
Speaker 5 (34:21):
Let us.
Speaker 2 (34:21):
Everybody's with an ass at Bloomberg dot net. Thank you
for listening, and we'll see you next week.
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