Bloomberg Businessweek Weekend - February 28th, 2025 - Bloomberg Businessweek

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Speaker 1 (00:00):
Bloomberg Audio Studios, Podcasts, radio news.

Speaker 2 (00:08):
This is Bloomberg Business Week, Insight from the reporters and
editors that bring you America's most trusted business magazine, plus.

Speaker 3 (00:17):
Global business, finance and tech news.

Speaker 2 (00:19):
The Bloomberg Business Week Podcast with Carol Masser and Tim
Stenoveek on Bloomberg Radio.

Speaker 4 (00:26):
Hi, everyone, Welcome to the weekend edition of Bloomberg Business Week.
A flurry of news this past week and video dropped earnings,
US consumer confidence is souring. The FEDS preferred inflation gauge
came in exactly as economists forecast. President Trump held his
first cabinet meeting with Elon Musk in attendance, defending doge's
attempts to fire federal employees. And then there was the

(00:49):
heated exchange at the White House that led to a
critical minerals plan with Ukraine being scrapped. So this hour
we tackled geopolitics, US politics, and the US political divide
thanks to two new books.

Speaker 5 (01:03):
One of the books is from a former State Department
sanctions official on the choke points in global American power.
The other book, Timely Considering the latest with Russia and Ukraine,
from a retired lieutenant Colonel. It highlights American mistakes in
Eastern Europe that led to a return of Russian imperialism.

Speaker 4 (01:20):
By the way, he served in President Trump's first administration.
We are talking about retired Lieutenant Colonel Alexander Vinman. We're
also going to dig into the details of those earth
minerals from Ukraine, what you really need to know with
a global investor in the space. We are talking about
the CEO of Orion Resource Partners, and we get an
update on state cases against Doze with the Attorney General

(01:42):
of Connecticut, And.

Speaker 5 (01:43):
A little later on in our second hour, autonomous dump trucks,
a boom in medical spas, Rome's legendary loss marbles, and
the CEO behind the reboot of the world's largest retailer, Walmart.

Speaker 4 (01:56):
All of that to come. We begin with geopolitical impacts
and Trumpet administration policies. There's a lot going on again
this week. In fact, we did get a report that
President Trump is planning to expand US semiconductor curbs at China,
and that Trump administration officials have already met with key allies,
including Japan and the Netherlands, to escalate their restrictions on
China's chip industry.

Speaker 5 (02:18):
Edward Fishman has a lot of experience with sanctions as
a former State Department sanctions official. Today he's senior research
scholar and professor at Columbia University School of International and
Public Affairs. He joined us to talk about his brand
new book, Choke Points, American Power in the Age of
Economic Warfare. We should note that we spoke to him
before Friday's news on Ukraine.

Speaker 6 (02:39):
Sometimes people ask me do sanctions work? And my response
is often, have you ever asked a general or an
admiral does a bomb work?

Speaker 7 (02:46):
Well?

Speaker 6 (02:47):
A bomb is very effective at blowing things up, but
it doesn't always get us what we want politically. Because
of the choke points that I mentioned in my book,
such as the US dollar, advanced semiconductor technology, oil supply chains,
the government has tremendous power to impose economic harm on
foreign countries. What we're less good at is taking that
harm and translating it into the political outcome we want.

Speaker 5 (03:09):
Well, I remember three years ago we were sitting in
this studio and we were going through all the companies
that had just announced they would stop doing business in
Russia as a result of Russia's invasion of Ukraine. No
more McDonald's, no more Coca Cola. I mean, the list
goes on and on, and people were theorizing, oh, as
soon as you know Russians can't get their iPhones or
their eye cloud doesn't work or whatever, then it's going

(03:32):
to be an issue for Putin's government. Fast forward three years,
and it looks like it didn't matter at all.

Speaker 8 (03:38):
I would disagree with that.

Speaker 6 (03:39):
I think that if you look back at the very
beginning of the invasion, clearly Biden's goal was to deter
Putin from invading in the first place through the threat,
the threat of swift and severe consequences.

Speaker 7 (03:50):
That failed.

Speaker 6 (03:50):
Right then there was a big hit on Russia. They
kind of adapted. But where are we now. You've got
interest rates over twenty percent, you can't get a home
mortgage in Russia anything less than thirty percent. You've got
sky high inflation. The Central Bank of Russia projects zero
growth basically this year. So what that means for those
of us who interpret Kremlin stuff probably a recession. So

(04:11):
I think that sanctions can take time to work, the
same way that you know wars take long to be fought.
Economic wars aren't usually one in a day. But right
now Russia is on the ropes, and I think that
explains why Putin is so desperate for a deal with
Trump right now.

Speaker 4 (04:26):
Tell us about the history of choke points and how
they've evolved into what the US considers choke points or
what the US has as choke points today.

Speaker 6 (04:33):
Yeah, thanks for asking that, because you know, historically choke
points are geographic features. So if anyone who's traveled to
Turkey or Istanbul, the Bosphorus is a classic choke point
where you have three million barrels of oil passing through
a narrow strait every single day. And so throughout history,
stats have used these choke points to put pressure on

(04:54):
other countries, for instance, by parking a ship right in
front of that choke point and saying vow shot not pass.

Speaker 8 (05:00):
And really that is how choke points were.

Speaker 6 (05:01):
Weaponized all the way up until the turn of the
twenty first century, going back to the famous embargo on
Iraq that the UN Security Council did in the nineteen
nineties that was implemented by warships patrolling the Persian Gulf
twenty four to seven for thirteen straight years. But the
choke points that I described earlier, such as the US
dollar and these integrated financial systems and supply chains which

(05:23):
really come out of the hyperglobalization of the nineteen nineties.
Now US officials can sign a document in their office
from Washington and impose much much more economic harm even
than those old blockades where you put warships in the
Persian Gulf.

Speaker 4 (05:36):
So you said, I think before, and forgive me if
I'm miss quoting, that the US maybe hasn't been so
good about using their choke points to get maybe their
desired outcome. But as President Trump, somebody who maybe understands
the use of these choke points to maybe get to
a desired income.

Speaker 6 (05:54):
So President Trump certainly likes using economic warfare. And during
his first term he imposed twice as many sanctions as
the previous record holder, Barack Obama. So he loves sanctions.
He says, he's a tariff man. The thing I'm a
little bit skeptical of, though, when it comes to Trump's
use of economic warfare is his love for tariffs. Tariffs

(06:15):
are a much weaker tool, frankly than sanctions. What a
tariff is is a tax on importers, right, So for instance,
we're putting a tariff on copper. I heard on your
news program earlier.

Speaker 4 (06:25):
Today, possibly possibly doing an investigation and there.

Speaker 8 (06:27):
Yeah, so that's possible.

Speaker 6 (06:28):
What that would mean is a US importer of copper
from a foreign country would have to pay a tax
on that. It doesn't actually block things from coming into
the United States. To really weaponize a choke point, you
have to cut it off entirely. So actually, these tariffs
are a fairly weak instrument, and I think that's why
they haven't been particularly effective at getting anything that Donald
Trump wants.

Speaker 5 (06:48):
So far, would you say that tariffs are part of
economic warfare or would you not go that far?

Speaker 6 (06:54):
Yeah, this is a really important question because historically the
answer is no. Tariffs have been used primarily for or
economic reasons, such as protecting domestic industries from foreign competition
or to use in trade negotiations. What they haven't been
used as is a national security tool to try to
get a deal, for instance, over the war in Ukraine,
or to try to bludgeon Iran's economy. And the reason

(07:17):
they haven't been used for that is because they're a
weak tool. Right Iran. You know, we have a trade
embargo on Iran. We don't import anything from Iran, so
it wouldn't make sense to put tariffs on them.

Speaker 5 (07:26):
How effective are sanctions in a world where a country
like China can come in and help other economies get
around sanctions that are imposed by the rest of the world.

Speaker 6 (07:40):
So China certainly does play a white night role, and
they've played that role for Russia right in particular, you know,
when Russia was cut off from components, for instance, like
semiconductors from the West, China has been a lifeline and really,
you know, that's why I've seen Russia China trade double
really since the beginning of the Ukraine War. But what
I would say is that there are limits to the

(08:01):
role China can play critically in this space of finance
because the R and B is not a competitor to
the US dollar.

Speaker 4 (08:07):
Well, that's where I want to go, because the ultimate
tool weapon is the US dollar, is it not?

Speaker 6 (08:13):
Indeed it is so tell us about.

Speaker 4 (08:16):
As long as the US dollar rain supreme. You know,
we go day to day, week to week, month to
month talking geopolitics and what seems to be these new
stress points and push back against globalization. But as long
as the US dollar rain supreme, does the US kind
of reign supreme?

Speaker 6 (08:33):
Yes, I think the dollar is the most impactful and
important choke point in economic warfare, and that's why China, Russia,
other countries are investing heavily in trying to figure out
a way around this choke point. I think the thing
that people misunderstand, though, is they say, oh, well, the
dollar is still the world's reserve currency, so it's secure.
The thing is, the way that the US weaponizes the

(08:56):
dollar is really less as a reserve currency and more
as a medium in exchange, a payment currency. And what
you've seen China do is launch something like the Digital
R and B, a central bank digital currency. They put
forward a platform called Mbridge, which allows cross border payment
settlement using digital currencies.

Speaker 8 (09:14):
These things could.

Speaker 6 (09:15):
Develop in parallel to the dollar based system and ultimately
erode US financial power.

Speaker 5 (09:20):
So what you're saying, and this is kind of my
world when it comes to crypto, the Crypto Show here
every Tuesday at noon. If is there a chance that
the rise of digital currencies, the rise of bitcoin, the
rise of central bank digital currencies, will decrease the power
that countries have when it comes to sanctions.

Speaker 6 (09:41):
The answer is no. But it could do, though, is
redistribute the power. Because if you think about it. There's
no reason that a digital currency couldn't be weaponized, right
if the digital R and B becomes sort of the
main currency for cross border settlement, which, by the way,
it could because China's got one hundred and twenty countries
where it's number who are who considered China?

Speaker 5 (10:01):
That's a centralized digital currency. What about a decentralized digital
currency like bitcoin?

Speaker 6 (10:05):
Yeah, I think it depends. Look, ultimately, bitcoin does live
on servers. There are companies that have to hold the wallets,
and so there are ability to weaponize that. We've seen
the US Treasury Department add bitcoin wallets to the sanctions list,
and we also I mean, you know, famously, the most
significant sanctions violation settlement of the last several years was
against finance with when they were fined four billion dollars.

(10:27):
So I do not think that cryptocurrencies or central bank
digital currencies are in any way sanctions proved. The key
for the United States if it wants to retain this
dominance is for the United States to be the leader
in digital currencies.

Speaker 4 (10:40):
Well, that's what I was going to ask you. Is
this then the argument for the US government creating some
kind of digital currency for transactional purposes, yes, like government, Yes.

Speaker 8 (10:50):
Yes, definitely.

Speaker 6 (10:51):
I think that it is a pity that the United
States does not have a central bank digital currency. I
have no idea why the Trump administration and seems hostile
to that and that that dates back to their previous administration.
But while we linger, China moves ahead.

Speaker 4 (11:05):
But would there be the same pushback against other nations
who don't like the dominance of the US dollar to
push back once again against the dominance of a US
central bank currency.

Speaker 6 (11:15):
Sure, but worth the incumbent right, So if the if you,
if the FED were to launch a central bank digital
currency that was considered effectively the same as dollars, then
all it would do is cut off at the knees
things like the Chinese digital remnant BEU, which right now
is running ahead in the race as we're kind of
just sitting at the starting line doing nothing. And this
is a really important point. I'm making choke points because

(11:35):
these choke points they're not immutable. They some of them fade,
others rise, they change over time, critical minerals, batteries. These
are choke points that China controls, not us. And if
we don't continue to innovate in these spaces, we will
not stay ahead.

Speaker 4 (11:50):
AI. Is that a choke point?

Speaker 6 (11:52):
Well, yes, certainly, what I will say though, it's really
it's really the computing power under undergirding AI. So the
semi can components, Yazacly.

Speaker 5 (12:00):
Look, have you sent the book to members of the
Trump administration? The crypto and AIS are David Sachs.

Speaker 6 (12:05):
I have not sent the book to David Sachs. I
would welcome a conversation with David Sachs about the book.
I think it would be great to talk to them
about I am what I will say. You know, in
touch with folks at the National Security Council, and I
know that they're very interested in the book and we'll
be talking to them about soon.

Speaker 5 (12:18):
Do they understand the need for central bank digital currency?

Speaker 6 (12:22):
I don't know, Honestly, I haven't talked to I haven't
talked to people about that. I do not know David Sachs.
I can't say where he stands. What I do know
is that Trump himself has been hostile to this idea.

Speaker 4 (12:31):
We've talked more about war in the last couple of
years around the globe, but is it economic warfare that
is really the bigger challenges? Going forward and forgive me
just about thirty seconds.

Speaker 8 (12:41):
Yes, it is.

Speaker 6 (12:42):
The reason is we have great power competition between the US, China,
and Russia. We all got nuclear weapons. We're going to
avoid fighting at all costs. So what's that mean? We
are going to compete in the economic space, economic warfare.
We're living in an age of economic warfare.

Speaker 4 (12:57):
Fascinating conversation. Do come back soon. Love to tone this.
Edward Fishman, Senior research scholar and professor at Columbia University
School of International and Public Affairs. We used to call
it SIA when I was up there.

Speaker 5 (13:07):
They call it SIPA now.

Speaker 9 (13:08):
Right, zepa now.

Speaker 8 (13:09):
Yes.

Speaker 4 (13:10):
His new book took points American power in the age
of economic warfare. Thank you so much, really enjoyed it.

Speaker 2 (13:21):
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Speaker 4 (13:35):
As we've noted, a meeting between President Trump and Ukrainian
President Volodimir Zelenski ended in a fiery exchange on Friday,
canceling a planned signing ceremony and press conference for a
critical minerals agreement between the two countries.

Speaker 5 (13:49):
The day before that, we spoke to US Army Lieutenant
Colonel Alexander Vinmanh. He was the Director for European Affairs
in the White House's National Security Council, former Political Military
Affairs Officer for Russia and diplomatic the American embassies in
Moscow in Kiev, the.

Speaker 4 (14:04):
Senior fellow at the Foreign Policy Institute, and the author
of the new book that is out now. It's entitled
The Folly of Realism, How the West Deceived Itself about
Russia and Betrayed Ukraine.

Speaker 10 (14:16):
Lovely launched so far, just lots of attention. I think
the fact is the book subtitle says it all. It
couldn't possibly be more timely. How the US deceived itself
about Russia and betrayed Ukraine. We see that playing out
in real life over the past couple of days.

Speaker 4 (14:30):
We want to get into that. What we want to
ask you, is President trum Trump at least to start.
President Trump said in his press conference with the UK
Prime Minister at the White House about the moves being
taken to quote lay the groundwork for a long term
peace agreement, the President saying this, do you believe there
is a long term peace agreement that can be made
between Russia and Ukraine?

Speaker 10 (14:50):
Eventually there can be. I'm going to go ahead and
say that it's that the prediction that it's not going
to end at all is wrong, and that it's going
to end very soon is also not right. The reason
is that I think the steps that the Trump administration
is taking right now, leaning so heavily into a Russia
first approach, really kind of being quite flexible, seemingly appeasing

(15:14):
Russia with some of the things that it's been seeking,
like Ukraine out of NATO, Ukraine giving up territory outside
of the construct of a negotiation doesn't really make a
huge amount of sense. That the onus is really is
on Russia to compromise. The Ukrainians are more than willing
to compromise. They might not say publicly, but they recognize
that they're not going to be able to retain regain

(15:35):
control of their occupied territory, all of it anytime soon.
That might play out over the course of years. So
it's really the Russians. It's in their court. The way
that we help that along, we don't ease the burden
on Russia. We put additional pressure on Russia. We continue
to support Ukraine. We continue to rush it up a
pressure with regards to economic extensions, and that is what

(15:57):
gets Russia to the negotiating table.

Speaker 5 (15:58):
There doesn't seem to necessarily be the appetite for a
lot of folks in Washington to continue to support Ukraine.
We actually saw this play out over the last couple
of years. Every time a funding bill would come up,
or the idea of providing aid or money to Ukraine
would come up. In your view, make the case to us,
to our viewers, to our listeners about why the US

(16:20):
should support Ukraine.

Speaker 8 (16:21):
So, first of all, we.

Speaker 10 (16:22):
Should grant the fact that the Biden administration didn't do
enough to make the case to the American public. And
at the same time, Trump, as the de facto leader
of the Republican Party, even before he ran for office,
was making the case that Ukraine was a bad guy,
corrupt Russia was the good guy. That is not a
recipe to sustain resolve behind Ukraine. The merits of the
case are pretty straightforward. Ukraine is on freedom's frontier. There

(16:44):
are a bulbwark against aggression, towards Europe itself, NATO specifically,
our strongest, most important security ally and our most important
economic partner. So the case here is that if Ukraine breaks,
Russia advances become stronger. By taking over, Ukraine is more

(17:04):
emboldened to conduct aggression against other within its own backyard
empire building and against NATO itself. So what we're doing
is we're actually making a down payment on security long
term by supporting Ukraine, and we've done it in the
most efficient way possible with a modest amount of aid.
Over the course of three years, Ukraine has stalled out,

(17:26):
Russia has broken its conventional military as weakened Russia and
its mischief making in Europe more broadly, now we're tipping
the scales in Russia's favor. Kind of the worst possible
scenario or the worst logic behind advancing US security.

Speaker 4 (17:43):
You know, some might suggest that the policies of both
democratic and Republican presidencies, you know, have been to really
push back on Russia right for a long time and
kind of keep them at bay. And so that's saying
of like keep your friends your enemies even closer, that
maybe it is time for a different strategy with Russia

(18:05):
between the United States.

Speaker 10 (18:07):
So that's I think contrary to the research in this
new book. I look at six different administrations thirty plus years,
and what I see is a consistent vein of Russia.
First why because we succumbed to hopes that we could
accomplish more with Russia. They dangled bright shiny objects, whether
that's arms control a valiant thing for US to pursue,

(18:30):
or climate change security or cooperation to root out transnational terror.
These things didn't really materialize in any substantial way. We
had pockets of success around arms control, and at the
same time, we succumbed to fears that if we did
more to condemned Russia as it graduated from just mischief
making to hybrid warfare, interfering elections in our country but

(18:52):
in other countries first along their border, and then graduated
to military aggression, we didn't hold the line. We were
very flexible consistently. We should have instilled some element of
conditionality in the way we engaged with them early on,
or condemnation and sanction as they graduated through all of
these different destabilizing events. I think we've been way too flexible.

Speaker 4 (19:15):
So you would just say that President Trump's relationship with
Vladimir Putin is just a continuation of what we've seen
over the last three decades.

Speaker 10 (19:23):
It is a doubling down and probably the most extreme
example of the mistakes that we've made over the past
thirty plus years. My research is clear and concise clear
on this point. I've interviewed the presidents involved, on both
the US side and the Ukrainian side, European leaders, and
what I've seen is a consistent vein of deep flexibility.

(19:44):
Putting Russia first, we bought into this principle that Russia,
large military, large country, was entitled to some sort of
privileged sphere of influence, even when they were they.

Speaker 4 (19:55):
Not with nuclear weapons, were they not on some level.

Speaker 10 (19:59):
On some level they I think the fact is we
made a valiant effort in the nineteen nineties to bring
him on sides. We made huge investments to try to
bring him into the democratic world. Those countless meetings that
Clinton had with his counterpart Yelson, But those didn't materialize. Right,
Russia was just biding its time, letting its economy regain strength.

(20:20):
You really getting fat off commodity prices, prices in two thousands,
and when they gathered their strength then acting aggressively to
advance their efforts.

Speaker 5 (20:28):
Do you remember back in twenty twelve when during that
debate between Mitt Romney and President Obama, when Mitt Romney
said that the US's number one geopolitical foe was Russia,
and he was kind of laughed out of the room,
right at that point? Was he right?

Speaker 7 (20:45):
He was absolutely right.

Speaker 10 (20:47):
It looked like a distant prospect because we were in
the midst of wars in the Middle East. It looked
like it was a bygone error. But if you were
paying attention, you saw the telltale signs in the two thousands,
really years just into Putins or Rain. You saw this
effort to coerce neighbors, muck around in Ukraine's election that

(21:07):
precipitated the Orange Revolution. Anybody that was paying attention to
Georgia in two thousand and eight and this war of
aggression against Georgia, it was clear, but it just didn't
resonate with the American public that wasn't paying attention to
the direction that Russias taking.

Speaker 4 (21:21):
All right, so how are you What are the optics
that you are seeing in terms of what kind of
deal might ultimately bring this war to an end and
what are the implications of that in your view and
how you think it might play out.

Speaker 10 (21:36):
So, first of all, I want to give credit to
both the Zelinsky administration and the Trump administration. They rationalize
these this crazy five hundred billion dollar effort to draw
funds out of Ukraine into something that makes sense. This
deal that looks to be signed is a good deal.
It's something that I talked about when I was in
the White House. I was talking about the fact that
we could cooperate with Ukraine on rare earths. We need them,

(22:00):
we need them to drive our economy. They have them,
they need investment. That all makes sense. Whether it actually
advances the cause of peace, that's not entirely clear. There's
no prescription in there for guarantees that the Ukrainians are
looking for. It doesn't really forestall Russian aggression. What I
see happening is right now, the pattern is the US
is easing the pain on Russia, increasing the pain on Ukraine.

(22:24):
I don't see how that brings Russia to the table.
What I think is going to end up happening is
that the Ukrainians are going to have to step the correction.
The Europeans are gonna have to step in double down
on support as best as they can. They can't fill
the vacuum of US absence. We have the largest military
industrial complex in the world, so they can't match that,
but they could plug some holes and give the Ukrainians
some staying power. Meanwhile, the Russians are taking significant losses.

(22:47):
They're also getting drained economically, and they don't have They
can't act forever with their manpower and then material they're dwindling,
digging into Soviet stackpoles. This is going to have to
play out of the course of the next six nine months,
when the Russians realized that Europeans are going to be
there the Russia, the Ukrainians aren't going anywhere, and when
Trump realizes that Putin is just dangling the prospect of

(23:11):
some sort of a victory form but he's not delivering.
Trump is going to want to win also, so we
may even relook our policy and come back to support Ukraine.
But it's going to be down the road after months
of learning the lessons that we should have learned over
the past thirty years.

Speaker 5 (23:26):
We're speaking with the retired US Army Lieutenant Colonel Alexander Vinmann.
He's got a brand new book out it's called The
Folly of Realism, How the West deceived itself about Russia
and betrayed Ukraine. Given your time studying both the governments
of Ukraine and Russia, what would you say Vladimir Putin's
ultimate goal is.

Speaker 10 (23:46):
He's empire building, he's building his legacy or what he wants.
What I think Russian elites have wanted really across generations
is they want Russia to be strong, and in order
to be strong, that means Ukraine has to be in
the fold. It's a central notion to them that great
Russia could only be great if it has little Russia.

(24:06):
That's what they refer to Ukraine, as and Belarus. Those
are the three kind of the trinity of Russian identity.
So it wants to fold these these countries and regions
back in. And then what it's been doing since really
the sixteenth century, the middle of the sixteenth century, it's
expanded in all cardinal directions until it's been stopped, until
it's hit a wall with other powers. So if they're

(24:28):
given room, they will they will be aggressive and expand.
If they are constrained, that is actually the recipe for
Russia to reformat its belief in this, you know, multipolar
world in which Russia is a central pole, is through
a recognition of the fact that they are not who
they were under the Russian Empire or the Soviet Union,

(24:49):
and they have much more limited capabilities, much more limited aspirations.
That is the recipe for you for Russia to coexist
with its.

Speaker 4 (24:56):
Neighbors, Alexandrew. Does that mean then a US backstock of
some sort for peacekeeping, you know, means we need to
see forces there to US forces to backstop Ukraine. Is
there some other kind of security guarantee that needs to
be part of this.

Speaker 10 (25:15):
I think that we don't have to put this question
of troops on the table inside Ukraine anytime soon. The
Ukrainians are capable of defending on their own with adequate
support from the West.

Speaker 4 (25:26):
Would US workers working in the mineral space and the
critic like that are on the ground in Ukraine? Is
that could that be part of the about it?

Speaker 10 (25:33):
In a peace time context, when there's a ceasefire, I
think there's room for troops, peacekeepers to come in, there's
room for workers to come in to cooperate on rarest.
I think the ultimate security guarantee is that Ukraine does
join NATO, but out in a ceasefire context somewhere after

(25:55):
this war ends, and that prevents Russia from engaging in
aggression down the road.

Speaker 7 (26:00):
I think it's hard.

Speaker 10 (26:00):
It's beyond the belief that we would do that right
now when there's a hot war going on.

Speaker 5 (26:06):
Do you think that's a realistic possibility, given that this administration,
including recently the President, said that Trump will never become
part of NATO.

Speaker 10 (26:14):
I think in this administration there's no chance. But this
administration has a clock. Also, we're talking about my time
horizons beyond twenty twenty eight, when we return back to
our pledges of two thousand and eight. That's a long
time now, right, twenty years back to bring you can
into NATO.

Speaker 5 (26:34):
Do you think that this war will continue until then.

Speaker 10 (26:37):
I'm not sure if it continues until then, because the
Russians don't have the staying power to continue until then.
I think the fact is that the both sides will
probably reassess deeper into twenty twenty five, maybe a start
at twenty twenty six. If the Russians are not able
to get favorable conditions on the ground, then they'll look
for some sort of off ramp.

Speaker 5 (26:57):
It's surprising to hear that just because it really truly
does seem like President Trump wants to end this war.
He talks almost every time we hear him, We hear
the President speaking a lot. He speaks to the press
a lot. He always talks about the young people who
are being killed in this conflict. It really seems to

(27:19):
affect him. It really seems to motivate him to want
to end this war.

Speaker 10 (27:23):
I think that might be true, but he's going about
it repeating the mistakes of the past. I think the
fact is what's clear to me. If he wants to
bring peace to the region, he should recognize that it's
not the Ukrainians that are in the pediment to piece.
They're going to have to do what they absolutely must
to preserve their sovereignty and territorial integrity, maybe giving up

(27:45):
some territory in the short term, but it's the Russians
that have absolutely maximalist objectives. They have not given up
on Ukrainian capitulation. They have not given up on Ukraine,
you know, as a neutral player with no military that
they could attack at will somewhere down the road. The
party that he needs to recognize as an impediment piece.

Speaker 4 (28:04):
What can you tell us about you were in the
first Trump White House, first administration, and as we are
now seeing the beginning of the second term play out,
what insight can you give us about how the president
thinks about issues and how things operate, and how maybe
different it is this time around. If you think it
is different, again, you're looking from the outside.

Speaker 10 (28:24):
I think from my perspective what you have and you
could still see the tension between the policy pros that
try to rationalize these decrees that Ukraine has to give
five hundred billion dollars and come up with this pretty sophisticated,
interesting deal on rarets. We had a lot more of
those folks in the cabinet back then. You had you
know what we're called adults from the room. These are

(28:46):
accepted foreign policy professionals. Right now you have a lot
more yes men and loyalists. So you have stumbles from
Secretary of Hegseth, Secretary of Defense that says makes these
declarations as if he's a Fox News ang or instead
of the Secretary of Defense holding out that negotiations that
a lot of these issues have to be resolved in negotiations.

(29:06):
So I think there's still going to be an effort
from the professional class to try to add you know,
clarity and resolve these these pronouncements that Trump makes. It's
just much much tougher because I don't think the president's
getting he's getting he has yes men, and he's not
getting you know, the most knowledgeable council. I advise them
to read my book and they could see what the

(29:27):
shameless plug there, but to understand the mistakes of the
past and how we can do better. The way we
do better is we're not so transactional. We do not
look at everything as a deal where we need to
maximally extract. I mean, it's it's not this is not
a business environment.

Speaker 4 (29:41):
We can't maxinate the balance of every administration because there
are deals all the time, whether it's a Democrat or
Republican right of deals being made to benefit citizens countries.
But there's always kind of a give and take.

Speaker 10 (29:52):
But you want the but you want the buffet deal.
You want the buffet deal. That's long term, longsighted, and
that's where the growth is over the course of you know,
not just a psych but over a long term. And
what I'm prescribing here is that we don't we're not
so transactional. We start thinking about the things that really
matter to us. Democracies are the bedrock of both our
security and economic prosperity. That's where we should be investing resources,

(30:15):
not the bright shiny object that's that's we're immediately in
front of us.

Speaker 5 (30:18):
You, I think it's fair to say much of your
career was not political in the sense of partisan politics.

Speaker 10 (30:24):
None of it was until the very end.

Speaker 5 (30:26):
It's so not none of it, But until the very
end you became certainly a lightning rod for politics. And
you know, there are a lot of folks on the
right who don't necessarily agree with you, especially after you
testified in twenty nineteen and the impeachment hearing that said,
do you still have the ear of people in the

(30:47):
government right now? Do you have communications with them? Do
you feel like you can talk to them?

Speaker 10 (30:52):
So I feel like I could talk to them because
I understand the terms in which we talk to him about.
You know that Trump wants to be the winner and
how to get a deal or something like that. So
I could talk to him understanding the Trump White House
and a little bit about a state of mind. But
I have to contend with the proclivity is he likes
Russia and he dislikes Ukraine. He likes strong men, he

(31:13):
doesn't like our democratic allies. So there's only so much
you could do there. At the same time, I don't
really have the means to talk to Republicans. I'm happy
to try and talk to him in the merits. You
mentioned that, you know, I became a political figure. I
never really thought of my I still don't think of
myself that way. I try to talk in terms of
national security. What I in my twenty two years in

(31:36):
the military, working at the Pentagon, writing the strategy for Russia,
all these different roles, What is it that's best for
US national security? Now, some people might see that my
being drawn into testifying in front of Congress when I
reported a presidential corruption is a political actor.

Speaker 8 (31:51):
But it wasn't.

Speaker 10 (31:52):
It was a duty as a as a somebody that's
wore notes to the Constitution and then called by Congress
to testify about what I witnessed. But I feel like
there's not that much opportunity for the sides to talk
together at all. It's not just me, it's you know,
the communications between the folks that are perceived to be

(32:12):
on the left and the folks that are perceived to
be on the right. Although I don't know if I
meet that bill, some people might call me a hawk
or something of that nature, because I think we need
a stronger, more muscular policy towards Ukraine.

Speaker 8 (32:23):
So it is, it's just.

Speaker 10 (32:25):
A moment where we're very, very tribal, and we were
not communicating with each other, even if it's on the merits.

Speaker 4 (32:30):
Any regret in the action that you did in terms
of testifying before Congress, I know you were subpoenaed, but
we've seen subpoenas be issued and not everybody kind of testifies.

Speaker 10 (32:39):
So absolutely not. I felt I feel like those people
that skirted their responsibilities for whatever personal I mean, they
did it for personal reasons. They did it because they
didn't want to be the lightning rod or subject to criticism.
That wasn't my job. My job was as a military officer.
I was obligated by a law to up here and testify.
If I had been given awful order by Trump back

(33:01):
then to not testify, things may have ended up differently
we'd had to play out in the courts, But the
bottom line is I felt like I did was what
I did was right, I felt like I fulfilled my
duty as an officer, and I could look my daughter,
who's now fourteen in her eyes and not say thy
shirked responsibility. And you know, continue to this day to
frankly advocate for the things that matter to me, including

(33:24):
a book that lands a month in the Trump's administration
that's critical of the mistakes that we seem to be
repeating instead of learning from the past.

Speaker 4 (33:32):
One thing I want to ask you, as a member
of the military retired, We've seen the firing of the
Joint chiefs of Staff, We've seen other military leaders being
let go, also the top lawyers, which is considered so
important in terms of military actions and making sure that
there is kind of a level of security safety. If

(33:56):
you will help us understand the military within a second
Trump White House, and I do wonder about the independence
of sure, because there are layers. When we talk about democracy,
there's judicial, there's like like we talk about checks and balances,
but military is an important part.

Speaker 10 (34:14):
So the military is non political. It serves at the
pleasure of the president. Everybody I swear as an oath
to the Constitution, and officers in that chain of command,
commander in chief being the president of the United States.
The thing is, this is not about these folks being disloyal.
It's about the ability to ensure that when the president

(34:36):
directs any element of the executive branch, that he has
absolute loyalists that don't question anything. That was the reason
that these three star jags were fired. These attorneys is
because they interpret the law. They will determine and advise
their four star bosses on whether the law orders that
are coming down are legal. Now, the military going to

(35:00):
follow the president's instructions if it's if it's a.

Speaker 8 (35:04):
Lawful order, lawful awful, they'll follow.

Speaker 10 (35:07):
The instructions because he's the commander chief. But what they
won't do is they won't follow illegal orders. And I
think this effort to sideline these three stars is to
make sure that nobody interprets that any instructions that come
from the president, not that anything has happened yet, but
at any point in the future, that everything is interpreted
as legal and that the officers in the military follow blindly. Really,

(35:29):
so guardrail has been removed, absolutely, a guardrail has been
removed these these I know some of these four stars
that I served with them, that have served that none
of them did anything disloyal. I think, on the face
of it, you know, it was I think it was
an attack on this whole DEI idea that there was
some diversity amongst these folks, but none all of these
folks who are going to follow the president's orders as

(35:50):
long as they were legal, but that wasn't good enough.

Speaker 5 (35:53):
Does it worry you that this guardrail has been removed?

Speaker 10 (35:55):
I think it it's it's a it's a warning sign,
and it's it's something that we should be mindful and
cautious about. But we need to understand that the military
is at large institution. These four stars have deputies that
are four stars also, and the three stars that were
removed to have deputy two stars. So there are plenty
of layers of folks that are going to hold the line.
It just has gotten a little bit harder than it

(36:16):
was before.

Speaker 4 (36:17):
Well, you know, you talk about levels, right in terms
of holding everybody to the true in military, what about
someone like Secretary of the State Department Mark Rubio, Like,
what are your thoughts about him and dealing with global
diplomacy and talking with leaders directly, and yet obviously they're

(36:38):
at the grace of the president.

Speaker 10 (36:40):
So I've had plenty of criticism of excusing of Mark
Ruby in the past on policy differences. But he is
a policy hand. He's been in the Senate for a while.
He under he's been on Intel committees. He understands the
state of play in the world, the seriousness of these
negotiations with Russia, how that might implicate Russia Chinese aggression

(37:03):
in the Pacific. Uh, he is going to try to
do the best he can. I think I'm comfortent well.
I think he's going to try to do the best
he can. Whether he holds whether he has the courage
the fortitude to withstand actors that don't want to really
care or don't care about national security is a different story.
I think Mike Walts probably is in the same category.

Speaker 11 (37:25):
Uh.

Speaker 10 (37:25):
They're never going to criticize the president directly because they
know what happens. That's you know, the lessons have been
learned in the first Trump administration, and I think they're
going to try to probably do the best they can
to rationalize some of the things that have been directed
into into policy that could that could advance US national
security interursts. I have more confidence in these folks than
I do in the purely political actors that you know,

(37:48):
really I have are unprepared for the positions they've been
put into.

Speaker 4 (37:53):
What do you say to people who say, Alexander Vintman
has got an ax to grind against the president. You
testified against him, You suit some allies of the president
for legendimidation of impeachment hearing. So what do you say
to those? Because you've got this book out, it is
very timely considering the geopolitics that consume much of what
we talk about, what do you say to that?

Speaker 10 (38:14):
My axe is sharp, actually, and I'm prepared to wield
it in order to advance US national security. And that's
what my life has been about, a life of service
to defend the nation. And if I feel like there
needs to be something called out or criticism on the
merits of national security and the dangerous country faces, I

(38:36):
will wield that axe. But it's and I, frankly do
I have. I don't like Trump. I mean he personally
attacked my family and targeted my family, made us the
targets of harassment and threats and things of that nature.
But mainly this is about this, this was my doctoral dissertation.
It's about how do we keep this country safe and prosperous.

Speaker 5 (38:57):
Just taking a hard turn in the last thirty six.

Speaker 4 (39:00):
We all need to lighten up a little bit.

Speaker 5 (39:01):
I've had this book on my desk and whenever someone
walks by, they say, I loved Viman in Curb Your Enthusiasm,
the penultimate season you and Larry David. How was it?

Speaker 10 (39:11):
It was lots of fun. And I did that season
and actually the final episode, and it was it was
a joy to do that. It was way outside of
my comfort zone, being dragged into the public eye. But
you know, open to these new experiences, all sorts of
different friends that I never had before, being able to,
you know, maybe leverage my voice in the way I
didn't before. So it's a mixed It was a it's

(39:32):
a blessing in that regard that I could, you know,
lighten people's lives on Curb or give people some hope
on the national security front. I'll embrace it, but I
don't look back.

Speaker 5 (39:43):
Well, if you talk to Larry, tell him we need
another season even though there's a finale. Hey, I really
appreciate you taking the time. We've been speaking with retired
US Army Lieutenant Colonel Alexander Vinman. It's a brand new
book out. It's out now. It's called The Folly of Realism,
How the West Deceived itself about Russia and Betraying Crane.

Speaker 2 (40:07):
This is the Bloomberg Business Week Podcast. Listen live each
weekday starting at two pm Eastern on Applecarplay and Android
Auto with the Bloomberg Business App. You can also listen
live on Amazon Alexa from our flagship New York station,
Just Say Alexa Play Bloomberg eleven thirty.

Speaker 4 (40:25):
On Friday, a critical minerals deal between the United States
and Ukraine was scrapped after President Trump's heated exchange with
Ukrainian President Volodomir Zelenski in the Oval Office. We've been
talking about this now. The fate of the natural resources
deal and a peace deal overall remains up in the air.

Speaker 5 (40:40):
On top of that, the world's top commodity traders are
rushing to ship copper to the US from as far
as Asia as Donald Trump's threat of import tariffs on
the metal creates a huge opportunity for profit. Yet the
question remains just how valuable are these metals and minerals.

Speaker 4 (40:55):
Someone who does know a thing or two about metals
and the mining sector, In fact, he knows a lot
is Scerlanowski. He is founder and group CEO at Oriyan
Resource Partners. We note again that we spoke with him
before the US Ukraine talks broke down.

Speaker 12 (41:09):
Copper is an imported material buy and large in the
United States. Some domestic production exists, of course, but it
is a big It is a big export from South America,
particularly Chile, into the United States. Tariffs will depending on
what shape they take, and obviously the devil is in
the details, will certainly impact the price of landed material

(41:30):
in the United States. I believe that there is probably
an investigation now at the heart of this as to
nd shaped material for various forms of copper. It's also
a discussion about what to do about copper scrap versus
refined primary material, but again it's too early to tell

(41:52):
at this point. The details are vital to determining what
the exact impact would be.

Speaker 4 (41:59):
Right, and it's an investor right. It's the section two
thirty two of the Trade Expansion Act. I'm reading from
our reporting it could lead mainly to terrorists on copper imports,
which we know. If indeed that would raise costs for things,
you know, it is interesting that's going on a headline
crossing the Bloomberg coming from Reuters about Ukrainian President Zelensky

(42:21):
playing to meet with President Trump on Friday. Earlier today,
Oscar we had talked about a possible deal with Ukraine
and the United States to develop Ukraine's natural resources, and
we've talked about minerals, in particular, mineral deposits there. What's
the reality of what is there in Ukraine, Where's the value,

(42:42):
what's the amount.

Speaker 12 (42:45):
It's actually a fairly interesting dilemma for the Ukraine. They
do have a fair degree of iron ore, they do
have tungsten, they have titanium on sites. There are at
least four mining companies that we know of that are
developing or looking at. It's you know, increased refining capacity

(43:06):
in that country to shift metal.

Speaker 7 (43:09):
Some of the best resources, though.

Speaker 12 (43:11):
Are really in this sort of ray zone where it's
territory that's currently occupied by Russia or very close to
the territory occupied by Russia. And the question will be
how much of that material will stay with the Ukraine
and how much will not. It's impossible to tell that
at this point, but there's there's a lot of optionality

(43:34):
in that country right now, and I believe that it's
something that really speaks to how the US and and
and allies of the US are are becoming more and
more aware of the centrality of some of these mineral
sources and and particularly how to process those into final

(43:55):
shaped material that they that they can use for industrial
and military and other uses.

Speaker 4 (44:02):
So it's a rich area. It sounds like it might
be some questions about who actually has access to that territory,
right either Ukraine or Russia. But it's is it a
rich area. We did some reporting that said the president
was looking for the equivalent of about half a trillion
dollars from rare earths, mainly used in high strength magnets.

(44:24):
Despite reports of ten trillion dollars in mineral deposits, Ukraine
has no major rare earth reserves that are internationally recognized
as economically viable. Is that correct?

Speaker 7 (44:35):
That is correct.

Speaker 12 (44:37):
You have to, of course assume certain price parameters when
you make something economic or non economic. I think the
more important question then whether not the reserves or resources,
should they be economic or not at this point is
what processing capability can be put to work on this.
I mean, the rare earths themselves are not particularly rare.

(44:59):
What they is very very difficult to separate from host
rock and the expertise in the world in doing that
it really resides in China, right and so the question,
the question becomes, you might have the best war body
in the world in the Ukraine, but if you don't
have the processing capacity or knowledge, it might as well

(45:20):
just sit in the ground.

Speaker 4 (45:22):
Well like bingo, right, like, it doesn't matter who has access.
But ultimately then you've got to have a relationship with
China in order to process.

Speaker 5 (45:30):
So well, why can't the US or why can't Ukraine
process these?

Speaker 8 (45:35):
Like?

Speaker 5 (45:35):
Is it as difficult as making advanced semiconductors?

Speaker 12 (45:40):
It is incredibly difficult processes about a nineteen step chemical
toxic process that needs as much art as science to
be successful economically, and the US and the West have
some capability in that area, but the real stars.

Speaker 7 (46:01):
Are the Chinese.

Speaker 4 (46:04):
So I am curious, we are curious. You're at this
Global Metals Conference BMO. Global Metals Conference BMO. What is
it that everybody's talking about? What's top of mind?

Speaker 12 (46:18):
I think there's two main topics. Obviously, the resiliency of
the gold price. It's you know, we find ourselves in
unusual circumstances, and that the goal price is stable to
rising and the dollar hasn't exactly been a poor performer.
That's that's atypical Historically. Usually the gold price is seen

(46:41):
as the hedge against the US dollar, and so they
move in opposite directions. They've been moving in the same
direction largely now for a little while, and that anominally
has led to a lot of conversations here in Florida.
The second topic, obviously, is is to some degree what
the West will do about critical materials, critical minerals. And

(47:04):
the first you know, initiatives out of the administration recognizing
ports to that, and you know, we were pretty happy
in this conference to see sort of a more joined
up initiative on sourcing that and potentially processing that. And
I think what you heard today about the copper situation

(47:26):
and the EO on that is really potentially a move
to reshoring some of that processing capacity back into the
United States.

Speaker 5 (47:37):
Do we do we want to be processing copper in
the United States?

Speaker 7 (47:42):
Absolutely we do. Yes.

Speaker 12 (47:44):
It is it's called doctor copper for a reason. It
is in central metal in many parts of the US
economy and the US military. And having that onshore and
being able to make sure that you have access to
that vital raw material on your own terms is really
essential to you.

Speaker 5 (48:05):
How did it move out of the US? Was it
like everything else? It was just cheaper to process out
of the US.

Speaker 12 (48:10):
It was cheaper to process outside of the United States. As
part of, you know, the sort of trend of globalization.
The lowest best cost center for processing was not the
United States, and so therefore processing solely moved out of
the country. And we find ourselves in a place now

(48:30):
where we want to we want to balance that out
a little bit, and we want to make sure that
for national security and other reasons, we.

Speaker 7 (48:37):
Have access to vital raw materials. And I think just.

Speaker 5 (48:42):
Help us understand, because this is this I'm out of
my element pun intended. Sure, but just in twenty seconds,
do we need to have the copper in the ground
here to process it? Or do we import the raw
material and then process it just twenty seconds?

Speaker 7 (48:57):
Both are possible.

Speaker 12 (48:59):
Obviously, an integrated supply chain in the United States is
the most favorable option, but certainly raw material concentrate form
copper and then processing it here as a second alternative
as also very possible.

Speaker 7 (49:11):
Either way process material Copper is.

Speaker 4 (49:16):
God to we get to run come back soon. This
was fascinating. Oscar, thank you so much. He's the founder
and group CEO of Orion Resource Partners.

Speaker 2 (49:27):
This is the Bloomberg Business Week podcast. Listen live each
weekday starting at two pm e stern up on Applecar
Play and the Android Auto with the Bloomberg Business app.
You can also listen live on Amazon Alexa from our
flagship New York station Just say Alexa Play Bloomberg eleven thirty.

Speaker 4 (49:45):
We go now from access and control of the world's
materials and minerals to the control over changes to the
US federal government made by Elon Musk and the Department
of Government Efficiency. We were talking about.

Speaker 5 (49:55):
DOJE earlier this month. Nineteen mostly democratic controlled states sued
to blo Elon Musk's DOSEE team from accessing confidential records,
citing potential overreach and data privacy violations. One of those states, Connecticut.

Speaker 4 (50:09):
William Tong is the state attorney general for Connecticut. He
joined us to talk about Elon and doge's ability to
access sensitive government data.

Speaker 13 (50:17):
What's most important is that democratic state attorneys general are
taking action to protect our states. You know, no matter
who the president is, it's my job to protect Connecticut families,
and right now they're exposed.

Speaker 4 (50:31):
You know, all about money that essentially should come to
the states or what in.

Speaker 13 (50:35):
Particular money are social security numbers, banking information, important private
information that's not just in the US Treasury that may
be at the Department of Education, that may be at
the IRS. Right an unelected billionaire and his army of
hackers and want to be stormtroopers are now tearing up
the federal government. Nobody elected them. There's no authority or

(51:00):
statutory basis to give them this power to.

Speaker 7 (51:02):
Go in and tear up the federal government.

Speaker 13 (51:04):
It's as if I said to you, Carol, you know
what's Donald Trump came down here and said, Carol, you're great.
I'm going to put you in the most secure and
nuclear weapons facility in the US Armed Forces. I'm going
to give you the password, just log in and have
at it. Would anybody have a problem with that?

Speaker 4 (51:20):
Is it, what's being done, who's doing it, or that
there is no transparency to it.

Speaker 13 (51:25):
It's all of that, and it's the damage right now.
You know, when he gained access to Treasury's central payment system,
the Bureau of Fiscal Services. He had control one guy
and again his army of hackers to cut off Social
Security payments, veterans benefits. Right, they're already canceling contracts at
the Department of Education. It's real world impact right now.

(51:49):
Money is not flowing to states. The Medicaid portal was closed,
the head Start portal was closed, important grants in federal
funding for trans rotation products, electric vehicles, climate related investments.
All of those, depending on the day and depending on
the hour, they're open or they're closed.

Speaker 5 (52:08):
General Elon Musk did speak during a cabinet meeting or
ahead of a cabinet meeting. He said that does is
helping fix government computer systems. Overall, DOGE goal is to
address the deficit. What would you say the folks out
there listening who said, this is what Americans voted for.
They voted for more efficiency, They voted for spending government
spending to go to be reduced and as the President says,

(52:33):
a reduction and again his words, waste, fraud, and abuse.

Speaker 13 (52:36):
Yeah, they didn't vote for mass unemployment, they didn't vote
for mass layoffs. They didn't vote for an unelected billionaire
to wreck families in Connecticut and across this country. You know,
it's not just a federal employee in Alexander or Virginia.
And by the way, that's important too. If mom or
Dad gets fired tomorrow, many families, even families that do

(52:59):
well and listen to this sho you know, they live
thirty days out or check to check, and that family
may have relatives in Connecticut. They are federal workers in Connecticut.
There are nonprofits in Connecticut that are laying people off
right now because they rely on, anticipate federal funding that
is not flowing, and they have to make decisions amidst

(53:21):
all of this uncertainty. And so families, children are being
hurt right now, and it's my job, as Connecticut's turning
general to protect them.

Speaker 5 (53:31):
Do you have specific examples of how many workers have
been affected in Connecticut, how families have been hurt in Connecticut?
What can you point to as sort of real world effects?

Speaker 13 (53:39):
So, for example, there are highway programs right now that
aren't proceeding, that aren't going forward because funding from the
Department of Transportation is not flowing. Remember, government isn't just
a big employer, it's one of the biggest employers. It's
also one of the biggest investors, spenders, and customers. And
if the federal government is not there to buy, I

(54:00):
invest to be a customer, then projects don't happen. And
that impacts not just state government, not just the federal government,
but all of the businesses, small businesses run by people
in Connecticut, small business people who rely on that part
of the economy.

Speaker 4 (54:16):
Some would argue, though, just because it's the biggest doesn't
mean it's the best or being run the most efficiently.
So what do you say to that.

Speaker 13 (54:23):
Yeah, so everybody, not just at the federal level, but
at the state level, should be working on making government
more efficient. And I don't disagree with that. I don't
think anybody does. But number one, you got to do
it in compliance with the law. You have to do
it in a way that's safe, that maintains the safety,
for example, of our personal information. Just because you want

(54:44):
to make treasury more efficient doesn't mean you can affect
the largest data breach in American history and expose all
of our social Security numbers and god knows what happens
to that. Does that end up on the dark web,
and then we all become victims of scams, And by
the way, that all comes back to as the state
attorney general when my phone starts ringing off the hook.

Speaker 5 (55:04):
What would you propose is the right way to do it?

Speaker 13 (55:05):
That Congress exercises its power to do that. The Constitution
is very clear, under the spending Clause of the US Constitution,
it's Congress's prerogative to decide how the nation's resources get spent.
Congress needs to do its job.

Speaker 4 (55:21):
And it is Congress not doing its job right now?
Or do you feel like it's certainly not along party lines?

Speaker 13 (55:27):
Congress in many respects feels broken. But you know, one
good example of how broken it is is that Congress,
it seems, in this budget proposal, proposes to cut Medicare
for the states. Are you kidding You're going to go
after medicare healthcare children? You know, I said when the
federal funding freeze was announced that this is a war

(55:49):
on the American people. And maybe that felt a little
dramatic at the time, but what's clear now four weeks
in is that it's a war on America's children, right
medicate healthcare, head start education funding, the Department of Education
saying they're going to cut education funding, not just for
colleges and universities, but for.

Speaker 8 (56:09):
All levels of education.

Speaker 13 (56:11):
If you can't meet their standards on what's acceptable not
acceptable in terms of your curriculum and your programs, this
attacks kids, children, families. What is the point of that.

Speaker 5 (56:22):
You've been in this position since twenty nineteen, that was
a few years into the first Trump administration. You were
active in big legal suits against the Trump administration during
that time as well. We've talked a little bit about
over the last few months how this administration feels a
little different because of the people they've brought in. How
would you say the legal aspect of this has been different.

(56:44):
Do you think the Trump administration was much more prepared
this time around.

Speaker 13 (56:47):
No, it's more lawless and more unconstitutional. And yes, it
feels like they were more prepared to do the wrong thing.
They were more prepared to break the law. They were
more ready to break the law. You look at what
are some examples of break and dan Bonjiorno, Well, first
of all, the very first thing they did and we
sued on, which is to abrogate birthright citizenship and to

(57:10):
eliminate birthright citizenship. That is utterly unlawful and constitutional, unconstitutional.
Look at the Fourteenth Amendment, and what the words the
fourtheenth Amendment say. They're very clear. If you're born on
American soil, you're an American citizen period. If not for
the fourteenth Amendment, Tim, I'm not sitting here. I'm an
American citizen by right of my birth. And it's as

(57:31):
if Carol as if a democratic president, let's say some
future presidents said, Okay, you know what, no Americans should
carry firearms. It's that unconstitutional. People would lose their minds
if some politicians said that. And Donald Trump is doing
that with birthright citizens.

Speaker 4 (57:47):
Jerial Ton, what do you think will happen to Trump's
Birthright Citizenship executive Order and his plan to also ban
transgender people from the military.

Speaker 13 (57:55):
I think his effort will fail, and I think the
Supreme Court will do the right thing and that it
will read the fourteenth Amendment to say and mean what
it says, which is that if you're born in America,
you're an American.

Speaker 5 (58:07):
Is that the ultimate test of the president's policies? Do
we continue to see legal challenges to the extent that
pretty much everything just goes to the Supreme Court.

Speaker 13 (58:16):
Look, we every middle schooler in America knows that we
have a system of checks and balances. Without checks and balances,
there's no America right there. If the president has unchecked power,
then Congress becomes optional, our rights become optional, States become optional,
and so checks and balances. These lawsuits are about checks

(58:38):
and balances. Congress right now isn't a very effective check,
and so states state attorneys general. We are a check
through the courts, through the judiciary, through the federal courts
on a president who doesn't respect and follow the law.

Speaker 4 (58:53):
You know, it's interesting there definitely have been some protests
at you know, community meetings with members of Congress. But
going back to that, as you say, Congress is there
to enact the law right and help make decisions. But
people in general, the president is still popular. People agree
with what he's doing. So I go back to kind

(59:14):
of Tim's question. If you look at Americans, put this
president in the popular vote. This time he won the
popular vote. He won it all, and so there are
a lot of Americans who think this is the right
direction for the country.

Speaker 13 (59:29):
I guess I don't want to quibble with, you know,
whether he's popular or not. I think he's underwater. According
to most polls, meaning less than fifty percent. I think
it's pretty clear that this country has split pretty evenly
fifty to fifty. It was a very close presidential election.
I don't think most Americans who voted for Donald Trump,

(59:51):
I think I don't think most Americans expect him to
break the law and to take the Constitution and set
fire to it. I don't think anybody. And this is
why I think Elon Musk and again his army of
hackers are very unpopular, because nobody said, turn the keys
over to somebody that we didn't vote for, give them

(01:00:12):
the password, give them the codes, and have at it.
Do whatever you want and hurt states and people directly
right now. The damage is being done right now. If
the state of Connecticut is working on its state budget
for the next two years right now, we'll finish that
work in early June. If they blow a huge hole

(01:00:35):
in federal funding, we're in big trouble. And many states
are the same position. And I would say something by
the way, really correctly too. Yeah, red states are much
bigger takers of federal funding.

Speaker 4 (01:00:45):
No, it's a really good point we got to leave
with there. General Tom, thank you so much. This is
Bloomberg Business Week.

Speaker 2 (01:00:55):
You're listening to the Bloomberg Business Week podcast. Catch us
live weekday afternons from two to five pm Eastern. Listen
on Applecarplay and the Android Auto with the Bloomberg Business app,
or watch us live on YouTube.

Speaker 4 (01:01:09):
Plenty Ahead in our second hour of the weekend edition
at Bloomberg Business Week, including how Walmart's CEO is navigating
a second Trump presidency all while going after Amazon's e
commerce crown.

Speaker 5 (01:01:20):
Plus the business of Botox, so called medspas, and a
first glimpse of Rome's legendary Los Marbles.

Speaker 4 (01:01:26):
First up this hour, he is a former Google engineer
that helped launch the company's self driving car program that
we now know today as Wai Moo. Today he is
the CEO of Pronto. It's an autonomous vehicle company for
the mining and trucking industries.

Speaker 5 (01:01:40):
We're talking about Anthony Lewandowski, and now a new deal
is poised to make him one of the biggest operators
of an autonomous truck fleet. Writing all about Anthony Lewandowski
is Bloomberg BusinessWeek columnist and co host of the Elinink podcast,
Max Chafkin.

Speaker 14 (01:01:53):
Anthony Lewandowski is really the single person most responsible for
creating driverless cars, as like an industry. He created a
He was involved in the original DARPA Grand Challenge, which
was this thing in the early two thousands where the
military had a bunch of technologists try to make self
driving cars. He built a prototype self driving Prius that

(01:02:15):
was sold to Google and played a really important role
at Google for years, and then left to join Uber's
self driving car effort. Played an important role there, and
then got into this intellectual property dispute with Google that
led to him pleading guilty to stealing trade secrets.

Speaker 8 (01:02:34):
He was actually sentenced to a.

Speaker 14 (01:02:36):
Prison term, but was pardoned by Donald Trump, and he
kind of emerged from this experience as a.

Speaker 8 (01:02:42):
Critic of the driverless car industry.

Speaker 14 (01:02:45):
Basically, Anthony Lewandowski's position is that these robotaxi services so Waimo,
Tesla is trying to come up with one, as we
just heard, and also GM Cruse which just folded theirs,
that these businesses are basically much further away than most
people realize, in fact, further away than the companies themselves

(01:03:06):
are willing to admit.

Speaker 8 (01:03:07):
He's been talking about.

Speaker 14 (01:03:08):
This for years and he is offering kind of a
different approach, which is bringing these technologies to essentially industrial
sites where they are still essentially driverless cars. They're just
driverless dump trucks, but they're not on city streets. They're
on private land, and they're monitored more aggressively because they're.

Speaker 8 (01:03:29):
Essentially heavy duty construction equipment.

Speaker 14 (01:03:31):
So instead of having to worry about cyclists and potentially
causing traffic jams and the interaction between customers and so on,
all these problems have really been deviled the robotaxi industry
and continue to bi devil the robotaxi industry. And one
of the reasons these companies have been able to turn
profit they basically take all that out of the equation
and we're just talking about a dump truck moving some

(01:03:52):
very heavy rocks from like one corner of a rock
quarry to another. Obviously, this is a smaller business in
the near term than in something like robotaxis, but I
think this company, Pronto, is showing that it's a real business.
And the news that we reported on today is they
signed a deal to supply driverless dump truck technology to

(01:04:14):
a dozen sights a dozen quarries around the world through
a German company called Heidelberg Materials. Basically, we're talking about
one hundred or so trucks, which doesn't sound like that much,
but having seen these trucks in person, they are very
very large.

Speaker 8 (01:04:29):
So it's so these are expensive, right, yeah, exactly, And
that's one of the reasons.

Speaker 4 (01:04:34):
Why inexpensive I was being sarcastic.

Speaker 14 (01:04:36):
Yeah, yeah, no, I know, is they are very expensive.
These are expensive items. And one of the reasons this
is an appealing area for this technology is because of
the expense. Like then, adding the sensors isn't such a
big cost.

Speaker 8 (01:04:49):
So we don't know exactly how much the sensor kit
in a way more.

Speaker 14 (01:04:53):
Costs, but it very likely costs more than the cost
of the car itself.

Speaker 8 (01:04:58):
You know, people have asked stimated in the hundreds of
thousands of dollars. So you're talking.

Speaker 14 (01:05:02):
About really expensive technology and then a lot of expensive
technology to support that. So whereas in the dump truck,
it's the sensor kit is a smaller percentage of the total.

Speaker 5 (01:05:13):
But Kamatsu and Caterpillar, as you point out in the piece,
already have this TECHNI I don't want to say this technology,
but they already have drivelogy.

Speaker 14 (01:05:19):
I'd say this is an area while yeah, they have
been really successful and This is the point that Lewandowski
makes a lot that you know, as much as we've
seen a lot of headlines about driverless robotaxes, when you
really get down to it, it's we're not talking about
that many cars, you know. I haven't looked at the
Waimo numbers lately, but my guess is in the hundreds,

(01:05:40):
maybe maybe around one thousand. I mean, that's kind of
like similar, and we're talking about like little trips. Those
are kind of similar numbers to what Komatsu and Caterpillar
have deployed in terms of these gigantic dump trucks, and
I think the revenue on the kind of industrial side
for now is probably a lot greater.

Speaker 8 (01:06:01):
I mean, obviously, the hope with.

Speaker 14 (01:06:02):
Weimo and Tesla is that you're going to make it
up on volume. You're going to find ways to do
this more inexpensively. Once it's deployed in a mass scale,
then it's going to change everything. The economics are gonna
get a lot better. But we haven't seen any of
that yet.

Speaker 4 (01:06:16):
Remote controlled versus driver lists, like, what's the kind of
nuances here?

Speaker 14 (01:06:20):
So these are these are autonomous in the sense that
like the computers are making the decisions very very similar
to what's happening in a WEIMO or something like that.

Speaker 8 (01:06:30):
With with with Waymo's.

Speaker 14 (01:06:33):
And with some of these other robotaxi solutions, you do
have some remote support. Now some people would call that teleoperation.
The companies, you know, there's a lot of back and
forth about how.

Speaker 8 (01:06:45):
Much remote support are they actually doing.

Speaker 14 (01:06:47):
Part of the the discussions that happened in the wake
of Cruises collapse where there were reports showing that these
these people and call centers were intervening very very often.

Speaker 8 (01:06:57):
So you're talking about a huge amount of support.

Speaker 14 (01:06:59):
Now on an industrial site, you also have some support,
right there is somebody monitoring the overall site, and the
tasks that are being done are incredibly repetitive. So basically,
and I've been to some of these sites, it sounds
kind of cool, but then when you experience it, it just
it's it's very competitive. The truck like starts at a
rock crusher, it drives to a mining pit, picks up

(01:07:20):
some very large rocks and does the same route back
and forth.

Speaker 8 (01:07:23):
And the whole point is again the same route back
and forth.

Speaker 14 (01:07:26):
There's no risk of a police car coming in, there's
no risk of a little dog running out there, are pedestrians,
are people, but all those people are wearing you know,
bright orange vests, and those people have a lot of
experience dealing with heavy machinery, whereas when you're talking about
on a city street, you know, none of that's true.
You have a ton of people. It's very unpredictable, and
those people, as we've seen from some of these incidents

(01:07:49):
in San Francisco, are not necessarily like their interest is
not necessarily to allow the robotaxis to operate efficiently.

Speaker 5 (01:07:56):
You're not going to be hailing a huge dump truck
or rock crusher on the side of the road to
drive you somewhere hopefully hopefully not. You know, these jobs
that typically are the ones who that you're talking about
that these replaced. Those are pretty high paying jobs, require
a lot of training. In some cases, they can be unionized.
Are those impediments to scaling this well?

Speaker 14 (01:08:19):
And I mean part of the appeal here, frankly, is
that the operators who operate these dumb trucks are a
lot harder to find than uber drivers. And one of
the reasons why Crews and Waimo have lost so much
money on these robotaxi businesses is that you put a ruber.

Speaker 8 (01:08:34):
Driver in a Corolla and that is a very low cost.

Speaker 14 (01:08:36):
Solution, whereas the kind of people who operate these this
heavy machinery, uh, these are much higher paying jobs that
require a lot of experience. The response from Anthony Lewandowski
you talk to other people in the industry is basically
number one, Look, these.

Speaker 8 (01:08:51):
Industries have a labor problem.

Speaker 14 (01:08:53):
This is not it's not like there's a surplus of
construction workers. Actually, they they're they're struggling to find people
can operate these dumb trucks and that at these sites.

Speaker 8 (01:09:02):
It's not like they're losing staff.

Speaker 14 (01:09:04):
What they're doing is taking somebody who would have been
driving a dump truck and putting them you know, operating.

Speaker 8 (01:09:10):
An excavator or something a sort of higher difficulty job.

Speaker 14 (01:09:13):
You know, even in these loops that are automated, right,
there's a lot of automation. The crusher, of course, is
doing its thing without people. Aren't literally crushing the rocks.
The dump truck is being driven, you know in some
case by a computer. But the person who's like deciding
what to put in the back of the dump truck,
that's a.

Speaker 8 (01:09:30):
Person operating an excavator.

Speaker 14 (01:09:31):
So what they're saying is like, yes, this frees up
humans to work on tests that are like more difficult,
but maybe also less unpleasant, not.

Speaker 8 (01:09:40):
Just this repetitive back and forth.

Speaker 14 (01:09:42):
I think in the long run, of course, as these
technology you know, like the idea here is to replace
human labor. For sure, there's a question of if you
replace one specific job, what does that do? Does that
actually does that require make mean fewer people on the
job site or just way more productivity? And I think
that the truth is we don't know the answer to

(01:10:03):
that question yet.

Speaker 4 (01:10:04):
Is this it or does he see something else down
the road?

Speaker 14 (01:10:07):
Yeah, I mean he says we're gonna everything with four
wheels is gonna be automated. It's just a question of when,
I mean his basic thinking. And honestly, I think this
makes a lot of sense when you followed the industry,
that there's gonna be a lot of sort of interim
automation going on where either something that's not a robotaxi,

(01:10:28):
but you're you're adapting some of the tools that could
be used for a ROBOTAXI, say in a more narrow
situation like on an industrial site with a specific kind
of equipment or even in a very narrowly defined geographic
range or something like that. But but that we are
a long way from the just set your robotaxi out
on the street. And it's kind of interesting to say

(01:10:49):
that because, of course, you have a couple of big
companies that are betting very heavily on this idea just
sending robotaxis right on the street.

Speaker 5 (01:10:55):
Yeah. One of those companies, Tesla, of course, headed by
none other than Elon Q, is spending a lot of
time in the Capitol. Your story ends in a really
in a really notable way. It discusses this idea that
wait a second, is the idea of regulation what's holding
this technology back? Or is the technology holding us back?
He argues, it's the tech. It's just not there yet.

Speaker 10 (01:11:16):
Yeah.

Speaker 14 (01:11:16):
And Musk has said and has said on these earnings
calls that oh, he's going to try to figure out
a way to get the Trump administration to ease the
regulatory burden. He's implied in all sorts of ways that
all Tesla needs is the regulatory Okay, that the tech
is there, And Lewandowski says, listen, if we're talking about regulations,
that's a distraction. The truth is, and I've heard this.
We're talking to other people in the av industry. If

(01:11:39):
they wanted to deploy these things more widely, they could,
And the reasons that they are not doing it is
partly because of the tech and partly because of the cost.

Speaker 8 (01:11:47):
Now we'll see. I mean, you know, Elon Musk has
tried very bold things in the past.

Speaker 14 (01:11:51):
He says he's going to launch a robotaxi service in
Austin this summer.

Speaker 8 (01:11:56):
See how quickly that.

Speaker 5 (01:11:57):
Goes He's I mean, he's been saying that for years.

Speaker 14 (01:12:00):
Yes, every year since pretty much twenty sixteen, but he
has said that this will be the time.

Speaker 4 (01:12:06):
Hey listen before we go, because you know, Peter til
and Pallenteer and we're gonna do a big discussion in
just a moment. But I mean, there are some concerns
about his exposure to Pentagon cuts. How do you see
it the relationship between he and Trump that we've seen
in the past. Do you think he needs to be
worried where his company needs.

Speaker 8 (01:12:23):
To be I think that Palenteer stock.

Speaker 14 (01:12:26):
You know, I'm not an equities analyst, but but if
you look at what equities analysts are saying, I mean,
it's very highly valued relative to its actual business, So
I mean, I'm not sure that. I mean, obviously, if
you're a defense contractor and there are potential defense cuts,
that is a potential warning sign. It's also a potential
reminder to investors that hey, it's possible that we've gotten

(01:12:48):
over our skis. I do think Palenteer, you know, obviously,
Peter tele is an important voice at Palenteer. He's the
single largest individual shareholder. But they do have other folks
involved with that company who are connected to the Trump administration.
I do think people who own the stock and are
close to the company are still optimistic that they are
going to benefit from this from this period. But yeah,

(01:13:10):
you do see some warning signs.

Speaker 4 (01:13:12):
Hey Max, thank you so much. Max chaff and columnist
of Bloomberg BusinessWeek, joining us here. He's also co host
of the Elon Inc Podcast and author of The Contrarian.

Speaker 2 (01:13:22):
weekday starting a two pm Eastern on Applecarplay and the
Android Auto with the Bloomberg Business app. You can also
listen live on Amazon Alexa from our flagship New York station,
Just Say Alexa played Bloomberg eleven thirty.

Speaker 4 (01:13:39):
Doug McMillan has been running Walmart since twenty fourteen. He's
been now at the company for a long long time.
He is credited with pushing Walmart into the digital age
and successfully steering it through the COVID nineteen pandemic. Now
he's turning his attention to the company's next chapter and
new challenges ahead.

Speaker 5 (01:13:57):
He's doing it not in Silicon Valley or Austins, but
in Bettonville, Arkansas. That's the location of Walmart's new three
hundred and fifty acre campus that's meant to lure talent
as the company takes on Amazon.

Speaker 4 (01:14:09):
This story is the cover of the upcoming new issue
of Bloomberg Business Week. It is now on the Bloomberg
terminal and also can be found at Bloomberg dot com
slash BusinessWeek. Writing about it Devin Leonard. He is senior
Global business writer for Bloomberg BusinessWeek, and Devin traveled down
to Bettonville for a sit down with the Walmart CEO.

Speaker 3 (01:14:27):
He's sort of taken them in his first decade. He's
sort of turned them from you this internet clueless kind
of you know dinosaur into this you know, possible Amazon killer,
you know, with a real like online business all but
then kind of what do you do and what do
you do is try to do some of this other
stuff that you've tried before, you know, and he failed,
but you didn't have the digital component, which is like

(01:14:47):
like a big push for more upscale customers. And you
know that you know, they have like you know, a
third party marketplace like Amazon, so they you know, they're
selling like four thousand dollar Gucci bags and you know
things like that. You know, that's the thing to ask about.
What's I won't would think, But.

Speaker 8 (01:15:02):
So they're in a.

Speaker 3 (01:15:03):
Position to do that. They're kind of rebooting a lot
of stores. But I think the idea is like, look,
there's people who would never go to a Walmart even now,
and a lot of them have been going during during
because you know, high inflation. Yeah, you know, and they
do well in bad times. But you don't have to go.
You can order online and they have a pretty good
delivery service. So so that now is the time to
make that big push.

Speaker 4 (01:15:24):
What's been so interesting too write that we've talked about
it's not just folks that are looking to save some
money in terms of shopping. Walmart has talked pretty openly
about the wealthier consumer and customer.

Speaker 7 (01:15:38):
Well, so there's I.

Speaker 3 (01:15:39):
Mean, the big question is are they there because of
because of inflation? I mean, I mean, you know, the
part of their business that's doing really well is the
so called uh, non discretionary side, which is like the
food side you know and think you know and things
like that. The discretionary side, which is you know, home
appliances and things like that, that's still you know, you know,

(01:16:00):
those sales haven't been going up to the question is
are people that's there, you know, shopping for groceries because
you know, food prices have gone up so much, or
are they going to make make the switch and buy
everything at Walmart? And that's unclear. We'll see what happens
about that.

Speaker 5 (01:16:13):
So you know, Walmart's tried to do this in the past.
With Jet dot Com, Mark Laurie came in. I think
you point out in the story that he was actually
paid high paid, more than Doug McMillan at the time.
That wasn't exactly a resounding success. They had this Jet
Black membership and I didn't know this, but even earlier
in his tenure, they tried to bring on sort of
like higher end consumers. What's different about this time?

Speaker 3 (01:16:36):
Well, I mean Jet itself, you know, didn't turn out
to be you know, Walmart's e commerce brand. But I
think what did work was basically bringing all these people
in here and you know, you know and and and
you know, being in there and out of here, you know,
you know, shaking things up and basically demonstrating kind of
to the rest of the world, you know, we're willing
to do this, and historically it's been you know a

(01:16:58):
lot of lifers and people who've been to sort of
change resistance. So just by doing that, you know, you know,
I think, well, was it worth the three point three
billion dollars? I don't know. Maybe they I guess they
had the money, and he had the board behind I mean,
I mean er the Walton zone, you know, in forty
percent of the company. But you know, you know what
they're saying now that him is that fifteen year years

(01:17:19):
ago or twenty years ago. You know, they tried to
do some of the same stuff with designer cloths that
fell flat. They did a big redesign of the stores
to make them more more like Target. You know that
that fell flat. But you know now now they have
a much more build out sort of digital side, and
they you know, and they can offer delivery you know,

(01:17:39):
you know, and things like that. And then also they
have that third party marketplace and they can sell all
kinds of stuff that they didn't before. So there probably
are in a better position. Is this still going to
you know, and I don't know. Look at the competition,
I mean, Target, Target's doing terribly, so I mean, you know,
is it going to work. It's going to take a
little bit longer. We probably need to get out of

(01:18:00):
the cycle, you know, you know, and see when there's
an upswing of the economy, do those do those people
have been shopping there? People do they stay? I mean,
that'll be that you know, if they do that, that'll
be the you know, the proof, Devin.

Speaker 4 (01:18:11):
I think what's interesting is, you know, who is Doug
McMillan and what he has done at this company, and
he is someone who's been there for a long long time,
not just a CEO, but a long long time, you know,
and really kind of transformed to some extent how people
look at this retailer.

Speaker 3 (01:18:30):
He's just he's some guy who you know, his family
moved to Bentonville, you know, at some point and he's
in high school and he got a job onloading trucks
at the warehouse. I mean then he just you know,
just never left. I mean he went to he went
to University of Arkansas, got his undergraduate degree, went to
the University of Tulsa, got his NBA, and they came
back and you know, became a buyer. But you know

(01:18:54):
he he early on became an advocate for you know,
we got to go harder, you know, in e commerce
and and and you know, I think that was a
pretty uphill battle. But he dates back to the Sam
Walton days and and you know what if interacted, you know,
it's with Sam Walton. He as a buyer sort about
you know, back in the early nineties. Sam Walton died

(01:19:15):
in nineteen ninety two. But so he has kind of
one foot in the past and then and then I
think that that sort of helps him. You know, there's
other other foot kind of kind of in the future.
But but but to kind of move the company forward,
he has this I think has a credibility and incredibility
with a board, which is what's what's really important. You know,
you know, the wall. The Walmer family controls the board

(01:19:37):
they've they back him, and you know, I just think
that the fact that he's kind of can you know,
you know, respects the past, certainly pays lip service to
the past, and you know, but it's also trying to
has his vision you know, you know, for the future.
That that that that that sort of made him kind
of you know, a winning CEO.

Speaker 5 (01:19:54):
So there's a pardon your piece that talks about the
tension between being located in Bentonville and the policies of
the state versus the coastal folks who they are trying
to attract to the state take us there and to
that anti abortion rally and what was going on.

Speaker 3 (01:20:14):
Well, I mean, that's that's been part of the issues.
It's just, you know, you need to become more of
a you know, an internet based company, but you know,
you're not going to the talent that you need. Isn't
you know, you know, isn't all sort of a Northwest Arkansas.
You have to lure people, you know, to bring in
people from Silicon Valley and you know, you're you're trying
to talk them into they have offices in you know,

(01:20:36):
in Silicon Valley too. But but but ultimately a few
many part of the leadership. You really have to be there,
be there in Bentville. And then it's kind of like, well,
you know, it's it's still a very conservative state. You know,
it went very very you know, you know, heavy for
Trump in the last election. And you know, it's Bentonville itself,
it's definitely you know, you know, a more liberal place,

(01:20:57):
and it's it's a much more diverse place probably than
it was, you know, ten or twenty years ago. But
you know, there's still it's still in northwest Arkansas. I mean,
there was a pro life rally on Saturday, but you know,
before I left, of course, there were counter protesters too.
There's some some some guy i'd got in a big
discussion seen listening at the bar who turned out to
be the next Walmart guy. But sitting at the bar

(01:21:19):
at the hotels right a sushi restaurant there, but they
didn't didn't have that twenty years ago. I can I
can tell you that, but different yeah, yeah, but he he, uh,
some some of we got we got to talking about
politics and any and he you know, started talking to
me safe full of like assault rifles and and uh,
well you know because because we're you know, we're talking
about Trump and I was like, well, I don't know

(01:21:40):
about that. In January sixth of that that was the
best best thing. And he said, uh, you know what insurrection?
That really was? At an insurrection? I have all these
kinds of people like me went, you know, went down there.
There would have been an insurrection, were a real insurrection,
you know, we might have lost, but it would have
been an insurrection. And you know, it's it was, Uh,
you know, you don't have those conversations everday in New York.

(01:22:00):
But I don't know. Maybe maybe it depends on where
you go out.

Speaker 7 (01:22:02):
I'm just missing.

Speaker 4 (01:22:03):
I think it's always great, like when you do get
out right anyway and you realize kind of what is
the fabric of America?

Speaker 14 (01:22:11):
Right?

Speaker 4 (01:22:11):
And I think it's very easy when you live in
one state or on one of the coasts that you
think just one thing. And it kind of speaks to
when you're such a giant in the retail space like Walmart,
I guess you have to be a little bit careful,
but you also have to appeal to so many different
populations across the country and it's really wide and diverse.

Speaker 3 (01:22:30):
No, And he's you know, Doug McMillan's you know mantras,
you know, we want to sell to everybody and so
so so I think there was this moment where CEOs
were being more outspoken, and he he was one of them.
And just the fact that the CEO of Walmart was
doing things like lobbying the state officials in Arkansas not
to pass you know, a bill that would have restrict

(01:22:52):
you know, restricted LGBTQ rights. You know that that was used.
You know that that main news. But right now, you know,
you know, things are little different.

Speaker 4 (01:23:00):
And he was at the inauguration, Yeah, on stage right.

Speaker 3 (01:23:04):
No, it was right up there, right, But.

Speaker 4 (01:23:09):
The whole dynamic is kind of funny, right, like who
got the front row seat?

Speaker 5 (01:23:13):
He was there, but like, you know, not necessarily hiding,
but he wasn't as prominently displayed as some of the other.

Speaker 3 (01:23:18):
And he definitely wasn't really all that. You know, we
talked to him about anything, Brad asked him about that
and and and he, uh, Bradstone, the editor that Business Weeek,
was there with us. But but but I think he
was you know, he didn't sound you know, super thrilled
like he was invited and you know, maybe they'd be seeding.
Maybe they wouldn't because they were moving and around. But
but but anyway, I mean, you know, he was he

(01:23:41):
was trying to put the best face on it. You know,
he'd gone tomorrow lago, and he was saying, we want,
we know, we just wanted to say, you know, how
can we help? And no, I worked with you know,
Trump during COVID and all that stuff.

Speaker 4 (01:23:51):
But it's a dance of many CEOs.

Speaker 3 (01:23:53):
Yeah, yeah, totally, totally. But but but you know, since
they're so big, the biggest retailer, I mean, you know,
it's really interesting to watch. It's really important, really important
to note. It's it's not something like little company or
you know, you know or you know or something or
something like that. They can really be affected by a
Trump administration policies and stuff.

Speaker 4 (01:24:08):
So and increasingly like Amazon, right in terms of things
that maybe while it pooh pooed maybe Amazon in the
early days in the digital marketplace, it's now embracing a
lot whether it's membership, whether it's ads, whether it's a
lot of things. Right, increasingly becoming a lot more like Amazon.

Speaker 3 (01:24:25):
Right, No, totally, I mean they have a ways to go,
but I mean, no, no, you're right, but you know,
growing advertising business, growing third party party marketplace. You know,
you know, they're there. Their membership Walmart Plus is still
still very small compared to compared to Amazon. We probably
should have thrown that in, But but they're doing it

(01:24:45):
and and and it's growing, and and uh, they have
to do something because really, really the they haven't built
lots of new stores in a long time, and for
decades that was the way they grew it. And as
a matter of fact, at one point, you know, Mille
was saying he came in, they were debating internally, are
the story is going to go away? I mean, which

(01:25:06):
which is kind of an amazing thing for people to
Walmart to be doing. But anyway, so they're in a
different place now, at a better place.

Speaker 5 (01:25:13):
The Trump administration question, I think is a really interesting one, Devin.
It's it's sort of the role that executives such as
this takes in this administration in the sense of, Okay, well,
he's not on stage there necessarily, but he still wants
to make sure that he's not ignoring the President of
the United States. What is the tension there.

Speaker 3 (01:25:34):
They have to worry about tariffs, obviously, and you know,
you know that they could get they could get hit
with that depending on lots of produce and things like that,
you know, you know, and you know from from Mexico,
home goods, appliances and things like that from China. They
you know, they sort of downplay that and say, well,
we've been dealing with tariffs since twenty seventeen.

Speaker 7 (01:25:53):
So wow.

Speaker 3 (01:25:54):
You know, that was that was why they were saying
they're not too worried about tariffs. You know, I think
any big employe have to worry about you know, you know,
the immigration restrictions you know that are coming down, you know,
the possiblity of work, workplace raids, and and and also
just you know, it's going to make it harder him
to hire people. And then there's the whole business with
with you know what's gonna happen with Arcade.

Speaker 4 (01:26:16):
Junior and and UH stamps.

Speaker 3 (01:26:18):
Yeah yeah, yeah, I mean taking away you know, not
allowing food stand payments for SODA's and juke food you know,
which Walmart sews a lot of.

Speaker 4 (01:26:27):
So I was shocked. Walmart receives an estimate twenty six
percent of SNAPS Supplemental Nutrition Assistance program spending.

Speaker 3 (01:26:34):
So yeah, Jaywon told me that I was shocked too.

Speaker 4 (01:26:36):
Yeah, that's a lot. Hey, listen, we've only got about
a minute left. And I feel like the way you
begin it and kind of end this idea of McMillan.
In terms of Sam Walton's office, it took him a
while to even once he was, you know, right, to
kind of sit there and feel like he could be there.
But now he's kind of a little melancholy about leaving it.

Speaker 3 (01:26:59):
Yeah, even the so even though you know, when you
think about it, it's I mean, it's just I mean,
obviously you.

Speaker 4 (01:27:06):
Don't describe it in a really it's not an upscale
corner CEO.

Speaker 3 (01:27:11):
No, he can do better. He can be in a
he can be in the higher floor and you have
a little bit more light. I have a feeling that,
you know, the new campus is going to suit him
just fine.

Speaker 4 (01:27:20):
So so he'll be okay, he'll eventually he'll get over
the melancholy and leave it. It's an incredible deep dive
about a company that we talk about so much for
so many different reasons, certainly in terms of retail, but
what it tells us about the consumer and what it
really tells us about a slice of life in America
in a big way. Thank you for sharing this check
of time with us. I really appreciate it. Devin Leonard,

(01:27:41):
He's senior global business writer a Bloomberg Business Week. This
is the cover story of the new issue of Bloomberg
Business Week. We've got it. Some of you maybe don't
have it yet, but we have it. But it's coming
your way and it's a great deep dive and you
can check it out on the Bloomberg and also a
Bloomberg dot com. Devin, thank you.

Speaker 1 (01:28:05):
This is the Bloomberg Business Week podcast. Listen live each
weekday starting at two pm Eastern on Applecarplay and Android
Auto with the Bloomberg Business app. You can also listen
live on Amazon Alexa from our flagship New York station,
Just say Alexa Play Bloomberg eleven thirty.

Speaker 5 (01:28:23):
Medspas short for medical.

Speaker 4 (01:28:26):
Count me in, Count me in.

Speaker 5 (01:28:28):
They offer let's say, let's call them aesthetic enhancements.

Speaker 4 (01:28:33):
Sign me up.

Speaker 5 (01:28:33):
Okay. Some of them specialize in lasers to zapp unwanted
hair or resurface skin. Others offer injections of all kinds botox,
lip filler, fat dissolver, butt plumper. So this is why
you got to read this stuff ahead of time and
say sign I.

Speaker 4 (01:28:49):
Have not done most of those, okay, including the butt
plumper okay enough.

Speaker 5 (01:28:55):
According to data from the American Medspas Association, actually wrote,
I just copied it.

Speaker 3 (01:29:01):
That's what I guess.

Speaker 5 (01:29:02):
How good it is. The industry expanded more than sixfold
from twenty ten to twenty twenty three, from about sixteen
hundred locations to more than ten thousand. Average annual revenue
per spa more than double during that period, reaching almost
one point four million dollars per spa as Amandimal writes,
the US is in the middle of a medspa boom,
and you can see it all over our faces.

Speaker 4 (01:29:22):
That he was going to say, you could see it
all over Carol's face, That's not the case. She is
Bloomberg BusinessWeek senior reporter Amanda mull Is, and she does
right about this and the boom and medspas for Business Week.
Check out her story on the Bloomberg and at Bloomberg
dot com slash BusinessWeek. She joins us from Brooklyn, where
apparently it's booming and medspas. Yeah, tell us what's going on.

Speaker 15 (01:29:45):
No matter where our listeners are, if they're in the US,
they have probably noticed this. In their own town or
community or neighborhood. Pretty much across the country, almost everywhere,
there has been a real uptick in the opening of
storefront businesses in malls and shopping centers, in strip malls.

Speaker 9 (01:30:02):
There's one in.

Speaker 15 (01:30:04):
My hometown outside of Atlanta, near the grocery store where
I went when I when I was growing up, and
there has been like just this real boom and opening
these businesses. And they offered just a really wide selection
of services, everything from off brand weight loss shots to
botox to laser hair removal, to ivs for if you're hungover.

Speaker 5 (01:30:29):
There's a lot of money in this stuff. Insurance doesn't
really cover it. These are cash businesses. What's the training
of the folks who are doing the injecting? These are
not doctors we're talking about.

Speaker 15 (01:30:41):
In most cases in medspas, they're not doctors. What the
exact training is for your injector is going to vary
depending on what state you're in. The licenser required is
going to depend on local laws, But in most cases
they are going to be nurse practitioners, physicians, assistants, registered nurses,
nobody who could give you a vaccine injection at your

(01:31:04):
doctor's office. Is also allowed to inject other things into you.
Basically in most places.

Speaker 4 (01:31:09):
You know what's fascinating too, Yeah, you have kind of
your typical dermatology offices right where there are doctors who
do this stuff to cost you. It's kind of coused
you and it ain't govid. But having said that, you're right, like,
I feel like I walk into all kinds of offices,
dental offices everywhere, They're all offering all these kinds of services.

(01:31:30):
But I do say these particular medspas, right, it's a
combination of like a place that you used to go
maybe for a spot to get a facial and a massage,
but it's kind of juiced up with all these other things.

Speaker 5 (01:31:41):
Right.

Speaker 15 (01:31:42):
A lot of these businesses that are specifically medspas are
going to offer things like eyelash extensions or massages or
traditional services provided by estheticians like facials. So you get
this mix of non medical beauty treatments and these like
very medical grade, very serious things that you know, our

(01:32:03):
things are being injected into you, or these very high
powered lasers are being or other types of energy tools
are being used on your your face or your body.
So it really has like expanded what we think of
when we think of, like, you know, the old school
notion of the beauty salon. A lot of these these
things that people access to change their appearances now are

(01:32:25):
are like quite serious, medical grade treatments.

Speaker 4 (01:32:27):
Yeah, this is so much better than a blowout. I'm
just going to say in terms of, like, you know,
our haircut. Hey having said that, if the botox phenomenon, like,
we know that it's used for medical reasons, but it's
also used for a lot of cosmetic reasons. If botax
hadn't come along, might this industry not have taken off?

Speaker 15 (01:32:46):
I think it probably still would have taken off to
some extent. Okay, but botox is really the origin point
for a lot of what we see today. When it
was approved for esthetic use in two thousand and two,
there was a huge amount of publicity around, a huge
amount of interest in it from the general public. And
you know, anybody who's tried to book a specialist appointment,
no matter how good your health insurance is, no matter

(01:33:07):
how good how willing you are to pay cash, there's
just not a lot of specialist physicians in the US.

Speaker 9 (01:33:11):
So it didn't take long.

Speaker 15 (01:33:12):
Before dermatologists and plastic surgery. Surgery offices were just overwhelmed
by the number of people looking for you know, relative
to other services, they provide something that is relatively small,
relatively quick, relatively non invasive. So that is when a
lot of you know, eye doctors offices, dentists offices started

(01:33:33):
adding botox specifically to their to their offerings, and other
other types of treatments like laser hair removal and fillers,
uh had sort of come along and become inexpensive enough
to be marketed to the general public at the same time,
and you know, taken together, those those things really just

(01:33:53):
exploded this industry.

Speaker 4 (01:33:54):
I mean, I'm just going to tell you tim is
related into fillers. I'm just going to tell you that.

Speaker 5 (01:33:57):
Well, speaking of that, I'm so afraid of needles. I
assume it involves needles, right, yeah, no, way like needles.
Not a fan. What's mar A Lago face?

Speaker 9 (01:34:08):
Well, mar Alago face is.

Speaker 15 (01:34:12):
It's like upsetting that you know what when you see it.

Speaker 5 (01:34:17):
This is just on the Supreme Court.

Speaker 15 (01:34:20):
Yes, this is a term that has has become popular
recently to describe some of the you know, Kimberly Gilfoyle,
some of the members of the Trump family Matt Getz
who have sort of clearly had botox or fillers or
some laser services or all of the above and have

(01:34:42):
a very sort of like Real Housewives look. That is
like traditionally what I think of it as because I
am a you know, a Real.

Speaker 9 (01:34:49):
Housewives fan from late two. But yeah, it is.

Speaker 15 (01:34:53):
Really this sort of like very tweaked, very plumped, very smooth, shiny,
like slightly over filled. Maybe some of the filler has
migrated and you look a little doe or a little
lumpy in.

Speaker 9 (01:35:05):
The face like that.

Speaker 15 (01:35:07):
That sort of combination of lots of lots and lots
of procedures that have sort of all been sort of
layered over time is mar Alago face.

Speaker 4 (01:35:16):
Really it's big business. Though we're having fun with this,
but it is huge business. And there's also, as most
things do, have a little private equity component.

Speaker 15 (01:35:24):
Yes, it is an enormous business. The the companies that
make botox and fillers, Allergan, et cetera, have had a
huge windfall from developing these these products that can be administered,
you know, non surgically in these sort of like not
quite doctors offices types of businesses, and the business itself

(01:35:46):
has exploded with the you know, there's been a sixfold
increase in the number of MEDSPA locations in the US
since twenty ten, and naturally, like like any growing business,
private equity has has come calling, you know some some
firms have looked to do roll ups. Some firms have
looked to buy larger chains of medspas. It's been a

(01:36:10):
little bit difficult though. Private equity currently only operates about
three percent of the medspas in the United States. Most
of them more than seventy percent are you know, one
off owners, sole proprietors. There's some small chains, so it's
really been hard for private equity firms who have made such,

(01:36:31):
you know, enormous profits in other sectors of healthcare to
find businesses that are big enough to be efficiently rolled up.
It is a very mom and pop business.

Speaker 5 (01:36:40):
I was trying to come up with some sort of joke.

Speaker 4 (01:36:42):
Are you looking for the like a medspa near you
right now?

Speaker 5 (01:36:45):
Well, I mean I feel attacked in this story because
I live in the neighborhood that she writes about, and
I'm never going to be able to walk down the
street from the subway to my home. You'out noticing medspas
you're among friends.

Speaker 4 (01:36:56):
It's owner speed dial. Come on, just be cool.

Speaker 5 (01:36:58):
Yeah, yeah, I'm I'm never going to not notice.

Speaker 9 (01:37:02):
These things now.

Speaker 4 (01:37:02):
They are everywhere, and it's pretty well amendimal. This is
such a great story. We're so glad we could get
to you on it and share it with our audience.
I feel like everybody needed the story to kind of
wrap up the day in the week, have a great weekend,
Be well, a minimal. She's Bloomberg Business Week senior reporter
joining us from Brooklyn.

Speaker 2 (01:37:20):
weekday starting at two pm Eastern on applecar Play and
Android Auto with the Bloomberg Business app. You can also
listen live on Amazon Alexa from our flagship New York station,
Just Say Alexa played Bloomberg eleven thirty.

Speaker 4 (01:37:39):
Well med spas in the US. Help us put our
best face and body forward. Thousands of miles in a
continent away is beauty that's been shrouded in myth and
mystery for a very long time.

Speaker 5 (01:37:48):
It's one of the greatest private troves of antiquities that
has been hidden away for more than half a century.
In Rome and Bloomberg BusinessWeek Arts columnist James Tarmi was
one of the few allowed to peek inside.

Speaker 11 (01:38:00):
Most even really rich people's collections don't have such incredible
international importance. And this family, which was sort of a
pre industrial fortune that was created just before like modernity
as we think of it. So they were basically so
rich that they were able to buy everything before like

(01:38:20):
the Rockefellers and the Morgans and the Getty's sort of
came in after them. They were there first, so they
bought all of these fading aristocratic family stuff and then
they kept it all. So it's collections of collections, and
they were able to amass this humongous amount of treasures
in a very short period of time, and as a result,

(01:38:43):
they kind of have a lot of Italian cultural patrimony
to themselves. So it's a little bit more fraught than
someone's trophy pictures on the wall.

Speaker 4 (01:38:52):
I mean there are if you go online check it
out of the Bloomberg there are a few pictures there.
But you know, you said, it kind of like blew
your mind when you walk take us there, like when
he walked in, and like.

Speaker 11 (01:39:02):
Like what was this family, which to be clear, still
is very very well off, has a couple of things.
One of them is a twenty acre compound in the
heart of Rome behind very high walls that is not
really available for the public view and you can't take photographs,

(01:39:23):
and they let me inside and it is just mind
boggling over twelve hundred antique statues there. They also have
an indoor outdoor pavilion of Egyptian antiquities. It's really something
else and it's theirs. Then they also have this the
Torlonia Collection, right, which is in a warehouse in Trusteveray,

(01:39:48):
and they have a conservation laboratory there. And then they
also have a warehouse where everything is stored and there
are it's literally like an army of statues, but it's
each statue is an unbelievable, super important work of art.
And there's just row after row after row busts going

(01:40:09):
up to the ceiling and it's all theirs, and they're
you know, people are aware of it, but people are
not allowed inside. However, they're beginning to loan these things
out into museums around the world.

Speaker 4 (01:40:21):
Why well, the sorry tim I had to ask.

Speaker 11 (01:40:26):
The patriarch of the family, this man named Alessandra, who's
the fourth prince Torlonia died and shortly before he died,
he created a foundation that would manage these things. The
foundation doesn't own them, it manages them, and his grandson,
who's a very forward thinking guy named also named Alessandra,

(01:40:48):
is basically trying to lend out works to museums around
the world in exchange for those museums doing conservation.

Speaker 5 (01:40:58):
Work actually can cost so much money, as you.

Speaker 11 (01:41:01):
Write, over one hundred thousand dollars to conserve a single statue,
and so it's amazing.

Speaker 7 (01:41:06):
Yeah.

Speaker 11 (01:41:06):
So basically what they're doing is they're letting people sort
of in. I mean they're not actually letting them in,
but they're letting people see these works sort of in
exchange for restoring them to the condition that they should
be in. And in the process, you know, people everywhere
going to see them. They did a huge show at

(01:41:27):
the Louver. It was the most visited exhibition at the
Louver in all of twenty twenty four. This is not
like a niche subject. This is a big deal.

Speaker 5 (01:41:35):
I don't want to be rude, but I still hope
you're going there.

Speaker 7 (01:41:40):
Yeah.

Speaker 5 (01:41:40):
Good, you say things can be priceless. How much is
this collection worth?

Speaker 11 (01:41:46):
So this is a subject of some debate in the
Italian press. In particular, I can speculate I have no
official reporting that would back this up. Italian press has
speculated that it is well over a billion euros. Some
have put the tune to two or three billion euros

(01:42:08):
in their art collection, just in the antiquity collection, Yes,
just the antiquity.

Speaker 4 (01:42:12):
Collection, right, So help me out here?

Speaker 5 (01:42:15):
Is that where you wanted me to go?

Speaker 15 (01:42:16):
No?

Speaker 4 (01:42:16):
Absolutely, but I'm so glad you went there. So wait
the idea, Are they being altruistic or do they need
the money to help do some of those conservation efforts
or why don't they just sell off a piece? But
we know it's to do some of it. So I'm
just trying to understand.

Speaker 11 (01:42:30):
Well, so the business of it, they neither need the money.
They are still a very very rich family, And I
also don't think it's quite altruistic. I think that there
has been a lot of controversy over the years because
everyone's known that they have this collection, which is again
a collection of very important different collections, and a lot

(01:42:51):
of people have wanted to see it. The now deceased
patriarch was had a sort of antagonistic relationship with the
Italian government. But this is speculation. There was a lot
of back and forth different At different points people were
calling to seize the collection. At different points people were
saying that the Italian station by the collection. I think
this solves a lot of problems. Right, They're letting people

(01:43:16):
experience this while simultaneously not giving up any of their
control over the family's own stuff. I also think that
selling it would be an extremely fraught proposition. Again, this
is speculation on my part, but it You know, I
don't think that you can really parcel it off that easily.

Speaker 4 (01:43:34):
Do you pick up a little something something on your way?

Speaker 11 (01:43:36):
Oh yeah, I just I flew home with a bust
in my carry.

Speaker 4 (01:43:39):
Off finger that had fallen off.

Speaker 11 (01:43:41):
No, no, that's exactly how how we had Bloomberg.

Speaker 4 (01:43:43):
Do things caring levity seconds.

Speaker 5 (01:43:47):
If someone wants to see any part of the collection.

Speaker 11 (01:43:49):
It is coming to the Art Institute of Chicago. Over
fifty sculptures more than that from the collection are going
to be on you.

Speaker 4 (01:43:56):
I thought you're gonna say, if anybody wants to see
the piece that James brought.

Speaker 8 (01:43:59):
Home, that's on my desk, sid Brook friend, thanks to.

Speaker 4 (01:44:02):
Your Bloomberg statue. Right, how many years. NA, I'm just kidding,
just kidding, Little Levity. James Tarmy, we love you.

Speaker 9 (01:44:09):
It's just needed.

Speaker 4 (01:44:10):
On this Wednesday. He is arts communist for Bloomberg Business Week.

Speaker 2 (01:44:15):
This is the Bloomberg Business Week podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live weekday
afternoons from two to five pm Eastern on Bloomberg dot com,
the iHeartRadio app, tune In, and the Bloomberg Business App.
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Bloomberg Businessweek Weekend - February 28th, 2025

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Carol Massar

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On Purpose with Jay Shetty

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