April 18, 2025 • 31 mins
In the third (semi-secret) episode of Bloomberg Businessweek's new podcast Everybody’s Business, Businessweek Editor Brad Stone fills in for Max Chafkin and joins Stacey Vanek Smith to talk trade war winners an losers. Though uncertainty still surrounds many of the Trump Administration's tariff policies, some trends are starting to emerge. Brad and Stacey select their winners and losers based on what we know so far.
And Harvard University is making headlines this week as it pushed back against Trump Administration demands. Now the University is at risk of losing billions of dollars in federal funding as well as its tax exempt status. Reporter Janet Lorin has been following the story and explains the stakes: What does it mean for universities if they lose federal money and why is the story captivating us so much?
Finally, Everybody's Business goes to space. A group of women, including entertainer Katie Perry and CBS's Gayle King, went on a short trip to space. The voyage has been heavily critiqued, but Brad argues that this is, indeed, a milestone.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. It's Everybody's business from
Bloomberg BusinessWeek. I'm Brad Stone and.
Speaker 2 (00:14):
I'm Stacy Vanicksmith. And Brad you are the editor of BusinessWeek.
You've been looking over business and economic stories all week,
and there are a few that stood out, like some
of the winners and losers from Trump's tariffs. That's starting
to become a little clearer.
Speaker 1 (00:29):
It was another week of whiplash, Stacy and Trump's America.
We had the president attacking major college campuses, and this
week Harvard refused to comply with demands from the Trump administration,
which froze two billion in the university's federal funding and
he threatened to revoke its tax exempt status.
Speaker 2 (00:49):
We also have our underrated story of the week, Stasey,
I'm going to make the unpopular argument that bethos as
the women in Space mission was actually kind.
Speaker 1 (00:58):
Of pretty cool and all part of his master plan.
Speaker 2 (01:02):
Okay, we will have to discuss, but first, like you said,
it has been a lot of whiplash this week. One
of the things really looming over the economy right now
is I mean, I guess, for lack of a better word,
feelings people are really worried about what tariffs and all
(01:25):
of these policy changes are going to do to the economy.
We got some really alarming consumer sentiment numbers out last
week from the University of Michigan. They found that sentiment
was at its second lowest level in history.
Speaker 1 (01:36):
Right and investors are clearly queasy about the economy right now.
I mean, every day feels like a year. The stock market,
the bond market just shaking at the foundations. These last
couple of weeks, really dramatic ups and downs. Companies have
lost trillions of dollars of value. J Powell came out
this week in an interview basically saying he's not that
(01:59):
sangue about the state of the US economy, and that
Donald Trump wrote on truth Social that his termination cannot
come fast enough.
Speaker 2 (02:07):
He's not a constructive criticism person, I think is one
of the things that we can safely say about the president.
But yes, Jerome Powell was talking about the threat of stagflation,
which is essentially when prices are rising and unemployments rising
at the same time, and he's worried that that's where
tariffs could take us. But you know, hear at everybody's business.
We like to talk to not just like the people
(02:28):
who are overseeing the economy and traders and experts and
economists and things like that, but we like to talk
to the people who are also living in the economy
and who make up the economy. Happened to be down
in Austin, Texas earlier this week, so I thought I
would ask some Texans how they were feeling about the economy,
if like the consumer sentiment data was resonating with them,
(02:50):
if they've changed any spending habits. So, Brad, here's what
they said.
Speaker 3 (02:53):
I'm not the type of guy who pays attention to
consumer sentiment data, so I've been spending fairly recklessly, only
I guess I spinned with a lot more anxiety.
Speaker 2 (03:04):
Now there's going to be a lot of business owners
that are very deeply impacted by this, and you know,
running a business is pard enough, and so that that
really sucks.
Speaker 1 (03:14):
I think people were worried because they think price is everything.
Speaker 4 (03:15):
I'm going to go up, which is a fair thing
to worry about.
Speaker 1 (03:18):
But the only things that I buy are American Anyway.
Speaker 3 (03:21):
Three or four days a week I would drive to
a barbecue spot here in Austin called Rudi's and buy
two cups of banana pudding, but the price has.
Speaker 2 (03:30):
Gone up, so now I only buy one, So now
you just have half the banana putting it used to have.
Speaker 4 (03:35):
Yeah, no, it's a terrible economy.
Speaker 2 (03:37):
Well, everybody has their own take on the economy.
Speaker 1 (03:42):
But you know what this reminds me of a little
bit like when the hurricane is off the coast and
it's heading in and everybody's battening down the hatches and
runs out to stock up on supplies. And we see
this in the data, like retail sales kind of boomed
in March. They were up one point four percent in March,
zero point two percent in February. So, you know, if
(04:03):
there's some wild argument that Trump is playing four dimensional chests,
maybe it's all about scaring people into opening their wallets
and trying to get ahead of something. But no, it
does seem like there's a fair amount of anxiety out there.
So Stacey, it's only been a couple of weeks since
Liberation Day. Oh cha, we all remember where Trump unveiled
(04:26):
as tariff plan, which really sent shock waves around the world.
Speaker 2 (04:30):
Yeah, but even still as things are settling down, there
is a lot of uncertainty over how things will pan out,
what the tariffs will actually look like, what kind of
deals will be made that maybe get around the tariffs
or mitigate the tariffs for some industries. But some answers
are starting to emerge, and so we thought we would
take a look at some of the industries and the
companies that are hardest hit, and maybe even some industries
(04:54):
and companies that might see a little boost from all this.
Speaker 1 (04:56):
We talked about picking some winners and losers based on
what we know so far. Now, I just want a
caveat this by saying, you're talking about uncertainty, and Trump
is negotiating. He might be trying to reduce trade barriers.
He was personally involved in discussions with a Japanese trade
delegation that was at the White House, and on Thursday
(05:17):
it was the Italians and Italian Prime Minister Maloney who
is at the White House. So it really remains to
be seen. Does this end up being better for global
trade or does he mean what he says when he
talks about protectionism and William mckinlee and bringing back the
golden age of tariffs. We do not know where this
will all.
Speaker 2 (05:36):
End up, although I feel like we're starting to see
some strong signals. I feel like every time I check
the news, the tariffs against Chinese goods go up again. Well,
I think it's now at two hundred and forty five percent,
and that is our biggest trading partner. So I feel
like we know that there will be some change, but
I think you're right, there's a lot of uncertainty.
Speaker 1 (05:55):
That's a great point with regards to China. It's relatively
clear that President Trump is into getting a trade war,
and that leads me to my.
Speaker 4 (06:03):
Pick for the losers, Yes, what is your loser?
Speaker 1 (06:06):
And I think the stock market agrees is in Vidia
down about twenty two percent year to date. This week,
the Trump administration tightened export controls on in Vidia's basically
kind of dumbed down H twenty chip, which it devised
for the Chinese market, and to accommodate the last wave
of export controls, this week, US official said that in
(06:29):
Video would need to get a license to sell that
equipment in China. In Vidia said that it was going
to take about a five billion dollars hit to its inventory.
Jensen Wong, as we speak, is in China meeting with
Chinese officials and this is bad for just a whole
bunch of reasons. Not only is it sitting on all
this inventory, not only is the world's second largest AI
(06:51):
market now basically going to be off limits for Nvidia,
but I think the biggest problem is that it will
even further motive Chinese companies a Chinese government to increase
the domestic production of AI chips. And you just never
underestimate the speed at which an authoritarian government will move
when it feels like it's sovereignty is at stake, when
(07:14):
it's future competitiveness is at stake. We've seen this before,
and I think in videos losing out how.
Speaker 2 (07:20):
Important is China to in video Though it seems like
it's only about thirteen percent of in Vidia sales are
in China.
Speaker 1 (07:28):
Well, I think estimates vary. I think if you look
at data center revenue, it's more like a quarter. But look,
we're moving into this, you know, bilateral world where the
US and China are in a race to create these
AI chips and these AI powered data centers, and the
(07:48):
fact that half of that market might be off limits
to the company that is most associated with this underlying
AI infrastructure trend is a big blow and anyway, Stacey,
I'm curious who your loser.
Speaker 2 (08:01):
Is actually brought soybeans into the studio, because my loser
is soybean farmers.
Speaker 1 (08:07):
Stacey, who will think of the soybean farmers?
Speaker 2 (08:10):
Think of the soybean farmers?
Speaker 4 (08:11):
I know?
Speaker 2 (08:12):
Strangely enough, our top export to China is soybeans. We
export about thirteen billion dollars worth of soybeans every year
to China. It's about half of all the soybeans we produce.
Apparently the Chinese mostly use it for livestock feed. As
the middle class has grown in China, meat consumption has
gone way up, and so soybeans are one of the
big sort of sources of feed and protein for pigs
(08:35):
and chickens in China. But a two hundred and forty
five percent tariff is probably going to do a lot
of damage to soybean farmers in the soybean industry. It's
really leaving the farmers in a tough position.
Speaker 1 (08:50):
Doesn't the US government kind of swoop in when these
trade policies impact farmers or bats growing seasons and offer
subsidies to kind of cushion the blow and get them
through the tough years. Could that happen here.
Speaker 2 (09:02):
Yes, farming has a lot of subsidies and has for
a long time. It's kind of part of the industry
at this point. Because it's such a huge part of
the soybean market, and because the harriffs are so high.
I'm just not sure where these farmers can go. That
would be a huge subsidy from the government. Certainly is
an option on the table. Certainly there's a big precedent
for it. But it's not just soybean farmers either. It's
(09:25):
corn and pork and a lot of producers who sell
a lot to China. They're one of the biggest buyers
of a lot of our agricultural products. So thirteen billion
dollars of subsidies would be a lot.
Speaker 1 (09:36):
Well, you know, I like your pick. My loser was
multi billionaire Jensen Wong and Nvidia, and you're a loser
or the poor soybeans part of.
Speaker 2 (09:45):
Soybean farmers exactly of South Dakota.
Speaker 1 (09:47):
So that's a good one. Okay. Do you want to
hear my winner?
Speaker 2 (09:49):
Absolutely? I feel like there aren't that many winners in
this situation right now.
Speaker 1 (09:53):
It's just incredibly hard to pick. I mean, this is
really literally changing every day, and I think my proposed
win here Apple Really it's a great example of this.
So last Friday, it seemed like Apple had a huge
exemption of the one hundred and forty five percent tariffs
on Chinese goods. The US Custom and Border Protection Service
(10:16):
said in a note that smartphones and other electronics were exempt,
with maybe the exception of the twenty percent fentanyl crisis. Now,
then Trump came out and said there were some tech
specific tariffs. It wouldn't be one hundred forty five percent,
but there would be something. Here's what I think Apple
got an exemption last time. You know, Tim Cook is
(10:38):
enormously sophisticated when it comes to getting to mar A
Lago and working the Trump administration.
Speaker 2 (10:44):
Yeah, he's been having a lot of power lunches with
the President for.
Speaker 4 (10:47):
Sure, exactly.
Speaker 1 (10:48):
And Apple has also prepared for this moment that now
makes twenty percent of its iPhones in India via fox
Con and its factory in southern India. I think what
we're seeing is Apple moving some of the supply chain
for at least it's US products over to India. It
assembled twenty two billion dollars worth of iPhones in the
last year in India. And I just think, you know,
(11:10):
not only is Apple sort of flexible, not only has
it prepared for this moment, but you know, the old
saying that there's a third rail in American politics, and
the answer to that's usually been social security, yeah, or
medicare I think we can now add smartphones to that least.
I think that, you know, the Trump administration is you know,
maybe just sensible enough to know that if you screw
(11:34):
with people's iPhone prices, oh, they're going to be annoyed.
And so I just expect kind of Apple to come
out of this, not maybe unscathed, but in a better
position than a lot of other companies, in particularly small businesses.
Speaker 2 (11:47):
But even though they have moved a lot of their
production to India, there's a big tariff against India too,
isn't there is like twenty four twenty five percent or
something like that.
Speaker 1 (11:57):
So I think prices will go up, but I just
don't think it's the wallop that everybody expected two weeks ago.
And again, Apple's prepared for this moment. They apparently airlifted
a ton of iPhone supplies to the US before the
tariffs took shape.
Speaker 2 (12:12):
They stop.
Speaker 1 (12:12):
I think, yeah, that they're like us. They're preparing for
the hurricane.
Speaker 2 (12:16):
Corporations, they're just like us.
Speaker 1 (12:19):
Look, this regime favors large companies with a lot of
cash on hand to go and make the changes that
they need to weather the storm. Who's your winner, Stacy?
Speaker 2 (12:29):
My winner is consultants. Consultants and lawyers.
Speaker 4 (12:35):
They always come out on top.
Speaker 2 (12:36):
They always come out on top. If you want to
win in this world, you become a consultant or a lawyer, because,
especially right now though, with all the uncertainty, international trade
lawyers and international trade consultants are really getting inundated because
companies are trying to map out all kinds of different scenarios.
Like you said, I mean, there are deals being done
every day. It's hard to keep track of what's going on,
(12:58):
and consultants are coming in doing I think a lot
of different if then type situations. I actually talked with
Martin Ludovics. He is the president of IWSR, which is
this huge international beverage industry consultancy, and he's that he
has just been getting calls from everywhere. Kentucky, Bourbon, Irish whiskey,
French champagne, German beer, Japanese sake. They are all calling
(13:21):
him just desperate, desperate for help in navigating this, and
you know that hasn't been the worst thing for business.
Here is what he told me.
Speaker 3 (13:30):
I mean, it's great for us because everyone needs answers.
Speaker 2 (13:33):
I mean, it's it's difficult because obviously my clients are
feeling the pain, so it's hard not to empathize.
Speaker 5 (13:38):
But at least from our perspective, it's great.
Speaker 1 (13:43):
Stacy does consider lobbyists to be in this umbrella.
Speaker 4 (13:46):
I mean, oh, totally.
Speaker 1 (13:48):
You know, anyone who has a role in helping companies,
rich companies navigate these tariffs to create personal connections, to
carve out exemptions that and I imagine the hotel business
and mar al Lago is quite swift these Oh.
Speaker 2 (14:02):
Yes, apparently they've seen quite an uptick.
Speaker 1 (14:10):
So Stacey, Harvard has been in the news all week,
which is usually just how Harvard alums like it.
Speaker 4 (14:16):
Yeah, exactly, but it's not for good reasons.
Speaker 1 (14:19):
It's because Harvard has refused to give into the Trump
administration's demands.
Speaker 2 (14:24):
Yes, so the Trump administration demanded that Harvard ban masks
on campus, eliminate a lot of its DEI programs, and
make a lot of changes to some of its different
programs and departments that quote fuel anti Semitic harassment. Harvard
said no.
Speaker 1 (14:40):
Right, and Trump did not like that. So he's frozen
more than two billion dollars in federal funding and has
reportedly asked the IRS to revoke the university's tax exempt status.
Speaker 2 (14:51):
Yes, it's a big issue. There are lots of parts
of it. And so to help us make sense of
what is going on for Harvard and for other colleges
and universities. Right now, we are joined by Janet Lauren.
She covers the finances of higher ed at Bloomberg. We're
very lucky to have her. She's very busy right now. Hi, Janet, Hi,
So what has your week been like so far. It's
(15:12):
been a.
Speaker 5 (15:12):
Little busy, multiple stories every day, lots of things changing
very quickly.
Speaker 2 (15:18):
Well, what is happening right now as of Thursday late morning.
Speaker 5 (15:21):
Well, there's this idea that Trump might try to take
away Harvard's tax exempt status. He mentioned that earlier in
the week. We think Harvard is a really rich place.
Speaker 4 (15:32):
It is.
Speaker 5 (15:32):
It has fifty three billion dollars, which is quite a
lot of money. It's a good cushion, it's a nice cushion,
but they can't spend it like a bank account. Something
like eighty percent of that is restricted because donors make
a gift for the crew team or the English Department
and only sign an agreement and you're not supposed to
use that for other purposes. So you can't fund that
(15:55):
money for the crew team, you know, to hire postdocs
in the physics depart If your funding goes away.
Speaker 2 (16:01):
You can't just pull out fifty three billion dollars in cash.
Speaker 5 (16:04):
No, and it wouldn't even be all liquid. That's a
whole other thing about how they invest their money. The
last time they gave an asset allocation, something like thirty
nine percent was in private equity, So that means it's
it's tied up.
Speaker 1 (16:19):
Channa. What does it mean to revoke the university's tax
exempt status? How serious a blow would that be? And
how practical is it? Can the administration just do that?
Speaker 5 (16:29):
Well, the administration has been issuing a lot of executive orders,
so it's unclear where the process goes. But Harvard gets
a lot of benefits for its tax exempt status. For example,
it doesn't pay property taxes. It has the ability to
issue tax exempt bonds. Now they also recently issued taxable bonds,
(16:51):
and that gives them a lot more flexibility. If you
make a gift to Harvard, you get a tax deduction
as a donor. So there's a lot of ways that
benefits it. And in twenty twenty three the benefit was
something like four hundred and sixty five million dollars, which
is a nice chunk of change. Now, Also in December
(17:12):
twenty seventeen, there was a massive tax bill and endowments
were ensnared in there, and for the first time schools
had to pay taxes on their investment income. Up until
twenty seventeen, they did not pay taxes on their investments
in their endowment.
Speaker 2 (17:30):
On the fifty three billion dollars, they didn't pay taxes.
Speaker 5 (17:33):
No that it wasn't fifty three billion dollars back then, okay,
but it was still quite a lot of money. And
they pay one point four percent on the net investment return.
And people in Congress and JD. Vance and others have
would like to see that increase.
Speaker 1 (17:50):
And how likely is it to happen. Do you think
that university isn't Harvard in particular lose this taxing some status.
Speaker 5 (17:57):
Well, if you would have asked me a year ago,
two billion dollars in federal research grant be frozen. I
would have said, I don't know how that happens, but
we're kind of in a different world here.
Speaker 2 (18:10):
How big of a deal is this for Harvard? I mean,
I keep thinking, like a lot of these stories have
come up. It's come up with Columbia and Princeton and
a lot of stories. But all these institutions have so
much they do have so much money, like, and they
charge a lot of money, and the charge a lot
of money. Can they tough it out? It feels like
they can tough Is this a really big deal for them?
Speaker 5 (18:30):
Well? Each school is going to be different. So Columbia,
which had four hundred million threatened, has an endowment of
about fifteen billion, so they're a lot less rich. Now
if you look at a place like Princeton, I think
it's up to thirty four billion ish, But they don't
have a lot of students there, so the endowment per
student ratio is like over two million dollars. So if Princeton,
(18:53):
which it relies on its endowment for about seventy percent
of its budget, they would have an easier time, you know,
more than a place like Harvard. Last year Harvard, the
endowment brought in about two point four billion dollars. It's
spending five percent, so they could spend more, but you know,
some of it is restricted, and the reality is they
(19:15):
would have to make a lot of cuts.
Speaker 2 (19:17):
But they wouldn't be They wouldn't like shut down.
Speaker 5 (19:20):
No, they wouldn't shut down. And they've just issued debt
for seven hundred and fifty million dollars. They also have
a one point five billion dollar line of credit, so
they have a lot of tools in their toolkit. They
learned a good lesson in two thousand and eight when
the financial crisis happened and their endowment did not have liquidity.
Liquidity is a really important word here. It's their cash
(19:40):
on hand, because remember, places still have to make payroll
every two weeks.
Speaker 1 (19:44):
I feel like this week, Janet, we saw major sat
change and the willingness of schools to fight the Trump administration.
So a few weeks ago our alma mater, Columbia, seemed
to give in the Trump and said it would negotiate
with the administration. And then this week kind of Harvard
stood up and Columbia's new acting president spoke out, wrote
(20:06):
a letter and said the university wouldn't do anything to
compromise its independence. So do you think schools are now
fighting and this all moves to the courts, and how
does it play out.
Speaker 5 (20:16):
It's really hard to know how it plays out, and
it really is going to depend on what happens with Harvard.
But the government came down very hard, very swiftly. Within
hours of Harvard's very defiant letter, two point two billion
dollars was frozen. Now last night they brought up the
(20:37):
specter of potentially limiting international students. That is a huge
game changer because last year more than one million international
students came to colleges. You know, at Harvard it was
in the realm of like six thousand. So that's opening
a completely new front. But you have to remember, you know,
(20:58):
fifty three billion dollars is nothing to the federal government.
It's about money, and Harvard may seem like they have
endless money, but the federal government is more powerful than Harvard.
Speaker 2 (21:09):
I'm wondering what you see as the stakes here, because
I mean, this is a story that's really grabbed headlines,
and like you say, like Harvard, they'll be okay at
least for a while. Why do you think this is
kind of captivating everybody so much. Well, we write about money, power,
and influence. That's why we spend a lot of time
writing about Harvard. But the idea that this is a
private university, the government shouldn't have such a big stake here.
(21:33):
But the government is one of the biggest funders, if
it's not the biggest funder of Harvard University.
Speaker 5 (21:40):
And I think people don't realize that the government pays
for student loans. If you are a graduate student at
Harvard Law School, where I believe it's going to be
one hundred and twenty thousand dollars for one year next year,
and you can't pay that you take out a government
loan at nine percent. So the government plays a massive
(22:01):
role within higher education. Since World War Two, they've partnered
with universities to give money to do research that's in
the interest of the country. So we will fund this
physics lab at Harvard or at cal Tech or wherever
to do really important work. You know, Princeton has won
(22:21):
multiple Nobel Prizes recently. All these top research universities have
by using money from the government. I forget how much
money Harvard puts in for research. It may be like
a billion dollars itself. But the government is a huge
sponsor of higher education, and you know, if they're taking
the government's money, they may want to listen to what
(22:44):
the government says.
Speaker 2 (22:45):
Well, you've gotten like I like, so many alerts have
come up on your phone just in like the last Yeah,
I feel like you've sent like several emails. I think
you're you're typing right now. Yeah, yes, I don't know
how you're doing that. It's amazing. But but I mean, clearly,
this is a story that's kind of grabbing everyone. Do
you think it has to do with like the place
(23:06):
that universities have in our country.
Speaker 5 (23:11):
Yes, of course. I think people were thrilled to see
somebody stand up to Trump. And I think if anybody
could do it, it's Harvard. The oldest richest university in America,
pre dates the United States, seems to have you know,
endless money. And if the law firms couldn't stand up
(23:32):
to Trump, at least here is an entity that seemingly could.
And I think, you know, Harvard is finding out it's
having consequences.
Speaker 1 (23:42):
A few weeks ago, Janna, we brought together a panel
of university presidents and chancellors included the head of NYU
A CU Boulder, and you know, it really preceated the
current crisis. But they were all making the point that
this is not just an attack on schools, but really
an attack on American competitiveness. They were making the argument
(24:06):
that if you defund science and research, you're just tying
one hand behind America's back in terms of competitiveness in
future markets. And clearly like they're trying to make an
argument like a pro growth argument. I have to say,
now a couple of weeks later, it feels like that
argument fell on deaf ears. I mean, do you agree
that the Trump administration just seems to be discarding that well.
Speaker 5 (24:29):
I think there's a lot of mistrust within higher education.
I wrote a story in December sort of previewing all
of this, and part of it described the view that
some faculty feel like their social justice advocates instead of
academics and researchers. And I think that idea maybe doesn't
(24:51):
sit well with middle America. And you know what the
cost of college is. It's ninety three thousand dollars at
many schools, and a lot of college presidents say, oh no, no,
nobody pays that. But that's that's actually not true. About
half of the people pay it. Granted, you know, Harvard
has extremely generous financial aid. They just upped it for
(25:13):
under two hundred thousand dollars, but you still have to
get into Harvard. It's going to be even more competitive now,
and they're asking people to pay a lot of money
if you don't make that threshold. I mean, there are
lots of people in America who make two hundred thousand
dollars and to pay ninety three thousand dollars is still
quite a lot of money. I think most Americans think
(25:35):
that is outrageous.
Speaker 2 (25:42):
Okay, Bradstone, it is time for our underrated story of
the week, this one you are bringing in. So what
have you got?
Speaker 1 (25:50):
Yeah, so this was a great story and it was
certainly not underrated in terms of coverage. I got a
lot of attention. On Monday, a all female crew traveled
to the very edge of space on Jeff Bezos's Blue
Origin rocket.
Speaker 2 (26:07):
You guys, I will have to tell you, look at
the moon.
Speaker 4 (26:09):
That's amazing.
Speaker 2 (26:11):
Wow, look at the blue line.
Speaker 1 (26:13):
The crew included CBS broadcast journalist Gail King, musician Katie Perry,
Bezos's fiance, Lawrence Sanchez, and that'sa rocket scientist, Aisha Bo.
The trip was a success. They were in space for
about three minutes and they all made it safely back
to Terra Firma.
Speaker 2 (26:33):
I got a singing space. I died inside a little
when I saw the story. Why is this underreach story? Okay?
Speaker 1 (26:41):
Well, all right, they were sort of savaged, right, yes, yes, look,
I mean I Stacey, you might not know this. I
read the first ever story about Blue Origin way back
in two thousand and four. I did exposed its existence.
I tell the story in my book The Everything Store,
where I really went to the top seat Great Headquarters
and I this was an embarrassing revelation. I was a
(27:03):
young journalist at the time. I went through the trash
and I found all the sort of founding mission document
through Blue Origin at the.
Speaker 4 (27:10):
Time origins trash.
Speaker 2 (27:12):
What did you find?
Speaker 1 (27:14):
Okay? So I found all these mission statements. And part
of Bethos's vision back then was to create a road
to space, to make space travel so reliable, so consistent,
so safe that people didn't think about it that it
was like air travel. And here we are twenty years later,
and this is what he's trying to do. This is
(27:37):
like the twelfth Crude mission to suborbital space. It is
by no means routine. In fact, Blue Origin lost one
of these rockets at the end of twenty twenty two,
like they had to figure out how to make it
safe again. And you look at this crew. I mean,
Gail King is a truly serious journalist. I love her.
(27:57):
She's such a great interviewer. She doesn't like even flying
on planes. She looked like there was not enough xanax
in the world to get her on that rocket, but
she did it. You know, yes, it was a little cringe,
But I think it's all part of like Bezos's long
arc of making this seem fairly routine, and the fact
that they were there and they were criticized and they
(28:19):
did it, I think sort of speaks to the success
of its mission. Maybe not the financial or business success,
because I don't think anybody's paying for this yet, but
like making this routine, getting people over the hump and
opening up the frontier for this vision that he has
of people living and working one day in space.
Speaker 2 (28:37):
I have to say, you make a very strong case.
You've come quite close to turning my mind around about this.
Speaker 4 (28:43):
And you know, I feel like there's a butt.
Speaker 2 (28:46):
It makes me feel terrible to go after this story
so much because gender equality, women in stem these are
very important things to me. But the whole way that
this happened in reality I found distressing for a number
of reasons. There were just the details I thought were
so difficult for me to swallow. The crew they called themselves,
(29:09):
I think the six women taking up space by the way,
which is also terrible. I feel like they did not
do themselves any favors. Like Lauren san just had special
like sexy spacesuits designed, and like Katie Perry gave an
interview and said she was putting the ass an astronaut.
There was like one of the passengers yelled, oh my
goddess while you were taking off.
Speaker 1 (29:30):
Oh my god, my god, oh my goddess.
Speaker 2 (29:33):
Which is perhaps the worst of the details.
Speaker 1 (29:37):
I'm gonna make you feel even worse about this because
I feel like there was a little bit of sexism
in the in the coverage, like when Bezos went up
on the first launch, same skepticism in his cowboy hat.
I mean he was gently ridiculed. When William Shatner went up.
They did a whole documentary about his enlightening, mind blowing
(29:57):
experience and yeah, I mean.
Speaker 2 (30:00):
And change and he's earned his.
Speaker 4 (30:01):
Stripes, right, It was a lot.
Speaker 1 (30:04):
But I feel like the criticism is shooting fish in
a barrel a little bit. And look, I might think
twice about getting on top of a rocket fueled by
hydrogen and oxygen, having a burn for you know, three minutes,
going up one hundred kilometers and then going back into
free fall like it's you know, I don't know. I
give him credit for a little bit of bravery.
Speaker 2 (30:27):
Okay, Okay, I see that.
Speaker 1 (30:28):
And by the way, one less point Elon Musk is
not has not strapped himself a top of a SpaceX rocket,
you know, for for all skill, yeah, religious fervor about
space travel and going to Mars. He has not taken
the risk that Jeff Bezos's fiancee took in the past week.
Speaker 2 (30:49):
So bred would you say it's fair that you're like
a semi believer in the space tourism business right now,
I'm a space geek.
Speaker 1 (30:56):
I have to be a believer.
Speaker 2 (30:57):
Oh me too. I love all of that, Like the
amazing images coming back from the telescopes out in the universe.
It is pretty spectacular, but also for our listeners, like
what do you think of the business of space, what
do you think about the six women taking up space
and that whole journey. We would love to hear from you.
You can send us an email at Everybody's at Bloomberg
(31:19):
dot net. That's Everybody's with an s at Bloomberg dot net.
Everybody's Business is produced by Stacy Wong. Magnus Hendrickson is
our supervising producer, Amy Kean is our editor, and Brendan
Francis Nenam is our executive producer. Sage Bauman heads Bloomberg Podcasts.
Speaker 1 (31:39):
Thanks for listening and see you next week.
Bloomberg Audio Studios, podcasts, radio news. It's Everybody's business from
Bloomberg BusinessWeek. I'm Brad Stone and.
Speaker 2 (00:14):
I'm Stacy Vanicksmith. And Brad you are the editor of BusinessWeek.
You've been looking over business and economic stories all week,
and there are a few that stood out, like some
of the winners and losers from Trump's tariffs. That's starting
to become a little clearer.
Speaker 1 (00:29):
It was another week of whiplash, Stacy and Trump's America.
We had the president attacking major college campuses, and this
week Harvard refused to comply with demands from the Trump administration,
which froze two billion in the university's federal funding and
he threatened to revoke its tax exempt status.
Speaker 2 (00:49):
We also have our underrated story of the week, Stasey,
I'm going to make the unpopular argument that bethos as
the women in Space mission was actually kind.
Speaker 1 (00:58):
Of pretty cool and all part of his master plan.
Speaker 2 (01:02):
Okay, we will have to discuss, but first, like you said,
it has been a lot of whiplash this week. One
of the things really looming over the economy right now
is I mean, I guess, for lack of a better word,
feelings people are really worried about what tariffs and all
(01:25):
of these policy changes are going to do to the economy.
We got some really alarming consumer sentiment numbers out last
week from the University of Michigan. They found that sentiment
was at its second lowest level in history.
Speaker 1 (01:36):
Right and investors are clearly queasy about the economy right now.
I mean, every day feels like a year. The stock market,
the bond market just shaking at the foundations. These last
couple of weeks, really dramatic ups and downs. Companies have
lost trillions of dollars of value. J Powell came out
this week in an interview basically saying he's not that
(01:59):
sangue about the state of the US economy, and that
Donald Trump wrote on truth Social that his termination cannot
come fast enough.
Speaker 2 (02:07):
He's not a constructive criticism person, I think is one
of the things that we can safely say about the president.
But yes, Jerome Powell was talking about the threat of stagflation,
which is essentially when prices are rising and unemployments rising
at the same time, and he's worried that that's where
tariffs could take us. But you know, hear at everybody's business.
We like to talk to not just like the people
(02:28):
who are overseeing the economy and traders and experts and
economists and things like that, but we like to talk
to the people who are also living in the economy
and who make up the economy. Happened to be down
in Austin, Texas earlier this week, so I thought I
would ask some Texans how they were feeling about the economy,
if like the consumer sentiment data was resonating with them,
(02:50):
if they've changed any spending habits. So, Brad, here's what
they said.
Speaker 3 (02:53):
I'm not the type of guy who pays attention to
consumer sentiment data, so I've been spending fairly recklessly, only
I guess I spinned with a lot more anxiety.
Speaker 2 (03:04):
Now there's going to be a lot of business owners
that are very deeply impacted by this, and you know,
running a business is pard enough, and so that that
really sucks.
Speaker 1 (03:14):
I think people were worried because they think price is everything.
Speaker 4 (03:15):
I'm going to go up, which is a fair thing
to worry about.
Speaker 1 (03:18):
But the only things that I buy are American Anyway.
Speaker 3 (03:21):
Three or four days a week I would drive to
a barbecue spot here in Austin called Rudi's and buy
two cups of banana pudding, but the price has.
Speaker 2 (03:30):
Gone up, so now I only buy one, So now
you just have half the banana putting it used to have.
Speaker 4 (03:35):
Yeah, no, it's a terrible economy.
Speaker 2 (03:37):
Well, everybody has their own take on the economy.
Speaker 1 (03:42):
But you know what this reminds me of a little
bit like when the hurricane is off the coast and
it's heading in and everybody's battening down the hatches and
runs out to stock up on supplies. And we see
this in the data, like retail sales kind of boomed
in March. They were up one point four percent in March,
zero point two percent in February. So, you know, if
(04:03):
there's some wild argument that Trump is playing four dimensional chests,
maybe it's all about scaring people into opening their wallets
and trying to get ahead of something. But no, it
does seem like there's a fair amount of anxiety out there.
So Stacey, it's only been a couple of weeks since
Liberation Day. Oh cha, we all remember where Trump unveiled
(04:26):
as tariff plan, which really sent shock waves around the world.
Speaker 2 (04:30):
Yeah, but even still as things are settling down, there
is a lot of uncertainty over how things will pan out,
what the tariffs will actually look like, what kind of
deals will be made that maybe get around the tariffs
or mitigate the tariffs for some industries. But some answers
are starting to emerge, and so we thought we would
take a look at some of the industries and the
companies that are hardest hit, and maybe even some industries
(04:54):
and companies that might see a little boost from all this.
Speaker 1 (04:56):
We talked about picking some winners and losers based on
what we know so far. Now, I just want a
caveat this by saying, you're talking about uncertainty, and Trump
is negotiating. He might be trying to reduce trade barriers.
He was personally involved in discussions with a Japanese trade
delegation that was at the White House, and on Thursday
(05:17):
it was the Italians and Italian Prime Minister Maloney who
is at the White House. So it really remains to
be seen. Does this end up being better for global
trade or does he mean what he says when he
talks about protectionism and William mckinlee and bringing back the
golden age of tariffs. We do not know where this
will all.
Speaker 2 (05:36):
End up, although I feel like we're starting to see
some strong signals. I feel like every time I check
the news, the tariffs against Chinese goods go up again. Well,
I think it's now at two hundred and forty five percent,
and that is our biggest trading partner. So I feel
like we know that there will be some change, but
I think you're right, there's a lot of uncertainty.
Speaker 1 (05:55):
That's a great point with regards to China. It's relatively
clear that President Trump is into getting a trade war,
and that leads me to my.
Speaker 4 (06:03):
Pick for the losers, Yes, what is your loser?
Speaker 1 (06:06):
And I think the stock market agrees is in Vidia
down about twenty two percent year to date. This week,
the Trump administration tightened export controls on in Vidia's basically
kind of dumbed down H twenty chip, which it devised
for the Chinese market, and to accommodate the last wave
of export controls, this week, US official said that in
(06:29):
Video would need to get a license to sell that
equipment in China. In Vidia said that it was going
to take about a five billion dollars hit to its inventory.
Jensen Wong, as we speak, is in China meeting with
Chinese officials and this is bad for just a whole
bunch of reasons. Not only is it sitting on all
this inventory, not only is the world's second largest AI
(06:51):
market now basically going to be off limits for Nvidia,
but I think the biggest problem is that it will
even further motive Chinese companies a Chinese government to increase
the domestic production of AI chips. And you just never
underestimate the speed at which an authoritarian government will move
when it feels like it's sovereignty is at stake, when
(07:14):
it's future competitiveness is at stake. We've seen this before,
and I think in videos losing out how.
Speaker 2 (07:20):
Important is China to in video Though it seems like
it's only about thirteen percent of in Vidia sales are
in China.
Speaker 1 (07:28):
Well, I think estimates vary. I think if you look
at data center revenue, it's more like a quarter. But look,
we're moving into this, you know, bilateral world where the
US and China are in a race to create these
AI chips and these AI powered data centers, and the
(07:48):
fact that half of that market might be off limits
to the company that is most associated with this underlying
AI infrastructure trend is a big blow and anyway, Stacey,
I'm curious who your loser.
Speaker 2 (08:01):
Is actually brought soybeans into the studio, because my loser
is soybean farmers.
Speaker 1 (08:07):
Stacey, who will think of the soybean farmers?
Speaker 2 (08:10):
Think of the soybean farmers?
Speaker 4 (08:11):
I know?
Speaker 2 (08:12):
Strangely enough, our top export to China is soybeans. We
export about thirteen billion dollars worth of soybeans every year
to China. It's about half of all the soybeans we produce.
Apparently the Chinese mostly use it for livestock feed. As
the middle class has grown in China, meat consumption has
gone way up, and so soybeans are one of the
big sort of sources of feed and protein for pigs
(08:35):
and chickens in China. But a two hundred and forty
five percent tariff is probably going to do a lot
of damage to soybean farmers in the soybean industry. It's
really leaving the farmers in a tough position.
Speaker 1 (08:50):
Doesn't the US government kind of swoop in when these
trade policies impact farmers or bats growing seasons and offer
subsidies to kind of cushion the blow and get them
through the tough years. Could that happen here.
Speaker 2 (09:02):
Yes, farming has a lot of subsidies and has for
a long time. It's kind of part of the industry
at this point. Because it's such a huge part of
the soybean market, and because the harriffs are so high.
I'm just not sure where these farmers can go. That
would be a huge subsidy from the government. Certainly is
an option on the table. Certainly there's a big precedent
for it. But it's not just soybean farmers either. It's
(09:25):
corn and pork and a lot of producers who sell
a lot to China. They're one of the biggest buyers
of a lot of our agricultural products. So thirteen billion
dollars of subsidies would be a lot.
Speaker 1 (09:36):
Well, you know, I like your pick. My loser was
multi billionaire Jensen Wong and Nvidia, and you're a loser
or the poor soybeans part of.
Speaker 2 (09:45):
Soybean farmers exactly of South Dakota.
Speaker 1 (09:47):
So that's a good one. Okay. Do you want to
hear my winner?
Speaker 2 (09:49):
Absolutely? I feel like there aren't that many winners in
this situation right now.
Speaker 1 (09:53):
It's just incredibly hard to pick. I mean, this is
really literally changing every day, and I think my proposed
win here Apple Really it's a great example of this.
So last Friday, it seemed like Apple had a huge
exemption of the one hundred and forty five percent tariffs
on Chinese goods. The US Custom and Border Protection Service
(10:16):
said in a note that smartphones and other electronics were exempt,
with maybe the exception of the twenty percent fentanyl crisis. Now,
then Trump came out and said there were some tech
specific tariffs. It wouldn't be one hundred forty five percent,
but there would be something. Here's what I think Apple
got an exemption last time. You know, Tim Cook is
(10:38):
enormously sophisticated when it comes to getting to mar A
Lago and working the Trump administration.
Speaker 2 (10:44):
Yeah, he's been having a lot of power lunches with
the President for.
Speaker 4 (10:47):
Sure, exactly.
Speaker 1 (10:48):
And Apple has also prepared for this moment that now
makes twenty percent of its iPhones in India via fox
Con and its factory in southern India. I think what
we're seeing is Apple moving some of the supply chain
for at least it's US products over to India. It
assembled twenty two billion dollars worth of iPhones in the
last year in India. And I just think, you know,
(11:10):
not only is Apple sort of flexible, not only has
it prepared for this moment, but you know, the old
saying that there's a third rail in American politics, and
the answer to that's usually been social security, yeah, or
medicare I think we can now add smartphones to that least.
I think that, you know, the Trump administration is you know,
maybe just sensible enough to know that if you screw
(11:34):
with people's iPhone prices, oh, they're going to be annoyed.
And so I just expect kind of Apple to come
out of this, not maybe unscathed, but in a better
position than a lot of other companies, in particularly small businesses.
Speaker 2 (11:47):
But even though they have moved a lot of their
production to India, there's a big tariff against India too,
isn't there is like twenty four twenty five percent or
something like that.
Speaker 1 (11:57):
So I think prices will go up, but I just
don't think it's the wallop that everybody expected two weeks ago.
And again, Apple's prepared for this moment. They apparently airlifted
a ton of iPhone supplies to the US before the
tariffs took shape.
Speaker 2 (12:12):
They stop.
Speaker 1 (12:12):
I think, yeah, that they're like us. They're preparing for
the hurricane.
Speaker 2 (12:16):
Corporations, they're just like us.
Speaker 1 (12:19):
Look, this regime favors large companies with a lot of
cash on hand to go and make the changes that
they need to weather the storm. Who's your winner, Stacy?
Speaker 2 (12:29):
My winner is consultants. Consultants and lawyers.
Speaker 4 (12:35):
They always come out on top.
Speaker 2 (12:36):
They always come out on top. If you want to
win in this world, you become a consultant or a lawyer, because,
especially right now though, with all the uncertainty, international trade
lawyers and international trade consultants are really getting inundated because
companies are trying to map out all kinds of different scenarios.
Like you said, I mean, there are deals being done
every day. It's hard to keep track of what's going on,
(12:58):
and consultants are coming in doing I think a lot
of different if then type situations. I actually talked with
Martin Ludovics. He is the president of IWSR, which is
this huge international beverage industry consultancy, and he's that he
has just been getting calls from everywhere. Kentucky, Bourbon, Irish whiskey,
French champagne, German beer, Japanese sake. They are all calling
(13:21):
him just desperate, desperate for help in navigating this, and
you know that hasn't been the worst thing for business.
Here is what he told me.
Speaker 3 (13:30):
I mean, it's great for us because everyone needs answers.
Speaker 2 (13:33):
I mean, it's it's difficult because obviously my clients are
feeling the pain, so it's hard not to empathize.
Speaker 5 (13:38):
But at least from our perspective, it's great.
Speaker 1 (13:43):
Stacy does consider lobbyists to be in this umbrella.
Speaker 4 (13:46):
I mean, oh, totally.
Speaker 1 (13:48):
You know, anyone who has a role in helping companies,
rich companies navigate these tariffs to create personal connections, to
carve out exemptions that and I imagine the hotel business
and mar al Lago is quite swift these Oh.
Speaker 2 (14:02):
Yes, apparently they've seen quite an uptick.
Speaker 1 (14:10):
So Stacey, Harvard has been in the news all week,
which is usually just how Harvard alums like it.
Speaker 4 (14:16):
Yeah, exactly, but it's not for good reasons.
Speaker 1 (14:19):
It's because Harvard has refused to give into the Trump
administration's demands.
Speaker 2 (14:24):
Yes, so the Trump administration demanded that Harvard ban masks
on campus, eliminate a lot of its DEI programs, and
make a lot of changes to some of its different
programs and departments that quote fuel anti Semitic harassment. Harvard
said no.
Speaker 1 (14:40):
Right, and Trump did not like that. So he's frozen
more than two billion dollars in federal funding and has
reportedly asked the IRS to revoke the university's tax exempt status.
Speaker 2 (14:51):
Yes, it's a big issue. There are lots of parts
of it. And so to help us make sense of
what is going on for Harvard and for other colleges
and universities. Right now, we are joined by Janet Lauren.
She covers the finances of higher ed at Bloomberg. We're
very lucky to have her. She's very busy right now. Hi, Janet, Hi,
So what has your week been like so far. It's
(15:12):
been a.
Speaker 5 (15:12):
Little busy, multiple stories every day, lots of things changing
very quickly.
Speaker 2 (15:18):
Well, what is happening right now as of Thursday late morning.
Speaker 5 (15:21):
Well, there's this idea that Trump might try to take
away Harvard's tax exempt status. He mentioned that earlier in
the week. We think Harvard is a really rich place.
Speaker 4 (15:32):
It is.
Speaker 5 (15:32):
It has fifty three billion dollars, which is quite a
lot of money. It's a good cushion, it's a nice cushion,
but they can't spend it like a bank account. Something
like eighty percent of that is restricted because donors make
a gift for the crew team or the English Department
and only sign an agreement and you're not supposed to
use that for other purposes. So you can't fund that
(15:55):
money for the crew team, you know, to hire postdocs
in the physics depart If your funding goes away.
Speaker 2 (16:01):
You can't just pull out fifty three billion dollars in cash.
Speaker 5 (16:04):
No, and it wouldn't even be all liquid. That's a
whole other thing about how they invest their money. The
last time they gave an asset allocation, something like thirty
nine percent was in private equity, So that means it's
it's tied up.
Speaker 1 (16:19):
Channa. What does it mean to revoke the university's tax
exempt status? How serious a blow would that be? And
how practical is it? Can the administration just do that?
Speaker 5 (16:29):
Well, the administration has been issuing a lot of executive orders,
so it's unclear where the process goes. But Harvard gets
a lot of benefits for its tax exempt status. For example,
it doesn't pay property taxes. It has the ability to
issue tax exempt bonds. Now they also recently issued taxable bonds,
(16:51):
and that gives them a lot more flexibility. If you
make a gift to Harvard, you get a tax deduction
as a donor. So there's a lot of ways that
benefits it. And in twenty twenty three the benefit was
something like four hundred and sixty five million dollars, which
is a nice chunk of change. Now, Also in December
(17:12):
twenty seventeen, there was a massive tax bill and endowments
were ensnared in there, and for the first time schools
had to pay taxes on their investment income. Up until
twenty seventeen, they did not pay taxes on their investments
in their endowment.
Speaker 2 (17:30):
On the fifty three billion dollars, they didn't pay taxes.
Speaker 5 (17:33):
No that it wasn't fifty three billion dollars back then, okay,
but it was still quite a lot of money. And
they pay one point four percent on the net investment return.
And people in Congress and JD. Vance and others have
would like to see that increase.
Speaker 1 (17:50):
And how likely is it to happen. Do you think
that university isn't Harvard in particular lose this taxing some status.
Speaker 5 (17:57):
Well, if you would have asked me a year ago,
two billion dollars in federal research grant be frozen. I
would have said, I don't know how that happens, but
we're kind of in a different world here.
Speaker 2 (18:10):
How big of a deal is this for Harvard? I mean,
I keep thinking, like a lot of these stories have
come up. It's come up with Columbia and Princeton and
a lot of stories. But all these institutions have so
much they do have so much money, like, and they
charge a lot of money, and the charge a lot
of money. Can they tough it out? It feels like
they can tough Is this a really big deal for them?
Speaker 5 (18:30):
Well? Each school is going to be different. So Columbia,
which had four hundred million threatened, has an endowment of
about fifteen billion, so they're a lot less rich. Now
if you look at a place like Princeton, I think
it's up to thirty four billion ish, But they don't
have a lot of students there, so the endowment per
student ratio is like over two million dollars. So if Princeton,
(18:53):
which it relies on its endowment for about seventy percent
of its budget, they would have an easier time, you know,
more than a place like Harvard. Last year Harvard, the
endowment brought in about two point four billion dollars. It's
spending five percent, so they could spend more, but you know,
some of it is restricted, and the reality is they
(19:15):
would have to make a lot of cuts.
Speaker 2 (19:17):
But they wouldn't be They wouldn't like shut down.
Speaker 5 (19:20):
No, they wouldn't shut down. And they've just issued debt
for seven hundred and fifty million dollars. They also have
a one point five billion dollar line of credit, so
they have a lot of tools in their toolkit. They
learned a good lesson in two thousand and eight when
the financial crisis happened and their endowment did not have liquidity.
Liquidity is a really important word here. It's their cash
(19:40):
on hand, because remember, places still have to make payroll
every two weeks.
Speaker 1 (19:44):
I feel like this week, Janet, we saw major sat
change and the willingness of schools to fight the Trump administration.
So a few weeks ago our alma mater, Columbia, seemed
to give in the Trump and said it would negotiate
with the administration. And then this week kind of Harvard
stood up and Columbia's new acting president spoke out, wrote
(20:06):
a letter and said the university wouldn't do anything to
compromise its independence. So do you think schools are now
fighting and this all moves to the courts, and how
does it play out.
Speaker 5 (20:16):
It's really hard to know how it plays out, and
it really is going to depend on what happens with Harvard.
But the government came down very hard, very swiftly. Within
hours of Harvard's very defiant letter, two point two billion
dollars was frozen. Now last night they brought up the
(20:37):
specter of potentially limiting international students. That is a huge
game changer because last year more than one million international
students came to colleges. You know, at Harvard it was
in the realm of like six thousand. So that's opening
a completely new front. But you have to remember, you know,
(20:58):
fifty three billion dollars is nothing to the federal government.
It's about money, and Harvard may seem like they have
endless money, but the federal government is more powerful than Harvard.
Speaker 2 (21:09):
I'm wondering what you see as the stakes here, because
I mean, this is a story that's really grabbed headlines,
and like you say, like Harvard, they'll be okay at
least for a while. Why do you think this is
kind of captivating everybody so much. Well, we write about money, power,
and influence. That's why we spend a lot of time
writing about Harvard. But the idea that this is a
private university, the government shouldn't have such a big stake here.
(21:33):
But the government is one of the biggest funders, if
it's not the biggest funder of Harvard University.
Speaker 5 (21:40):
And I think people don't realize that the government pays
for student loans. If you are a graduate student at
Harvard Law School, where I believe it's going to be
one hundred and twenty thousand dollars for one year next year,
and you can't pay that you take out a government
loan at nine percent. So the government plays a massive
(22:01):
role within higher education. Since World War Two, they've partnered
with universities to give money to do research that's in
the interest of the country. So we will fund this
physics lab at Harvard or at cal Tech or wherever
to do really important work. You know, Princeton has won
(22:21):
multiple Nobel Prizes recently. All these top research universities have
by using money from the government. I forget how much
money Harvard puts in for research. It may be like
a billion dollars itself. But the government is a huge
sponsor of higher education, and you know, if they're taking
the government's money, they may want to listen to what
(22:44):
the government says.
Speaker 2 (22:45):
Well, you've gotten like I like, so many alerts have
come up on your phone just in like the last Yeah,
I feel like you've sent like several emails. I think
you're you're typing right now. Yeah, yes, I don't know
how you're doing that. It's amazing. But but I mean, clearly,
this is a story that's kind of grabbing everyone. Do
you think it has to do with like the place
(23:06):
that universities have in our country.
Speaker 5 (23:11):
Yes, of course. I think people were thrilled to see
somebody stand up to Trump. And I think if anybody
could do it, it's Harvard. The oldest richest university in America,
pre dates the United States, seems to have you know,
endless money. And if the law firms couldn't stand up
(23:32):
to Trump, at least here is an entity that seemingly could.
And I think, you know, Harvard is finding out it's
having consequences.
Speaker 1 (23:42):
A few weeks ago, Janna, we brought together a panel
of university presidents and chancellors included the head of NYU
A CU Boulder, and you know, it really preceated the
current crisis. But they were all making the point that
this is not just an attack on schools, but really
an attack on American competitiveness. They were making the argument
(24:06):
that if you defund science and research, you're just tying
one hand behind America's back in terms of competitiveness in
future markets. And clearly like they're trying to make an
argument like a pro growth argument. I have to say,
now a couple of weeks later, it feels like that
argument fell on deaf ears. I mean, do you agree
that the Trump administration just seems to be discarding that well.
Speaker 5 (24:29):
I think there's a lot of mistrust within higher education.
I wrote a story in December sort of previewing all
of this, and part of it described the view that
some faculty feel like their social justice advocates instead of
academics and researchers. And I think that idea maybe doesn't
(24:51):
sit well with middle America. And you know what the
cost of college is. It's ninety three thousand dollars at
many schools, and a lot of college presidents say, oh no, no,
nobody pays that. But that's that's actually not true. About
half of the people pay it. Granted, you know, Harvard
has extremely generous financial aid. They just upped it for
(25:13):
under two hundred thousand dollars, but you still have to
get into Harvard. It's going to be even more competitive now,
and they're asking people to pay a lot of money
if you don't make that threshold. I mean, there are
lots of people in America who make two hundred thousand
dollars and to pay ninety three thousand dollars is still
quite a lot of money. I think most Americans think
(25:35):
that is outrageous.
Speaker 2 (25:42):
Okay, Bradstone, it is time for our underrated story of
the week, this one you are bringing in. So what
have you got?
Speaker 1 (25:50):
Yeah, so this was a great story and it was
certainly not underrated in terms of coverage. I got a
lot of attention. On Monday, a all female crew traveled
to the very edge of space on Jeff Bezos's Blue
Origin rocket.
Speaker 2 (26:07):
You guys, I will have to tell you, look at
the moon.
Speaker 4 (26:09):
That's amazing.
Speaker 2 (26:11):
Wow, look at the blue line.
Speaker 1 (26:13):
The crew included CBS broadcast journalist Gail King, musician Katie Perry,
Bezos's fiance, Lawrence Sanchez, and that'sa rocket scientist, Aisha Bo.
The trip was a success. They were in space for
about three minutes and they all made it safely back
to Terra Firma.
Speaker 2 (26:33):
I got a singing space. I died inside a little
when I saw the story. Why is this underreach story? Okay?
Speaker 1 (26:41):
Well, all right, they were sort of savaged, right, yes, yes, look,
I mean I Stacey, you might not know this. I
read the first ever story about Blue Origin way back
in two thousand and four. I did exposed its existence.
I tell the story in my book The Everything Store,
where I really went to the top seat Great Headquarters
and I this was an embarrassing revelation. I was a
(27:03):
young journalist at the time. I went through the trash
and I found all the sort of founding mission document
through Blue Origin at the.
Speaker 4 (27:10):
Time origins trash.
Speaker 2 (27:12):
What did you find?
Speaker 1 (27:14):
Okay? So I found all these mission statements. And part
of Bethos's vision back then was to create a road
to space, to make space travel so reliable, so consistent,
so safe that people didn't think about it that it
was like air travel. And here we are twenty years later,
and this is what he's trying to do. This is
(27:37):
like the twelfth Crude mission to suborbital space. It is
by no means routine. In fact, Blue Origin lost one
of these rockets at the end of twenty twenty two,
like they had to figure out how to make it
safe again. And you look at this crew. I mean,
Gail King is a truly serious journalist. I love her.
(27:57):
She's such a great interviewer. She doesn't like even flying
on planes. She looked like there was not enough xanax
in the world to get her on that rocket, but
she did it. You know, yes, it was a little cringe,
But I think it's all part of like Bezos's long
arc of making this seem fairly routine, and the fact
that they were there and they were criticized and they
(28:19):
did it, I think sort of speaks to the success
of its mission. Maybe not the financial or business success,
because I don't think anybody's paying for this yet, but
like making this routine, getting people over the hump and
opening up the frontier for this vision that he has
of people living and working one day in space.
Speaker 2 (28:37):
I have to say, you make a very strong case.
You've come quite close to turning my mind around about this.
Speaker 4 (28:43):
And you know, I feel like there's a butt.
Speaker 2 (28:46):
It makes me feel terrible to go after this story
so much because gender equality, women in stem these are
very important things to me. But the whole way that
this happened in reality I found distressing for a number
of reasons. There were just the details I thought were
so difficult for me to swallow. The crew they called themselves,
(29:09):
I think the six women taking up space by the way,
which is also terrible. I feel like they did not
do themselves any favors. Like Lauren san just had special
like sexy spacesuits designed, and like Katie Perry gave an
interview and said she was putting the ass an astronaut.
There was like one of the passengers yelled, oh my
goddess while you were taking off.
Speaker 1 (29:30):
Oh my god, my god, oh my goddess.
Speaker 2 (29:33):
Which is perhaps the worst of the details.
Speaker 1 (29:37):
I'm gonna make you feel even worse about this because
I feel like there was a little bit of sexism
in the in the coverage, like when Bezos went up
on the first launch, same skepticism in his cowboy hat.
I mean he was gently ridiculed. When William Shatner went up.
They did a whole documentary about his enlightening, mind blowing
(29:57):
experience and yeah, I mean.
Speaker 2 (30:00):
And change and he's earned his.
Speaker 4 (30:01):
Stripes, right, It was a lot.
Speaker 1 (30:04):
But I feel like the criticism is shooting fish in
a barrel a little bit. And look, I might think
twice about getting on top of a rocket fueled by
hydrogen and oxygen, having a burn for you know, three minutes,
going up one hundred kilometers and then going back into
free fall like it's you know, I don't know. I
give him credit for a little bit of bravery.
Speaker 2 (30:27):
Okay, Okay, I see that.
Speaker 1 (30:28):
And by the way, one less point Elon Musk is
not has not strapped himself a top of a SpaceX rocket,
you know, for for all skill, yeah, religious fervor about
space travel and going to Mars. He has not taken
the risk that Jeff Bezos's fiancee took in the past week.
Speaker 2 (30:49):
So bred would you say it's fair that you're like
a semi believer in the space tourism business right now,
I'm a space geek.
Speaker 1 (30:56):
I have to be a believer.
Speaker 2 (30:57):
Oh me too. I love all of that, Like the
amazing images coming back from the telescopes out in the universe.
It is pretty spectacular, but also for our listeners, like
what do you think of the business of space, what
do you think about the six women taking up space
and that whole journey. We would love to hear from you.
You can send us an email at Everybody's at Bloomberg
(31:19):
dot net. That's Everybody's with an s at Bloomberg dot net.
Everybody's Business is produced by Stacy Wong. Magnus Hendrickson is
our supervising producer, Amy Kean is our editor, and Brendan
Francis Nenam is our executive producer. Sage Bauman heads Bloomberg Podcasts.
Speaker 1 (31:39):
Thanks for listening and see you next week.
Host
David Papadopoulos
Popular Podcasts
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Special Summer Offer: Exclusively on Apple Podcasts, try our Dateline Premium subscription completely free for one month! With Dateline Premium, you get every episode ad-free plus exclusive bonus content.
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.