{"id":1152,"date":"2024-11-12T22:06:37","date_gmt":"2024-11-12T22:06:37","guid":{"rendered":"https:\/\/europaskolos.lt\/index.php\/2024\/11\/12\/transcript-peter-goodman-the-big-picture\/"},"modified":"2024-11-12T22:06:37","modified_gmt":"2024-11-12T22:06:37","slug":"transcript-peter-goodman-the-big-picture","status":"publish","type":"post","link":"https:\/\/europaskolos.lt\/index.php\/2024\/11\/12\/transcript-peter-goodman-the-big-picture\/","title":{"rendered":"Transcript: Peter Goodman &#8211; The Big Picture"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div>\n<p><iframe class=\"lazy lazy-hidden\" style=\"width: 100%; max-width: 660px; overflow: hidden; border-radius: 10px;\" data-lazy-type=\"iframe\" data-src=\"https:\/\/embed.podcasts.apple.com\/us\/podcast\/how-the-world-ran-on-empty-with-peter-goodman\/id730188152?i=1000676160980\" height=\"175\" frameborder=\"0\" sandbox=\"allow-forms allow-popups allow-same-origin allow-scripts allow-storage-access-by-user-activation allow-top-navigation-by-user-activation\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p><noscript><iframe style=\"width: 100%; max-width: 660px; overflow: hidden; border-radius: 10px;\" src=\"https:\/\/embed.podcasts.apple.com\/us\/podcast\/how-the-world-ran-on-empty-with-peter-goodman\/id730188152?i=1000676160980\" height=\"175\" frameborder=\"0\" sandbox=\"allow-forms allow-popups allow-same-origin allow-scripts allow-storage-access-by-user-activation allow-top-navigation-by-user-activation\" data-mce-fragment=\"1\"><\/iframe><\/noscript><\/p>\n<p>\u00a0<\/p>\n<p>The transcript from this week\u2019s, <em>MiB: Peter Goodman, How the World ran Out of Everything<\/em>, is below.<\/p>\n<p>You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify,\u00a0YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.<\/p>\n<p style=\"text-align: center;\">~~~<\/p>\n<p>This is Masters in business with Barry Ritholtz\u00a0on Bloomberg Radio.<\/p>\n<p><strong>Barry Ritholtz<\/strong>: This week on the podcast, another extra special guest, Peter Goodman, is the award-winning investigative reporter and economics correspondent for the New York Times, his latest book, how the World Ran Out Of Everything Inside The Global Supply Chain. What a fascinating deep dive into how we got here in terms of why were we unable to get basic protective equipment during the pandemic? How could we not get ventilators or even things like face masks and, and gowns. What led us to outsourcing everything and not having a backup, not having an emergency system. How did we break our resilience leading up to the pandemic? I thought the book was a great read and very fascinating. I learned a lot about it, and I, I think this conversation is fascinating also, if you\u2019re at all interested in things like global supply chains, the role of consultants in, and the role of shareholder primacy in how society operates, plus all the craziness that took place during the pandemic is detailed in the book and in with great specificity, I think you\u2019ll find this conversation fascinating. With no further ado, my discussion with the New York Times, Peter Goodman.<\/p>\n<p><strong>Peter Goodman<\/strong>: Thanks so much, Barry. Great to be here.<\/p>\n<p><strong>Barry Ritholtz<\/strong>: So I found the book fascinating. It\u2019s such a fresh story in everybody\u2019s minds. But before we get into the book, let\u2019s talk a little bit about your background. You, you have really a fascinating career. Oh, thanks. You, you start as a feature writer freelancing in Japan from Southeast Manila and Jakarta. How on earth did that happen?<\/p>\n<p><strong>Peter Goodman<\/strong>: Yeah, so, you know, I was one of those kids who got outta college and just, I did what I wanted to do. I, I liked to write, I had been sort of a political activist in college, but life seemed more complicated than it did to my activist friends. So journalism drew me and I wanted to go check out Southeast Asia. So I, I first stopped in Japan, got a job writing features for the Japan Times, teaching English to pay the bills and save up the money to then move to Manila, and then eventually Jakarta spent a lot of time in Cambodia. Wow. Covered a massacre of pro-democracy demonstrators in East Timor, got kicked outta Indonesia, came back to the States and ended up in Alaska at the Anchorage Daily News.<\/p>\n<p><strong>Barry Ritholtz<\/strong>: Yeah, I was gonna ask, how, how do you find your way from, from Asia to, to Anchorage? What, what was it like reporting from a small town in Alaska?<\/p>\n<p><strong>Peter Goodman<\/strong>: Yeah, I mean, I basically figured out that if I wanted to do this seriously, I was gonna have to go somewhere to, to learn journalism. I didn\u2019t go to J school, went to a liberal arts college where we didn\u2019t have, you know, that sort of paper where we had beats and, and structure. And I, I understood that, you know, freelancing would take me a certain distance, but if I wanted to be serious about it, I had to go work, you know, doing local journalism somewhere. And the anchor, I, I was lucky enough to be hired by the Anchorage Daily News, which was just a heavyweight shop of talent, only about, you know, 16, maybe 20 reporters. They had won the Gold Medal for Public Service Pulitzer, huh? A few years before I got there. They were a finalist the year before I got there for the Exxon Valdez crash. And it was just a very talented, creative group of people. I, and yes, I ended up in, I was living in Palmer, which is next to Wasilla. It was the local government reporter where I covered, as you can probably guess, a then unknown member of the Wasilla City Council named Sarah Palin.<\/p>\n<p>00:03:45 (Speaker Changed) And how and how did that turn out?<\/p>\n<p><strong>Peter Goodman<\/strong>: You know, it was, it was fascinating. I mean, there\u2019s nothing like having a local beat and having to figure out who matters. What\u2019s a story? How do I go to a, a meeting of local government, prepare for whatever issue seems most interesting, develop sources, build people\u2019s trust, figure out, you know, when you get it wrong, how to make it right. And, and, you know, there\u2019s nothing like being in a place where someone will call you if you get a fact wrong. I mean, when you\u2019re freelancing in Cambodia, writing about Cambodian refugees, you spell somebody\u2019s name wrong, nobody\u2019s gonna call you. You mess up a fact. Like I once messed up a fact. You know, I, I misheard somebody, say assessment when they meant Cessna. And boy, I, I thought I was gonna have to flee the state in embarrassment you, and you learn how to, how to get it right.<\/p>\n<p><strong>Barry Ritholtz<\/strong>: So you have a knack for being in the right place at the right time. You were the Shanghai Bureau chief for the Washington Post, really, as China was emerging as a global superpower. Tell, tell us a little bit about your experiences in Shanghai.<\/p>\n<p><strong>Peter Goodman<\/strong>: Yeah, that was as just an incredible story. It was a story of a lifetime. I mean, it was, it was a moment where China had become a, a very significant story in the American media and, and imagination and, and politics. But, but it was still before, you know, everybody had these giant bureaus before we were covering news in this very granular way. So you had time to really dig into stuff. And, you know, we had two guys in Beijing who were phenomenal, my two colleagues who did a lot of political stuff. And I was ostensibly the economic writer. But the truth was, all of her stories were more or less the same because everything was an economic and political story combined. Right. And it was a moment where you could just sort of point at anything like, how did that ballpoint bearing factory get there? Who owns it? How did the land and the energy become available? Where are they selling their product? Who\u2019s getting a cut of the action? You know, anything you dug into was a story that would tell you something about power and the trajectory of, of the Chinese economy.<\/p>\n<p><strong>Barry Ritholtz<\/strong>: And, and I\u2019m sure that helped set the stage for all the things you saw when the world ran out of everything. But, we\u2019ll, we\u2019ll circle back to that. You also covered the financial crisis and recession as the Times New York based economic correspondent. Right. I have a vivid recollection of my experience during the financial crisis. Tell us a little bit about your experience in \u201908, \u201909.<\/p>\n<p><strong>Peter Goodman<\/strong>: Well, you know, it\u2019s interesting. I I, I was sort of an accidental national economic correspondent. \u2019cause I was very happily working for the Washington Post covering international econ. And the post was, let us say, not having its best days. Right. And I had this opportunity to go to the Times, and they offered me the National Economic Correspondent. I thought, well, you know, I\u2019m living in New York at the time. I\u2019m working in the New York Bureau of the Washington Post. Wasn\u2019t all that keen to leave. I love the Washington Post, but I thought, well, I better do this sleepy story, the national economy. It\u2019s the fall of 2007. Didn\u2019t know anything about it, was surrounded by people who knew much more about it than, than I ever would. The first story I ever pitched was, you know, it seems like consumer spending is drying up because housing prices are falling. That could be significant. I keep reading that, you know, consumer spending is more than two thirds of, of the American economy. So I got Mark Zandy to go crunch some data for me, showing where were home equity lines of credit drying up the fastest, and what was their historical relationship to consumer spending. And I got this crunched for like every metropolitan area in the United States. And, and almost at random, I said, I\u2019m gonna go out to Reno.<\/p>\n<p><strong>Barry Ritholtz<\/strong>: I was gonna say four areas stick out in my mind. Southern Florida. Yeah, Vegas and, and Reno, right. As two and three. Yeah. Southern California. Right. And I\u2019m trying to remember, maybe DC was the other area that was,<\/p>\n<p><strong>Peter Goodman<\/strong>: Well, there were a lot. Yes. DC was hit for sure. There were parts of New England that were hit. Right. But you just listed that. But so I, I sort of randomly said, well, I\u2019m going out to Reno because if you look at the ratio of home equity lines of credit to consumer spending, we\u2019ve seen this big right dry up fest. And within five minutes of getting off the planet, I had no real reporting plan. I pulled off the road from the airport headed to where I was staying, and there was a tile shop. And I went in, introduced myself and talked to this guy, Marshall Witty, who was a salesman who at that time was about to send the keys back on his third spec house. His commissions were drying up. He told me how he had, you know, financed a trip to Tahiti for his honeymoon on home equity line and credit.<\/p>\n<p>He used to get a new truck every year for the variety of color. And suddenly he\u2019s answering his phone. No, dude, I can\u2019t go to the club tonight. I\u2019m staying home to watch Netflix. And I just sort of glued myself to this guy for three days. I met all of his friends and I went back to New York, and I remember saying to my colleagues in the newsroom, we are, and I used an impolite word that I will not use on your radio program. We are, you know, really up a creek here. And they\u2019ll say, you know, calm down. You know, let\u2019s take it easy. But that story, I, I sort of just accidentally fell my way into, I I, I saw that this was gonna be really bad. It was not merely a mild recession. And so every story I did afterwards, I mean, as I then got into the minutia of how the mortgage markets work and eventually covered the foreclosure crisis really began with that just basic, you know, naive, you know, question, well, what\u2019s gonna happen when we can\u2019t just use our homes as, as ATM machines anymore? That seems like it\u2019ll have implications. And yes, it did.<\/p>\n<p><strong>Barry Ritholtz<\/strong>:\u00a0 That reminds me a little bit of the scene from the Big Short, either the book or the movie, but in, in the movie, it\u2019s Steve Carrell speaking to a stripper about the home she bought to fix up. Right, right. And he said, he goes, wait, you, you\u2019re buying this home as an investment property. And she\u2019s like, I have six homes as an investment property. And suddenly he realizes, oh, we are in for a world of trouble. This is much worse than anyone imagined it.<\/p>\n<p>00:09:46 (Speaker Changed) It\u2019s exactly that. In fact, the guys I was hanging out with when I said, well, I\u2019ll take you out to to dinner and drink so we can have a longer conversation, we ended up in a place where there were people of, of that profession. It was actually my first expenses that I ever recruited as a New York Times writer. And I was embarrassed to submit them given tickets (Because it was so expensive?). \u00a0It wasn\u2019t that it was so expensive. It was what it was the name of the place!.<\/p>\n<p><strong>Barry Ritholtz<\/strong>:\u00a0 I love the expression, the expression jingle mail people used to put their keys in an envelope and send it back to the bank. And that\u2019s jingle mail. I\u2019m done with this.<\/p>\n<p><strong>Peter Goodman<\/strong>: Actually, Marshall Woody explained that to me. I didn\u2019t even understand what he meant. He said, yeah, I\u2019m sending the keys back. I\u2019m like, whatcha talking about doing what? He\u2019s like, well, you know, this home, I never expected to live here. I guess I\u2019m gonna be spending some time here. I figured I\u2019d be moving uptown, you know, next year. That\u2019s not happening.<\/p>\n<p><strong>Barry Ritholtz<\/strong>: It, it\u2019s amazing. And, and in fact, until the financial crisis, I don\u2019t think anybody ever stopped to find out, am I in a recourse state or a non-recourse state? Meaning am I still on the hook after I lose the house? Or is the bank limited to just, they get the house and I get to walk away?<\/p>\n<p><strong>Peter Goodman<\/strong>: I mean, let\u2019s face it, we all click agree, read all the terms to millions of documents a day that we don\u2019t even read a sentence of. Right. Right. And suddenly we\u2019re living in the fine print. Oh, they\u2019re actually are terms that are gonna apply here. That matter. Right. That matter. That people that we deluded ourselves into believing would never, you know, this never mattered because housing prices are going up forever. Even Alan Greenspan says that you\u2019re a sucker if you don\u2019t get a variable rate mortgage. And you know what could happen? Oh, if it doesn\u2019t work out, I\u2019ll refi, I\u2019ll sell. So well suddenly, you know, we\u2019re dealing with the all of this ink that was never intended to have effect.<\/p>\n<p>00:11:27 (Speaker Changed) That\u2019s right. I, I\u2019m still to this day, amazed that the models never allowed for home prices to fall in New York. I have a vivid recollection of finishing grad school in 89, and anybody I know who bought a co-op or condo in New York, they were underwater for 5, 6, 7 years until, until the next leg, late, late nineties. And the booming stock market started to send real estate prices higher. But you don\u2019t have to go that far back in time. Look at the 1970s to see when inflation made, at least in real term, home prices not go up. And then, you know, pre-war, there were some pretty bad recessions in depressions in the turn of the century or the twenties and thirties. Obviously, homes weren\u2019t as widespread owned back then as they are now. And I don\u2019t wanna spend too much time talking about the financial crisis. I have to ask you, you\u2019ve done multiple trips to some pretty heavy conflict zones, Iraq, Cambodia, Sudan, East Timor. What\u2019s it like being in these areas? Are you embedded with the US military or are you just walking around hoping no one takes a pot shot at you?<\/p>\n<p><strong>Peter Goodman<\/strong>: It depends. I have been embedded in places, you know, Iraq actually, I was there at the best possible time to be a journalist, you know, in this period. Like the, I was there as Bush declared mission accomplished. I was just in my own SUV driving from the Kuwait airport up to Basra with a couple Washington Post colleagues. And then we drove, you know, all the way up to Baghdad and Keokuk. And actually, I\u2019ll never forget the car broke down when we put a black market gasoline. And at some point I had to call him National Car Rental in Kuwait, and then get that thing on the back of a flatbed truck through all these laid off truck drivers who had no business. And we hired somebody for a couple hundred bucks to drive it through the desert. You know, it\u2019s, it, it\u2019s always, I I\u2019m not a thrill seeker by nature.<\/p>\n<p>I mean, there are, there are people who cover conflict who\u2019ve spent a lot more time in conflict zones than, than I ever will. Some of whom, you know, I fear for their safety, right? \u2019cause there is, I, I\u2019m just somebody who wants to see what\u2019s going on. I\u2019m not like the bravest soul, but, but there\u2019s nothing like being in a place. And boy, I mean, Iraq after Saddam was just a goldmine for journalists because there are all these people, many of whom are English speaking, who are, are dying to tell their stories. Whether it\u2019s like, how do these trading companies work despite American sanctions? I did a story on smuggling out of the Port of Basra, where like in a day I found the guy who like ran a smuggling ring, who took me to the porch, showed me the fake bills of lading. Like, that was absolutely incredible. Huh. Cambodia was, was an endlessly<\/p>\n<p><strong>Barry Ritholtz<\/strong>: Fascinating place. Of all these, of all these wild overseas stories you\u2019ve done, what\u2019s been your favorite to cover? What\u2019s been the most challenging?<\/p>\n<p><strong>Peter Goodman<\/strong>: That\u2019s a, that\u2019s a tough question. I, I mean, I would say that Iraq coverage just felt so vivid and, and important. And I mean, there, there\u2019s nothing like when, when you get accustomed to doing, you know, sort of enterprise or investigative or longer form stuff, there\u2019s nothing like being in a place where it\u2019s like, no, people actually want to know right now what happened to you today. And, and stories almost write themselves. I\u2019m gonna go to, you know, an oil refinery that shut down \u2019cause the looters came and the Halliburton people haven\u2019t figured out how to turn it back on. And there are a bunch of Iraqi employees saying, who\u2019s gonna pay us? And how come we can\u2019t go in there? You know, these sorts of stories are just so vivid and, and compelling. So I, I found that, you know, particularly amazing. I mean, my, my time in China was kind of un unbeatable as, as well. It\u2019s just such a fascinating place.<\/p>\n<p><strong>Barry Ritholtz<\/strong>: Yeah. Really fascinating. Let\u2019s talk a little bit about some of the background philosophy. Tell us about the Lean Taliban and the cult of efficiency.<\/p>\n<p>00:15:18 (Speaker Changed) Love it. Yeah. So the Lean Taliban refers to the way the people at McKinsey and Company, the business consultancy viewed themselves in proselytizing for lean manufacturing, or just in time as we know it now, just in time, is a very sensible idea, pioneered by Toyota that says, you know, instead of having giant warehouses filled with all kinds of stuff that we may need at some point in the future, but who knows when it\u2019s Japan, the end of the second World War space is limited, capital\u2019s limited. Let\u2019s have the suppliers bring the stuff we need on the supply chain as we need it. They, they sort of emulated the way a supermarket deals with milk. You, you want enough on the shelf that everybody gets milk, they don\u2019t leave unhappy, they can\u2019t buy it, but not so much that you\u2019re spilling it. Well, this is a great idea until business consultancies like McKinsey get hold of it and turn it into this crude imperative to just slash inventory hand the extra savings to the corporate executives as a reward for being smart enough to hire McKinsey.<\/p>\n<p>00:16:20 And I end up digging deep into how this actually works in the decades before the pandemic, and I spent time with this guy in Minnesota who was working at this industrial generator plant where McKinsey\u2019s, lean Taliban show up, bunch of slick suited young people, straight outta Ivy League universities, one older guy from the Chicago branch. And they say, you\u2019re doing it all wrong. You know, why do you have all these $5 sheet metal brackets sitting around taking up space in warehouses? Let\u2019s go lean, just order them when you need them. And the guy I\u2019m talking to, he says, well, well hold on Indus, these are giant industrial generators that need to be installed by Crane. Talk about just in time. And if we listen to your advice, we\u2019re gonna be slow with orders. Which is exactly what happens. So now they\u2019re spending hundreds of thousands of dollars to expedite delivery of their products. They\u2019re losing sales because they\u2019re upsetting the contractors. We\u2019re waiting for their generators. Also, they can say, look at us being so lean that we don\u2019t have $5 sheet metal brackets.<\/p>\n<p>00:17:24 (Speaker Changed) And, and, and without those brackets, you can\u2019t complete that generator. Correct. But even worse, when you give people incentives and metrics, no matter how ridiculous they may be, they follow those incentives and they, they\u2019ll do those metrics to the point where the people running the factory will not take delivery of key components. Right. \u2019cause it\u2019ll be sitting on their books on the 29th of the month and it\u2019ll screw up their metrics. Exactly. They leave \u2019em the, they won\u2019t accept parking lot until first, until the first<\/p>\n<p>00:17:56 (Speaker Changed) Right out in the parking lot.<\/p>\n<p>00:17:57 (Speaker Changed) And it, that just seems like, no, aren\u2019t we supposed to be making products and selling them this secondary level of metrics seems kind of absurd. This<\/p>\n<p>00:18:05 (Speaker Changed) Is central to understanding the product shortages that we\u2019ve experienced for the last few years in overdoing it on lean. And the ultimate example, the story I tell in the book is I found a railroad engineer out in Idaho who\u2019s working for Union Pacific now. The railroads have their own version of the Lean Taliban. It\u2019s called precision scheduled railroading, fancy way of saying, let\u2019s lay off lots of workers. Let\u2019s stick the remaining workers with more jobs. Let\u2019s make scheduling really complicated. Let\u2019s, let\u2019s limit scheduled service, make trains longer than ever. Well, so this railroad engineer is horrified to discover that he\u2019s actually pulling freight to the wrong destinations. And this is not by accident, this is because Union Pacific has told Wall Street, we hear you on the need for efficiency and going lean. We\u2019re gonna limit dwell time, which is the amount of time that cargo sits in any individual place.<\/p>\n<p>00:19:00 And so the guy running Union Pacific\u2019s rail yard in Nebraska absorbs this mantra and says, well, I don\u2019t care where the next train\u2019s going. I am attaching as many cars to it as possible. So I have done my job. I have lowered dwell time. Well, the real effect of this is there\u2019s somebody sitting in Southern California waiting for auto parts that are in Oregon. \u2019cause this guy\u2019s hauling them to the wrong place. We\u2019ve lowered dwell time. Wall Street\u2019s happy. If all you\u2019re looking at is some window on a Excel spreadsheet, oh, the railroad is more efficient than ever. If you\u2019re the paint manufacturer in California needing a drum of chemicals that\u2019s stuck in Washington state, and now you gotta tell your customers you\u2019re late with the order, that doesn\u2019t seem particularly efficient. My takeaway from doing this book is there\u2019s a lot of inefficiency in this ruthless efficiency.<\/p>\n<p>00:19:50 (Speaker Changed) So I wanna, I\u2019m glad you brought that up because I am not a big fan of consultants in general. You have a lot of interesting things to say about McKinsey in the book who, who perhaps have not distinguished themselves over the years with many of the things they\u2019ve contributed to it. It\u2019s sort of funny to see a bunch of Ivy League suits who\u2019ve never run a factory or who\u2019ve never run a railroad or who\u2019ve never run a, a retail shop, come in and say, no, no, you\u2019re doing this all wrong. Here are the metrics that will get you a higher stock price on Wall Street, regardless of the subsequent impact to either your sales, your profits, your other stakeholders, including employees and customers. Right. Just a relentless pursuit of how can we get the stock price up regardless, right. Is that, is that a fair assessment? Yeah,<\/p>\n<p>00:20:44 (Speaker Changed) I think that is a fair assessment. And the problem is that that trick works time and again<\/p>\n<p>00:20:49 (Speaker Changed) For a while anyway.<\/p>\n<p>00:20:50 (Speaker Changed) Y you know, I I mean, you think about slashing inventory, right? Which on the books, if all you\u2019re thinking about is you\u2019re in a cubicle and you\u2019re analyzing numbers for some publicly traded company, you slash inventory, you\u2019ve lowered, or I\u2019m sorry, you\u2019ve increased return on asset because inventory is asset, right? So asset is now smaller. Whatever your revenue is, is divided by a smaller number. That\u2019s a higher measurement. Well, as a, as this London Business School professor I talked to for the book, put it to me. Yeah, that\u2019s really great. But if you can\u2019t make a ventilator in the middle of a pandemic because you\u2019ve managed your inventory, so that quarter to quarter you\u2019ve boosted your return on asset, you don\u2019t get to say, well, at least our share price is high.<\/p>\n<p>00:21:32 (Speaker Changed) So I remember having a conversation with Duff McDonald who wrote a book called The Firm Oh yeah. About McKinsey and Company. And, and some of the things that McKinsey is responsible for is, is kind of like shocking. Like it, it seems whenever there\u2019s some financial engineering based disaster, and you look into the details somewhere in the back of it is some consulting person right. From McKinsey who says, what would happen if instead of doing it the way you always did it, we focused on these metrics instead. Right. And let\u2019s see if that helps get the stock price up. It sounds like lean inventory and just in time delivery is a version of focusing on a secondary characteristic in order to affect the stock price rather than focusing on increasing revenues and doing it more efficiently.<\/p>\n<p>00:22:30 (Speaker Changed) Yeah. I mean, let me be clear, just in time is a good idea and trying to eliminate waste from your supply chain is a good idea. The question is, are you doing it in a way that\u2019s commonsensical or in a way that\u2019s purely driven by trying to hit some metric that some 22-year-old at a Harvard told you, you know, is a good way to<\/p>\n<p>00:22:47 (Speaker Changed) Do it. So, so let\u2019s stay with that, because you talk about Toyota\u2019s role in all of this, right? Toyota, they\u2019re on an island, the everything is destroyed post World War ii, it would make, and they don\u2019t have a lot of capital. So given those constraints, their version of common sense, rational, lean inventory, you know, given their constraints seems to be pretty<\/p>\n<p>00:23:11 (Speaker Changed) Intelligent. Oh, it was, it was highly<\/p>\n<p>00:23:12 (Speaker Changed) Effective and, and it worked. Is the implication that when everybody else started implementing this via consultants, they just took it way too far, is that the thinking?<\/p>\n<p>00:23:24 (Speaker Changed) It, it\u2019s that the consultants understand who they\u2019re working for, they are working for executives who must get the share price to go up right now. And if they fail to do that, they\u2019re gonna be looking for their next job. So whether they think it\u2019s commonsensical or not, in terms of the long run, I mean, look, this, we learned up close during the financial crisis, right? Right. Like you can now<\/p>\n<p>00:23:44 (Speaker Changed) Radical deregulation turned out to have a cost to it.<\/p>\n<p>00:23:47 (Speaker Changed) I mean, you can have spectacular business failures that we can all see that are wildly successful for all the people involved as long as they get out before the plane crashes. Part of the mixed metaphor. And, and so if, if you talk about the role of, of consultants, it\u2019s a question of are you distilling it down to this kind of cultish reverence for just hitting that one metric? I mean, even Toyota, well first of all, Toyota understood that they needed their suppliers close at hand because you have to be able to replenish the supply. If something goes wrong, they would never have signed up for supply chains across oceans, which is what we get from McKinsey combined with the rise of the, of container shipping and the internet and all these, all of these things that have made our version of globalization, you know, doable.<\/p>\n<p>00:24:34 What\u2019s happened is we\u2019ve eliminated all the margin for trouble. But McKinsey actually, even McKinsey, realized that we had gone too far in the nineties when they discovered that Toyota factories were telling their suppliers not to replenish enough to fill even the existing space on the assembly line. They said, well, this doesn\u2019t make any sense. Even McKinsey said, look, why have two trips to replenish the same workspace, just so you can say on the spreadsheet that, you know, you\u2019re only holding four bits as opposed to eight. That\u2019s right. Even, even McKinsey recognized that was bananas. But<\/p>\n<p>00:25:09 (Speaker Changed) That\u2019s you coming down the other side of the efficiency curve and all along this stuff, you\u2019re giving up long term resiliency in favor of these short-term metrics of supposed efficiency. Fair, fair statement. Yeah,<\/p>\n<p>00:25:22 (Speaker Changed) I think that\u2019s right. Look, you know, take this to, to real life. Imagine that you told your kid who you\u2019re trying to get to brush teeth. At the end of the day, I insist that you spend five minutes by the sink. You know? Well, if that\u2019s how you do it, your kid\u2019s gonna spend five minutes by the sink watching YouTube videos. You know, common sense is no, I better get involved in knowing what exactly are they doing and what, like, how\u2019s this gonna play out? Well, we\u2019ve effectively let McKinsey write those kinds of rules. And it\u2019s not just McKinsey, it\u2019s lots of business consultancies. And it\u2019s not even just because of the business consultancies. It\u2019s, it\u2019s that we\u2019ve handed over our business and societal fate to shareholder interests, to the exclusion of anything resembling common sense.<\/p>\n<p>00:26:02 (Speaker Changed) Huh. Really, really interesting. None of this is a new concern. I was fascinated in the book in Henry Ford was concerned about supply chains and resource availability a century ago when he was building the Model T, how did his concerns about supply chains be so easily forgotten?<\/p>\n<p>00:26:23 (Speaker Changed) Yeah, so Henry Ford, I I, I was fascinated by this story myself, you know, bonded with Thomas Alva Edison riding a rail car back from a trade show at a hotel on Coney Island. This is, you know, in the 19 teens, Edison is his hero and they bond over the supply chain. Edison says, yeah, you know, you have all these great creations, but if you can\u2019t get the materials you need, these are, these are just ideas. And Ford was obsessed with self-sufficiency. I mean, to the extent to which he had his own fiascos, you know, trying to become self-sufficient rubber. He had this failed venture in Brazil, but you know, the scale of his factories, like including the River Rouge factory, which remains, you know, Ford\u2019s showcase outside of Detroit was all about having soup to nuts. The ability to make a car without, as Ford put it being pinched by some supplier.<\/p>\n<p>00:27:15 He was suspicious of rail in particular. So he bought his own rail and shipping lines. Vertical integration didn\u2019t exactly work out, but that concept of let\u2019s understand what we\u2019re dependent on and how reliable is the supply. I mean, Ford would\u2019ve been horrified to see what I saw at his River Rouge plant, a century later where I\u2019m, I\u2019m actually watching the F-150 come off the line. This is Ford\u2019s most popular vehicle pickup truck. Beautiful vehicle, amazing, you know, orchestrated assembly with some automation. But at the time that I\u2019m watching this in January, 2022, they\u2019re taking the cars and parking them in these giant lots in the shadow of Ford\u2019s corporate headquarters and across the street from Henry Ford Elementary School because they\u2019re dependent upon one supplier for the computer chips happens to be across the ocean on this island that not incidentally is claimed by China as part of its own territory. I\u2019m talking about Taiwan. And until these computer chips show up, these F1 fifties are just taking up space in a parking lot.<\/p>\n<p>00:28:17 (Speaker Changed) Four horrified. I had, I had a car come off lease, I wanna say late 21 or early 22. And I recall going to the dealer and going through a whole floor of cars, and they were divided in half. That half doesn\u2019t have the chip for the sunroof, which we\u2019re allowed to sell. Right. So the sunroof is closed and whenever the chip comes, o back comes in, bring the car back and we\u2019ll get you sunroof working. Right. Those cars, they don\u2019t have the a, BS chip, we\u2019re not allowed to sell those. You can\u2019t drive. So you can\u2019t, you could drive it, but a, b, s, but stop it. That would be flood. Well, you could stop it the way you stopped cars 20 years ago without all the technology. And so, wait, I don\u2019t understand why, why can\u2019t you get these chips? And that, that was an early read into that. So we, we talked about Toyota and Ford and McKinsey. If we\u2019re talking about supply chain and globalization, we have to also talk about the outsourcing to China, right? Where you spent a lot of time. Right. And I\u2019m curious about the role of Walmart. Yeah. In moving so much manufacturing capacity to China. Tell us a little bit about Walmart.<\/p>\n<p>00:29:27 (Speaker Changed) So Walmart is the ultimate example of how publicly traded companies have undercut costs in the name of gratifying consumers with low prices. And they found in China the, you know, ultimate solution to their bottom line concerns. I mean, here\u2019s this country where there\u2019s no labor unions. They\u2019re, they\u2019re effectively, they\u2019re banned by the Communist Party. You can cut a deal with the Communist Party official to get hold of space or resources. You\u2019re tapping into the world\u2019s potentially largest consumer market for, you know, just about everything. And China, even before China enters the World Trade Organization in 2001, but especially afterwards, I is the, you know, perfect place to make products at scale, increasing sophistication, low cost. And, you know, we spend a lot of time now talking about how this supposed, you know, export juggernaut intent on killing American living standards is undercut all these manufacturing jobs in the us. I mean, it isn\u2019t, I\u2019m glad you\u2019re, you\u2019re, you\u2019re putting the focus on companies like Walmart because it really was American and western companies in general clamoring for a shot at the Chinese market as a way to satisfy their own concerns for low prices to make their share prices go up.<\/p>\n<p>00:30:50 (Speaker Changed) Huh. So what about the politicians? Who, who do we blame? Is this Bill Clinton? Is this Ronald Reagan who helped set the stage for the hollowing out of the American Industrial Center and China\u2019s entry into the World Trade Organization?<\/p>\n<p>00:31:06 (Speaker Changed) Well, I\u2019m not so sure that it was wrong, by the way, to let China enter the World Trade Organization, though we could have put more focus on terms for, for labor and human rights and, and, and<\/p>\n<p>00:31:18 (Speaker Changed) Environmental<\/p>\n<p>00:31:19 (Speaker Changed) And environment for for sure. You know, I I I argue in the book that, you know, most of our problems and the problems are significant in terms of the, so-called China Shock that cost, you know, a million direct manufacturing jobs in the decade or so after China. China enters the wt O and 2 million, if you count, you know, the truck drivers who right. No longer have a factory to deliver to, you know, that\u2019s really home cooking, right? I mean, other countries, I mean, Canada is not, you know, seething with anti-trade sentiment to the extent that it is in the US because they have national healthcare there. We Right, we don\u2019t have national healthcare. We don\u2019t, we have trade adjustment assistance, but it\u2019s woefully underfunded. That\u2019s a program that\u2019s supposed to help people who lose their jobs because of trade deals transition to something else. I mean, it\u2019s our own political decisions that have left workers effectively abandoned when, when, when they lose their jobs.<\/p>\n<p>00:32:07 And in terms of the net trade with China has actually been a positive for the American economy. It\u2019s a question of how we\u2019ve distributed the spoils. But in terms of how that all came about, yeah, I think you gotta look at Clinton, who, I mean, I tell the story in the book of how Clinton runs in 92 as the answer to George HW Bush calls him, calls him out for supposedly coddling the butchers of Beijing, you know, cozying up to the Chinese Communist Party after the Tiananmen Square massacre in 1989. Clinton vows, that things are gonna be different in his own administration. Human rights are gonna matter so much. And not even a decade later, he\u2019s at the Great Hall of the people. This is across the street from Kenman Square itself, saluting his host. This is Jang Zain with Hillary by his side and, and saluting the great strides that China has made as he\u2019s lobbying for this deal that will bring China in into the WTO. And he even goes to the back of the hall, picks up the baton and conducts the People\u2019s Liberation Army Orchestra. This is the orchestra for the institution responsible for the Tiananmen massacre. Now why does he do this? Because he comes from Arkansas. This is Walmart\u2019s home state because the Democratic party and the Republican party for that matter, awash in campaign contributions from retailers, manufacturers who want a crack at China. \u2019cause it\u2019s good for business. And, and that ultimately drives the equation<\/p>\n<p>00:33:35 (Speaker Changed) During that debate about China entering to the WTO, we heard the phrase democracy tossed around a lot, right? That this will open up China to democracy, that this will improve their environmental regulations, it\u2019ll improve human rights and their labor laws. None of that happens.<\/p>\n<p>00:33:55 (Speaker Changed) None of this happens. We hear this from Larry Summers, we hear this from Bill Clinton. We hear this from Bob Rubin. What does happen? Bob Rubin gets to go to China with Citigroup and make Right, you know,<\/p>\n<p>00:34:06 (Speaker Changed) As chairman,<\/p>\n<p>00:34:07 (Speaker Changed) As chairman, you know, and, and crack that market. And that\u2019s good for, for their share price. Of course, what happens, China does become the workshop to the world. Retailers get a crack at this giant market for a time. Although we\u2019ve never really gotten the market opening. That\u2019s right. Promises that we got share, prices do go up because costs come down. Consumers, you know, if, if, if you like the idea of being able to go to Walmart and buy a badminton set for three bucks or whatever, like you, you got the bonanza. But we got a lot of lost manufacturing jobs. We got a real hit to the kind of psyche of American industrial areas. Our politics change, not, not for the better. As inequality sinks in and is working, people understand that their ability to support their families doesn\u2019t seem to matter very much to the people running the economy.<\/p>\n<p>00:34:55 (Speaker Changed) In, in the beginning, it, it felt like there were inexpensive products from China later on. That lack of environmental regulations or lack of even basic safety standards kind of cause problems. I don\u2019t know about you, I won\u2019t buy dog treats or food made in China. \u2019cause you never know what\u2019s in them. We had that whole thing with the sheet rock that was mildew or problematic. Yeah. And, and on and on Every time it, it seems that there\u2019s a problem with a Chinese product. It\u2019s not that the, the people who are working in the factories are doing anything wrong, it\u2019s that they\u2019re just allowed to do anything with no sort of regulatory oversight. So you end up with asbestos in sheet rock, or you end up with some bad chemical in the dog bones. At, at what point is, is the backlash from the lack of regulatory oversight in China gonna actually impact them?<\/p>\n<p>00:35:56 (Speaker Changed) Well, I mean, it has had some effect, right? I mean, Chinese citizens are unhappy about polluted air. I mean, there\u2019ve been a lot of moves to reduce. We, we don\u2019t see the progress here yet. Coal-fired electrical plants, or at least move them further away from urban areas in places where the environmental destruction resulting from massive industrialization. It\u2019s really hit. We\u2019ve seen protests. We\u2019ve, we, we have seen some change there. But ultimately China has been driven by a very successful effort to lift hundreds of millions of people out of poverty. And so for, for the most part, economic considerations have trumped all, all other considerations. I mean, the great irony is that the, the driver of the kind of globalization that I\u2019m writing about in this book, at the center of it is this, what I describe as a joint venture between the people\u2019s Republic of China. This institution forged under a, a peasant rebellion revolution in under a Marxist Leninist terms and Walmart, the ultimate retailer from the citadel of, of, of western capitalism. And this joint venture has really propelled us through the decades. And that\u2019s what is now changing.<\/p>\n<p>00:37:09 (Speaker Changed) So there\u2019s some really interesting tidbits in the book. I i I have to bring up. Between 1981 and 2000 American companies reduced their inventories by about 2% a year. By 2014, they were holding $1.2 trillion less in inventory than they had been in the eighties. That seems like a giant number.<\/p>\n<p>00:37:36 (Speaker Changed) Yeah, it is. Now some of that is reflective of more reliable products. So, so some of that is the part of the Toyota production system that doesn\u2019t get talked about much, which is, you know, quality improvement. So if your parts don\u2019t break as frequently, then you don\u2019t need to hold as many. That\u2019s fine. But we know that every time there\u2019s a shock to the system, we run outta stuff. I mean, the pandemic brought that if, if you didn\u2019t know that before the pandemic, you sure found out about it when we ran out of, you know, everything medicine, right? I mean, that\u2019s the title of my book. But the first supply chain disruption story I ever wrote was back in 1999 when there was an earthquake in Taiwan and we had shortages of chips and other electronics. Then of course the Fukushima did Fukushima disaster in Japan in 2011 and into 2012.<\/p>\n<p>00:38:25 We had massive shortages of electronics for months after we had floods in Thailand around the same time that knocked hard drive production outta whack. And each time people who pay attention to this stuff. And that\u2019s a, a fairly geeky set of people would say, I think maybe we\u2019ve overdone it with just in time. But this equation has been so good for the people running publicly traded companies that any CEO who says, I don\u2019t know, maybe we need more of a hedge against trouble, that\u2019s an invitation to go out looking for your next job. The CEO says, let\u2019s keep going lean. They know that eventually there will be a comeuppance. But with any luck that\u2019ll happen after they\u2019ve moved on, they\u2019ve sold their op, they\u2019ve cashed in their options, and then they\u2019re on, you know, some beach and a hammock with a cocktail in their hand. So,<\/p>\n<p>00:39:11 (Speaker Changed) So let\u2019s talk about what took place before and after the pandemic and some of the data in the book is really quite astonishing. Pre pandemic China made 80% of the fa face masks sold in the US and 90% of many basic antibiotics. Yeah. That just seems insane to me.<\/p>\n<p>00:39:31 (Speaker Changed) Yeah. In retrospect it\u2019s, I mean it\u2019s certainly insane.<\/p>\n<p>00:39:35 (Speaker Changed) Like, like how can we not make our own antibiotics in, in the United States? I<\/p>\n<p>00:39:39 (Speaker Changed) Mean, what makes it insane is we\u2019re discussing a period where we\u2019re deciding to have a trade war with China. Right? I mean, right now, you know, i I mean if you have a great re I mean, I, I think if we were saying 80% of our face masks are made in Canada, I don\u2019t think we\u2019d give that any thought. Right? \u2019cause the likelihood that we\u2019re gonna close the border seems pretty small. But yes. To be going into the pandemic simultaneously having this trade war, while we\u2019re heavily dependent for really significant stuff on this country that, you know, happens to be on the other side of the Pacific Ocean, that\u2019s a problem.<\/p>\n<p>00:40:11 (Speaker Changed) So let, let\u2019s talk a little bit about what this looked like. Once the world shuts down by the middle of 2021, 13% of the world\u2019s container shipping fleet, they\u2019re just stuck in traffic jams at ports. They can\u2019t get in or out. Yeah. About a trillion dollars worth of product is just stuck offshore. Te tell us about that.<\/p>\n<p>00:40:33 (Speaker Changed) Yeah. Involuntary warehouses, suddenly container ships or involuntary warehouses. You know, I\u2019m tracing in the book the passage of the single shipping container from a factory in China to a warehouse in Mississippi. This is the most important shipment in the history of this startup company based in Mississippi called Glow run by a guy named Hagan Walker. And Hagan Walker\u2019s got this deal with Sesame Street to make these light up bath toys. And this is his first order that\u2019s big enough to fill a 40 foot shipping container. And first, you know, the price of moving a container of goods from the West Co, from coastal China to the west coast to the US goes from like 2,500 bucks to north of $25,000 in the space of a few months. And then by the time he manages to get his stuff on board a ship, there\u2019s 50, 60, 70 ships just floating off the twin ports of Los Angeles and Long Beach. These are the two ports that collectively are the gateway for 40% of all imports reaching the US by container ship. And there\u2019s just not enough space on the docks for them to unload. So they\u2019re stuck floating for sometimes for weeks.<\/p>\n<p>00:41:39 (Speaker Changed) So do we not have enough ports or was it just a shortage of port workers and truck drivers and, and railroad cars and even shipping containers themselves that led to this problem?<\/p>\n<p>00:41:53 (Speaker Changed) It\u2019s a little of each of these things all at once. But it\u2019s important to understand that the shipping industry is basically an unregulated cartel, right? Made up of international companies. They\u2019re all foreign companies. They\u2019re organized though there are scores of them into three alliances. Think like airline alliances, like your star alliance or your one world or whatever, right? And these three alliances, they control like 90 plus percent of the traffic across the Pacific. So in the same way that, you know, it\u2019s not an accident that you get on your united flight and every seat\u2019s taken and they\u2019re looking for volunteers \u2019cause they\u2019re managing inventory so carefully, right? They want you to be anxious about getting space on that flight. So if you really gotta make that trip, you\u2019ll pay whatever it costs. They have a similar, the shipping carriers have that relationship with the people who are dependent upon space on their ships.<\/p>\n<p>00:42:47 So you\u2019ve got limited capacity and, and sorry to back up on you, but there was a, a massive miscalculation by much of international business as the pandemic begins, right? We, we get the first shutdowns in China, we then get disruptions in Europe as the pandemic spreads and we get quarantines people throwing outta work. Unemployment shoots up to 14% in April of 2020 in the US. And people running businesses react to this as if, you know, oh this is familiar, okay, this is a, this is a, a terrible downturn, like the great financial crisis and then the great recession. We just need to slash orders for everything because, you know, people are outta work. So spending powers drying up. Well if they had part of it, right? Yeah. If we\u2019re not gonna offices, then there\u2019s no need for the sandwich shop on the corner. We\u2019re not going to the gym, gyms are shut.<\/p>\n<p>00:43:40 But guess what, we\u2019re now stuck at home cooking, you know, 27 meals a day for our cooped up children. We need more kitchen appliances. We can\u2019t go to the gym. But now we\u2019re buying Pelotons and sticking \u2019em in our basements. We need more of those. A lot of this stuff\u2019s made in China. So there\u2019s now demand for these container ships to carry them across the ocean. And a lot of the containers have been sent out to places that are bearing face masks and, and gowns and, and other PPE and they\u2019re headed to places that don\u2019t have that much stuff to send back to China. So there\u2019s stacks of containers in, you know, west Africa, in parts of Latin America that don\u2019t do that much trade with China. Just as China\u2019s turning on to make our pelotons and our, you know, bar backyard barbecues and trampolines to entertain our cooped up children.<\/p>\n<p>00:44:28 So shipping price skyrockets and it turns out we actually need more stuff including ships than, than we needed. And at the same time, to your earlier point, we got truck drivers six. So we don\u2019t have as much truck drivers, so we don\u2019t have as much trucking capacity. Dock workers are six, so we don\u2019t have as many people to load and unload. Warehouses are now full. \u2019cause we don\u2019t have people to move the stuff outta warehouses. So we don\u2019t have places to put all these boxes that are coming in. So they\u2019re piling up on the docks. The whole system just<\/p>\n<p>00:44:59 (Speaker Changed) Buckles it. It\u2019s amazing. And it\u2019s, it\u2019s so hard to imagine what it was like before. \u2019cause we know how it turned out. And, and today it feels like, how could any of mi one have made that mill miscalculation? It\u2019s so obvious the demand for goods over services was gonna spike. But at that time, not a lot of people saw that coming, did they? It it was a pretty big miscalculation.<\/p>\n<p>00:45:27 (Speaker Changed) It was a big miscalculation. But it also goes back to what we were discussing earlier in terms of shareholder primacy. You know, one of the things that Toyota really valued in its own version of just in time is you have to take care of your suppliers. If things are bad, you don\u2019t just say, well, you know, we disown you. We don\u2019t need any of what you\u2019re making. Good luck to you. Because then when you do need them, they\u2019ll be out of business. Right? But that\u2019s effectively what we did with computer chips. You know, why can\u2019t you find a car that\u2019s got a computer chip? Because the auto companies, well the auto companies made a series of terrible cal miscalculations, right? First of all, they didn\u2019t understand that they didn\u2019t actually matter very much to their ultimate customers, right? The chip fabricators in Taiwan, they thought, well, you know, we\u2019re Ford, we\u2019re gm, we\u2019re, you know, Nissan, whatever. Like they, they have to take care of us. No, they don\u2019t. They\u2019re taking care of Google and Apple. That\u2019s most of their markets. So, and even they, those companies can\u2019t get chips. So whatever chips they can make, they\u2019re going into the iPhone because that\u2019s the big customer. Sorry, Ford, you\u2019re last in line for<\/p>\n<p>00:46:27 (Speaker Changed) Those chips. Well, not quite last because it was<\/p>\n<p>00:46:28 (Speaker Changed) Medical<\/p>\n<p>00:46:28 (Speaker Changed) Device manufacturer. Manufacturer, right. Small med devices and, and some real important lifesaving devices. That\u2019s right. Could not get manufactured according to your book. Correct.<\/p>\n<p>00:46:37 (Speaker Changed) But when you tell a chip manufacturer, Hey, sorry, we don\u2019t need any of what you\u2019re making, we\u2019ll, we\u2019ll call you. When we do, they turn their fabrication plants offline and you can\u2019t just turn a switch on to get that going again. It takes billions of dollars, it takes lots of materials, it takes months. So once we realize that we\u2019ve grossly miscalculated in terms of running the economy, we then have to wait to ramp back up. And that does go, that, that is an indictment of how we\u2019ve done just in time. We haven\u2019t thought about suppliers as, you know, partners. They\u2019re just, suppliers are just costs to be contained. And the same goes for human beings. You know, you go back to what you were saying about McKinsey earlier. One of the things McKinsey did in terms of proselytizing for lean, is they turned human beings and human workers into inventory. Okay? Oh, we don\u2019t need you. Well, we\u2019re just gonna make you flexible. You\u2019re, you\u2019re an independent contractor now, congratulations. That effectively means we own your time. If you\u2019re a warehouse worker or you\u2019re a, a worker in a, in a plant that makes something like, you know, you\u2019re engaged in Biomanufacturing, if we need you, we need to know that. We can tell you a day before that you have to show up for work so you don\u2019t have control of your time. You can\u2019t go on vacation, you can\u2019t schedule, you know, a doctor\u2019s appointment for<\/p>\n<p>00:47:57 (Speaker Changed) Your kid. How do you drop off your kids? How do you do any of that stuff?<\/p>\n<p>00:47:59 (Speaker Changed) Right? But you don\u2019t get paid unless we call you. Well, guess what? The minute unemployment drops to historic standards, people say, you know what? I got other options. I\u2019m gonna pursue them. \u2019cause I don\u2019t like being treated like inventory. And you go back to Henry Ford who understood that, you know, Henry Ford is not a figure to be lionized, right? He was a racist, he was an anti-Semite, he crushed organized labor. But he understood that if you want workers showing up, giving their all, you gotta pay them. He doubled wages in 1914. Some people called him a communist. He said, I\u2019m just a guy who wants to make product reliably. And any business premised on low wage labor is inherently unstable. We broke that connection. So, so ultimately we lost, we, we have these labor shortages we love to say, but we\u2019re really, we ran out of people willing to continue to sign up for the deal of downgraded jobs.<\/p>\n<p>00:48:53 (Speaker Changed) So, so let\u2019s talk a little bit about that because I, I, I constantly harp on this point, and I feel like so many people don\u2019t understand this. So the decade leading up to, or maybe the two decades leading up to the pandemic post nine 11, the Bush administration changes the rules for who can stay in the United States if they\u2019re here on an education visa, right? We reduced the number of legal immigrants who take a lot of jobs that Americans don\u2019t want. Right? Then we have the pandemic. And so there\u2019s no traffic in or out. I don\u2019t know. Arguably it was close to 2 million people in the US die of, of covid, right? I, I know the official numbers are a little less than that, but it feels like that\u2019s a conservative guess. You have millions of people on disability, millions of people who still have long COVID, all these different factors come together and it creates this massive shortage, right? Of workers in the United States. Of course, unemployment is four point something percent, right? We don\u2019t have enough bodies. How much of this, what you\u2019re describing is just in time inventory for people? How, how much of this traces back to, to that approach?<\/p>\n<p>00:50:09 (Speaker Changed) A lot of it, you know, I mean, I think we heard a lot about how are your stuff\u2019s not showing up because there aren\u2019t enough truck drivers willing to do it as if these guys just lost their mojo to do their jobs. I actually spent three days riding along with a long haul truck driver from Kansas City. It\u2019s<\/p>\n<p>00:50:25 (Speaker Changed) A tough gig, isn\u2019t it? It\u2019s a,<\/p>\n<p>00:50:26 (Speaker Changed) I mean, look, it\u2019s always been a tough gig, but you know, before deregulation and under Carter, people love to talk about Reagan, but a lot of that stuff actually starts with Carter. In the late seventies, the teamsters were in charge. Okay, here\u2019s another institution not to be lionized, you know, they have an unsavory history, but they, they demonstrate the power of having a union because you, you know, you\u2019re away from your family. You\u2019re on the road, you are worried about where to park. You know, that was always true. But these guys got paid really well. I mean, it was, this was a, a truly middle class to upper middle class job. Now it\u2019s basically a working poor job and you\u2019re, you\u2019re away from your family more than ever. You are really at the mercy of, of too much competition in that particular industry where trucking companies are constantly undercutting one of those.<\/p>\n<p>00:51:14 It\u2019s very hard for any of them to make any money. \u2019cause there\u2019s so many of them. And so they rely on being able to squeeze labor. And that model works so long as there are huge numbers of people so desperate to do anything that they will sign up for. You know, and going back to our earlier discussion of, of, of the mortgage industry before the great financial crisis, there are these predatory schemes, reminiscent of subprime right? In the recruitment of drivers. And a lot of drivers sign off on this pitch that the, you know, the allure, the open road and we\u2019re gonna pay for your training program. But then you\u2019re indentured to the company that paid the training program for six months or sometimes two years. And by the time you figure out this is actually a really bad deal. I\u2019m not getting paid by the hour.<\/p>\n<p>00:51:59 I\u2019m getting paid by load delivered. I\u2019m spending hours and hours just waiting at some port for my container to be available. I\u2019m stuck at outside some warehouse that\u2019s also short of employees waiting for them to unload my freight so I can pick up the next load. I do the math. I\u2019m actually working barely minimum wage in some cases even below a lot of people quit. And so we have this churn where even a successful trucking company has to replace their entire fleet in the sh in the space of a year in any other industry that would be a scandal in trucking. We just accept that that\u2019s how it goes. Well that breaks down once unemployment drops below 5%. Yeah.<\/p>\n<p>00:52:35 (Speaker Changed) One of the fascinating things about the combination of the pandemic and the CARES act that we\u2019re sending people pretty decent sized checks enough that they could live on for, for a couple of months. The highest level of new business formation in American history, 20 21, 22. It seemed like a lot of people figured out, Hey, I gotta find something and if they\u2019re not gonna pay me, I\u2019m gonna figure it out myself. Right? And whether it was creating new apps or just their own little businesses that they were running, it looked like a big swath of Middle America said, I don\u2019t need one of these high efficient corporate jobs for that sort of headache. I, I could figure something out myself. How much of the labor shortage has been driven by people just kind of upskilling and, and saying to corporate America, Hey, I think I have a shot at at, at generating as much as you\u2019re paying me.<\/p>\n<p>00:53:33 (Speaker Changed) I think a lot of it, I mean, certainly in the supply chain, you know, the normalcy that we\u2019re accustomed to where you click your buy button on Amazon and you wait sometimes just a few hours and some somebody shows up at your door, we\u2019re invited not to think about the army of workers behind that. You know, that\u2019s based on large numbers of people being so desperate for a job, especially a job if it happens to pay, have healthcare, that they\u2019re not looking around for anything else. And they\u2019re aware that whatever else is out there probably represents a downgrade. If they\u2019re able to stay in their home and support, support their families. I mean, we know that lots of people who are working in, you know, places like Walmart warehouses who are moving packages in giant Amazon fulfillment centers qualify for food stamps. I mean, they need a federal subsidy courtesy of us, the taxpayer, just to keep themselves fed so they can do those jobs.<\/p>\n<p>00:54:29 (Speaker Changed) Do you remember the mc helpline back in, I wanna say twenty twelve, twenty thirteen? I recall a bunch of news articles that McDonald\u2019s would hire people Oh yeah. And then help them, like Walmart, get all this aid, and it makes you think, wait, you\u2019re spending all this money lobbying to keep the minimum wage low. Right? So if you\u2019re a, if you are a private company, why are you asking me the taxpayer Sure. To subsidize your employees. I don\u2019t care if the burgers 30 cents more. Pay your clients a little. And the fascinating thing about that, I have a vivid recollection, I wanna say it\u2019s 2015, right? Of Amazon announcing we\u2019re gonna pay $15 an hour and scooping up all the best people. And, and they left places like Walmart, right? Scrambling. There was a period where Walmart shelves were empty. Sure. The stores were dirty. Sure. I think Amazon had enough money that they said, we don\u2019t care about a couple of bucks. Let\u2019s just, this is a resource we\u2019re gonna capture. Right. We we\u2019re gonna monopolize this resource. Right.<\/p>\n<p>00:55:26 (Speaker Changed) Well, so a lot of that was reflective of the fact that you have huge numbers of people who are just so busy doing two jobs, driving vast distances to keep the job they\u2019ve got, that they don\u2019t have time to think about, well, what alternate career could I pursue? That\u2019s like thinking about going to the moon, right? Well, suddenly the pandemic shuts everything down and you are now having to contemplate whether you want to or not, some other way to feed your family. That was such a shakeup At the same time that we do have emergency unemployment benefits that are taking the edge off and allowing people to continue to, to spend on their basic needs. And we have unemployment drops so much that suddenly people who are not accustomed to thinking about alternatives, you know, what else is out there? Let\u2019s check it out. Maybe I will start a small business. You<\/p>\n<p>00:56:16 (Speaker Changed) Talk about the meat packing industry in the book that also ran into not just shipping problems, but worker problems. What made the meat packing industry so unusually at risk to supply chain problems?<\/p>\n<p>00:56:33 (Speaker Changed) Well, it, it\u2019s a perfect example of this. Engineered scarcity is the term that I use where, because, you know, one of the types of deregulation that we\u2019ve had that\u2019s been so disastrous because we eliminated antitrust enforcement. This goes back to Reagan continues through every presidential administration on both sides of the aisle until this break under Biden, we\u2019ve got four companies that are in control of 85% of the meat packing capacity in the United States. I mean, that\u2019s a number that\u2019s higher than during the Robert Baron era. So guess what? They\u2019re setting themselves up so that the cattle ranchers in selling their animals have few alternatives which keeps prices low on the front end. You know, the people they\u2019re paying have no pricing power, right? So they\u2019re getting the animals cheaper at the other end where they\u2019re distributing to restaurants, to consumers, grocery chains and the like.<\/p>\n<p>00:57:33 They, they are benefiting anytime there\u2019s a shock to the system. So they\u2019re getting record high retail prices or, or wholesale prices that are translating into retail prices. At the same time, the cattle ranchers are going outta business because they\u2019re getting a smaller slice of the dollar that we\u2019re spending on, on, on beef, and they\u2019re working the system. So they get the Trump administration in the first wave of the pandemic to drop an executive order that says, slaughterhouse workers are essential. Workers have to continue showing up even when local public health authorities say, actually these slaughterhouses their super spreaders. Right. What I discovered in researching the book is at the time that, so I tell this story, this one woman tin I who\u2019s an immigrant from Myanmar who actually dies, and the jb well, she contracts covid and dies the first wave. She worked at a JBS slaughterhouse outside of Denver. At the time that the Trump administration is parroting industry talking points, these people are essential workers. If they don\u2019t keep showing up for work, we are not gonna be able to get fed. Right. The meat packers are actually sitting on record volumes of frozen meat, and they\u2019re boosting their exports, including to places like China. So we essentially sacrifice the lives of these slaughterhouse workers, not to feed Americans to, to continue to funnel monopoly profits to, to a handful of companies. So,<\/p>\n<p>00:58:55 (Speaker Changed) So let\u2019s talk about those profits, and I wanna talk about a data point in the book. When, when the phrase greed deflation first started circulating in mid 2021, I had a list of, you know, 15 things that, that were contributing to inflation. And I think I had greed. Deflation was 13. I was pretty skeptical of it. Yeah. And then as time went on, there was more and more data coming out Sure. That said, Hey, we\u2019re seeing record profits. And it looks like a lot of this is, is a little opportunistic. The data point that you have in the book. By the time inflation is peaking in June of 2022, more than half of the price increases in US goods we\u2019re going to increase profits. A mere 8% found its way to to workers. So it seems like the greed, deflation narrative turned out to be pretty right.<\/p>\n<p>00:59:51 (Speaker Changed) A hundred percent. And the thing is, this was not a surprise to anybody listening to the earnings calls because the executives of companies like Kroger, you know, the giant supermarket chain publicly, well, you know, we\u2019re having to shell out more. There are all these supply chain disruptions. Our prices are going up. So unfortunately our costs have to go up. Meanwhile, they\u2019re telling Wall Street analysts, this is fantastic. You know, we, this is the greatest opportunity we\u2019ve ever had to jack up our margins because everyone\u2019s rising lifting their prices, you know, collectively. So nobody\u2019s gonna point the finger at us.<\/p>\n<p>01:00:26 (Speaker Changed) Historically, people don\u2019t realize this. Historically, stocks have always been a great inflation hedge. \u2019cause when prices rise, well, it just gets passed along. Sure. And then profits rise either the same or more. And if your stock price is a function of your profits, well guess what? It\u2019s a great hedge against inflation. It\u2019s not gold. It\u2019s stocks that are the good inflation hedge.<\/p>\n<p>01:00:51 (Speaker Changed) I mean, the question is, and, and this is something I get into in detail in the book, the question is, are we talking about an industry where there\u2019s truly competition or not? If there\u2019s competition, then you\u2019re limited in how much you can jack up prices, because presumably your competitor will say, well, I\u2019ll accept a slightly lower margin for greater market share that\u2019s actually free market capitalism. But,<\/p>\n<p>01:01:10 (Speaker Changed) But it didn\u2019t feel like that happened in 21 or 22. It kind of felt like, Hey, no one\u2019s gonna notice if I make this package a little smaller. Right. Or if we raise, like everything is just gonna get lost in this giant surge of prices and who\u2019s gonna really know. But<\/p>\n<p>01:01:28 (Speaker Changed) Beneath a lot of this, it turns out, is market concentration and various forms of collusion. I mean, oh, what, what a coincidence. Every time one airline lifts their fare from New York to la the other ones Go ahead. You know, how interesting that, you know, this just happens to be how it works out, you know, every single time. You know, why is that we don\u2019t have enough competition and there\u2019s no transparency in the marketplace. And you know, everybody knows that if you walk into the casino thinking that you\u2019re the smartest guy, well you\u2019re the sucker because there\u2019s a lot of data operative behind you. And that\u2019s the world that we\u2019re living in. This is, this is not competition most of the time.<\/p>\n<p>01:02:09 (Speaker Changed) And, and we have since learned that a lot of the algorithms and software that are being used to set prices also contribute to that conclusion most recently with rents, landlords, and rents. Yeah, that\u2019s right. That, hey, these guys have kind of figured out that this algorithm is, is colluding to drive Sure. Rents higher. Yeah. Because we have access to all this data and oh, we know what those guys are charging and we know what those guys are charging. So we could, we could bump up to that level. And it\u2019s, it seems that if you\u2019re putting software in charge and all the landlords are using the same piece of software, right? Hey, that very much looks like collusion.<\/p>\n<p>01:02:46 (Speaker Changed) Yeah, no, that\u2019s, that, that\u2019s absolutely right. And you know, my favorite example of this recently is we, we just had this dock worker strike on the Eastern Gulf Coast of the United States, and there were all of these breathless stories, but this is such a terrible time for the shipping industry. You know, they can\u2019t move any of this cargo. Well, guess what happened after they settled the strike? The stocks of the companies that are publicly traded plummeted. Why did they plummet? Because anybody who understands the container shipping industry gets that engineered scarcity is the name of the game. And when there\u2019s a shock to the system, if you can\u2019t move cargo, they\u2019re gonna jack up freight rates globally way in excess of their underlying cost. So the market said, oh no, the strike\u2019s over, we\u2019re back to normal. That\u2019s my chance to, to sell off at the, in the, in the same way that, you know, we\u2019ve got the, the Houthis in Yemen opening fire on vessels, headed toward the Suez Canal, effectively shutting the canal, making ships that are going from Asia to Europe, go the long way around Africa Fed analysts tell me that probably increased cost for shipping companies by maybe 40%.<\/p>\n<p>01:03:56 I mean this, oh, really? Increased diesel costs, you know, more labor costs. Well, shipping rates are up three and 400%. That\u2019s fatter margins. So when there\u2019s a shock to the system, if there\u2019s no competition, that gets expressed as pricing power, which means we all pay more.<\/p>\n<p>01:04:14 (Speaker Changed) So, so since the pandemic, the new administration has focused on re industrializing the United States nearshoring, or in-house shoring, or whatever you wanna call it, what is the state of manufacture? Reshoring is the phrase I was looking for. What is the state of of bringing manufacturing back to the United States? How long will it take before we can have a little more resilience built into our own system? Well,<\/p>\n<p>01:04:44 (Speaker Changed) We\u2019re gonna get more resilience, you know, over the next decade or or two. You know, we\u2019re globalization\u2019s not over, by the way. Like my book is not a call for making everything in America that would be extremely expensive. It would be wrenching and disruptive. It, it is a call for greater actual resilience alongside this kind of ruthless efficiency. And it\u2019s not real efficiency, as we\u2019ve discussed. It\u2019s really about catering to these metrics. So, you know, in strategic industries like semiconductors medicines and the medicine supply chain electric vehicles where the Biden administration is now handing out tens of billions of dollars in subsidies. Right. We do see a real construction boom. And, and actually it\u2019s been interesting to see that a lot of the investment is going into places that were hit hardest during the, so-called China Shock, North Carolina, Michigan, you know, getting a lot, Arizona, Arizona, you know, getting a lot of this investment into these emerging, you know, future facing industries. In other industries, especially where labor costs still matter. It, it\u2019s unlikely that this stuff\u2019s gonna come back to the us.<\/p>\n<p>01:05:55 (Speaker Changed) So we\u2019re not making furniture, we\u2019re not making clothes here, really didn\u2019t treat great<\/p>\n<p>01:05:59 (Speaker Changed) Numbers. We\u2019re not making tube socks. And the Carolinas again, you know, but, but instead of making it all in China, we\u2019ll make \u2019em in Central America. We\u2019ll make \u2019em in Mexico, we\u2019ll make \u2019em in India. So there\u2019s a hedge against reliance. I mean, it\u2019s not that we\u2019re abandoning China, by the way. I mean, China\u2019s going to continue to be a very significant center of manufacturing. It\u2019s that there\u2019s a sort of portfolio rebalancing, and I, I, I would put it to you this way, we\u2019ve talked a lot about Walmart. 15 years ago, if you were, if you had a product that you were trying to get on the shelves of a Walmart superstore and you flew down to Bentonville, Arkansas to pitch the Walmart buyers on your product, you have to go see them. They don\u2019t come see you. It\u2019s like visiting the pope, you know?<\/p>\n<p>01:06:39 Right. And you get your appointment and they would ask you, where are you making this product? And if your answer was something other than China, you had a problem because they would assume that you couldn\u2019t be getting the lowest possible price. You weren\u2019t making it at the most efficient scale. Well now if you go to Bentonville, you got your product, Walmart says, where are you making it? And if your answer is only China, you have a problem. They want to hear, well, what\u2019s your backup plan? You know, we, we don\u2019t want to get stuck waiting for container ships to come in to LA to serve our customers in, you know, Oklahoma City. So are you making it in Mexico? Are you looking to India? Are you moving some stuff to Vietnam? There, there\u2019s gotta be a greater mix. And that, that is happening to an extent, but I am dubious that it will continue to happen the longer away we get from the pandemic for the simple reason that, you know, you\u2019re an incentives guy, I\u2019m an incentives guy. The incentives for a publicly traded company are still quarter by quarter lowest possible cost. So if you\u2019re the CEO of a company and you\u2019re saying, well, let\u2019s spend a little more for redundancy, let\u2019s have a second factory in Mexico. If you\u2019re diluting next quarter\u2019s earnings or the quarter after that, this is a good chance you won\u2019t be around to get the praise whenever the inevitable next shock materializes that will reveal that. That\u2019s a good strategy.<\/p>\n<p>01:07:59 (Speaker Changed) So globalization, not dead resiliency, not as important or fundamental as we might\u2019ve been led to believe over the past few months. I<\/p>\n<p>01:08:08 (Speaker Changed) Mean, there\u2019s certainly a change to the talking points, right? McKinsey now talks about just in case instead of just in time. But we gotta watch to see if these lessons will really get learned because the shareholder\u2019s interest is still with us.<\/p>\n<p>01:08:22 (Speaker Changed) Huh? What are you watching these days or listening to? What, what\u2019s keeping you entertained?<\/p>\n<p>01:08:26 (Speaker Changed) I\u2019ve been rewatching The Sopranos. Oh really? You haven\u2019t watched it since it came out?<\/p>\n<p>01:08:30 (Speaker Changed) How\u2019s it hold up? It\u2019s<\/p>\n<p>01:08:31 (Speaker Changed) Great. Yeah, it\u2019s, yeah, it\u2019s hilarious. I forgot how funny it is.<\/p>\n<p>01:08:35 (Speaker Changed) Oh, it was always very<\/p>\n<p>01:08:36 (Speaker Changed) Funny. It was always very funny. So well acted obviously, just really well written it so well-written, and I also re-watched Succession. See, from beginning to end. I,<\/p>\n<p>01:08:45 (Speaker Changed) I, I tried a couple of times to watch succession. I like by the second episode, it\u2019s like each one of these people, and I know the, you\u2019re right, everything I\u2019ve read, the writing is great. It is. This is, and I just couldn\u2019t, I just couldn\u2019t find myself, you know, interested in anybody. It\u2019s like weird. You don\u2019t, like, it\u2019s like no character you like<\/p>\n<p>01:09:09 (Speaker Changed) As a guy who lived through one of the most grotesque mergers of all time, which is a OL purchasing HuffPost<\/p>\n<p>01:09:14 (Speaker Changed) Time Warner. Yeah.<\/p>\n<p>01:09:15 (Speaker Changed) Yeah. Well, I wasn\u2019t a Time Warner. No, I was, this is the, the what\u2019s left of a OL buying HuffPost. Oh, okay. When, when I, when I had a senior leadership position in the newsroom. Yeah. It was so interesting to there, there\u2019s a merger in the fourth se in the last season of succession where you\u2019ve got like the public facing, like synergies, magic. And meanwhile you got these two characters who are like screwed and they\u2019re just desperate to consummate this deal as a way to kind of wipe away their problems and keep the whole Ponzi scheme going. That was so true to me in terms of what I lived through that Yeah. It, I I\u2019m willing to, you\u2019re right. These are not sympathetic<\/p>\n<p>01:09:54 (Speaker Changed) People, but, but everybody seems to lo love it. It it\u2019s, that\u2019s a great show. You, you know, what I watched during the Pandemic that I hadn\u2019t seen in real time. And it was just one of those things. What you never saw, this was Mad Men. Oh, it\u2019s great. Was sort of your Yeah. Fantastic. You rewatching Sopranos Yeah. Was me watching Mad Men for the first time. And even though there are some complex characters that have good, good sides and bad sides, there\u2019s still people you root for in are empathetic. That\u2019s true. And I, I just found it to be<\/p>\n<p>01:10:25 (Speaker Changed) Madman is incredible.<\/p>\n<p>01:10:26 (Speaker Changed) How did I miss this the first time around? Sort of the,<\/p>\n<p>01:10:28 (Speaker Changed) Yeah. It\u2019s just, that\u2019s an amazing show.<\/p>\n<p>01:10:29 (Speaker Changed) Yeah. Really. All right. Let, let\u2019s, let\u2019s go on, let\u2019s talk about your mentors who helped shape your fascinating career.<\/p>\n<p>01:10:37 (Speaker Changed) Well, thanks for that. I, I had a couple of old school newspaper people I sat next to in the first newsroom I ever worked in, which was at the Anchorage Daily News in Alaska. It was a columnist named Mike Dugan and a reporter named Sheila Toomey. They were veterans. And I just listened to them working their sources on the phone and, you know, giving \u2019em a hard time holding people to account. And I just thought it was so thrilling and I that it, it really a, a affected how I go about it, the how dogged they were. When I got to the Washington Post, I was lucky enough to spend time with Steve Call, who\u2019s one of the all time greats. And every time I would talk to him about a story, I would come away with like a, a new understanding of the historic significance of whatever it was that I was covering. And I\u2019ve always tried to think about every story is like, what does this mean as like a letter to somebody in the future? What does this signify that\u2019s broader than just the thing that I\u2019m writing about that I thought the Washington Post in that period was very good<\/p>\n<p>01:11:35 (Speaker Changed) At. Let, let\u2019s talk about books. What are some of your favorites? What are you reading right now?<\/p>\n<p>01:11:41 (Speaker Changed) I\u2019m reading Isabel Wilkerson\u2019s, the Warmth of Other Sons, which is this fantastic narrative history of the black migration from the south to northern cities, which is a, a period that I realize I just don\u2019t know enough about, but it\u2019s just so important in terms of<\/p>\n<p>01:11:56 (Speaker Changed) Post Civil War, pre-World War I, that sort<\/p>\n<p>01:11:59 (Speaker Changed) Of area. Yeah. This is like from World War I in into the 1970s. And it\u2019s just so significant in terms of affecting the politics and of course, race dimensions and, and, and class and, and American culture. And it\u2019s, it\u2019s, it\u2019s just a beautifully written book. You know, I\u2019m, I, I\u2019ve always loved Steinbeck. I was very influenced early in my career by, by Norman Mailers, nonfiction. I like this idea of like, the best work is, is the reported stuff that, that unfolds like a novel. The Executioner song had a great effect on me, a Tom Wolf stuff. I feel like I\u2019m just dating myself now,<\/p>\n<p>01:12:36 (Speaker Changed) But so, so when you say Tom Wolf the Right Stuff or Bon Bonfire, the values<\/p>\n<p>01:12:42 (Speaker Changed) Is fantastic. Yeah. I, I like his VII think Bonfire of the Vanities is really entertaining, very insightful book in lots of ways. I\u2019m a sucker for Michael Lewis. I mean, there\u2019s names,<\/p>\n<p>01:12:53 (Speaker Changed) Anything he writes. Yeah,<\/p>\n<p>01:12:54 (Speaker Changed) Absolutely. The Big Short certainly is a amazing, I loved Moneyball. I\u2019m a big baseball fan.<\/p>\n<p>01:12:58 (Speaker Changed) Yeah, no, Moneyball was one. In fact, just look at his past half Dozen works e each one more Fascinating. He\u2019s yeah, he\u2019s amazing than the next, the Undoing project was absolutely fascinating. Haven\u2019t gotten to that yet. Oh really? Yeah. I gotta do that. About Kahneman and Ky. Yeah, I gotta that and essentially the invention of behavioral finance, which ca by the way, the, the, if you read the introduction of the book, you find out that after he writes Moneyball, he gets an email from Dick Thaylor and Kas Sunstein who said, Hey, everything you\u2019re talking about was Ky and Kahneman, huh. All of the the alternative ways of looking at data dates to them in, at first in Israel and then in the us You should, you should talk to, you should talk to them. Yeah. Oh, and PS Amos Dki, who\u2019s no longer with us, his wife lives right up the street from you. At Berkeley. At Berkeley, yeah. Such, and that\u2019s what led to that. Amazing. Really. If you\u2019re interested in Yeah, I strong recommendation fast my list.<\/p>\n<p>01:13:56 (Speaker Changed) Okay.<\/p>\n<p>01:13:58 (Speaker Changed) Our last two questions. What sort of advice would you give to a college grad interested in a career in, in journalism, in freelancing, in economics? What, what advice would you give to them?<\/p>\n<p>01:14:10 (Speaker Changed) It\u2019s real simple. Just write, do find something that allows you to just write and write and write, because there\u2019s just no substitute. You can\u2019t develop the muscles without doing it. It\u2019s as simple as that. And writing a deadline is super useful. Covering a beat is incredibly useful in terms of helping you develop judgment. But whatever you\u2019re doing that involves finding stuff out and writing will make you better at it.<\/p>\n<p>01:14:34 (Speaker Changed) Huh. And our final question, what do you know about the world of investigative reporting, economics, journalism in general that would\u2019ve been helpful 30 or 40 years ago when you were first getting started?<\/p>\n<p>01:14:48 (Speaker Changed) The power of one or two deeply reported cases is much greater than the over-reporting spreading too thin that I think most of us, when we\u2019re young, tend to do, we don\u2019t have the judgment developed yet to say like, I\u2019m gonna stay right here and I\u2019m gonna dig deep into this. Where we\u2019re constantly wor well, what question will my editor ask that I won\u2019t have an answer to? Therefore, I have to, I have to cover the landscape. I have to talk to 12 companies when actually be better. If you spent more time with two carefully selected companies. And, and that oftentimes the thing that can elevate a story to one that people will really remember is like, well, I got enough that I could write. I, I now know the story. I\u2019ve got my data. I\u2019ve got some quotes, but no, now I\u2019m gonna go find a character. Now I\u2019m gonna go find a, a place where the sense of place is gonna draw a reader through and it\u2019s gonna unfold like a story that we might tell somebody who\u2019s not deciding to think about finance or economics. They just wanna know something interesting. And all that com, all that backstory that I\u2019ve developed by doing my reading, by looking at reports, by talking to experts and asking questions that might be dumb, that\u2019s gonna come to life. Now through this great example that I\u2019ve come up<\/p>\n<p>01:16:08 (Speaker Changed) With Peter, really fascinating stuff. We have been speaking with Peter S. Goodman. He is the global economics correspondent for the New York Times, and the author of the book, how the World Ran Out of Everything Inside The Global Supply Chain. If you enjoy this conversation, well check out any of the other 540 we\u2019ve done over the past 10 and a half years. You can find those at iTunes, Spotify, YouTube, wherever you find your favorite podcast. And be sure and check out my new podcast at the Money Short single topic, conversations with experts about your money, earning it, spending it, and most importantly, investing it at the money in the Masters in Business Feed, or wherever you find your favorite podcast. I would be remiss if I did not thank the crack team that helps put these conversations together each week. Nick Falco is my audio engineer. Anna Luke is my producer. Sean Russo is my researcher. Sage Bauman is the head of podcasts here at Bloomberg. I\u2019m Barry Riol. You\u2019ve been listening to Masters in Business on Bloomberg Radio.<\/p>\n<p>\u00a0<\/p>\n<p style=\"text-align: center;\">~~~<\/p>\n<p>\u00a0<\/p>\n<p><iframe class=\"lazy lazy-hidden\" style=\"width: 100%; max-width: 660px; overflow: hidden; background: transparent;\" data-lazy-type=\"iframe\" data-src=\"https:\/\/embed.podcasts.apple.com\/us\/podcast\/masters-in-business\/id730188152\" height=\"450\" frameborder=\"0\" sandbox=\"allow-forms allow-popups allow-same-origin allow-scripts allow-storage-access-by-user-activation allow-top-navigation-by-user-activation\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p><noscript><iframe style=\"width: 100%; max-width: 660px; overflow: hidden; background: transparent;\" src=\"https:\/\/embed.podcasts.apple.com\/us\/podcast\/masters-in-business\/id730188152\" height=\"450\" frameborder=\"0\" sandbox=\"allow-forms allow-popups allow-same-origin allow-scripts allow-storage-access-by-user-activation allow-top-navigation-by-user-activation\" data-mce-fragment=\"1\"><\/iframe><\/noscript><\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<div class=\"printfriendly pf-button pf-button-content pf-alignleft\"><img decoding=\"async\" class=\"pf-button-img\" src=\"https:\/\/cdn.printfriendly.com\/buttons\/printfriendly-button.png\" alt=\"Print Friendly, PDF &amp; Email\" style=\"width: 112px;height: 24px;\"\/><\/div>\n<\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/ritholtz.com\/2024\/11\/transcript-peter-goodman\/\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u00a0 The transcript from this week\u2019s, MiB: Peter Goodman, How the World ran Out of Everything, is below. You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify,\u00a0YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ This is Masters in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":12,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[827,1907,1906,828,49],"class_list":["post-1152","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ekonomika-finansai-bankininkyste","tag-big","tag-goodman","tag-peter","tag-picture","tag-transcript"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/europaskolos.lt\/index.php\/wp-json\/wp\/v2\/posts\/1152","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/europaskolos.lt\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/europaskolos.lt\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/europaskolos.lt\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/europaskolos.lt\/index.php\/wp-json\/wp\/v2\/comments?post=1152"}],"version-history":[{"count":0,"href":"https:\/\/europaskolos.lt\/index.php\/wp-json\/wp\/v2\/posts\/1152\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/europaskolos.lt\/index.php\/wp-json\/wp\/v2\/media\/12"}],"wp:attachment":[{"href":"https:\/\/europaskolos.lt\/index.php\/wp-json\/wp\/v2\/media?parent=1152"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/europaskolos.lt\/index.php\/wp-json\/wp\/v2\/categories?post=1152"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/europaskolos.lt\/index.php\/wp-json\/wp\/v2\/tags?post=1152"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}