Bloomberg Businessweek Weekend-August 1, 2020

But as you'll hear throughout the show, I was joined throughout the week by Bloomberg anchor and a good friend of mine, reporter Scarlet Food. She was along for the Bloomberg Business Week Show. We had some great conversations this week. The cover story Americans, Well, they aren't making babies, and it's not just bad for maybe us as humans, it's bad for the economy. Plus why veteran investor Alan Patrick off he's betting on aging consumers with a new thirty

two million dollar venture capital fund. And how do we stuff up and make sure that communities get the resources they need. We'll hear from Georgetown University professor Marcia Chaplin on her new book, It's called Franchise. The Golden Arches in Black America all about McDonald's and its role in racial diversity or lack thereof. An amazing look and an amazingly timely book as well. But first, the US reaching a grim milestone this week to be sure, coronavirus deaths

topping one hundred and fifty thousand people. Well. Dr Bruce Farber, he's the chief of Infectious Diseases at north Well Health. He joined us to discuss where we stand with the virus and developments around a vaccine. We started off by talking about the shift in cases in the Northeast and the success in this part of the country at fighting COVID nineteen. It's dramatically better than it was obviously months ago, and it sounds like it's dramatically better than it is

in many parts of the country. We're sort of in the eye of the hurricane in the sense that things are quiet. Our healthcare facilities have single digited ations of COVID patients, not zero, but generally one to three per day. The total hospital census is dramatically down to double digits. Uh. Many of the chronic patients who are still around, the severe long term survivors that are struggling to get off ventilators. Um and uh, the number of sick patients being admitted

is dramatically lower. UM. So things are good. Elective surgery has restarted. People are screened regularly before coming into the hospital. When they come into the hospital for even treat and release things, they're often screened, and they're screened before any elective surgery. So things are good. They're certainly not normal, and I don't anticipate they will be for a long time,

you know. Um. The New York Times has a map on its website that tracks the number of cases across the country, and the northeast New York, New Jersey, Connecticut, and New England are in the best position. Right were light yellow versus dark red for Florida and California. However, New Jersey's transmission rate, according to Bloomberg a story on Top worldwide, has risen to one point one four, a thirteen week high. Dr Farber, do you think it's inevitable that New York City will also see a rise? I

think it's uh. I don't know inevitable, but it's certainly a risk, and I think we're preparing for it. It's hard to stay locked down number one, and it's hard to prevent people from reintroducing the virus from other parts of the country. And that's a reality. Although as you know, there's quarantines for what thirty one states and people coming in they are impossible to enforce, their difficult to monitor.

And uh, we see a lot of people coming up from Florida, you know, who are nervous, and other states who have relatives and other people in the in the northeast, So you know, inevitable. I don't know, but it's certainly a risk and it's hard to imagine that, um there aren't going to be bumps along the way. Well, you know, it's interesting. Dr Farber and its Scarlet raised this as we were preparing for this segment very rightly. We were

just talking about this party in Southampton. You know that the CEO of Goldman Sachs was the DJ four and you know, it's upset the Governor of New York pretty tremendously. There must be a lot of heightened interest, uh and concern on the part of public officials. How are the public officials feeling about kind of where we are and what are they most worried about. I think people let their guard down quick Tranckically. I'm always amazed how intelligent

people know what they should be doing. But you know, a few months go by, they don't here as much, the hospitals aren't busy, and they let their guard down, and UM, it's not right. I agree with the governor in this instance. Um, you cannot have large parties. You know, you can't open up these bars. You can't have crowded restaurants and crowded parties and weddings and concerts. We're just not there yet, and I don't know when we're going to be there, but whenever that happens, there's going to

be a clusters. We've certainly seen clusters just in a couple of local retirement parties and other birthday parties. Um, sometimes they're outside, but most often they're in enclosed spaces where people take off the mask to eat and drink. Okay, you can't have large parties, and a few people would compare school to partying, but can you have kids go back to school then? So, as you know, it's an

extraordinary complicated issue. But I would summarize it by saying the safety of the schools is going to be predominantly dependent by how low the transmission rates are in the community in which the school is located. So clearly it's not going to be safe to open schools in southern Florida and Houston at the present time. In New York, that's a different story. I mean, it's as safe as it's going to be. At some point in time, we're gonna have to open schools. We're not gonna have closed

schools for years and years and years. And no matter how often optimistic you are about a vaccine, I don't think there's any realistic way this thing is coming to an end within the next year, even if we have a good vaccine. So I think it is safe to carefully open schools, but it's not going to be fail proof, and there are going to be outbreaks. There are going to be little clusters. They just have to be whacked

down when they occur. You have to have good protocols, you have to have careful monitoring, you have to available testing, and you have to be prepared that it's not going to be perfect. And that's north Well Health chief of Infectious Diseases Dr Bruce Farber. We always learned so much from him, in part because he was in one of the systems that had to deal with COVID nineteen early early on in this epidemic. We know that the New York area was such a hotspot, really the epicenter of

this disease outbreak early on. When we think about March, April, and May, it's a very different world right now here in the Tri State area, but very different outside of this area as well. You're listening to Bloomberg business Week. Coming up. What veteran investor Alan patrick Off says he's doing in the third chapter of his life and why he says he's king startups, writing what he calls the Silver Tsunami. Yeah, it's an interesting one. This is Bloomberg.

This is Bloomberg Business Week with Carol Masser and Jason Kelly from Bloomberg Radio. Well, today I'm bringing you some of the most important and informative conversations we had on our daily Bloomberg Business Week radio show. I was joined by Scarlett Food, Bloomberg Television and Radio anchor in Carol Master's absence, well famed investor Alan Patricoff. He's making his next big bet. He's made a lot of them over the years across the technology landscape. This new project, it's

a little bit different. He's teaming up with entrepreneur and former Thrive Global president Abby Miller Levy. They're backing startups focused on aging consumers. They both joined us to discuss. In all the years I've been in this business, I've never seen a idea resonates so effectively. And it's just a great experience to his partnering with Abby, who is you know, been indoctrinated the wellness area for the last

at least asked four or five years. And uh, I've been focused in this area for the last year, and together we're an incredible team. And I will tell you that the idea has just resonated based on all the media coverage and all the inbound inquiries we're getting today. Yeah,

it's been very exciting. So Alan, take us back a little bit here, because you're talking about making investments in companies and financing products and services for an aging population and investing in these older entrepreneurs basically people over the age of what fifty five sixty? How did you come up with this idea? What happened to get you thinking about this opportunity? The idea came together because Abby has been working on this idea for a year, and I've

been talking about it. She'd been doing something and she was preparing to launch. And through one of my sons who said, you know, Dad, you already get together with that. You knew both of us obviously, and he said, you're you're both focusing on the same area. And I guess you have to be honest and say, I got to it because my wife has Alzheimer's and has had it this is our eleventh year. So I've watched her slow deterioration.

But I'm more so I've learned took the time to learn about the aging market and what the needs are, which are so different than what the millennial generation is and and you know, so much of our money is being spent a marketing dollars of being spent on the on the uh, younger generation of millennials, where the money the money is in the older generation who you know made it and uh and and now need all kinds of service. This was this whole concept came about pre COVID.

COVID is just frosting on the cake. Frankly, Abby, you know your background, as Alan has so nicely teet it up for us is really just made for this. Tell us about the idea from your perspective and how you really locked in on this through your work at Thrive and soul Cycle among others. Well, thank you so much

for having us today. We're we're thrilled to be with you. UM. You know, the the interesting thing for me as I looked at the space around UM aging an older adults, where there was so few startups, so few entrepreneurs who are designing new businesses for this consumer. And as Alan said, this consumer that is the fastest growing segment of our population UM, of our population, six of our network as a country UM, and less than ten percent of the

marketing spend. So I was really excited to um, you know, think about how we can get more entrepreneurs interested in the older all this consumer because to date, I think there's very outdated images. And I'm sure you would agree on what it is to uh to age, particularly age in America, and Alan's the perfect example of at at age.

Hope you don't mind Alan at age eight five. You know, Alan bike rides ten fifteen twenty miles a day, was in the ocean, you know, uh for for for a dip, just the other day, and you know, with prime time, this is his you know, next new venture, his next new entrepreneur venture. So I think for us, we're really excited about finding founders and entrepreneurs who are designing for a much more up to date view of what aging looks like. Yeah, and health, of course, health care and

wellness is just one part of it. I've seen home builders, for instance, UM not just target the senior living population, but the active adult population, so folks who are over the age of fifty five but who are still very physically active, like Allen UM. Talk a little bit here about why there aren't other VC funds who are targeting the same demographic the way you guys are. I mean, this all makes great sense, and the numbers are behind you. You would think that more people would be doing this.

You know, we'll be ask we get that question often, and I don't want to clean pride of ownership because a lot of vcs have had what they called a silver tsunami as a bullet point on their investment teams. I mean, it's hard to talk to any health or wellness related UH venture capital fund that isn't eyeing this

population because to your point on the data. I think what's prevented UM having more involvement in the space is you know, first or rather what I think is one of our advantages is really being specialized, so for you know, for us to really understand, you know, how to reach this consumer both through B two B as well as B to see UM, how to UM you know, look at this consumer, you know in their headergy to genety. Since a very diverse audience UM, I think is something

that is a real advantage for prime time UM. And at the same time, UM, you know, it's not really the VCS faults at the same time, because there actually haven't been as many startups focusing on this audience because if the majority of founders are people in their twenties and thirties, they're typically solving for the user needs that

are supposest to them. And so what we're seeing though, and it's been interesting, you know, I've been tracking this this segment for you know, at least a year now, and I've been working on this idea for a few of these for a few years. But really since November when Allen and I met kind of teamed up UM, we've seen really a steady increase in the number of business plans and an early stage businesses that have come across our our inboxes and it's only accelerated with COVID.

And I think part of that is that more founders. Well, first of all, to take a little what the COVID COVID impacts had to to to dramatic sides and both supply and demand. Abbie, let me start with you. We were talking earlier about the opportunities here. Have you made the investment yet in this fund? Absolutely? So, you know, this is uh something. While we we just closed our first closing of the fund, it is still open until

October for strategic investors. But um, we have made foreign investments to date UM and are about to close on two additional ones. And I think it's really a sign of just the momentum in the space. While we're specialized and focused on the older Delta's consumer, we're pretty diversified from the spector perspective. So our investments we've made to date are in financial services, telemedicine, UM, e commerce and media,

so you know, really across the board. UM. You know, as we look at opportunities for founders, and that's entrepreneur and former Thrive Global president Abby Miller Levy, joined by veteran investor Alan patrickof well known inventure capital and political circles.

I'm fascinated by what they're doing, in part because you gotta watch someone like Alan Patrick off over decades and decades he has not just seen but participated in the growth of venture capital, betting on some very well known startups. And now he's looking at a new market and that bears some attention. You're listening to Bloomberg business Week. Coming up, how the pandemic is impacting the travel industry. We'll hear

from Travaco CEO Axel Helfa. This is Bloomberg. This is Bloomberg Business Week with Carol Masser and Jason Kelly from Bloomberg Radio. What does that bring you? Some of the most important and informative conversations I had along with Scarlet Food on our daily Bloomberg Business Week radio show. This week, Carol Masser is on vacation. Will travel, Speaking of vacation continues to be, unfortunately one of the industry's hit hardest by the pandemic. International travel, of course, is one of

the areas that is suffering mightily. Will Travago CEO Axel Helfa. He was back with us. He joined us from Germany to talk about why, and we started by asking him about his backyard in Germany is unfortunately significantly better than what we've seen last earnings. Um so UM, there is quite a bit of travel activity. The health situation is relatively speaking stable. And just to give you give you

an idea, if we compare the travel um environment in Germany. UM, all leisure nature destinations like beaches and mountains are getting close to last year's volume, whereas city trips and international are around fifty so still significantly down. That is incredible. I just think about how many people here. Um. Jason's working from home. So many of our colleagues are working from home. No one's taken it any time off in the last four or five months. Because you're working from home.

You want to stay productive. You're just grateful to have a job at this point, Axel, who is taking these vacations? Are companies m granting vacations the way they were every year? Yeah, I mean people are taking vocations, but and and in particularly families are obviously desperate and the difficult situation to also get some rest in the summer, which is also something that you see across Europe, but not to the

same extent than in Germany. And I think to be honest, in particular, in a situation where a lot of people are working from home with all the stress that is related to that, it is important to take a break. And we, for example UM have have basically introduced a mandatory vocation of one week in August for our employees to make sure that they do get some rest and

also do take some time off. Well. I wondered about that actual sort of the running of the company, because obviously we talked to you so much about sort of what you're seeing in terms of trends and and travel on on the parts of so many people around the world. But I do wonder, like what the challenges have been for you running your operation there. I that's difficult. Way

we have to start. So the in in March, basically our revenue collapsed too close to zero in April and UM at that point in time, clearly, UM, I mean you're initially obviously in paralysis. So what is going on? UM,

what what shall we do? And UM The thought that that it was really helpful to us was that we very early on accepted that the traveler would disappear or at least temporarily, and said, okay, how will the world look in the future, And we we define three phases of recovery, no traveling, some traveling with the restrictions, which is basically where we are right now, and then the new normal, whatever that will look like, and work backwards and said, okay, what do we need to do for

the traveler, for our customer and UM and what do we need to prepare for And so despite the fact that the timing of all these phases is completely uncertain, it gives you a stability and also a clear focus and UH and focus and structure is what in these uncertain times is extremely helpful. UM to give guidance and also also emotional support, to be honest to all of us. That's a really great way of breaking it down. And

I want to pick up down that point. If we're in the some travel phase right now and eventually we'll get to the new normal, what are you seeing in the some travel phase now that will become part of the new normal. Will people avoid cities, Will people avoid the United States? Will they choose to go on vacations that are local and reached by car as opposed to

by plane or by boat. So what we do do see right now and and most pronounced obviously in Germany is there the situation is very stable, but pretty much in most of the markets, UM is that that the first destination and the first vacation that that people and travelers want to do is is really to the nature beaches, normal summer vacation destinations and just get a break and UM.

So that that's something clearly a trend and they're What you also can see is that destinations that can reach by car and even more importantly left by car in case something would happen UM are clearly favored by many many travelers. The second thing that you can observe is that apartments and the vacation houses are more popular than before because a certain segment of travelers is preferring to

be really on their own on vacation. And in the US and particularly what we've seen is that there is a lot more are um um interstate travel UM so going to closer destinations that are better known and that just feel safer. And I do think and we overall think that there's trend. Two, more local travel will continue for the foreseeable future, whether it will remain and stay for the very long term, I think that's too early

to be to be seen. But International Longhould Travel, I think will be will be muted for um for quite some time. And that's Travago CEO Axel half A joining Scarlett Food and Me from Germany on the heels of his earnings, giving us a sense of how travel looks in different parts of the world. And some themes are emerging here as we look at when people start traveling and where they're going to go, and the answer is they're getting back slowly and they're staying pretty close to home.

You're listening to Bloomberg Business Week. We talked to someone else who's very familiar with the travel business. He's the former chief ethics officer of ARABBNB. But we were talking about home sharing. We were talking about integrity. That's coming up next. This is Rupert. This is Bloomberg Business Week with Carol Masser and Jason Kelly from Bloomberg Radio. Well today and bringing you some of the most important and

informative conversations from our daily radio show this week. And we talked a little bit about travel with Axel Hetha earlier in the show, just a few minutes ago. So another big name in the travel business, certainly one that has become very popular over the past few years, is Airbnb, the famous home sharing service, the unicorn that everyone's waiting to go public. We caught up Scarlett Foo and I did with the former top lawyer at Airbnb is a guy named Rob Chestnut. He also was a top lawyer

at eBay. He's a former federal prosecutor, and we weren't talking to him about his jobs at any of those places, at least not directly. We're talking about a new book that he's put out. It's called Intentional int Aegrity, How

smart companies can lead an ethical revolution. And this conversation, interestingly happened during a week where big tech executives were on Capitol Hill, the leaders of the biggest technology companies in the world virtually zooming in or webexing into Capitol Hill to face a lot of scrutiny from lawmakers about their role in society, their lack of competition, and what they've been doing along the way. Amid a lot of investigations, a lot of big, almost existential questions about the role

of technology in our lives. One of the core issues is what effect all of this technology is having on us as humans, but also how these companies are run, and that was very top of mind for Rob Chestnut. I think everyone needs a like a north star in life, a purpose and sort of a commitment to live with integrity as they can best perceive it. But people also, I think, need to have some self awareness and listen to people around them. Uh, and they willing to adjust

their views as they learn more information. Uh. You know, it seems like we do a lot of partisan thinking in this country where people kind of get stuck on one side and just feel like they're dogged and committing to stick by it no matter what. And that's not going to get us a good place. So tell us about the sort of the foundation of this book, because I'm fascinated by your background. You are a federal prosecutor. You went to work for eBay, I believe in ultimately

at Airbnb. What led you? What? What was sort of the genesis of the spark? Well, I've been I've been dealing with rules. I think my whole life as a photo prosecutor, I prosecuted espionage cases. Uh, you know, which I think it shows about as much lack of integrity as you can you can ever find in a work. Kames, right, you were involved in that league, James, he was one of the cases that I prosecuted. When I was in nor of the Virginia, I bet an eBay. I started

their trust and safety department. All the rules around what you can sell on eBay, you know, can you sell guns and alcohol and tobacco products and drugs and the like. So I'm the dealing with the rules my whole lifetime. But uh, you know, just the last three or four years, I've really gotten a sense that the world is changing. Uh. People are far faster now to call out bad conduct by leaders and my companies. I refer to it, you know,

as an integrity revolution in the book. Uh, people are really desiring when they go to work to have a positive impact in the world. And if they perceived the values of their company to not be aligned with their own values. In the past, they were quiet. Now they're communicating with each other on blind and Slack, and they're blogging about it, they're tweeting about it. They're even organizing walkouts.

And I think it's not just employees it's customers. Now we are in an age of conscious consumerism where you know, consumers, if they don't like the way that a particular company operates, they're going to take their money and they're gonna move

it somewhere else faster than ever before. So the generalis for the book, I think is it was really recognizing the sea change and this heightened expectation that the world's putting on leaders and on companies, and there's an effort to try to help companies adjust in this new world so that they can really take advantage of it and led it as opposed to fighting the todd and ultimately really hurting their brands. You know, Rob, let's talk a little bit about the tech world if we can. You've

been a part of it, uh in many ways. And as Scarlett pointed out, and as we talked about earlier, you know, this is a day where we had some very well known tech executives on Capitol Hill. It does virtually that is uh some cases not being able to ironically figure out the technology to testify. But we'll set that aside for a second. Um, how big of the deal is it or how big a deal should we make of it? That we have some big existential questions around the role of technology in our lives and the

behavior of big tech. Well, I remember back when tech was the darling. Don't you know, of course that companies they were going to save the world, right and the boy things have changed and I think, uh a lot of that I think has been their own doing in In a number of the large tech companies, I think it's a singular focus on making money, which is of course critical, but you've got to be thinking about other stakeholders. You've got to be thinking about your employees, you've gotta

be thinking about the communities where you do business. And I think and that's on that scorecard and ab these big companies haven't done as well, and that has caused the world to to take a hard look at them. The microscope is out and I think we need to see them get ahead of the curve. I think Microsoft, for example, is doing a pretty good job of this, actually recognizing that the world needs more from big tech.

They need big tech to step up and salves some big problems instead of solely focusing on that quarterly that quarterly reports think about you know, I have to look at Facebook, so they've got to deal with misinformation and hate on their platform. I think they've got to own up to it and their failure to do it, and I think they've been kind of stubborn about this is

really hurting Bright. How much of that do you think is tied to the fact that a lot of these big tech companies are still fairly young companies run by their founders. You bring up Microsoft, and that's, you know, at this point, an old company. Uh. The guy who runs at such a Nodela is not Bill Gates. Um, he's a hired hand. Essentially, he's a professional manager. Whereas Facebook is run by Mark Zuckerberg, Amazon is run by

Jeff Bezos. They are still in the mindset of building their company, building market share, uh, growing as fast as they can, as opposed to understanding that they are behemoths. Now. I think some of it may be the lack of experience. Someone like such an develop perhaps has been around a little longer sort of understands this idea of building a loved brand for an infinite time hase. And but you know,

look at Brian Schusky and Airbnb. I think the Airbnb has done pretty well overall in recognizing that there's something bigger than just getting big. That the way that you do it and the values that you demonstrate while you're going big, uh, make a huge difference. A lot of

it is who you listen to. I think that some of the younger tech executives, it isn't the fact that they're young and inexperienced as much as are they really demonstrating an open mind, a curious learning mindset to listen to people who are outside of their type inner circle and learn from them. I do think Facebook could do a better job in this regard. And Jason, that's why diversity and inclusion is so important, to make sure that you don't have the same kinds of people in your

company that you talked to all day long. Totally, I was that's exactly where I was going to go next, and Rob, I do wonder along those exact lines. It feels like these dual crises, the pandemic and the virtual world we're living in, you know, zoom to zoom or however you're communicating with people, as well as a long overdue reckoning. When it comes to racial inequality, it feels like it's laid there a lot at all sorts of companies,

big and small. How do we take advantage of that and and maybe reset ourselves well, I think we need to start with an understanding that we all come to the world with our own specific set of goggles and lens as we see the world through our own lives and our own experiences. But what we sometimes fail to understand is that there are a whole broad set of experiences out there that diversity can really help us learn from. I'll take Airbnb. You know, when the Airbnb face of

discrimination crisis several years ago on its platform. I think part of those caused by the fact that there wasn't enough diversity in the leadership of the company back then, people who would actually experienced discrimination who could have helped, I think, be a little more proactive and getting and getting on top of these sorts of issues. Diversity brings the power of human experience beyond what any one individual

can do. I love walking into a room and seeing people that look different than I do, because it means that we're going to get some different perspectives that I couldn't begin to understand. But those are critical, I think in dealing with dealing with crisis and dealing with the racial injustice, you've got to have that understanding inside your company at the leadership level. Rob, you talked about stakeholders earlier on, and that brought me to the Business Roundtables. Uh,

definition of a corporation or purpose of a corporation. Last summer they came out they revised their mission statement, essentially saying that it's not just for the shareholders right there, They're not just committing to shareholders, are committing to their employees, to customers, two suppliers, to the communities as well. How did you interpret that because it was sufficiently vague that one can walk away with the interpretation that they want. Well,

I think it was a powerful move. Uh. Well, we're talking about abandoning now decades of thinking about the purpose of a company and why it exists. And I think the fact that the Business round Table did this was a big step. But you're right, there's still a lot. There's still a lot to interpret. And that was Rob Chestnut, the former chief ethics officer at Airbnb, that company's top lawyer.

He worked at eBay. He also was a very successful federal prosecutor, so he understands not just ethics but integrity, and that led him to write this book. It's called intentional integrity. How smart companies can lead in ethical revolution. Fascinating to get some time with him this week and at this moment where we as a country are facing dueling crises and there are a lot of big questions about the role of companies as we think about where we work, what we buy, and who we buy it

from in an entirely different light. Well plenty coming up in our next hour. Americans, they aren't making as many babies during the pandemic, contrary to what people might have thought about a pandemic baby boom. And that's bad for the economy, so says Peter Coy. It's the cover story this week in Bloomberg Business Week, plus Georgetown University professor Marcia Chaplin on her book franchise, The Golden Arches in Black America. This is Bloomberg. This is Bloomberg Business Week

with Carol Masser and Jason Kelly from Bloomberg Radio. Hello, I'm Jason Kelly. Put ahead for you in this hour of the weekend edition of Bloomberg Business Week, including Georgetown University professor my alma mater. Proud to have her on the show, Marcia Chatelaine. She's got a new book. It's called Franchise The Golden Arches in Black America. Incredibly timely a look at one of the best known companies in the world and certainly in the United States, McDonald's its

role in the struggle for racial equality. Plus, we'll hear from Stanford Graduate School of Business Dean Jonathan Levin and Associate Dean Sarah Soul about that same issue. Stanford it's the number one business school according to Bloomberg Business Week. Carol Master of my partner and I have been there the last couple of years to talk about what they're doing. Well, they've got a new plan as it relates to racial equity,

and so we give Carol Master. You're not hearing here this week, she's on vacation, but you will hear Scarlet Food throughout these conversations. She was nice enough to join me throughout the week on our daily Bloomberg Business Week radio show. Let's begin this hour with our Business Week cover story. Economics editor Peter coy writes, I'm quoting here pandas and white rhinos are the only creatures that are unsuccessful at Maybean Captivity. Yep, he's talking about human beings

he's talking about us as Americans. The US could see five hundred thousand fewer births next year. That, of course, will have strong repercussions long after the pandemic is over, especially on the economy. Peter and the editor of the the magazine, Joe Weber, joined us with this story. Peter and I started talking about this, Uh. That brought a sense of

demographics um earlier in the year. Uh. And then you know, we started this lockdown thing, and we kept talking about it because I was like, man, there might be a lot of babies that come out of this, and so we kind of stuck with that. And then it sort of went the other way, and what we expected to be a baby boom ended up being more of a baby bust. Uh. So we called, um, you know, sex columnists slash um economists Peter Koy and asked him to

do that. UM. So, Peter, can you walk us through what what you what you were able to discover as you were reporting the story. Yeah, I mean, as you said, you didn't get a chance to put a lot of babies on the cover. Um. But I think I came out of okay anyway, because we we came up with a good storyline, which is not only is there a deep line in uh fertilities fewer pregnancies, but it seems as if it's probably not going to be made up after we're out of the recession the pandemic, so that

the consequences will be long lasting. You know, think about it. Babies who are not born in are people who will not be alive in the twenty second century. I mean,

this is a This is in a way. In some ways, the number of missing people from the population because of the decline in births is bigger the number of missing people from the population from the deaths from COVID and and those numbers are actually worth just kind of dwelling on for a second, because we're up to like one fifty deaths in the US now, but it could be as number of a number as high as five hundred

thousand babies that are not born next year at least bookings. Okay, so some staggering numbers there, But when you think about it, when you take a step back, policy is not aligned with having kids. They are damn expensive and sorry for for just swearing there, but you are on your own to find childcare, education, expensive healthcare. I mean, people when

they get healthcare, they don't want to leave it. Then of course there is a motherhood penalty and fatherhood penalty, and very rarely do see middle cost families with more than three kids, um, Peter. Was the birth rate rising or was it holding up pretty well? Before the pandemic? The US had been known for a long time for having an unusually high fertility rate compared to other wealthy nations.

As recently as two thousand seven, it was two point one children per women woman, which is replacement rate that if you if you have that rate, the US population be stable over time. But it started falling in the last recession, remember that one yeah, Um, And then it didn't recover afterwards as people had expected. It's down to under one point seven in who knows it's going to go even lower now. So it's not as low as that of say Japan, South Korea, Western Europe, but it's

it's definitely below replacement rate. And now this comes along and then that magic number Peter for for sort of a population is two point one um. And it was to walk us through why that number matters so much where the US is now and what implications that has for growth. Well, just think about it, um each um couple. Just imagine you have a couple, they produced two children to replace themselves. The reason it has to be more than two is that not everybody will survive to adulthood

and have children of their own. So it's a little over two. And as I said, we're down at around one point seven. Now in the US, you have countries like Russia, I mentioned South Korea and so on, they're down to one point three area. Actually Rush came back a little bit, but yeah, um, one point three. It means that your population is going to be falling, if it's not already falling well. And the employment picture, I mean, you mentioned this in your story, and I think this

is an interesting thing. And I mean this is more I guess sociological, maybe psychological. I mean, there are people who are just experiencing a high level of unemployment, anxiety, all sorts of things, you know, worried about their health. People just like I don't want to have sex. What they're doing it with protection? Who knows, let's not. I deliberately didn't get into that. And then Jason goes and

brings it off, and that's Spoomberg. Business Week Economics editor Peter Coy and the editor of the magazine, Joel Webber. And one of the things I loved about this interview you can actually hear Peter Coy blushing a little bit when I bring up the idea of people actually having sex. So uh, that was a fun moment for me across the week, but a really important story to understand the economic implications of where we are. Maybe an unexpected one captivity.

It isn't so good for reproduction. It turns out you're listening to Bloomberg Business Week. Coming up, our next guest reveals the untold history of how fast food became one of the greatest generators of black wealth in America. We'll hear from Georgetown professor Marcia Chatwin. This is Bloomberg. This is Bloomberg Business Week with Carol Masser and Jason Kelly from Bloomberg Radio. Well, today I bring you some of the most important and informative conversations we had on our

daily radio show this week. Carol Masser, my partner was on vacation, but Scarlet Food gamely filled in throughout the week on Bloomberg Business Week, And I want to bring you our conversation with Georgetown professor and author of franchise The Golden Arches in Black America talking about Marcia Chatwin. This is an incredibly compelling book, in part because it breaks down at an incredibly timely moment, the complicated and

intimate relationship between Black America and McDonald's. Listening, the story of McDonald's and Black America starts in ninety eight after the assassination of Dr Martin Luther King Jr. And essentially, at this moment, like our moment today, people were really reflective about the various pressures that were happening in predominantly African American communities that had been cut off from resources.

And in addition to many of the concerns of communities, people said that they would like to see more black owned businesses. And this was a moment in which a lot of corporations were shifting in that direction. And so McDonald was a leader in the sense in recruiting African American franchise owners to go into African American communities and to build McDonald's the brand, as well as use their restaurants as a way to reinvest in communities. And so

how did it come about? I mean, because there must have been some sort of candidly, you know, just knowing a little bit about the history some tricky mechanics and politics around that at the time, especially in the sixties,

Dr Chaplin help us understand those right. Is a really pivotal moment because the mainstream civil rights movement um is trying to decide what direction it should take, and having having seen so many legislative victories in the nineteen sixties but not actually seeing this translate into economic opportunity, better schools, better access to housing, a number of leaders and civil rights movement really wanted to work with business and corporations

to bring in these opportunities. In addition to that, many white franchise owners no longer wanted to do business in group in communities that were becoming increasingly black or were segregated and all black. And so you see this convergence of an economic white flight as well as the support of the civil rights movement. And then you have President Richard Nixon who is investing in this idea of black

capitalism where he's putting money in business. But one of the things that I think is important to note is that none of these approaches necessarily get at the root causes of structural inequality. But you start to see business becoming part of the conversation. Business becomes part of the conversation, and it becomes part of the community. You write about how these black owned franchises of McDonald's shape the community around them. They it goes beyond providing jobs. They play

a leading cultural role. Talk a little bit about that, right, So, African American franchise owners take on the role that black business owners have historically taken on, and that means that they're providing other resources and communities because of the color line in government services and opportunities. So they're underwriting youth programs at schools, They're making sure that first jobs are actually being created in the communities. They are sponsoring things

like the early Martin Luther King Jr. Holiday. So you start to see their influence not just in the business sector, but for historically black colleges and universities for the creation of the All American basketball team. And so these black franchise owners become incredibly visible and incredibly popular in these communities because, as I say in my book, these communities are cut off from federal resources and other types of

opportunities in order to have their needs met. So, Dr Chaplin, how far does it extend beyond McDonald's, because we do know that today in the gap in wealth between Black Americans and white Americans is massive. Why didn't this catch

on more beyond McDonald's. Well, I think that the reality is is that you can't solve robust and complex and deep social problems simply by um having business lead the way that we have a public sphere, we have public policy, we have public resources like taxes in order to do that. But what it does reveal is that this moment that McDonald's is in right now saying that they stand for black lives donating to the c P, it's not new.

We have a fifty year plus history of McDonald's inserting itself into the civil rights struggles so that they can appear that they're on the right side of history. But in this early period when McDonald's was extending the opportunity for franchising, people did not have the full understanding of the consequences of fast food on the American diet, as

well as the concerns about wages in the industry. Today, supporting black lives via v McDonald's has more to do with the quality of work and benefits and providing for its people than some of these other solutions from the past. Very well said, and I'm struck also by the parallels to today, this idea that um companies, the private sector kind of pick up the sl when the government, the public government is unwilling or can't provide a lot of

the funding. How did you come to writing this book, Well, I was concerned about that very issue. I think that this book is a story about how these relationships are complicated. On one hand, we can't say that we're concerned about the gap in nutrition and help outcomes and access in African American communities without understanding the history of how fast food became such a presence in certain parts of our country.

And we can't say that it's simply a matter of giving people food choices and then they'll follow without understanding the other kinds of relationships that businesses have with communities. And we also have to remember that if we want to solve problems, we have to invest in the public good, the public sphere, and we can't allow corporations to lead

the way. One of the things that I was struck I had the opportunity to serve on a panel with Congressman Lewis, and he described the moment after teen election as some of the most challenging and trying of his life, which is an incredibly um poignant thing to hear from someone who lived through so many times of turmoil. But I think that at both moments sixty eight and today, we have a growing consciousness among a larger group of

people about the problems of racial injustice. And that's Georgetown professor Hoya Sasa and author of franchise The Golden Arches in Black America. Marcia Chaplin, fascinated by this book, had tipped to my co host this week's Scarlet Food for bringing this book to our attention. And man, this book could not be more timely as we start to understand the economic intricacies of racial injustice that has lasted centuries in this country. A really important look and a really

important book. You're listening to Bloomberg Business Week coming up, speaking of racial inequality and efforts to combat at it. How Stanford is working on a new plan to increase racial equity on its campus. It's the number one business school according to Bloomberg Business Week. We'll hear from Stanford Graduate School Business Dean Jonathan Levin and Associate Dean Sarah Soul. This is Bloomberg. This is Bloomberg Business Week with Carol

Masser and Jason Kelly from Bloomberg Radio. Well today and bring you some most important and informative conversations from our daily Bloomberg Business Week radio show. Scarlett Foo was joining me throughout the week. Carol Master is on vacation. Well, our next guest hail from the number one business school

in America, according to none other than Bloomberg. Sweet Carol Master and I have been there the last couple of years to celebrate Stanford's Graduate School of Business, so we were really glad to welcome back the Dean, Jonathan Levin, as well as Associate Dean Sarah Soul. They've both been guests on this program before, and they talked to us about the school's action plan for increasing racial equality and equity. It's important for them as a school. It's also important

because they are in the heart of Silicon Valley. It's a very unusual time. There's nothing. You know, a university campus is meant to be a place with interaction and students and faculty and staff and everyone just bumping into each other, and right now it feels lonely and empty on the Stanford campus. Yeah, that interaction is key, and it's what contributes to the success of institutions like Stanford

Graduate School of Business UH associating SOUL. I want to bring you into this conversation here because obviously, as with other universities UH, Stanford is trying to of course increase its diversity, equity and inclusion efforts, really increasing the representation of black and other disenfranchised UH people, not just amongst students,

but also in your faculty as well. Talk a little bit about the plan to increase racial How do you go about that in this kind of environment when people cannot get together and the interaction is so artificial and in stilted. Yes, thank you, with Scarlett, It's really nice to meet you. Nice to meet another Cornell alum. Yes. Yes, let me step back a little bit and say a word or two about what it is we've been working

on here at the Stanford Graduate School of Business. In ten, we re released our first Diversity, Equity and Inclusion Report, and one of the goals that we issued in that report for the academic year of was to spend some time studying and thinking about how we could do better as a school, as an institution to learn from and um increase representation and increase a sense of an inclusion and belonging for groups that otherwise before had been underrepresented

in our effort to date, So what we've been working on really started last year, and what we're announcing today is what we're calling the Racial Equity Action Plan for

the school. And as you noticed, Scarlett, one of the things that we are working on is representation in particular, and so what we are thinking about in in this particular bucket and what we're announcing our commitment for is thinking how we can do better about bringing black and other underrepresented minority teaching faculty, staff, and students to campus.

And you know, as I noted, this commitment really does build on the momentum that we have had over the last couple of years around our broader diversity, equity and

inclusion efforts. But in particular, when we think about uh hiring of black and you are in teaching faculties, what we're thinking about doing in particular is taking advantage of an incredible um initiative on the part of the university at Stanford University to UM to to bring ten new faculty members and tender line faculty members to campus UM on a search that is really centered around the impacts

of race in America. So that's one piece of what it is that we're working on collaborating with the university to take advantage of these new ten billets for ten year line faculty members. And then on the on the sort of lecturer side, we also have a number of

UM practitioners who lecture in our classes. We're working actively with our alums and also with our our faculty to identify more black and underrepresented minority teaching faculty as well as guest speakers too, so we can make sure that we are having voices heard in the classroom and that we're able to teach issues related to race in business

and race in America. One of the topics that we've spent a lot of time thinking about in in our curriculum over the last few years has been generally preparing students to go out and be effective managers and leaders in uh in diverse organizations and to help go organizational cultures and be the effective in leading in the world where the country has become more diverse and the need for businesses to create widespread opportunity in many different ways

has become increasingly important and is on everyone's mind. And that Stanford Graduate School of Business Dean Jonathan Levin and Associate Dean Sarah Soul the architects of this new plan that Stanford has. I'm going to say it again. It's the number one business school in America according to Bloomberg Business Week, so people look to them for leadership. It's also notable that they are not just in Silicon Valley.

They are of Silicon Valley, and they have helped create so much of the innovation, and they dry the conversation in a really meaningful way. So what they do is going to have a dramatic impact, not just there in the Bay Area, but beyond. You're listening to Bloomberg Business Week. Coming up, we'll take you even further afield talk about China with author Chris Benton. He's an entertainment and executive. He's got a new book out. It's called Feeding the Dragon.

Inside the trillion Dollar Dilemma facing Hollywood, the NBA and American business. This is Bloomberg. This is Bloomberg Business Week with Carol Masser and Jason Kelly from Bloomberg Radio. Well, today I'm bringing you some of the most important and informative conversations we had across the week on our daily Bloomberg Business Week radio show, Scarlet Food. You'll hear her voice in just a few minutes. She joined me while

Carol Master was on vacation. Well, we've talked a lot during the course of this show about some domestic issues as it relates to racial equality or lack thereof, some of the history of it, and some of what big institutions are doing to combat it. Let's broaden the conversation to China because it has been one of the stories we've been following so closely over the past couple of years. We were delighted to have back with us Chris Fenton.

He's a longtime entertainment executive, and in fact, his interest in entertainment goes almost all the way back to when he was a student at Cornell, Scarlet Foods alma mater. He went on to work as a Hollywood agent and then got deeper and deeper into the entertainment business. As he did that, he spent a lot of time going back and forth between the US and China and really started to understand the complicated economic relationship, the political relationship,

and the consumer relationship between the two superpowers. That led to his new book. It's called Feeding the Dragon. Inside the Trillion Dollar Dilemma facing Hollywood, the NBA, and American business. Another timely read. Check it out. I was in the process of meeting with publishers last time I was on the show, which was in October, just after Daryl Morey, the GM of the Houston Rockets, sent out that tweet supporting the huston of the Hong Kong protesters, and we

we talked quite deeply about the NBA's issues. And then Lebron James had just landed back in the US and he had um issues explaining exactly where his point of view was on it. And and it's amazing because the book. Yes, the timing of having a book like this is fantastic, um in regards to selling books. But if it's a little bitter sweet, because um, we're also facing probably one of the worst relationships the two countries, the U S

And China have had in the last forty years. So it's a bit concerning, But yes, um, a lot of it has to do a lot more than with than just with commodities or tech. UM. I was in the middle of definitely the cultural and commercial exchange between the two countries, and the culture between us is really a very strong glue, whether that's in the sports industry or in the movie business. Basically you're talking about soft power.

I mean the NBA, Hollywood movies. That's America's soft power and that's what people in China kind of fell in love with. And um, it's one of our most powerful ways of influencing the rest of the world. How much did that get caught up in the trade war, the trade discussions or was it something on the side, Well, it's it's funny because you have, um a lot of

hawks that want to decouple completely from the relationship. And I argue to the hawks that UM some of the most powerful if you want to say the words weapons are our products in the cultural business because not only can we monetize that market, because there is a large demand in the consumer market of China for things like movies, are television program and our sports um are sports industry. UM. But on top of it, there is real money to

make from those products and services too. So every time a kid puts on a pair of Nike shoes, or every time they watch a Transformers movie or they see an episode of Game of Thrones or House of Cards, they're getting a little seepage of Western democracy into that market. So there's this soft power influence that comes even with the money that we're generating. It's sort of a two

handed sword. So let's talk more about that because and and I'm glad you alluded to that time that we talked in October, because it was a banana's time to use a very technical term, because of what was going on with the n B A, I mean, with everything else that's happened in the world, that issue with Daryl Morey and Lebron James's response to it has largely faded, although with the Lebron issue it sort of came up again with the Hong Kong protests, you know, heating up

again and everything that's happened between Beijing and Hong Kong since then. But remind us kind of where the NBA sits in all of this, because the estimates for the money lost around that freakas as it were, was measured in I think a couple hundred million dollars. Yeah. Well, the NBA's issues are still ongoing. I mean, obviously Covids has caused other issues with the NBA, but um, up

to now, they are still not broadcasting the games in China. Um, there are still quite a bit of merchandise, definitely from the Houston Rockets, but various other teams that aren't even sold over there. Um, there are some games that are delayed streamed on various platforms, but a lot of that, the lion share of the revenue that NBA was generating out of that market is non existent right now, and they're having a real hard time trying to get it back.

So Um, part of that has to do obviously with the Darryl Morey situation back in October, which by the way, seems like ten years ago at this point. But then the the the second thing is just that the relationship between the two countries is so afraid right now it's very difficult to make any progress, um in the in the correct path that the NBA has to go at

this point. You know, when you talk about the NBA in China, I can't help but think about Joseph Tie, who's a co founder of Ali Baba and how he's an owner of the New Jersey Nets or is it New York Nets. I'm showing my age here. That's a that's a callback Starlett it is. Um. How critical is that to mending some of the damage from between the NBA, between China and and kind of putting the best foot forward for both the league and the country. Well, I'm

a little torn on that issue. I'm glad you brought him up. UM. You know, I don't know him personally, but I think, UM, the fact that he labeled what Darryl Moorey brought up and brought to the attention of Americans. UM, he called it a third rail issue, and why to keep it a third rail issue? I think is really a poor UM decision and a poor influence that he's trying to put through. We really need to put this stuff UM on the front burner and make it part

of the national discussion right now. I mean, what happened in Hong Kong, what's happening with the leakers, what's happening in various unfair trade balance issues, UM, quotas, protectionist policies, forced j vs, UM, text swaps and intellectual properties. UM, you know, protection issues. These all need to be brought up, talked about, buy our legislators, um, by our business leaders,

and we need to construct a proper path forward. UM. The time of sort of putting our ostrich heads in the sand is over and and quite frankly, if we figure out the right way to engage China moving forward, where it's a much more balanced relationship and we're addressing things that are American values and principles in the right way, so we feel good about it, the bilateral relationship is

going to get repaired. In the process. It will be disruptive and a little messy in the interim, but will come out the backside of it in a much better situation where quite frankly, they'll be strategic competitors and and partners um, just simply because we both need each other. So Chris, let's talk about Hollywood, uh and the movie business and the entertainment business, because you have sat right

at that nexus between the US and China. And if the NBA's relationship with China is complicated, I feel like the entertainment industry's relationship with China is ten times more so. Issues. Everyone needs a lot of therapy. Seriously, what break down the key issues for us and how you navigated them because you did UM in your former job over at

DMG Entertainment. Yeah, well, I mean the micro issues UM are is very it as for instance, when we when we get a movie into that market, um our share of that that that receipt from that film is of the overall box office, whereas the global norm is closer to They also have a quota there where only thirty two to maybe thirty five movies internationally which includes Bollywood and Europe in that mix, are allowed into the market. And then on top of it, they have strict censorship rules,

very strict marketing and distribution rules, etcetera, etcetera. UM that all needs to be figured out, and obviously that sits behind a lot of other big macro trade issues. But then there's things that really affect all Americans and just essentially what makes us UM the people that we're proud of,

and one of those is our freedom of speech. And what Senator Ted Cruz and various other members of Congress that brought up is this cross border censorship that has been UM such a big issue right now between US and China, whether it's them trying to silence Daryl Morey outside of their borders and talking on behalf of Hong Kong protesters wore a jacket that Tom Cruise is wearing in Top Gun, where not only do they want to censor it in their country, but they want it censored

when it showed in Argentina, Germany, or in Peory, Illinois. And that's something that we need to address. And that's Chris Fenton, author of Feeding the Dragon inside the Trillion

Dollar Dilemma facing Hollywood, the NBA, and American business. And I loved that he reminded us about our last conversation, which was last October before he really got underway with this book, when the NBA was really front and center, the National Basketball Association and it's controversy over a single tweet by the general manager of the Houston Rockets that led to a couple of hundred million dollars in repercussions, a lot of rhetoric and a lot of lost opportunity

and a lot of big question jens around how the US and China can do business and how global brands really can exist across the two superpowers. It's only gotten more complicated in the wake of the global pandemic and a lot of accusations certainly going from the US back to China about its role in the coronavirus outbreak. So a very important book by Chris Fenton. Well, that wraps up the weekend edition of Bloomberg Business Week from Bloomberg Radio.

Thank you so much for joining me. I'm Jason Kelly. Be sure to tune into Bloomberg Business Week Radio. We're live Monday through Friday starting at two pm Wall Street Time. And if you can't catch us live, get our daily Bloomberg Business Week podcast wherever you get your podcasts. Get the full versions of conversations you heard on this show. You can also watch the show live on YouTube. Just search for Bloomberg Global News. Carol Master and I will be back right here next week at the same time.

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