This is Bloomberg business Week Inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebek from Bloomberg Radio.
Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. This week we are diving deep into some of the major geopolitical tensions of our time, including the ongoing tensions in the relationship between the US and China. One key driver of that stress Taiwan. We catch up with the author of The Struggle for Taiwan In just a moment.
Meantime, Russian President Vladimir Putin visiting Chinese President Shijin Ping, underlining the vital importance of their relationship. As Beijing faces growing US pressure to curtail support that's helping Moscow continue its war in Ukraine, the two pledging to intensify cooperation against US containment of their countries. A new novel out takes us back to Moscow in the early nineteen nineties and to what might have been when it comes to Russia's historical path.
And then there is the Middle East, which has played out in numerous protests on college campuses by pro Palestinian students and groups which have been largely shut down ahead of recent college graduation. Well, it got us thinking again about all the money in higher education, and so the author of Bankers in the Ivory Tower, the troubling rise of financiers and US higher education will be along shortly.
All of that to come. We begin, though, with the US and China. This past week, JP Morgan CEO Jamie Diamond called for full and thoughtful engagement with the country as President Biden imposed sweeping tariffs on a range of Chinese imports.
And then tim there's Taiwan. This past week, Reuters reporting US and Taiwan navies conducted joint drills in the Western Pacific and April, citing four unidentified people briefed on the matter, and this as China's military has ramped up its activities
in and around Taiwan over the past few years. Also, a US delegation in Taiwan this weekend for the inauguration of Taiwan's next president, casting the visit as keeping with long standing practice in an effort to manage tensions between the self governing island and China.
China, the US, Taiwan. As we like to say, it's complicated, and sometimes a history lesson is key in understanding the situation and what's at stake. Sulman Wassaf Khan is professor of History and International Relations at Tuff's University. His new book The Struggle for Taiwan, A History of America, China and the Island Caught Between.
We're now at a point where there are large numbers of ships floating too close to one another, too many planes in the sky, and the US and China seemed to my mind to be one accident and a bad decision away from something that could go horribly, horribly wrong for all of us. And going through the history shows you both how we got here, but also that there were various ways out along the way, and there are moments that we can look to and learn from and that might help us better navigate the future.
Well, it's interesting that you say that, and I do. I wonder it always feels so delicate, if you will, And I think about going back to when Nancy Pelosi what was it the summer of twenty twenty two, and took a visit she was then what us house speaker, and she went to visit Taipei. That was not a great situation, to say the least.
It was not a great situation. And if you cast your mind back to that, you might remember who she Jin, who was the editor of a tabloid, saying her plane should be shot down, which was remarkable. It's not something that you would expect to be said, because usually Beijing has been quite good at controlling the level of vitriol
that gets into propaganda. But you think about it, and then you cast your mind back to the heinan spyplane incident that kicked off George W. Bush's presidency, and you say, you know, a Chinese plane collided with an American plane. But we all managed to walk away from that alive. That was partly because there was an interest in both Beijing and in Washington and getting along and in not
going to rule. When Belosi went to Taiwan, the thought that kept going through my mind was if this goes wrong, do we have that mutual commitment to getting out of it live still intact? And the answer seemed to be uncertain, which is not something you want to think about. When there are two great powers armed with nuclear weapons.
You know, it's interesting. I feel like we have that conversation a lot about you know, both of us, kind of whether it was the Middle East with Iran and Israel, about walking away and saying, wait a minute, the risks of moving forward are escalating. Are just it's too much that's at stake. But when you look at what's happening in Taiwan and the US and China, is that willingness to walk away and preserve some calmness if you will, Is that willingness kind of waning if you will.
I think it's waxing and waning. To be honest, it depends in any given moment. It was heartening to see some commitments with both Joe Biden and reaching out to one another and saying can we walk away from this? It was heartening to an extent to see some recognition that, you know, while China might be a competitor, we don't want to go all the way into cataclysm. In some contact with Chinese officials to that effect. What was not heartening, however,
was the fact that the waxing happened too. So you mentioned the terroriffs just now, you mentioned the drills, and it's an election year and in an election year, everybody advis to get tough on China. One of the things Donald Trump did was to forge a bipartisan consensus around the idea that we needed to get tough on China.
And that's something that in an election year will lead to what, to my mind, amounts to a lot of fostering and a lot of dangerous bosturing, because the sensitivities in daging are such that you don't know when things will go wrong.
Well as you know, getting tough, the United States getting tough on China right, maybe through tariffs, and then there's something different. I feel like when it comes to Taiwan. Is that fair to say that that is a whole other level in terms of what China, how it's used, high and the importance of it.
I think it's certainly a whole other level to Beijing. I think Taiwan is one of those spots that hurt and that they felt they had a commitment from the United States to a one China principle that the United States still says we do not challenge that. But if you look at things like trying to bolster Taiwan's diplomatic partnerships, if you look at things like Belosi's visit to Taiwan
and other senior lawmakers visits to Taiwan. You really do have to wonder, especially if you're sitting in Beijing, how committed is the United States to that principle that's being you know, in some ways at the core of the relationship between the two countries since Nixon and Kissinger went to China. If that is being challenged, it opens up a can of worms that's just far more sensitive than even a trade dispute would be.
You know, it feels like with President g the one country, two systems policy that seem to work, it doesn't feel like it does anymore.
One country, two systems is a fascinating concept, and Dunshaping was actually the person who came up with it, right, And when Dun comes up with it, it's interesting he actually wants it to work like two systems. He's very explicit about saying, you know, when Hong Kong comes back under one country, two systems, I don't want to tamper with the second system. It's the goose that lays the golden eggs.
Why would I change something that's working, And that actually starts off a huge debate in Taiwan at the time, maybe one country, two systems is the way to go. What changes under Xi Jinping, of course, is that the
second system bit gets left out. Hong Kong, if you look at it today, is not a place that it was even ten years ago, even twenty years ago, when you could commemorate the Tianeman Square massacre, when you could criticize the government in Beijing, when you can do all sorts of things that you know mainland China proper, you probably could not have got away with. That's not the case anymore. So what Chijinping has demonstrated is that one country, two system items is a nice concept, but it can
change with the people charged with implementing it. And if you're sitting in Taipei and you say, look, we worked really hard to get to a democracy where there have been peaceful transitions of power, one country, two systems doesn't look all that attractive anymore.
Soman, How do we get here where Taiwan is caught between the United States and China and we know that it's a nation that Beijing covets, protects ownership. You see it very clearly, and yet as you note, it wasn't historically Chinese.
Historically, it starts off being its own weird level waste station between East Asia and Southeast Asia in maritime terms, and then the Qing dynasty conquers China along with other parts of the world and conquerors Taiwan. That dynasty then loses Taiwan to the Japanese Empire in the War of eighteen ninety four to five, and Taiwan is seed it
to Japan in perpetuity. Perpetuity lasts till the end of World War two, and the United States at the Cairo Declaration says that Taiwan is going to be restored to the Republic of China. Problem with that declaration being there's many different China's at the time, including of course the Communists and the civil war that erupts between the Communists and the nationalists that would be the Nationalists would be the Republic of China. Is one that the United States
is not sure where it stands on. It wants to wash its hands of the nationalists, and when the Nationalists are eventually beaten back to the island of Taiwan, the betting money is sooner or later, this too is going to become part of the People's Republic of China. What the nationalists set up on Taiwan is a police state by the way, that has a whiff of settler colonialism
to it, so there's not much sympathy for it. But when the Korean War breaks out, Truman sends the Seventh Fleet to the Taiwan straight and that begins the separation of the island from the government that is governing China. For much of the next few decades, the United States is going to be stopped trying to choose between two Chinas, and it's only when Henry Kissinger and Richard Nixon decide to make peace with the PRC in nineteen seventy one that the United States once again has a modus of
evende with Beijing. But that leaves the fate of Taiwan uncertain because for domestic reasons, the United States feels it cannot come to a definitive handing over, as it were, of Taiwan to the PRC. But the One China principle acknowledges that Chinese on both sides of the Taiwan Strait maintained that there is but one China, that Taiwan is a part of China, that the United States does not
dispute this formulation. That is more or less the situation that attains still normalization of relations between the United States and the PRC with Jimmy Carter overseas. But that normalization comes with the Taiwan Relations Act, which means that the President is supposed to think about the defense of Taiwan, that being in the interests of the United States, which
of course has Beijing howling mad. But that is where we are, and as a result, Taiwan has maintained a separation from China to this date.
Well, you know, it's interesting, So you give that that history, and I feel like it's been a tortured relationship a little bit on the part of US and US politicians about what the US role is right in terms of protecting Taiwan.
It remains a tortured relationship. You know, if you look at the Taiwan Relations Act and ask, how is this consistent with the one China principle, right, and so it doesn't look all that consistent, but one can talk one's way into thinking of it that way. If the United States remains committed to the defense of Taiwan at some level, that is saying we have an interest in what is happening here, and we're willing to tell China what to
do about it. So to maintain that that is somehow consistent with the idea that Taiwan is part of China seems to me to be untenable. Why is the United States committed to this? I think there's a whole host of reasons. There is s partly credibility. One wants to show China one can be tough. There is domestic political consideration. One doesn't want to appear weak on China before one's constituents. And what has been created on that island is something that excites some sympathy.
Well, what does Taiwan want and what's its own kind of independent thought in all of this? And I think about it especially We spent so much time, as you would imagine, talking about semiconductors, the importance of TSMC, how important it is to the world, the global world of semiconductors. But I do think about what does Taiwan want in all of this? What can it do independently if anything?
So I think what Taiwan wants And you actually saw a consensus on this in the elections earlier this year. There doesn't seem to be any rush to unify with China. The three parties that were contesting the election, mainly we're all pretty much agreed on that there is a faction
that wants to declare independence outright. What's weighing against that, of course, is if one declares independence outright, one is stuck with a situation where that might provoke China into destroying such independence to facto independence as exists at the moment right, and there's no guarantee that the United States would do the right thing there. One never knows what the United States will do or not do at a
given moment. So I think if you asked what is the one thing most people in Taiwana agreed on, it would be we don't want to jeopardize what we have. How one goes about that as a separate thing. Does it come with a commitment to declaring independence? Maybe some point down the line, if one has prepared one's defenses to the point where they could withstand or at least cost China a lot if there were to be an assault. And one of the things that has sharpened this conversation
in Taiwan is what happened in Ukraine. It looked like the reason the United States was willing to commit money to Ukraine and support to Ukraine was the fact that the Ukrainians, against quite a bit of the betting money, stood up for themselves. Would Taiwan be willing to do that? And one of the interesting things about studying the past and studying how wars break out in the past and what people do, is you never know till the last moment.
There's an element of choice that comes into it. But it is a conversation that's being had over there, and it's a conversation that's being had with increasing intensity.
Just thirty seconds, and I need you to be quick if I can, if I may the driver's seat. Who's in the driver's seat in this triangular relationship US, China or Taiwan.
Nobody everybody has the illusion they're in the driver's seat, but they're all jostling for the steering wheel.
That can cause issues, as we know. I hope we can continue this conversation in the future because I do feel like this is an important issue and you're absolutely right with what's going on in Russia Ukraine right now, very very topical and very very relevant. Congratulations on the book Suman Khan, Professor and Dennison Chair in History in
International Relationships relations Excuse Me at Tufts University. His new book that is out, The Struggle for Taiwan, A History of America, China and the Island Caught Between.
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Russia's President Vladimir Putin in Beijing this past week, meeting with Chinese President Jijimping, publicly underlining their strong relations in a direct challenge to the United States. As Moscow presses forward with a new offensive in Ukraine. Putin's visit coming as Russia has become more economically dependent on China following Moscow's full scale invasion of Ukraine more than two years ago.
A new book out takes us back to how Russia might have been more of an ally to the West and to the US. It's in a novel by Kevin Maney. He's the New York Times best selling author who was a journalist in Moscow. His work is one of fiction. It's called Red bottom Line and it was written thirty years ago.
I actually was writing it when my daughter was first born, and so thirty some years later she starts asking me about it.
She says, you know, you wrote that novel. Where is it?
I'm going like, I wrote it at a floppy disc, I worked perfect, like I'm never gonna it. Turned out that I had a print out of it, and I pulled out the print out and I started reading it, and I'm going like, wait, this is actually pretty good with a little work.
Why did it just collect dust on a floppy disc for thirty years?
Though?
Like?
What stopped you from pursuing?
You know, I didn't know anything about the book business. I sent it to a couple of editors randomly, which was probably dumb.
Didn't hear anything back, and I.
Just kind of figured, well, you know, all right, never mind. You know, it's like, probably not that good. But then I, you know, I went on and started writing nonfiction books and had a lot of success. I have published nine nonfiction books, all about business and biographies and things like that. So when I returned to it, you know, I had of a path and more of a knowledge of like how to get this thing published.
I think what's interesting is it takes us back to a different era, right And I know at your book party we talked a little bit about it and stuff. But you think about, you know, what our expectations were for a Russia moving forward or a Soviet or what the new Soviet Union or not, you know, the dissolution like they did their first presidential election. Like you just think about where it was and where it could have gone.
Well, that was, you know, and when you read the if you read the novel, because it's you.
Know, it's all real stuff that I experienced.
I mean it's basically it's made up story based on real facts of what was happening.
And there was this optimism. There was a sense.
Among young people and there's you know, these young characters in the novel who are all into this idea of like creating businesses and you know, getting into private enterprise and you know, making contacts with Westerners, and and there was this incredible optimism that there was something new was going to arise out of.
This and everybody felt that, right.
Yeah, everybody felt that.
And you know, and us business people were starting to go over I you know, I ended up being present at the opening of the Moscow McDonald's.
I was going to talk about that because that's like so iconic from that era, and it was also iconic two years ago around this time. We talked a lot about it because when McDonald's exited the country in the wake of Russia's invasion of Ukraine, it brought back those images from the early nineties of people waiting in line to try the first big.
Mac that's right, yeah, and it was.
I mean, we forget about it now, but it was this incredible cultural, geopolitical event that McDonald's opened in Moscow, and there were like I think there were thirty eight thousand people that went the first day to that McDonald's because they were so hungry for.
Not hungry for burgers, but hungry for like, you know, American stuff.
Well, you know, it's funny. I have a conversation when I was with my husband and we just said, you know what, if we had decided rather than especially if you look at the tensions between US and China today, like if we decided, well, let's work with Russia and let's manufacture stuff there, Like just if we'd made as a as a world, as a you know, generally decided to work more with Russia going forward, Like you just wonder how things might have played out differently.
Well, there wasn't the transition time. There wasn't enough time for enough stuff to happen because pretty quickly, and I experienced this because I wasn't living there, but I was traveling there frequently, right and from the late eighties to around nineteen ninety two, you could actually sense every trip that things were getting like more chaotic, more dangerous, more weird, because you know, there's this sort of transitions of the
government from Gorbachev Yels and Yelsen was kind of a disaster. He wasn't really he started handing out whole industries to his friends, which is what the birth of the oligarchs was.
Sort of mob activity was running half the economy, and so there was never a chance for this to really catch hold before the Russian society basically got sick of this and was welcoming somebody like Putin to come in and say I'm going to actually create some order out of this chaos, and then it just all kind of fell apart in terms of being able to connect with the West.
What I think so notable about the novel is that it paints a picture of what could have been in Russia and what many people in the early nineteen nineties thought would actually happen. It's there collecting dust for thirty years before you go and publish it, and here you are publishing it, and it's the complete opposite of what ended up happening, as you just described, right, right, So what was the moment you think it went wrong?
It was under the Elton administration, right, And you know, I mean, look, I never met Boris y Elson, but there's lots of reports about him. I mean, you know, the guy was kind of a disaster as a leader, and it just let things sort of fall apart all around him. So what could have been set on a path of creating a more global, western facing country just got derailed. And then, you know when Putin wanted to take it in a completely different direction once he got
a board. One of the points you were sort of alluding to here is that if I had sat down to write this novel today, trying to rely on my memory or my notes or something from I could never have captured all the details that I did, even like
for me rereading it. One of the magical things about it is that I wrote it in the moment, so I was recalling like all these sort of very fresh, tiny little details about what life was like for individual Russians or for somebody who was trying to run a factory and trying to transition to capitalism and all these things.
And because I was writing it while I was there, those are captured and then you know, all these years later, now I was just able to put a little bit more shine on them and make it, you know, a more holistic story.
That worked better.
What was that like when you picked it up again? Right, because you hadn't read it really in thirty years, there is and like to go back there and be like, oh my god, like, yeah, this is exactly what was going on.
Well, what was fun for me was because I had I remember very little of it, so it was almost like I was reading it for the first time. I got I would who is this guy that wrote this?
This thing is actually pretty good published?
You know what?
It's fascinating, right, It's like a window back into kind of exactly what you were experiencing.
Yeah, so I wrote this little author's ode in the beginning that that you know, after before I thought of doing anything with it. I actually sent it to my daughter, and she is a she's a journalist and editor herself. So she reads it and she writes back to me and says, you know, Dad, this is really good, but like here, I've got like two pages of notes.
That you can make it better. But one of the things I thought was funny that she pointed out was so.
The like, especially the main character, there's kind of this nineties sort of you know, the characters from Friends kind of like language and snarkiness that are in the book that she said, like it is sort of inappropriate today, right, And like so if I were writing that book today, like it wouldn't even have that sort of.
Language in it.
But it's emblematic of the time.
It was emblematic of the time, right.
Yeah, like a time without iPhones and a time that people had to actually you know, make plans to meet in certain places.
Right, and you know, make jokes about things that nobody would want to make jokes about it, for example, and stuff like that.
Right, give us some thoughts, as you've been a journalist, just thinking about kind of what's going on in the world and how democracy continues to be tested because we think every time a market seems to open up its arms to it, we think, okay, it's just going to continue. And it's not the case. It wasn't certainly in the Soviet Union, it hasn't really been in China. You mean, though a lot of Western companies moved in there and we thought it would be a different outcome.
I think there's an interesting nuance to that. There was not so much about like this anticipation that Russia or China when you know, in this nineties and we're going to be democratic, But there was this anticipation that there was going to be a legal system, a rule of law, a set of rules that everybody could play by that was not the whims of a dictator or something like that. That's what's really important to businesses, more than more than the fact that the people are going to vote for
their leaders. The fact that, you know the opposite of what's happening now in Russia or in China, you know, where she is sort of taking all these these sort of random actions of penalizing tech companies.
And other you know, and there's an uncertainty, and that uncertainty is what the business business people don't want.
You know less than the idea of purityocracy.
Right, the rules change. It's funny that you say that, you know, Zekeer like having Chinese ev maker making its debut here in New York and IPO. It was a big deal here. But part of the questioning with the
executive about okay, Chinese government involvement. And that's part of the problem right now, right like we just don't know as investors, and we've seen certainly investors pull back when it comes to China overall of just not knowing do the rules change, especially if you're investing in a business.
Yeah, And and there was this, you know, in the in the moment when the book is said, there was this rush into into Russia by a lot of businesses McDonald's and Procter and Gamble. There was there was one of the emphasises for me going over in the first place, in fact, was there was you know, the Russian people
had never seen much of anything of American products. And I learned about a convention that was going to happen where all these companies like Procter and Gamble and Unilever or whatever, We're going to show stuff like tooth based and deodorant and you know, an enormous convention center where there was all these you know, typical displays of all these little things, and there just mobs of Russian citizens coming in and just with bags and trying to grab
everything that they could. But all those companies wanted to go in because they were anticipating that the economy is going to open up, there's going to be this hunger for Western may products, but also that there was going to emerge out of this, you know, the Gorbachev era, something that was more predictable and stable than you know, under the whims of the former Soviet premiers, that could just basically, you know, order anything to have happened.
Right.
You know, you say you're not a political expert, You're more an expert in business. But I'm still going to ask you some questions about the politics, because you'll you absolutely understand of it all. We had it on the program a couple of weeks ago.
David E.
Sanger from The New York Times. He's got a new book out called New Cold Wars China's Rise, Russia's invasion in America's struggle to defend the West, and he argues that the West didn't see coming post the collapse of the Soviet Union, what we see today busy fighting, you know, this war on terror, and in the meantime, China's has the Belton Road initiative around the world, and Russia is coming back with its plans for an empire once again.
And I'm wondering if you see any similarities now in twenty twenty four what we saw before the fall of the Soviet Union, Like if there is sort of a new kind of axis forming right now between Russia and China.
Well, I mean it seems like to me, like the opposite of what was happening back then, right, I mean, there was this there was this moment in time. It's so different now that we almost can't believe that it actually was happening.
But the.
In the if you grew up in the nineteen eighties, there was this thing called the Iron Curtains, Yeah, which was impenetrable, right, it was you know, it was all those Eastern European countries, It was a Soviet Union. China was a closed nation essentially to the West. So there was this entire part of the world that wasn't even part of the global economy.
But is that happening again?
So well, that's what that seems to be working, were returning, Yeah, that's what there was this. Yeah, so there was this moment in time that was mostly contained in the nineteen nineties really between China and Russia and the Deng Jumping are era in China, when it seemed like all of that was this. I mean, this was the era when the idea of globalization was birth, because there was this moment in time when it seemed like the whole world
was going to play together. And if the whole world was going to play together, then there was this prospect for a kind of global peace that was never possible before.
And in the late nineteen nineties that was.
Sort of the that was sort of where we were, and the economies around the world were absolutely booming, you know, and that was the whole dot com move in the US, and the markets were going crazy, and to me, what
marked the end of that was nine to eleven. Suddenly it just was like this this wake up call that the world was not playing going to play together, and you know, and then we started to see things roll back in Russia and China through the two thousand and twenty tens and we are we've kind of moved back to that era when there was this entire part of the world that was operating separately from the rest of us.
Yeah, it's it's kind of fascinating. I do feel like,
you know, some of the alliances. We've talked a lot about kind of the Middle East, and I'm lumping a lot in there, but just kind of the amount of money that's coming out of the Middle East and going into so many different areas, whether it's business, whether it's renewables, whether it's sports, and just that how countries, United States and others are picking when to look away because of the money involved or they needed the need for an alliance,
versus when to say, wait a minute, something's not here. It's just it's an interesting time to say the least.
Yeah. Yeah, And you know, the and there's another sort of sad thing about this.
Too, is that it just got about forty seconds last.
I rushed you because I I've always written about technology, and so one of the things I sought out in Moscow in the late eighties and early nineties were these
little startups that were starting to bloom. And there were so many smart, incredibly talented software people in Russia at the time, and there was this seed of what could have been a global tech industry that came out of there that just got snuffed and either the smart people that had those ambitions came to the US and set up in Silicon Valley, which a lot of them did, or they just sort of disappeared and that never materialized.
Right like what could have been right, very different. Thank you so much. This is what we were I was hoping we could do with you, so thank you so much for fantastic really appreciating this awesome Kevin Maney, we said, New Times best selling journalist and author his book Red bottom Line.
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The college graduation season is underway, Columbia University canceling its main commencement ceremony here in New York City, others pulling back as well, following the recent pro Palestinian protests on campuses around the country. That led to police arrests and a clampdown on protest activities.
As part of the protest, students called for universities to pull back on investments linked to Israel, which once again brought to light the many rich endowments and their specific investments and their ties to various forms of Wall Street.
Right, and those ties made us want to explore more. So we sat down with Charlie Eaton, Associate professor of sociology at University of California, merced. He is the author of Bankers in the Ivory Tower, The Troubling Rise Financiers in US higher education.
You know, our wealthiest universities now have endowments that are valued in the tens of billions of dollars, and that connects them to every corner of the global economy. A lot of that is via hedge fund and private equity investments. The wealthiest endowments now invest more than sixty percent or sometimes even more than seventy percent of their endowments with private equity and hedge funds.
I wonder how that's different now than versus the nineteen eighties, Because something that we've been talking a lot about, Professor, over the last few weeks has been what happened on Columbia's campus, for example, during the nineteen eighties when the students were protesting apartheid in South Africa. How is the relationship between money and education changed between then and now?
If you go back to the eighties, very few of the endowments, even the wealthiest endowments, we're investing with private equity and hedge funds. It starts in the eighties, but over the last forty years those endowments have grown through those kinds of endowments by an average of ten percent average annual rate of return over the years, so that what the portfolio is invested in has really changed.
What's most problematic about the relationship today? Is it just that it's heightened? Is it the amount of money involved? The financial entanglement? You know, over fifty billion at Harvard, forty at Yale, thirty four at Princeton, thirty four billion, thirty thirteen billion, almost fourteen billion at Columbia, twenty one at the University of Pennsylvania. Real money. These are big money.
And you know when we inquire about them, you know, many say, well, this is what's required at an institution of this caliber, and this size if you will, to attract professors in the facilities. But I do wonder these are big numbers, and I just wonder how you know the amount of money that's involved this financial entanglement. What's most problematic about it in your view? And from the research and analysis that you've done.
Yeah, there's two sides of it.
I mean, one is, you know, are the thing that endowments invest in are they consistent with the values of the university, So you know, questions like fossil fuel divestment have gotten at those kind of questions. But the other side of it is what are the universities use the funds for? And if you look at the largest head the largest university endowments, they've gone up tenfold since the nineteen seventies. Princeton's a good example because there's no law school,
no business school there to complicate it. Their endowments up tenfold, but they still enroll a similar number of undergraduate students to what they enrolled in the seventies. And what that means is you go back to the seventies, they spend about ten thousand dollars per year per student from the endowment to support university activities. Today, they spend about one hundred thousand dollars per year per student from the endowment
to support university activities. The question I ask is would Princeton still be a world class university if it enrolled twice as many students to serve more Americans for more walks of life and only spend fifty thousand dollars per year per student. So there's two sides of the question of how should endowments be managed and what should the funds be used for.
I wonder about the demands that protesters are making today. There are lots of different protests happening or were happening on campuses around the country, but in some cases, like at Columbia for example, calling for the school to divest from companies that support the government of Israel or do business there, for example, I'm curious if that type of action would even be possible for an endowment given the complexity of endowments today.
Well, you know, Brown University in Northwestern University have recently suggested they can. The example of fossil fuel divestment has suggested that you can do some pretty complex divestment. I I think we like to think of universities as innovative places. And we like to think of finances an innovative sector. That's a can do sector where we can use technology and use use innovation to be thoughtful about what we
invest in. So, you know, at a certain level, I think there is a kind of can do thing if you get a little bit more brass tacks.
You know.
One thing is that particularly smaller endowments invest more of their portfolio with index funds and other passive funds. And there's a growing community of passive fund managers that use ESG, Environmental, social and governance principles for managing endowment for managing investments, and they use screens. There's over three hundred such fund managers who screen out weapons manufacturers.
For example.
So you do have private sector finance partners who you can work with to do this, and I think that's why some universities have expressed some openness to looking at what can be done and what should be done. I think the harder question is what are your values and how should you apply your values to your investing. It's not the technical question of how to do it well.
And I do wonder, you know, going back to those endowment size and the importance that these schools hold in terms of having relationships with big donors, major donors and making sure that they can maintain that endowment. But what does it do to kind of who has the power in an academic economy?
Yeah?
No, absolutely, And you know, another issue that your question gets at is the issue of transparency. Endowments have a culture and an institutional history of operating in the dark. They're managed by a chief investment officer with oversight from a board of trustees, and they often work with private equity or hedge fund managers who themselves value secrecy because that's part of the business. You're trying to beat the market. You're trying to use private information and your own smarts
to outsmart the marketing. You don't want people others to know what your strategy is. So I think opening up your endowments to invest according to other principles, being more inclusive to students and community members who want to have a say in the endowment, being managed according to their values requires a shift in transparency in some of these practices that aren't how endowment managers have been built historically.
Should the endowments be taxed based on your view your research It.
Depends on whether the endowment is being used sufficiently to serve enough students and students from all backgrounds. So if a university uses it endowment to enroll, to grow its enrollment to serve all communities, then it should be tax exempt. If not, then I think there's reason to tax the endowment so that we can supports to go where there's not as my resources.
Is it tough to make sure that the right values are in place, especially when the board members are overwhelmingly, as you write about, drawn from the alumni who tend to donate most generously.
Yeah, I think it is tough.
But universities are supposed to be places of innovation and ideas, and so I think reimagining the university and reimagining finance to be more inclusive and to give us say to our students and our community members is something that we're up to.
Professor, appreciate you taking the time. That's Charlie Eaton, Associate Professor of Sociology at the University of California Mercett. He joins us from Merset today. He's the author of Bankers in the Ivory Tower, The Troubling Rise of Financiers in US Higher Education.
You're listening to the Bloomberg Business Week podcast. Catch us Live weekday afternoons from two to five pm Eastern. Listen on applecar Play and ed Broight Auto with a Bloomberg Business app, or want us Live on YouTube.
I want this semity shade on the ball of broken dreams. All right, folks, sleep, sit down, grab something to drink, because this is a story of broken dreams. It's also a story that's among our most read on the Bloomberg Today.
It's a story about I Am Academy, also known as the Harvard of Trading, that grew from a small New York operation into a global phenomenon during the pandemic by selling the promise that it could teach anyone, particularly teens and twenty somethings, how to become a savvy retail investors for a fee. Of course, it promised a lot, and many lost a lot. We know we not wanted to know more about this story, So with us as Bloomberg
News Personal Finance reporter Alice Cantor. She's joining us from London, where we know it's a little bit later. So Alice, we so appreciate you hanging around to talk with us. This story, by the way, to be featured in the forthcoming issue of Bloomberg Business Week magazine. You can read it now on the Bloomberg and also find it at bloomberg dot com slash BusinessWeek. First of all, a story like this, Alice, how did you first come across it?
Carol, Well, first things for having me on.
Yeah, so I it was in the midst of the pandemic actually, and I was looking at stories around financial crimes in France because at the time I was in Paris, and I saw this like small news website that did an investigation about iam Academy in France, and it was about all these teenagers who were getting really excited in the pandemic about making money from memes, talks and bitcoin.
I'm sure you're familiar with that.
And they had come across IAM Academy, this company that promised them that within a few months they could really become multimillionaires. They could earn a passive income if they just knew the right strategy to trade online.
You know, they this company had the recipe for them.
So yeah, I started digging into it and found out that France was just one of the many, many countries that this New York based company had expanded in and was making a lot of victims.
Essentially, Well, I wouldn't how to get into the size and scope in terms of how many got impacted, but tell me, like how it works. I mean, I've kind of read through here, so I have an idea. But tell our world how this company worked. How it said, Okay, you're going to make money, and you know what was involved in terms of becoming a member and what you had to kind of give across. Could you have to pay a fee right to be a part of this?
Yeah, So initially it worked like any subscription to an online product.
It's like an online educational platform.
So you paid two hundred and fifty dollars to join, and then you'd have to pay two hundred and fifty dollars every month to keep having access to this online platform. And on the platform, you'd get sort of pre recorded videos of I am so called I am educators that would teach you the basics of markets, you know, how do you make a stop loss, how do you figure out a difference in percentage points?
And how do you take advantage of them?
And then they also said, well they have this amazing algorithm that charts price of currencies and stocks and any financial product. And this algorithm can sort of tell you when a price is.
Going to go up or going to go down.
And so if you just pay the subscription, you'll have access to all that information and you can you can really quite quickly earn money by using that.
Trading advice and learning how to read those graphs.
I feel like a lot of folks in the financial community would be like, wait a minute, like what is this algorithm? And it almost sounds too good to be true? Tell us about that they targeted really a younger generation. How did they do that? I mean it sounds like, you know, I was looking through it, you know, it almost sounds like there were influencers on there about like, look at all the money you can you can make here.
Absolutely so, at the end of the day, the software that they promoted, the algorithm doesn't work. It's very basic,
it's not really predictive. But they really lured people in through the lifestyle that you could that you could have once you get those millions, And they did that on social media, and essentially the CEO of the company hired these really muscular, energetic salesmen that went on Instagram and showed their lives on a Dubai yacht or at a five star villa in Italy saying, look, I'm this rich, you know I'm You want to be like me?
Well why don't you just join?
I am?
And this is the recipe for success eventually, So that's really how they attracted people that way.
Who's behind it all? Tell us a bit about the company's CEO and how he did in all of this.
Yes, so, Chris Terry is a man who was born in the Bronx and he started working construction. He had apparently the construction company had ties to a mob family and he had to pay a fine.
He was like implicated in a criminal conspiracy.
So that's where he started, and he likes to mention his mob background quite often. But then he went on too Amway and was a salesman's for another multi level marketing company. And then after that he tried to build a reputation of himself as a trader, saying he was managing hedge funds and he knew all about financial markets, but really he was never a financial broker. He has no financial real accreditation from any real US institution, and he's made very well for himself, so he's definitely a
multi millionaire. I AM at its height in the pandemic was selling the equivalent of five hundred to six hundred million dollars in.
Subscriptions for the year.
And he flies around in his private jet and has a bunch of condos around the world in Dubai and Las Vegas in New York.
So he's making a lot of money from all this.
Tell us about I mean, so he made a lot of money, But tell us about some of the individuals who paid, who got a part of the platform, did some of the trading. Some of these young individuals some really sad stories in terms of what happened to them. They lost a lot.
Yeah, So people would come in thinking I'm going to learn all about retail trading, make a lot of money, And what happens is not only do they pay the subscription, but often they start trading and kind of gambling their money away using strategies that don't work, so pretty quickly they'll have a lot of losses. But what i AM educators will tell them then is, well, there's this other side of the business. You can earn a commission if you sell subscriptions to other members. And so that's the
multi level marketing aspect of it. And so where it gets a bit tricky and where people feel like they can't leave the company and they end up losing way more than just like a regular financial service, is that these teenagers end up really kind of being gas lit and a little bit sort of brainwashed into believing that, you know, it's their life's purpose to be in this company. They have to keep trying to recruit, they have to keep bringing more people. If they're failing, it's their fault.
So there's this whole strategy to keep people involved, to keep people selling more subscriptions to others, even when they realize the trading lessons are really basic and not helpful at all.
It does sound like h and I know you get into this. I mean, it's prime for regulators. It feels like to take a look, Alice, where are we on that front? Because it sounds like this, you know, has to be on their radar absolutely.
So, I mean across Europe, a bunch of investigations are open at the moment, but nothing.
Has really has really happened so far.
And then the biggest investigation that's ongoing right now is by the FDC in the US that is looking.
At IAM Academy.
They're reviewing complaints, they're talking to the CEO, and well, it looks like there might there might be in discussions to kind of try to put an end to this company's activities.
But to be.
Honest with you, Carol, there's not that many regulations around multi level marketing companies or these kinds of financial education platforms, so they might just go on. They might just like filter through all these regulations that come come kind of they might pay a fine and just and just get on with their business.
Yeah, I do wonder on something like this. I mean, is it kind of eyes wide open if you're gonna pay money, like you have to kind of know what you're getting into. Or is it a case of is there a way of proving And I'm not saying there is, but you know, fraud of some sort in promising an algorithm that's going to kind of do everything, or do we all just kind of know that maybe if it sounds too good to be true, it's not going to be true.
Well, yes, they can be liable for making false income claims, so early on they would have people on Instagram posting like pictures of their rolelexes and bills and saying, you know, I make ten grand a month in passive earning and passive income. So those kinds of figures can really put the company in difficulty because you're not allowed to make these claims unless you can back them up, and in this case they can't.
So that's one area that's problematic.
The other one is that they do They say they don't give financial advice, but really they kind of do, and they almost trade for the people that are part of the company. It's kind of tricky, but they usually just right like tell them which brokers to go with. Used to mirror trades automatically, so just like copy and paste trades from traders and give a challenge with the members.
I have to ask you only got about thirty seconds, so just quickly. Company is still active, Yes, it.
Is still active.
I was just at a conference there in Budapest that they had a huge company rally a few months ago. So you're still active and doing well.
I got to say, you paint such incredible pictures in this story. I feel like it's like a mini documentary just waiting to happen, but it sounds like the story still to be played out here, so we'll continue to follow any updates. I'm so glad we could get some time with you to kind of spell it out for us. As we said, it's among the most read stories on the Bloomberg Today. Alice Kanter, She's a Bloomberg News Personal finance reporter joining us from London.
You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Easter on Apple car Play and Android Auto with the blue Burg Business ad. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa, playing Bloomberg eleven thirty.
Plenty ahead in our second hour of the weekend edition of Bloomberg business Week, including the new Apple Plus mini series about the Black Panther being smuggled to Cuba under the guise of a fake Hollywood production. Yeah sounds like Argo, but it's not. We talked with the executive producer of The Big Cigar.
Plus the Best Art Exhibitions in Venice. Why the cassette tape revival is a past? Yeah, I mean, my little brother, What uses cassette tapes. But you remember dating it's like this, he's cool. I guess I just remember dating guys like you. I have a cassette tape for you. Yeah, but that's because that's what comes because there was no Sidify then Carroll who had a Walkman.
I had both Walkman's cassette and CD mixtapes. All right, so we've got Bloomberg Pursuits coming up first up this hour. You may have heard, the world's biggest sporting tournament is coming to North America in twenty twenty six, Soccer's FIFA World CU We played in the United States, Canada, and Mexico.
Overseeing the matches in Miami is the former CEO of Celebrity Cruises, Lisa lutov Perlo, who went from selling cruises at door to door to becoming CEO of the company. She wrote about all that in her book Making Waves of Woman's Rise to the Top using Smart's heart and courage, all of which she will likely use in her new job as CEO of World Cut Miami. Being asked to do the job initially, though, came as a bit of a surprise.
One day, just out of the blue, I got a text from a woman that I know I met under different circumstances, and she texted me and said, got a minute and had no idea why she was asking that, and I said, for you.
Of course. She called me and talked to.
Me about this, and I wasn't sure that I really wanted to jump in.
And what was there? What was the trepidation?
You know, I was just stepping away after a crazy career and working really hard and being so busy, and I knew I wanted to do some things. I just wasn't sure I wanted to take on something so big and and something I really didn't know anything about, you know, men's soccer and the World Cup.
But the more I talked to people, the more excited I got.
And just like everything else I've done in my life and career, I said, what the heck, I'm a lifelong learner.
I'll figure it out. And here I am.
I was. I was going to say, it kind of sounds like your path to becoming CEO at Celebrity, which was, you know, taking advantage of the opportunities that I don't want to say we're given to you, but that you had earned. There was a reason people you were asking you to do these things going from you know, essentially a salesperson all the way up to CEO.
Sure.
And there was a reason that she reached out to me, and she because she was in a meeting. Here's the here's how the story went. She was in a meeting and she was she's representing a big stakeholder in the Miami Day Miami World Cup, and they were describing the attributes of the ideal CEO that they wanted to run it, and she said, every time they mentioned an attribute, which one of them was actually being a CEO, she said, my name kept popping into her head and she just
had to reach out to me to do this. And as I've learned, as I've gone through this, I realized that understanding and knowing soccer isn't what they were looking for. They were looking for someone who ran a serious business, because this is a serious business. Someone who could bring communities together.
And there's no more bringing of.
Communities better than the cruise industry collaborating because we have to collaborate across many different cities and counties to pull this off, and running extraordinary events, which and guest experiences which I did, and also really challenging logistical issues that you have to deal with. And you know, we're going to have six one hundred thousand to a million visitors
in South Florida during those five weeks. So those were all the reasons that I think I was some on their list and why they chose me.
Well, wait, so how quickly did you say yes? After some like trepidation? Like, how quickly did you say yeah, I'm on it?
It took me a little while.
You know.
First of all, it was a long process, as you probably know, as these things go. The more people I talked to, though, the more excited I got about it. Listen, this is historic, this has never been done before. It's the biggest World Cup in the history of the World Cup. There are forty eight teams, one hundred and four matches, three different countries.
This is big.
You know, the world stops when the World Cup happens. I thought about all the people I was going to meet and all the opportunities that I was going to be a part of that are historic and that have never happened to me before.
And it's a two year gig. So I'm like, all right, you can do this.
You can sign up for this, and it has a beginning it has an end.
So I'm in You're so real, and I got to ask you, did you, like, I don't know bingeon ted Lasso. Did you do a lot of googling online? Since this wasn't necessarily something you were so familiar with, what did you do to kind of be like, yeah, this is kind of cool.
Well, first of all, Carol, I have binged on ted Lasso, probably we all three times for all three seasons, right, the greatest show ever, and so sure and listen, I'm in Miami. We've got messy, We've got backdam This is the soccer capital, the football capital of the United States. It's the gateway to Latin America. Miami is a sexy, wonderful city. Everyone wants to be here. So there were so many great things about it. It's not going to
be easy, but nothing in my career has been. But I just thought about how cool and exciting this was going to be. And my husband is a huge soccer fan, loves soccer, loves the World Cup. And I worked with twenty thousand crew members from all over the world who all played football.
That was their sport and that's what they loved.
So I do have an affection for the sport, even though I don't know a lot about it.
Well, and my understanding, you really kind of lay it out really well. Why you it doesn't make sense for you to be doing this. My understanding is that this is going to bring in more visitors in the Super Bowl. So it's a lot, right, I mean, this is just massive. We all know it. We've I've all I just remember when it's going on, like it doesn't matter what company you're at. There's like viewing rooms because everybody is watching it.
So tell us a little bit about like how you're thinking about how do you put your own spin on it, your own mark on it.
Well, we're in the planning stages of that right now. So you know, I have two ambitions as the CEO of the FIFA twenty twenty six Miami World Cup. One is to be the envy of every other city in North America that's hosting these matches, and the other is to ensure that it performs financially, because you know, I want to surplus. I don't care if it's a dollar.
And so we're in the planning process right now. Over the next like ninety days, we're going to put our plan together about, you know, what we need to raise and how we need to offset the costs. And I really want to think about what's going to attract companies to sponsor this. I will tell you every time that I am talking to someone and they say, so, what are you doing, and I mentioned what I'm doing, their eyes light up. Everybody wants to be a part of this.
It's families, it's companies, it's employees, it's communities, it's everybody.
Soccer is just you know, nineteen billion viewers.
Now it's over a period of five weeks, but there are nineteen billion people watching all of these matches all over the world. When the World's Cup happens, one point five billion watched the Super Bowl.
So this in order of magnitude is ginormous.
Well, you know, and I'm just thinking about Tim and I are lucky enough that we've covered the US Open here in New York City and it's you know, yes, it's about the matches and the players, no doubt about it. But it is such a hospitality experience in terms of the food and the venues. And we've got about forty seconds then we'll come back. I can talk more. But is that are you thinking a lot about that. The you understand hospitality.
Yeah, that was one of the big reasons they liked me for the role.
And I do understand hospitality, and absolutely we are looking at every venue in Miami Dade County. We're looking at outside of the county because we're going to have to spread out with all those people, as you can imagine.
But yeah, we're going.
To We're going to figure out some fantastic events and hospitality for everyone, for sure.
Do you think we should go down there Carol for the rematch?
Lisa? I think make that part of like you.
Know you broadcast, bring us down and we'll.
Do a live broadcast along with everybody else who's going to be there.
Well, you two are my favorites, so I'll figure if we can figure that out.
For sure.
Score it's official.
I mean your home of New Jersey will be pulling you that way too for matches.
Hey, listen, New York, New Jersey has.
The final exactly, Lisa.
One thing I wanted to ask you, and I was looking through in prep for this, there was an Instagram post and it reminded us that you are the first former CEO from outside the world of sports to lead a FIFA World Cup twenty sixth host committee. Do you feel pressure as a result of that?
No different than I felt my entire career, Carol. It's you know, when it was when the announcement was made, the local announcement in the I think it was the Miami Herald, Yet was the Miami Herald.
My husband took the page and he put it on my desk.
And I took a photo of it and I posted on social media that day.
And I have had so many.
Opportunities to be covered by the press, whether it's business press like yours, lifestyle press, travel press, consumer press, magazines, newspapers, but I have never until now been headlined in the sports section.
And I just thought that was hilarious that I've actually made the sports section.
And yeah, you know, you always feel a little bit of pressure because you're doing something new and you're in unchartered waters.
If you will pardon that bad cruise pun.
But but I'm also invigorated and excited by it as well.
Is there anybody you talk like you want to talk to or you have been talking to though leading up to this, When you think about sport events or just experience experiential you know, things for consumers overall.
Well, one of the great things about this, just like other things that I've done in my career, is I'm surrounded by.
A lot of different types of experience in that regard.
So I have I'm working with a group of people that has Super Bowl experience. I'm working with some people that have Conka Calf experience, some people that have experienced working with FEFA, because that's also.
Very new for all of us.
And you know, I you know, the subtitle of my book is A Woman's Rise to the Top using.
Smart's heart and courage.
And I think part of being smart is surrounding yourself with people who have different and more experience than you do in certain ways. So they add a tremendous amount of value. And I hope that I in turn at a tremendous amount of value as well. So it's a good team. We all bring some good experience that we all need. So I think it's I think it's going to work out well, at least that's the intention for sure.
Are you still building the team at this point?
Yes, I am.
We are small and mighty right now, and over time, you know, the event is in a couple of years but right now, between now and the first of June, I'd really like to get the core leadership team together. So there's a couple of pieces of that puzzle still left to go. And then and then we'll put our planning together and then we'll start adding the rest of the team in early five.
Are you leaving me too? Are you yourself?
I mean in the winter? Yeah, I could go down there.
In the way you Yeah, private message for you too?
Sounds good? Hey, so is it is it? Are is your boss? FIFA? Essentially?
No?
No, Well, listen, all of our boss I guess, all of our host city bosses FIFA. And you know, there are a lot of restrictions. There are a lot of things that we have to follow. There are a lot of FIFA rules. This is a FIFA event in the city of Miami, New York, New Jersey, Kansas City, Seattle, you know, all of the different cities. And we work very closely with PIFA, and they're getting to know the United States a little more and we're getting to know them a little more. The way we work here is
quite different. In our experience here is quite different than a lot of these other countries that they work with and so we're all finding our way together to put on an extraordinary event in twenty twenty six.
Yeah, so cool, no doubt about it. Hey, one thing I was thinking, and I think about this when I'm going somewhere, whether it was a Disney theme park, whether it was the US Open, or just a concert like this combination, this balance of willing to have a great experience, but you don't want to feel like you're constantly being
faced with marketing and sponsors and everything screaming money. So I'm curious how you think about that balance, how important that is to you, or how you think about applying it.
Well, Listen, every experience is going to have a branding component. That's just the way it is because these people are paying the bill. But you you know, it doesn't have to be obnoxious, it doesn't have to be in your face. And if you're providing a great experience and a brand is associated with that, then you only would hope that people would have a really strong and good and positive feeling about that brand.
So that's always something that's a delicate balance.
I always feel like if people are having a lot of fun then and they are joining the experience, you know, just like I said, in the cruise industry, then they're going to want to spend money and they're not going to be opposed to the fact that there's a company that's associated with the experience.
That they're having.
So we'll make sure that experience above all else, but that brands get the recognition they deserve for the investment that they're.
Going to make.
All right, I got to ask you any players, any fun players you've been able to talk to kind of like pick their brain about stuff.
Not yet, but I can't wait to meet Lionel MESSI very very David Bedham and David Bedtham two great players right here in my backyard.
I have to say. At Milkin, which was out on the West coast last week where we were doing our live broadcast, uh, there was a line constantly for the main ballroom, which was actually kind of far away, and one of the big lines was for David David Beckham, who was there making a presentation. So it was really really he was at Milkin. You know, it's that cross section of so much Ted Lasso. Their important word was believe. Do you have kind of a word that you keep in your head?
What's going over your door?
To your office exactly.
Okay, well, funny enough, Carol and Tim.
Over the door in my home office is a Ted Lasso belief sign. No, yes, yes, yes, And it's because I believe that I can do this and I believe it's going to be fantastic. And you know there's a saying, whether you think you can or can't, you're right and I believe I can.
Well listen, We wish you good luck and looking forward to hearing the plans as they roll out, and just looking forward to what you are going to be doing for the next couple of years. I wanted to ask you then what's next, but I feel like I'm going to give you a break and not go there, at least not yet, because you got a lot ahead of you. We believe in you and really fun to have you back with us. So good luck with everything, and look forward to continuing the conversation. Be well.
Thank you, Thank you, Carol, thank you, Jim. Always great being with you.
Shall all right, take care. Lisa lutav Parlo of course, as we said, former CEO of Celebrity Cruises, now the CEO of World Cup Miami. Just taking that over and of course check out her book fun read making waves of woman's rise to the top using Smart's heart and courage and really I feel like a determination that listen, I can do this.
Just go believe. Believe that's all you need.
Isn't that great?
That is?
I love it.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple car Play and then brought auto with a Bloomberg Business app just Live on YouTube.
It's nineteen seventy four. A leading Black revolutionary is at a party also on Trent nationwide, manhunt by the FBI, he meets a powerful Hollywood producer. They decide to create a fake movie production. Not with the goal to create films, Nope, it's to hatch his escape plan to Cuba.
It's all in a new mini series that debuted Friday on Apple TV Plus. It's called The Big Cigar and follows the true story of one of the founders of the Black Panther Party, Huey P.
Newton.
Behind the series executive producer Jim Hackt, also known for Winning Time, The Rise of the Lakers, Dynasty, and for working on the Ice Age movies.
Yeah he's done a lot. Heck joined me and in Bloomberg News Equities reporter Bailey Lipschultz and began by sharing how he brought his graduate thesis to streaming twenty five years later.
This is what I always wanted to do. And so when Josh Barman, who is a friend of mine, stold the story that ultimately became Argo to Smokehouse to George Clooney Company, I was like, I have something similar.
I think it's.
Better, cooler, better characters, and he sort of took a look at what I had and agreed, and so that was two thousand and nine maybe, and then he started working on the article, and we couldn't find Bert Schneider, like he had produced all these movies Easy Writers, Last Picture Show, Five Easy Pieces, the Monkeys, and he had just sort of disappeared. His house had burned down, no one knew where to find. So we were about to give up. And then I used to write at night
a lot. So I went to swingers one night at like three o'clock in the morning, and they were kicking out this older, unhoused gentleman with a walker, and he dropped money on the floor, and when I bet down to.
Help him pick it up.
I saw the eyes and I was like, oh my god, you're Bert Schneider. And he was like, yes, tell them who I am, tell them what I did with chaplain and.
We sat in a booth. He was living in a one motel next to Swingers Diner on Beverly.
And so I've just always been fascinated with the decision making behind this. What made you not want to make it a movie? What led to landing on a short series versus a traditional film.
Yeah, that's a great question. And we had originally approached it as a feature, but it was like there was so much more character and story that we wanted to tell, particularly the story of the panthers Hewey's backstory, and in a two hour format it just started to get crowded
out by all the caper stuff. But in a longer format six hours, eight hours, we saw that we could sort of, I don't know if you've seen Escape from Ganamora, but sort of use the caper as a thin level of story at the top, and then use but most of it is about these people and these characters and their relationships. So it just seemed like a limited series was a better format to do that.
We'll talk about the relationship though, between Bert Schneider and Huey Newton.
Yeah, Bert saw Hughey and was like, you know, this is a guy who had discovered Jack Nicholson an easy rider, and he was famous for sort of supporting talent and letting them do what they wanted to do. He never went to set famously, and he saw Hughe He's like, that guy is a star. And he aggressively tried to seek out Hughey and try to get involved with the Panthers.
He wanted to give them money. Healey was wary of him at first, but ultimately they did start to work together and Bert would you know, write checks for Panther programs and sort of stay out of the way like he did with his with his movie productions, and and and the friendship blossomed from there. They stayed, you know, friendship friends, very close friends until hue eyed Bert was in his wedding and yeah, it was it was a close person friendship.
Well, tell us about the tale of and what just give us a little bit of a tease of what someone who watches The Big Cigar what they will see and what this story is all about.
Yeah, it's to me. The thing that's that's cool about it.
It is a portrait, a nuanced I think portrait of a of a revolutionary and crisis, which is something that you don't see often. I don't like to do hey giography, Like I don't think it's helpful for people to see perfect people do incredible things. I think it's helpful to see people that have human issues like we all do, do incredible things, because then you can do something too.
And he spent three years in solitary confinement, which we now know is a form of torture for shooting a police offic officer who shot him and he was The conviction was ultimately overturned. But he comes out of prison, he has all this probably PTSD. He's an instant international celebrity, which he wasn't when he went in, and the FBI is pursuing him twenty four to seven, basically trying to
kill him. But you know, it's sort of a slow motion assassination attempt where they didn't just walk up to him and shoot him, but they tried to drive him insane. They pitted panthers against each other, they wrote fake letters between leaders and from letter you know, made phony phone calls from rival factions were going to get you. They bought the apartment next door. They would break in, you know, all the time and wake him up with a gun.
In his face.
They staged a shootout in the hallway of his apartment building to try to draw him out to shoot him. So it was just this constant, you know, like someone's trying to kill you, and it's the federal government with the full force and urchs of the FBI and Jaegerhuver personally targeting you. And they ultimately were able to charge him with this murder. And he'd become friends with Bert and with nowhere else to go, And that's part of
the success of cointelpro. It cut him off of all of his allies in the movement and locally in Oakland, where he didn't know how to trust. He had a safe haven in Hollywood, and he fled there. They bulldozed the car and hit it and hit him out and ultimately hatched this plot of getting him to Cuba under the guise of making a movie. And they all had code names. You know, this guy's the producer, that guy's
the director. Hueye is the package or the star and the story is about how the producer got the star to Big Cigar aka Cuba without landing in the pokey. But there's a shootout that was real in Canter's Deli. They hired a pilot to like somebody's drug dealer who was known for making runs to South America, to build an airstrip and fly him to Hughey. But the guy pocketed the money and tipped off the mob, who already had a hit out on Heey, So they came down
to Hollywood and took a shot. They hired a boat, and I don't want to get into too much what happened.
With the boat, but it will blow your mind when.
You see it. But that's all true. You know, it's just a series of like any production, things went, especially when you're dealing with seventies Hollywood, things are going crazy. These guys are putting out fires and hewey at the same time dealing with He's ad what I loved about this race. He's at a crossroads in his life where he really has to re evaluate everything and get back on the beam because he had made a pivot from
you know, you're used to seeing the black panthers. You look on Google, you're going to find a bunch of images of guys with guns.
But which you don't see is that they were.
Getting up at five a every day and feeding Oakland's school children in a program that's still in operation and feeds millions of kids. You don't see that they built housing and education and hospitals and ambulance serving service. They
built a factory for clothes and food. And so that's what he had pivoted to, and that is why the FBI declared war on him, not because of the guns, but because he was doing these programs and they saw these programs could work and people were going to want change, and so they declared war on him before he could you know, usher in this revolution that he was talking about. They saw it was real and that he could do it, and they tried to break him.
Before we move on, Jim, I do want to ask you on the Big Cigar and telling HM unit and story. I mean, why do you think it hasn't been done before? Like he's a really interesting, gosh individual.
Yeah, I mean I think there's like at least four hundred and fifty years of history.
Beyond that question.
Fair.
I think it's it's hard breaking.
You know that that there hasn't been a Hueton movie that you know, there's a lot more story to tell, and somebody should do the eight season Panthers, you know, Game of Thrones, gigantic epic series about about you know, everything that they did. I think it is, you know, it's hard to get stories around.
People of color made. Then you have other dirty words like politics, and people don't want to do political and period, and you know it's just those are things that I think are turn off for people.
That how hard was it for you to get this done?
I've been working on this for twenty five years, Like I said, this was my thesis project at USC, so yeah, I mean it's been uh, you know, it all came out of a like a personal bottom for me where I had this conversation with myself which was like, you can no longer do stuff that you like anymore, just do stuff that you love, and you can't try to make shows that you think people want to watch anymore. You have to make the show that you would want
to see. And that led to you know, I think it was the day after that self conversation that I found the book that became Winning Time and then people were like, what else do you want to do? And I was like, this, this is the story I want to do more than anything else.
As you've mentioned, twenty five years in the making, you cast Andre Holland to play Hughey. What went into the casting process? Again, given the length of time it's taken you to get this across the finish line, and what's set out about Andrea?
Well, that's it.
I mean I thought that's the one person that should do this. Like I watched Andrea and the Nick that's I think that's the first time I really became.
You know, aware of what he could do.
And I think he's one of the greatest actors living today. I don't know anybody that I would say is better. I mean that, And not only was he I mean he is breathtaking in this role. He is incredible. And not only was he incredible on camera, but working with him, he fought tooth and nail to make sure we got it right, to make sure that the perspective stayed with Healey, to make sure that we didn't dip into any tropes. I mean, Andre was in the details and is just
an incredible creative partner and an inspiring actor. To work with and we were blessed. So when his agent called and said, what about Andre Hewnt, I was like, you don't have to, Like, that's it, there's a list of one that's the guy I want.
And Jim, I'm a big fan of nonfiction. When you're working with stories based in reality and you're trying to hold them up, you know, it's kind of like what we do with in journalism. How does that impact your ability to stick to a script and make sure that you're delivering what actually happened and not kind of fraying too far into reading between the lines or kind of implying what could or could have happened.
And this one we.
Felt more of a responsibility to stick as close to the truth as we absolutely could. In certain cases, we had to combine scenes just because of budget, basically because we wanted to portray certain things. We didn't want to lose them, and we wanted to you know, I think your guiding principle is stick to the capital T truth of the story that you're trying to tell and the
characters that you're representing. There were a few things that I mean, I'll give you one example, like we had a bombing there's a bombing portrayed in one of the social programs, and I don't know that that went down that way, but it is reflective of the measures that people took at the time against the Panthers, like a rap Browns was bombed, Fred Hampton was shot in bed, you know, like.
It is indicative of the kind of things that happened.
And so we wanted to portray a that they that they were opening this thing, and b also get a part the measures that get across the measures that the FBI took against the Panthers and co Intel pro and that this was indicative of the kind of things that they did.
What did you learn in the process. This is obviously someone that you like, As you said, did your thesis you knew a lot about obviously you know knew this subject the history, But what did you learn the process?
Jim, Oh, my god, that is a great question. I mean, well, first of all, when I first became attracted to the story, I was sort of and this is an overshare for television radio, I was sort of in the midst of becoming an addict myself, and so I was attracted to certain elements of seventies Hollywood that I thought were heroic or really cool, and I got you know, I got
sober in two thousand and one. So in the twenty two years that followed, my perspective on this story has shifted a lot, because I do think these are incredible people too, incredible people who were derailed by addiction and mental health not being the topic that it was in the early seventies, particularly for men. You can just kind of, you know, see the way that the insidiousness of addiction and mental illness sort of impact, you know, took away to great thinkers from our times.
I also, I just think you don't know what you don't know.
Like, you know, I came into this as someone who studied a lot of radical politics and just every day was a constant, you know, checking of yourself of what tropes are you bringing to this process? Like we're you know, how are you thinking about things? And I think when you're when you consider yourself as sort of like, for lack of a better word, liberal kind of a person, it's surprising at first to see how much is you know, of your own thinking is out of line and needs you know, a little bit.
Of a step back.
And and and fortunately I work with people that could explain things, Jimmy. You know, in a way, it was just a constant learning. Every day was a learning experience, and that's that's part of the great thing about this artistic process on this show is like I didn't even know how much it was going to be, like putting myself out there.
People are going to see what you think when you pick up a pen and start writing.
Well, I think it's safe to say that the last few years and really coming off the pandemic, and just things that we continue to learn about our history as a nation and just people in general, like things that we just actually don't know a lot about. And so it's this and other things that really kind of help fill in some of the gaps and have these conversations like you've been having. It sounds like with yourself, Jim. So fun to get some time with you. Good luck
with it, Jim Hecked, creator The Big Cigar. Catch It because it is making its debate debut on Friday on Apple TV Plus. Jim Take Care Jim joining us there in La.
You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on Apple car play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg eleven thirty.
What to see at the BI Andala in vettics this year because sett tapes are back, Who Knew? And the twenty twenty five Aston Martin advantage. I guess it's.
Said you say it right?
Yeah?
Yeah, you know, Carol, Yes, I guess you can have. We'll catch you if you said you said it right, so we'll get you one of those vehicles. Hey, also tasting notes in stemlessses and no we're not talking about a vineyard but instead the Napa Valley of beer. It's all in this week's Pursuits here with more. The editor of Bloomberg Pursuits, Chris Rouser, Chris, that's exactly where I want to start, this idea that I knew it, you
knew it. What I love about this story is it's all about taking sort of a wine approach to beer in this day and age, the idea of being at a vineyard but you're at a brewery.
Yeah.
The original pitch for the story was the winification of beer, which is the idea being like you go to a place where terroir is much more present when you experience the beer. It's also a leisurely experienced so you go to a tasting room, you maybe have some food paired with it, you hang out all day. And in the Hudson Valley there are a bunch of breweries that are really taking the Napa Valley approach and creating this kind of environment. So you come, you're in a special place.
You get to see where the plants grow, and you get to taste. You get to taste the stuff that's made on the land, and it just really gives you a full sense of the product. Many of us live in cities, so we think of a brewery as like a bar you know that you go to and has a million taps, and like a chalk board that has a million beers that you don't really understand what the difference between honey of the beers are. And then this is like you're there with the brewers, with the farmers,
with the people who make it. You can look out over the field and see the apple orchards and the pear orchards that they use the fruit to mix in to the.
Brew That's what I love how they're doing it right there, cherries, peaches, blueberries, honey from the beehives, I mean. And there was some interesting little law right or something.
So this is happening in New York State. This is actually happening all over, but we're talking about New York State, which actually is sort of in the southern Hudson Valley. Is creating kind of a little bit of an informal tour, like a trail where you can go from brewery to brewery and people will recommend which one you go to next.
You can spend a couple of days doing it. And the reason that this has been growing is because in twenty thirteen, the state passed legislation that allowed brewers to serve consumers directly, which means, like you were at the brewery, they serve you a beer, which they didn't used to be able to do. You think it's all you bottles,
but they couldn't serve you. And if the ingredients for the beers were largely local by the year twenty nineteen, so the law passed in twenty thirteen, if you could get to more than sixty percent local ingredients by twenty nineteen, then you can start serving people. And so that's why people started building these tasting rooms and a lot of people did it. And it also influenced local ingredients and you know, growing stuff on your own farm.
Who knew about these laws?
You're at the beer dude, I yeah, like beer. How much do you experiment in like different Like I love the idea of like fruits and honey and all this different stuff.
Yeah.
What I like about this is it's less about sort of the high alcohol IPAs that have been so popular for so many years and like just getting that bitterness there. But there's a lot of variation here. Yeah, and I think that's really cool. Like farmhouse ales, seasons like those are that's the good Stuffyle.
And you know what's funny to me is I'm not a beer person, but I've learned a lot about beer over the past ten years and I just love that. Like when you when you taste like a peach inflected beer, it's because they literally threw peaches in that turn brewing. It's not like why more complex than it's not why
where people? Yeah, it literally is they just threw a bunch of blueberries and or maple syrup, and that makes it really interesting and really fun and more accessible than wine in a lot of ways.
Does it seem like this is taking off Chris the idea of creating this kind of Ale trail sort of similar to what we have in Napa Valley in California, or or maybe what we have in Kentucky. When it comes to the Bourbon.
Trail, it isn't formalized yet, So this the state Tourism Agency does have like pamphlets that list about ninety breweries, but there isn't like a trail where you can check off where you've been. So our writer Tony Rehagen talked to brewers and they basically told him like, go here next, go here next, And that's how he found like his little route, and we put a map of it in the magazine season.
So they're still a little choose your own adventure at this point.
Yeah, exactly.
I love it.
I just love the history and just the idea that this is kind of like growing up and it's just a few hours outside or city.
Are you so, are you a beer person at all?
Courl I grew up actually, you know, I mean my dad and my brothers and we liked Ale so absolutely, and you don't necessarily have to go to Venice to appreciate those I was.
Gonna say, you don't have to be an artist to appreciate.
Art, all right, better you one. Listen you guys, I love you. Take us everywhere and the very big art exhibition that happens in Venice. I know James Harmy loves to cover it and talk about it. Just give us an overview, just remind us of what this is all about, why it's important to the art world.
So if you don't feel like sitting in a picnic bench in a field in upstate New York having a beer, you can go to Venice and go to a giant cathedral and see some absolutely new, cutting edge contemporary art. So this year is the year of the Venice Bionale, which is every two years. James calls it the most important event in contemporary art, and you know a lot of people regard.
It that way.
And it's technically a giant show every year that has you know, different themes and different curators, has three hundred and thirty one artists. That's the central show, which is called Foreigners everywhere this year, but then like thirty different countries have pavilions where they bring a mean like a primary artist who does a show. So the US artist
this year is Jeffrey Gibson, who's an indigenous artist. There's these thirty pavilions, and then through the rest of the city there's just all these other ancillary installations and exhibits and it's way too much, honestly to see all of it. But James went during the early days, saw a bunch of it and basically picked out his favorite things to see.
You know, it's very cool. You see these old palaces with tintorettos on the ceiling and then on the ground there's like a gold cube and you have to figure out what the art is, you know. So anyway, so James has a great list of stuff to see.
While you're there, we gotta talk his sets.
I want to talk to you about that well, Chris, when you and I were youngsters, because we're about the same vintage, we made mixtapes.
I'm guessing, oh, yes, I still have many of them. I don't have a player.
That's exactly what I was gonna say. And then a few years ago my brother who's like he's I guess he's considered like a young millennial. H he started having cassettes of like bands in his car. Oh yeah, and he drove me around. I was like, what what are Why do you have tapes here? Like, oh, everybody's releasing tapes now?
Does he have a pencil to rewind?
I have no idea. So he's doing He was like born ahead, like he was born after tapes were a thing.
Yeah, so artists are still making tapes, like record labels still make tapes. So when Taylor Swift released The Tortured Poets, Department heard of it. Yeah, she they sold one point six million physical units, so that's records, CDs, and cassette tapes. She sold twenty one thousand cassette tapes, which is nothing compared to the seven hundred and fifty thousand CDs she sold, but that's a lot the twenty one thousand kids Taylor Swift fans bought cassette.
So why are they doing this?
Because people really like owning a physical part of the artist's project. And you know, vinyl has been back for a long time. You know, records store owners were not surprised that Vinyl came back because people loved it so much and they weren't even really surprised that cassettes came back because it's portable and it's less expensive. A vinyl album can cost like thirty bucks, a cassette tape can cost you less than ten dollars. But you feel like
you're carrying around a piece of your artist. And what's been surprising to these records store owners is that it's young people that are buying. Is not like geriatric millennials like who used to run around with our Sony Walkman, but actually kids who are just like I just you know, it's sort of a secondhand nostalgia and they want to be a part of the project.
What are they playing them on? Good questions?
A really good question. So this story that we do by Matt Cronsberg, who's our gadget guy, we talk about three of the devices. So there's the We Are Rewind player, which actually has Bluetooth headphones, so it's a little like digital analog, but it has an input jack so you can record mixtapes like we used to do, and it even comes with a little pencil to sort of try
to fix your tape if you screw it up. There's a Japanese company file that makes a CP thirteen and then Retrospect, which is a vintage e company that we've covered before. They make vintage like cameras and stuff and tape players. They have a CP eighty one which is also which has like vintage g headphones and it also you can record on it, so there's a lot of devices and they're like in the one hundred dollars range.
I liked that it comes with a pencil as if you know, it anticipates that there will be issues. Yes, maybe not if, but when yes.
There's always going to be an issue, just quickly. The Vantage that Hannah Elliott Aston Martin reviewed.
Liked it, but it was great, but sometimes great is not good enough. So this, the Issen Martin Vantage is inarguably like a really great car. It's a coop, it's one hundred and ninety one thousand dollars, it's very powerful,
very fast. But Astin Martin really needs is not doing great and this, Hannah is great at looking at this kind of stuff, like they've been having trouble over the past few years, and what they really need is a product that will beat like Porsche and Mercedes that their cars are in the same class, like the nine to eleven turbo and this one just is not it and.
You could feel it.
Yeah, yeah, it was like her key jerking around like she felt like it was. It doesn't have real, real steering. She felt like it was like figure skating with a heavy backpack, which is so evocative. I was like, I know, I've never done that, but I know exactly what you mean.
Not great, not great.
We gotta talk sunglasses. Okay, because it's spring, it's going to be summer soon. But apparently there's like a new style of sunglasses thanks to what some pretty famous actors wore on the red carpet.
Yeah, so the new trend in sunglasses is sunglasses where you can see the eyes through the sunglasses, so not so tinted that you can't see through.
Behind the dark. Well, I also like, especially if.
I feel tired, like today, I love wearing the sunglasses. But I'm totally face blind when people wear sunglasses. I will not recognize my best friend Carol as she's walking down the street if she's wearing sunglasses.
This is true, So I do appreciate it.
Fazing, right, So we have the one this week is a pair of sunglasses. They're not cheap, they're eight hundred and twenty dollars some classes, and they come from a brand called Jack Marie Majet and they're called the Sandro Lenses.
Can I tell a story real quick? Chris really is face blind? When I was on parnal leave, no, I actually became close friends with one of his good friends, unbeknownst to Chris, and we sent Chris a photo of the two of us, and I was wearing contacts and I usually wear glasses, but I was wearing contacts. And Chris texted back to our mutual friend Grid picture. But who is that?
I said, am I supposed to know who that man is?
And it was me and Chris and I've worked together for years. I was like, and I just told this guy, hey, oh I love Chris.
We record every week.
And then I looked like an idiot because so Chris really is face blind?
I am.
I thought maybe he was. I literally was like, I thought he might be like a professional athlete.
But you were.
Excited to be standing next to Thank you.
I take that as a compliment, all right.
Well said, Well said, I'm glad we did that story, all right, Chris, thank you so much, really appreciate it.
You guys.
That's the editor of Bloomberg Pursuits. Also, can I say this like our favorite dude around, Chris.
Rous, You can yeah, like we look forward to this.
You have no idea.
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