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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 Stenebeck from Bloomberg Radio.
Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. Well, earning season got into full swing, so too has the final stretch of the election. As we are a little over two weeks to go until US voters head to the polls. Keep in mind many of some states have already casted their ballots. Early voting is underway. We have several takes on the elections this week, from free speech and fearless speech to how the men who governed America
governed their own money. Yes, we mean the US presidents that coming up in our next hour.
This hour, the company that invented blue jeans more than one hundred and fifty years ago. On today's crowded marketplace, the Levi's CFO stops by, Plus the CEO of Gusto has his pulse on small and medium sized businesses. He shares what he's seeing is he builds out his rapidly growing business.
First up, we begin with geopolitics and the US election, from the Middle East and the Russia Ukraine War to the US campaign trail and beyond. One name at the top of our list when we want to cover.
It all is Ed Price. He's a former British trade official, now non resident senior Fellow at NYU, also principal for geopolitical Forecasting at the global intelligence and consulting firm ERGO. He's advised members of the European and British parliaments. And we started by talking about his summer road trip.
So I drove from New York to San Francisco via the northerly route, and then I drove back via the south via Dallas, New Orleans, and really just tried to stop as much as possible and just make conversation, right, just stop someone and say, hey, how are you, by the way, what do you think about the election? What do you think about the economy?
And they everyone greeted you with open arms, right, I mean.
Right, So this is the interesting thing. We've heard this so many times, Jimmy Carvill. It's the economy stupid, It kind of is, and it kind of isn't. And one of the things that I noticed most was that in any given generic conversation with anyone really, after they'd said, oh, you know what, I really hate.
The other guy, right, the other candidate, they.
Would then basically come up with a list of things that they wanted whoever it is that's president to do.
At home that were very similar.
And so there's you know, we always talk about polarization in this country.
That is the case, but there's.
Also this sort of bipartisan feeling that somehow, some way the economy could be better. Now that might mean that, you know, Harris is in trouble because it's it's in some ways her economy, but it's interesting to me that so many Americans said exactly.
The same thing.
Yeah, it's interesting that that's what you came away with.
It's also dark contrast to so much data out there, data point after data point, Carol, showing that for a lot of people, the economy is really good.
Exactly, and yet Americans, there's a lot of Americans, as you know, ed that don't feel so good. I mean, based on your conversations, did you get a feel of who might ultimately win come November we know it's a very close race. We see the polls, we are reminded of it daily or hourly. But did you get a good feel of which way it could go? And is it just based on the signs that were on people's lawns?
Oh my goodness. Okay, listen.
If presidents were elected to be a signage, Donald Trump would be the Roman emprop because I can tell you, guys, and you know hand on hot I didn't see a single Harris sign in the rust Belt. I didn't see a single sign.
No, seriously, I know, I get it.
I went around the country a lot in the last couple of months. One question I'll ask, though, is when were you doing this?
What month?
Because remember July twenty first is when Biden dropped out. Yeah, and this signs weren't around. The signs weren't around for.
A while, so August, the whole month of August. It's a really good point about data.
And of course it might be that the missing signs just aren't there because either they haven't been printed or because people don't want to put them up, in which case you might say that Richard Nixon's silent majority is going to go blue this year. I've got to tell you, you know, I'll declare my bias. I'm voting this time, I'm voting against Donald Trump. So there's my bias, me not seeing a single Harris sign and seeing ginormous Trump signs.
You know, you can't help but think, Okay, this guy's going to win.
It's a good point. I think I've talked about this before, but I was in Colorado a few weeks ago. It seemed like there were there were two things that I'll share. One is that there were a lot of local signs that were clearly proclaiming the way one person felt like who the candidates were that they were voting for that
didn't necessarily add have a presidential sign with them. So it was like county commissioner, Congress, and local state legislature signs, but not necessarily signs proclaiming president, which I thought really interesting, showing the way people are thinking downballot.
That's super interesting too.
And where I live, I'm in a red county, but I'm getting leaflets from both sides, both parties, and they've stopped putting their political party on them, just the name of the candidate, which I think is maybe another.
Interesting data point.
I do also wonder, you know so much. There was an interesting time story actually the New York Times, and it said the Trump voters who don't believe Trump, when the former president endorses violence and proposes using the government to attack his enemies, many of the supporters assumes it's just an act. I actually had a conversation with an individual over the past week when we were out on
the West coast. Same thing said. You know, I just think when when the former president Donald Trump says things, he's just trying to, like, you know, kind of put people off, if you will, whether it's allies, whether it's political opponents, just kind of shake things up, but not that he's necessarily going to follow through with all these things. We know from his first administration he does follow through with some things. But I wonder what you make of that argument or that thinking.
I wouldn't want to take the risk. Frankly, as I say, I have a bias.
I think he's a clear and present danger to borrow from Tom Clancy to the United States Constitution.
That's my view.
But the interesting thing I think about sort of, you know, me turning up in hunting stores and seven to eleven's and not being a polster and not really being a journalist, is that very often I would speak to people who do support Trump, but then they would sort of they'd give me like the second and third layer too. And one guy that comes to mind, he's running a hunting store in Oregon, but he's sort of said to me, I'm voting Trump, but there are things I don't like
about the guy. And I wouldn't talk like that in front of my kids. So you know, that's still there, and maybe I got to hear a bit more of that because you know, who am I nobody?
I'm not a polster.
Yeah, I guess the question is to what extent these folks show up? And also based on where you were at, you know, Oregon, a state like Oregon not exactly a
swing state right now. I mean the Pennsylvania observation that you made were really we're really interesting, and you did drive through a lot of swing states certainly, but it's you know, as you know, we live in a world where the electoral college, and I think Mark Gongloffer, a columnist at Bloomberg Opinion who covers climate change, described as basically a football stadium full of people deciding the election.
Well, yes, that's probably true. So look, I'm back in New York State.
Now, probably some of those people aren't too far away in Pennsylvania.
This was non.
Scientific, as I say, but if you just based it on visual evidence, conversational evidence, it feels like on the surface of things, Trump has this in the bag. Now, that said, there's always that chance that, as we know, in an election this close, you know that the other side pips through for some reason or other.
But my feeling is that Trump could really get to the end here.
So why did you write about this in the context of the silent majority in the Richard Nixon area? Why go back?
Well, I think in part it's because I also have this side hustle teaching students, right, and yeah, I've been doing that for like five or six years now, really enjoy it. But I've seen a change in the body politic, so to speak, of the student body, and it seems to me that there's at least one parallel with the Vietnam War, which is that there are moralistic imperatives in
the minds of protesters to oppose US foreign policy. Now, for me, that's false, that's not an equivalence that works because Vietnam as things turned out an error and the war that Israel's fighting was imposed on it. But you know, Richard Nixon was really trying to say in that speech that look, you may not hear the people out there. For Richard Nixon, he liked to speak about himself and the third person, but they're out there, they're just not protesting.
And so the question was.
Are the people that aren't really out on the streets, are the people that aren't display big Trump signs thinking about voting for Harris?
And I'm afraid to say, I don't know.
Yeah, I feel like there's a fair amount of questions about you know that, and just kind of then what it means for the outcome. I am also curious ed you're back from overseas. We talk a lot about whether it's us allies their concerns about the outcome of the election. What insight can you give us on that front.
I think from my perspective, from you know, European eyes, that I have foreigners in the UK and Europe think this is probably an existential election. I'm heading over to Japan in a couple of months, I imagine they think
the same thing. And a lot of this comes down to NATO, right, and whether or not if Trump is re elected he goes and does to your point, Carol, about whether he actually does the things he says, actually does go ahead and pull the US out of NATO in a meaningful way, And that's probably a segue at
some point into the Ukrainian behavior on the battlefield. But foreigners right now, I think are really scratching their heads about how exactly there could be such a bifurcated choice in the world of foreign policy between what we presume Harris will do and what Trump might.
There's one caveat. They do seem to be joined at the hip in agreeing that Beijing.
Is a problem, and it does seem whoever wins, as we know, trade policy will continue down a confrontational path.
It is amazing to me ed are not surprising that there was a period where every day one of the top stories on the Bloomberg had to do with the war between those two countries. Obviously, now we have the Middle East we're following, and that is a top the list of concerns geo politically, though, Let's talk about Russia Ukraine and where you think this might go and how the US election outcome might impact that.
Well, thank you, Carl.
I mean, it's astonishing and sad that we've been talking now for years about this war and it's entering its third winter. So I think where it's gone is more or less where the broad analytical community expected it to go, which was stalemate. There are, of course, two caveats to that. One is time, which is that the Russians are fighting a war of attrition, and the other is, for want of a better phrase, bravery, in that the Ukrainians have now thrust into the Cursk.
Region with their own offensive.
My interpretation of that offensive is that it is designed as a message, a plea to the United States saying, look, we can do the job.
We have the will give us the means.
And of course we are still sitting on decisions such as whether or not long range weaponry should be used, should be allowed to be used on Russian soil, So a lot will come down to who's sitting in the White House.
I think, what do you say to US citizens who might be like, well, it's the Europeans problem, Say it's for the Europeans to figure out to support, to provide funding and weapons. What do you say to that.
Well, I would say that Munich in nineteen thirty eight it was the Europeans problem, and then after that Poland in nineteen thirty nine was the Europeans problem, and then after that it wasn't it was ours.
It was America's problem.
And America has a fundamental or national interest in containing, if not defeating, aggressive military powers in the world. I mean, this is almost one of the top three American things, right, It's like apple pie, the aforementioned freedom and beating dictators. So you know, I'm surprised when I hear that narrative. I think it's tied in a strange way to this
Trump wing of the Republican Party. If there's another wing left in which Russia is held up as an example, Hungary is held up as an example of how to do business, how to run a country. It's very strange, but of course it's patently false and should putin defeat Ukraine in the field.
We're in a world of trouble.
Meanan what there'll be Poland or something else next.
Well, first of all, dictatorships everywhere will be emboldened. I think that there's an obvious link between the relationship between Russia and Iran, and Iran was obviously emboldened to embolden others such as hes Balar and Hamas to attack Israel. So this is not one war. This war is an ecosystem. But meaning as well that the revanchist nationalist Russia that Putin has unleashed in the last decade or so and that we have failed to confront, does have its eyes
on the restoration of a former Tsarist empire. It's not the Soviet model. This is a red herring. It's the Sarist imperial model of Russia, in which there are these vassals, these occupied vassals around its borders as a form of self defense. You can perfectly well imagine why the Russians are paranoid. They've been invaded several times, believe it or not. British and Japanese troops have been on Russian soil in
the twentieth century, and so on. But unless we the West properly confront this aggression, forecast that it will only get worse.
Okay, So make the case then if members of the US House and Senate are listening or watching right now, make the case as to why you believe it's essential to support Ukraine.
So there's an idealistic case and there is a practical case. The idealistic case is the one that I just gave you. I would appeal to any elected official in the United States, I would appeal to their heart, and I would say, look, America has a unique role in the world. Jefferson, let the genie out of the bottle. It's a good genie. It's about human freedom, and it should be universal. That's the idealistic case.
There's also.
A monetary case, right, there's a fiscal case, which is how much money do you want to spend putting Putin back in his box? And as far as I'm concerned, this is cynical. You could say, well, who really cares about Ukraine? What we really want is to defeat and degrade Russian power, and by the way, I think we've been doing that. So I think that Putin has made tactical games measured in years, but has probably set himself back strategically as measured in decades. Right, So he's not invincible.
The curse offensive for shownness. And if we just want to send a rounding era of our national budget and inventory that we otherwise would have mothbolled to brave people fighting for freedom. That's an idealistic thing, but it's also very practical because again, otherwise.
You think about Ukraine going down.
I mean, then you know Poland the Baltics are in trouble, or Putin says that's enough for now and sends all of his expertise and or material soldiers say to Iran in a war with Israel.
So this we really have to think about this practically as well.
Hey, ed, one thing I wanted to ask you also, coming back from being in the UK and overseas, are people getting frustrated with the US support of Israel?
Yes, but they shouldn't be. This is a very sensitive topic. I recently wrote an op ed about this. I thought very carefully about writing it, but I did. And it asked three questions. One, is Israel fighting a war of self defense?
The answers yes.
The second question was is Israel conducting a genocide?
And the answer is no.
And then the third question was is Israel bringing us all to the brink of World War three? And the answer was, I don't know. If you spend more time thinking about security in terms of appeasement and nineteen thirty eight. As I mentioned, then Israel was attacked and is doing the absolute right thing in defending itself. If you think this is more like a nineteen sixty two Cuban missile scenario globally, then perhaps we should be getting to the
time that we wrap this thing up. I'm in the former camp, A lot of people are in the latter. But I would say that every single time Putin has said, look, I'm going to use terrible weapons.
He doesn't always use or whatever, use.
The words nuclear weapons, and we've said, well, actually we will cross that red line, he's done nothing.
So I think we are acting.
With a week attitude.
And a strong hand. We should get on and finish the job.
I'm going to hate myself for asking you this, but forty seconds quickly, what do you think is the number one threat to the world, be it an individual, a dictator, or a country.
I think the number one threat to the world is a all out conflict between China and the United States that turns nuclear.
The good news is I think that's unlikely right now.
The Chinese do not want to attack Taiwan before they see how these other two conflicts play out, and so there's another maybe third reason for your senators and your congressmen and congresswomen avoiding World War three.
We did it.
It took us around the world, as you always do. Thank you, Thank you so much. Glad we can reach out to you and that you are ours coincide a little bit better with us right now, the.
US, Russia, Ukraine, Israel, more of the Middle East, China. We did it all with that price.
Yeah, and as we often say, it's all complicated him laying it out though so clearly at price. Thank you so much, senior fellow at NYU, former British trade official, Thank you, thank you. This is Bloomberg Business Week.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm. Easter Listen on Apple car Play and Android Auto with a Bloomberg Business act or watch us live on YouTube.
Fashion has been all about genes since the pandemic, well and also yoga pants to be fair, but there are signs that that might be changing. I mean retailers and data makers. They will need to move fast to catch the next trend.
Earlier this month, Levi released earnings and after seeing challenges abroad in declines across its home market, the company cut its full your guidance.
Levi also said it's reviewing options for underperforming dockers, including US sale as it focuses on its namesake and beyond yoga brands.
For some insight into the company's plans, Molly Smith and I caught up with Levi Strauss cfo her Meat Singh.
We are the market leader and the as the market leader market Leader market leaders now and Women's as the market Leader are response coonssibility is to lead trends and drive people towards our products. You know, we're focused on what we call Denim lifestyle, which is more head to toe across both men's and women's.
You're wrapping it and how yeah.
And I'm wrapping it. You can see, you know, the other folks. But Denim is having a moment, as you call it. The last cycle started with the skinny way back into in the late late two thousand and seven, two thousand and eight. That lasted for about eight nine years. We were the first to introduce the loser fit just before COVID, and it took off post COVID. And you know, the other thing that we really focused on is because
the words become a lot more casual after COVID. You see it in a hybrid work culture, you see it in other social occasions. And so we are making a stronger pivot to the non denim piece of our apparel. For men, we've got something called performance Tech. It's like the ABC Lulupan, and that's really gaining traction. And so as we think about, you know, growing the business, it's about owning allows the share of the closet without taking the eye off the ball on what we're really known for,
which is denim. And so it's all about denim lifestyle.
I would think a lot of it right now too, is about wide legged denimo. I mean that is just like we had a great story about this recently about you know, women in particular who are buying you know, roughly one hundred dollars wide legged jeans and then the seven hundred dollars wardrobe to go along with it.
Jim's eyes just bulged.
So yeah, all the rest of maybe like the crop sweaters and jackets, because if you've got like a waist that's coming up kind of high, then you want the shirt to kind of hit roughly around there. I'm learning this. I have a style of she's telling me all about it. So yeah, I mean, obviously, Hermie, you could tell us more about this zeal.
It's actually you hit the nail of the head. I was going to talk to you about it. But it's not only about bottoms, and as the as the fits for the bottom to change, so do the tops, and so as we think about denim lifestyle, we're also focused on growing our tops business, which was up nicely in quarter three. You know, it's up to eight percent. But overall, what you saw in quarter three largely was that Levi's as a brand grew five percent, and that's the strongest
good we have had in Levi's over two years. Sequentially is getting better, and that's why, as we talked about quarter four, while we took our overall guidance for the year down, you know, our belief is sequentially quarter four is you know, slightly better than quarter three.
Well, if if Dunham is having this moment, then why don't you think investors are buying into this? Levi Strauss shares up about twelve percent so far this year, underperforming the S and P five hundred. Why aren't investors buying into.
This, Yeah, I think. You know, what we've done this year is we have narrowed focused into Levi's and beyond yoga. You know, we announced the exitive Dockers. The Dockers was underperforming. We had a small footwear business really based out of Europe. We are exiting that. And we were present in Target through our Denisen brand. We introduced Levi's Red Tab in Target that had a good run. So you know, we thought it was better to focus on Levi's than Red Tab.
And so as you think about it, I think the fact that we are transforming in the year, while are we trying to perform and performing really well on Levi's, is I think why people are just saying, Okay, let the transformation you know, get complete and we'll buy in. But overall, you know, Levi's as a stock over the last twelve months has had a decent run. We're long on the stock, We're long on you know, trends of
the business. Our longer term goal is to take the six billion dollar business and make it more like a ten dollars ten billion dollar business, improving our operating margins by a couple of percentage points. The other thing that is happening in the business. Is this transformation to more of a DDC first business. It doesn't mean d DC only.
It does mean, you know, we lead with DDC, which is our stores, r E commas and wholesale compliments are a direct to consumer business, and that transformation is taking ship today. DDC is about half our business when I joined us, about a fifth of our business.
We're gonna get more on direct to consumer in just a minute. But you mentioned doctors, so I wanted to talk to you a little bit about the options for doctors. You did announce that you're looking to sell the business. When when I heard that, I think to myself, this is like a perfect fit for authentic Brands group. Jamie Stalter is like, you know, Jamie Salter's group. He's got Airwalk, air Apostle, Billibong, DC, Greg Norman, Eddie Bauer, Champion Fry. I mean, I'm only down to F at that point
in the alphabet. He's got everything over there down to Volcom. Does that make sense?
You know? I won't comment about prospective bias. I would say that the reason we announced the exit of Docers we created Dockers. Okay, so it's a homegrown brand that had a wonderful run for a long period of time. We launched Dockers just to you know, take advantage of the casual friday of a sudden in the in the mid to late eighties. The what has happened is it's
in a lower growth category. And I'm a you know, we're a firm believer that what this does is unlocked Dockers with somebody who can take it to the next level while we concentrated on taking Levis to the next level. I've been part of spinoffs and I've seen that happen. To your question about you know, prospective buyers, we announced it so that we would probably hear from perspective bias
is early days. Our intent is to sell it, uh, and intended to sell it to bias that can not only take the brand to the next level, protect as many employees of Dockers as they can and UH and we'll see where this goes.
Uh.
Phones are ringing, which is a good new These transactions take time and you know, when we have something to talk about us, So who's the perspective of acquire, we'll definitely you know, talk about that.
You just call us, Yeah, let us know.
Yeah, just pass their phone calls maybe onto us when those phones are ringing. I mean, what kind of timeline do you think is reasonable to look at something like that to really complete that kind of a space.
No, it's a strong brand, and in our view is something like this can take six to nine months. You know, what we're really interested is is ensure that it's the right buyer who does the right thing for the brand. And so you know, we're going to do it in a fast way, but we'll do it the right way.
Right Well, I mean, I think this is the time where we pivot to Beyonce. I mean, tell us more about this partnership. I think a lot of people want to know about it when what exactly like her role is with the brand here, Like, is Beyonce like straight up designing Levi's clothes? Now, Like, can I at a Beyonce designed pair of Levi's jeens.
No, It's it's not about a product collaboration. It's about a partnership with someone. You know, she's an icon, She's been in the center of culture. You know, you know
she her values and our values resonate. You know, she'd been a supporter of the brand for years, for decades and when she named a song after Roy Carter Cowboy Carter and the song Levi's that was organic she you know, in nineteen I remember she she was at Coachella and was wearing US shots again a very organic you know uh thing that she did, and you know, product sales went up on the shots. So you know, we kind of sat back and said, you know, it's a it's
a it's been a great partnership. Could we take it to the next level and having somebody like her support our brand, support the iconic apparel that we have, the five or ones for example, the teacher. Actually actually, you know, I think we think it's a win win for both Beyonce as well as US. Plus, you know, we're leaning heavily into driving our women's business about a third of
our business. We see no reason why it shouldn't be half our business, right and I think you know, she has you know, many fans around the world, and I think the combination of the two brands would make a difference.
Just about fifty seconds and then we're going to come back for more with you. Have you already noticed a higher sales figure or more loyalty on the back of this campaign.
You know, it's early days with a campaign. This is the it's a twelve month partnership. We just launched the first chapter. You know, we'll have three other chapters. But what I can say is, you know, difficult to link you know, brand advertising with direct sales. But what I could say right now is as we close quarter three, which is reported, women's sales were up, you know, close
to eleven percent. I Iconic five oh one was up double digit and I you know, so that's what we believe continues over time.
You guys went public about five years ago again on the New York Stock Exchange. I was at that IPO because I was working on the floor of the exchange back then, and you guys were able to do something that I think in the you know, more than one hundred year history of the New York Stock Exchange has not ever been done before, which is allowed genes on the floor on the trading floor.
There.
There's a lot of rules of the New York Stock Exchange. One of them is no genes allowed. I came in that day, everybody was decked out in genes and wasn't.
Everybody looking great?
Oh yeah, Levis, Yeah, it was Lewis Jeans, and you know that was you know, part of the deal we did with n y I see, you know, as we were debating Nico and Nasdaq, you know, we said, hey, if you can change the floor on the day of the listing and make it a denim flow, you know, we are in.
And they were able to do that and into the wonderful, you know, wonderful morning, and you know, I think beginning of a new chapter for.
The company understanding how things work between the New York Stock Exchange and the NASDAC. I think that they probably didn't even have to check with anyone. They probably just said yes at that moment, Harmid, I promise we get back to the idea of going direct to consumer and building that relationship one on one with the consumer. Nike tried to do this over the last few years and they really alienated the foot lockers of the world who
were such a big part of their business. And now there's a new CEO Nike, they're trying to turn that ship around, repair that relationship. How do you do this but not alienate alienate the brick and mortar stores who for so long have sold your products.
Yeah, I know, we love our wholesale customers. And the second pillow of a strategy is DDC first, but it's not DDC only.
The whole CTC direct to consumer.
Drake to consumer wholesale is in a big compliment to how we're going to grow the business. The reason DDC is important is allows us to provide more of a head to two assortment. We can drive the consumer experience and it's actually a proof point for wholesale retailers to see how the product is taking ship. So our new product introductions and we have a wonderful product pipeline hits the DDC flow first, the wholesale customers see how it's performing,
and then they buy into it. We need wholesale customers largely because you know, to be the market leader, we have to reach out to consumers in a far and beyond and the only way to do that is having a combination of a successful DDC business and a successful wholesale business.
So I imagine ideally like you would love to see the DTC base be new customers, adding like net new customers to the business. But is there a risk that this cannibalizes the wholesale customer and that they shift over.
Yeah, you know, it's a very good question. I've been asked that a couple of times and not seeing any evidence of cannibalization the other pieces in the US. Our d d C offer is what we call tier one and tier two, so's is the best and the better the offer for wholesale customers more tier three. We are talking to a few wholesale customers to introduce our tier two offer because in the top fifty sixty dollars, you know, there is the consumer that wants the higher tier product.
So we're not seeing cannibalization. We also don't see cannibalization between the different two channels within d d C, which is e commerce and our stores and in fact consumers now as you know, you know, like a seamless you know, shopping experience. So our view is that both channels can grow. DDC grows probably faster because we control the channel. We're able to drive the experience and have a head to tour assortment.
We're talking a lot about the US election. It's top of mind here for us. Question is not about the politics of this, but about how you're potentially preparing for another Trump administration given the tariffs that you experienced during the first Trump administration when Trump put European still in aluminum ex sports tariffs on those, and then you guys were hit with tariffs on jeans. So there's that part of it, and then a potential more tariffs between the
US and China. How do you plan for that?
Yeah, you know, we've been around for one hundred and seventy years, you know, and we've seen different administrations. The business in the brand has grown through different administrations, and so from our perspective, you know, we believe that. And you know when we guided quote a fold and we talked about a sequential progression, you know, our belief is the brand continues to grow. To your question about tariffs.
A couple of years ago, we were importing from China into the US about fifteen sixteen percent of the product. Over the years, we've scaled that down, so the imports into the US from China about a percentage going instead. And because we have a supply chain, we're able to cross source it across different geographies. So you know, we've been able to cross source it from other countries in Asia and think Vietnam, think Bangladesh, think Pakistan, and that's
really what's really helped us the cross sourcing strategy. Besides the fact that we're not concentrated significantly in anyone country makes a difference. And so our view is that you know, any administration, you know, we'll be able to continue to grow.
What about resaliatory tariffs from the European Union or other countries on your own products?
Yeah, I think you know, we have a strong business in Europe. If you have to cross source, we can, I think the end of the day Israeli. How does it impact the consum You know, tariffs could mean higher prices for the consumer, and that is something that we will, you know, tackle as the time comes along. Our products provide good value, okay, and if they are in fashion and they're you know, we bring in innovation, the consumer is going to gravitate and open the checkbook to buy
our products. So, you know, as we think through it, we have contingency plans in place in case, you know, different scenarios play out, and well we'll be able to tackle through them.
Is it tempting to think about a fifteen percent corporate tax, right and what you might do with all that money that's not paid in taxes?
You know, I have a wonderful tax group that you know, plan different tax opportunities all the time. But you know, our view is as good corporate citizens. You know, we have to pay the taxes. We'll pay the taxes.
And is that noble thing to say?
Yeah? They and you know, at the end of the day, it's very important for us to provide great value to our consumers and build the oil fans, and that's what we focus on.
I gotta say, not many of our guests can pull off head to toe denim. And it's not just that, it's also the shirt as well. Harmy, You're one of those folks who can do that. Har meet sing CFO at Levi Strauss joining us here in the Bloomberg.
Thanks Tom, Thanks studio.
Good Harmy. It's going to be featured in the forthcoming issue of Bloomberg's CFO Briefing newsletter. You can sign up for it now at Bloomberg dot com, slash account, slash newsletters, slash CFO Briefing.
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We got a whole bunch of them out there.
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Josh Reeves co founded and runs a company that's been valued at nearly ten billion dollars. The company handles all the stuff it seems a lot of founders don't really want to handle, you know, things like HR payroll benefits, and other stuff like that.
Gusto has raised more than seven hundred million dollars and does payroll processing for more than three hundred thousand small and medium sized businesses. To put that in perspective, they do the payroll processing for more than six percent of employers in the US.
It's a lot. Josh is also the CEO of Gusto. He's stopped by our studio to talk about his business and the kind of keen vantage point he has on the US economy.
Yes, we do love serving small medium sized business I just love to remind folks there are the foundation for a lot of society. When you think of people and the businesses they can remember, it's often the communities that are near them. One thing we can see in our data, and it's also in the census data, there's a lot of new businesses being formed across the country. Over five hundred and fifty thou new employers in the US in
this past year. That's something that got kickstarted and became stronger with COVID, and that's a tailwind to our business because we focus a lot on serving new employers when they hire their first employee.
We're the areas of strength, at least in your data geographically.
So we see some strength more in the south East, so it's sort of the sun belt, a little bit more sun Belt. But then we also and I would point to, published quite a bit of content here. We call it gustinomics. If anyone is ever interested.
In exploring, Yeah, we're interested in that stuff.
Economists on staff where we try to make that visible to anyone.
No, we don't like data at all.
Go ahead, that's like our thing. So you're seeing sun belt areas of weakness, areas of strength. What areas of weakness are you seeing areas.
Of weakness can tend to be more in the major cities. Still, that's gotten a little bit better in the last couple of years, but that's still hanging on. But it is also industry by industry, and I need to look back at the data myself. I left our mind, folks, there's more dentist offices in the US than tech startups. So even though I live and based in Silicon Valley, we obviously care a lot about that mainstream SMB audience.
Well, so then you have a great window into where communities are developing and moving towards. And I just think about the conversation we had last hour with our Brett Pulley taking us to a place where you know, you're seeing a lot of migration happening and something you hadn't seen. The pandemic did that too, So tell us about that shift. What you're seeing where communities where we maybe didn't have them, all of a sudden you see them really growing up.
Well, specifically, it shows up in our business in what we would call multi state employment. So just the ability for a five to ten person company now to have employees be in multiple states. Well, there's a lot of positive to that you can access new talent pools. One of the biggest negatives is because of how the US was formed, local, state, and federal rules are quite different by region, and so that's where we also can try to be helpful is make it easier to kind of
abstract that complexity. But we do talk about this compliance inflation concept that is still happening across the country.
Because that means different payroll rules and regulations depending on the state that they live in.
And the county and the town, and a lot of times it's basically highly variable. It ties to what that specific jurisdiction chose to do. And it's not just payroll. It could also be employment filings, it could be compliance requirements. Think about just all the different government rules that get created, really agnostic administration. Generally, it's just been more, not less, and a business owner, especially a small business owner, has to do it all on their own.
How quickly do you get insight into what's going on in the economy? For example, when we see a job's number for September, a payroll's number that's just a blowout number. Is that not a surprise to you because you're seeing the same thing at your level.
So it increasingly is getting to interesting scale, as you mentioned, where over three hundred thousand businesses.
Like, when will we start talking not about the ADP numbers that we get, but about the GUSTO numbers.
Well, maybe gustinomics becomes that next alternative.
But seriously, I mean, you're six percent of employers in the country, Like, that's a real window. That's a huge sample size.
Yeah, and we see all the data related to benefits, enrollment, salary distributions, wage increases or decreases, hiring, off boarding, all that shows up inside or.
Or the basebook calls you up, or the FED officials call you up, or do they already?
I mean, we have work we try to do on policy side to bring the voice of small business to policy makers. There's a whole host of folks that you know, would like access to this type of data more in the hedge fund world that we avoid and do not engage with obviously.
So, Josh, if there's a net net in terms of what you're seeing your window into the US economy, what are the words you would use to describe the economy based on that data.
Never been a better time to start a small business. And part of that is not just because of the trend we see concretely, but also companies like us trying to help make their life easier.
So is it sort of puzzling to you to see Kamala Harris and Donald Trump out there on the campaign trail trying to make it even more attractive to small business owners.
I don't think it's logical to me that folks are going to evangelize small medium sized business.
You said there's never been a better time, But the key.
Is what are you doing about it?
Right?
I mean, small medium sized business leads to employment. Employment is a good thing in any kind of politicians career. So you know, we're agnostic politically, but I'm not surprised that politicians talk a lot about SMBs. There is even lots of good policy, tax credit policy that have been created for SMBs. Again, them actually being able to access these different government programs has been the complexity historically.
Okay, you say it's never been a better time to be running a smaller, medium sized business. What about a tech company based in Silicon Valley that's been valued at nearly ten billion dollars that's raised seven hundred million dollars, sounds in financing, sounds like you're coming.
It sounds like well, I view all of those as byproducts. Right, If we can serve hundreds of thousands of businesses solve real pain in their life, we will grow and have higher evaluation. But that's not what we obsess over. But thirteen years in, I am really excited. I feel like we're still early in the journey. You know, we only serve seven percent of these companies. There's so much more to do.
Well do you stay them with small and medium sized or do you go all the way.
So we do have our foundation in small medium size. And I love to remind folks there's more dentist offices than tech startups. Right, I said that earlier. And so you know, we're only at six seven percent market share and a lot of tech companies historically just jump to mid market enterprise. We've built a great business serving small medium size. We're excited to reinforce that for many years to come.
So you don't need to tap into you know, I think of you know, there's you guys, or there's something like an ADP. Right, you don't need to service the big publicly held companies or do you want to at some point.
I mean, we want to solve pain wherever it is. But there's a lot of work to do for small medium size business. One thing I'll share, I mean ADP is one hundred billion dollars plus company into it as a company. We respect that also cares a lot about SMB. But you have close to twenty five percent of companies in the US today still doing payroll by hand on pen and paper, So there's a lot of real So there's a lot of fragmentation in a lot of greenfield.
Have you you're based in Silicon Valley. Have you spent much time in New York in recent months? And my question is going somewhere we have an office here.
Careful how you are?
Yeah, we love New York. I love New York.
So have you ridden the subway much?
I've rode the subway to this office.
Did you see lots of ads for competitors to your company? Because sometimes I get in a subway car and I'm like, I've never heard of this competitor too. Gusto would be like, you know, it's not rippling, it's not deal, it's not just work. So I mean, these are all startups that are trying to do what you're trying to do. Yeah, they're everywhere.
I mean, there's a huge opportunity here. So we are excited to compete, press our advantage, launch the best possible product, keep winning market share, keep winning wa wallet share. But yeah, I would be a shock if there wasn't competition when you have a big market opportunity. I think it is hard to build what we've built from scratch, so I think people take different approaches to it. But you know, we feel like we have a leading position and we want to maintain that.
So do you go public?
At some point we'll be a public company eventually, it's a milestone in the journey. But we're going to be building Gusta for many decades. And the thing I anchor on more is we'll be an independent company for many, many decades to come. It goes to why we started the business in the first place.
So, but no pressure to do so. Right, you're finding the funding that you need and it provides you a certain luxury right in terms of building it out.
Well, Gusto at this scale, you know, we're free cushilal positive have been for several quarters. We can sell fun, be aggressive, on R and D. Launch new products in the time tracking space, launch new products in the international hiring space, launch new products in the Gusto embedded payroll space. We can talk about that too. But I you know, again just there's a huge, huge market opportunity here, and you know the beauty of a private company, there's some positives as well.
We work for a private company in case you didn't notice, and we understand the benefits.
I wonder about different opportunities that are sort of adjacent to the core business here, the idea of catering to specific types of businesses and what you've done in recent years to make it easier for a small gym, for example, or for some sort of hair salon or appointment bookings like getting into the space that isn't necessarily what you're known for, but are sort of add ons for the core business.
So first it comes with customer you know, pull right, they're asking for us to help with these additional product areas.
And it could be health benefits, it could be tax credits, it could be you know, business insurance, workers comp These are all adjacent pain points and again, you know, this is where we can be a conduit for big companies I've had access to what a specialists and resources, whether it's cloud, paperless, mobile, or AI as kind of a more recent technology tailwind, we are going to be the ones to bring those benefits to small medium sized business.
So yeah, we have a big roadmap of product apps to kind of go launch, bring live, lots of work ahead.
What exactly does embedding payroll mean?
So think of this as if you're familiar with Stripe and embedded payments basically analogous but for payroll. So one of our partners is Chase. They have a product called Chase Payroll, but it is powered by Gusto. So if you're a Chase customer, a business customer, you will have the chance to go add payroll to your experience inside Chase. But then Chase didn't have to build it all from scratch.
So it's another avenue for us to reach SMBs where they are already versus what we're doing already on the Gusto dot.
Com sid Can you do that with multiple banks?
Yes, we have dozens of partners. Yeah, not just Chase, and we're excited about this big trend. Embedded payroll didn't exist till a couple of years ago, and again we think it's just a very logical product for any SMB platform out there to launch live.
What's the hard part? You said pretty optimistic, which is great, But what's the thing that you still feel like you have a nut to crack?
Oh, broadly speaking, I mean how to keep improving, running a great company, attracting great talent. You know, thirteen years in, I feel like we're early. Everything has to keep changing, evolving and getting better. We're doing a lot of work to kind of revamp our products, suite our underlying data model. I could go on and.
On thirty seconds. International opportunity. You mentioned international, How tough is that?
So on the employer side, you know, the US is like fifty countries. We are US focused today, but we feel like we did a fair bit of work to expand across the country. It's not if, but when we would serve international employers, but right now our focus is on US pace.
So so if you are a small business owner who has employees outside of the US, you can't be so you.
Can use guessto. So I'm talking about employer. On the employee side, you can now hire in over one hundred countries. On the contractor front and on the EO R side you can also hire in over ten countries.
More to come.
Pretty cool stuff. Great, well, stay in touch. Listen how things are going. Really appreciate John Josh Reeves, excuse me, co founder and chief executive Officer. I said, gusto, but it's gusta. It's giving it a little jenning us Here in our Bloemberger studio.
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YouTube Plenty ahead in our second hour of the weekend edition of Bloomberg Business Week, including free speech, is it really? Some would argue no. Others would argue that what matters is fearless speech. It's all in a new book.
Speaking of books, how about one that takes a look at what the leader of the free world does with his own money. We're going to hear from the author of all the President's Money. Shortly, it's his money, because you know, there hasn't been anything all the President's men, all the President's money.
I love how that works, but there's no female president, so of course you can just use his Yeah, good points. We shall see see. Plus, we wrap up the hour with the Regenerative Kitchen and some thoughts on how plant based recipes and sustainable practices to nourish ourselves and the planet. Yum yum. Yeah, yeah, good recipes.
I love it all.
Yeah, it's food.
I love it.
Surprise, surprise.
Freedom of speech may be protected in the US by the First Amendment, but it's still something that's the focus of much attention thanks to the proliferation of misinformation on digital platforms. What's been happening on college campuses in the wake of the Israel Hamas war and what we regularly hear from politicians.
Yeah, that's right. State and federal officials, for example, already grappling with back to back hurricanes that have killed hundreds across the Southeast, have been dealing with another disaster related threat. Disinformation over their relief efforts and the cause of the storm.
Unbelievable the world we are living in. Conspiracy theories and hate speech targeting the government's storm response erupted across social media, especially on X after Hurricane Helene devastated the region, with former President Donald Trump and ex owner Elon mush Us amplifying unverified allegations.
It's a world. Our next guest understands well. Mary Anne Franks is an author and a professor at George Washington University. She's got a new book out. It's called Fearless Speech, Breaking Free from the First Amendment.
We have this incredibly narrow, very legalistic, really reductionist, largely incoherent idea about what freedom of speech is. That's based on perceptions and misperceptions of a legal doctrine, of course, the First Amendment, And when we really think about what is important in a democracy, the kinds of hard questions we have to ask about what kinds of speech should be promoted and what kinds of speech should be punished.
We need a much.
Richer and more nuanced understanding of speech than you can get from that legal doctrine.
All right, So what is your definition of freedom of speech?
The definition I would use is to say the most important thing for democracy, that is the most vital kinds of speech that you would want to protect in a democracy are going to be those kinds of speech that the ancient Greeks referred to as parasia. Fearless speech, and the way that they described that really essential form of speech was that you had to be someone who was speaking truly as their own identity, so not trying to cover themselves in some kind of performance or try to
disavow some distance between them and their speech. And you had to speak courageously in a critical way about something or someone who was more powerful than you. And the risk that you would be taking and speaking that kind of truth would be to yourself as opposed to trying to cause harm to others.
You know, you say this, and what actually comes to mind is the way that Senator jd Vance has answered the question about whether or not Donald Trump won the twenty twenty election. He's done it over and over again, and his answer was always the same. I'm focused on the future, not necessarily answering the question. He's focused on censorship and what tech platforms did when it comes to censorship. Is he doing fearless speech there.
He's definitely not doing fearless speech there. And he's also misstating what censorship is. And this is one of the reasons why I wrote the book, is that for all the problems and I do highlight a lot of the problems with the First Amendment doctrine, we still want to
be accurate about what it actually says. And what it's very clear about is that censorship means when the government is trying to make private individuals say something they don't want to say, or is punishing them for something that they've said. Social media platforms making decisions about what they want on their platform or not is not censorship.
It does not violate the First Amendment.
I think he does know that, and he's trying deliberately to create misinformation about the First Amendment itself.
So when it comes to policing platforms, then what is your thoughts on social media? Is it media? Is it playful? We know it's dangerous, but it's also a place where a lot of folks get their news, something that we are involved in on a daily basis. Does it need to be policed? And I'm just curious how you think about that.
Well, it depends a lot on what the outcomes are that we want from those platform When we say we go there for entertainment, we go there for news. If we care about those spaces in that way, then we need to have the kinds of rules or the kinds of standards or the kinds of design to make those outcomes happen, because that kind of speech doesn't just happen
by itself. You don't get to good conversations, entertaining conversations, high value conversations, by just letting everybody do whatever they might want to do, because that isn't actually a free speech protective position.
What you'll get is a bunch of chaos. You'll get a lot of people.
Who are saying really provocative, stupid, uninformed, really outrageous things, and they will drown out everybody else. So if you want quality speech, if you want accurate speech, you have to have some kinds of standards in play. And every platform knows this because they all have standards in play. There are standards against spam, there are standards against all kinds of rules, of privacy, regulations, any number of things
that every platform is already engaged in. The question is are you going to wield that power wisely and are you going to do it in a transparent way? And are you going to take responsibility for the things you leave up as well as for the things that you take down.
I mean, we know how some platforms treat this stuff because of what's happened on X in the last couple of years. But I also think about incentives and the way that incentives could be misaligned. Right now, you can get paid on platforms by views, So your incentive is to create something that people will see. People see stuff. When the algorithm sees that people are interacting with it, leaving comments on it, reposting it, then it surfaces it
in other people's feeds. Whether that's true or not, it doesn't seem like the system is designed to reward what you refer to as fearless speech.
Definitely not, and that shouldn't be surprising because what we often forget, and partly because the tech industry and major players in the tech industry try to make us forget this, is that this isn't the public square, This isn't some sort of democracy experiment. This is a corporation that has a product and it's trying to sell you that product, and it's trying to tell you that what you're doing by speaking or posting or whatever it is, is freedom
of speech. But all it is from the corporation's perspective is profit. And so the only real standard that is being used in those cases is what's going to make that company profit, And so, of course it's not going to align with democracy. Of course, it's not going to align with high quality content.
It's not even going to have.
The regular guardrails as you mentioned, of newspapers, radio stations, TV stations, all of whom have to take responsibility when there is false information on them. When you know that The New York Times can get sued, we know that Fox News can get sued if there's outright false statements
being broadcast. So why is it that the tech industry gets this pass where they're allowed to do whatever they would like or do nothing, and allow disinformation, misinformation, truly harmful content to simply proliferate simply because it lines their pockets.
You know, I'm curious about what you think about the protests that we've seen on universities and campuses over the last year or so as a result.
Of you're at George Washington University School of Law.
You are the Hamas attack on Israel and then obviously Israel's response, and so it felt like freedom of speech was certainly being questioned or maybe not allowed equally. So help us with that one, because that was certainly problematic. As we know, a lot of university heads are no longer there as a result. Walk us through your thinking about that and how it might apply.
I think the first thing to note about that conflict, and I say conflict because it's ongoing right that this is some of the campuses are struggling with right now, is to say that this should be proof in the first instance, that the First Amendment doesn't.
Help us here. It doesn't resolve these questions.
You can invote free speech all you want, you can invoke the First Amendment, but it's not actually going to answer the question of what kind of community do you want to have at any given university and what are the kinds of threats to that kind of community that
you should be focused on. And what I think was really tragic about so much of the demonstration activity that happened in the last few months and the responses by universities is that they in some ways looked over their own communities and were speaking to I think audiences that were more like members of Congress, or maybe the donors, or maybe the media, but they weren't speaking to their students.
They weren't speaking to their own communities.
And hearing what people were trying to communicate, and of course the things they're trying to communicate are controversial, they are complex, they can be misinterpreted, they can be rightly interpreted in ways that are maybe concerning. But what you really should have seen from these universities is some leadership about their own community and some grace and some generosity for the students as they struggle through incredibly complex, fraught issues.
That's the kind of leadership that I really wish we had, as opposed to grandstanding for donors, members of Congress, and others who were trying to weaponize those demonstrations to make their own political points.
The theme of burning is a big part of your book, Fearless Speech, Professor, burning crosses, burning women, burning books, burning down the public square, and then finally you conclude with choosing your own way to burn. Why is that omnipresent in your book For.
Multiple reasons, But one of the main ones is the scene that I opened the introduction of the book with, which is the burning of the press. The newspaper, a newspaper called the Memphis Free Speech, and it was Ida Wells's newspaper, and it was burned at the ground after she published an editorial that she had written about the truth about lynching, and it was a moment where I thought,
this is really a repeating theme throughout American history. We have this belief, this mythology about the First Amendment that wet radical speech and we protect dissidents. And then you look back to the people who have spoken out against slavery, You look back at the people who were speaking out against lynching, You.
Look at the women who are fighting for the right to vote.
You look at the moments now in terms of Black Lives Matter protests and the Me Too movements, and you see that time and time again, the mob has come for those individuals.
They have suppressed that speech. It's been violently.
Suppressed in a way that sometimes took the form of literal burning of newspapers, but sometimes took the form of incredibly onerous lawsuits or persecutions in other ways. So time and again, those who are trying to be most fearless in their speech have been suppressed. They have been violated, they've been assaulted. And that's really a theme that I wanted to emphasize in the book.
You know, just in your intro to you know, you say, on fettered, free speeches does indeed exist, but only for some Americans today. In America, delusional stalkers have a First Amendment right now to terrorize their victims. Pornographers have a First Amendment right to glorify sexual violence. For profit businesses have a First Amendment right to deny services to gay people and to advertise this fact. Anti abortion ze let's have a First Amendment right to mislead pregnant women with
fake pregnancy and clinics. It goes on and on and on. So it is interesting. So what's the answer. What's the way forward?
I think we can, and I think it starts with acknowledging that we've never done it. I think it starts with acknowledging that this is our whole mythology about the First Amendment. The mythology about our country generally has always been at best and aspirational idea. It's never been a
completed project. So for the First Amendment, specifically for the question of free speech, we really have to be confrontational about how throughout our history the First Amendment has not stood up for free expression, at least not for those who were speaking out against the most powerful parts of society. It has shown up for the people who are the enemies ways of democracy and of those who are trying
to be egalitarian and progressive. So what we have to do first is we have to admit that we have to stop telling ourselves this bedtime story about the First Amendment that we've always protected free speech and acknowledge and really grapple with the fact that we haven't. We have
chosen winners and losers for the First Amendment. The moment we admit that, then we can have an honest discussion about what belongs in that part of the First Amendment that says this should be most protected, and what belongs in that part that most of us would agree should
be something that we're allowed to regulate. Fraud, if we think about defamation to some extent, if we think about the kind of food and drug labeling misinformation that you might work about, if there weren't any kinds of protocols
for those kinds of issues. We need to think about and be honest about the fact that we've always made assessments about harm and speech and injury, and let's talk about how we can do that in the fairest, most transparent way and really think about the context that we're speaking in and care about the harm, not just abstract harms, but actual harms. Are the one we've been talking about all this time. That is, there are people who are going to die because.
Of her Ria information.
Let me ask you, so, then, is it the Supreme Court who figures that out?
I wish I could say that we should have any confidence in the Supreme Court to do that. I don't think they're going to figure that out anytime soon, But that doesn't mean that the people can't figure these things out. The one takeaway here about the First Amendment being neither necessary nor sufficient for freedom of speech is that we can do free speech. We can do fearless speech without waiting on the Supreme Court, without waiting for the law
to change. We can actually lift up, amplify, highlight those people who have taken those risks even though they had no protections, and we can make those people at the center of our discourse and we can model ourselves after them.
Professor, what's the link between Americans trust in media or a lack thereof, and the misunderstanding of the First Amendment in your view? Thinking of a report from Gallup that came out just yesterday that says that trust in media remains at a low, with only thirty one percent of Americans expressing a quote great deal or fair amount of confidence that the media will report the news fully, accurately and fairly.
I think it is a sign that we have at least two competing problems, or at least two problems that are contributing to this, and one is just a general lack of First Amendment literacy in our public right. We don't have really good education about what the First Amendment actually does and what it's supposed to protect because we're losing out on that clarity. The few parts of the First Moment that really are clear say that you've got to make sure that the government isn't trying to throttle
the media. You've got to make sure that that members of Congress aren't trying to intimidate researchers. Those are the things that actually are quite clear and quite good about the First Amendment, And if we could get clarity on those, then we could understand why it's so frightening that the government is trying to take hold of media and social media in all the different ways. But that's partly lesson
for the media real large too. Which is help educate the public about what the First Amendment does and doesn't do.
What hope do you have that things change?
I have hope that things can change because we are at a very dangerous moment in history. But we have had these kinds of moments before, and there have been people who have been willing to stand up to say the things that are really hard, to act in a way that is against their own self interest, and to try to rescue democracy and to make that promise of equality become a reality rather than just an empty promise. And so I do still have hope for that, because I still have hope in people.
I know.
No, you don't seem optimistic, Carol.
Speaking of speech, I feel a little speechless because I think it's such a big discussion of our time right in terms of we talk so much about free speech, and that means people can say things that you don't agree with or can be uncomfortable. I don't know, though, if there's a line that I think you can cross obviously when it creates harm, is it should it still be protected? I guess I would say no.
But yeah, I think the way that just the speed at which speech travels now m m is so fast because of the technology and velocity. Exactly Yeah, that's exactly right.
Well, Marian gave us a lot to think about timely, certainly, as we you know, we're thinking in the middle, like in the thick of it, and try to be so careful about the information certainly that we talk about, right and so careful. But that's not the case everywhere in the world. Marion Frank's professor of an intellectual property technology civil rights law at George Washington University. Her new book Check it out, Feel a Speech Breaking Free from the First Amendment.
This is FO.
You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on applecar Play and Androyd Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa, playing Bloomberg eleven thirty.
Who is in the White House sitting in the Oval Office will determine policies that potentially impact the money businesses have to invest or to hire workers. Those policies, too, will impact the money we all as citizens have in our own pockets, which kind of got us thinking about the experiences of past presidents and how they were managing their own money. Turns out there's a new book on just that.
Megan Gorman wrote it. She's founding partner of the independent wealth advisory firm Checkers Financial Management. She's also a tax attorney. Her book All the President's Money, How the Men who governed America Governed their Money.
She joined Bloomberg Daybreak Europe co host Stephen Carroll and me while we were at the Bloomberg Earthshot Prize Innovation Summit last month in New York City. We started by asking I write the book.
So first of all, I've always loved history, like a lot of Americans, and I think it's always interesting to understand where the president's a lot like us, where they have their humanity and money is emotion, and this is a great way to look at presidents across American history in terms of how they feel about money, how they
interact with money, and what were their money values. Now we are in an election year, so obviously you know the spotlight goes to both Donald Trump and Kamala Harris to figure out do their personal finances impact their policies? And I'd have to tell you it's not that it impacts their policies directly, right, Fiscal policy is thousands of people working on it. But what I would tell you is it's a lot about sometimes a reflection of things
that are important to them. So for instance, with Trump and the Tax Cuts and Jobs Act, you know, he increased the unified credit, the amount we can pass free of tax at our death to now in this year, it's thirteen point six million, very much a reflection of his values of generational wealth transfer. In contrast, when we carve into the current tax proposals by Kamala Harris, very much a focus on the middle class, and she's been very clear to all of us that she comes from
a middle class background. So there's some correlation there that we can definitely see.
What surprised you in doing this process? And I'm curious, did you get through all the presidents or how did you pick and choose?
Yeah?
I tried to.
I got about thirty four in the book because the book sort of looks at the traits I saw my high net worth clients, right, and then tell you stories. So what I found really surprising is how quirky some of the presidents were.
So I found letters that.
LBJ wrote that basically said I was up at two am in the morning worried about money. And then in the next sentence he starts talking about buying a suit that would be like somebody today buying a four.
Thousand dollars suit.
Things like, you know, FDR forgetting to file his income tax returns because he lost the paperwork somewhere between Warm Springs and his house in New York.
So really fun.
Little things that made the presidents feel much more like like we are today.
I love that you point out in the book that two questions that everyone asked you when you tell them that you were writing it. Who was the best with money? And who was the worst?
Exactly?
Let's start with who was the best?
Okay, so you know the best people always means is that the richest, right, And I think the thing is
wealth has a lot of connotations, so don't laugh. But I would tell you the best with money was probably Herbert Hoover, you know, grew up an orphan in Iowa, makes his way, you know, and learns how to budget as a child in order to get access to funds to have clothing and food and medicine, gets to Stanford goes to Stanford basically tuition free because he was in the first class at Stanford University, and then he takes his geology degree and through the use of grit and
his budgeting, he ends up discovering gold mines in Australia. And so it's really important to note that as incredibly wealthy as he became, he.
Was very, very charitable over the course of his life.
I think the other president that we would call sort of the best with money is George Way Washington. And you know, over the course of his life he built immense wealth through you know, acquiring land and by doing something that a lot of other presidents did.
To make money by marrying up Martha.
Washington had a lot more money than George and so it helped him with his net worth by marrying her. So I think the thing about both of them is they both worked really hard, really utilized the skills that they had to build wealth. The one caveat is, and we always have to keep this in mind, is Washington was a slaveholder. When it comes to the worst, I'll tell you, Thomas Jefferson, do not take money advice from him. He was incredibly illiquid, not good at budgeting. Really just
focused on living a fabulous life. I mean, you wanted to go to his dinner parties, but you did not want to be there when the bills came. And so he lived this very big life, didn't have the money.
And I'll tell you at the end of.
His life, the last letter he writes is this beautiful treatise and democracy. The second last to last life he writes in his life is to try to buy wine on credit because he just didn't have the money to pay for it. And so that's why Thomas Jeffernerson just struggled so much with managing his money.
So be a Washington, not a Jefferson.
I think people might be surprised to that. Abraham Lincoln was one of the wealthiest presidents of his era. Walk us through that.
Yeah, So Lincoln grew up poor, made a ton of mistakes growing up right, would start businesses, they fail, But he finally gets to the point where he studies, he becomes a lawyer, and he does what Washington did. He married up. So Mary Todd was a wealthier woman than.
He he was.
So between his law career and Mary Todd's family, he does incredibly well.
And when you go to Springfield, Illinois. What's striking is he has the best house in town.
But Lincoln really made money when he became president because he rented out his house in Springfield, and every paycheck he would save half of it and put it into treasury bonds and try to three notes that were paying six and seven percent to finance the war. And so by the time he passed away, he had a net worth of eighty five thousand. Doesn't sound like much to us today, but really it's about two million dollars in
today's money. But again, Lincoln's one of those ones. He did make some mistakes, died without an estate plan, and the family had to have the Chief Justice of the United States come in and administer the estate. So did some good stuff, but struggled with some other issues.
Megan, talk us through. I really enjoyed the story that you said you told in the book about Joe Biden and house hunting, and that's about Joe Biden's relationship with property.
Yeah.
Well, first of all, we have to remember with Joe Biden, this is a guy who grew up with not a lot of money and early in his life had a very traumatic moment with his wife passing away, and so as a result, when you deal with trauma, you want to be sort of slowing down your thinking.
But Joe Biden loves real estate.
Right.
We all know he has the house in Rehoboth, but he fell in love with this very big house in Wilmington, Delaware, and it was a house that he should never have bought on a senator salary, and it was an old DuPont estate was falling apart and he was able to buy the house, but he didn't have the cash flow to keep it up, so he would do crazy things like sell off pieces of the land or only fix
up certain parts. And so this house was sort of it was sort of like an episode of the Money Pit, and it was something he really really loved because he loved this idea of what the house represented, but he really just didn't have the liquidity. And I think this is something that's relatable to all Americans, right. We all struggle at times to have assets that we might not have the liquidity to manage.
So Biden is not someone you really want to emulate.
You want to look at him and go gush, really think through how you make financial decisions and what will happen five, ten, fifteen years from now based on that decision.
All right, well we're staying with kind of current presidents or recent presidents. How about the Clinton's. Take us to Bill and Hillary.
Yeah, Bill and Hillary Clinton, you know, incredibly smart people, but early on in their lives, they had an opportunity to invest in something called Whitewater. And anybody over the age of forty remembers Whitewater, right, So, but Whitewater started out pretty innocently. If I showed you a picture of Whitewater. It was pitched to them to be a retirement community that people would be able to build houses on, and
it was beautiful. And when they were pitched this investment, they made a mistake that most people do because they're
afraid of looking foolish. They didn't do due diligence, they didn't ask a lot of questions, and they basically got themselves into an investment where really, if you had dig dug into it, you would have realized this was also going to be a bit of a money pit and you were going to have to keep adding money in because there was no septic there was no electricity on this land, and so the Clintons made a series of mistakes with this.
Now what's nice is we still get there.
Up till twenty sixteen, we could still see their f financial disclosures. I think one of the nice things to say about them today is they've really become quite organized with their finances. You definitely see a state planning in place. There's an irrevocable life insurance trust on Bill Clinton. They tend to invest in index funds, so they eventually learn
their lesson. But the takeaway with the Clintons is, you know, really do due diligence, ask a lot of questions about your investments before you put your money to work.
What did you learn from researching Donald Trump's finances?
That could be a whole book all itself.
You know, Look, I think the thing about Donald Trump is you're dealing with generational wealth transfer.
Right.
He's generation two. He inherited four hundred million from generation one. His goal is really to get the money down to generation four and five. So when you have someone with that mindset, and you have someone who is willing to take risk and really push the envelope, you know, what you get is a lot of estate planning techniques that are technically correct that the technique itself is a lot at something a lot of high net worth American use, but he takes it to such an extreme level that
that's where you start to have challenges. I would also say with Donald Trump, he also reminds me of another New Yorker who was incredibly aggressive with real estate, and that was Martin Van Buren. And so Martin van Buren was also someone who became an attorney, very poor background, becomes an attorney and starts to learn how to navigate the real estate market so he can aggressively buy land
from people. So I would tell you Trump is someone you just have to watch because of their risk and the fact that they're willing to push the envelope.
I still have thinking about the role of women and the dowries and the importance in helping out some of the presidents are thanks to Megan Gorman, she's founding partner of the independent wealth advisory firm in San Francisco, Techer's Financial Management. Her book All the President's Money, How the Men who governed America governed their Moneyting.
To the Bloomberg Business Week podcast, catch us live weekday afternoons from two to five pm. Easter listen on Apple car Play and and Brout Auto with a Bloomberg Business act or watch us live on YouTube.
Earlier this year, Carol and I spoke to Rebecca and Josh Tickle, the filmmakers behind the documentary Common Ground. It's all about the regenerative movement in farming. It's the idea, Carol, that soil health is everything, and food production and industrial farming wreak havoc on the environment. Regenerative farming instead undoes the damage that's been done for generations.
Regenerative farming is something Camilla Marcus has focused on for years. She is a chef and founder of Westbourne. It was the first certified zero waste restaurant in New York City. It's now an online foods business that has the goal to quote send nothing to the landfill.
Camilla also has a new cookbook out. It's called My Regenerative Kitchen, Plant based recipes and sustainable Practices to nourish ourselves and the planet. We started by asking her to explain the regenerative movement.
I really found the regena movement through my work in restaurants. I mean, I'm a professionally trained chef. I've worked for a bunch of different chefs and restaurant tours here in New York City. I had my own restaurant in Soho, And I think when you really dig into the supply chain, you're nothing without your farmers, Right, everything starts at the source. I would say, sustainability and food quality and flavor start
with our ground. And I really think it was sort of starting in that world about fifteen years ago, meeting farmers and realizing the disconnect from who's shopping at a grocery store to what's happening at the earth, and how vitally important that system is. It's the only system that can pull down carbon in time for my generation that's
obsessed with climate change. It sort of was this light bulb of why isn't every dollar and every effort that we have pouring into this system and into this massive land transition, and that's really our only hope to solve it, And.
Yet industrialized farming still exists.
We do a lot of things that aren't logical here in the States.
Well, I am curious, like in your process of building your restaurant and just learning more about this that how entrenched it is and how difficult it is to shift to more regenerative farming. Can we do it? Like we talk about organic? I don't know, you know, it's still probably smaller, right like in.
Terms of versus conventional Yeah.
Like, so I'm just like, how do we get there? Because I feel like Chipotle was somebody who talked a lot about trying to do food production in a much much better way, in a regenerative way, years ago. So I'm just like, how do we get there? Can we get there?
I think that's really the ethos of the book is if every single one of us made one decision today to do a regenerative practice in their home, whether that's buying a regenerative food at the grocery store, getting in touch with the regenerative farm. So many, especially now the internet, you can buy these products online direct, right, you know, direct from the source, cooking in a way that's a
little bit more mindful of climate. If every single one of us did just one thing, Yeah, we could turn the system on its head.
Am I moving the needle by composting?
Yes?
Really drastically.
I do read the book. I share the data carbon but the data is there. You look at the carbon capture, it turns your entire kitchen into being carbon negative from carbon positive just by composting. And now there's so many home systems, there's no excuse.
Here's why I ask. In a city like New York, we now have composting citywide, But at that time, I can't imagine us doing this without having a weekly collection for compost. People live in multifamily, people live in apartments. It's not something they can definitely necessarily just go throw in their backyard and a composter.
Except now there's companies like Lomi and Mill where you can absolutely do it anywhere. If you own a trashman, you can own one of these systems, and you absolutely can do it anywhere. It wasn't like it was even three years ago. Again, I think the technology, the startups, the support, the financial systems absolutely have made composting accessible.
Am I understanding that more and more products are getting marked with regenerative like they're noting it to see that if you are looking to do the right thing, as you said, each of us can do it by buying a product starting there you can find the markings. Is that right?
That's absolutely the genes I'm wearing our regenerative cotton. We're partnering on this cookbook tour with Citizens of Humanity. They have the same mission in the same aha moment that I had, which is from the clothes you wear, to the beauty products you use to what you're buying in a grocery store. We make more decisions about food and beverage in our daily lives than anything else.
I want to ask you costs though, and I think about.
Sub get it a lot.
Yeah, so tell us a little bit about what the cost is for things and whether this is just a small sliver of the economy that can actually partake in this regenerative cycle.
I really don't agree that it's just down to cost. And I will say because I think if you pair it with a more waste oriented practice in your home, which is what the book again holistically is trying and explain if you're thinking about quality over everything and less is more upcycling things in your home kitchen, not throwing out food. I mean, we all know the stats. We throw out a lot of food in America. It's not that we don't grow enough to feed our communities, it's
that we waste too much. If you really think about quality of ingredients, supporting these farms, supporting these products, but buying less and being more creative and how you cook. I think net net you'd have more of the masses.
But we talk about this like, I know in my household, like we're trying to shop more often. My daughter spend some time overseas and she's like, everybody shops daily.
It's a very dig don't go in the refrigerator right.
Right exact, you know. But this quantity of that, we have to have so much stuff food or otherwise. It's I don't know how we as a society, certainly here in the United States, get away from that.
I think the truth is we have to.
I mean, I think that's what the book is trying to also siren a little bit, is in a very beautiful and lovely way, sound the alarm of we kind of don't have a choice of continuing down the path. That's really the truth. So how do we change our hands? Kind of being forced already? Right, but climate crisis is looming. Traditional industrial farming is not working, both from a health and a sustainability standpoint.
So let's zoom out a little bit and talk.
About change is reducing some of the land we've got.
Yeah, talk about some of the issues with modern farming because I think when people go to the store, they don't necessarily realize that what they're buying may have been grown in a way that isn't necessarily good for the environment, and in fact is bad for the environment. I don't think people I think regenerative. The concept of regenerative is still very new to a lot of people and unfamiliar to a lot of people.
Yeah, you know, my philosophy is always I don't know that I care whether someone can define it. I don't think most people can define organic. It means pesticide and chemical free. But I don't think the average person is going to say that doesn't roll off the tongue. Same with regenerative. It's really all about the soil. Best way to remember it, soil is a four letter word. It's the thing we need to care the most about, and it's the most tied to our health. What's better for
the earth is always better for our health. When we have farming practices that care about carbon in the soil and health of the soil, we get better for you foods that are higher in nutrient and density.
Do you think the government needs to get involved and say, Okay, these things are allowed. These things are not allowed.
Absolutely.
Look, I always say follow the money, right. We are in an industrial stranglehold in agriculture because of the Industrial Revolution following World War Toooh.
I would say that about fossil fuels in many ways, right exactly, But anyway, go ahead.
No, the context has changed, but the policies are still sort of stuck back in time. We say we need to be more progressive. Go back in time before that industrialization and the difference. You asked about regenerative The best way to think about it is in one hand, you're holding that soil that you get when you're planting something in your home. It's black, it has organisms, it's wet, it's moist, versus picking up dirt around a tree right on the side of the road or here in Manhattan.
One is chalky dry, it's sort of a dull brown color. That's the difference between traditional farming and regenerative farming. I'm a visual person, so I like to think of it in that way.
But don't hate me for going back to this, But I mean, in terms of the cost of a regenerative farm, is it more expensive to do right now?
Again, I think it depends on how you look at it. Is it a shift in practices that require capital investment, yes, does it pay back and reset the farm? Absolutely? And the biggest long term shift in that and whether it costs more to me, is those yields are going down. They are not these existing farms that have industrial practices and traditional modern farming. They're not able to grow the same that they were last year or the year before and the year before oil.
So at some.
Point that cost structure is going to surpass. So maybe today there's an argument to say that, but I would argue that's the fallacy that the incumbents want you to believe. It's not actually true when you look at the next seven years.
So where should we be getting our food?
A couple places. First, as locally as possible. Most communities have some form of a farmer's market, I think. Second, thinking about again buying directly from farms, their CSA boxes, dried products from all these incredible sources from around the country. And then third, go into your grocery store asking for regenerative brands, talking to the manager, going on shelf and
looking for that word regenerative. It's what I talk about in the book from Rice to pasta, the sauces to our west Warren, avocado oil, all your basic staples now, so a lot of brands out there doing the good work.
I think, you know, it is no different than when we kind of shifted towards organic right and looking for it. And I think we all have figured out how to do that. What you look like you wanted to ask something.
I think the Tickles told us the same thing, to go to the grocery store and ask about this stuff. Because we're kind of the front line of this right.
Always look at regenerative cotton right when Patagonia was one of the first to do, you know, organic cotton. Now it's table stakes to have organic cotton in your wardrobe.
How often do you find that organic cotton? I'm trying to think, like when I go shopping aganic.
Cotton now is really sort of the baseline.
I think.
Yeah, I mean even at you know, again accessible mass market companies and brands organic cottons everywhere. It wasn't ten years ago. Now, Regenerative textiles is the next wave, Like I said, from jeans to you know, upcycled products for your sunglasses, your glasses that you're wearing. I think you're seeing it actually more trailblazing in fashion and beauty, and I think foods behind, which is what we're trying to catch up.
Your story though you started a restaurant take us back there twenty eighteen. I believe, Yeah, not an easy thing to do.
If they were easy, everyone would do it. That's what my dad always said.
Tell us about that process.
Oh god, what I mean?
Yeah?
Look, opening a restaurant business period in this country is very hard. You know. Unfortunately the country is not so supportive of small businesses. And it's interesting, right, restaurants are the second largest employer next to healthcare, and yet you know they hire more people per square footage. And yet again we talked earlier about following the money, very little incentives.
You know, most restaurants pay thirty percent corporate taxes when you tally it all up, I kind of brutal when you compare it to other businesses and employ a lot less Americans. So it's tough. The cards are stacked against you. But you know, I think we're all crazy and for the love of the game and the impact that it can make. I think on connecting the food system to all of us in the public, it's powerful.
What do you think is the long term effect or long term consequence of what restaurants went through during the pandemic?
Oh, big question.
Look, I think be very involved in trying to save restaurants. You were out there lobbying for these small businesses to save your own. That was a big part of it.
I was.
I helped start Roar here in New York where we did cash assistance along with the Robin Hood Foundation, as well as the Independent Restaurant Coalition, which is still in existence, working tirelessly. The team is still activated. So I would say the overhang and sort of the pain of it all is still there. I mean, look at what's happening now. You know in the southern part of this country with
the hurricane, it's hard enough to operate these businesses. You know, it really got crushed during the pandemic, and I don't think anyone's really come out of it. And then you continue to get just really heavy regulation every time. When we even talked about penalty, right, you look at the straw ban. You know, Amazon doesn't get a plastic ban, but restaurants somehow, you know, have to constantly go through hoops of oh you you know, have to accept cash,
you can't do straw. There's all these regulations that come down so that it's a nice headline, but where's really the support for an industry that's always been a big game changer when it comes to agriculture, Right, Everything we learn about biodiversity often comes from restaurants. You learn about new ingredients, new farming techniques. We talked about organics, so much of that language comes from when you die now and you learn from chefs around the country who are
usually the first adopters. And yet we don't really have large government support for making these strong, viable businesses that are critically important to our farming system, important to feed people and massive employers.
Camilla, Why doesn't that happen here? We are in an election year?
Is it the.
Lobby group isn't strong enough donating enough? Like I'm just curious because, as you say, follow the money in politics, that's true in terms often of who gets heard.
I think it's that, But I also think it's the nature of the business. You know, during the pandemic, one of our big taglines was, you know, we're we are collectively as small We are each a small business technically, but collectively we're obviously a massive industry. I think that's part of the problem, is right, you look at aerospace, there's a handful. You can count on your hands how
many players that the government has to negotiate. I think we get written off because it's, oh, everyone's so different. It's a bunch of small businesses. Who knows what the owners want. But there are very similar through lines through all of them. And I think it's really just the being very daunted that there's so many players involved, versus seeing it as a bigger industry like a healthcare which it is.
Is there also local rules and laws versus federal, Like I'm just.
Curious, local, state, federal. I mean, you name it right, rests it's great headlines. You guys know you're in the news business. Everything's about clickbait and splashiness. And when you regulate a restaurant or you come down hard on things related to labor, real estate again food, it all makes for really good headlines when you pass a regulation, but they don't really think about the ripple effects.
Kind of on that. You know, you said nothing's off limits, So I have some of really important questions. We have kids that are like the same age. My five year old is a very picky eater.
I love these guys.
What are you cooking for your kids and how do you get them to eat it?
So I'm going to go back, which is one grows something in your house. It's a big ten ind of the book. I find that children look at food totally differently. Even if you do windowsill herbs and you have them putting herbs in their own dish quote unquote cook My son can literally cook his own meal at a stove with a knife. They understand cutting boards, they know knife safety. My three and a half year old fully kin chop things for me. Have them participate in meals, but it
really starts at the source. Grow something. Have them watch watching My children understand that a strawberry takes a certain amount of time, that a squash is something that they took care of every single day for months. There's a very different most kids I would be. I would be shocked if a child wouldn't eat something that they actually grew. It's like the part of being human and having an ego. Play into that with your own children. Give them authorship.
It's very hard not to get into it when you're part of it. So grow something include them and cooking, and then give them a lot of agency and choice, put out different sauces, have them decide. My kids also do our grocery shopping. They go to the grocery store, they go to our farmer's market, and they have to live up to what we call top chef challenges. They have to pick a new fruit or vegetable every single month.
They have to try something new. Our rule in our houses you don't have to like it, but you have to try it. You can't just refuse. And then we talk about what are we going to have this week, what are we going to try, what are you into?
What do you like?
What did you not like? But I think also making it very interactive and giving them a form of agency of okay, you can have broccoli, but right there's twenty. First of all, there's many kinds of broccoli out there, and let's talk to the farmer. My kids have to pay,
they have to actually procure their own produce. And then when we cook, let's talk about grilling, Let's talk about you know, roasting, let's talk about steaming, let's talk about raw and we talk about all those different things and how they can make it different ways again, giving them agency. And then I'd say, lastly, educate kids love information. Talk about what each fruit and vegetable is doing in their body. I mean my kids will use the word vitamin see.
I mean my three year old knows what that means. Talk about does it help your eyes, does it help your bones, does it help your muscles? And then how does that relate to their day and being higher performance and fuller.
I just want to make the honeynuts squash with fried squash seeds thirty secs over the weekend thirty seconds. Who is this book for everyone?
It really is? If again, it doesn't mean you have to adopt it all, but I get a lot of questions about kids and families and who's it for the cost? Every single one of us could pick one thing out of that book and do it and adopt it and feel really excited and fulfilled after, I promise, you will feel better and you'll realize that it's actually not that hard to make that change. You'll tell a friend, they'll tell a friend, and we spread it like wild fire.
And I feel like the world is increasingly, at least in my circle, moving towards those plant based diets increasingly Camilla, thank you so much.
This is fun.
Good luck, good luck Camilla Marcus my regenerative kitchen, plant based recipes and sustainable practices to nourish ourselves in the planet.
I know what you're doing to It's squash season, heis. I spent all weekend cooking squash.
You're twenty all different titles and go make it different ways. Get them involved.
All right, everybody you are listening and watching Bloomberg Business Week, thank you.
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