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This is Bloomberg Business Week with Carol Messer and Tim Steneveek on Bloomberg Radio. Die did you well.
If others have.
Did slowly go, Yeah, you're gonna understand maybe what we need to be doing with all of our kids that are at them. I've got them, Tim's got them, You've got them. I'm sure.
Uh.
And there's something important when it comes to understanding politics, but probably more importantly, how our government works.
Okay, So here's some numbers that might freak you out, Carol.
Okay.
According to a twenty twenty three Annenberg Constitution Day Civic survey, nearly one in five Americans cannot name a single branch of government.
You and I can do it. We did a test.
Before we did a test. It's executive, legislative, and judicial, by the way, but yeah, nearly one in five can't name a single one of those branches.
Twenty percent.
Yeah.
So perhaps not surprising given the state of civics education in the US. Recording to the Committee for Economic Development It's the Public policy center of the Conference Board, only seven states require a full year of civics or government in schools. And thirteen states have no civics course requirements.
I didn't take a Civics class, did you?
Not?
In high school I learned about government.
Yeah, yeah, yeah, not do it in high school.
You're right, I don't know.
I just all right.
Anyway, a lot at stake. If Americans really don't know how their government works, just ask Lindsay Kormack. She is Associate professor of political Science and director of the Diplomacy Lab at Steven's Institute of Technology, my dad's alma mater. By the way, she got a new book out about all of this. It's entitled How to Raise a Citizen and Why It's up to You to do It? And she joins us right here in New York City. Professor Kormack,
Great to have you here with us. We feel like there's so much we want to talk about, including book, but we are very interested also because of your background in hearing about your thoughts on today's presidential political environment and that's all of that's also too been going on in the past month. Is this, in your view, democracy at work?
Yeah?
I really think it is.
You know, we have systems in place for it doesn't go the way that everyone thinks it's going to go, and it seems like it's it's working out in the selection of a new candidate.
How do you what do you mean, how's it working out in the selection of a new candidate?
Well, I mean when Biden stepped down and a lot of people were like, oh, is there going to be an open convention? How are we going to pick someone? And really at that point it was already at the delegates, and because of our primary system, it's like, well, they're deciding it's going to be common one, and that's how it's going to be.
You know, It's funny because it's just I've been listening to a lot of podcasts political podcast Tim has too, and we've all kind of we've been doing mega deep
dives just because of everything that's going on. And I heard something that said, you know, we're still a young country, and other countries have seen a lot of you know, the kind of their ups and downs over hundreds and hundreds of years or even longer, you know, And I guess, you know, we asked the question, and we've seen the Democrats, at least President Biden was for a long time while he was still in the campaign trail as saying, you know, we've got to protect democracy.
It's really important.
But democracy isn't necessarily working for everyone who feel like they're struggling to put food on their table, make sure there's a roof over their heads, just struggling to make monthly payments. Is democracy, though, working for everyone?
I mean, that's a great question. Yeah, that's it's a really good question. Isn't working for everyone? It works in different ways.
I think the relevant comparison might be like what a life would look like under an autocracy, and I think it probably looks worse for people who are having a bad time here. And so I think one of the problems is we don't really know how to engage in our democracy to necessarily make it work for us. And that's kind of the research that I'm into and what I'm all about.
That's interesting, Lindsay and Carrol, an interesting thing that you brought up. I don't know if you can read my mind, but as I was praying for this, I was looking at some stats to try to set this up. The American Bar Association. Lindsay says that less than one third of millennials considered essential to live in a democracy.
Huh, why see that's what it's slight everywhere. Yeah, I mean part of it is we don't have a tradition of really talking about this in a very positive way, and instead our children get messages from really early ages that like, government is bad, it's annoying, it's negative. And so it's not surprising to me that people think, like, uh, it's not really worth fighting for or worth working towards.
But I don't think that's true. None of our millennials know what it's like to live under an autocracy, and I don't think they'd like it that much more.
So, how do you Yeah, so let's talk about that. I mean, I have a twenty one year old and has young kids. You know, my daughter will remind me of how we've kind of messed up everything for her generation. We talk a lot of politics. She is the daughter of two journalists and folks who have been in the news business, so it comes up a lot. I had a family that we talked abound the dinner table about
a lot of stuff that was going on. But how do you think we should be approaching it with a younger generation And how early do you start on all of this stuff?
Yeah?
So you well are lucky, because that's that's atypical. Most of our families don't have those sorts of discussions. In research that we did for the book, we found that only twenty five percent of eighteen year olds report that they ever had an intentional discussion about politics or government with their parents. And my sort of stance on this is you can't start it too early because kids are just trying to make sense of the world around them.
They're soaking it up. So if they hear us talking, you know, like saying like politicians are all bad or they're negative, they're liars, they're cheaters, they're going to hear that. And so it's not that not talking to them doesn't give them a message. They sometimes just pick up the negative pieces. So it's up to us to kind of recast the narrative around this in front of them.
Okay, and I have a large family, a lot of nieces and nephews. What do you do though, when a twenty something year old or an early thirties like, yeah, all the politicians they're really lousy. What's the right response? How do you deal with that? Where they're kind of so set in their view.
Yeah, so when I hear something like that.
I usually think that people are talking about federal politicians and I try to change the conversation and think about who their local and state representatives are. Yeah, because for the most part, the people who do this work at lower levels.
They're not bad. They're not out there to do ill.
They're really trying their best, and oftentimes they're not that well supported financially. The jobs don't pay that well. People yell at them, and so really I think most of the people doing our politics are trying their best.
You know, we hear what you said. We hear a lot from the mayors we talk to. We check in with mayors around the country quite a bit, and oftentimes they are Democrats or Republicans. They're required to have a party affiliation, but regardless of what party there and they don't really consider themselves members of a certain political party because their job is to come up with solutions to fixing potholes and making sure that things are running on time in a small city or in a metropolitan area.
And it's an interesting issue because there is this separation between the local level versus what happens on the federal level, and so much air is taken out by national politics, and that's sort of the vibe that people pick up on.
Yeah, that's absolutely true.
You know, we talk about federal politics more than anything else, despite the fact that local politics is some of the most consequential for our quality of life decisions.
You know, it's funny my husband and I, as I said, he's a news guy too, and it just said, you know, when he was kind of working his way up, you always went to the town hall meetings and local politics. And part of it is, you know, the demise of local journalism, Like there's just no reporting on it anymore. And so it's all kind of the same stuff. As you said, a lot of it at the federal level, but it's not really getting down to you know, what's
happening on a different level. I mean, it is why I will be Tim's right, like we love talking to mayors, We love talking to governors, Like what's going on in your state, what's going on in your towns, it's really important. All right. So you've got a five year old, how do you teach them about government? How do you teach them about civics?
Yeah, I think if you have a five year old, the point is just to make sure that you are comfortable doing it in front of them, have conversations around them, have conversations in front of them. We don't need to raise like little government trivia experts, you know. They don't need to know all the presidents. They don't need to know how.
Bill becomes a law at that age.
But it's about giving them the vocabulary, letting them hear these words so they can kind of start to make sense of it. For every other subject, we start kindergarten with little concepts, little vocap and we build. But for government, a lot of the times we wait until they're almost eighteen and then say like, here, we're going to teach you everything right now. And so it's just this idea of scaffolding, like we do with every other skill and subject.
Okay, so parents can't always be the ones who are doing this because they're not necessarily the ones who are doing this. What's your view on how this should be taught in schools?
So we do need to take an approach that prioritizes things younger, like we do with everything else. Well, a lot of the ways that we do this is very idiosyncratic because states will say here's how we think we should do it. But then it gets further devolved down to school boards, or it gets devolved down to counties, and so we don't have a unified curriculum. We never
are going to. But the thing that we can do is start earlier and start building over time instead of just backloading everything in that second semester of senior year when kids really aren't that receptive to new information anyhow.
You know what's interesting, I'm getting some messages from a member of our audience who says that the kids aren't necessarily the problem. It's the parents who seem to be the least educated, the most susceptible to misinformation online. We only have thirty seconds left, then we're going to come. Actually, we have a little more time with you.
Those grown up kids.
What do we do with that?
Yeah?
What do we do with those grown ups?
Yes? You know what. That's one of the reasons I wrote this book in the way I did. The first half is sort of like, here's the problem, here's what our kids need to know, And the second half is a primer because I understand that people who are parenting today, we are products of systems that were deprioritizing civic education. A lot of times we had parents who were not comfortable talking about these topics, and so whoever's pointing that out to you, I share that viewpoint with the parents.
We need a little bit more education here too, and that's sort of what this effort is about.
How do you You know, it's interesting because I think we've all had conversations with adults where it gets heated, and you know, how do you how do you how do you have that conversation like, well, wait a minute, you don't really understand how this works, Like how do you do that in an environment where there's just a lot of anger and nobody wants to listen.
Yeah, I'll tell you the strategy.
I'm mostly talking with college students, like eighteen to twenty year olds, and they get heated too. But instead of asking someone what they think or why they believe that, the first question I always like to ask is what have you heard about that? Because I think when you ask someone what have you heard, it removes them from
having the responsibility of defending or justifying a position. They can say, oh, I heard this on Twitter, Oh I heard this from my uncle or whatever it is, and then you can kind of work with that instead of putting it on them to defend whatever it is they're trying to think.
Source matters, right, It's funny that, I mean, I find myself doing that to a lot, Like where did you hear that it does?
But I think one challenge now is the polarization that we see on these online platforms. So you have, you know, a for example, the Elon Musk, the owner of X, has endorsed Donald Trump and he has hosted a conversation with him on the platform, and he is in complete
control of that platform. Can you imagine the outrage that you'd hear from folks out there if you saw that on the flip side of like if it was more open you mean, or no if it but if you saw the opposite, like on Facebook or something like the CEO of.
Oh, like if Zuckerberg sat down with Kamala Harris.
Yeah exclusively or endorses her.
Yeah. Yeah, you know what that might be like a pulse on current politics because I imagine that that probably would have more outreach than what happened with one point two million people listening to Elon Musk and Donald Trump. But yeah, it's hard to know, but you're probably right your intuition there kind of goes with what I would think too.
Let's get back to our guest. We're talking with Lindsay Kormack. She's Associate Professor of Political Science, director of the Diplomacy Life at Steven's Institute of Technology. Her new book, How to Raise a Citizen and Why It's up to You to Do It. She is still with us in New York City. Hey, Lindsey, we mentioned that you have got basically five rules or five skills that you think kids ought to have. Can we go through them?
Sure?
Thing, This is the things that you need to go over with your kids before they leave your house, so before they're gone for college or whatever awaits them after. The first one is they need to know how to have hard conversations. And one of the reasons that I know that that's true is as a college professor, I have students who are afraid to upset anyone and they're afraid to feel this discomfort themselves, and so that's like a big skill that we need to make sure that
they have. The second one is parents need to make sure their kids know how to register to vote, and then they have to change it when they move. I take our kids just to vote every year when we have an election, and without fail, some of them are turned away because they thought they were registered and they don't realize that if you're registered in one county, it doesn't transfer to the other. So make sure that they understand how to do this and how they change that
when they move. The third one is they need to understand the difference between primaries and general elections. All too often we only focus on general elections when we talk about this in schools, and so they really miss out on this big piece of power, which is picking someone in a primary election. The third thing is they need to have an understanding of federalism because we so are
the fourth thing. Rather, we oftentimes focus on the federal level, and then they don't realize that state and local governments control so many things. When we think about big policy issues like gun licensing, or healthcare or marijuana policy, things that matter to young voters, this happens at the state level for the most part, and so having an appreciation of these different levels it's an important thing for them
to have. And the fifth one, and this is a hard sell, but a lot of parents that I'm talking to are pretty receptive to it. Your kids need to have read the Constitution at least once before they leave your house. It's our charter of government is the rules of the game. And once they have an understanding of it, they can't be as suayed with bad information or misinformation because they'll really just have a rooted understanding of what our system is all about.
And yes, you could start with Hamilton, like it'll get you really excited like that. No, seriously, like I think about something like that gets people interested, like, oh wait a minute, this is really our history in a fun form. But there's a lot of information there. What is it that the kids that you teach eighteen to twenty one, twenty two, you've got a young daughter too. But I am curious about the questions that come up the most when it comes to government politics. What do they want
to know? What is it that they're like, I don't really understand this. I feel like when there's a piece of legislation going through Congress, we all are kind of like, wait, where are we in this process? And where are we and what vote is this and how does this work? Because there's still things, I think the mechanics that don't always make sense or don't you know, there's just it feels like nuances do it. But anyway, what do kids ask you the most?
I mean, I wish I could tell you that there was this one thing that they didn't understand, But truly they're lost. Like their understanding of the courts is based on like courtroom drama TV. Their understanding of the presidency is sort of like whatever they've seen on Instagram or TikTok that morning.
And when it comes to like how the.
Legislature works, it's really hard and so it's not something where we can fix it overnight. But I do think that if we start a little earlier, if we're a little bit more intentional about it, and we recognize that we have a role as families in writing this thing, we can get to a lot of their questions because they're kind of lost all over the place.
Do the social platforms have a role too? You mentioned Instagram and TikTok just now, how do you see them?
I mean, they're already here. They're going to be here for good, I think, and so we have to understand what they are. I think something that parents can do is, you know, we're not going to see the same things
as our kids. We're algorithmically fed different things. We all know this, and something that I argue in my book is that take a little time with each other and say, like, what is it that you're seeing and make sure that you kind of have an understanding of what their algorithm feeds them, and let them see what you're getting fed as well. That way, you can talk about things with a better understanding of the background inputs that either side has.
You know, we talked about education, tim you asked earlier. I think let's you some questions. But do we need to have mandatory civics classes in school? Do we need to have a Civics test before people vote?
I don't think a civics test is necessarily the way to do it. The people who study like education, the people who are experts in this field, always come back to this idea of action civics, which is like giving kids a project so that they can really see how the process works. You know, they find like a playground and say, oh, our basketball courts are kind of cracked and they don't really work. How can we figure out
how to fix that? And that process is you know, figuring out which branch of government is responsible, which level is responsible, trying to figure out how you activate to talk to those people, and even if you don't succeed in getting better basketball courts, you understand a lot more about the process. And so the people who study that sort of like what can we do in schools, they mostly point to action civics versus study for a test, get ten answers right and go on with your life.
The January sixth riot on the Capitol was that, I mean, how do you think about that in our political history? And I'm just thinking, like, does it make you nervous? Like those individuals did they think, well, this is democracy. I believe the vote was stolen, you know, like, like, how do you kind of teach around that that those are citizens to people who may have thought, listen, you know, we think things weren't democratic, and so we're protecting our state.
Yeah, that's a really hard one, and I talk about this a little bit in the book. I think one of the things that's challenging there is, my guess is that people who are storming in the Capitol on January sixth, I don't think many of them ever worked as poll workers or election workers, because I think if you had, you would understand how difficult it is to actually steal an election, or how unlikely it is that enough people would conspire to do that.
And so this is.
All sort of going back to the point of like, if we understand our systems better, I think they operate in better ways and we're less prone to things like misinformation that can incite violence. So I think about January six as an ultimate failure of political education more than anything else.
But many Americans do still believe the twenty twenty election was stolen and question and again, I'm going to the American Bar Association. They write that they question the integrity of our election systems, and you actually hear the current front runner and Republican nominee still questioning the twenty twenty election. How do you view those in positions of power making comments like that.
So I think it's easier to give Donald Trump a pass versus seasoned politicians a past, because seasoned politicians, you know, they understand these systems, They've interacted with them for a longer time. I think what Donald Trump kind of brings is more of an infotainment style of things and not a deep rooted understanding of how the processes that underlie
our systems work. I think it's kind of dangerous for us to kind of take that as the teaching versus going back to basics and saying, you know what, maybe I'll go volunteer as a poll worker and go see how that actually is. That would be the version of doing like your own real research. And I think when people do that, they realize it's very hard to steal an election. It's very hard to do these sorts of things because we have so much redundancy in place in the US system.
Hey, lindsay one last question. We've got to wrap up, but got about a minute. I think there are a lot of folks there like, this isn't my government, it's companies who do lobbying. You worked at a lobbyist in Washington for about a year, and I just, you know, how, how do they're like, why should I vote because it doesn't really matter because my vote doesn't matter because it's money that matters. What do you say to them? And again, we just got about forty five seconds.
Yeah, I think that's a hard feeling, and I understand it to think that you're inconsequential. The thing is you're truly not at all the local and state levels federal government, sure, You're a small piece of that, but when you're doing things that are understanding local level, you are pivotal. We have elections that are decided in fewer than hundreds of votes, so I understand that concern.
I think you should put it away and.
Still exercise the rights that you have here.
All right, really cool stuff and very thoughtful as we are. How many days are we away? Just over eighty eighty days away and people can start voting come September. Lindsay, thank you so much. I really enjoy this, Lindsay Cormac. She is Associate Professor of Political Science and Director of the Diplomacy Lab at Steven's Institute of Technology. Her new book out, How to Raise a Citizen and Why It's up to You to do It. That book is out as we speak.
Eighty two days.
Eighty two days.
Yeah, according to the countdown clock at two seventy to win dot com.
All right, yeah, no, I know, fast and furious. All right, you're listening and watching Bloomberg BusinessWeek. One of the big headlines, certainly here at Bloomberg we've been talking about it all day, is a deal in the package food space today between brands we all know We've been talking about it, whether it's cheese, it's M and MS, Dove Bars, Pedigree, Original Greenies. We mentioned earlier Mars Agreen to buy Kelennova, formerly of Kellogg's,
for nearly thirty six billion dollars. It included in debt in that deal, and it really brought together two major food companies and the biggest deal of the year. And then we get a lot going on. We've got retail sales tomorrow Walmart. So it got us thinking big time, Tim, about the consumer.
There's a voice we turned to again and again on the consumer and the retail environment. It's Eric Clark. He's portfolio manager at Rational Dynamic Brands. FUN ticker hsut X, sixty eight million dollar. FUN top holdings include Amazon Live Nation, Uber, Netflix, Apple, Chipotle, and more. Eric joins us from San Diego. Eric, how are you.
I'm great, Tim, how are you?
We're doing pretty well. Hey, we're gonna get to the I want to get to big picture in just a sec. But when we were on our planning call this morning and our producer Paul Brannan told us that you were adding to Chipotle after the news of Brian Nichol's departure. We were both like, whoa wait a second, wait, what give us your thesis here, given that we saw shares fall significantly yesterday after this news was announced.
Yeah, sure, I mean, listen, Brian has done amazing job with Chipotle, and he will do a lot of great things at Starbucks. But the reality is he put a big team in place, a big formula in place, and it's working. And he's a builder and a fixer, and you know, psychologically, builders and fixers get bored when things are kind of stable, and I think that's where we
are with Chipotle. They are appealing to lots of demograms, epics, traffic is strong, digital was amazing, They've removed all the friction from acting, and it's just one of those restaurant fast casual brands. It's just very, very popular. And you know, for him it's probably less interesting. Then you know, let's what can we do to where can we go to fix something else? And I'm sure you know the compensation at Starbucks was amazing, so the deal was probably too
good to pack. I do not worry about Chipole at all.
That's interesting, that's interesting. So having said that, but did you buy any Starbucks?
I didn't you know, it's funny, and we were looking at Starbucks as well as you know, I like to call them diamonds in the dumpster, and you have you know, Starbucks, Nike, Lululemon, sde Lauder. There's a bunch of really amazing brands that are just down on their luck. So we ended up adding Nike and Lulu back. And we haven't known those for a while, thank heavens, because they're down over fifty percent. But I think it's a great time to start picking
up those things. But Starbucks, I certainly wasn't going to chase it after twenty twenty five per because I feel like, you know, that's the first two years of benefit of having Brian come in and assess everything. It gets harder from here.
I think, okay, so let's move on a little bit big picture stuff, and then we're going to go smaller picture once again and talk about more individual names. Strength to the consumer, strong, weak, recession coming? What say you?
I think without the recession? I think, yes, the consumer. I just wrote a report a little note that said, is the consumer tapped out or opting out? And it's the latter. The consumer has been getting overcharged all of us for two plus years. Eventually we get tired of it and we push back on brands, and so consumers are basically saying, I am going to say no to that at least for now until you write size prices. I really love that concert, so I'm going to overspend
on that one. Or I want to go on vacation and I know I'm going to have to overspend there, so I'm not going to buy some goods. And so I see this kind of almost seasonal consumer spending that's happening because prices are just too high everywhere and I don't buy the inflation is almost back to two percent. I don't see it anywhere in the real economy.
Hey, one thing that's a big holding in your portfolio, and I believe has for a while is Alphabet. And we talked earlier about the Department of Justice Eric Mulling an idea of maybe breaking up Google after a landmark antitrust win. Does that depending on how this plays out, will that impact your investment thesis for Alphabet?
You know all of these big techts, and I'll put Google and Amazon in particular, if there were any type of real breakup, and I don't think the odds of that are very high, and they would take multiple years. That would be an unlocking of value because there's so many great brands inside of these great companies that if you set them free on a standalone basis, the sum of the parts is much higher than the current market cap for Google or Amazon. Amazon in particular, which is
why it's the biggest holding. But I think it's a lot of noise, and certainly it could it could keep people away because they don't want to deal with headline risk. But I don't think it's anything more than just typical DJ stuff and you know, just trying to make waves about big companies that are dominant.
There's a well known brand that just reported earnings, Cisco, that is also trying to write it ship and we just broke down the numbers and we did see the stock actually pop in the aftermarket. How do you think about a brand like that? Is it just something when you look at the tech universe you're not interested or do you see some value there?
You know, we don't follow Cisco as much because it's not kind of direct consumer within our portfolio, you know, Amazon, Apple, and then we have some Google and Meta. We're more in the communication services, you know, with the Netflix or a Live Nation or things like that. So we have owned some direct tech, but Cisco isn't isn't part of that.
That's true because it's not as much consumer consumer focus there.
Hey, Eric, I look through your holdings in the Rational Dynamic Brands Fund and I see a company, a couple companies or segment. I should say that it's like kind of that old is the is it Sesame Street? One of these things does not belong. It's like one of these things. Yeah, one of these things is not like the other. Gave all these consumer facing companies, and then you have private equity Blackstone, KKR, Apollo. You've added to Apollo recently on the dip. Why is private equity or
I guess alts as we they want to be called. Now, why is it appealing to you?
Yeah?
You know, it's a major theme in the high net worth area, money migrating on the margin from public equities to and public fixed income over to privates, and very few people have any exposure to the private market, which is eighty percent of the economy. So it's just that little area that I think it shields people from volatility. You get out to some of the smartest investors on the planet. They can see around corners, they have great information kind of advantages, and they've been all of them
since they're IPOs. They've been monster out performers. And they all pay a dividend and they grow that dividend. So you know, sometimes they can be a little bit vollable, but they are terrific companies, terrific stocks, and they are really under owned still even though two of the three are part of the S and P and Apollo. I'm sure in the next twelve months or less would be part of the Oh.
Interesting, I like a prediction. I like a prediction. Absolutely, we'll come back to that in the next twelve months. Yeah, exactly, So you're right about that.
Eric, talk to you about it. Hey, listen, Eric, take care. Enjoy the rest of the summer. Eric Clark, portfolio manager at Rational Dynamic Brands Fund.
As we mentioned, it's always summer in San Diego. You don't have to say enjoy the summer to somebody who lives in San Diego, like three sixty five. It's beautiful there.
It's a state of mind, it really is.
You're to date.
His fund is up to shy of nine percent according to Blomberg Rankings, putting it in the seventeenth percentile. One year, it's in the seventy fifth percentile.