Will Americans Push Back on Inflation, and Farmers on America First?

culture in America. And they've changed some rules in baseball. What could that mean for the future of America's pastime. But we begin with inflation and the economy. Let's get started. Inflation in the US eased ever so slightly in March, fueling talk of FED rate cuts, but core inflation is still sticky and this might not last. Chicago Fed President

Austin Goolsby is calling for a more judicious response. What I want us to think about is why I think that at moments of financial stress like this, the right monetary policy is really caution and watchfulness and prudence. But maybe the rest of us, the general public, might be taking the inflation surge a bit too lightly. Let's talk about it. Bloomberg opinion columnist Chris Bryant covers industrial companies

in Europe and joins me. Now, and Chris, you mentioned in your column on the Bloomberg terminal, back in the nineteen sixties, people would just take to the streets over inflation. They'd be protesting in front of grocery stores and department stores. Is it time to bring back that level of civil discourse. Yes, it sounds controversial, but I do think that consumers need

to start pushing back a bit harder. And the reason is this that over the past couple of years, we've had a lot of shocks to the economy, a lot of surprises. People weren't used to inflation, and so when companies began raising prices over the last year or two, I think consumers general default view was, Okay, well, this seems all right. We need to go along with that.

We should expect prices to go up. However, we have seen day to come out that suggests that actually companies have used the pandemic in order to increase their profit margins, suggesting that making rather too much money and that consumers could indeed afford to push back a bit more. Do you find people are starting to do that protesting in their own way, perhaps not painting signs and chanting in

the streets, but yelp reviews, tweets, social media movements. Well, I think, you know, to start with, ultimately, consumers are going to start to face much more difficult conditions. Maybe some of the savings that they've built up during the early parts as pandemic had been eroded away, so simply they just don't have the capacity anymore to make some of the purchases of services or goods that they did earlier. But yes, I think there is growing irritation with some

of the increases that we've seen. An Anecdotia had to Readers emailed me and say, look, yeah, somebody acts the other day for this deal and you know, without rage. And I went back to them and I said, hey, is that is that okay? And I think that's what we're talking about here. I'd like to see in effect to try and my own life sometimes maybe to question be as businesses about a bit more about the level

of cost inflation they're facing. I think consumers are very understanding when a local business is facing lots of input costs increases that they of course need to pass on to customers in order to pay their bills. I think they're not understanding though, when businesses take advantage of, you know, the stresses that we've seen in the economy over the last couple of years in order to be further increase their their margins at the time when you know a

lot of consumers are struggling. Yeah, how final line is that, how do you know when retailers hands or sharp's hands is tied. Their hands are tied, and there's not much that they can do no matter how hard you push back against inflation versus when they're just using this as an opportunity to make a little more cash on the side. It's very difficult, isn't it. I think you, as the customer, you don't always have a cire insight into some of

the costs people are facing. Uh. You know, even when you look at some of the data which show now that you know, commodity prices for falling, things like agricultural prices of food are going down, and yet in the shops the cost of food is still going up. You as the consumer don't know whether the business is you know, really you know, price gouging, or whether they're simply passing on costs that you know they've locked in from a

long time ago, or something like that. I think though, um, you know, consumers, you know, supermarkets for example, can be the friend of the consumer here and that they I think, do require their supplies often to lay out very clearly the kind of cost pressures they are facing and have

at times pushed back. We had a good example in the UK last year when Tesco, the big supermarket, temporarily removed Hinds baked beans, you know, a famous British uh, you know, beloved product from their shelves because they argued the price was simply too much and didn't reflect the

costs of the company was asking for. Are there signs have you seen in your research on this topic consumers are starting to reach that inflection point and demanding, I don't know, show your work, mister grocery store, show us where your costs are and why you're passing them along to us. Are you seeing more of that? I think

we've had isolated cases. I mean, there was an example last year, for example, of the US beer companies where they, you know, they all increased prices by quite a lot, and then they did see a very big fall off

in demand towards the latter part of the year. The new boss of Walt Disney, for example, he came in and he admitted openly that the company had perhaps been too aggressive in increasing prices at some of their parks, and of course that triggered, you know, beforehand, a lot of complaints from very loyal customers who felt they were being gouged. You know, they would love to go to Disney, but they felt that they were being charged too much.

So I think a lot of companies often have a very sensitive ear for these kind of things, and therefore, you know, when consumers do start speaking up and pushing back, then they hear it. They do a lot of surveys, they know what their customers are saying, and so I think, yes, we are seeing these this pushback starting to happen. We see it also just in terms of, you know, the

volume of good customers are buying. So while you see you know, the overall revenues that companies are making going up, you see that you know, part mostly that's because of price in the consumer sector in Europe now, and actually the actual volumes of goods that customers are buying us going down, suggesting that they have reached a limit. And we are talking with Bloomberg opinion columnist Chris Bryant about inflation in the US and what the consumer can do

about it. Chris, I wanted to ask a little bit more about that tipping point among consumers. When do we reach that tipping point? What does it look like? How do you know when we're there? I think you see it very obviously, when you know business begin to report, you know, shrinking volumes or when they start to see customers trading down and the kinds of goods that they're buying.

A big tail win for businesses over the last two years when you know, they were able to sort of premiumize their products, essentially pushing consumers to buy luxury versions of the goods that they'd already bought, helped by the fact that customers had more money into their pocket. We could see a reversal of those trends now, particularly in the autosector for example, you know, people were paying well

over sticker price for a new vehicle. We're starting now with more supply in the market to discounting return to the sector, which I think a lot of consumers were welcome. Nevertheless, prices remained far higher than they were, particularly the use cars before the pandemic. And you say it really well

in your column on the Bloomberg Terminal. What you say is, many of us will see the high price of a flight or a hotel room, we'll grumble about it, we'll buy it anyway, we go ahead and click, and we just move on and kind of throw up our hands. So we're not here yet. They're at that tipping point. We're just not feeling as much of a pinch as we need to feel because, for lack of a better term, it's just not expensive enough. Yet. Is that what has to happen? Well, I think we need to be careful

who we're talking about. Of course, I mean poorer consumers that reach that limit long ago. And we're seeing you know, credit card balances you know, rise up, and delinquencies on loans and so forth, so you know, the poorer consumer is already really there. And yes, some people would say, well, the fact that prices continue to rise just suggest that the demand is there. Price is a function of supply and demand, and therefore, you know, essentially it just means

that you know, those prices are justified. But when you listen to companies and how they talk about inflation off, and you know they're deliberately restricting the supply of goods into the sector, or they're capitalizing on the fact that

you know, supply has remained so limited. So in the airline sector, for example, there's a host of reasons why companies have the airlines have struggled to restore the capacity that had before the pandemic, and indeed they needed a lot more now because the economy is bigger, and so they are taking advantage of these situations. And yes, I think there's a lot of revenge spending going on, which you know, people wanting to have a good time after

the pandemic. But you know that might well de sria as this year goes on, I think, and some of these high prices that people have been paying perhaps will become too much. What do you recommend? What should people do? Personally?

I say, in my own life, I think I tried to speak up a little bit more now I think it's you know, okay, you know, I go into my local Bay Career for the you know, the other day, and another price increase had gone through it, you know, fifty percent more than I was paying, you know, a year ago or something. I think it's okay to at least speak up and say, hey, um, you know, I want to be a customer here, but you know, cut

me some slack or at least explain why. And I think when customers start pushing back a bit more like like that, or indeed, you know, going elsewhere trading down, you know, in the supermarket sector, you might well find that people cross over to the lower price supermarkets when when their budgets are tested this then, yeah, businesses will have to respond. And you know, hopefully we are all seeing that happen already. You know, the inflation rate is

coming down. Unfortunately, you know, core inflation, which is what the central banks look at, remains uncomfortably high. And so long as that's the case, there will be this temptation to respond to inflation with higher interest rates. And you know, my view in this columns, and it's shared by several economists I think, is that you know, interest rates are

a very blunt tool. Yes, they can reduce inflation by reducing demand, but at the cost of you know, much higher unemployment and really hurting the economy and ultimately hurting consumers, the very people who have suffered with higher inflation. And my far better it would be I think if consumers spoke up more, push back more against prices, and therefore, you know, price levels drop that way, rather than having to raise rates so aggressively. Bloomberg Opinion column is Chris

Bryant coming up. We're going to look at how one industry in the US is also fighting low cost competitors from overseas and it's struggling. And you might be surprised to hear which sector is taking the most heat. You're listening to Bloomberg Opinion. You're listening to the Bloomberg Opinion podcast. Catch us Saturdays at one and seven pm Eastern on Bloomberg dot Com, the iHeartRadio app, and the Bloomberg Business app, or listen on demand wherever you get your podcast. You're

listening to Bloomberg Opinion. I'm Amy Morris, and we've heard this before. A once dominant industry in the US now struggling because of low cost competitors from overseas. It's a familiar story, but this story has a twist. In this case, We're not just talking about a manufacturer. We're talking about the American farm. Adam Mentor is a Bloomberg opinion columnist covering Asia, technology and the environment, and he's an author. His latest book is Secondhand Travels in the New Global

Garage Sale and Adam joins us. Now, thanks so much for taking the time with this today. Let's just get right into it. What is happening with US agriculture exports. Well, they're declining at least some of the key trends of corn and soy, which are two of the most important and largest commodity exports from the US overall, not just in terms of commodities, but in terms of all products, whether it be cars or semiconductors. They're slowing down because

of greater foreign competition. Is that really what it is? Greater foreign competition and where is this coming from? Well, it is a greater foreign competition combined with a lack of new free trade agreements. The US Department of Agriculture recently took a look at what are the factors that are causing US agricultural exports to slip, and they pinpointed a few things. Certainly a strong dollar accounts for it as well, but the other key factor is that the

US is no longer joining free trade agreements. Between two thousand and twelve and two thousand and twenty, the US didn't join any while the rest of the world is really partnering up. And when other countries partner up on free trade agreements, that makes it cheaper to export to the countries where those free trade agreements are covering. For example, regions of Africa which of fast growing middle classes, which

would traditionally be opportunities for US farmers to export. The advantages that say Canada hasn't exporting to them because they have free trade agreements just don't exist for US farmers, at least over the last decade. You know, that really surprises me. I was thinking NAFTA covered most everything that we would be interested in, and other free trade agreements as well. Didn't we have those sorts of rules and regulations in place that would protect both the producer and

the consumer. Well, traditionally we have been doing that. And it really goes back to the nineteen eighties when which was the last time US agricultural exports began eroding, also in part because of a strong dollar, but also because of the establishment of the European Union and other free trade agreements. The decision was made to create free trade agreements that benefit farmers and other workers, and we had

that for many years. You know, when NAFTA was passed and enacted in nineteen ninety four, US agricultural exports overall we're about forty six billion dollars. This year they are up to almost two hundred billion dollars. So everything sounds very healthy of free trade has really benefited farmers, but it's slowing down. And in fact, this year we're actually going to the United States is actually going to have an actual agricultural trade deficit of about fourteen point five

billion dollars. So that speaks to some of these issues, and it's one of the things that's motivating farmers and farm groups in particular to go to Congress and say we need help, we need free trade agreements. Adam, how long has this been coming? Have farmers and others been aware of this sort of gathering storm and the rest of us are just sort of figuring it out and catching on. Yeah, yes to an extent. I mean it's funny, you know, there's there's all kinds of stereotypes about f

country and American farmers. But one thing you learned very quickly if you spend time in farm country is they are some of the biggest advocates for free trade you'll meet anywhere in the United States. And that's because they know what happened in the nineteen eighties when the US started looking to open up markets. You know, starting in twenty fourteen, mid two twenty teens, we really started to

see some of the erosion and key American markets. That was the year that the US stop being the world's largest exporter of wheat. Instead it was being replaced started being replaced then by the EU, Russia, and Ukraine. Believe it or not, but twenty fourteen we saw the erosion of this traditional strong American export and that started ringing

alarm bells in farm country. And then more recently, as trade wars under Trump were initiated and key American agricultural exports like soybeans to China began being impacted, you saw a more organization growing up around this issue in farm country.

So it's been building for a while. In this year it's really come to a head with a lot of these farm groups going to Congress and saying we need to address this we are talking with Bloomberg opinion columnist Adam Mentor about the future of farming in an age of global competition. Let's pick right up where you left off, Adam. When they go to Congress and they talk about this and they try to get some sort of response, when

might we see change. Certainly it can't be a partisan issue helping out the American farmer, No, no, I can. It really requires a bipartisan consensus on this issue. You know, sort of the traditional polarizations that we've become accustomed to

are a little bit mixed up. You know, we've seen a lot of the anti free trade talk in recent years coming from the Republican side, But on this issue, we're actually seeing quite a bit of support in Congress from the Republican side, from especially farm state Republicans who

want to see new free trade agreements. And the opposition is I mean, really from the Biden administration, which has made it quite clear to farm groups that it's not open to the idea of negotiating free trade agreements because they believe that it could hurt manufacturing. They would like to instead if they can create sort of one to one agreements that aren't formal but understandings with American trading partners that will hopefully open up markets to US farm exports.

But but there's a lot of skepticism to that approach because it's it's not if you will written down, it's not signed. And so thus the pressure from farm farmers and from farm state legislators to get something done, to get something started at least, so an informal agreement, a sort of weekend and nudge is not going to do it. They need some pen on paper, They need some promise if you yeah exactly. They want to they want to give.

I mean, in particular, what farm groups would like to see is what led to NAFTA and what led to some of our other free trade agreements is what's called fast track authority, and Congress had this also for TPP, if we were call, which was the Transpacific Partnership, which was supposed to be a multi country free trade agreement between the US and primarily Asian countries and countries that

trade into Asia. The Trump administration scuttled that fast track authority, which would allow the administration to negotiate an agreement and then get an up or down vote on it in Congress.

They want to see if farm groups want to see that kind of fasts track authority given to this administration and have this administration aggressively pursue these kinds of agreements, especially with emerging market countries, because traditionally the places where the US has grown farm exports are countries that are developing middle classes that are moving up the food chain, want better food, want better quality food, and so you

see growth in those places. So places like Africa, places like Southeast Asia, that's where that's where they would like to see these agreements forged. What would be the risk if we played this out and just took it as status quo and it continued year after year with the numbers that you were quoting and the deficit that they are experiencing when it comes to the exports. What's the

endgame here? What's the risk? Well, the endgame is is that especially on the two key US agricultural exports right now, corn and soybean, Argentina and Brazil, and Brazil is growing very quickly, they basically edge the US out of current markets and emerging markets. So current markets places like China, which is a complicated story. It's not just free trade agreements with China, but also places in Southeast Asia and Africa that the US loses the opportunity to export into

those regions because our product is just too expensive. Bloomberg Opinion columnist Adam Mentor joining us there and don't forget. We are also available as a podcast on Apple, Spotify, or your favorite podcast platform. Earlier this month, two black lawmakers were expelled from the state legislature in Tennessee. The reason they were protesting, along with their constituent, calling for stricter gun control measures after a shooting at a Nashville school. Now.

One of those expelled, Representative Justin Jones, spoke out about the controversy after he was reappointed to his seat just days after his expulsion. I want to welcome democracy back to the People's House. Then, on last Thursday, members of this body tribe to crucify democracy. But today we stand as a witness of a resurrection of a movement of a multiracial democracy that no unjust decision will stand. Meanwhile, there was a mass shooting in Louisville. The governor of Kentucky,

Andy Basher, speaking out about that. I have a very close friend that didn't make it today, and I have another close friend who didn't either, and one who's at the hospital that I hope is going to make it through. So when we talk about praying, I hope people will Mass shootings happening just about every day in this country now. Frank Wilkinson has been following this. He has a Bloomberg opinion columnist. He covers US politics and policy. Frank, thank

you for taking the time. I just wanted to ask you about the exis between gun violence and the removal of the representatives Justin Jones and Justin Pearson from the House. Why explained that connection to me? Well, it's a pretty complicated connection with a lot of history behind it. But if you look at the history of the United States and guns, it's primarily been a history of white people with the right to guns and black people not with

the right to guns. But in the case of the removal of the two legislators in Tennessee, that too has a long history. We have, you know, for instance, in reconstruction, which is a time when blacks were not allowed to carry guns, they had guns removed from them, for instance. They were also blacks in legislatures in the South in those days, for instance, Tunis Campbell was the lead black

legislator in Georgia. He was simply removed during after reconstruction from his seat because the white powers of the state did not want to have black legislators. Is that what stood out for you when this happened in the Tennessee legislature, when these two men were removed, My first question was that seemed to be a fast escalation. Why not just censure them. I think what we're seeing in a lot of legislatures and a lot of governor's offices in the

United States right now is a pretty severe reaction. The Red States are really clamping down on rights. They are clamping down on voting rights, they're clamping down on other types of rights. Abortion obviously, and what we saw was really a kind of heightened reaction, but it's not inconsistent with the other types of behavior we're seeing, where a reassertion of white conservative power at a time when there is a very serious challenge across the country to that power.

And just to make the point clear, there were actually three people who were protesting, the two gentlemen and a white woman, and she was not removed. That's correct, And you know, obviously, if you're going to remove two and you can parse, well, geez, you know, the two who were removed were louder or something than the other one. But it was a pretty clear racial message. I thought that, you know, we're targeting the black guys and not the

white wall. In your column on the Bloomberg terminal, you say this was a quote that stood out for me. For all the condescension on display, fear seemed to be driving the day, fear of what well, look what we've seen over the last fifteen years say, or to be perfectly honest, since the election of Barack Obama is a reaction. First of all, we had the Tea Party, right. The

Tea Party was supposedly all about spending. Well, Donald Trump came in and spent more, you know, had a bigger debt than any president in the history of the United States. There were no Tea Party protests about Donald Trump. When researchers went in and really looked at this academic researcher researchers looked at what was going on with the Tea Party, it was what they found was very similar to what they found when they looked at the MAGA movement. And

who was you know, supporting Donald Trump. The base of the movement. This doesn't mean every person, but the base of the movement is a racially resentful white audience that is very upset about assertions of black power and non white power in general, and changing morays, changing cultural attitudes, and so what you see time and again in the last few years is this kind of political reaction to what is going on culturally and politically in this country. Now.

I want to be clear about your column specifically, because we started off with the idea of gun violence and what happened in Tennessee and the removal of the two black representatives from the Tennessee House, and we were finding a nexus there. But you aren't saying that all gun violence is based in race and discord there. What you are saying is that the need to keep those guns and to keep those laws in place and to not necessarily hear what the constituents are saying about protecting them

from gun violence, is based in that fear. I think there is a very large racial component to that, yes, but you know, once again, to be careful. It's it's a reminder that this controversy in Tennessee initiated because children and other protesters came to the state capital saying, hey, we need protection. We need to stop this madness where anybody is allowed to buy a gun, anybody is allowed to carry a gun, and it's just you know, promoting this, this this view that everyone should have a gun at

all times. And so the legislature, rather than deal with that, which is another fear by the way, that's another fear based politics, which is we're afraid of getting killed. Instead of dealing with that, the legislature turned on the black legislators who were part of that protest. So there is a nexus between the gun violence and the racial politics.

Does this get worse? Can it get better? I think the current trajectory is more likely to get worse because I think once you've left the realm of rational policymaking, and I think we left that realm a good bit ago in terms of gun politics, once you've left that realm, and data no longer means anything, and facts no longer mean anything. And you have, you know, a judiciary, conservative judges saying well, I'm going to base this ruling about

gun laws based on history and tradition. But I'm only going to take the parts of history and tradition that's pork my view, and I'll leave all the other pieces of history and tradition out of that. Because the history of guns in the United States is very complicated. It'd be very hard to say, oh, the United States has always had gun regulation extensively throughout the country. It's equally hard to say, oh, the United States has always you know,

everybody's always been able to have a gun. Neither of those are true. It's a very mixed and complicated legacy. So when you have judges saying, oh, look, I looked at the history here and it all says where everybody should have a gun and there were no inhibitions on

having guns, that's just not grounded in reality. So what's the answer then, Well, you know, politics is difficult and culture is difficult, and this is a piece of political and cultural business that is very unresolved in the United States. It's a bit where there is a very impassioned contest and people have very powerful passions about it. And you know, it's a bit where a lot of other factors, race is only one of them, come in to play in

how people feel about it. Bloomberg Opinion columnist Frank Wilkinson want to thank you for taking the time with us, and stay with us. Bloomberg Opinion continues with a closer look at Major League Baseball. Well, look at the new rules and what it means for the future of America's pastime. This is Bloomberg. You're listening to the Bloomberg Opinion podcast.

Catch us Saturdays at one and seven pm Eastern on Bloomberg dot Com, the I Heart Radio app, and the Bloomberg Business app, or listen on demand wherever you get your podcasts. You're listening to Bloomberg Opinion. I'm Amy Morris. Well. Baseball maybe America's pastime, but we evidently don't have the attention span for it anymore. So Major League Baseball has changed some rules to help speed up play and encourage more action within games. Bloomberg Opinion columnist Connorson joins us

now with his take. Connor, thanks for joining us. What is the most significant change that you've seen? So, if you're going to a game, the thing you're going to notice the most is how much shorter a game is due to the introduction of a pitch clock, which limits how much time pitchers and hitters have to stall. So that's going to reduce the time of games by twenty or thirty minutes, and we've seen that in spring training

and the early game so far. But in terms of gameplay and strategy, the biggest change is how much easier it is to steal a base and what that means for managerial and roster strategies down the road. You right that it will take years to see the impact of these new rules. Why is that because the players and the rosters that we have playing today we're constructed based on the rules of years and years and years ago,

So it becomes that much easier to steal a base today. Well, maybe you signed a player to a seven year contract and you can't change that player is stuck on your team for the next seven years. Maybe they're not very good at stealing bases, maybe they're good at other things that were valued more in the past. So to the extent that steals are worth more now, it's going to take a while for that to be reflected in the market. So is it a foregone conclusion we are going to

see more stolen bases in baseball. We've seen it so far, and traditionally, or over the past several years, the success rate for steals was in the low seventies, like seventy two percent, and early in the season it's been more like eighty five percent, which sounds like just a modest increase, but it actually means that sort of the expected value of the stolen base has tripled because you're much more

likely to succeed than fail. And they're sort of dynamics related to that is that because of the larger bases, it's larger bases, it's that pitchers can only throw over to first base twice unsuccessfully before it counts as a back. And then it's also the pitch clock. So if you're a runner run first, you know that the pitch are only has eight seven six seconds to throw and you can game that in time at better time your jump. Are these changes here to stay? Is our life? Now?

I think that baseball has shown it's finally willing to change its long standing rules and not be stuck with the game that we had thirty forty fifty years ago. So to the extent that things aren't quite right this year, there's now the opportunity to make tweaks down the road. Okay, so does that mean they're open to debate over how to find new approaches to America's pastime. On the one hand, it sounds kind of fresh and new and different, And on the other hand, hey, get your hands off my

baseball game exactly. And I think that's what I find fun about this whole thing is that we're no longer just stuck with what we had before. We can now debate what makes the best version of baseball? Is this change a good thing or a bad thing? Should we eliminate the runner on second base and extra innings because games are now shorter? Is it too easy to steal bases? Should we make it even easier to steal bases? These are all now discussion that the baseball fans can have.

Is this a discussion now as as to ten years ago or maybe twenty years ago? Because our attention spans are so small? I mean, I was kind of joking a little bit at the top of this interview, But now that I think about it, is that why these changes are necessary? Because the game got really long and we just couldn't sit there all day. Yeah. I think it's the combination of our attention spans got shorter and the games got longer, and the games weren't getting longer

because of more action. It was more dead time, so players stepping out and adjusting their batting gloves, pitcher stepping off the mound and gathering their thoughts. And it's as a fan watching a game or in the seats, it's just kind of slow. And what we have now is just as much action as we had before, if not more, but a game that lasts two and a half hours instead of three. Any other changes might be coming down the pike or are we going to settle down for now?

I think it's too early to say. We'll have to see how this goes. But it's encouraging that baseball is willing to respond to perceived problems with the game and make it better. And now fans can get more engaged in terms of is this working better in the past. These are the fights the baseball fans love, and we finally have them again. Sounds terrific. Thanks so much for your insight. This is going to be fun to watch. Thank you for taking the time. Yeah, thanks for having me.

Connorson is a columnist for Bloomberg Opinion and that does it for this week's Bloomberg Opinion. We are produced by Eric Mallow, and you can find all of these columns on the Bloomberg Terminal. We're available as a podcast on Apple, Spotify, or your favorite podcast platform. Stay with us today's top stories and global business headlines coming up. I'm Amy Morris. This is Bloomberg.