How the World Ran on Empty with Peter Goodman
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this week on the podcast. Another extra special guest, Peter goodmen, is the award winning investigative reporter and economics correspondent for the new york times.

His latest book, how the world ran out everything inside the global supply chain, what a fascinating deep dive into how we got here in terms of why were we unable to get basic protective equipment during the pandey? How could we not get ventilators or even things like face max and and gowns? What LED us to outsourcing everything and not having a backup, not having an emergency system, how did we break our resilience leading up to the pandemic? I thought the book was a great read and very fashioning.

I learned a lot about IT. And I I think this conversation is fascinating also, if you're at all interested in things like global supply chains, the role of consultants in and the role of shareholder primacy in how society Operates, plus all the craziness that took place during the pandemic is detailed in the book in in with great specificity. I think you'll find this commerce station fascinating with no further to my discussion within new york times either. Good men.

thanks so much.

Very great to be here. So I really found the book fascinating. It's such a fresh everybody's minds story.

But before we get into the book, let's talk a little bit about your background. You you have really a fascinating career. You you start as a feature writer. Free lancing in japan from southeast manila, jakarta. How on earth did that?

yes. So, you know, I was one of those kids who got out college, and just, I did what I wanted to do like right? I've been sort of a political activist in college, but life is more complicated than that did to my activist friends or journalism.

dreamy. And I wanted to go check out southeast dasia. So I um I first stopped in japan, got a job, uh writing features for the japan times, teaching english to pay the bills and save up the money to then move to manilla. Then eventually jacta spent a long time of cambodia, uh covered A A massa of pro democracy demonstrators and E T or got kicked out of indonesia, came back to the states and ended up in alaska, the in daily yeah.

I was going to ask, how do you find your way from from asia to to encourage? What was that like reporting from a small town in alaska?

Yeah I mean, I basically figured out that if I wanted to do this seriously, I was going to have to go somewhere to to learn journals. I didn't go to jay school, went to a liberal art college where we didn't have that sort of paper where we had beats and and structure. I understood that you know, freeling would take me a certain distance, but if I want to be serious, but I had to go work you do in local journalism somewhere.

And the I was Lucy enough to be hired by the acro daily news, which was just a heavy weight shop of talent. Only about, you know sixteen maybe twenty reporters they had won the gold metal for public service porter a few years before I got there. There were finalists the year before I got there for the excEllent validas crushed and was just very talented creative group of people. I yes, I ended up in um I was living in palmer which is next to washita was the local government reporter where I covered, as you can probably guess, then unknown member of the wasted city council .

and pale and and how did that turn out you .

know IT IT was fascinated. I mean, there's nothing like having a local beat and having to figure out who matters, what's a story? How do I go to A A meeting of local government? Prepare for whatever issue seems most interesting. Developed sources, bill, people trust, figure out, know when you get IT wrong, how to make IT right and you there's nothing like being in a place where someone will call you if you get a fact wrong. And when you're financing in cambodia, writing about cambodia and refugees you spell some his name on, nobody is going to call you. You mess up a fact like I wants to mess up a fact, you know, I miss heard somebody say assessment when they meet sesa and boy, I thought I was going flea the state in embarrassment you and you learn how to how to get right.

So you have a nack for being in the right place at the right time. You were the shanghai bureaux ef for the washington post really is china is emerging as a global superpower. Tell us a little bit about your experiences in shanghai.

Yeah, that was just an incredible story, was the story of a lifetime. And he was a moment where china has become, uh, a very significant story in the american media and imagination and politics. But but IT was still up before, you know, everybody had these giant bureau before we recovering news in this very granular way.

So you had time to really digging to stuff. And, you know, we had two guys in beijing who were phenomenon, my two colleagues who did a lot of political stuff, and I was astanding bly the economic rider. But the truth was, all of her stories were more less than the same, because everything was an economic and political story combined.

And IT was a moment where you can just sort of point at anything like how did that ball point barring factory get there? Who owns IT? How did the land and the energy become available? Where are they selling their product? Who's getting a cut of the action? You know, anything you dug into was a story that would tell you something about power and the trajectory of the chinese account.

And i'm sure that helped set the stage for all the things you saw when the world ran out of everything will circle back to that. You also covered the financial crisis in recession. As the times new york based economic correspondent, I have a vivid a recollection of my experience during the financial crisis. Tell us a little bit about .

your experience in o know it's interesting. An old for the washington post covering international econ. And the post was a, let us say, not having its best days, this opportunity to go to the times. And they offered me national economic correspond. I thought, well, you don't live in in new york at the time.

I'm working in the new york beer of the wasn't all that kindly I love the washington post but I thought, well, I Better do this sleepy story the national economy, the fall of two thousand and seven didn't know anything about IT was surrounded by people who knew much more about IT than I ever would the first story ever pitch you IT seems like consumer spending is drawing up because housing Prices are falling. That could be significant. You know, I keep reading that consumer spending is more than two thirds of of the american economy.

So I got mark Sandy to go crunch some data from me showing where were home equity lines of credit drawing up the fastest and what was their historical relationship to consumer spending. And I got this crunched for, like every metropolitan area in the united states, and almost IT ran. And I am going to go to reno.

I was going to say four areas stick out in my mind. So n. Fla, yeah, vegas and and reno as two and three. Yeah, a southern california. And i'm trying to remember maybe D, C, was the other .

area that D, C, hit for. They were part of new england that we're head, but you just listed that. But so I sort of Randy going out to reno because if you look at the ratio of homelier credit consumers spending, we've seen this big dry up and within five minutes of getting off the planet, no real reporting plan.

I pulled off the road from the airport, headed where I was staying, and there was a tile shop, and I went in, introduced myself, and talk to this guy, Marshall Willy, who is a salesman, who at that time was about to send the keys back on his third speak house. His commissions were drawing. He told me how he, you know, find the trip to heat for his honeymoon on home. I will be going to create, used to get a new truck every year for the variety of color, and suddenly is answering, no dude, I can't go to the club tonight.

I'm staying home to watch a net face and I just sort of a glued myself to this guy for three days I met all of his friends and I went back to new york and I remember things to my colleagues in the news um we are and I used an impolite word that I will not use on your radio program we are you really up a great here and you know calm down. You know take you this but that story um I sort of just accidently fell my until I I saw that this was gonna be really bad. I was not merely a mild recession.

And so every story I did afterward that I mean as I then got into the muncie of how the markets markets work and eventually covered the four closure crisis really began with that just basic, you know, naive question. Well, what's gonna happen when we can just use our homes as as A, T, M. Machines anymore? That seems like it'll have implications.

And yes, IT did. That reminds me a little bit of the scene from the big short. Either the book of the movie, but in the movie is Steve carel speaking to a stripper about the home SHE bought to fix up and he said, a, he goes, wait you, you're buying this home as an investment property and she's like, I have six homes as an investment property and suddenly he realizes, oh, wearing for a world of trouble. This is much worse .

than the exactly in the the guys I was hanging out with. I take out to dinner and drinks so we can have a longer conversation. We ended up in a place where there were people are of of that profession. Actually, my first expenses that .

I ork IT IT wasn't .

that I was so expensive.

That was what was the name of the place.

But that's where they wanted to go.

I love the the expression jingle. Male people used to put their keys in the envelope and send .

them back to the bank and that's jingle man. So so like, well, you know, this home I never expected deliver. I guess i'm going to be spending some time here, figured i'd be moving up town, you know.

next, it's amazing. And and in fact, until the financial crisis, I don't think anybody ever stop to find out, am I in a record state or a non record state, meaning am I still on the hook after I lose the house? Or is the bank limited to just they get the house .

and I face we all click agree with all the terms to millions of documents that we don't even read the sentence of right, right. And suddenly we're living in the fine print. Oh, they're actually our.

That are going here.

that people that we delude ourselves into believing would never this never matter because housing Prices are going on up forever even now. And Green span says that you are sucker if you don't get a variable rate mortgage. And you know what could happen if he doesn't t work out of refile ourselves? Suddenly we're dealing with that. All of this ink that was never intended to have effect.

That's right. I'm still to the stay based that the models never allowed for home Prices to fall in new york. I have a vivid recollection of finishing grad school in eighty nine.

And anybody I know who bought a cop a condo in new york, they were under water for five, six, seven years, until till the next legate late nineties. And the booming stock Marks started to send real estate Prices air. But you don't have to go that far back in time.

Look at the one thousand seventies to see when inflation made, at least in real term, home Prices not go up. And then you know prewar there were some pretty bad recessions and depressions in the uh, turn of the century or the twenty years and thirties. Obviously homes worn as widespread on back then as they are now.

Um I don't want to spend too much time talking about financial crisis. I have to ask you, you've on multiple trips to some pretty heavy conflict zones, iraq, cambodia, sudan, east team, or what's IT like being in this area. So you edit with U. S. Military, you just walking around hope, and no one takes .

a pot shot IT IT. depends. I have been embed. Ed, in iraq.

X, I was there at the best possible time to be a journalist, you know, in this period, like the, I was there as bushed declared mission accomplish. I was just in my own S. U.

V, driving from the kuwait airport up to bostra with a couple washington post colleagues. And then we drove, you know, all the way up to back dad and cure coke. And actually never forget, the car broke down when we put A A black market gasoline.

And at some point I had to call national car rental in kuwait and then get that thing on the back of a flat bed truck throughout these laid off truck drivers. I know business, and we hired somebody for a couple hundred years to drive through the desert. You know, it's always, i'm not a thrill seeker by nature. I mean, there are there are people who cover conflict, who've spent a lot more time in conflict on than I ever will, some of whom you know I fear for their safety because there is i'm just somebody wants to see what's going on. I'm not like the bravest soul but but there's nothing like being in a place um and boy I mean iraq after sadam was just a gold mine for journalist because they're all these people, many who were english speaking who are are dying to tell their stories whether it's like how do these trading companies work despite american sanctions I did a story on smuggling out of the port A A bosra where like in a day, uh, I found the guy who d like ran a smuggling ring who took me to the poor show me the fake bills of lading like that was absolutely incredible cambodia was was an endlessly fascinating of of all these .

wild overseas stories you've done what's been your favorite to cover? What's been the most chAllenging .

that's a that's a tough question. I mean, I mean, I would say that a rack coverage just felt so vivid in and important. And I mean, there's nothing like when you get into doing you know our enterprise or investigate of a longer form stuff, there's nothing like being in a place works like no people actually want to know right now what happened to you today.

Stories almost write themselves. I'm going to go to you an oil refinery that shut down because the looters came and the haliburton people haven't figured out how to turn IT back on. And there are a bunch of iraqi employees saying, who's going to pay us and how come we can go in that?

You know, these sorts of stories are just so vivid and and compile. I found that particularly amazing. And my time in china was unable able as as well as just such a fascinating place.

really .

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Let's talk a little bit about some of the background philosophy. Tell us about the lean taliban and the cult .

of efficiency love IT. yeah. So the lean taliban refers to a the way the people at mckinsey and company, the business consultancy, viewed the selves in protists ing for lean manufacturing or just in time, as we know IT.

Now, just in time is the first sensible idea pinned by toyota that says, instead of having giant warehouses filled with all kinds of stuff that we may need at some point in the future, but who knows when it's japan, the end of the second award, spaces limited, capital limited, let's have the suppliers bring the stuff we need on the supplies as we needed. They sort of emulated the way a supermarket deals with milk. You you want enough on the shelf that everybody gets milk.

They don't live unhappy. They can buy IT, but not so much that you're spilling IT well is a great idea. Till business consulting es like machines, I get hold of IT eternally to this crude imperative. Just a slash inventory, hand the extra savings to a the corporate executives as a reward for being smart enough to harm a kinsey and I end up um digging deep into how this actually works in the decades before the pandemic.

And I spent time with this guy in minnesota who was working at this industrial a generator plan where mckinsey lean taliban show a bunch of slick suited Young people straight out of ivy league university, one older guy from the chicago branch. And they say, you're doing IT all wrong, you know, why do you have all these five dollars sheet metal brackets sitting around, taking up space, and where, let's go lean, just order them when you need them. And the guy i'm talking this is in china, industrial generations that need to be installed by crane.

Talk about just in time if if we listen to your advice were going to be slow with orders, which is exactly what happened. So now there's spending hundreds of thousands of dollars to expert ite delivery of their products. They're losing sales because they're upsetting the contractor's. We're waiting further generators also. They can say, look at us being so lean that we don't have five dollar metal .

bracket and and without those brackets, you can complete that generator, right? But even worse, when you give people incentives and metrics, no matter how ridiculous they may be, they follow those incentives and they i'll do those matrix to the point where the people running the factory will not take delivery of key components because it'll be sitting on their books, uh, on the twenty ninth of the months and they will screw .

the market leave.

And that just seems like suppose we making products and selling them this secondary level of metrics seems kind of service.

This is central to understanding the product shortages that we've experiences for the last few years in overdoing IT on lean. And the ultimate example, the story I tell him the book, is I found a railroad engineer out in idaho, es, working for union pacific. Now the railroads have their own version of the lean e taliban is called precision scheduled railroading fans way of saying, let's lay off lots of workers.

Let's the remaining workers with more jobs. Let's make scheduling really complicated. Let's let's limit scheduled service, make trains longer than ever.

Well, so this world engineer is horrified to discover that he's actually pulling free to the wrong destinations. And this is not by accident. This is because union pacific has told wall street, we hear you on the need for efficiency.

In going lean, we're going to limit time, which is the amount of time that cargo sits in any individual place. And so the guy running union pacific s railyard in nebraska absorbs this montreal and says, what? I don't care.

With the next train going, I am attaching as many cars to IT as possible. So I have done my job. I have lowered dwell time. Well, the real effect of this is there somebody sitting in southern california waiting for auto parts. They are in organ because these guys haul in them to the wrong place. We've lowered well time, wall street tap if all you're looking at at some window on a excel spratt sheet, oh, the railroad is more efficient than ever if you're the paint manufacturer, R N california, needing a drum of chemicals that's stuck in washington and state and that you are going to tell your customers you're late with, the hotter that doesn't seem particularly efficient might take away from doing this book.

There is a lot of efficiency and the less fiction ency I glauke up. I'm not a big fan of consultants in general. Um you have a lot of interesting things to say about mckinsey in the book who who perhaps have not distinguished themselves over the years with many of the things um they've contributed to IT.

It's sort of funny to see a bunch of uh ivy league suits who've never run a factory or who've never run a railroad or who've never run a retail shop come in and say, no, no, you're doing this all wrong here. The metrics that will get you a higher stock Price on wall street um regardless of the subsequent impact to either your sales are your profits, your uh other stakeholders, including employees and customers, just a relentless pursuit of how can we get the stock Price up regardless? Is that is that a fair assessment?

Yeah, I think that is a fair assessment and the promise that, that trick works time and again .

for a while.

And you know I mean, you think about slashing inventory, right, which on the books, if all you're thinking about is your cubicle and your analyzing numbers for some publicly traded company, you slash inventory, you've lowered or i'm sorry, you've increased return on asset because inventory's asset, right? So asset is now smaller. Whatever your revenue is, is divided by a smaller number.

That's a higher. measurement. Well as as this london business professor, I talk you for the book put IT to me yeah, that's really great. But if you can't make a vela or in the middle of a pandemic because you've managed your inventory, so that quarter a quarter you've boosted your return on asset, you don't get to say, well, at least our share Prices high.

So I remember having a conversation with duff mcDonald, who wrote a book called the firm about machines, an company and and some of the things that um is responsible for is is kind of like shocking like IT seems whenever there's some financial engineering base disaster. And you look into the details somewhere in the back of IT is some consulting person from a kinsey who says what would happen if instead doing in the way you always did that we focused on these metrics instead, and lets see if that helps get the stock Price. IT sounds like lean inventory and Justin time delivery is a version of focusing on a secondary characteristic in order to affect the stock Price rather than focusing on increasing revenues in doing IT more .

efficiently. Yeah, I need let me be clear, Justin, time is a good idea and trying to eliminate waste supplement is a good idea. The question is, are you doing in in a way that's common sensical or in a way that's purely driven by trying to hit some metric that some twenty old that harvard told you is a good way?

So so let's stay with that because you talk about toyota, toyota, they're on an island. The everything is destroyed, possible war two IT would make, and they don't have a lot of capital. So given those constrains their version of common sense, rational, lean mentor, you know, given their constraints, seems to be .

pretty highly effect.

And IT worked. Uh, is the implication that when everybody else started implementing this via consultants, they just took IT way too far, is that the thinking .

is that the consultants understand who are working for they are working for executives who must get the share Price to go up right now. And if they failed to do that, they're going to be looking further next jobs. So whether they think it's common sensor or not in terms the long run, and this we learned up closed during the financial crisis.

right to deregulation turned .

out to a cost. I mean, you can have spectacular business values that we can all see that are wildly successful for all the people involved as long as they get out before the plane crashes. Part the mixed metaphor. Um and so if if if you talk about the role of it's a question, are you distilling ing IT down to this kind of cultish reverence for just having that one metric? I mean, even toyota, first of all, toya understood that they needed their suppliers close at hands because you have to be able to replenish the supplies for something goes wrong.

They would never have signed up for supply change across oceans, which is what we get from macinnes, combined with the rise of container shipping in the internet and all of all of these things that have made our version of globalization. You do able what happens. We've eliminated all the margin for trouble.

But machines, I actually, even mckinsey realized that we had gone too far in the nineties when they discovered the toyota tories were telling their suppliers not to replenish enough to feel even the existing space on the assembly line. This what this doesn't make anything, even machines I said, but why have two trips to replenish the same workspace just so you can say on the spreadsheet that you know you're only holding for IT. So supposed even weekend recognized that was .

anas you down side of efficiency curve and all along this stuff, you're giving up long term resiliency in favor of these short term metrics. S of suppose efficiency.

Fair statement. I think that you know, take this to to real life. Imagine that you told your kid who you're trying to get to brush at the end of the day, I insist that you spend five minutes by the sink, you know, well, if that's how you do IT your kids going to spend five minutes by the, think, watching youtube videos.

You know, common senses, now I Better get involved knowing what exactly are they doing and like, how's this play? Well, we've effectively let mckinsey write those kinds of rules. And it's not just mckinsey is lots of business consultants es, and it's not even just because the business conserves that we've handed over our business and societal fate to shareholder interest, to the exclusion of anything resembling in common sense.

Really, really interesting. None of this is a new concern. I was fascinated in the book. Henry ford was concerned about supply chains and resource availability a century ago when he was building the model tea. How did his concerns about supply chains be so easily forgotten?

yeah. So Henry ford, I I was fascinated by the story myself. You bonded with Thomas alva riding a rail car back from a trade show at a hotel on tony island.

This is you in the nineteenth, Edison is his hero, and they bond over the supply chain. Edison says, yeah, you know, you have all these great creations, but if you can get the materials, you need these just ideas. And ford was obsessed with self sufficiency, I mean, to the extent to which he had his own fiasco.

S he know, trying to become self sufficient rubber, yeah, this failed venture in brazil. But you know, the scale of his factory is like including the river rouge factory, which remains fords, uh, showcase outside of detroit, with all about having soup to nuts, the ability to make a car without. As ford put IT being pinched by some supplier, he was suspicious of rail in particular, so he bought his own rail and shipping lines.

Vertical integration didn't exactly work out, but that concept of let's understand what we're dependent on and how reliable is the supply. I mean, ford would have been horrified to see what I saw at his river rouge plant a century later, where i'm actually watching the f one and fifty come off the line. This is ford's most popular vehicle, pick up truck. Beautiful vehicle, amazing. You orchestrated assembly with some automation.

But at the time that i'm watching this in january twenty, twenty two, they're taking the cars and parking them in these giant lots in the shadow of ford's corporate headquarters and across the street from hy four medical school because they're dependent upon one supplier for the computer chips, happens to be across the ocean on this island that not incidentialy is claimed by china, part of its own territory. I'm talking about taiwan. And until these computer chips show up, these f and fifties are just taking up a space in a parking light.

Four years hard, I had a car come off least, I want to say, late twenty one or early twenty two. And I recall going to the dealer and going through a whole floor of cars. And they were divided in half.

That half doesn't have the trip for the sun roof, which were allowed to sell. So the sun roof is closed. And whatever the chip comes, so back comes in, bring the car back and we will get you son of for those cars.

They don't have the A B S chip. We're not allowed to sell those. So you drive IT.

But no, well, stop the way ars twenty years ago, all the technology. And so wait, I don't understand why. Why can't you get these chips? And that that was an early read into that.

So we talked about toyota and ford. And if we're talking about supply chaining globalization, we have to also talk about the outsourcing to china. We would spend a lot of time, and i'm curious about the role of wall mart in moving so much manufacturing capacity to china. Tell us a little bit about wl mart.

So warmer is the ultimate example of how publicly traded companies have undercut costs in the name of gratifying consumers with low Prices up. And they found in china the ultimate solution to their bottom line concerns. I mean, here's this country where there's no labor unions. They are effectively, they are banned by the communist party. You can cut a deal with the company's party official to get hold of space resources.

You're tapping into the world's a potentially largest consumer market for you know just about everything in china um even before china enters the world trade organ in two thousand one but especially afterwards IT is the your perfect place to make products at scale, increasing sophistication at low cost. And you know we spend a lot of time now talking about how this supposed you know export jugg onod intent killing american living standards is undercut all these manufacturing jobs in the us. I mean, he is i'm glad you're putting the focus on companies like walmart because IT really was american and western companies in general clamouring for a shot at the chinese market as a way to satisfy their own interns for low Prices to make their share Prices go.

So what about the politicians? Who do we blame? Is this? Bill clinton is a rono regan who helped set the stage for the hallowing out of the american industrial center and china's entry into the world trade organza.

Well, i'm not so sure that I was wrong, by the way, to let china to enter the world trade orange ation, though we could have put more focus on term for labor and a human rights and an environmental and environment for for sure. You know, I I, I argue the book that you most of our problems and the problems are significant in terms so called china shock.

They cost, you know, a million direct manufacturing jobs in the decade or so after china enters the W, T, O. And two million, if you count, you know, the truck drivers who no longer have a factory to deliver, you know that's really home cooking, right? I mean other countries, I mean canada is not you know saving with anti trade sentiment to the extent that is in the us because they have national health care there.

We don't have national health care. We don't we have trade adjustment assistance, but it's wwf li underfunded. That's a programme that's best to help people who lose their jobs because the trade deals transition to something else.

I mean, it's our own political decisions that have left workers effectively abandoned when they lose their jobs. And in terms of the net trade with china has actually been a positive for the american economy to question how we've distributed spoils but IT trims how that all came about. Yeah I think you've tt a look at clinton who I mean, I tell the story in the book of how clinton runs in ninety two as the answer to George H.

W. Bush calls him, calls him out for supposedly following the butchers of beijing, closing up to the chinese companies party after the tenant square massa in one thousand and eighty and nine, clinton vows things in different own administration. Human rights are going to matter so much.

And not even a decade later, he's at the great hall of the people. This is across the street from tiny square itself, a saluting his host. This is Jones men with Hillary by his side and and saluting the great strides that china has made as he's lobbying for the steal that will bring, trying to the W.

T. O. And even goes to the back of the hall, picks up the baton and conduct the people's liberation army orchestra.

This is the orchestra for the institution responsible for the tenant. Masser know, why does he do this? Because he comes from arkansas. This is wall mart at home stay. Because the democratic party and the republican party, for that matter, a wash in campaign contribution from retailers, manufacturer who want a cracked china because it's good for business and and that are ultimately drives of the equation.

During the debate about china entering to the W. T. O, we heard the phrase democracy tossed around a lot that this will open up china to democracy, that this will improve their environmental regulations and improve human rights and their labor laws. None of that happens.

None of this happens. We hear this from Larry summer. We hear this from bill clinton. We hear this from bob room. In what does happen, bob rubin gets to kota china with city group and make as german as chairman, you know and crack that market and that's good for for their share Price. Um of course, of what happens, china does become the workshop to the world.

Retailers get a crack at this giant market for a time, although we've never really got the market opening that promises that we've got, uh, share Prices to go up because cost come down. Consumers, you know if if you like the idea of being able to go to warmer and buy a bad man, set for three box or whatever, like you got the baLance, but we ve got a lot of loss of manufacturing jobs. S, we got a real hit to the kind of psyche, uh, of american industrial. As our politics change, not not for the Better, as inequality sk ending is working people understand that their ability to support their families doesn't seem to matter very much to the people running the economy.

In the beginning, I felt like they were inexpensive products from china. Later on, that lack of environmental regulations or lack of even basic safety standards, china caused problems. I know about you. I want buy dog treats for food, main china, because you never know what's in.

Then we had that whole thing with the shit rock that was mill du no problematic and and on and on every time IT IT seems that there is a problem with the chinese product. It's not that the the people who are working in the factories are doing anything wrong. It's that they're just allowed to do anything with no sort of regular ory overside.

So you end up with this pestition sheet rocker. You end up with some bed chemical in the dog bones. At at what point is is the backlash from um the lack of a regulatory oversight in china going to actually impact them?

Well, I mean, he has had a fact, right? I mean, chinese citizens are unhappy about polluted air. I mean, there been a lot of moves to reduce. We don't see the progress.

We had coal fired electrical plants or at least move them further away from urban areas in places where the environmental destruction resulting from massive industrializing really hit. We've seen protests. We have seen some change there. But ultimately, china has been driven by a very successful effort to live to hundreds of millions of people, a poverty. And so are for for the most part, economic considerations have trumped all, all other considerations. I think the great irony is that the the driver of the kind of globalization i'm writing about in this book at the center of IT is this what I describe as a joint venture between the people's republic of china, this institution for under a rebellion, uh revolution in uh uh under a marxist lenise terms, and walmart, the ultimate retailer from the city of western capitalism. And this joint venture has really propelled us through the decades, and that's what .

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So there are some really interesting tidbits in the book I I have to bring up. Um between ninety eighty one and two thousand american companies reduce their inventories by about two percent a year. By twenty fourteen, they were holding one point two trillion dollars less in inventory than they had been in the eighties. That seems like a giant number.

Yeah, IT is now some of that is uh, reflective of more reliable products, right? So so some of that is the part of the toyota production system that doesn't get talked about much, which is quality improvement. So if your parts don't break as frequently, then you don't need to hold this money.

That's fine. But we know that every time there's a shock to the system we run out of stuff. I mean, the pandemic brought out if if you didn't know that before the pandemic you sure found out about when we run out of, you know everything matters, right?

I mean that's the title on my book. Um the first supply and disruption, so I wrote, was back in one thousand ninety nine and there was an earth waking taiwan and we had shortages of chips and other electronics. Then of course, the full ash fu ash ma disaster in japan.

And twenty eleven and twenty twelve, we had massive shortages of electronics for months after we had floods in thailand around the same time that knocked hard drive production out of waking each time. People who pay attention to this stuff and that's, uh, fairly geeky set of people would say, think maybe we've overdone IT with just in time. But this equation has been so good for the people running publicly traded companies that any CEO who says, I don't know, maybe we need more of the heads you against trouble, that's an invitation to go out looking for your next job.

The CEO said, let's keep going clean. They know that eventually there will be a come up, but with any look that will happen after they've moved down, they've sold their theyve cash in their options. And there on you know some beach in a hammock with a cake.

So let's talk about what took place um before and after the pandemic. And some of the data in the book is really quite astonishing. P pandemic china made eighty percent of the face must sold in the U. S. And ninety percent of many basic and biotics ah that just seems insane .

to me yeah in retrospect. I mean, it's certainly .

saying like how can we not make our own any biotics in in the night?

I mean, what makes an insane is we're discussing a period where we're deciding to trade war with china, right? I mean, right now, you know, I mean, if you have a great really, I mean, I think if we were saying eighty percent of our face master made in canada, I don't think we give that any thought. The likelihood that we're going to close the border seems pretty small. But yes, to be going into the pandemic simultaneously having this trade war while were heavily dependent for really significant stuff on this country that you know happens to be on the other side of the pi, that's a problem.

So let let's talk a little bit about what this looked like. Once the world shuts down by the middle of twenty twenty one thirteen percent of the world's container shipping fleet. They're just stuck in traffic, James, at ports they can get in around, yeah, about a trillion dollars worth the product is just stuck offshore. Tell about that .

in voluntary warehouses. Suddenly container ships in voluntary warehouses. You know, i'm tracing in the book, uh, the passage of the single shipping container from a factory in china to a warehouse in mississippi.

This is the most important shipment in the history. The start up company based on mississip called glow, run by a gun haggan Walker, and having Walkers got this deal with sesame street to make these light up bath toys. And this is his first order that big enough to fill a forty for shipping container.

And first, you know, the Price of moving a container of goods from the west, from a coastal china to the west coast to the us, goes from like twenty five hundred box to north of twenty five thousand dollars in the space of a few months. And then by the time he manages to get his stuff on border ship, there's fifty, sixty, seventy ships just floating off the two parts of lost Angeles and long beach. These are the two parts that collectively, of the gateway for forty percent of all imports reaching the U.

S. By container ship. And there's just not enough space on the docks for them to unloads. So they're stock floating for sometimes for weeks.

So do we not have enough ports? Or was IT just a shortage of port workers and truck drivers and railroad cars and even shipping containers themselves? S that LED to this problem?

It's a little of each of these things all at once, but it's important, understand that the shipping industry is basically unregulated cartel, right, made up of international companies. There are all foreign companies. They're organized though there are scores of them into three alliance think like airline alliances, like your star alliance are your one world or what I and these three lies they control like ninety plus percent of the traffic across uh, the pacific.

So in the same way that you know it's not an action that you get on your united flight and every seats taken and are looking for volunteers because they're managing so carefully, they want you to be anxious about getting space on that flight. So if you really got to make that trip, you pay whatever cost. They have a similar that shipping Carriers have that relationship with the people who are dependent upon a space on their ships.

So you've got limited capacity. And sorry to back up on you, but there was A A massive miscalculation by much of international business as the pandemic begins, right, we get the first shut downs in china. We then get disruptions in europe as the pandemic spreads are and we get team people throw out of work, unemployment shoots up to fall percent April of in and people running businesses react to this um as if you know this is familiar okay, this is a this is A A terrible downturn like the great financial crisis and then the great recession.

We just need to slash orders for everything because people are at at work. So spending powers drawing up. Well, they had part of IT, right? Yeah, we're not going to offices that there is no need for the sandwich shop on the corner.

I were not going to the gym. James are shut. But guess what? Was now stuck at home cooking, you know, twenty seven meals a day for a cooped up children.

We need more kitchen appliance can go to the gem and our buying pitons and sticking them in our basements. We need more those a lot of the stuff s made in china. So there's now demand for these container er ships to Carry them across the ocean.

And a lot of the containers have been sent out to places that are bearing face masks and and gowns and and other ppe, and they're headed in to places they don't have that much stuff to send back to china. So the stacks of containers in west africa, in parts of the amErica that don't do that much free with china, just as china is turning on to make our palatine, and are AR backyard barbecues and tramples to entertain our cooked up children. So shipping Price skyrockets.

And he turns that we actually need more stuff, including ships, than we needed. And at the same time, to your earlier point, we got truck driver sick. We don't have as much truck driver, so we don't have as much truckin capacity, dark workers or six, so we don't have as many people to load and unload.

Warehouses are now full because we don't have people to move this stuff at a warehouses. We don't have places to put all these boxes they are coming into. They are piling up on the docks. The whole system just bugles.

It's amazing and it's it's so hard to imagine what IT was like um before because we know how I turned out and today IT feels like how could any of met one have made that miscalculation is so obvious that demand for goods over services was gonna Spike but at that time, not a lot of people so that coming did they IT was a pretty big calculation.

IT was a big calculation, but IT also those back to what we're discussing earlier in terms of shareholder primacy. You know, one of the things the toyota really valued in its own version of Justin time is you have to take care of your suppliers. If things are bad, you don't just say, well, you we just own you.

We don't need any of what you're making good luck to you because then when you do need them, they will be at a business. But that's effectively what we did with computer chips. You know, why can't you find a car that's got a computer chip? Because the auto companies will the other companies made a series of terrible cat this methods.

First of all, they didn't understand that they didn't actually matter very much to their ultimate customers, the chip fabricators in taiwan. They thought, well, you, we're four or G M, we know need on whatever like they have to take care of. No, they don't.

They're taking care. Google and apple, that's most of their market. So and even that those companies can get chips.

So whatever chips they can make, they're going to the iphone because that's the big customer. Sorry, forward your last in line. Well.

not cause the small md devices and and some real important life saving devices that could not get manufacture cording to you about correct.

But when you tell a chip manufactured, hey ah sorry, we don't need any what you're making, what will call you when we do, they turn their fabrication plants off line and you can just turn the switch on to get that going again. IT takes billions dollars. IT takes lots of materials.

IT takes months. So once we realized that we've grossly miscalculated in terms of running the economy, we then have to wait to get back up. And that does go that, that is an indication of how we've done just in time.

We haven't thought about suppliers as your partners there. Just suppliers are just cost to be contained, and the same goes for human beings. You go back to what you're saying about machine earlier.

What are things what kinsey did in terms of protez ing for lean is they turned human beings and human workers in the h we don't need you. Well, we're just going to make you flexible. You you're an independent contract or now congratulations, that effectively means we own your time.

Or if you're a warehouse worker or you're a worker in a in a plant that makes something like you, you engage in biometric turing. If we need you, we need to know that we can tell you the day before that you have to show for work so you don't have control of your time. You can go on vacation, you can schedule, you know, a doctors .

appointment.

but you don't paid unless we call you well, guess what? The minute unemployment drips. To historic standard, people say, you know what? I got other options. I'm gna pursue them because I don't like being treated like inventory.

And you go back to Henry ford who understood that know Henry ford is not a failure to be lionize right racist to sai cross organized labor. But he understood that you want workers showing up, giving there all you got to pay them. Me doubled wages in nineteen fourteen.

Some people call them a comes. He said, I just, the guy wants to make products reliably. And any business promised on the low wage labor is inherited unstable. We broke that connection. So so ultimately, we lost. We have these labor shortages, we love to say, but we're really we ran out of people willing to continue to sign up for the deal of downgraded job.

So so let's talk a little bit about that because I I constantly harp on this point and I feel like so many people don't understand this. So the decade leading up to um or maybe the two decades leading up to the pandemic post nine eleven, the bush administration changes the rules for who can stay in the united states if they're here in an education VISA.

Um we reduced the number of legal immigrants who take a lot of jobs that americans don't want right then we have the pandemic and so there's no traffic around I know arguably IT was close to two million people in the us. Die of of covet. I know the official numbers are a little less than that, but IT feels like, um that's a conservative guess.

You have millions of people on disability, millions of people who still have long coded all these different factors come together. And IT creates this massive shortage of workers in the united states. Of course, unemployment is four point something, percent.

We don't have enough bodies. How much of this what you're describing is just in time inventory for people. How much of this traces back to that approach?

A lot of IT, you know. I mean, I think we heard a lot about how are are yourself selves not showing up? Because aren't enough truck drivers willing to do IT as these guys? I just lost their mother to do their jobs. I actually spent three days riding along with a long hall .

truck driver .

from a tough, it's always been a tough gig before deregulation under Carter. People have talked about raging, but a lot of that actually started Carter and seventies. The teamsters weren't charged. Okay, here's another institution not to be alive.

You know, they have an unsavory history, but they they demonstrate the power of having a union because, you know, you're away from your family, you're on the road, you worry about where to park. You know, that was always true, but this guys got paid really well. I think this was a truly middle school to upper middle class job.

Now it's basically a working poor job and use your away from your family more than ever. Uh, you are really at the mercy of of too much competition in that particular industry where cking company are casually under cutting one of those very hard for any of them to make any money because you're so many of them. And so they rely on being able to squeeze and that model work so long as there are huge numbers of people so desperate to do anything that they will sign up for.

You know going back to earlier discussion of of the mortgage industry before the great financial crisis through these predatory schemes, reminisces of supreme in the recruitment of drivers and a lot of drivers sign off on this pitch that the lure the open road and we're going to paid for your training program, but then you're indentured to the company that paid the training program for six months or sometimes two years. And by the time you figure out this is actually a really bad deal, i'm not getting paid by the hour. I'm getting paid by low delivered.

I'm spending hours and hours just waiting at some point for my container to be available on stuck outside some warehouse that's also short of employees waiting for them to unload my free so I can pick up the next. I do the math. I'm actually working barely minimum wage, in some cases, even below lot of people quit.

And so we have this turn where even a successful trucking company has to replaced the entire fleet in the in the space of a year in any other industry that would be a scandal in trucking. We just accept that that's how IT goes. Well, that breaks down once unemployment drops below five percent.

You one of the first in any things about the combination of the pandemic and the cares act that were sending people pretty decent size checks enough that they can live on for for a couple of months, the highest level of new business formation in american history, twenty, twenty one, twenty two. IT seemed like a lot of people figured out, hey, I got to find something. And if they're not going to pay me, yang, going to figure that out myself.

And whether IT was creating new apps or just their own little businesses that they were running, IT looked like a big swath of a middle, amErica said, I don't need one of these high efficient corporate jobs for that sort headache. I can figure something out myself. How much of the labor shortage has been driven by people just kind of up skilling in and saying to corporate america, hey, I think I have a shot at at at generating as much as you're paying me.

I think a lot of IT, I am certainly the supply chain, you know the Normal see that were customer to where you click your buy button on amazon and you wait sometimes just a few hours and something shows up your door, were invited not to think about the army of workers behind that.

You know, that's based on large numbers of people being so desperate for a job, especially a job, if that happens, have health care, that they're not looking around for anything else. And they're aware that whatever else is out there probably represents a downgrade if they're able to stay in their home and support sports, their families. I mean, we know that lots of people who are working in, you know, places like, uh, walmart warehouses, moving packages in giant amazon for film centers qualify for food steps. I mean, they need a federal subsidy, uh, courtesy of us, the taxpayer, just to keep themselves fit so they can do those.

Do you remember the make help line back in, I want to say, twenty twelve, twenty thirteen, I recall a bunch of news articles that maDonna would help people and then help them, like walls mart, get all this aid. And IT makes you think, wait, you're spending all this money lobbying to keep the minimum way low.

So if you're a if you're a private company, why you asking me the taxpayer to subsidize your employees? I don't care if the burgers there sense more pay your clients and the faster anything about that. I have a vivid recollection.

I want to say it's twenty fifteen of amazon announcing we're going to pay fifteen dollars an hour and scooping up all the best people. And they left places like walmart rumbling. There was a period where walmart shelves were empty.

The stores were dirty. I think amazon had enough money that they said we don't care about a couple of box. Let's just this is a resource. We're onna, capt. We're going to monopolize .

this resource. A lot of that was reflective of the fact you have huge numbers of people who are just so busy doing two jobs, driving vast distances to keep the job. They've that they don't have time to think about what what alternate career can I pursue that's like thinking about going to the moon um will suddenly the pandemic shot everything down and you are now having to contemplate whether you want to or not, some other way to feed your family.

That was such a shake up at the same time that we do have emergency unemployment benefits that are taking the edge off and allowing people to continue to to spend on their basic needs. And we have unemployment drop so much that suddenly people who are not unaccosted to thinking about alternatives, you know what else is out there? Let's check in out. Maybe I will start a small business.

You talk about the meat packing industry, uh, in the book that also ran into not just shipping problems, but worker problems. What made the meat packing industry so unusually, uh, at risk to, uh, supply chain problems?

Well, IT is a perfect example of this engineered scarcities, the term that I use where because you one of the types of deregulation that we've had has been so disastrous because we are eliminated anti trust enforcement, this goes back to raging, continues through every presidential administration on both sides of the air until this break under biden.

Ah we've got four companies that learn control of eighty five percent of the meat packing capacity in the united states. I think that's the number is higher than during the robber baron era. So guess what? They're setting themselves up so that the cattle ranchers in selling their animals have few alternatives, which keeps Prices low on the front end.

The people their paying have no pricing power. So they're getting the animals cheaper at the other end, where they are distributing to restaurant to consumers, grocery change in the lake, they they are benefiting anytime there's a shock to the system. So they getting record high retail Prices are our wholesale Prices that are translating into retail Prices.

At the same time, the cattle ranchers are going out of business because they're getting a smaller slice of the dollar that we're spending on, on on beef and and they're working the system so they get the true administration in the first way of the pandemic to drop an executive order that says slaughterhouse workers are essential. Workers have to continue showing up, even when local public health authorities say, actually, the slaughter houses their super spread ers. What I discover in researching the book is the time that so I tell the story, this one woman, tin I, who is an immigrant from me, anna, who actually dies, and the jb, while SHE contracts cover IT and dies the first wave that he worked in A J B S.

Slaughterhouse outside a denver at the time that the troubled administration is parroting industry talking point. These people are essential workers if they don't keep shown up for work, we are not going to be able to get fed. The me packers are actually sitting on record volumes of frozen meat, and they're boosting their exports, including the places like china. So we essentially sacrifice the lives of these slaughterhouse workers not to feed americans to to continue to fund monopoly profits to to a handful companies.

So so let's talk about those profits um and I want to talk about a data point in the book when the phrase greed flaw first started circulating in mid twenty twenty one, I had a list of fifteen things that were contributing to inflation and I think I had great inflation was thirteen I was pretty sceptical of IT yeah and then as time went on, there was more and more data coming out that said, hey, we're in record profits and.

IT looks like a lot of this is is a little opportunistic, the data point that you have in the book. Um by the time inflation is peaking in june of twenty, twenty two, more than half of the Price increases in us goods, we're going to um increase profits. A mere eight percent found its way up to workers. So IT seems like the great deflation narrative turned out to be pretty right one hundred percent.

And the thing is this was not a surprise to anybody listening to the earnings cost because the executives of companies like Roger, you know, the giant supermarket chain publicly, well, you know, we're having to shell out more than all the supply change disruptions. Our Prices are going up. So unfortunately, our cost meanwhile, they're telling wall street analysts, this is fantastic. You know, this is the greatest opportunity we've ever had to jack up our margins because everyone's rising, lifting their Prices and collectively. So nobody y's going to point to figure out us historically.

people don't realize this. Historically, stocks have always been a great inflation hedge because when Prices rise, well, IT just gets passed along and then profits rise even the same or more. And if your stock Prices a function of your profits, well, guess what? It's a great heads against inflation. It's not gold. It's stocks that are the good inflation.

I mean, the question is, and this is something I get to in detail, the book questions. Are we talk about the industry with the truly competition or not? If there's competition, then you're limited in how much you can jack up Prices because presumably you're competitor. So all except a slightly lower margin for greater market here. That's actually free market capitalists.

But I didn't feel like that happened in twenty one or twenty two IT kind of felt like, hey, known is gonna notice if I make this package a little smaller or if we raised like everything is just gonna get lost in this giant surge of Prices. And who's gna really know.

but we need a lot of this, turns out, is market concentration and various forms of collusion. I mean, oh what what a coincident every time one airline lifts their fair from new york to L A. The other ones go head.

Ah you know how interesting that you know this just happens to be how IT works out you know every single time. Um you know why is that we don't have enough competition and there's no transparently in the marketplace. And everybody knows that if you walk into the casino thinking that you're the smart s sky, well, you're the soccer because there's a lot of data Operative behind you and that's the world that we're living in. This is this is not competition most of the time.

And we have since learned that a lot of the algorithms and software that are being used to set Prices also contribute to that conclusion, most recently with landlords and rents that, hey, these guys have kind of figured out that this algorithm is is colluding to drive retire because we have access to all this data. And oh, we know what those guys are charging and we know what those guys are charging. So we could we could bump up to that level. And it's IT. Seems that if you're pulling software in charge and all the landlords are using the same piece of software.

hey, that very much looks like collusion. Yeah that that's absolutely right. My favorite example this recently is we just have this dockworker strike on the eastern golf across the united states.

And there were all of these breath less stories. But this is such a terrible time for the shipping industry. Know they can move any this cargo will guess what happened after they settled the strike.

The stocks of the companies that are publicly traded plute, why do they plum? Because anybody who understands the container shipping industry gets the engineered scarcity is the name of the game. And when there is a shark to the system, if you can't move cargo, they're gona jack up freight rates globally, way access of the underlying cost.

So the mark, oh no, the strikes over. We're back to Normal. That's my chance to to sell off in the same way that we've got the the hot in yemen opening fire on vessels headed toward the sus canal, effectively shutting the canal, making ships that are going from asia to europe go the long way around africa. Fan analysts tell me that probably increased costs for shipping companies by maybe forty percent, this increased dial costs, no more labor costs will shipping rates or up three and four hundred percent that's fatter margins. So when there's a shocked to the system, if there is no competition that gets expressed as pricing power, which means we .

all pay more. Since the the new administration has focused on the industrializing, the united states ensuring or uh in how sharing or what if you want to call IT um what is the state of manufacturing reassuring is a phrase I was looking for what is the state of of bringing manufacturing back two united states? How long will I take before we can have um a little more resilience built into our own system?

Well, we're gonna get more resilience. You know over the next decade or or two, you where the globalization not over, by the way, like my book is not a call for making everything in amErica that would be uh extremely expensive， would be branching and disruptive ah IT is a call for grey actual resilience alongside this kind of ruthless sufficiency. And it's not real efficiencies as we've discussed.

It's really about Carrying to these metro. So you know in strategic industries like semiconductors are medicines and the medicines supply chain, electric vehicles, were the administrations now handing out tens of billions of dollars in service? We do see a real construction movement and actually been interesting to see that a lot of the investment is going into places there were hit hardest during the so called china shock. North CarOlina, michigan know getting a arizona getting a lot of this investment into these emerging future facing industries. In other industries, especially where labor costs .

still matter, it's unlikely to back the so furniture. We're really.

really again, but instead of making IT all in china will make him in central america, will make him in mexico, will make him in india. So there's a hedge against realize. I mean, it's not that we're abandoned in china, by the way.

I mean, china is going to continue to be a very significant center if there's a sort of portfolio rebounding. I would put IT to you this way. We've talked a lot about walmart fifteen years ago. If you were a uh uh if you had a product, you are trying again on the shelves of a walmart superstore and you flew down a bent ville, arkansas to pitch the wall mart buyers on your product, you have to go see them. They don't come years like visiting the pope, get your appointment.

They would ask you where you making this product and if your answer was something other than china, you had a problem because they would assume that you couldn't be getting the lowest possible Price you weren't making in at the most efficient scale. Well, now if you have a bton vill, you got your product. Walmart is where you're making IT.

And if your answer is only china, you have a problem they want to hear, well, what's your backup plan? You know we don't want to get stuck waiting for container ships to to l to serve our customers in, you know, oklahoma city. So are you making IT in mexico? Are you looking into india?

Are you move in some stuff to there's gotto be a greater mix and that, that is happening to an extent, but I am dubious that IT will continue to happen the longer away we get from the pandemic. For the simple reason that you you're an incentives guy. I'm an incentives guy. The incentives for a publicly traded company are still quarter by quarter, lowest possible cost. So if you're the C E O of a company and you're saying, well, let's spend a little more for redundancy, let's have a second factory in mexico if you're deluding next quarter earnings of the quarter after that, there's S A good chance you won't be around to get the praise whenever the inevitable next shock materializes. That will revealed .

that that a good strategy. So globalization, resilience, ces, not as important or undamned as we might have been LED to believe over the best few.

I mean, there certainly a change to the talking point machines now talks about just in case, instead just in time. But we got a watch to see if these lessons will really get learned because the shareholders interest is still with us.

What are you watching these days or listening to what's keeping you entertain?

I've been really watching sonos washed to came out.

he hold up.

It's great. It's ilaria. I forgot how funny was always very funny.

So well acted. I we see just really well. And I also revealed succession from beginning. And I tried .

a couple of times, yes, succession I like by the second episode. It's like each one of these people and I know that everything i've read the writing is great to this is and I just couldn't I just couldn't find myself, you know, interested in anybody. It's like, weird. You don't like this, like no character you like as a guy .

who lived through one of the most grateful of all time, which is a well, time, yes, I was in a time or no, I was.

This is the what's left of while buying half post when I had a senior leadership position in the news um yeah that was so interesting to there's a merger ah in the fourth in the last years right session where you've got like the public facing like synge's magic and meanwhile are these two characters who are like screw and they're just desperate to concentrate this deal as a way to kind of wipe away with their problem hand, keep the whole ponzi scheme going. That was so true to me in terms of what I lived through that yeah, I am willing to. You're right. These are not .

synthetic, everybody. M, I watched during the pandemic that I hadn't seen in real time, and I was just one of the things what you never saw, this was mad men, was sort of you, we watching the pronouns, was me watching mad men for the first time. And even though there are some complex characters that have good, good sides and bad sides, there are still people, you rude, foreigner, empathetic.

And I I just found IT to be, how did I miss this the first time around? 说 了的 yeah really let let's go on。 Let's talk about your mentors who helped shape your fascinating career.

Ah well thanks for that. I I had a couple of uh old school newspaper people SAT next to in the first news er I ever worked in, which was at the anchor daily news. Last was economic mike do again and reported in china to me, they were veterans, and I just listened to them working their sources on the phone.

You given him a hard time holding people to account. And I just thought I was so thrilling. And and I IT IT really affected how I go about IT, how dog they were when I got to the washing post. I was lucky enough, spend time with Steve, carl who's one of the all time grades um and every time I would talk to him about a story I would come away with like a new understanding of the historic significance of whatever IT was that I was covering and I ve always tried to think about every story is like, what does this mean as like a letter to somebody future? What is this signify the broader than just the thing that i'm writing about that I thought the washington post in that period was very good.

Lets talk about, uh, books. What are some of your favorites? What are you reading right now?

I'm reading isabel Walker sons are the warmth of other sons, which is a fantastic narrative history of a the black, a migration from the south to northern cities, which is in, and a period that I realize, I just don't know enough about but it's .

just so important position .

war pro war into one thousand nine and seventies and it's just so significant in terms of affecting the politics and of course, race dimensions and in class and in american culture. And it's it's it's just a beautifully uh, written book. You know, I ve always loved stein back.

I was very influence early in my career by by Norman Myers, non fiction. I like this idea of like the best work is is the reported stuff that unfolds like a novel. The execution of song had a great effect on me, a tob wolf stuff. I feel like i'm just .

dating myself. So so when you say time of the right stuff or by fire.

that is fantastic. A yeah I I like his victim. I think my fire, the one is really entertaining in in very simple ful book and lots of i'm a socket for Michael Lewis. I mean.

there's anything he right? Yes.

the big, sure. Certains, I loved the money ball. A big body. Yeah.

no money ball was. In fact, I just look at his past half works, each one more fascinating. The next, the undoing project was absolutely fascinating, really about conomo and diversity and essentially the invention of behavioral finance, which can't, by the way, the if you read the introduction of the book, you find out that after he writes money ball, he gets an email from dick valor and Cassie in who said, hey, everything you're talking about was diversity economy.

All of the the alternative of looking at data dates to them in first in israel, then in um the U S. You should talk to you should talk to them ah oh in P S A most diverse is no longer with us. His wife lives right up the street from you at berkely.

Such and that's what LED to that really if you're interested in a strong recommendation facility OK. Um our last two questions. What sort of advice would you give to a college grad interest in a career in in journalism, in financing, in economics?

What what advice would you give? It's president just right to find something that allows you to just write and write and write because there is just no substitute. You can't develop the muscles without doing IT.

A is simple as that running a deadline is super useful. Covering a beat is incredibly use for in terms of helping you developed judgment. But whatever you're doing that involves finding stuff out and writing will make you Better at IT.

And our final question, what do you know about the world of investigative reporting, economics, journalism in general? That would have been helpful thirty or forty years ago when you were first getting started.

Um the power of wonder to deeply reported cases is much greater than the overreporting spreading. Two thing that I think most of us one were tend to do we don't have the judgment developed yet to say, like i'm gna stay right here and i'm going to dig deep into this were constantly, well, what question my editor ask that I won't have an answer to, therefore, I have to have to covered the landscape.

I have talked to twelve companies would actually be Better if you spent more time with two carefully selected, uh, companies and and the often times the thing that can elevate a story to one that people will really remember is like, well, I got enough that I could write. I now know the story, i've got my data, i've got some quote. But now, now i'm gonna find a character.

Now i'm gonna find in a place where the sense of place is going to draw reader through, and it's going to unfold like a story that we might tell, somebody who's not deciding to think about financial economics, they just want to know something interesting. And all that come, all that back story that i've developed by doing my reading, by looking at reports, by talking exports and asking questions that might be done. That's going to come to life now through this great example that i've come up.

Peter, really fascinating stuff. We have been speaking with Peter as goodmen. He is the global economic correspondent for the new york times and the author of the book how the world ran out of everything inside the global supply chain. If you enjoy this conversation well, check out any of the other five hundred and four we've done over the past ten and half years.

You can find those at itunes, spotify, youtube wherever you find your favorite podcast, and be sure to check out my new podcast at the money short, single topic conversations with experts about your money learning IT, spending IT and most importantly, investing IT. Add the money in the masters in business feed or wherever you find your favorite podcast. I would be remiss.

I want to thank the crack team that helps put these conversations together each week. Nick falco is my audio engineer. On a look is my producer.

Sean russia is my researcher. Sage bowman is the head of podcast here at bloomberg. I'm barry rattles. You've been listening to masters and business on bloomberg radio.

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