Start spreading the cash: Michael Bloomberg runs for president

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Hello and welcome to the Intelligence on Economist Radio. I'm Your host, Ed McBride, filling in for Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. The video sharing app TikTok has been taking the world by storm. As a result, its Chinese parent company is valued at $75 billion. Some American officials see a sinister side to its success, while other tech firms see a daunting rival. And Switzerland has maintained a strategic reserve of various foods since the 1920s. But when the government decided there was no longer any reason to stockpile coffee, ordinary Swiss dropped their mugs in horror. First up, though, The field of hopefuls jostling to be the Democrats nominee for president is already crowded.

What happens in 2020 is going to determine the direction of our country.

Bombers and everybody here knows it.

Climate change is real. It is a crisis.

The core values of this nation, our standing in the world, our very democracy, everything that makes America American is literally at stake.

But the entrance of Michael Bloomberg as a candidate could change the race. On Sunday, he announced his run via a campaign ad. It features pictures of him as a boy scout, spins the story of him building his media empire and extols his 12 years as mayor of New York. Raising teachers salaries and kids graduation rates and creating a more open and livable city for the millions who call it home. Mr. Bloomberg is the world's ninth richest man. He's spending more than $30 million on ads just for the first week of his campaign alone. A splashy start that's drawn fierce criticism from his rivals. We need is a dynamic democracy, not some billionaire who decides that he wants to run for president of the United.

States because he's a billionaire.

Mr. Bloomberg is a bit of a political chameleon. He was a Democrat for most of his life, but was twice elected mayor of New York as a Republican. But As a Republican, Mr. Bloomberg was liberal on social issues like gay marriage and immigration.

Since the days of the Dutch, wave after wave of immigrants have transformed this city. They have flourished because of the culture of tolerance and acceptance that characterizes New York. Our challenge is to strengthen that culture and fight bigotry in any form, wherever it may happen.

He was elected to his third term as an independent, and since he left office in 2013, has lavishly supported the Democratic Party. Prior to his announcement, there had been lots of speculation that Mr. Bloomberg might enter the race. But when he spoke to our podcast the Economist Asks in September, he said that he didn't think it likely he could win the nomination.

Polls say that the most likely voters in the Democratic Party are much more liberal than I am and would not vote for me now. If I was the only one, they would vote. If I was the only one that they thought could be Donald Trump, they might. But our conclusion was you could not get the nomination.

So why has he changed his mind and is he a serious contender?

Michael Bloomberg's changed his mind, I think because a lot of people looking at Joe Biden, who's the frontrunner among the moderates in the field, a lot of people look at Joe Biden and think based on his debate performances, he's rather a weak candidate.

John Priddo is the Economist US Editor.

And they're nervous about a left winger like Elizabeth Warren or maybe even Bernie Sanders winning the Democratic primary and losing to Donald Trump. He's been fairly critical of Elizabeth Warren's policies on things like Medicare for All and wealth taxes.

Well, I think an awful lot of what Elizabeth Warren has proposed is not possible to implement and is the wrong thing to implement both. A wealth tax is probably not going to get through Congress. The Medicare for all. The economics just don't work. You could bankrupt every hospital and every doctor who has loans to pay back and that sort of thing.

And there's a relationship there between his criticism of Warren and his decision to run, I think. And yes, he is a significant figure to the race. That's partly because he has extended executive experience. He's a well known figure in American politics. I think if you could separate out the question of is he likely to win? Bloomberg's significant because I think there's a good case that he'd make rather a good president.

What does his time as mayor of New York tell us about what his candidacy will be like?

His candidacy, I think, will be highly technocratic. When he was mayor of New York, he surrounded himself with brainy technocrats and was proud of taking A data led approach to everything. Perhaps not surprising given his business background. Bloomberg being a very large provider of financial data and information and particular standout things, education reform. The city became safer on his watch. Attempts to tax soda. And the most controversial one, stop and frisk, which was a policing policy that was seen to target non white New Yorkers disproportionately.

But New York is very different from the rest of America. How will those policies that you described and his others from his time as mayor go down with the primary voters?

New York is very different from the rest of America. I could imagine Michael Bloomberg doing pretty well with upscale whites who are an important part of the Democratic Party coalition. College educated whites, less well perhaps with African Americans, less well with non college whites. Those are two groups that Joe Biden is particularly strong with. So the way that people have presented the Bloomberg candidacy is, oh, it's a threat to Joe Biden. But if you get into the demographics of who actually seems to like Joe Biden in the primary, it's African Americans, non college educated white people. Those are not the people that Michael Bloomberg really appeals to.

So what can Mr. Bloomberg do to broaden his appeal?

Well, he's done a bit of apologizing for stop and frisk already.

I got something important really wrong. I didn't understand that back then the full impact that stops were having on the black and Latino communities.

So that's part of his attempt to broaden his appeal to African Americans. He has a solid record on things like climate change, on gun control. Those are both important things in the Democratic primary. So those could go over quite well. But more broadly, Ed, he's not particularly well liked. He is in our YouGov poll, the second most unpopular politician in America, just beaten to the punch by Mitch McConnell, who's right there at the bottom. So he starts with very large negatives. Now it's very early in the campaign, he could turn those around. He's clearly an impressive figure in many ways. But as I say, Republicans, I think think of him as a Democrat and quite a lot of Democrats still think of him as a Republican.

On the other hand, he has bucket loads of money to throw at the race. Will that make a difference? What's his primary strategy?

Well, his strategy, as you say, is to self fund. He's got a very large fortune and he's happy to spend a good chunk of it on the campaign. TV ads can be pretty effective in primary states. There's a part of his strategy also which seems to involve sitting out the early primary state so not bothering with Iowa, New Hampshire, maybe even South Carolina, and then coming in later, that's a strategy that hasn't worked well for candidates in the past. Typically, what happens is already by that point, somebody has become the front runner and gets all the media attention. It becomes harder for other candidates to come in late. That said, there is a bit of a wrinkle this year that might make it a bit different. California, which has a lot of delegates because it's such a big state, is earlier than it normally is. So California comes on Super Tuesday in early March. So it's possible to imagine Bloomberg doing very well on Super Tuesday and suddenly becoming in the front ranks of candidates. But based on past experience in primaries, that looks unlikely.

How are the other candidates reacting to this new Bloomberg threat?

The other candidates so far don't seem too bothered. Joe Biden has said, well, I'm ahead in the polls. I've been ahead in the polls for a while. I welcome Mayor Bloomberg to the race. He's a significant figure, you know, a good guy and all that kind of thing. And he's right in the sense that he has been ahead in the polls for quite a long time. You know, Elizabeth Warren's been there or thereabouts as well. But Joe Biden's been strong in the polls quite consistently. Despite a lot of commentators saying that he looks like a rubbish candidate. Elizabeth Warren has also welcomed him to the race. I think she thinks that anything that makes the talk more about billionaires and their nefarious doings is good for her campaign. So they're not acting as if they're terrified at the moment.

And how is the Democratic rank and file reacting to Bloomberg's candidacy?

Well, judging by the numbers, they're not reacting that much at the moment. There's this perception among elites, Democratic elites, that the field may be rather weak, that the ideal candidate isn't out there, that all of them have shortcomings in some form or another that doesn't seem to be shared by Democratic primary voters. So if you ask them, 80% say they're satisfied with the candidates in the field, which is a historically high number. And also, Mike Bloomberg's polling is quite low at the moment. That said, and this is a big caveat, it's early. And also, the thing that Democratic primary voters say they want more than anything else is a candidate who can beat Donald Trump. And so if Mike Bloomberg manages to persuade Democratic primary voters that, okay, they may not love his past positions on Stop and Frisk, they may think that he's Too business friendly, too centrist and so on. If he can persuade them that he's the best person to beat Donald Trump in November 2020, he would stand a chance of getting the nomination. So I wouldn't write him off entirely.

So a two tycoon election is a possibility.

Two New York tycoons going toe to toe. Wouldn't that be a thing?

John, thank you very much.

Thanks, Edward.

15 second videos of adorable cats, skits and practical jokes. This is the world of TikTok pranking.

My girlfriend every day until Halloween, day one. Let's start off with the nail through finger prank.

It's what the kids are into. The app has been downloaded hundreds of millions of times in the past year. But for some grownups in America, this is a battleground in geopolitics. The Beijing based company that owns TikTok, formerly called Musical Ly, is being accused of mining data for the Chinese government.

It's a bit like YouTube on steroids.

Ludwig Ziegler is our U.S. technology Editor.

I mean, it's been hugely successful, meaning that it's been downloaded 750 million times the app in the past 12 months. And that's more than Facebook, WhatsApp and Instagram together, I think. And so it's been more successful than the social media apps we know. And it's mostly used by teenagers, kind of 12, 13, 14 year olds, so they're using it extensively. Also, it makes it really easy to actually produce videos. It has very easy to use editing tools that people can use to make these 15 second clips.

So it all sounds like good clean fun. What's the problem exactly?

TikTok was created in the US and back then a couple of years ago it was called musically and then it was bought by the Chinese company ByteDance, which is one of the kind of the most valuable startups in China. 75 billion valuation, the last fundraising round. And so politicians in D.C. who are quite paranoid when it comes to China these days, are worried that some of the data or all of American citizens flows to China to Chinese servers, and may perhaps then be used by Chinese spies to do something. American politicians are also worried that TikTok censors content it doesn't like. In particular short videos about what's happening in Hong Kong, which is true. You can't see any or I didn't find, find any Hong Kong videos when I look for them.

What do you think about that? Is the American government right to be worried?

I think it's a bit over the top. The current mood in D.C. is that everything Chinese is risky. You know, all the kind of the sanctions they've put on Huawei, the Chinese telecoms equipment maker. And so it's in that vein, yes, in theory, the way things are in China, the Chinese government probably could get some of that data. TikTok or ByteDance denies all that. They say that all the American data or data on American citizens resides in the US that the moderating of the videos is done in the US by American citizens. And so that there's enough kind of distance between ByteDance and TikTok. And the CEO of TikTok has said if the Chinese government ever were to ask him to give hand over the data, he would say, no, I don't think that's going to be enough to satisfy the worried souls in Washington. They will probably force ByteDance to put some more distance between TikTok and itself. And the way that could work is basically by creating kind of a separate company versus separate board and, and get other people to perhaps certify that the data isn't being sent to China. Or they could force ByteDance to divest TikTok, but that would be taking it very far. We're not there yet, I think.

Where are we so far? What have American officials been trying to do about that?

Today they've asked the relevant authorities, agencies to look into the takeover of musically kind of the Predecessor app to TikTok and see whether that was kind of correct, because it wasn't. It wasn't signaled to American authorities and they say it should have been. So they're looking into that, but it's not clear what's going to come out of that.

You've mentioned how American officials are worried, but I imagine with those sort of download numbers, lots of American tech companies are worried too.

It's an interesting case. So we always think that these big American tech companies like Facebook or Amazon or Google, they're unassailable. And TikTok kind of has shown that that may not be Zuckerberg and Facebook, they clearly, clearly work. So what they did, they did the usual thing. They launched a TikTok clone called Lasso at the end of last year. It's not been very successful so far. What else are they doing? I mean, they usually, when they fight an upstart competition, they try to copy the feature. So a developer in Hong Kong found some code in, I think it was Instagram that would essentially offer the same feature in Instagram that offered by TikTok, the video clips, the short video clips, doing all that and usually what else they would do, they would try to buy TikTok. I mean, remember they did that with Instagram itself and they also did that with WhatsApp. But in this case TikTok is owned by a Chinese company. It's much more difficult for Facebook to buy TikTok by now. Also be very expensive. So my guess is it actually may happen that TikTok could become a serious competitor to Facebook.

Given all the challenges and the competition you mentioned. Do you think it's just a fad? Will it last?

Seriously?

I don't know. There are arguments that it may be a fad. It's kind of pumped up by lots of ad spend. Then again, there have been cases, especially in China, of companies that have used exactly that strategy to break into markets like social networks, payment services, and that has been successful, so remains to be seen, I would say.

Right, but in the meantime, you're compulsively watching, right?

No, I've stopped using it and I will uninstall it because it's too, too addictive and too much of a time sinkhole. And actually that's, for me that's, that's much more of an issue than, than all the other problems we've, we've talked about. I mean the, the amount of time that's wasted on this app must be, be huge.

Ludwig, thank you very much for joining us.

Thank you.

The Swiss have been known for self reliance since William Telled, a tyrannical Habsburg official with a crossbow laying the foundation for Swiss independence. From the 1920s onward, the landlocked country has kept stockpiles of food, meat, medicine, animal feed and cooking oil in large quantities to prepare for any potential shortages. But some shortages are more urgent than others.

The Swiss Federal Office for National Economic Supply announced in April a plan to stop stockpiling coffee, which they had done since the 1920s.

Wendelin von Bredow is our European business correspondent.

The Swiss are stockpiling lots of coffee. As much between 15,000 and 16,000 tons at the moment. It's fairly pricey to stock all that much coffee, which is why they thought it's an obvious cost cutting measure that they should do.

And why are they stockpiling it at all?

It's something they've done since the First World War because they are a landlocked alpine country which lacks essentials such as rice and sugar. And so they just want to have some supplies in case there's a major disruption, such as a major flood or let alone a war or something which could endanger their supply of vital victuals.

I guess the point is that the authorities don't think coffee is vital anymore. How did that decision go down with the Swiss themselves?

Switzerland's 8.5 million residents sip around 9kg of coffee per person annually, which is triple the British consumption. I suppose the British are tea drinkers and double what the Americans guzzle, who seem to constantly have a coffee cup in their hand. So they really do love their coffee. And Swiss coffee tends to be also very good. From my experience, they basically can't imagine starting a day without a cup of coffee. And so when the government announced these plans, there was a huge outcry on Twitter and the newspapers and people said, no, you know, we basically cannot function without our daily fix of coffee. The outcry was a such that last week the government decided to postpone the decision on scrapping stockpiling. And many think it'll just abandon the plan altogether.

How do you even store 15,000 tons of coffee?

The way it works is that importers of coffee such as Nestle store the coffee in several places. You know, wherever they store other wares, they pay a levy on imports of coffee, which then finances the cost of the storage.

Well, I guess the broader question is whether or not this stockpiling idea is outdated in the first place.

It's not only terrible disasters such as floods or wars that can cause interruptions of supply. For instance, last year the low water levels of the Rhine river led to bottlenecks in the coffee supply chain. And the Swiss were very happy to have these stop bys because they could be used in order to bridge that bottleneck.

So it sounds like you think this furore will simply go away and everyone will have the 15,000, 16,000 tons of coffee that they so desperately want to keep.

It looks to me because the decision has been so unpopular, unexpectedly unpopular, they haven't finally said that they will not cut it or will not abandon it. But from what I heard when I talked to people in Bern, it seems that that they are actually quietly shelving the plan.

Venden, thank you very much for your time.

Pleasure.

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