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This is Everybody's Business from Bloomberg Business Week. I'm Stacy Banick Smith.
And Max, 2025 is coming to a close. It has been quite a year. Honestly, very hard to process all of it.
But, you know, here we are. This is my favorite time of the year because we get to break the format. We get to do different things on the show as we process.
Yes. And you know, we're looking out over this year and we have to ask ourselves, like, what are the big themes that have emerged in the economy for 2025?
Well, Stacy, you and I knew that we had to assemble.
Too big for two people, or even too big for Bloomberg. As big as Bloomberg is, we needed an elite team that would cross many newsrooms and many genres of the greatest podcasters. We sent out a kind of bat signal across the economic podcasting world. We like to think of it as the legends of pod.
And here they are. We have Tracy Alloway, seer of markets, keeper of the VIX, and host of Odd Lots.
Keeper of the VIX. That's a new one. Thank you.
If Tracy goes on holiday, there is no VIX. That voice you hear is Felix Salmon, economic sense maker, the king of context, the host of Slate Money, and our colleague, contributor to Bloomberg Weekend.
I'm Bloomberg Ideas and Culture. It's very exciting.
And last, but definitely not least, the great Robert Smith, economic story seeker, able to break down the economy in a single minute, contributing host for Planet Money, and of Pushkin's new business history podcast.
I'm the only one with the visitor's badge here. I'm very excited.
Now, we've assembled you all to talk about the year that was 2025. And we thought we would do it by looking across a bunch of different categories and different parts of the economy. But before we start, because we all deal with numbers a lot every day, we thought we would have you all pick a number. One number that you thought summed up or distilled some part of the 2025 economy. Tracy Alloway, keeper of the VIX. Let's start with you. Number of the year.
Okay. Well, I was kind of torn between selecting a number that was like a little bit more unknown versus one of the big giant market cap numbers of one of the big tech stocks that just keeps going up and up and up. But in the end, I went with the first one. My number is 40%. It is the amount of 2025 US GDP growth that is estimated to be generated by AI investment.
So nearly half the US economy is now driven by AI capital spending.
No, no, no. But it's actually... Wait, wait. But it's a bigger driver of the US economy now than consumer spending growth, which is crazy. But consumer spending is still like 20 times bigger than AI.
I'm not sure anymore, honestly.
Yeah. No, I mean, if you're looking at what is one of the great things about capitalism is that people don't care about large numbers. They only care about growing numbers. And so if you care about what is going to make the US economy even bigger than it is already.
I think that is true. And the US economy has grown, what, on average around 3% a year, which is amazing, right? 3% adds up to this enormous success that the United States has had. And so the components of that growth, of the 3%, is incredibly important because it's different every year what is driving the growth of the US economy. So in that sense, like in terms of what's driving the growth, yeah, this has been an AI year. Are we going to spend the whole time talking about AI? Because I feel like we could, like.
At least 40% of our time, I think, is safe to... Okay. Felix Salmon, what is your number?
My number is $115 million.
Someone... Is this like an art? Is it like a painting or something?
There was a painting that sold for $238 million. So roughly half a Gustav Klimt.
Is that your annual wardrobe budget?
That's really... I was going to think an apartment we can see from here. It is none of those. It is the legal bill that Charlie Javis managed to run up in her legal fight against JP Morgan. Well, actually, technically in her legal fight against the US attorneys who were prosecuting her criminally for doing all manner of criminal things when she sold her company to JP Morgan. But because JP Morgan had like directors and officers insurance and she was a director of an officer or something, she got JP Morgan to pay all of her legal bills. She went to Alex Spiro, who is a friend of the pod, I'm sure, who is Elon Musk's lawyer, Elon Musk's lawyer and various other, you know, people like that. And he managed to bill out at $2,100 an hour and run up 15... $2,100 an hour.
Ran up $115 million of legal bills, which they then presented to JP Morgan and said, 'You have to pay this.' After losing, you know, even more than that on buying her company in the first place, now they have to pay the legal bills to send her to jail. It's an amazing story.
Wait, I'm still stuck on $2,100 an hour. I just feel like I'm in the wrong.
It's the $100 added to it. It's kind of a tip. It's a tip, which as we know is going to be tax-free.
Wait, what did she do? I like honestly I have trouble keeping straight the fraudulent fintech companies from the not fraudulent ones.
Some kind of fintech thing, right, Felix? She had this company that claimed to have millions of customers of people with student loans and that she would help them optimize and refinance and do all of the and find the good deals and the government forgiveness and all the rest of it that you can that you're looking for when you have student loans. She did not have the four million customers that she promised JP Morgan she had. She had like 12. And so yeah.
That was the end of that. It was a breakout year for Alex Spiro. That's kind of he did. He spread his... He's like no longer even the Elon guy. He's got a whole...
I'm gonna charge what I'm worth after listening to like motivational tapes in the car. He was like, you know what? I'm going to make it $2,100. Robert Smith, number of the year.
My number is 2.24. It's going to be impossible to guess, but think global.
And think it involves sex.
Oh my gosh, Robert, are we allowed to do that?
Is this the total fertility rate in some country?
It is the total fertility rate of the planet.
2.24, meaning the average woman has 2.24 kids. It is barely above the replacement level, which is 2.1. It's been going down for decades.
Or a hundredth of Alex Spiro's hourly work.
Exactly. Right. That is how they measure.
I appreciate that. I'm going to... Yes. And so it does appear that during my lifetime, may it be long, the globe will stop growing in population and will begin to decline.
I believe that this was also the year in which more than half of the planet lives in a country with a TFR of less than 2.1.
Total fertility because China now has a total fertility rate of less than 2.1. And once China flips, then you have more than half the planet.
Do you remember in the '90s we were always told that overpopulation was the problem?
And now we have Elon Musk obviously saying that we have to have babies to save capitalism.
It's a big about-face. There was also like the Malthusian theory, remember? Like there's we can't run out of food, like the population will self-correct. I can't really get out of that mindset and into the mindset of like now we've got to make more people. But you have to start thinking like we don't have an economics profession that has ever dealt with shrinking population globally. Like what is what? Yeah. For one country, right? But Korea is the really tough one.
But no, I think that Elon has the solution to this, which is pay every woman who has a baby $30 million and then that will be enough of incentive to get people to have more babies. I don't know if I can quite get behind that method.
Elon, of course, only does it for women who have his baby, but in principle it scales.
I'm kind of depressed about this, Robert.
One of the most interesting debates in the world right now is the one about is it good for the planet to have babies or to not have babies? Because for the past 20 years or so, everyone has been told that the carbon footprint of having a baby is absolutely enormous. Especially once you consider the carbon footprint of like the babies that they will wind up having and so on and so forth. And that the best thing you can do to save the planet is to have fewer or even no babies. And now for the first time people are coming out with actually no, we need to have children otherwise we won't have the people who are going to be necessary to solve all of these problems.
It will rapidly shrink too. You've heard of sort of geometric growth on the way up, but we're not prepared for geometric growth on the way down. Like the human population will rapidly shrink and then we're going to have to figure out like is it okay if a GDP goes negative every year? It would be nice if the population shrunk and we saw wage growth go up with it like we did. Do you remember the Black Death?
Not personally. The Black Death. Yeah.
Good old days.
But there was a big population decline and the value of human labor went up. I suspect that won't happen this time though.
Well, housing will be very cheap. Like that's another good thing, right? I'm glad we've been talking about Elon Musk because my number, and this is maybe a hint just generally, is Musk adjacent.
Okay. Musk adjacent. Go. What is your number, Max?
Okay. 214 billion. Anyone?
Um, his bonus or his salary?
Well, I think it's like a trillion dollars, right? That's too low. Elon would never... he doesn't get out of bed for less than that.
Uh, it is. Anybody any other guesses?
The value of his stake in SpaceX.
This is... I should have said this is a dubious number. I don't know if that helps. This is the claimed savings by DOGE. The number from the DOGE wall of receipts, made up according to DOGE.
There is evidence. It's on the website.
Remember Elon Musk said initially that they were going to save $2 trillion. That was kind of, I think that was at a rally in Madison Square Garden that I went to only like a year ago, and then it was kind of knocked down to a billion dollars and here we are at 214 billion. I think...
Is Big Balls still maintaining that website? Is it still being updated?
Yes. What happened to him?
Okay. My understanding on Big Balls, we'll have to check this after this if we finish recording. I believe Big Balls is back in the Trump administration. But I don't think he's on website duty. The funniest thing on this to me anyway is that the Airbnb guy is like the chief design officer for the US government. And now like there are a couple websites like you're starting to see his work and they look like 2010 startup...
Go to trumpcard.gov and it really does look like Airbnb.
You need to put sunglasses on for all the gold.
Like rounded corners and like the Helvetica font. It's like it's so strange, especially if you live through that time, which was so closely identified with Obama and the Airbnb guys were like...
You know what has rounded corners and is woke? Calibri.
That's the new font. No, the administration, the State Department under Biden switched from Times New Roman to Calibri on the grounds that it's easier to read for people who find it hard to read words. And then Marco Rubio has switched back to Times New Roman saying that means you are being woke and threw Calibri under the bus calling it a woke font.
Times New Roman. You know how much men think about Times New Roman every like multiple times a day. It's the best spot.
All right, legends of pod. Those are our numbers of the year. But now we have some categories, stories of the year. You all sent me your stories and I pulled a few from each of you. Some of you have an interesting mind meld happening which was quite interesting.
Not just our obsession with fertility.
Not just your obsession with fertility. Exactly.
Speak for yourself, Robert. You're the one that chimed in with all the facts.
All right. All right. Yes, fonts and fertility. So, the first category was flub of the year. And for this one, Tracy, I'm going to let you go first and then Robert. And Tracy, you had kind of a mind meld here.
I mean, this is the obvious one, right? So, it's the Liberation Day rollout of the Trump administration's tariffs.
Giant poster. My fellow Americans, this is Liberation Day. Waiting for a long time. April 2nd, 2025 will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again.
Yeah. It just did not have to be that way. And yet it was. And even though, you know, a lot of the market reaction has since recovered, it was still an enormous amount of chaos. And it's still an enormous amount of chaos for businesses that is ongoing. And again, it just did not have to be like that.
But it was such an amazing buying opportunity for the stock market.
Sure. But it's hard to believe, you know, because he hires the best people, but like his staff completely failed him. This is the biggest economic moment he's gonna have, one that transformed the world and...
Build him like formula-wise.
Well, fortunately got the formula from AI, right? And then they put on there. Mine was more specific about that chart, the tariffs imposed on the uninhabited islands, the Heard and McDonald Islands, inhabited only by penguins and seals.
Got to get more penguins.
Just saying we haven't gotten a lot of money from that island since we imposed 10% tariffs.
That was my favorite moment of Liberation Day. I found it terrifying when I was watching that poster being unveiled. I was like, 'This is the end of the economy.' I was so worried. I had done a lot of reporting on like Argentina and like big tariffs being imposed suddenly by countries. I was so worried. The only thing that helped me sleep at night was the penguin.
So I have the exact opposite terror, right? I have this terror that we have right now in this country tariffs at levels that have not been seen since like the 1930s or earlier. They have transformed global trade. They have rewired the entire global economy and somehow because, you know, stocks are doing great, like there isn't that panic anymore and no one is losing sleep over this and we have managed to normalize it. And if we were still in the sort of post-Liberation Day panic zone that would feel more sensible to me.
Well, I'm still losing sleep if it makes me feel better. And also, just on a personal note, I bought something from Holland a few months ago, actually many months ago now, and I'm still waiting for it to be shipped because they can't figure out the US tariff system. That was back in September, I think.
I'm not going to tell you. Let me ask you.
It's a tulip bulb and you paid too much.
So, it was definitely like unquestionably a political screw-up. I think like basically Trump's presidency has gone downhill I think pretty much since that moment. Are we 100% sure it was an economic screw-up? Like to your point, Felix, nothing bad has really happened.
A lot of bad things have happened. And to Tracy's point, they have been kind of overshadowed by AI. And if it wasn't for the AI, things would look a lot worse. And a lot of the bad things will continue to happen. It will continue to get worse in the future unless the Supreme Court decides that the whole thing is illegal. Like there's still...
I have to think, right? We'll still have a bunch of tariffs even if they rule that Liberation Day is illegal. It'll add to the chaos.
Which is another failure of the rollout, right? Is we don't know if these are legal or not and at some point maybe half of them are going to get rolled back.
Yeah, that's the thing. The numbers keep changing. Hundreds of times they've changed. There have been so many exceptions. I think there have been estimates that as much as a third of what we import is like exceptioned from the tariffs. So I'm not sure if the impact is as devastating.
Look at Canada. Canada's my favorite one which is like the entire country of Canada is up in arms over these tariffs. Basically, the entire country of Canada has just boycotted traveling to the United States and they have this tiny little asterisk underneath the massive tariff saying unless it's covered by USMCA, which is 90 plus percent of all of the trade between the US and Canada. And you're like, 'Yeah, it's all exceptions. Everything is exceptions.'
The big irony here is if you think about the Trump administration, they say they hate red tape and bureaucracy, right? Think of how many man hours are being spent now pouring over customs forms. I can't imagine.
But luckily, luckily we all have our jobs at the Apple iPhone factory down the road where we all work our shifts making American-made iPhone. Fingers dextrous so we can do the little screws.
This feels like a good moment to segue to our person of the year. Max, your answer was by far the most fascinating to me. I want you to explain it.
Well, I just feel like obviously the person of the year, like objectively, is probably Donald Trump for all the reasons we're talking about. I picked Shohei Ohtani who is arguably, or I would argue, the greatest baseball player of all time, greater than Babe Ruth. He put together an amazing performance in the World Series.
Hit in the air to right field. Back it goes. It is gone. Yeah. Sky-scraping home run from Shohei Ohtani.
We are living through a wonderful, wonderful baseball moment. Shohei Ohtani pitched in a game and hit home runs. And even Babe Ruth, the greatest baseball player of all time, did not do that. It's really freaking cool. The World Baseball Classic, by the way, coming in March. Good times.
Were we allowed to pick happy news? Like that's way too positive for this year. Okay, now our feud of the year. Felix, feud of the year. You and Robert had kind of an interesting mind meld here, but fire away.
So yeah, I went for Bessent versus Musk, which was a famous shouting match that almost became a fist fight.
Should we show them? It was chest to chest, right? There was shoving. There was maybe a hockey...
Chest to chest. They were doing the like...
Yeah. Supposedly like alpha males trying to alpha male each other.
Totally. And they're in the White House. They're like within... like you could hear them screaming at each other from the Oval Office.
Like an ambassador to Italy or something like that had overheard this whole thing. And allegedly Bessent called Musk a total fraud.
Wow. He seems so relaxed. No, I was going to say like he contains multitudes because his vibe is not the like 'I'm going to throw a... I'm going to take a swing.'
Well, that was when he got the eye injury as well, right? That was like supposedly from that fight.
Well, no way. I mean, Musk said it was his kid, so... but we all know.
Yeah. No, I was just fussing around with little X and I said, 'Go ahead, punch me in the face.' And he did. Turns out even a 5-year-old punching you in the face actually does.
No, it was X that did it. X could do it.
But Bessent, you know, for people who knew him over the past couple of decades, did have this incredibly physically aggressive side to him. And he, you know, in good old hedge fund manager style, he goes very, very hard when he goes. And this was like, to be clear, a fight over who should get to nominate the head of the IRS. It does not sound like a thing to really scream at people.
Economic fight. We love it.
That's literally what the fight was about.
One of the reasons I'm dubious it actually happened is...
Well, I just think that one of the ways you get Trump's attention is by performing, like performing aggression and like being a part of this like reality television show. And I think whether or not Bessent really shoved Musk or whacked him or whatever, it was a very savvy move because it's a move that like...
Was it? Yeah. Within Trump world, like this is a way...
We would all get fired if we did this in our workplaces.
Yeah. But if your boss is as different as Donald Trump, like you know, remember there was this power struggle going on in the... It's easy to forget that like Elon Musk was for a very short amount of time like the most powerful person in the Trump [administration].
I know the entire development world really, really wishes that Marco Rubio had done this to Musk over the USAID cuts, right? That like all you needed to do, it turns out, was shout at him very loudly in the White House and then that would get him to back off and we could have saved, you know, half a million lives. But apparently Rubio hadn't worked that out at that point. And now, you know, all of these children are dying.
Americans who go to France know that talking louder always works.
That's true. They're just pretending not to.
Meme of the year, Robert.
So, my meme of the year, and I laugh every time I see it, is a still from when President Trump toured the Fed construction.
And there he is wearing a hard hat. Jay Powell is also wearing a hard hat, you know, chair of the Fed. And they're walking along and Trump just starts making up some numbers about cost overruns.
It looks like it's about 3.1 billion. It went up a little bit or a lot. So the 2.7 is now 3.1.
Yeah, I haven't heard that from anybody.
And poor Jay Powell, who actually takes numbers seriously, looks confused, disturbed. He picks up a piece of paper and has a like what...
We should say it was the sort of the restoration of the building. This was Jay Powell's version of the famous Jonathan Swan reaction to Donald Trump during his HBO... actually it was an HBO interview where he's just looking at Trump going what?
That is incredible. You've been talking about...
I have the numbers in front of me and so...
And so no, it pops up all the time. It's just like with lines like, 'Oh, you know, me looking at the credit card bill after my kids took the credit cards out' or something like that. It's like, 'Oh.'
He had a very pronounced frown, right? Because like Trump handed him the bill and he just had a very frustrated [look].
You just spent $5 billion on your new building and he was like, 'No, I didn't.'
And he was like, 'Nope, you've added in a different building.' Nope.
I know. We are going to play a game later. And what I wanted to do, but I'm not going to do, was have clips of Trump talking about building renovations. And we would have to guess whether the quote was from an HGTV episode or a...
I would be so good at that.
I'm just saying or a UN speech.
He talks about building materials and buildings so often. There are gold accent walls and marble. Remember, Stacy, you're right. Like the fact that he spends half of his address to the General Assembly of the UN to the world saying like I bid on renovating this building. They declined my bid. If I'd done it, it would have been marble. In fact, look at the floor.
He actually said look at these cheap tiles.
Which, and also by the way, I just want to say for the record since I'm at Bloomberg and everything we say here is true. The UN building is the most beautiful building in New York. I love it so much.
It is a beautiful building. Yes. It's very...
I am happy that Donald Trump did not get his paws on it.
All right. CEO tweet of the year/social media post of the year. Tracy Alloway, this is you.
Wait, is this the Ackman division or the non-Ackman division?
This one was tough because of Ackman. But I went with a non-Ackman one and there's a little bit of recency bias in here as well, but it is Palantir CEO Alex Karp announcing the Neurodivergent Fellowship after his appearance at the DealBook Conference where he couldn't quite sit still and made a lot of erratic hand movements. And the funniest thing about the fellowship is they put up the application form and I took a look at it and there's no like requirements listed at all. So I don't know if they're measuring people on the basis of like how good they perform or how neurodivergent they actually are.
I'm just so confused because I thought Alex Karp was really against diversity, equity, and inclusion and various...
He says this one's important and you know, emphasizing differences and so on. Yeah, it seems strange. I've also seen a lot of clips of him where he isn't moving around that erratically, which is another thing that I don't know. He's clearly doing something right though because the stock is... well, not lately, but it's...
The stock is doing well. A lot. Robert, you also had a very funny tweet I wanted you to talk about.
Oh, well, so I do not follow a lot of CEOs on Twitter because thank god my job does not require it. But I did see one, um, because I see this guy's tweets all the time. Brian Johnson, a former fintech CEO and life extension guru.
He's the one who's like always injecting the blood of youth.
He has trademarked the phrase 'never die' and he stands like shirtless next to his son and being like, 'You can't tell the difference.' I'm like, 'I can't tell the difference.' So I'm kind of, I'm like cringey and concerned about him all the time. But, but he's your Roman empire. But in the last few weeks, he sent a tweet and it started out, 'Guys, I finally have a girlfriend.' Yes.
And he says like it's basically a coworker of his and it's like she fits me like a puzzle piece and it was a very long love letter to her. And I was actually kind of moved because I'm like maybe now you can live a normal life. Like it seems like you were searching for something in all of this weird supplements and nighttime emissions, but like you can finally just like go on a date and have a picnic and like watch Netflix together. Or maybe in 10 years he's gonna start preserving his girlfriend in like kind of a bride of Frankenstein. You never know.
