Musk and the military industrial complex

Make Me Smart September 27, 2023 Transcript

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Kai Ryssdal 

So are you ready?

Kimberly Adams

Yeah, I’m ready. Let’s do the thing.

Kai Ryssdal

Hey everyone, nice lipsmack Kai. Hey, everybody, I’m Kai Ryssdal. Welcome back to Make Me Smart. Where we make today make sense. Sorry.

Kimberly Adams 

As one does I’m kidding. I’m Kimberly Adam, thank you, everyone, for joining us on this Wednesday. Happy Hump Day. It is September 27.

Kai Ryssdal

There was a woman who was the director of Marketplace many years ago. Her name is Jane Lindholm she has now or was for a very long time in Vermont. And when she used to direct this program, which was early in my hosting career here, she used to make me redo things. If she heard her teeth clicks, like my teeth would be come together. And she would say no, no, no, I heard a teeth click. And I was I was too young and raw in this job to say “Jane cut it out.” But anyway.

Kimberly Adams 

Paper shuffles is what it used to always get me.

Kai Ryssdal 

I had an engineer, there was an engineer at Marketplace who used to yell at me because, this is a true story, because my shirt was too loud. Chris Clark, he said never wear that shirt again.

Kimberly Adams 

I have had that same complaint. I had a shirt that I had to stop wearing when I was like tracking because everyone complained about how much noise it made.

Kai Ryssdal 

I know. And you’re like, come on, man. Anyway, you know.

Kimberly Adams 

The things we do for our career. All right, what’s your news?

Kai Ryssdal 

Okay, so mine is a headline, and then a little bit of a commentary, which is not infrequently the way I do the news on this podcast. So there’s a story in Bloomberg today, which says that SpaceX run, of course, by Elon Musk has gotten his first contract from the US Space Force to provide customized satellite communications for the military under the company’s new Starshield program, which is about communication services in the satellites, as as I said, so that’s fine. Whatever. It’s under a hundred million dollars is not a boatload of money, relatively speaking, relatively speaking in the defense budget and overall, right. And that’s fine. Look, SpaceX is a for profit company, they provide valuable service to the space station and all of that, and have led the way into the commercialization of space, which, fine, but given what we now know, about the way Musk handled Ukraine, and Starlink and his

Kimberly Adams 

You should say more about that. Okay, I don’t think everybody knows.

Kai Ryssdal 

What we now know from Walter Isaacson’s biography and from a piece in The New Yorker a number of weeks, maybe a month, six weeks ago, whatever it was, is that early in the Russian invasion of Ukraine, Elon Musk by his company SpaceX sent to Ukraine terminals that would let the Ukrainian military forces use the Starlink satellite Program, which is which is Musk’s SpaceX satellite program to provide command control and communications the classic C3 right? And then it turns out when Ukraine wanted to use that C3 technology to target Russian forces in Crimea. Musk said no, I’m not going to turn it on. It was already ring fenced around Crimea, right. They already didn’t work around Miami. They got an official, SpaceX got an official request from the Ukrainians to turn it on to allow them to target Russian forces. Musk said no. And Musk was having conversations with Lloyd Austin, the Secretary of Defense about this, he was having conversations with the Ukrainian government about this. And he was playing a key role in maybe the key geostrategic issue of our day, certainly the past 18 months and probably you know for a while and and here’s why I bring it up. I bring it up because of this news. But but here’s the bigger point. It is to me remarkable is the lightest possible way I can think of to do it so that we don’t get the E and Bridget doesn’t yell at me. It is remarkable that a private citizen has this kind of oomph number one. But number two, that as a defense contractor, he has the ability to use the on off switch fundamentally. Can you imagine what would happen if Boeing said to the Pentagon? No, I’m sorry, I’m going to turn off the tracking capability on XYZ machinery, or I’m not going to let you use the targeting capability on this very fancy airplane that Lockheed Martin built for you, or whatever. It is incredible to me. And yet the Pentagon because Musk now has such oomph in in the defense industrial complex, right, the defense defense department keeps on going back to him. I mean, I get that they have to but holy cow, that’s a problem.

Kimberly Adams 

I would be very interested in the details of that contract and what kind of guardrails they put in place? Again, something like that, if any.

Kai Ryssdal 

if they did, if they did, right, if they did?

Kimberly Adams 

Because I mean, what kind of leverage do they have to negotiate really? I mean, short of, you know, threatening to nationalize the company or something. I’ve seen a couple of assets. I’ve seen a couple of dates calling for that.

Kai Ryssdal 

Look, I would entertain that conversations. It’s not how we do things. But, you know.

Kimberly Adams

We were just saying the other day, just because we’ve done things a certain way doesn’t mean that we’re should start nationalizing. Anyway.

Kai Ryssdal

Anyway. Anyway. So that’s my news. That’s my rant. That’s where I am.

Kimberly Adams 

Yes. My news is is actually a follow up to this conversation we had a couple of weeks ago about retail theft, because I saw a story in CNBC this morning. That had I just want to read you these two headlines, two stories from CNBC. First story that was published Tuesday morning, 10am. “Retail theft isn’t actually increasing much major industry study finds.” And this is citing a report from the National Retail security survey, which comes from the National Retail Federation, which is a big industry group, which says that yes, total retail shrink, which is what they used to describe, like losing inventory, from theft, damage, vendor error, or whatever has gone up, it’s gone up to $112 billion in 2022, up from $93.9 billion the year before. But that is in line with the increase in sort of sales and increase and you know, the inventory that they had. And so this idea that said retail shrink climbed in absolute dollars, but when reported as a percentage of sales, as is commonly done, average annual shrink increased to 1.5%, up from 1.44% and 2021. The share is largely in line with past years, right? So that’s once again, the headline, retail theft isn’t actually increasing much major industry study finds. Okay, fast forward to today’s headline actually, this was another story on Tuesday, not even today. This was another story yesterday at 3pm. So that same day, “Target says it will close nine stores in major cities citing violence and theft.” Right. So scrolling down in this article, you know, Target announced the store closures the same day that National Retail Federation said that the effective depth on retailers bottom line is about the same as it has been for years. It cited that Nordstrom closed its flagship flagship stores in San Francisco and a couple of other locations, citing market dynamics dynamics rather than crime. And so all of this to say you have a lot of stores, choosing to close locations, in cities in downtown areas, I will be very curious into the demographic overlap of the areas where these stores are being closed. Citing theft and violence, even though overall the numbers line up with traditional numbers relative to sales. Some of them are claiming that it’s the theft, some of them are claiming that it’s the market dynamics, and we’ve talked at length about how downtown areas are losing so much business. Right. And so that’s something worth keeping in mind. It’s, you know, in the in the article about Target they’re saying and the other article as well. They were saying it’s the increased violence that’s coming with some of this theft, that is the concern, but as we learn from your guests the other day, you know, we really don’t have good data about it. And there was a really good example, in the what CNBC was reporting about Nordstrom, where they were saying that there was a brazen smash didn’t grab in August and one of Nordstroms other locations in LA made national headlines. And people asked about this in the earnings call, the company had in August. And they said it was disturbing to all of us and losses from theft are at historical highs. But he the CEO added theft is included in company guidance and not higher than expected.

Kai Ryssdal

Exactly. Exactly.

Kimbelry Adams

So I’m really appreciating all of this additional context to the sort of statements that the companies are making, the viral videos that we’re seeing, and the narrative that is literally causing cities and states to change the laws when the situation may not be as bad as retailers are pointing it out to be.

Kai Ryssdal

Yup, totally, totally.

Kimberly Adams

That’s my news.

Kai Ryssdal

Alright Drew, hit it. All right, go ahead.

Kimberly Adams

I love how we always end up having space stories on the same days.

Kai Ryssdal

Always, always.

Kimberly Adams

Yes. My make me smile is a warm and hearty welcome back to Army Lieutenant Frank Rubio, who after 371 days on the International Space Station has just completed the longest single spaceflight ever undertaken by an American. His original mission was just supposed to be six months, but due to some technical difficulties with some shuttles and things like that, he got stuck up there much longer and spent more than a year in space. So just a warm welcome back, Lieutenant Rubio and like, glad you had a safe trip home.

Kai Ryssdal 

No joke. Smile, just because there will be listeners who will know this because they follow space news a little bit as we do. He’s Lieutenant Colonel in the United States Army, which is which is a different rank.

Kimberly Adams 

I’m sorry, Lieutenant Colonel. Thank you. Sorry.

Kai Ryssdal 

I totally get it. I totally get it. I knew nothing about it.

Kimberly Adams

I didn’t mean to get it wrong.

Kai Ryssdal

That’s all right. It’s all good.

Kimberly Adams

You don’t know about ichor

Kai Ryssdal

Right, exactly. I don’t know about ichor or mermaids or any of that jazz. So you know, we’ve all got our areas of expertise.

Kimberly Adams 

Lieutenant colonel, my bad, no disrespect, intended Lieutenant Colonel.

Kai Ryssdal 

A note about the Chinese American relationship, which is fraught right now at the geostrategic level and also at the economic level, also, it turns out at the panda level, by the end of next year, we are not going to have any great pandas in this country because all the arrangements and and agreements are expiring, which is kind of a bummer. I know. I know. I know. I know. I know.

Kimberly Adams

Even here in DC?

Kai Ryssdal

Yes, yes, yes, yes. Yes. Yes. Which is really funny because if you’ve, not funny, but these zoos.

Kimberly Adams

That’s why people go.

Kai Ryssdal

That’s why people go, they’ve made huge infrastructure investments. The public is is excited to go see these animals anyway. So giant pandas are everywhere. The Washington DC National Zoo, I’m reading this from Bloomberg. Three live in the zoo’s $50 million Asia trail, there are T-shirts, trucker hats and refrigerator magnets. There’s a panda cam. Washington pandas are going away. The zoo’s three pandas are set to return to China by December of this year. Atlanta, San Diego and Memphis zoos are going to lose their pandas already, they’ve gone or we’ll see them return to China by the end of next year. So you remember when this all started? Right? It was panda diplomacy. I would submit and this article points out, this might be a little bit of reverse reverse panda diplomacy.

Kimberly Adams 

I’m real sad about Yes. I love panda cam and like, you know, one of our DC intern, her parents were visiting town and I was like, you have to go see the pandas. You know, like, that’s the thing that you do. Totally, man. So there you go. How is that a smile?

Kai Ryssdal 

Well, you know, I, we I have I have I have alternated smiles between things that make me go huh and things that actually make me smile. It’s our podcasts, we can do what we want.

Kimberly Adams 

Okay, well, it is our podcast, but we 100% can’t do it on our own. And here comes the hard pivot, because

Kai Ryssdal 

Oh, no hard, nothing. That was graceful, and so well executed. My goodness.

Kimberly Adams 

Thank you. We can’t do it without you. We are in one of our fundraising drives. And in addition to the breaking news about pandas, which has just broken my heart, we also are getting ready for it despite my most optimistic outlook, what increasingly looks to be a government shutdown in a couple of days. I was just telling Kai before the show that that is already affecting the ability of me to reach government officials who’ve been scrambling trying to get ready for the shutdown and they can’t work on the policies that I’m trying to cover because they’re doing that and so we’re covering the government shutdown. We’re covering the pandas. We’re going to be covering the presidential election, kind of already are as well as lots of other things that are relevant to your economy and mine. And, you know, we really try hard to bring you news that’s valuable, and with context and, you know, actually not generated by AI or made up as some people like to do. And so, you know, it’s Marketplace. It’s Make Me Smart, we’re here for you. And we’re trying to help everybody understand the economy, and how politics and everything else affects it. As I say, lots of times. We’re one of the very few sources of business and economics journalism that is not behind a paywall, and we really can only do that because of you all.

Kai Ryssdal 

We are looking for 2000 participants in the fundraiser this fall. We’ve heard from 830 of you so far. We got a week left marketplace.org/givesmart. Shout out here on the way out to Charles in Arlington, Virginia, who donated over the weekend, told us he has listened to all 1002 episodes of this podcast, Charles, sir thank you holy cow, and yes, he’s gonna be 70 years old or perhaps. So marketplace.org/giftsmart help us out. 70 years old. Make Me Smart is produced by Courtney Bergsieker. Ellen Rolfes writes our newsletter. Today’s program was engineered by checking, yes Drew Jostad. Our intern is Niloufar Shahbandi.

Kimberly Adams 

Ben Tolliday and Daniel Ramirez composed our theme music. Our senior producer is Marissa Cabrera. Bridget Bodnar is the director of podcasts and Francesca Levy is the executive director of Digital. You can’t believe I got his rank wrong. That’s embarrassing.