What Happens Next – Sunday May 16, 2021 Food Addiction, Amazon, Good Stagnation, ESG, and Racial Indoctrination My name is Larry Bernstein. What Happens Next offers listeners an in-depth analysis of the most pressing issues of the day. Our experts are given just SIX minutes to present. This is followed by a Q&A period for deeper engagement. This week’s topics include Food Addiction, Amazon, Good Stagnation, ESG, and Racial Indoctrination. Our first speaker is Michael Moss who is a Pulitzer Prize winning investigative reporter formerly of the New York Times. I was introduced to Michael by a previous guest on What Happens Next, the Yale Nutritionist Dr. David Katz who encouraged me to read Michael’s new book entitled Hooked: Food, Free Will and How the Food Giants Exploit our Addictions. Michael points out that we humans really enjoy Salt, Sugar and Fat, a lot. I hope to learn from Michael about how food companies formulate their products to be addictive and what, if anything, we can do about it. And, why should we condemn food makers for giving us what we love and crave. Our second speaker is Brad Stone who is the author of my favorite business book The Everything Store. Brad has a new book that was released last Tuesday entitled Amazon Unbound: Jeff Bezos and the Invention of a Global Empire. The book discusses all aspects of Amazon’s business including Amazon’s cloud computing, its profitable advertising model, and the Amazon Marketplace. Today, Brad will speak about Alexa, Amazon’s expansion into the grocery business, and Amazon’s success in logistics. Our third speaker is Dietrich Vollrath who is a Professor of Economics at the University of Houston. Dietrich has written a new book entitled Fully Grown: Why a Stagnant Economy is a Sign of Success. Dietrich expands on William Baumol’s work that as we grow richer, we substitute services like education and health care for goods. Unfortunately, services productivity has been less than the manufacturing sector and that implies less growth in our future. We welcome back our fourth speaker Vivek Ramaswamy who spoke on What Happens Next last summer. Vivek is the founder of the biotech company Roivant Sciences and has a new book that you can preorder now and will be released August 17th which is entitled Woke, Inc.: Inside Corporate America’s Social Justice Scam. I’ve asked Vivek to speak about stakeholder capitalism and the ESG movement which refers to Environmental, Social and Corporate Governance that measures the sustainability and societal impact of a business. As a society, we are reconsidering the goals of a company away from profit maximization and towards non- 1 economic objectives. Vivek will explain why this change in corporate purpose is a threat to the integrity of American democracy. Our final speaker is Paul Rossi who is a former math teacher at the Grace Church School in NYC. Paul recently got into a public dispute with the school principal over the racial indoctrination program in Grace’s K-12 school. The dispute erupted on the pages of the NY Post and was discussed in detail on Bari Weiss’s website. Today, I hope to learn from Paul about what is happening in NYC’s private schools and in particular at Grace Church related to both racial indoctrination and the degradation of privilege. Last week, we heard from Lewis Alexander on the prospect for rising inflation. This past week, the US Consumer Prices were up in April by 0.8% after being up 0.6% in March. A 1.4% two- month increase in inflation that annualizes to 8.4% which is the fastest rate of price increases in over 13 years. Consumer prices was led by increases for used cars, rent, furniture, and insurance. The economy is accelerating out of COVID and businesses are unable to keep or hire their employees. Casey Mulligan had warned us on a previous episode of What Happens Next that the recent Federal Government expansion of unemployment insurance would discourage work. Earlier this week, the US Bureau of Labor Statistics released its JOLT survey which showed that businesses substantially expanded their job openings to 8.1 million unfilled positions an increase of 600,000 on the month. This month has the largest number of unfilled jobs in US history. I have heard anecdotal evidence from small businesses that it is impossible to hire new staff, very few even show up for job interviews, and many are quitting to take new jobs. Other business owners have complained that many of their workers have quit to take unemployment because it pays a comparable or better compensation. Labor markets will be the key to understanding economic growth for the rest of 2021. If you are interested in listening to a replay of this program or any of our previous episodes or wish to read a transcript, you can find them on our website Whathappensnextin6minutes.com. Replays are also available on Apple Podcasts, Podbean and Spotify. Alright, let’s begin today’s program with Michael Moss who will discuss his book Hooked. Michael Moss: In 2008, I was in Algeria interviewing Islamic militants, when a couple of FBI agents showed up at the New York Times headquarters looking for me. I had been spending the previous few years traveling to Iraq, tormenting the Pentagon for failing to equip American soldiers with body armor, and then writing critically about the war on terrorism, and according to the FBI agents, I had managed to land myself on an Al Qaeda hit list. I actually think it was just the Algerian government trying to get rid of me, but when my editors ordered me home that night, and I came back to the United States looking for something new to do, it was like going from one war to another, because my editor, Christine Kay, had 2 spotted this outbreak of salmonella in peanuts that were being used as ingredients by this billion-dollar processed food industry about which we knew very little. And when I looked at that situation closely, it became the story about that industry losing control over its food chain. And then I started to write about E. coli in meat because I thought Upton Sinclair had solved the meat problem 100 years earlier, but there was a rolling wave of contamination of E. Coli, and hamburger making people sick. And this was a story of the meat industry intentionally losing control over its supply chain in order to avoid costly recalls. And I was continuing to look at contamination when one of my best sources who tests meat for the industry said to me, "You know, Michael, as awful as the incidents are you really should look at what my industry is intentionally adding to its product, over which it has absolute control." He was concerned about the salt going into processed meat, which led me to look at sugar, and into fat. And boy, was he right. I mean, the obesity rate was soaring. Pre- pandemic, we passed 42% of American adults being clinically obese, type two diabetes tied to bad diets is in the tens of millions, pre-diabetes, even larger. I think there were like 8 million cases of gout last time I looked. And as a journalist, I was incredibly lucky to come across this trove of documents that took me inside the largest processed food companies, as they were formulating, marketing, positioning their products toward us, and it was those documents that enabled me to meet insiders who opened up even more secrets about how they do it. And much of what you get from that material in those interviews is that this is an industry that's striving day and night to use extraordinary science to get us to love their products and want more and more, and initially for the first book I worked wrote, Salt, Sugar, Fat, that I focused on that unholy Trinity, if you will. Because salt they call, "The flavor burst," and fat, "The mouthfeel" and sugar, "The bliss point." And in combination and individually, those three ingredients are meant to hit the brain’s reward centers so fast that we lose control over our eating habits. And it's not just that they engineered a bliss point for sweet foods, the companies moved around the grocery store, adding sugar to things that didn't use to be sweet before, so now by one estimate, two thirds of the products in the grocery stores have added sugar, which is a really big problem for a lot of people. Still, I hesitated to call this, "Addiction" because frankly, if we'd had this conversation five years ago and you suggested to me that Oreo cookies were as addictive as heroin, I would 3 have scoffed and said, "Where's the excruciating pain of withdrawal and where are the people committing armed robbery of 7/11 to buy their Oreos like they might a pharmacy? And how come not everyone gets hooked on these product?" But the more I looked at that question, the more I became convinced that actually, these products are in many ways as troubling as cigarettes, alcohol, even some drugs. And in some ways, even more troubling. And I'll tick off the ways that they are similar. The industry is succeeding in getting us head over heels, over convenience foods, "fast groceries" as I like to call them, by tapping into our basic instincts. We by nature love food that's cheap. They use chemical laboratories to mix and match formulations, in search of ever cheaper formulas for their product, knowing that we'll get really excited by a box of breakfast pastries that cost 10 cents less than it did the week before.