carol: welcome to "bloomberg businessweek". i am carol massar. renick.i am oliver the long shadow that may follow president-elect trump for treasury sector. oliver: all that ahead on "bloomberg businessweek". ♪ carol: we are with megan murphy. look at energy,

looking at the social cost of carbon, something the obama administration had come up with. is pegged off of looking at donald trump's. put a lot of climate skeptics into the. we looked at how they pegged the social cost of carbon, originally set at 24,000 per metric time and has increased over time. we are tracing the development of that. was an economic estimate of the cost of climate change to society. questioning now is what can donald trump's administration do if they are going to advance policies that would roll back this clean power. what could they actually do? this number is one that many asnomists on both sides see arbitrary, difficult to pay, and

something he would not be able to undo, but still underpinning. oliver: another big pic is rex tillerson for secretary of state. , hise politics section relationship with russia. tell us about that. dominated the news cycle since donald trump got elected because there has been so much about whether russia influenced the electoral outcome. expect said they do russia was actively trying to influence the elections. any ties to russia will be under close scrutiny. rex tillerson is a fascinating choice as secretary of state. his ties to russia go back some time. he was awarded a friendship medal from vladimir putin. they have the deal to explore in arctic.

that is worth many billions of dollars if the sanctions are relaxed and they are allowed to deal. they have a joint partnership with rosneft. senators,republican marco rubio, lindsey graham, john mccain coming out strongly and saying i'm not sure we want somebody as secretary of state who has and braced vladimir putin. donald trump has been incredibly consistent about appointing people to his cabinet who he thinks have executive level experience. that is something that makes people in washington very uncomfortable. rex tillerson is going to be under heavy scrutiny. carol: another member of donald trump's team, steven mnuchin. donald trump has lauded him as a great businessman. look at that.a we look at his relationship with

a branch of a bank that he was involved with that was very heavy into something called reverse mortgages, which people will be familiar with. they allow you to get cash out of your home, mostly targeted towards elderly people who are ending the term of their mortgage and want to release the equity in it. ofis a product long thought to disproportionately target elderly people. it is something that has come under close scrutiny. this is a part of his financial history that i expect to get a lot of scrutiny as well. ,ostly because steven mnuchin former goldman sachs partner, but this is something that targets people and away way they know and can relate to. when you think about your mother and father being exploited, that's going to be interesting to see how that plays out. oliver: we talked about it.

job before working for the trump campaign, he spent six years running the spanking california. the bank was a complete disaster. it collapsed and had been taken over by the government in 2008. , foundedlled indy mac by the same guy who ran countrywide. countrywide had a terrible record of making loans that put it in, got it in trouble during the housing collapse. inven mnuchin came along 2009 with a group of billionaire investors, rounded up this group and put $1.6 billion in. old employer,his john paulson, who made a fortune shorting the housing market. was putting money

behind this, and a bunch of old friends from goldman sachs. they got together and bought this company out of bankruptcy control, and turned a around, and it was staggeringly successful investment for the investors. they made a fortune. oliver: there is a catch now. carol: he sold it, right? >> he sold it to his former colleague. success,ked like a big and from a financial perspective from the investors, it deftly was. it was a fantastic investment for them. oliver: as they started going to the numbers, what started to crop up here? >> just within a few weeks of closing the purchase and owning this bank, they started realizing that there were problems. they got subpoenas from the u.s. department of housing and urban

development investigating their reverse mortgage business, which was just a small part of the bank that steven mnuchin had sold them. when they started looking into this, they start to realize the books were a mess. idea how much money they had to set aside for various problems, and eventually they had to set aside $230 million more than they had taught, so it was kind of an unpleasant surprise. found ane auditors at the unitakness" doing those reverse mortgages. is reason you do this story because president-elect donald trump has put out steven mnuchin as his nomination as treasury secretary and lauded him as a you'resinessman, so looking at one of his business ventures that was not so great

and did not have such great oversight. clear, from be steven mnuchin's perspective and his co-investors, it was fantastic. carol: they made money. >> he took something like $380 million out. careermnuchin has a long with a lot of success in it. he financed avatar, worked for 17 years that goldman sachs, where he was a partner in part of the management committee, but this is something, his last real job left a limit shone his record that was only really discovered after it was sold. oliver: up next, how the trump administration -- by many in rural america. a new we will take about approach that workers and companies are taking to retirement. ♪

carol: welcome back to "bloomberg businessweek". i am carol massar. oliver: i am oliver renick. the single biggest program impacted by trade is social security disability insurance. carol: that could change under the trump administration. pay into the social security fund, you have access to a trust fund for disability insurance, which means if you become sick or injured on the job or not and you are no longer able to complete work, then you are eligible for a monthly subsidy. in placeram has been since 1956. in the last 20 years or so it has grown from 2.5% of working adults to 5.2% of working adults. that is a national number. when you look at the regions where this is most prevalent, then you get a better sense of what is going on, which is for a

number of different reasons, they seem to be most relevant and areas without a lot of economic opportunities. disability should not go hand in glove with unemployment. you get sick or you down. you get injured or you don't. but what we are discovering is that a lot of people who would otherwise be eligible for this program but don't apply for it when jobs go away, do apply for it. carol: people will open up the magazine and see a map of the united states. walk us through a little bit worried you highlight certain areas of the country. >> that map shows what some economists call a disability held, the appellations, a spotippi delta, and between the borders of arkansas and missouri, northeast in arkansas and southeastern missouri, so these are rural areas, areas where the work that it tended to be

economically depressed areas. you can look at national trends, and i talked to the chief actuary for the souls of security administration, and they said there is a good case nationally that demographics is driving this growth. women have entered the work force and are now coachable for disability, so they can apply for it and draw down from that fund. are getting older, so not just retiring workers, but the tail end of the baby boom, in its 50's, but still able to, but not able to work because the older you get, the more likely you are to have an injury and be unable to work. the social security administration says mostly demographics. map and say, it don't see demographics. i see lack of economic opportunity. carol: as you look at this map,

you look at different counties. highlight that the county is 95% white. in dickinson county, 98% white. what was the point here? >> i think the politics of this are pretty tough. , theye look at programs are blind, but when we talk about welfare, aid to needy families, it tends to be race-based. asn we describe barack obama the welfare resident, it is a coded word for race. what is interesting about the disability program is that it is most prevalent in white areas. it is very much a rural program, and there is a fine line between saying people are applying for

jobs because it no economic opportunity anymore and people are applying for jobs because health outcomes tend to be poor in these areas. because the work that was their tended to be very physical, so the point of pointing out the ethnicities of those counties is to say that when we talk about government programs, there tends to be a racial component, even if we are not bringing it out in the open. carol: a new and gradual approach to retirement. .> it's cold phased retirement it means you cure down instead of one day and announcing you are retiring, and then two months later you are completely out. you switch to a part-time reduced schedule, but you are still in the workplace getting used to the idea of retiring. carol: it is a win-win for the company and the employee, is it not? >> right, many companies have

large numbers of av boomers exiting all at once. they have large knowledge, practices, procedures, and they need to teach that to the younger employees, so they need to pass on what they know. why is this a story right now. ? >> absolutely. you have baby boomers hitting 65 every day, and will be for the next 16-17 years. people are working more sometimes, but other people want to leave at 63, so you have companies with large number of rumors exiting at once. one is steelcase, a big furniture manufacturer in grand rapids. they have a plant that makes desks and filing cabinets.

they will lose one quarter of their workers over the next 3-5 years. personyou talk about one who has worked at this company for a long time. >> yes. he is a principle of electrician, one of their best electricians. he is hitting 65 in february. they did not want to lose him. he sat down and talked to his boss and initially wanted to go on a reduced work schedule where andould have thursday off friday, and his boss said that is not going to go because those are our busiest days of this plant, and often the equipment is being repaired on saturday, and that is what he does. they worked it out and he is now taking off mondays. he has gone from six days a week to 30 hours a week. oliver: is it all a smooth transition in his experience? are there any kinds of speed

bombs? adjustment on everybody's part. bosses have to get used to flexible schedules, but also the people that were doing this are used to being in charge, and they have to step down and let go. one of the people i talked to, he is only working one day a week on a very specific project. he really took care to leave his office and say i don't need my office anymore. this office goes to my successor, and i now have to sit in a curable. goes through aen huge cultural change in the wake of the emissions scandal. dream: why the american all has been a nightmare to get off the ground. ♪

oliver: welcome to "bloomberg businessweek".

i am oliver renick. oliver: i am carol massar. you can also listen to us on radio. in london, and in asia on the radio plus app. volkswagen's emissions scandal leads to a reboot of the corporate culture. you chose to start your story with an anecdote that took place several years ago in a gaudy setting, paints a picture of what volkswagen used to be like. management that has been put in charge to steer the company through what is effectively the deepest crisis and the company's history is trying to more than resolve the .candal or fix the cars

they are also trying to turn the company at the moment, rain in excessive spending compared to the other automakers, and they are trying to turn and make the company leaner and more flexible , because the auto industry is facing age or shift towards electric vehicles with features like autonomous driving, so that is a pretty long, comprehensive list of things they need to address, while at the same time trying to digest the financial hit. carol: talk about some of the crazy things going on at the company. the company culture, you talk about a garden center where employees can order flowers. there is an in-house butcher, caterers at the company. i guess none of us realize the

excessive nature of volkswagen. we have been keeping pretty much everything they we have bey much everything they do and related services in-house. almost all other car manufacturers have been outsourcing services like that, but volkswagen has always resisted that, part of the role is the labor unions play. there is a vital interest to protect jobs, and that has led to some of the excessive results, where a sausage factory, a flower service, a postal service is still run from the company itself. carol: one stat, volkswagen employs 80% more people than tour yoda produce the roughly

same number of vehicles, so it sounds like excessive headcount there. >> volkswagen worldwide people,s about 620,000 120 one factories, more than any other automaker. the key reason behind this is because all sorts of different parts and components in-house, whereas other companies have outsourced the manufacturing of parts and components that are not critical to external suppliers who can produce these items at lower costs than the manufacturer in itself and that is something the company is currently trying to resolve by bundling the component operation into one big organization, but there needs to be something to get the cost down. carol: speaking of free booths and remodels, the troubled story of the american dream all in new

jersey -- mall in new jersey. >> construction is underway. it has been stalled for a while. financing is still not entirely in place. more totake billions finish. it has taken $2 billion to get to where we are now. is autumn 2018. carol: it sounds like third time is a charm. this is the third developer trying to get this mega-retail entertainment complex in the meadowlands. this is supposed to be a huge development, but had a lot of problems. >> it started in 2004. it was called sanna do. it was meant to be shopping and entertainment. the big feature was an indoor ski slope which you can see from the turnpike, not complete, but you can see the frame for it.

that was the main feature, then the group that was developing it ran into financial trouble and walked away from the financial project. in and developer came ran into the recession and had to walk away from the project, and then there it sat. ski slope, a hole of a structure in the meadowlands with hundreds of millions of cars driving by every year, but no one could finance it. governor chris christie, who probably if you live in new jersey, you know he once called it the ugliest building in new jersey, maybe america. , but when he came into office, he looked at it in and said, you know what, these developers have party put $2 billion into this. if we can get it going, we can create a lot of jobs.

there are promises of take economic benefits to the region. good location, right outside new york city, convenient, and there is a train link that goes to the stadium. not direct, but it will go to the stadium. it goes there on game days. it seemed like a good idea to try and revive it, so they brought in a third developer, triple five based in canada owned by a family who also runs and the westca edmonton mall. they have been working on this project since 2011. they have greatly expanded what was already huge to include an amusement park, a water park, and they are redoing the inside and adding all kinds of things. carol: up next, the challenge of preventing tainted seafood from

washing up an american supermarkets. oliver: that is next on "bloomberg businessweek". ♪

oliver: welcome to "bloomberg businessweek." i'm oliver renick. carol: and i'm carol massar. oliver: if you ever bought our work on a cruise ship, prepare to get sees it -- prepare to get seasick. carol: and tainted seafood. what's behind it and what is being done about it? ♪ oliver: another must-read. the cover story titled "bad scrap." shrimp.

it caught me by surprise. what was the first thing that pops out at you? >> the first thing that pop down is the context we are talking about is china and where we are going in the global economy. just the chain it goes through and what islems getting into the food supply. theells a tale of regulatory environment that leaves a lot to be desired. carol: here we have the u.s. regulators putting sanctions on chinese shrimp and they found ways to get around it. i don't know if you would call them loopholes, but the way they have evaded scrutiny.

the very fact of wanting to get having a robust environment. the contrary effect is that it seeks in and you don't know what is happening of where these things are living and breathing. and the effect of having a superbug possibility. it is a concern. it beats like a movie when you read this story -- it kind of -- a kind similarly of reads like a movie. desire for a higher-margin, higher profit. and carelessness in terms of parts of the world that have very different standards. oliver: i am glad you brought it to this topic of globalization. sciencelk about the

about what is happening. basically, there is this ecosystem that is getting polluted and not in the way we think about it. working its way through the system, building up in the food we eat. >> that is the thing. it is a story about how something is designed to be good and can manifest itself in ways we don't have a structure in place to deal with it. nororse, it develops -- it phs and develops. we uncovered this tale of how this is filtering its way in the u.s. and other countries and a way that people did not think it could happen. story, imagery of this pigs next to discarded medicine

and discarded antibiotics, and people shoveling excrement from animals into the same part of that ecosystem where shrimp and other wildlife is living and breathing. oliver: when i was reading it, i was picturing one of these diagrams from middle school. [laughter] the arrow is going from here tobacco -- the ever is going from here to there. >> when you start to introduce antibiotics and of the equation. be much moreng to sensitive about the increase use of adam iata cap how it is about thehese -- increase of antibiotics and how it is creating superbugs. >> when you talk about globalization and we are seeing it being played out in the western world -- regulators move at different speeds and economies are moving a very

difference beads and then we'll take the advantage or they can in terms of exploiting regulatory arbitrage. -- the endduced product of the economy, that is where the problems are emerging. it is really accelerating. decade, is there a need for some global oversight where you have unpredictable effects of what is designed to be a good thing. carol: we talked to the creative director about the cover for this story. >> this story is kind of gross. we wanted to run with that theme. it is obviously shrimp and antibiotics. so we picked a very simple image

of two shrimp getting pierced with a needle. carol: that kind of creeps me out. i love the letter that you did. it takes a back to science class. you have some of the lettering. >> that was exactly what we were going for. like littleok microbes and he did a fantastic job. oliver: you went through a lot of effort to take pictures of the shrimp. so, with pictures like this, it was difficult to get them to stand up on the needle. wild west ofild, like streaming. oliver: one developer trying to

help the little guy getting a concert ticket without having to pay a scalper.

♪ oliver: welcome back to "bloomberg businessweek." i'm oliver renick. carol: and i'm carol massar. oliver: facebook does it and so does twitter. carol: live streaming. the trend is just starting to take off. oliver: we spoke to a reporter about the pioneering. that16 has been a big year all of the platforms have been pushing live video capacity. his book has been into it. twitter, youtube live, amazon with twitch. trying to get all of their users to do livestream. that is a big part of

it. the corporate element. there people who can do their own thing. bems like livestream will going towards a corporate client. facing well-positioned for the current moment. they sell a bunch of services, hardware, software to anybody who wants to do a livestream and make it look semi professional without hiring full production team. 2016 has been a huge year for this company. carol: run down some of the companies they are working with. at this point, they are up to 10,000 paying clients. i was surprised when i went to meet in with them. everything you can imagine -- churches, make a churches --mega

churches, a lot of them are live streaming. radio stations like to livestream with people doing radio. there are big brands. exxon mobil just hire them to do live streaming. tech companies who want to live stream product launches. , second-tier sports teams and leagues, professional bull riders is one of their clients. just nonprofits, universities who want to get their professors live streaming. anyone doing a conference these days foster have a livestream on the internet. the world economic forum is using them. oliver: why does the room for them to take this part of the industry when there has been skype around for a long time that pioneered the video chatting and back and forth? how are they able to take this part of the market? >> what they have going for them

is you have these huge platforms like facebook, youtube that are given away basic services. you can live stream on facebook for free, skype is free. there are these places were organizations can go to do a livestream, but i think where this company livestream is coming from is you can use those services for free, but if something goes wrong, there will not be anyone on facebook to answer your questions. if you want to monetize it, good luck how to do it on your own. what they say is for a little bit of money, we will hold your hand and make it look professional and michigan is reliable. carol: and app call song kick can improve the life see experience. jones is 30matt years old from england. essentially, he was able to start selling tickets directly

to artists over in england. when she wasdel unknown. he had these relationships and started selling tickets for them. a crowd source, they could sell 20% of their tickets. they had a lot more control. hehe made 10%. what do you do after you conquered england? you come to the u.s.. carol: then you meet ticketmaster and live nation. they are a beast and control a lot of the ticket sales. >> they do. even before the merger with live nation, ticketmaster --. are estimated they had contracts with 80% of the biggest event in the u.s. in england, concert halls are higher. it is not hard for the artist to

get there toe in there. in the u.s., ticketmaster negotiates exclusive deals with all of these places. carol: with the venues are artists? deals with the concert halls and that artists sell 80% of their tickets to their fan club members, but they keep a tight lock on that. oliver: who exactly are they disrupted and who is on their side? is it about trying to break agreements that these venues have? getting artist to come on board? >> in england, when you have multiple ticket sellers, you can disrupt that. the artist can use the cloud and kind of demand a certain percentage of ticket sales. ultimately, that is the strategy here.

the thing about live nation and ticketmaster is that they make their money from surcharges. they kick a lot of that money back to venues. that is where the prophetess. they don't make money -- that is where the profit is. that is an important business for them. if song kick wants to disrupt things, they have to break ticketmaster's hold and forced ticketmaster to give them more tickets. ticketmaster sees all this and says, we are not giving you anything. you are turning around and selling tickets to the general public. world'sp next, how the biggest art galleries make their money on cruise ship's. oliver: and products to keep you flying in style throughout the holiday season. ♪

♪ carol: welcome back to "bloomberg businessweek." i'm carol massar.

oliver: and i am oliver renick. you can catch us on the radio boston, 91 inn inhington and a.m. 92.60 london. in the features section, one art gallery has carved out a successful business selling its art on cruise ships. carol: but the passengers getting a good deal? we talk to a reporter. lines,ll the major crews there is one company called park west gallery space outside of detroit which says it is the biggest art gallery in the world, and it does it sells above cruise ships. over 100 cruise ships aroma world, thousands of options every year and has a niche in our market and the crew's business. i was intrigued to see how that

worked, especially sense there had been a long history of complaints about these options. carol: you have to tell us what this process is like. tell us what you saw and how they conducted it. the complaints had been they were promising people investment and returns on her artwork. they were saying they were getting great bargains and that people were coming ashore and saying they could not sell it for as much as they bought it. i went on as a passenger to attend auctions and see what would happen with these controversies in mind. what was interesting, event after event, they passed around the champagne and would butter up everyone and get a good , and everyone of these auctions, they were same every tell value is $4000, but we will start bidding at $3000.

and i wanted to know where people getting a good deal? after the series of lawsuits, had park west gallery's changed its ways? my thought was it was a mixed bag. us an idea of what type of pieces that people are buying. are they can recognize their names? what kind of stuff are they selling? >> i mean, it is a full range of stuff. you can buy a piece of art for $50. you can buy something for $15,000. the bulk of it is artist like kincaid, and thomas who is very popular in the u.s., and people who you may not have heard of, but part of this stable of artists of park west. i felt something that i liked.

paintings.ot these are prints worth tens of thousands in some cases. the bulk of what i saw from selling was the thousand dollar -- was in the thousand dollar range. some people you heard of, some people you have not. thatnteresting thing is they said that they could not predict the future. on the other hand, there was a question did people know what they were buying? this is where i was unsure of at first. walking around the gallery, they had kincaid with splotches of paint on them. they were actually a mix, not necessarily one-off painting, but something mass-produced and touched up to be one-of-a-kind.

carol: what is interesting is maybe what you see on the cruise ship as a consumer or someone who ends up betting on a piece of work, you don't necessarily get that piece of work you see on the ship? this is was on the passengers were confused about. i bid on that day up there, saw it, bought it, pick out the frame and we will send you another version from our warehouse. it was there in the fine print . there was one guy and a new york yankees t-shirt that thought he bought a painting on canvas, but ended up buying something on an inkjet printer. they do hundreds of thousands of the same picture and call it a limited edition series. it was not always clear to the passengers. oliver: staying on travel, let's

talk about travel gadgets. productsm tested for that may help with your flying over the holiday season. sam: because her with the product i was most impressed by was the bose headphones. they have been making noise reducing headphones for some time. these are new and has some interesting new features. they are wireless and noise reducing. earbuds, which i think is a preferable -- >> how do you block out noise using a bud? bose headphones were quiet controlled and they use opposite phase soundwaves to counsel out background noise. g of an airplane. it generates the opposite

frequency canceling out. carol: i love my bose headphones. i they like them? sam: worked very well. they are a lot smaller. carol: you have to tell me about the scooter luggage, which looks fun to see you on. sam: i cannot say it was necessarily fun to use. this company micro makes scooters and decided, hey, what if the attached a carry-on bag, a traditional, hard side carry on back to a scooter? handle can come up and down like a traditional rolling cart and you could write this thing around the airport. as you know, sometimes the distance between the gates to baggage claim or exits can be almost a mile. i'm thinking about terminal one were you just keep going on. carol: they look small.

sam: it is a small back, it is a heavy bag -- it is a small bag, it is a heavy bag. you do get some really funny looks from people and the airport. carol: you have to talk about the carry-on cocktail kit. designedsmall company and created these little sardine can-sized kids with all of the mixers you would need to create a proper cocktail on an airplane. the only thing you need to get from the cart is the liquor. but this is all tsa approved, very small amounts. anyou want to make old-fashioned or a bloody mary, you just get the appropriate liquor, the vodka, the scotch the flight attendant, and

you open up this kit and it has everything you need. in the case of the bloody mary mix, it comes with tiny little pickles. carol: did you sample it? the flight attendant, and you open up this kit and it has everything you need. sam: i sure did, are you kidding me? i'm a journalist. that is my job. carol: to me about the deep rest mask. sam: some people think about the mask, what could there be -- the people think about sleep masks. you want padding around the perimeter of your eye. we're getting very technical year, but it causes the rest of yourye mass to live above lie above your eye, which means you can blink and you don't fill the pressure. if you are wearing eye makeup that both of you might be doing depending on the shoot, it does not miss anything like that up. a completely blocks out all light.

very affordable and recoverable. carol: "bloomberg businessweek" is available on newsstands now. oliver: did you have a favorite? carol: i like the cover story on the bad shrimp. it takes down into the overuse of antibiotics getting into the seafood. we don't want to see that because it is creating a superbug. it takes down into the details and tracks the progress of shrimp coming in from china into the united states. oliver: very interesting. carol: favorite story? the americanbly treatment new jersey because as new yorkers, some of us have driven past it and it is not going anywhere. it is called the american dream. it was great investigative reporting. carol: good story. oliver: more bloomberg

television starts right now. ♪

♪ coming up on "bloomberg best" , the stories that shaped the week in business around the world. thickens, more to come. >> they took a small step beyond being data dependent. >> the oil outlook brightens the outlook for food. the gardenchange in goldman sachs. >> goldman sachs is making this move from a position of strength. >> donald trump's unconventional picks. you are going to be