carol: welcome to "bloomberg businessweek". i am carol massar. oliver: i am oliver renick. one day trader who loves wearing a wire for the fbi. creator hasert strange and controversial viewpoints. carol: the shockingly bad safety record for auto-parts makers in the south. oliver: all that ahead on "bloomberg businessweek". ♪ we are with the editor in chief megan murphy. you look at china, specifically

an economist who is trying to shut light on the chinese economy. story about ana economist who ran into trouble with the authorities and 2012 because he did a study on inequality and found that was higher than economists had forecast and was visited by several members of the administration at the time. what he is trying to do is do this complicated survey of china's wealth, and particularly china's people's wealth. estate,they have real what their farms are like, what the agricultural productivity is like in order to generate wealth. china, a huge swath of the hastry is agrarian and

not caught up with that development. someone who has faced opposition in his past is looking at what we need to pair back and give the truth about. oliver: let's talk about the opening remarks section, president trump has criticized ed about dismantling geopolitical institutions. the united nations is one he has criticized and whether or not it needs improvement. former reporter in liberia and it talks about an institution that is right for reform. there is concern about donald trump and his efforts to pair back foreign aid, and we should point out this is not a topic unique to the u.s.. there an issue with the fact

that people who work for the united nations and are in these war-torn countries are in pristineraveling 4 x 4's, living an expensive apartments, dining in expensive restaurants. they are there to help people, but she says this is an institution that has tried to stop reform, cutting access, and maybe there is some access there. carol: i was surprised to find out that the united nations does not measure the effect of its work. nations wouldted say this work is votto. -- is vital. as bigs no organization as the united nations that does not have some areas where people are going to look at.

carol: let's look at the cover story, auto manufacturing. megan: it is an incredibly goesful story because it into this darker underside when we talk about bringing manufacturing back to america, which is a team of donald trump and the current administration. it has not come without costs. this story focuses on the of auto manufacturers have moved their plans. concerns havefety run a much higher safety risk and have had greater incidence of injuries and fatalities than rivals and union shops. oliver: it is an illuminating look at the industry and an incredible human element.

let's talk about the auto-parts industry. that is where my story focuses. it is the area where we have the most egregious workers safety and health issues. the plants the automaker set up, there ecosystem of suppliers follow them from places like korea, japan, germany, other parts of europe, and this alto part manufacturing industry really flourished in alabama. more than 170re different auto-parts suppliers for these carmakers, and they employ around 26,000 people, so there has been an auto part boom in auto-parts manufacturing. ,hese companies, the assemblers

kia, hyundai, japanese companies, they squeezed their parts suppliers. they demand high rates of , manufacturing on steroids, essentially providing the assembly lines of the carmakers with parts that come directly over from the suppliers with no warehousing in between. that puts tremendous pressure on the auto-parts suppliers. talk about that pressure. it puts incredible pressure on workers in those factories and an environment with there is no union to protect them. >> we do know unions work with rules. they work with management to set work our limitations. they are active in safety and health. the united auto workers has shop stewards who focus on nothing but safety and enforce safety

rules. that is a key point, and indeed where our story focuses, which is the safety and health of workers in these auto-parts plants. there is a long litany of sad cases. in the article, i said it reads like an upton sinclair work or charles dickens. we had one individual, nathaniel walker, in his mid-20's working at a german company. nathaniel was working the back line come cleaning these tanks of acid where they would anodized metal parts to toughen them up with a coating, and they needed to be cleaned out every saturday night. the beginningn about 12 hours or even 24 hours to clean 25-30 of these tanks and change out the cathodes and

do whatever servicing was necessary. as productivity was increased, they were given less and less time. nathaniel would jump around on top of the installation docs which were on the edges of these tanks and was servicing one of them a few years ago and it was empty, but the one in back of him where he was perched in between these two tanks was filled with acid and his hand slipped on the repair and he fell backwards into four feet of acid and was literally wallowing in this stuff, swallowing it until he righted himself and a colleague watched him down, but did peel hisey cotton t-shirt off of him like tissue paper. it is not an atypical story.

intor: turning that story a cover image was the job of rob vargas. we interviewed some of the victims and these terrible accidents. one of the characters in the story lost his arm in one of these accidents, so we basically went out and took a couple of shots and ended up with this one, which we thought was pretty carful. when i first saw it, it stopped me. went intoiscussion how you are going to tell the story. it is a brutal story and one that stays with you. rob: if we did not have cooperation, it would have been impossible to do the story in the first place.

obviously the way in which we shot them was documentary style. we were not trying to over editorialize it. when you can put these people up as plainly as you want, but it is still striking because of what they lost. where he lost a good portion of one of his arms. how comfortable were they with doing that? rob: he was very comfortable and cooperative. we had a lot of shots of them on the inside feature, but you want to tell the story. carol: a new coalition fighting the white house. oliver: the political consulting firm that helped president trump get elected is now trying to capitalize on its success. carol: this is "bloomberg businessweek". ♪

carol: welcome back to "bloomberg businessweek" i am carol massar. oliver: i am oliver renick.

cambridge analytic as data models help form the backbone of campaign trumps campaign strategy. carol: now the firm is trying to leverage its ties to the white house. >> cambridge was a late entry to the trump campaign. their analysts help to identify pockets in the rust belt where there were persuadable voters. that is where they won the electoral college. their role was small but important. they had a great sales pitch. that they have this data analysis where they use people social feeds. it is called psychographics. they can tell whether people are persuadable taste on the things tweet.ach they say they have done it .lsewhere and have had access

the company has a mixed experience. oliver: those rust belt areas, people were wondering what is he doing, what is going on here? it turns out he was right. tell us about where else they have taken part. >> they have worked him and in campaigns all over the world, and some tactics they brag about our questionable and would raise eyebrows in american politics. they talked about how they it tensions and lafayette, blaming russians for the economic problems. usedinidad, they said they

a graffiti campaign. their candidate said i am a man of the people, and it was all a set up. there is a lot of talk about .ake news and misinformation that is the interesting thing about this company. it has been successful in using psi ops. measure what is motivating people and what might help persuade people from being radicalized. some of those have been effective, but some are the the lurecks that are of campaign bios and our

questionable in u.s. politics. oliver: it seems like their role in the u.s. election was to work with the trump campaign and figure out where they needed to place their energies. that seems to some degree a passive brawl, but as you point out, they have an active role in these other collections and have havebeyond that where they begun assessing potential terrorists. talk to us about their clients and who pays them for their services. they have had a lot of success in working for the u.s. state department. they just gave them a contract to measure potentially radicalized youth in different countries where they are afraid of ice is getting a hold of people. they are doing interviews, assessing social media fees and

seeing what issues could make someone go towards isis or find a less distractive way to act out their political beliefs. places have used fake information can saints, and that is the concern. a lot of times intelligence agencies used fake news and ispaganda, so the question do we want our tax dollars paying for company which has use questionable tactics elsewhere. is the company that has done a lot of the crushable tactics. carol: a group of states attorney general have joined forces to resist trumps conservative agenda. oliver: we talked to matt phillips. >> with democrats outnumbered in

congress, your real resistance is becoming this coalition of aggressive blue state attorney general's that are unified against the trump agenda. they are on the offensive, suing, notching two victories on the travel ban attempts by the feelingt, and they are like they have some momentum and are looking forward to fighting on fronts from environmental regulation to repealing obamacare. oliver: take us back to the 101 level. , we been following the pushback to those executive orders, judges, attorney generals, lawyers, talk us through what matters here. >> in february, a three-judge panel in the ninth circuit ruled in favor of a suit that was put by washington state attorney

general bob ferguson that basically knocked down his first attempt at the travel ban. it was discriminatory plain and simple. rather than pushing and fighting towards the supreme court, they revised the travel ban and put it forth again. it was met immediately with theher suit this time by hawaii state attorney general who basically suit on the same front, calling it discriminatory. few hoursgain a before was set to go into effect on march 16. and have stymied the president. president certainly has some self-inflicted wounds in the first two months in office. the democrats have been able to notch against him have come from these unified state attorney generals who are

democrats. carol: let's talk about that coordination among the democratic ag's. at play.coordination >> that's right. this was the annual meeting of all state attorneys generals in washington at the ritz carlton. the agenda is warring and did not mention trump, but 10 or so anocratic ag's took that as opportunity to meet privately on the sidelines out of earshot and eyesight of their republican colleagues to strategize and they coulds and how coordinate, join each other's lawsuits, how new york and california could work together and find common ground, and in a way they are taking a page out andhe republican playbook

have used it effectively against president obama. carol: up next, why it is important to saving cash rather than paying down debt or putting money into an ira. this is "bloomberg businessweek" . ♪

oliver: welcome back to "bloomberg businessweek" i am oliver renick.

carol: i am carol massar. you can also listen to us on the radio on series radio channel 119. dc and in washington a.m. 960 in the bay area. in the focus on retirement section, why do you may want to think twice before putting extra cash into your ira or 401(k). mylast year i paid off student debt and was celebrating and reading a book by a guy called the value of debt. he is somebody i have talked to before for other stories. i was surprised by the advice he was giving me in the book, so i asked him about it. the takeaway i had was that i was doing it wrong. i was putting a lot of money into my retirement accounts into putting more of my money in

cash. his whole idea is that we need liquidity as we move through our careers. what in argument and read about in business week is that so many people end up locking up their money, pay down their mortgage, put their money in an ira or 401(k) and instead of having that cash available when there is an emergency, when there is an emergency, they to do intoave equity in their home or stock. i'm all about that liquidity, right, but only to a certain extent. he does throw off the accepted knowledge of little bit. what is the common knowledge people had been using and where does he inject a new strain of thought? >> one of the issues with his

advice is the counter argument is that a mortgage or 401k is like a forced savings device. a lot of people if they have money in the bank will spend it. we think we will always find a use for that. think anderson is basically, forcegument is we have to ourselves to act rationally and find a way to segregate that money and put it somewhere where it will be available to us, but we will not be tempted to spend it. oliver: he basically says have a savings account, and no matter how much you are putting into it, put something in, even if it get in thelars, to practice early on that it will not be locked up. it is about having something secure and not readily access, but not completely out of touch. about a balanced

path. he says if you are making a certain amount of money, there is a certain amount of debt you can have, savings you should have, and maybe there is a certain amount -- there is 401(k) and ira money you should have set aside as well. you don't want to overdo any one of those buckets. carol: i knew blockchain or computer program to build any kind of business. oliver: a former day trader turned into an enthusiastic fbi informant. carol: this is "bloomberg businessweek". ♪

oliver: welcome back to "bloomberg businessweek" i am oliver renick. carol: i am carol massar. still ahead, america's top diplomat has a pension for going off the grid. oliver: a day trader with the silent hustle with the fbi. carol: the creator of dilbert. oliver: that is still ahead on "bloomberg businessweek". ♪ oliver: we are back with editor in chief megan murphy to talk about must-reit's in the magazine. let's talk about blockchain. it is getting very important. tell us about why blockchain is

in markets. megan: blockchain is one of those things you have heard about so much. on this partcuses of blockchain -- everybody knows bitcoin and how blockchain has ,reated a more secure bitcoin every transaction can be identified by a different set of numbers. so others to follow the way that the currency is the motivator. you can exchange contracts, and it isrograms, built into the blockchain. so why is it so important? instead of just being used as a crypto currency, it could be a way to program large parts of this is operations by exchanging these contracts between their

own systems and other people systems, and how much can simply automate. carol: you can tell it is thattant by the companies are involved, big companies looking at it. they are looking at it as the next manifestation of blockchain. how they weres hacked and $16 million was stolen, whether it is secure enough, whether they should be changing the back code, so it is still controversial. if we are looking at blockchain becoming the real thing, this is in focus. take a look at this product that is to suppress sugar cravings. megan: this is one of my favorite quirky stories. this is a former big hedge fund guy who worked for gotham ofital, and tells the story

how he said, there is a market. he thought if there was a way to reset my appetite before i had done that and not crave that sugar, what would it have been like. journey to makerma the taste for sugar unpalatable would lead to not eating. what they do is make sugar tastes unpalatable. help isthat will interesting. , the amount ofng research he went into, the science behind this product. oliver: it is interesting the way he implied some principles of his investing background.

let's talk about the story in the futures section, an incredible story about this fbi cooperation. it seems like it's going to be a movie. what was your favorite part of the story? megan: at the beginning where this fbi informant, they want him to crack down on pump and dump schemes. beginning, they took them off an airplane, got him a cheeseburger at a diner and said you have two options, help us do this or go to jail. case to and the prosecutor with a 98% success rate. oliver: he says no, let's roll. carol: that's what is fascinating, he gets addicted to the informing. oliver: he gets addicted to developing his method. they talk about how at first he

isobvious about the fact he an informant. mark --loves to hug his learns to hug his mark. carol: we got more on him. lasttrader tipped me off year to look at this website, rogue informant. it is a picture of a guy getting off a private jet. the tipster said this website was made by someone named guy genteel. you should give him a call. i called him up in the first time we talked, he was so ready for a reported a call. oliver: it is not a normal thing. >> it was bizarre. i have a story for you. it is like a woeful wall street meets american household. oliver: at the time, what is his

role questio? >> he runs and e*trade type company. he said he had spent the past four years working undercover for the fbi running sting operations to catch crooked traders. he had all this evidence and said he had a falling out with the fbi and wanted to tell the whole story of what happened, .hich is totally unusual oliver: who did they want him to get? >> the main target was a lawyer who specialized in taking small companies public. offering,ublic something he had been doing for decades. i look up all the come is it mentioned his name and regulatory files.

all the stock charts look the same. the fbi had spotted this pattern, but he was very careful , so they needed him on tape saying i am going to manipulate the stock. they could not just get him on these patterns they saw. oliver: did he have a ntile?onship with ge >> they had worked together on one of the deals that he was in trouble for back in 2008, so join the plan was gentile would call him and meet up and bring up this oh deal and get him to we did not get arrested for that one. it was a big scam. oliver: he was careful. >> it did not work. he was not playing ball on that, but did want to work with gentil e, so he started talking about other deals.

e loved being an informant, so he had all sorts of ideas. he said let's go after this guy. that guy owes me some money, let's get him. transpired much time -- he still had his trading platform up, but was spending time pointing up people he worked with and bringing them to the fbi. thesewould talk with agents every day and strategize about some targets, and the newark office is not the southern district of new york. they are not always bringing the biggest cases, and these agents did not have a ton of experience with these types of pump and dump cases him as so he brought them some high-frequency trading stuff. he says the agents were excited that he could bring them these cases and bring them into the big leagues of securities fraud. oliver: up next, rex tillerson

writing -- rewriting the rules on what it means to be secretary of state. carol: and how the creator of dilbert ended up rooting for donald trump. oliver: this is "bloomberg businessweek". ♪

oliver: welcome back to "bloomberg businessweek". i am oliver renick. i am carol massar. i am carol massar. carol: i am carol massar. he is doing it differently than any secretary of state of the modern era. a corporateng mentality into the job and diplomacy where everything happens behind closed doors. negotiations are kept secret. the press has no utility. they are a nuisance to be cut out rather than being used as a

messaging tool. that cuts especially when compared to john kerry, who never met a camera he did not like. rex tillerson is the anti-john kerry. he made some references to john kerry and soccer. oliver: that's right. john kerry was gregarious and love the press and had a habit a soccer ballund on the tarmac of what ever airport he found himself with the press. saidillerson spokesperson the days of kicking around a soccer ball on the tarmac are over. that speaks mimes about how rex tillerson and how his slim staff sees the job versus their predecessors. carol: that's interesting. this is story points out that or pastor state department,

secretaries of state, have been part diplomat and part public relations person. rex tillerson does not seem to want to do any of that. >> that's right. you can count on one hand the times he outside their annual meeting gave press availability. he did not see a need and did not do it. he is doing basically the same thing with the state department. this is his first big trip abroad. japan, south korea, and china and brought with him one reporter on the plane. but reportersol, had to line up their own transport and follow him around. for a lot of the trip, they had no sense of what he was up to them aware he was, what was being said, no better sense than for i hadgh had --

watching the tv. so that is a market difference -- marked difference than any secretary of state, where you do travel with a pool, keep them on the plane could sometimes you chat them up off the record or on background, but rex tillerson sees no value in that. he has a smaller plane. it flies faster than the 757 john kerry liked to fly in. carol: not a lot of room for other reporters. >> that's right. oliver: in the features section, our profile of dilbert creator scott adams. carol: including his unique outlook and habits. >> dilbert has been around for three decades. i think he is a staple of office culture, but a lot of people don't know who he is and were

surprised when he resurfaced during the campaign is one of the first people to predict that donald trump would win the election. our goal was to go to california ,nd find out who is scott adams what was his interest and the presidency come what has he been up to. oliver: tell us what he has been doing. huge comic strip, still published, very popular around the tech boom. what has he been doing now in addition to keeping the common strip -- comic strip going? beyondas gone well cartoons to write best-selling business books, blogging regularly, and it turns out he is fascinated with persuasion and has been for his entire life. he sought trump as a fellow

master persuader and started writing about him on a daily basis. oliver: what is the form he is writing in? what is he writing about? >> he is writing to an ever-growing audience. when he started, he was getting 10,000-12,000 hits a day. days, 450,000. it is an interesting read the kaz as the election -- read because as the campaign was progressing, trump was saying things that people thought were not statesmanlike, offensive, and often scott adams would think they were brilliant persuasion techniques, that trump was a political savant. oliver: it is interesting because he was one of the come

of whether are not you agree or disagree with trump, his prediction that trump will win turned out to be true. >> right, which he is very happy about. he has a book deal now, although he says speaking engagements have dried up. he said he was always getting invitations on a weekly basis and that nobody wants him to speak i. oliver: because of his pro-trump stands. >> exactly. he said he was not endorsing trump, although he did have disparaging posts about clinton, and putid endorse trump up lists of things that trump supporters could do to convert clinton supporters, but he did not vote. oliver: he did not cast his vote.

he pointed out in ignorance of the voter in general. the average citizen, including him, does not know enough about international affairs, economics, and science to cast a vote, but he's still feels that it is important enough that he apparently wants to influence the vote. oliver: up next, worried about disappearing honeybees? >> you are not alone. and the answer might involve drones. carol: will the iphone survive augmented reality. oliver: that is ahead on "bloomberg businessweek". ♪

carol: welcome back to "bloomberg businessweek". i am carol massar. oliver: i am oliver renick. you can also catch us on the radio on serious xm 119, 99.1 fm in washington dc, and a.m. 960 in the bay area. in the technology

section, a butterfly-sized rhône that could be exactly what mother nature ordered. a researcher at the national institute of advanced science technology in japan has developed through adhesive , conductive gels and liquids, and started to repurpose them as a means of pollinating flowers. ofcerned about decades worth devastation to the world be population. oliver: is this a surrogate for the bees that is driving this? this guy isnes attaching bid he's of two is about the size of butterflies. the end goal is to make them autonomous enough to complement the be population.

the actuall us about technology. you guys got some cool photos in the magazine. tell us about where the adhesive fits into it. >> the drone is about the size of a butterfly. the in game is to get to the point where they are more autonomous. he puts the gel he has developed on the underside of the drone and as he pilots it from flower to flower, the it he's it will pick up pollen grains on contact been deposit those pollen grains once it comes into contact with the next flower. oliver: how does this drone compare -- you guys have been covering this technology as it has emerged. have you heard of anything like this before?

a new one on us. a lot of the technology you hear about is the pentagon or commercial quad copters, $800 drones that people can pilot around the park. oliver: do we know where his funding comes from? part, to hisst wife's chagrin, he took the initial funding out of his own pocket, but now has got grant money. oliver: you have got basically the resin here. is that where his research began? do we know how it was being applied before? >> he was in the adhesive business for a while, and had been developing shells designed to be electroconductive, so when he started thinking about the bee problem, one of the gels he

had invented seem to dovetail with picking up and releasing pollen grains. isver: also, tim cook betting augmented reality can keep his company on top. >> it is a huge bet. they have several hundred people. they made acquisitions. they are making this known as their next technology. they have talked about a lot of stuff, ai, self driving cars, cloud, and ar. he has mentioned it everywhere from financial conferences to a tech conference at year ago and salt lake city, utah. i think it will be core to the next series of apple products. oliver: what do those products look like? software, games and apps on your phone, or would they go into a new type of device? >> i think it will be a mix of

all of those things. it definitely glasses are in development. there are ai glasses on the market. these usually cause north of $1000. $700,one starts at around and those are very powerful. a pcave to connect them to to get the graphics horsepower. on the other end of the spectrum , the samsung gear vr. google glasses $1500 through a ta program. they need to strike a balance and make something that is not very expensive, but also very powerful and not flimsy, so we will see if they can pull that off. carol: you put a note in your

story that tim cook alike and augmented reality to its game changing potential to that of the smartphone. he thinks this is truly a game changer for the company. important for apple, a company that gets the bulk of its earnings from the iphone, but he is putting it on that kind of level. >> the thing about the iphone that made it unique is that it went well beyond the phone and , ipad,off in ecosystem eric potts come many products and services that the company makes its money from now that are here because of the iphone. in theooking at a ar same way. it is not just a singular product. augmented reality can be fed into software, create its own gaming ecosystem. side, we wille

see glasses and other ar products down the road, so it will be court to a new generation of products and services, just like the iphone when it was released in 2007 created this next decade of other products built around that ecosystem. carol: "bloomberg businessweek" is available on newsstands now. oliver: what was your favorite story? carol: i was moved by the cover story. auto parts manufacturers in the american south. we have seen the growth of this industry in the south because of tax breaks that have been good for the local economy, but not necessarily the workers there. some are getting hurt, some losing their lives. a brutal, tragic story. how about you? about thee story former day trader. it is so funny. it is a great story and sheds that on the malfeasance goes on on wall street, but a

great personal story about a guy fancying himself being a secret agent himself. carol: it will be a movie someday. oliver: absolutely. more bloomberg television starts right now. ♪

fedfed coming up, the stories that shaped the week in business around the world. a shocking attack rocks london. the health-care battle continues in washington. the u.k. and the european union set dates to deal with brexit, and the trump trade hits a speed bump. >> it is like someone flipped a hands off. said >> i am asking, what is the rush to raise rates? >> trade and finance ministers push back. >> i am in