♪ carol: welcome to "bloomberg businessweek." i'm carol massar. julia: i'm julia chatterley and we are inside the magazine tech headquarters in new york. carol: in this week's issue, self-driving technology gets paint makers revved up. julia: the fall and the fall of uber's travis kalanick. carol: and the flaws at intel that may chip away at the company. julia: all that is ahead on "bloomberg businessweek." ♪ a carol: we are here with the assistant managing editor at bloomberg businessweek, jim ellis. i want to start at the business,

because there is a fascinating story. we have been so focused on the auto sector. we had the auto show underway in detroit. when we think of self driving, we think of the auto manufacturers, but you also have to think about the paint manufacturers. that is what you guys write about this week? jim: this is a really interesting story, because we think this technology is all about sensors and high-tech things and now some of the most old-school companies around, paint manufacturers, are sort of key to the new technology. but it turns out that for all the sensors we are equipping newfangled cars with, autonomous vehicles need to be able to bounce off another oncoming vehicle or vehicles around and then they judge the distance between them, they do -- crucial to make this work. the problem is it turns out there's a blind spot these sensors have, and that is people can't read very well cars that are black or dark colored. carol: and there are a lot out

there. jim: that's it. the bouncing needed to determine distance between things doesn't happen when things get black. so paint manufacturers are coming up with new ways to how to make things bounce back. they have taken inspiration from an unusual place. julia: from eggplants. jim: from the eggplant. it turns out it is dark but grows in the sun and stays cool when it is picked. so an engineer at ppg figured out that is because the near-ultraviolet rays go through the dark skin and bounce off of the white underside and come back. what they discovered is you can do paint that has a paint that goes through the dark outside, goes to a white undercoat and bounces back to the sensor and therefore, it can be used for autonomous vehicles. julia: i wonder what the challenges here would be if you have autonomous technology, electric vehicles, does that

mean less vehicles on the road, but the amount of paint that is required per vehicle is far higher. jim: it turns out you're right. if you have autonomous and more shared vehicles, there are fewer cars and therefore if i make paint for cars i will lose , business. this is great, however, because electric cars particularly need lots and lots of paint and coatings. all the batteries -- and there are lots of batteries. the entire bottom of the car is almost completely batteries. all of them have to be wrapped in paint and coating. carol: what is fun about this story is paint is kind of high-tech already. it has been used to control temperature and so much more. i didn't know that. jim: but we have so many smart features built into the new cars now. cars that can park themselves, cars that have the distance determination within the car, all those things require sensors and a lot of those sensors work better if they can either have special paints that are around

the electronics or around the part of the car on the bumpers to allow the waves to go in and out. julia: ppg is working on barcodes to allow cars to identify each other, which is quite fascinating. i want to move over to the u.s. cover story this week and talk about who would love to paint over the cracks. travis kalanick. jim: it is quite a story. we have sort of got a look at the year-long fall of uber's ceo and going from the hot startup to the company that could do no wrong to the company everyone hated. it is an interesting tale because it is a tale of hubris, overreach, stubbornness and it says so much about silicon valley and so much about american business. carol: and it is a great thing about travis kalanick crawling on all fours. i am not going to give it away, but it is unbelievable.

brad stone has written a lot about uber in the past. he's got a book out, and this is kind of an update of that story. we talked to brad. brad: one year ago, uber riding high. it was a company valued at almost $70 billion. it was seen as this success, this unimaginable success story that transformed transportation around the world, but that was the public perception. and inside, there was a little bit of early worry that this company had gone too hard too fast for too long. and the -- one of the things they did, they took the first step toward hiring a professional manager, a guy named jeff jones, who came in as the president. he was a former target marketing guy. he came to uber. he only lasted a couple of months, but he decided to do some marketing surveys to see what the perception of the company was. carol: and uber had never done this. brad: of course not, that was way too conventional. julia: of course, some were voicing slight concerns. others had no concerns

whatsoever. brad: of course. travis kalanick, the cofounder and ceo, felt pretty secure in his aggressive approach, but jeff conducted some polling research and they found that the more people knew about uber, about how it was run and who was running it, the less favorable a perception they had. so this meeting where eric newcomer and i start our story in businessweek this week is all about the meeting where they were talking about this. the question is, did uber have a pr problem or did it have a how the company was run problem? julia: a culture problem. brad: exactly, a culture problem. and this was before all of this stuff happened, they they were debating that. at this moment, in this debate, ironically, bloomberg and my colleague, eric, we posted a video of the dashcam footage of travis kalanick over super bowl weekend 2017 berating a driver. carol: talk about timing. so kalanick looks at that video

and goes back to this meeting and starts crawling around on all fours. brad: this is when he saw the video. he is on his knees and is saying, i'm terrible, i'm horrible. but you know, it's funny because that meeting had big ramifications, and we report on this in our story, which is about the unraveling of uber. one of the things was travis went and entered into a financial arrangement, a private financial arrangement with the driver that really alienated some of his colleagues at uber. another thing that happened is he didn't really address the core problem. he continued to think it was a pr problem. julia: even at that point, after he had crawled on the floor for a little bit, he was like, we need new pr strategies? i want you to explain more about that financial arrangement with this driver, because you point out this was meant to be a conversation. he was going to go apologize and the thing got a little bit heated again and he started saying he would write a check to the guy. the other member of uber that was there was like, hold on a second.

what is going on here? brad: right. that is one element and a previously unreported element of the saga, travis went to the driver. i might mispronounce his name. he was advised to spend a couple of minutes in the room with him, apologize and leave, and he -- and instead he debated him for an hour and agreed to give him uber stock. uber's lawyers objected to that, and he ended up making a private payment. after he had gotten removed as ceo but was still actively involved in the company, there was some sense the media would report on this. and from afar, when he asked uber's global head of security, a guy named joe sullivan, to see if he could look at the emails of people who might be leaking this story, and now we are six or seven months later, a precipitating event that led in part to the entire 14-member executive leadership team writing a letter to the board

asking board members, but travis in particular, to step out of the day-to-day. carol: turning the trouble into a cover image was the job of a design director. chris: there are no photos of him doing any of these things, so we hired this illustrator to do kind of a couple different scenes. this is definitely the most visually impactful one of him on his knees after he has watched this video of him arguing with the uber driver. carol: it feels like such a different cover for you guys. i looked at it, and i am so used to photographs or type, but there was a lot of white space. julia: stark. chris: we wanted it to be arresting and we used the typography to zero in on him. have that weight of all those different events. carol: it is interesting that you say that, because is it the company's problems and ultimately, it turned out to be the ceo who was the problem. chris: definitely. he is falling and falling and falling and falling.

carol: up next, kentucky's experiment with medicaid. julia: plus, gerrymandering gets its day in court. carol: this is "bloomberg businessweek." ♪

♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. julia: i'm julia chatterley, and you can find us online at businessweek.com. carol: and on our mobile app. this summer, kentucky will begin requiring medicare recipients to show they are working. julia: we spoke to matthew philips about how the plan may unfold and what might be the outcome. matt: this is something conservatives have long wanted to do in their idea to shrink eligibility for medicaid and to make it harder to qualify for a lot of the social safety net that exists for poor and low income americans.

so on january 12, president trump gave states the ability to start experimenting with medicaid however they want. they have to apply for waivers, but a lot of that will include adding work requirements to that. the next day, they approved a kentucky request to do just that, which had been pending since 2016. so starting this coming summer in july, kentucky will be the first state in the union to require medicaid recipients to prove that they are working and if not, that they are disabled or pregnant or volunteering or in school. julia: very briefly, who does this actually apply to then and of those that are getting medicaid at this moment, who would be excluded? matthew: sure, so medicaid is the 53-year-old federal and state program that is aimed at providing insurance for low-income americans.

right now, 72 million americans are enrolled in medicaid. that spending is just shy of $700 billion and accounts for about 20% of total health care spending in the united states. so it is a massive social safety net program and right now, your income threshold, depending on where you are in the country, is about 138% of the poverty line, which amounts to about $16,000. that was expanded under the affordable care act under president obama and about 30 states, including kentucky, chose to expand medicaid. so those numbers went up starting about 2014. what we are seeing now is, on top of the gop effort in congress to undercut and repeal obamacare, kind of chip away at it, now the battle has moved to the state level. kentucky is the first state to do this. there are nine other states that

have similar waivers that are pending in front of the federal government that will probably be approved sometime in the next few months. so what we will see for 2018 and for the next few years, we will see this social experiment conservatives have been wanting to do to raise the eligibility for medicaid to save money and get people back to work. julia: also in politics, two redistricting cases are raising the odds at the supreme court may define some voting maps violate the constitution. carol: we got more from peter coy. peter: gerrymandering is when you either pack all the voters from the other party into a certain district where they will be harmless, because you put them all in one place, or you will try to spread them out very thinly, but always in the minority so they can't win. basically, it is a way of making sure your party gets more seats

than the other one disproportionate to the actual support for the party in the state. julia: where were these cases and what will be heard this year? peter: they have already heard back in october one case back in -- one case involving wisconsin and redistricting the state assembly, and it was republicans that did it and the democrats objected. the case in maryland, the opposite. one single congressional district, a democrat districts where the republicans are complaining. julia: when these districts are redrawn, what is the excuse given if not for political reasons? carol: and it is done every 10 years, isn't it? peter: right. on the state level, for purposes of congressional districting it is related to the census. one reason you draw lines is to make sure you have the same number of people in each district. the one person, one vote rule. you have to do that anyway. so then it comes down to where do you draw the line? julia: the shape. peter: there are many ways to get the same number of people in the district, and you can see

some -- i believe it was massachusetts where the word gerrymandering came from. it looked like the shape of a dragon. but with modern software, they are getting more creative in finding ways to pack and crack. those are the terms in the profession to get maximum advantage. carol: who is in charge of drawing the lines? i feel like in this day and age with computers and algorithms, you could just throw the data in and let a computer decide. julia: meeting all the requirements. carol: right, make it fair. but who ultimately -- peter: state legislatures do it. here is the case. john roberts, supreme court chief justice, is very strong on the idea that he does not want the court to be politicized. or even to be perceived as political. he wants to keep his hands clean because he said the credibility

of the supreme court is very important and has to be preserved. julia: bipartisan. peter: yeah, and he is afraid if they start disallowing this redistricting, allowing that one, inevitably people will say they are being partisan. julia: up next, political instability is leading some bankers to seek friends in unusual places. carol: and silicon valley sees a brain drain to china. julia: this is "bloomberg businessweek." ♪

♪ julia: welcome back to "bloomberg businessweek." i'm julia chatterley. carol: i'm carol massar. you can listen to us on sirius 119.annel

106 .1 in boston. 99.1 fm and washington, d.c. julia: and in asia on the bloomberg radio plus app. in the economic section, the u.k.'s opposition party, the labour party, has been sought out by fund managers, ceos and bankers over the past six months. carol: the reason may be simple. the prospect of labour winning power is starting to overshadow brexit as the biggest wildcard for investors. julia: here is our editor christina lindblad with more. >> mcdonnell is not your typical politician. he has been a veteran of labour and he's a man who has waived the red book in debate in parliament and lists one of his interests as fermenting the overthrow of capitalism. julia: that will sit well with everybody. [laughter] carol: talk about that, because business people, investors are

more concerned about labour winning in the next election than they are about brexit. cristina: the party's performance in the snap election last year was a wake-up call to britain. carol: 40% of the vote. cristina: that's right, a high water mark that goes up to the 2000's. so i think the expectation is they have a very good shot of winning the next election, whenever that happens. one is not scheduled for years, but we know that may's government is very troubled, so it could come sooner. so i think there is a moment where it is like let's feel each other out, where we stand. it is an opportunity perhaps for business to go in and say these are parts of your agenda that make us really uncomfortable. is there any room for flexibility in these areas? also -- but i think one of the big issues is that the party's stance on brexit has been more

flexible than may's conservatives. i think businesses and the banking sector are certainly attracted to that since they overwhelmingly opposed brexit. julia: traditionally, the labour party would have been pro-europe, there is the debate on brexit that maybe if jeremy corbyn had taken a strong stance and we wouldn't be here in the first place. there is some strange irony. what extent are businesses now courting him, approaching him, trying to talk to him? like you said, there are concerning policies when you look down the list, whether it is raising corporate taxes or reversing that corporate tax cuts we have seen, raising the level of personal taxes quite dramatically, borrowing, it is very labour. old labour. cristina: it harkens back to another time. so people are actively seeking audiences with corbyn and mcdonnell. i think more people have been talking with mcdonnell. julia: yes. cristina: it is a strange situation because lobbyists and

some advisor firms don't have contacts into labour. they date back into new labour, so they are having to scramble a bit. some people have resorted to the idea of trying to get a seat next to mcdonnell at events. [laughter] carol: i love that. cristina: and goldman just sort of walked up to him at a conference and said we would like to have a meeting, and they are working on scheduling something. carol: in the technology section, chinese engineers in silicon valley are moving back home in record numbers. julia: we talked to jeff muska's about the trend. jeff: they are getting tired of a bamboo ceiling, this idea there are not leadership roles available to them in the major silicon valley companies. or at the very least, it is taking them too long to rise above the level of entry-level engineering and deal with the kinds of grander problems that they see friends and colleagues

back in china wrestling with. julia: and now tech has taken over finance as the most popular reason for these guys to go back home. jeff: according to a recent survey, it accounts for one in six expats going back to china. julia: which is quite fascinating, at a time when xi jinping is cracking down on internet privacy and the approach for these companies, why is it so easy for these guys to start up their own companies? and operate in this space? jeff: according to the headhunters, a big piece of that began with the 2014 ipo of alibaba. now there is more money than ever flowing through chinese venture capital funds. once in a while, even, there was briefly more chinese vc money than american vc money. getting back to the bamboo ceiling question, chinese engineers seem to have a much

better time raising money if they are in china. carol: and you do talk about the vc money flowing into china. three of the five biggest startups are based in beijing. that gives a credibility when it comes to the startup world. jeff: absolutely, and the other piece of this opportunity question aside from the money, one engineer, according to our reporters, received $30 million in compensation for a four-year deal. carol: whoa. that blew my mind. $30 million for a four-year deal for an engineer. jeff: it really is pro athlete money. or ceo. carol: like a sports contract, yeah. jeff: but the other piece to it, according to the engineers we spoke to has everything to do with what you are talking about in terms of the looser privacy laws, this idea that the 700 million chinese internet users' privacy and data is much more

accessible and usable than those of americans. julia: that makes total sense. when does this become a problem for silicon valley that they are losing all this talent to places like china, and i am sure it is going on in other countries, too. jeff: the thing silicon valley has to worry about in the long term is losing ai-related engineers who, at the moment, are the most in demand of anybody in the valley or elsewhere around the world. that could take a while. of the 850,000 ai engineers or ai related workers in the u.s. right now. but one in 12 of 70,000 have chinese heritage of some kind. that is still more engineers that are in china, it is about 50,000. carol: up next, the latest cosmetic innovation in china doesn't come in a tube or compact, it is found in a petri dish. julia: plus, a brave face from intel's ceo at the recent cef conference, but the problems persist.

carol: this is "bloomberg businessweek." ♪ retail.

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julia: welcome back to "bloomberg businessweek." i'm julia chatterley. carol: and i'm carol massar. still ahead in this weeks's issue, fixing intel's chips. julia: making a fortune from mexican drug ballads. carol: the film financier changing the colors of hollywood. julia: that is still to come on bloomberg businessweek. ♪ julia: we are back with assistant managing editor jim ellis and the editor of the business section here. in the more must-read section,

beauty may be skin deep, but that skin matters. jim: it matters quite a lot. it turns out that humans all have very similar epidermis, but beneath that, there are lots of differences. lots of ways that individual cells react differently depending on the race or nationality or locality of the person, and l'oreal, the french cosmetics company, is doing some very interesting work with that, looking at how it can tailor-make cosmetics for chinese skin, and to do that, it has gone to the lab and are making chinese skin, growing it there. carol: it's fascinating. and this is how they can play around with products, adapting existing products so they work well on chinese skin. jim: it turns out that when even if the products have the same name, they can have big differences for the chinese market or the u.s. market, or even the european market. for example, revita-lift in the

u.s. market and europe, it goes through getting rid of wrinkles. julia: it is a plumper. jim: it is a plumper, but the way chinese skin ages, it tends to plump up as women age. instead, they are looking for flexibility and the ability to get rid of discolorations, but the name stays the same. you discover this when you grow skin and then test it and see how it reacts versus skin they have already been growing for europeans for years. carol: what is interesting is the skin they are developing, they are also creating another market where they are selling it to other cosmetics companies to do their own testing. jim: they are donating it to academic researchers, but selling it to other cosmetics companies. so this is -- it is a double business for them. julia: the other challenge is the chinese demand products be tested on animals. carol: the body shop is one that does not want to do that. julia: their brand is based on

that. jim: this is the possibility of allowing companies like bert's bees, who currently don't sell directly in china, to enter those markets because once you develop what truly is skin, you can test on that skin and don't have to test on animals. so we have already seen lots of companies getting excited about that and this is the wave of the future for skin care. carol: talking about futures, let's see what the future of intel is. this is another story we have a future -- i feel like this will end up being the big stories of 2018. it is about intel, and a group of researchers discovered a major, major flaw in intel chips. jim: what is so interesting about this is not the fact that we found a flaw. we find flaws in technology a lot, and in some ways that is a good thing. you are constantly trying to tighten things up, but the issue

here was -- a google researcher actually discovered this flaw in intel's chips. the thing is it is in the chips used in most pcs and most devices around the world. the sheer scale of this is what makes it so phenomenal, that all of a sudden -- and also what it involves. it involves the section of a chip where you -- carol: like your passwords. your information. jim: you put your information there, and they figured out a way to access that, things like passwords, security codes and that is a problem, especially a problem that intel knew for six months and never said anything about. julia: and there are whopping great share sales in that time. this is a fascinating story. here is reporter max eskin. max: ces was about a week and a half ago. the consumer electronics show, the big gadget extravaganza and

then, brian krzanich, the ceo of intel comes out for a short amount of time says something very serious, which is not quite an apology, but an explanation of this terrible security flaw that had been discovered days earlier. so it was a very awkward situation and the security flaw -- you could make an argument it is the worst security flaw in the history of computer chips. it is a really bad one. julia: what exactly did he say on that stage? because as you said, this is huge. max: that is where the story goes, is that he didn't quite apologize, which was surprising because this is so bad. he thanked intel's partners for standing with the company in the face of this security flaw and then basically tried to change the subject. what my cowriter ian king and i get into in the story is this isn't going to be an easy subject to change. earlier this year, right at the beginning of the year, intel

disclosed these two vulnerabilities. one is called specter, one is called meltdown. what they amount to is the most secure part of your computer, the part that basically everyone thought was uncrackable, is in fact crackable. it gets really technical really quickly, but it is the memory ed by the kernel, the operating system on your computer and a group of security researchers, led by somebody at google but also working people all around the world, figured out how to get into it. carol: what i love is that security researchers -- there was a thing floating out there that there may be a way to get in and no, intel could never have left a hole like this to get in, but they did. max: this is one of those ones where people were talking about it in theoretical terms and as we say in the story, and as bloomberg has reported previously, the security researchers looked past this because they assumed no one would miss this. julia: the accusation here is they put speed before security

here and as you mentioned at the beginning, actually, most of their clients, their partners have been pretty tight-lipped over the subject. microsoft would be the one i would point to and came out and said fixing these flaws could mean delays. max: and it is important to remember -- one thing that happened is you have this bad flaw and then most of intel's partners, with the exception of microsoft, publicly come out and stand arm in arm with intel. carol: kumbaya. max: in the background, they are also not happy about this. but one reason we haven't seen more stuff out in the open is because intel has a virtual monopoly on server chips. julia: bingo. max: server chips are the chips that basically run the internet. it is not the biggest, but probably the most important line of intel's business. they still sell tons of cpus for personal computers, but they are basically the only game in town in server chips at the moment. and so amazon, microsoft, apple,

all these companies that buy a lot of these chips -- dell, hewlett-packard -- they can't just break with intel. they have to work with this company because there is nobody else. the problem is there is not really anyway -- one of these flaws is patchable, sort of, but it will really slow down the chips. the other flaw is not really patchable and in any case, the only way we get past this is with a full chip redesign. that is going to take a long time. it is not the kind of thing they can just fix overnight. that is why you are seeing these big cloud providers publicly try to put on a brave face, maybe privately saying whoa, this is really bad. julia: up next, on the lookout for a bitcoin bubble and what may cause it to go pop. carol: plus, what might give high school and college a bad grade. julia: this is "bloomberg businessweek." ♪

♪ julia: welcome back to "bloomberg businessweek," i'm julia chatterley. carol: i'm carol massar. you can also find us online at businessweek.com. julia: and the bloomberg mobile app. in the finance section, the big bitcoin question. carol: from $900 to $20,000 to $10,000. what would it take for more of a selloff? julia: here is our reporter, matthew. matthew: you have seen incredible price movement in bitcoin in the past year. a year ago, it was under $1000. it went over $20,000 briefly last month and is now back at $12,000. it is not often you can see an asset that sees a bubble and a crash at the same time, but what we are looking at in this article is what are the kind of things that could dent that confidence in bitcoin? because we are making the case that bitcoin is a belief. people believe in it, it is the first digital currency that

can't be stopped by governments or corporations and that is appealing to a lot of people. i think that is what got us from 2009 up to last year. with bitcoin, you have seen hacks and exchanges, hundreds of millions of dollars of bitcoin stolen, governments try to ban it. there has been a civil war going on among the developers who are essential to this for years and yet, none of that has stopped this incredible upward momentum. carol: one thing you do say is a risk, that would be be the underlying technology of bitcoin, and that is blockchain. maybe having problems with that, because so far, we haven't seen problems. matt: that's right. that is the thing that makes bitcoin possible, the blockchain. it is a time-ordered sequence of every transaction that has ever been done with a bitcoin. you know everything -- you can trace back the history of the bitcoin you just bought. and that is why the digital currency works.

for the first time, that was the main breakthrough. so it is possible to go in and overwhelm that network of computers all around the world and try to change that history so you can pay for a yacht for $10 million of your bitcoin and go in and hack the network and take the bitcoin back and you still have your yacht. that is a silly example, but what is so interesting about this is if you can take over the network and have that much computing power, you might as well sit there and earn bitcoin for the transactions you verify. you get free bitcoin for every one you do, so the incentive -- it is fascinating that there is not an incentive to hack it, unless like from the batman movie, some joker type who wants to sow chaos in the world. that is possible, but it is interesting that every but we get to has a strong counter argument in my opinion. carol: and now to another debate

-- the cost and benefits of education. julia: opening the magazine this week, in "remarks," peter coy considers the controversial theme of an economist's new book. carol: "the case against education: why the education system is a waste of time and money." julia: ouch. i think the title says it all. listen in. peter: it is a theory that has produced a bunch of nobel prizes that signals education, having a degree, walking into an employment office with a diploma says stuff to an employer about your level of intelligence, your willingness to work hard and complete the four-year degree and your degree of conformity, in a sense, in that you managed to work through a fairly rigid system and comply with all of its rules. carol: the boring classes, perhaps. julia: it is about this signaling effect and what you actually gain from being there. peter: from what you learned.

the core idea is that if you believe in signaling, you could study anything. sanskrit, cement mixing, and it will be perfectly fine as far as the employers are concerned because they are not paying you for what you learned in college, but just for the very fact that you have that degree. julia: he believes only 5% of americans should actually get a college education. i mean, that is a headline. peter: that is pretty extreme. so a lot of people, i think, will read this book and be with him on a lot of his points and yeah, i went to college and spent a lot of time throwing frisbees around and don't know how much i really learned. carol: i'm with him. peter: how much of what i learned in history class or quadrilaterals -- whatever that stuff is, i don't remember. [laughter] julia: the triangles, i know. square of the hypotenuse. carol: right, or algebra or geometry, how much do we use it on a daily basis? what is interesting as you also say -- all right, if says only

-- if he says only 5% of people should go to school and you take away a lot of funding and support, college loans, who gets to go to school? ultimately, the wealthy. peter: that is where i come to at the end of the piece. i believe that, as a libertarian who is very focused on getting government out of the picture and the free market will sort things out for the best, the people who should go to college will go to college because it will be worth it to them, but i am afraid about is the people who will have the money -- or the parents who have the money -- who will still see the benefit of college as a signal and make sure their kids go to school and you have lost the potential benefits of college for equalizing society. julia: but he does make the distinction between a vocational qualification and a degree. i think we need to make this point too. what does the evidence suggest about getting a college education and your earning power going forward? because we did this in the u.k.

and promoted more people getting degrees, and you had people do things like beyonce studies as a college course -- i exaggerate, but they didn't get a job afterward. peter: that is a strong point of his argument. if you are academically inclined, and you can learn a lot and do get that human capital benefit, but for people who aren't, they actually could be better off learning a productive trade, heating, ventilating, and air conditioning, name it. and they will be happier. they will probably work harder because it will be something they have a genuine interest in, and their lifelong earnings could end up being higher than if they go into some liberal arts program and don't learn anything. carol: up next, a mexican star finding fame singing about the drug trade. julia: plus, financier charles

king on getting black people seen and heard in hollywood. carol: this is "bloomberg businessweek." ♪

♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. julia: i'm julia chatterley. you can listen to us on xm radio and also in new york, boston, washington, d.c. and the bay area. carol: and in london on dab and in asia on the bloomberg radio plus app. in the futures section, a look at the semi official music of mexican drug cartels. julia: they are known as narcocorridos, and record label twins music group has made this pretty dark genre its speciality. carol: here is reporter david

peiser. david: el komander is this guy named alfredo rios, and this guy has become a popstar. his claim to fame is singing these very violent narcocorridos. they are essentially mexican drug ballads. he sings songs about mexican drug cartels, drug activity among other things. he sings traditional romantic love songs as well. i guess his big claim to fame is that he really kind of -- narcocorridos have existed in mexican music for decades, but he really upped the ante and made them more violent, more graphic, and that is what made him famous. carol: right. you included some of the lyrics in your reporting and it is

pretty interesting. i didn't realize this was such a popular mode of music. david: yeah. i mean -- like any kind of music, it goes in and out of popularity or in cycles, but it is very popular. it has a huge following. even shows in california, in atlanta -- these guys play all around the u.s. and they play to 5000, 10,000 people in mexico, some places in central america they will be playing to 10,000 to 15,000 people. carol: and 100 million views on youtube. people are watching what he is doing. david: absolutely. it is a big market and yeah, youtube has been a huge part of it. these guys do very elaborate videos and make their videos into little five-minute movies and they are very savvy about that. julia: but this is quite

heartbreaking, i have to say. they are glamorizing something that has huge implications for the country. obviously, we have seen the mexican government really crack down on this in the past couple of years. as you pointed out in the article, last year was the deadliest year for drug-related killings we have seen in many years. so talk to us about the record label that he is actually signed to and what kind of pushback have they received on the music they are making? david: the name of the label is twins and it is run by two guys who are twins. one of them now lives outside of l.a. and has an office in burbank. the other one has an office down south. the label has been very successful. el komander is kind of their big star, but as far as pushback, it is not as much as you might think.

the best analogy is if you think about gangster rap here. yes, there are people who are upset about it but for the most part, it has become part of the sort of musical landscape and i think narcocorridos in the same way have become part of the mexican musical landscape, with tradition going back quite a ways. julia: focusing on the entertainment business now, and this week's game changer is charles king. carol: he was the first black partner at hollywood power agency william morris endeavor. julia: and now he is financing films in hollywood. carol: here is reporter lucas shaw. lucas: he is a guy from atlanta who went to vanderbilt and then howard law school and then worked in the mailroom of one of the oldest agencies in hollywood. he was inspired by barry diller, a couple of moguls who took the same path. agencies have been the way to rise in hollywood, and he became the first black partner at the william morris endeavor company

after it merged. after 15 or 20 years in hollywood, he fulfilled his dreams of starting his own company, and specifically, bankrolling filmmakers of color. hollywood had a reputation of this very progressive place, primarily has white directors, white male directors and charles has set out, both as an agent in representing the likes of tyler perry and others, and now a company trying to get black directors behind the camera. julia: he made some interesting comments. he said he still believes casting in hollywood is about appeasement when people of color are hired rather than being fundamental change. how do you think he thinks he can change that specifically? lucas: i think he is hoping macro, his company, by selecting directors of color to make movies, those directors will then have a crew that is more diverse and a cast that is more diverse. if you look at what is happening

in hollywood right now, there are a handful of powerful directors. the director of selma made a show for oprah's tv network, where i believe all of the directors and most of the writers and people on the crew were people of color. charles is trying to do that not with just one director and one project, but with almost everything he does. while that is just a handful of projects in a town of hundreds of projects at any one time, every small company makes a big difference. carol: lucas, what does he say about his path to where he is today? how hard was it for him to work up the ranks? lucas: i think he, like a lot of people in their 20's, had to kind of figure out where he wanted to go. he was in college, made money by modeling and acting, but always seemed to have this sense, or he says so now, that he was good at identifying talent and making deals for them behind the scenes. he seems like one of those people who was very driven and

had a very clear sense of where he wanted to get from an early age. he made the decision to move to hollywood and work at a talent agency mailroom. he rose up the ranks there reasonably quickly and when he had the opportunity to start his own company, he did so. i imagine he faced his challenges like anyone else, but he was someone with a clear goal and focus early on. carol: "bloomberg businessweek" is available on newsstands now. julia: and online at businessweek.com and our mobile app. we have to talk about the cover story. carol: love this story. it is really all about the trials and tribulations and downfall of the company's cofounder travis kalanick and how you ultimately see investors and team kalanick, employers who were once behind him are not backing him anymore, and that led to his downfall. julia: we talk a lot about this story, but this tracks the path before the media got hold of what was going on at the company. such a huge disruptor, but at the core of it, perhaps a lesson to be learned about management

structure as well. story in was a tough 2018 -- 2017 for uber and this story really breaks it down. julia: it really does. more bloomberg television up next. ♪

♪ >> lawmakers meet on capitol hill in a bid to end the shutdown. it could -- a companies could come. >> the standoff may hit president trump's davos plan. they will make a travel decision day by day. world's top oil producers hint at extended upward curves. saudi arabia and russia say their strategy is working. up.witter earns a thumbs