Clock starts on TikTok ban

This episode delves into the U.S. government's decision to potentially ban TikTok unless its Chinese parent company, ByteDance, sells the app, highlighting broader historical concerns about foreign ownership in U.S. communications and tech sectors.

1. The U.S. has a longstanding tradition of restricting foreign control in essential sectors to protect national security.
2. TikTok's potential ban stems from concerns over foreign espionage and propaganda, not just economic competition.
3. Historical legislation, such as the Radio Act of 1912, set precedents for the current actions against TikTok.
4. The episode also discusses the broader impacts of manufacturing declines in companies like Boeing, reflecting systemic issues in American industry.
5. Shifts in sports broadcasting rights from traditional cable to streaming services illustrate significant changes in media consumption trends.

1: Introduction

Kimberly Adams introduces the topic of TikTok's potential ban and its implications. Kimberly Adams: "Today President Joe Biden signed into law a $95 billion foreign aid package, including a provision that would force the owner of TikTok to sell the video app or see it banned in the United States."

2: Historical Context

Discussion on historical precedents for restricting foreign ownership in the U.S. Zephyr Teachout: "The focus and anxiety about foreign corruption and foreign powers was really central at the constitutional convention."

3: TikTok's Response and Legal Battle

Details of TikTok's reaction and its planned legal challenge. Henry Epp: "TikTok called the measure unconstitutional and says the company will challenge it in court."

4: Broader Business and Policy Shifts

Exploration of Boeing's manufacturing issues and changes in sports broadcasting rights. Kimberly Adams: "Boeing shared its first quarter earnings report today. And despite the disastrous Alaska Airlines flight earlier this year and the ensuing public scrutiny, the report wasn't as bad as many expected."

1. Stay informed about the implications of foreign ownership in key sectors.
2. Understand the historical context behind current legislative measures.
3. Consider the security aspects of foreign companies operating in national infrastructure.
4. Keep an eye on evolving trends in media consumption and broadcasting rights.
5. Monitor how traditional manufacturing companies adapt to modern challenges.

Today, President Joe Biden took a decisive step by signing a bill that could ban TikTok in the U.S. unless its Chinese owner, ByteDance, divests from the company within nine months. This move echoes a long history of limiting foreign ownership of communications companies, dating back to the founding of this country. Also in this episode: Boeing’s financial woes, the NBA’s media bidding war and New England’s free college frenzy.

People

Kimberly Adams, Zephyr Teachout, Henry Epp

Companies

ByteDance, Boeing

Books

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Guest Name(s):

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Content Warnings:

None

Kimberly Adams
The effort to keep other countries out of our conversations online and off, is way older than this TikTok fight. From american public media, this is Marketplace in Washington, I'm Kimberly Adams, in for Kai Rysdal. Its Wednesday, April 24. Good to have you with us. As youve no doubt heard at this point, today President Joe Biden signed into law a $95 billion foreign aid package, including a provision that would force the owner of TikTok to sell the video app or see it banned in the United States.

The apps, chinese parent company ByteDance now has several months to complete a sale. In response, TikTok called the measure unconstitutional and says the company will challenge it in court. Now its not everyday Congress takes aim at a specific foreign owned company over national security concerns. But limiting ownership of firms in the US, especially in telecommunications, has a long history as marketplaces, Henry Epp reports. By long history we mean like all the way back to the founding of the United States, says Zephyr Teachout, a professor at Fordham Law School.

Zephyr Teachout
The focus and anxiety about foreign corruption and foreign powers was really central at the constitutional convention. The founders, she says, were really concerned that foreign countries would try to meddle in the US. So they passed measures, including the emoluments clause, which prohibits office holders from taking gifts from foreign officials. Over the decades, the government restricted foreign businesses from taking part in energy, shipping, and telecommunications. In 1912, the radio act was passed, which prohibited foreign ownership of radio stations, and that really became a model for other communications infrastructure.

Henry Epp
The idea, teach out says, was to prevent foreign actors from using mass communication to do two things, spying on the. One hand and propaganda on the other. Those are the same concerns lawmakers now have about Bytedance, the Beijing based owner of TikTok, says Ganesh Citaraman at Vanderbilt Law School, it really matters who owns the basic communications infrastructures of our country, and tech platforms are one of the central ones in the modern era. But what's unusual in this case is it's Congress spelling out who can own a specific company. Usually that's left to a government body called the Committee on foreign investment in the United States, or CFiUS, says James Lewis at the center for Strategic and International Studies.

CFIUS can block a sale, but they can also say, okay, we'll let you operate this american company, but you need to do the following things. CFIUS had been looking into TikTok, but Congress's action overrides that work now, with the US giving the company a matter of months to sell off the algorithm at the heart of the app, and the chinese government pushing back, we've set ourselves up for a head on collision. It's a bit like a game of chicken. And the real test here is the algorithm. Who gets the algorithm?

And that fight, Lewis says, does not have a historical precedent. I'm Henry Epp for marketplace. Bit of a waiting game on Wall street today ahead of tomorrow's GDP report. We'll have the details when we do the numbers.

Kimberly Adams
Boeing shared its first quarter earnings report today. And despite the disastrous Alaska Airlines flight earlier this year and the ensuing public scrutiny, the report wasn't as bad as many. Expected revenue came in slightly higher than forecast, but still down 8% from the year before. That's the first drop in seven quarters. The company, which has been around since 1916, is struggling.

And with a history that long, it raises the question of how Boeing ended up here. Jerry, you seem wrote about Boeing and what he calls the dark age of american manufacturing for the Atlantic. Jerry, welcome to the program. Hello. Thanks for having me.

You open your piece with a pretty stark comparison of Boeing of the past and Boeing of more recent days. Can you lay that out for me? Well, the comparison is a stark one. In that early in Boeing's existence, it paid very close attention to the process of manufacturing. And the original founder, Bill Boeing, had his office right in the building adjacent to the shop floor and would often stroll over, inspect individual pieces.

Henry Epp
And what we've arrived at now is a situation where management of Boeing is very much detached from the actual building of its planes. Can you briefly sort of take me through the timeline of Boeing of how they went from this super prestigious company that was doing everything in house, had all of its engineers very plugged into what was going on, to what we're learning, as these investigations continue about such a disparate chain of events that led to the door blowing out on the plane and things like that? The timeline is kind of a long one. I think it was in the early two thousands that a lot of the key decisions were made. And airplanes are that kind of business where the errors of yesterday take a long time to show up.

But it was around 2005 that they really got serious about what they called offloading. And this meant doing less and less of the work in house, you know, for some of its planes, having the wings built elsewhere, having the entire tail section built elsewhere. But they took this further and further. And I'd say prior to the accidents, it was beginning to recognized it had taken this too far and was beginning to sort of reintegrate and try to make some steps to bring itself back to kind of its engineering manufacturing roots. How common is what Boeing has done in the rest of american manufacturing?

I think it's actually not uncommon. It's a very visible case for what I think has been a fairly pervasive phenomenon. I mean, as recently as the early two thousands, intel was seen as the absolute last word in manufacturing prowess. And its CEO frankly admitted that, like, it lost its edge on the shop floor. And they've pronounced, like, what he's called a death march to get back to leadership and the actual process of making things better, ensuring quality, et cetera.

Kimberly Adams
Yeah. One of the issues you point to in american manufacturing is that power in these companies, like Boeing, moved from engineers to financial managers. How did that happen, and what's been the consequence? It was the engineers who first were sort of in charge of the executive suite when the american corporation came to be Henry Ford and Bill Boeing. These were people who had arose from the shop floor.

Henry Epp
Over time, it's been pretty well documented that the CEO class came to be populated by people out of the finance function, which has meant they spoke the language of numbers and accounting. They didn't speak to the language of engineering. And so those best equipped to understand how to put things together were no longer in charge. And I think that's a process that's now gone too long. Gone too far.

Kimberly Adams
Yeah. What's the lesson for other american manufacturers to take from this situation, not just what Boeing is doing right now, but how Boeing got to this point? I think the lesson is ignore the process of making at your peril. A lot of people have set up the Boeing store as a case of a company that's put costs in front of quality. But the thing is, really what they've done is actually made it more expensive for themselves.

Henry Epp
They've had their production lines shut down extremely costly. So you got to find sustainable ways to keep on driving costs down, keep on improving quality. So it's a matter of, are you going to do it bluntly by getting rid of your experienced workers, your advanced machine tools, and the managerial attention required to make those sort of continual improvements, or are you going to lean into it? All right, we'll end it there. Jerry, you seem writing about Boeing and the, quote, dark age of american manufacturing for the Atlantic.

Kimberly Adams
Thank you so much. Thank you.

Switching to the business of sports for a bit now, the bidding war for rights to air the NBAs 2025 season and beyond is officially on the window for ESPN and TNT to extend their exclusive deals with the league closed this week without a final agreement. Now, those legacy media companies have to face competition for the rights worth tens of billions of dollars. With streamers like Amazon Prime Video, Apple TV and Netflix, who are all eager to expand their live sports offerings, Marketplace's Savannah Marr has more. Live sports is one of the last things keeping many fans from cutting the cord. But leagues can't afford to keep living on cable, says David Offenberg, a professor at Loyola Marymount University.

Henry Epp
Most of my students have never had cable in their homes. Offenburg says. The migration to streaming is about meeting younger fans where they are. Streaming is the only way to reach those viewers and to keep their sport relevant. That's worth a lot to the NBA, and so are the billions of dollars at stake.

Savannah Marr
And for streaming companies struggling to retain fickle subscribers in a crowded market, sports. Fans are pretty loyal, analyst Ross Benesh. With eMarketer says one way to capture that loyalty for a good chunk of. The year is to have their favorite league on. But leagues like the NBA can't abandon cable holdouts.

Mike Prue with Forrester says that's mostly older folks who will never make the switch to streaming. We are in the messy middle right now. Prue expects the NBA to strike deals with a mix of legacy media and. Tech companies over the next couple of years. We're going to continue to exist in this hybrid format where rights could also.

Be broken up among multiple streamers. Lets say Amazon Prime Video gets the NBA regular season except Tuesday night games, which go to TNT and HBO Max. And maybe youve gotta subscribe to Netflix to watch the in season tournament. Ross Benesh with eMarketer says if youre looking to stream multiple leagues trying to. Watch all of them, you would need like a whole publication dedicated on telling you where to watch what, which might.

Have some fans feeling nostalgic for their cable subscription. I'm Savannah Marr for Marketplace.

Kimberly Adams
In New England, a couple of states have started offering free community college. There's a relatively new program in Maine for high school graduates, and one in Massachusetts where residents who are 25 and older can get free tuition. The thing is, these programs turned out to be way more popular than state leaders bargained. At some campuses, enrollment is up more than 13%. This jump comes as many community colleges lost a lot of staff to retirement and better paying jobs after the pandemic, so all these new students are overwhelming the system.

WBUR's Carrie Young has more Friday afternoons. At the Mount Wachusett Community College in north central Massachusetts are affectionately known as FAFSA Friday. Go ahead and type in your password one more time. Community outreach counselor Cassie Paltola says this is a time when prospective students can get help applying. But because you don't already have an associate's degree, that means you are eligible for mass reconnect.

Zephyr Teachout
Mass reconnect is the free community college program the state launched last fall. To qualify, students have to apply for federal financial aid, and Paltola says that's made FAFSA Fridays hectic. Things have been getting busier and busier as the semester goes on. Mass reconnect covers community college tuition for adults 25 and older who don't already have a degree. 27 year old Ryan Soulier says the tuition help has been huge.

Henry Epp
It just allowed me to switch to part time at my job and that helps me be able to get my homework done more easily and stuff. It's less stressful. This program has been incredibly popular. Enrollment at Mount Wachusett last semester was up by about 12% from 2022. Statewide, it's up 8%, according to the Massachusetts Department of Higher Education.

Zephyr Teachout
North Shore Community College dean of enrollment Services Jason Marsala says the influx of students has been a double edged sword. For students, it can be life changing. But for staff, if you're the person. Who has to make all the adjustments and fix all the accounts and follow all the money, it's made your life super difficult right now. It doesn't help that many community colleges have been slowly losing staff for a few years.

Many left higher education after the pandemic, and while it might seem like more students would translate to more money for the school, it doesn't often work out that way. Like most other states, Massachusetts community colleges get less state funding per student than four year public universities up the road. In Maine, community colleges are also struggling with the enrollment surge we anticipated and. Frankly, budgeted for 8000 new students. We're up to 12,625 students.

David Daigler is the president of the Maine Community College system. We can't underestimate the pressure that the faculty find them in. They now have full classrooms. It is common to see an enrollment bump when a state or city offers free community college. John Fink is with the community College Research center at Columbia.

He says the increase probably feels more dramatic in Maine and Massachusetts because enrollment reached historic lows during the pandemic. So I think it's encouraging, but to some extent not surprising that there's a lot of folks out there in communities that with the offer of free tuition, they're going to come back to the community colleges. Fink hopes states extend their investments beyond tuition so colleges have adequate faculty and staff that can support students to make. Sure that students aren't just getting in, but getting through. In Massachusetts, state leaders say they hear that Noe Ortega is the commissioner of higher education.

Henry Epp
This is a year of learnings, I would say. I do think that what we need to pay close attention to is what kind of capacity are we going to need to build out? Because, he says, Massachusetts wants to keep offering free tuition. There's about 20% more funding for the program in next year's budget proposal, including dollars for college staffing increases. If that goes through, Ortega hopes it will make a difference.

Zephyr Teachout
In Boston, I'm Carrie Young for marketplace.

Kimberly Adams
Coming up, this is the best sauerkraut in town. I'd buy the big bucket except for I want the purple stuff. A new way to buy and sell local. But first, let's do the numbers. The Dow Jones industrial average fell 42 points, a 10th of a percent, to end at 38,460.

The Nasdaq rose 16 points, a 10th percent, to close at 15,712. And the S and P 500 was up one point just a tad to finish at 50 71. We were talking earlier in the show about Boeing. It gave back two and nine tenths percent today on first quarter revenue that beat analysts expectations. European rival Airbus was off three tenths of a percent.

Texas instruments shot up five and six tenths percent. The chipmakers quarterly earnings and revenue also beat expectations. Micron technology dipped six tenths percent. Nvidia slipped three and a third percent. Bonds fell.

The yield on the ten year t note rose to 4.64%. And you're listening to marketplace.

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With access to so much information, it's hard to feel like an informed, discerning citizen. That's why on make me smart, which is a podcast from Marketplace, we make it easy for you to stay in the know. Hi, I'm Kai Risdahl. Every weekday, Kimberly Adams and I unpack the latest from Washington, DC. The Senate minority leader has announced that he will step down as the republican leader.

What's happening in AI? I mean, don't buy at the top, but holy cow, artificial intelligence and all the companies related to it are the hot new thing. And we do the numbers so as a refresher. Inflation is the rate of increase in the prices of things. It's not just sort of things getting more expensive at which things get more.

Expensive, because in a world that's constantly changing, we all need to stay smart. Listen to make me smart wherever you get your podcasts.

Kimberly Adams
This is Marketplace. I'm Kimberly Adams. This week, the Centers for Medicare and Medicaid Services finalized a rule setting new minimum staffing requirements for nursing homes. Once the rule is fully phased in, nursing homes that get federal funding from Medicaid and Medicare will have to have enough nurses and nurses nursing assistants on hand to be able to give at least three and a half hours of care to each resident every day. They'll also be required to have a registered nurse on call at all times, Marketplace's Samantha Fields reports.

Until now, the only staffing rule for nursing homes has been that they have sufficient staff without specifying what that means. This is the biggest reform in nursing home policy in decades. David Grabowski at Harvard Medical School says many nursing homes have been understaffed for years. But especially since the pandemic, we've seen. Some really gross examples of this, where facilities with low staffing have put resident lives in danger.

Henry Epp
This is going to, for the first time, set up a floor that nursing homes can't staff below. That's the aim, anyway. And Priya Chidambaram at the health policy nonprofit KFF says it's important. Adequate staffing in nursing homes is proven to be one of the measures that's most strongly associated with higher quality of care. But she says a recent KFF study found only about 19% of nursing homes currently meet all the new requirements, and many say it's going to be hard to comply.

Zephyr Teachout
We have no dispute with the goal of quality. We fully embrace that. Katie Smith Sloan runs leading age, an association of nonprofit nursing homes and other aging services. But we believe that a mandate like this should be preceded by a government supported effort to attract, incentivize and train registered nurses and aides. Because we currently have a severe shortage.

Kimberly Adams
Federal and state support will be key to addressing that shortage, says Jasmine Travers at NYU's College of Nursing. It's one thing to implement the minimum staffing standards, but really being able to recruit the people in these positions and not let it be an unfunded mandate, that's going to be important. The Centers for Medicare and Medicaid Services says it plans to put $75 million toward recruiting and incentivizing nurses to work in nursing homes. I'm Samantha Fields for Marketplace.

All 50 states have some sort of cottage food law which allows the average person to, say, sell things like homemade brownies at a school fundraiser without having to go through a food inspection. But some states are expanding beyond the bake sale when it comes to what kinds of foods can be sold this way. For example, in Wyoming, new local stores are giving farmers another venue to sell their vegetables, fruits and meat. Wyoming Public radio's Hannah Haberman has more. Up on a little hill just outside the small town of Lander, Wyoming, two pigs munch on bits of sourdough bread near stacks of hay bales.

These are some of the luckier pigs in the county. That's Anna Schmetz, a local farmer. They have access to some corn, but they're raised mostly on scraps from the local restaurants, so extras from the bakery. It's a chinese restaurant in town. Schmetz has been a farmer and rancher for twelve years, and now she has a new way to access consumers.

Carrie Young
Meadowlark Market, a new local food store a couple miles down the road. The market is in an airy brick building on Main street. It's opening day, and shoppers browse shelves stocked with locally made crusty baguettes and bushels of fresh basil. And in the freezer, lamb, chicken, pork. I really love good meat, well grown meat.

And I love lamb, which is not easy to find in our safeway. That's Suze. Obedient. She's perusing a display of seasonings on a long wooden table in the center of the room. She lives just a couple blocks away, and I'm very excited that it's easy to get here and affordable.

Meadowlark is designed to be a year round, one stop shop for customers. Melissa Hempkin helped start the store and says it's easy for producers, too. Provides them a lot more flexibility. They may have young kids, they gotta go feed their cows. They don't need to be here to sell their product.

Hempkin runs a poultry hatchery 4 miles outside of town and has a full time job at the local community college. And I don't have time to run an egg route. I get requested a lot for eggs, but I'm not able to deliver or really even set a time often that I'll be home for eggs, pumpkins, says farmers markets. Metalocks are a great place to meet customers, but they're typically only once a week, and it's a lot of work to set up and break down a booth. Being able to sell her products at the store is a real time saver.

Meadowlark will just make it way easier. I can just say, hey, go down to Meadowlark. Whatever I have available is down there. This kind of space is possible because of the Wyoming Food Freedom act. Under the law, producers can sell a wide range of foods without licenses or certifications as long as the consumer consumer is properly informed about the food source.

That's a big difference from most typical cottage food laws, which are often restricted to things like breads, jams, and baked goods. And a 2023 amendment to the Wyoming law now allows for a store like Meadowlark to serve as what's called a designated agent to sell these products. Meadowlark never purchases it. They just hold it in their space and then they're the designated agent to sell it for me as the producer. The market takes up to a 25% commission from all sales pumpkins says Meadowlark also has a commercial kitchen that producers can rent.

As the businesses are looking to scale up. They can't fit anymore in their home kitchen. Or they just need to separate family and business a little bit. They can come here for whatever hours they need. A cucumber farmer could come here to pickle, or a dairy producer could use the kitchen to make yogurt.

The commercial certificate then allows the farmer to sell that product to bigger grocery stores. As customer suzeobedient checks out, shes excited about all her finds, but she says there was one product missing. She loves farmer Fred Sauerkraut, but theres only the green cabbage version for sale right now. This is the best sauerkraut in town. Id buy the big bucket except for I want the purple stuff, she says.

Thats all the more reason to come back again soon. In Lander, Wyoming, I'm Hannah Haberman for marketplace.

Kimberly Adams
This final note on the way out today, since we were talking about Boeing earlier in the show, we'll close out with this other bit of aviation news today, the Biden administration rolled out new rules to get flyers more refunds more quickly when flights are delayed or canceled, and get those refunds in cash, not vouchers or travel credits. The new guidelines also require more disclosures of baggage and change fees. Doesn't do much about how small the seats are, though. Our media production team includes Brian Allison, Jake Cherry, Justin Dooler, Drew Jostada, Gary O'Keefe, Charlton Thorpe, Juan Carlos Torado, and Becca Weinman. Jeff Peters is the manager of media production.

And I'm Kimberly Adams. We'll be back tomorrow.

This is APM. With access to so much information, it's hard to feel like an informed, discerning citizen. That's why on make me Smart, which is a podcast from Marketplace, we make it easy for you to stay in the know. Hi, I'm Kai Rysdal. Every weekday, Kimberly Adams and I unpack the latest from Washington, DC.

The Senate Minority leader has announced that he will step down as the republican leader. What's happening in AI. I mean, don't buy at the top, but holy cow. Artificial intelligence and all the companies related to it are the hot new thing. And we do the numbers so as a refresher.

Inflation is the rate of increase in the prices of things. It's not just sort of things getting more expensive, it's a speed at which things get more expensive. Because in a world that's constantly changing, we all need to stay smart. Listen, to make me smart, wherever you get your podcasts.

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Listen, to make me smart, wherever you get your podcasts.