Support for Capitalism Hits New Low & Howard Stern Stays with SiriusXM

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0:33Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, I'm glad John D. Rockefeller wasn't around to see this. American support for capitalism hits a new low. Then, two years after New York City cracked down on Airbnbs, did rents get any cheaper? It's Tuesday, September 9th. Let's ride.

0:55Toby, I have a pop quiz for you. France's longest land border is with what country? Ooh, I know this one. It's actually Brazil, because French Guyana is an overseas territory. Well done, my friend. You know, you'd be an asset to any team at our upcoming monthly trivia night, which is taking place one week from today at a new bigger location in New York City. This is our fourth trivia night this year, and each has been better than the last. So don't wait to sign up. To sign up, it's free. Just head to the link in the show description. We'll also post it on our Instagram. If you want to meet me and Neil, chop it up with fellow MBD listeners or just get your hands on some MBD swag, consider stopping by.

1:35But Neil, any hints for prospective players? You know, I'd be brushing up on 9th century Estonian literature if I were y 'all. Not even sure they had ironed out a written language back then, but sounds good. Can't wait to see you guys there. And now a word from our sponsor, Indeed. Indeed. I keep hearing about the state of the world of work, but there's so many conflicting messages to sort through. Neil, I know what you mean. I'm certainly not a hiring expert, but the good people at Indeed are. They've been innovating with AI-powered solutions for job seekers and employees and reshaping the hiring landscape.

2:07The scale of their data is unreal, and they're utilizing it to help accelerate and simplify the job search and hiring processes. They're getting into all of this and more at FutureWorks September 10th and 11th, then Morning Brew will be there for it all. Learn more at IndeedFutureWorks.com slash brew. That's IndeedFutureWorks.com slash brew. Americans are biting the invisible hand that feeds them. Support for capitalism dropped to a new low in the United States, according to a Gallup poll released yesterday. Just 54 % of Americans viewed capitalism favorably this August, down from 60 % in 2021, and the lowest share since records began 15 years ago.

2:48The decline was driven by Democrats, just 42 percent of whom view capitalism positively, a drop from 51 percent in 2021. Independents have also soured on Adam Smith. Fifty one percent of them have a positive opinion of capitalism compared to 59 percent four years ago. Republicans haven't budged at all with three quarters holding a positive view. Growing aversion to capitalism hasn't translated into a tighter embrace of its economic doppelganger socialism, at least nationally. And that's because more favorable views of socialism among Democrats have been offset by less favorable views by Republicans.

3:25Two thirds of Democrats have a positive view of socialism, up from 50 percent in 2010. 14 percent of Republicans have a positive view of socialism, down from 19 percent in 2010. And independents haven't really changed their views at all, leading to 39 percent overall support. Socialism has become a hot topic recently with the rise of NYC mayoral frontrunner Zoran Mamdani, a self-described democratic socialist who wants to open government-run grocery stores, institute a rent freeze, and slap much higher taxes on the wealthy and corporations. His bid for Gracie Manchin takes inspiration from Senator Bernie Sanders, who popularized the democratic socialist brand with two failed but galvanizing presidential campaigns.

4:06Toby, what do you think this survey reveals about the American economy? I mean, it looks like the American dream is getting further and further away for a lot of people. I mean, just think about the government data that we've gotten recently that showed an increasingly tight job market. Consumer sentiment has been declining over the last few years. So it's not surprising that we're seeing some souring on capitalism, even though it still does have broad majority appeal. What was also interesting about this survey was that people are souring on capitalism as this concept, but they remain very positive towards specific parts of it, specific components of it.

4:4195 % still say they support small businesses, which makes sense. And then 81 % said that they support the concept of free enterprise. So even this umbrella term capitalism is kind of losing favor amongst people. There's specific components. It's almost this paradox that's arising. I think capitalism just needs a rebrand because if you like free enterprise, capitalism is a similar concept. Free enterprise is just one major component of capitalism. Maybe they have to go talk to the folks at Cracker Barrel or American Eagle about, well, that's certainly ways to not maybe refresh your brand. The Scalop poll also asked about thoughts on big business, and it found that Americans' views on big business is increasingly unpopular.

5:23Only 37 percent of U.S. adults have a positive image of big business, which was down from 49 percent when this poll began in 2010. There is also a major partisan split in how Americans view big business. 17 percent of Democrats have a positive view compared to 60 percent of Republicans. And that share of Democrats having a having a rosier view of big business has gone down dramatically in the 15 years in this poll. So corporate America broadly has taken a hit in perceptions among Americans. And then not only is this partisan gap, there's also generational undercurrents here as well, because a lot of these younger cohorts who are responding to this survey, they didn't live through the Cold War.

6:06They didn't live through the post-Cold War either, where socialism was the Soviet Union and there was all this open hostility towards that part of the world and those policies. Now they are young Republicans are still skeptical of socialism, but they're not reflexively skeptical of socialism in a way that maybe their parents or grandparents were. So definitely a generational tilt toward socialism and a generational tilt away from just reflexively thinking that socialism is inherently bad. Yeah, we're seeing a flashpoint in this actually from Elon Musk's recent pay package, which Tesla granted to him.

6:40And if he hit these particular targets would become the world's first trillionaire. So Bernie Sanders yesterday, the senator who popularized democratic socialism, said he tweeted another 900 billion for Elon Musk while 60 percent live paycheck to paycheck. Really? This is not only grossly immoral. It is insane economics. No society can survive when one man becomes a trillionaire while the working class struggles to survive. This cannot stand. So that's this more of the socialist point of view. And then a bunch of more pro free market repliers said, well, you're looking at this the wrong way. This is all contingent on Elon Musk hitting particular targets that grows Tesla's market cap to eight point five trillion dollars and creates all these new products and leads to hiring and more innovation and more technological investment that makes everybody richer.

7:26So Elon must pay package and CEO compensation more broadly has been at the center of these fights of capitalism versus socialism that capitalism is currently losing right now. Let's move on. When New York City passed a law in 2023 that cracked down on short term rentals like Airbnbs in the city, the idea was that it would free up apartments and ease the housing crunch. But while it has led to a reduction in noise complaints and disruptive parties, rents haven't budged. Two years on, Manhattan's median rent hit$4 ,700 per month in July, an all-time high, while vacancies still sit at near all-time lows.

8:01One thing the law did do effectively is crack down on the amount of Airbnb units in the city. There were over 38 ,000 listings at the start of 2023. but after the law required hosts to live in units and keep guests below two, the number dropped by 89 % in two months. Now there are only 3 ,000 or so legal short-term rentals left. So what happened to those additional units that aren't being used for bachelorettes anymore? Many owners pivoted to longer-term 30-day rentals or opted to keep the unit semi-vacant for family or personal use. So the hoped-for supply return hasn't translated into rent relief.

8:38Airbnb has become a flashpoint for housing politics in many cities around the world, with hotels, hosts, and tenant groups all lobbying hard for their respective interests. Meanwhile, more structural drivers of affordability, things like supply, density limits, or construction barriers, often go untouched. In the meantime, though, Neil has told me his couch is open if you all need to crash anywhere. And it's a quite comfortable couch. I'm not there every day. Here's what New York City was trying to solve for. The comptroller's office, in a report examining rents from 2009 to 2016, found that roughly 9.2 % of the rent increases imposed by landlords could be attributable to the effect of Airbnb alone.

9:17And this concept is quite evident because if you are a landlord or an investor, you want to buy up many different rental properties. And the fact that you can rent them out for short-term stays rather than a longer-term lease will net you more money. It's just economics. Look at Miami, which is a big Airbnb city. Airbnb and VRBO listings there earn an average of$300 per night, according to AirDNA, while long-term rentals bring in about$109 per night. So if you are a landlord, then you are trying to get trying to get maximize your earnings and you will rent it out to a short term stay. And New York City says that this has been driving up rental prices over the 2010s and Airbnb.

10:02And so in 2023, it decided to enforce a longstanding restriction on short term stays in order to free up the housing ply, bring down rents. It hasn't really worked out like that. Yeah, because there were 38000 listings in early 2023, which sounds like a lot. But that is out of a million total units. So that's small in relative terms. But technically, if you look at the amount of vacancies, that is big in terms of vacancies because there's only around 40 ,000 vacancies of those a million units at any given time in New York City. So yes, the math would say like, hey, let's free up these units and give them back to people to actually live in rather than giving them to landlords.

10:41But where it hasn't really worked out necessarily is that it's led to an increase in demand And for hotels, hotel rates have jacked up their prices. They've seen an influx in visitors. It hasn't necessarily led to those units going back on the market for whatever reasons. And a lot of people just point to the fact that, hey, the structural issues are still there. You need to increase supply. You need to build more. You need to have more units available. You're not going to get there by just subtracting Airbnb units. Yeah, opponents of Airbnb bans say that governments are using Airbnb as a scapegoat for their own failures to boost the supply of housing.

11:20And they artificially limit it in other ways that are way more profound than what the Airbnb effect does. Things like rent control, limits on density, restrictions that slow down construction, red tape all across the board are ways that governments, local governments tamp down housing. And if you look at the EU, where there has been a huge crackdown on Airbnb, Barcelona last year said they would end Airbnb's completely beginning in 2029. Analysts found that Airbnb isn't really driving the growth of over-tourism in Europe, which has become a huge, huge concern. There were a record-breaking 3 billion tourist nights spent in hotels and other accommodations in the EU in 2024.

12:01That's equivalent to 80 % of all guest nights in the region. Hotels and similar accommodations accounted for five times more guest nights than Airbnb in 2023. So if you're looking for a place to crack down on over tourism, Airbnb is a small fish in a large pond, according to Airbnb supporters. And then the final thing that we need to note here is that a lot of these cities do need tourists. Like you don't just lose housing with these short-term rentals. You are bringing people to your cities who spend money. They feed restaurants, they feed shops, and they create jobs for people as well. And then especially this is present ahead of the massive summer that New York City has coming with the World Cup coming.

12:43I mean, the Olympics are coming eventually. And then also the fact that there's a 250-year America celebration. So there's going to be a big tourism summer. If you don't have those flexible short-term leases, then I just pity the people are going to open up their hotel apps and see what those hotels are going to cost. Well, they'll just stay in New Jersey. All right. As the Howard Stern show went on air yesterday morning at 7 a.m., someone other than Howard Stern was behind the mic. Bravo legend Andy Cohen began talking, telling listeners that he would be taking over to the show. And Howard was out at Sirius XM, where he's called home since 2004.

13:17Sirius XM shares dropped and several media outlets reported that Howard Stern was taking his show elsewhere. Except it was all a hoax. Stern, one of the country's foremost radio personalities, announced that it was all a gag masterminded by him and that rumors over his departure were, quote, completely false. So everyone had a little chuckle, but this prank speaks to the larger audio wars being fought by massive players like SiriusXM, Spotify, and Amazon. Over 20 years ago, Stern became one of the highest paid media personalities in the world after signing a deal with what was then Sirius Satellite Radio.

13:50Sirius later merged with XM and leveraged Stern to become a publicly traded audio behemoth with nearly$9 billion in sales and 33 million subscribers. Signing key talent like Howard Stern and keeping them happy has been key to its success in radio and increasingly in podcasts where it's become a juggernaut. But questions have swirled over Howard Stern's future with a company as his contract worth$100 million per year expires at the end of 2025. After coming clean about the hoax, Stern didn't say that he had reached a new contract with SiriusXM, just that the two sides were in talks. Toby, it's a negotiation that everyone is watching for its implications for the future of SiriusXM and the audio industry in general.

14:30This was kind of like an awkward haha joke because Sirius is in an awkward place with Howard Stern right now. Obviously, he helped build them into what they are today, but he's kind of a symbol of the media of the past. Just look no further than the deal that SiriusXM recently signed with Alex Cooper, who is a multimedia juggernaut. juggernaut basically like howard stern 2.0 as a lot of people are calling her just given her mass appeal across social media platforms she just signed 125 million dollar deal meanwhile you have howard stern with this massive reportedly 100 million dollar deal sitting there maybe not bringing the audience that he wants used to what do you do with them he's sort of like the aging star player on a baseball roster who you needed to give the big contract who still brings out fans but definitely not the young, new, exciting talent.

15:18So it's almost like creating the salary cap problem for SiriusXM at this point. So it is very symbolic because as Sirius is navigating this transition into more of a podcasting network, perhaps a similar thing happened when Howard Stern moved from terrestrial radio to satellite radio. So it's a very poetic sort of system going on right now. Let's talk about its move into podcasts because if you want to borrow the baseball metaphor, It has established a very strong farm team in podcasts as it's transitioned from its old aura of satellite radio. It now represents, Sirius XM, represents half of the top 20 podcasts in the United States.

15:57It's brought on huge talent like Alex Cooper and Caller Daddy. Smart List, it paid$100 million for those. That's three comedians interviewing people and just yapping it up. Freakonomics Radio, the last podcast on the left. 99 % invisible. Conan O 'Brien needs a friend. And it's also hired huge talent like Trevor Noah, Kevin Hart and Stephen A. Smith. So Sirius XM has been going to war with these other podcast companies, most notably Spotify, which is number one. But analysts pointed out that if Spotify didn't have Joe Rogan, if you took Joe Rogan from the equation, which, you know, you can debate whether you should or not.

16:31Then Sirius XM would be the top podcasting company in the entire country. I don't know what you do with Stern at this point. Do you re-up them and still pay them a top dollar? Do you cut them loose? There was this study that showed that if Howard Stern left SiriusXM, he would take 15 % of their subscribers with them, which would create a massive churn headache. Or do you just totally focus on your new generation of audio stars coming up? I don't know how much longer maybe these institutions can anchor themselves through these legacy talent going forward. So the joke was kind of the awkward joke that you make at a cocktail party where everyone nervously laughs when he said, oh, I'm leaving.

17:09You're like, oh, are you actually? So just a fascinating situation that Stern and Sirius find themselves in right now. All right, we're going to take a quick break and come back with Toby's Trends.

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18:39Get your very own purple button by signing up for your$1 per month trial and start selling today at shopify.com slash morningbrew. That's shopify.com slash morningbrew. We're back with another edition of Toby's Trends, the segment where I take a deep dive into the business world to emerge with a trend that will have your parents going, huh, how'd you get so smart? Today's trend is an olfactory one. America is in the middle of a fragrance arms race where brands keep dialing up the intensity of scents because we've been trained to equate stronger smells with cleaner, better products. Madison Darbyshire, a reporter from Bloomberg, just recounted her experience with Dawn Dishope changing its original scent this year.

19:21The company slapped stickers on bottles bragging about their new clean scent. But what that really meant was a new, more intense scent, one that has led customers to report headaches, nausea, and just general porta potty vibes. Despite the negative reaction, companies like Procter & Gamble have been turning up the volume on scents in dishopes, detergents, and surface cleaners because research shows Americans equate stronger smells with cleaner and more effective products. But that can create a sort of sensory arms race. If you dial up the smell, olfactory fatigue can kick in, which means people stop noticing.

19:53So then brands add even more and the cycle escalates. That's an especially fraught cycle since smells are emotional and transportive. It's the reason why smelling Axe body spray can take you right back to middle school or chocolate chip cookies can transport you to your parents' kitchen. So you're not imagining it. our sensory environment is becoming denser. Brands like Dawn are fighting harder to stand out, but in the process, risk breaking the emotional continuity that led people to trust and buy them for decades. Neil, help us make sense of the sense. Oof, this is deep. You know, one concept from this sense world that really spoke to me was the concept of olfactory evidence, that brands are responding to our demand of evidence that their products are working.

20:35And I did my laundry yesterday after diving into this research, and I smelled my clothes to be like, well, are they clean or not? And I realized that they needed to give off a particular scent for me to think that they were clean. If they were just not – if they didn't smell like anything at all, then I would say, hey, well, this detergent isn't really working. And that perhaps – that need to smell particular evidence that the product was working is driving this arms race of intense fragrances that you're talking about. And all these fragrance houses inside these big brands are trying to use it as a marketing and development tool as well because it's very hard to come out with a new dish Dawn soap and say like, hey, it cleans better.

21:17You know, the easiest way to do that is just make it smell differently because as you're saying, this olfactory evidence does play a role in your dish soap, in your surface cleaners. But you risk messing with people's nostalgia. They have associated Dawn Dish Soap throughout maybe their childhood, throughout maybe their early adult years as this thing that represented cleanliness and this basically saying that we can trust this smell. When you change that, you say, well, I can no longer trust this brand. So it's almost this catch-22. And the market is demanding innovation out of these companies, but also people are demanding continuity from some of the products that they grew up with.

21:53And there's been a reverse effect as well. just as these companies are rolling out even more intense smelling products, there's been increased demand for basically neutral products, free and clear, they're called. And if you go on eBay and search for the original Dawn soap without all of the added intense scents, that's going for 300 % markup. It's five times more expensive on eBay than the actual thing you can buy. So we're starting to see a reaction because people do a very intense physical reaction when something smells that they don't like. And then this weirdly reminds me of what Howard Stern is going through right now with Sirius, because it's a test of how much a company can kind of tamper with a legacy product before, you know, loyalty starts to crack.

22:37So I feel for Sirius and I feel for Don right now because they are trying to innovate, but they risk, you know, alienating people in the process. Now, it's interesting that people do probably take their smell for granted. There was a study from a neuroscientist at Brown University. I want you to tell me what you think about this. almost 40 percent of people would rather lose their sense of smell than their hair i would hate both of those outcomes obviously but i think people underestimate smell and when it comes to senses as evidenced by this uh survey but i do think that without smell you know things would taste different that's what people don't understand like bacon the smell really contributes to it without smell researchers have said that it would just taste salty you won't get you know that rich kind of fatty goodness that people love bacon for.

23:21So I don't even make me choose between the hair and the smell. I'm choosing both. Let's bring to the finish with some final headlines. Like the slowest drivers, you know, Fox News is staying to the right. The Murdoch family resolved its dramatic decades long succession battle yesterday with an agreement that will hand Lachlan Murdoch, the son of family patriarch Rupert, the keys to the media empire. This will please Rupert because of all his kids, Lachlan was his chosen heir and will ensure that the 94-year-old's outlets, that include Fox News, The Wall Street Journal, and The New York Post, will maintain their conservative bent upon his death.

23:55The rest of the Murdoch children, Lachlan's older siblings, lost the fight for control of the company, but their bank accounts won. Each of the three will be paid$1.1 billion for their shares in the empire. I'm going to make the joke, they should totally make a TV show about this, Neil. But yes, keeping that ideological bent was really important into the elder Murdoch. He has always kind of preferred Lachlan as his permanent successor. Lachlan has done pretty well as chair of News Corp since he was installed in 2023. Fox's stock price has doubled since the end of 2023 and News Corp stock is also up.

24:31So killing two birds with one stone here, protecting the conservative voice in the English speaking word as Rupert Murdoch put it. And then as well as having someone who's been pretty savvy at the helm of the business so far, it was the obvious choice for the Murdoch empire going forwards. France is going through more prime ministers than me with cheap earbuds. Yesterday, a no-confidence motion in parliament sent the government into collapse again and forced French prime minister Francois Bayrou to resign from the role. That leaves President Emmanuel Macron to choose a fifth prime minister in less than two years and a third in the last 12 months.