Morning Wire - Economy Hits Black Friday & Taylor Swift Ticketmaster Meltdown | 11.25.22

Episode Date: November 25, 2022

The current state of the economy influences Americans shopping habits, Taylor Swift’s Era’s Tour causes issues for Ticketmaster, and a new report ranks states by how business friendly they are. Get the facts first on Morning Wire. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Economic headwinds, including stubborn inflation and supply chain issues, are creating headaches for retailers and influencing Americans shopping and giving habits. How will economic forces shape the holiday season? I'm Daily Wire Editor-in-Chief John Bickley with Georgia Howe. It's November 25th, Black Friday, and this is Morning Wire. A Taylor Swift tour prompted a ticket master meltdown, sparking outrage from vans and accusations of an abuse of power from some lawmakers. We had 14 million people hit the site, including bots, another story, which are not supposed to be there.

And despite all the challenges and the breakdowns, we did sell over 2 million tickets that day. We discussed the growing debate over ticket masters pricing and its increasingly pivotal role in the music world. And state tax policies have a direct and at times dramatic impact on businesses and consumers. A new report ranks which states are friendliest to businesses and residents when it comes to taxes. Thanks for waking up with Morning Wire. Stay tuned. We have the news you need to know. If you like this podcast,

subscribe to our Morning Wire newsletter available exclusively to Daily Wire members. Get the Morning Wire newsletter delivered straight to your inbox when you join at DailyWire.com slash subscribe. Use code MorningWire to try Reader's Pass membership and get your first month for only 99 cents.

Holiday season is upon us, but this year, things might look a little different thanks to one key factor, inflation. According to new data, American consumers and companies are preparing to spend less and donate less than in years past. Here to discuss is Daily Wire Senior Editor Cabot Phillips. Cabot will start with the consumer side of this.

Today is Black Friday. What changes are we expected to see this holiday season? Well, it'll hardly be a surprise at this point, but virtually everything is going to be more expensive this holiday season. We talked recently about Thanksgiving meals being more expensive, but it goes well beyond that. flights are 40% more expensive this year than last, and gas, while down relative to this summer's peak, is still about 10% higher than last Thanksgiving. As CNN put it, quote, get ready for the

most expensive holiday travel season ever. And those price increases mean Americans simply have less to spend on other things like gifts and charity. Yeah, tell us about that. What do we expect with consumer spending? So according to a recent survey by Deloitte Consulting, Americans plan on buying an average of nine gifts this holiday season. That is down considerably from 16 gifts in the same survey last year. We saw another report from Ship Station that predicted a $30 billion drop in holiday gift spending this year compared to last, with the biggest drops expected in clothing and footwear. And keep in mind, we've already seen consumer spending going in the wrong direction for months. It did jump 8% last year, but has seen less than 2% growth every month

this year. And because most Americans are strapped for cash these days, retailers know they've got to offer big sales to try and entice customers, but that is tough when businesses are also feeling the pinch. All right. So what are retailers doing to try and compensate for that? Well, first, retailers have tried their best to move customers toward online shopping as opposed to in person. That helps them offset the cost of labor, which is important given how tight the labor market is right now. That also explains why many so-called Black Friday deals have been going on for weeks now. companies are really trying to spread things out to their advantage. Another thing you're going to see more of this holiday season as consumers grapple with higher prices are buy now, pay later installment plans offered by

retailers. Now, these might help offset sticker shock on higher priced goods in the short term, but long term can be dangerous as they often hurt your credit score and include incredibly high fees for missed payments. Yeah, Dave Ramsey would not approve. Now, we're also expecting to see a decrease in charitable donations this year. What's the latest on that? Yeah, this party is really concerning as well. So not only do many businesses rely on the holiday season to reach end of your fiscal goals, but a lot of charities are in the same boat. About a third of all donations take place between Thanksgiving and Christmas,

but this year charities are bracing for a drop in giving, as donations are often the first thing cut from a budget when things get tighter. On that note, we've seen more than a 10% drop in the number of Americans giving to charity this year compared to last. And the biggest drop, not surprisingly, comes among those giving less. than $500 a year. Now, it's important to note the United States is far and away the most charitable nation on earth. Last year, for example, Americans gave away nearly half a trillion dollars. So even with the dip this year, we're still meeting the world in charitable giving, but definitely a concerning

trend that's clearly being driven by the poor state of the economy. All right. So inflation is clearly the key factor here. But what else is causing this downturn? Yeah, there's no question inflation is the number one factor. It's not rocket science. People just have less money to spend. But beyond inflation, consumer sentiment is also a really important factor in all this. Right now, Americans are more pessimistic about the state of the economy and their own personal finances than at any time since the 0809 recession. And that means that even if some Americans do have enough money to afford gifts or donations now, if they feel like they won't be in a good spot a year from now, they still are likely to hold off. And that's really driving a lot of this.

Yeah, that makes sense. Could things change as we approach Christmas? Well, there's always the chance the projections end up being wrong. And to that point, there are some economists and companies with a more rosy outlook. They say that people might give one answer in a survey, but often end up acting differently in reality. Both Walmart and MasterCard to that point have projected healthy holiday spending this year. And there's also the fact that supply chains aren't quite as backed up as they've been in the past, meaning inventory is higher than last year. So some reason for optimism, but the general fundamentals of the economy still in a very negative spot right now. Well, let's hope for some surprisingly good news.

Cabot, thanks for reporting. Anytime. That's Daily Wire senior editor, Cabot Phillips. Ticketmaster has come under intense fire for its mishandling of Taylor Swift concert tickets. The ticket outlet has also been criticized by Springsteen fans and other artists for high fees and having a monopoly on ticket sales. Joining now to discuss is Hollywood reporter and editor of Hollywood in Toto, Christian Toto. So first, Christian, Taylor Swift has been all over the head. lines this past week, what happened there?

Well, the Ticketmaster's site really melted down just all that high traffic on the day the tickets for Taylor Swift's new concert went on sale. Now, she hasn't been on tour live for years, five years, and this is, of course, supporting her new album, The Eras. The entire fiasco just led to calls for the so-called Ticketmaster Monopoly to be broken up and you can't blame fans. Now, according to Ticketmaster, though, within 3.5 million people pre-registered to buy those Swift tickets. huge demand. They expected it, but it was even worse than they imagine. Now, they said that bot attacks also factored in here as well. So given all that attention, the bots, the system

broke down. That means fans faced really bad technical glitches along the way. Some of them were getting booted off the site and other ones just had to wait hours and hours to get those tickets. And has Taylor Swift actually addressed this issue? She has. You know, Taylor Swift has a huge social media following. So she went to social media and shared her thoughts. And she said, listen, I'm really sorry, and I feel terribly about this. She described what fans went through as like being through several bear attacks. Pretty clever, and it really does connect with a common fan. Now, regarding the criticisms of Ticketmaster, this isn't the first high-profile incident we've seen that's prompted calls for it to be broken up.

Tell us about the Springsteen incident this past summer. Yeah, I don't think a lot of artists love Ticketmaster. It's kind of a necessary evil as they see it. But just in July, Bruce Springsteen's fans were outraged by, the platform's fees. Now, just to put in perspective, fans are being charged thousands of dollars for even mid-range seats, not the best of the best, not the front row, and this was all due to Ticketmaster's dynamic pricing model. Now, again, fans don't mind paying big bucks for big seats, but these prices, I don't feel like extortion to them. Now, according to Vox report, the average ticket

fee is about 27% of the overall face value of a ticket, and in some cases, it's as high as 37%. In that case, the fans just were angry at the boss, Bruce Springsteen. Now, he's long been this blue-collar hero, his songs touching those themes over and again. It's his brand. And fans thought the prices were being kind of hypocritical and really conflicting with that image of him. Now, has Bruce Springsteen actually addressed any of this? He didn't right away. At first, it was just Springsteen's manager, John Landau, who came to his client's defense.

Now, he said, well, yes, some of the tickets do cost $1,000. thousand dollars or more, the true average ticket price in his words, were in the mid-200 range, which he said was a fair price, especially when you're talking about Springsteen. I mean, he's regarded across the culture as one of the greatest artists of his generation. And I don't think that's a, that's hyperbole at all. No. Springsteen himself stayed mum on the subject for a while, months and months. And then recently he spoke to Rolling Stone magazine. The conversation came to those tour price tickets and all the controversy. And he defended the price. He said they were totally affordable. And he also said that Ticketmaster should be able to sell some

tickets at higher rates. So we're now again hearing calls for Ticketmaster to be broken up. For example, Congresswoman Alexandria Ocasio-Cortez tweeted something to that effect over the past few days. Is that something we could actually see? It's certainly possible. It'd be kind of interesting to see this had some bipartisan support. We'll have to kind of rebates. I mean to see how that plays out. But, you know, she called Ticketmaster a monopoly. Pretty, pretty harsh words, but some may agree with that. And the U.S. Justice Department has opened up an antitrust investigation into Ticketmaster. They've been reaching out to different companies, different venues, saying, hey, according to the York Times, is this an abuse of power in this concert space?

But of course, music lovers may have to wait a while if they want any lower prices or even just a little bit of what they see as justice. These antitrust battles, even the ones that are successful, they all take years and years to play out. All right. Well, Christian, thanks so much for reporting. Thank you. That was Daily Wire contributor, Christian Toto. Many factors contribute to how friendly a state is for business. A new report details the business climates for each state and where they ranked based on tax policy.

Here to bring us more information as Daily Wire's Charlotte Pence Bond. All right, Charlotte, some intriguing numbers here. Tell us about this report. Sure, so the Tax Foundation released its 2023 state business tax climate index last month. And through the findings, we can see which states have the best and worst tax landscapes for businesses next year. You might not be surprised to hear which states had the worst taxes. New Jersey came in 50th place with New York, California, Connecticut, Maryland, and Minnesota coming in above it. So all pretty deep-blue states there. The best states were Wyoming

at number one, then South Dakota, Alaska, Florida, Montana, and New Hampshire. Unsurprisingly, unsurprisingly, mostly red states in that list. What exactly contributes to a state being considered so burdensome for Texas? A few factors. So the report said that states that ranked the lowest had a few things in common, essentially high rates paired with complicated tax policies. New Jersey, which again was the worst state, came in 48th for individual and corporate taxes, 42nd for sales taxes, and 45th for property taxes. It has some of the steepest property taxes of any state as well as the highest corporate income taxes and one of the steepest rate individual income taxes. Now, one of the main reasons a state lands in the top 10 is when it doesn't have a major tax. Every state has property and unemployment insurance taxes, but some don't have one or more of the other huge taxes like the individual income tax, the corporate income tax, or the sales tax. Some examples of that are Nevada, Wyoming, and South Dakota. They don't have any individual or corporate income tax. But Nevada does tax companies on gross sales. Alaska has no individual

income tax or sales tax at the state level. Florida doesn't have an individual income tax and New Hampshire and Montana don't have a sales tax. It's not entirely clear cut, though, as the report points out. Indian and Utah do have all of the major taxes, but they're still in the top 10 states on the report. Now, I noticed Texas, which has no income tax, is off the top 10 list there. Why is that? Yeah, Janelle Fritz, a policy analyst at the Tax Foundation,

told me that even though Texas doesn't have an individual income tax, it has high sales taxes and high property tax collections. And while it doesn't have a traditional corporate, income tax, the way it targets businesses gross receipts is actually worse. Got it. Some other interesting points, Arizona moved up in its ranking this year. It changed from four income tax brackets to two, and in 2023, a 2.5% tax rate will start, which is lower than it has been and will help it move up in the rankings next year.

Washington State moved down on the list a full 13 places. It used to not have an income tax, but now it started a capital gains income tax on people who make a lot of money. but the tax isn't adjusted for inflation and has a marriage penalty. Janelle Fritz, again, from the Tax Foundation, she told me that states can improve their rankings by prioritizing pro-growth tax policies, and they shouldn't just try to get rid of a specific tax only

since that can sometimes lead to undesirable trade-offs. What are some other factors that residents should take into account when it comes to taxes in their state? Well, an interesting thing that might come into play is the tax on student debt forgiveness. Some states don't tax on this, but others might tax the forgiven loans as someone's income. CNBC also ranks states to see which are the best this year for business

and also incorporated how states use certain competitiveness markers to promote business in their state. North Carolina came in first, followed by Washington and Virginia, with Mississippi coming in last, followed by Alaska and Louisiana. The site used other measurements, such as the life, health, and inclusion in the state, its business friendliness, education, and cost of living. But lots of factors certainly can be important for companies. companies as they either attract people to live there or don't, as we're seeing with people moving out of California to other states where they would rather work and live. Yeah, it makes sense. A lot of factors to consider there. Charlotte, thanks for reporting.

Thanks for having me. That was DailyWire's Charlotte Pence Bond. Well, that's all the time we've got this morning. Thanks for waking up with us. We'll be back this afternoon with more of the news you need to know.