6 Episode results for "Felix Salmond"
Jeff Bezos Midlife Crisis
"Hello Welcome to the Jeff bezos his midlife crisis edition of slate. Money or guide to the business and Finance News of the week in which Jeff bezos dropped one hundred sixty five million dollars on a Piha tear in Los Angeles and what else happened. Oh does a major fed chair brouhaha going on in Washington. We're going to talk about that. We're going to talk about antitrust issues. Not only as pertaining to telecoms but also as pretending to technology. We're going to talk about Jed. I if you don't know what Jed eye is you're about to find out but it also involves big tech and the power thereof and if you were slate plus member can. I just say you're in for a treat this week because there is a truly magnificent emily peck rant. So all I have to do now is just introduce ourselves. My Name is Felix Salmond of axios. Emily you I hear from her post island Szymanski. You are here from breaking views and we are going to be talking about. Mana of techno awesome things coming up on slate money. Let's talk about transfer wise the smartest way to send and receive money internationally. If you've ever had to move money across borders chances are haunted by hidden fees whether you used your bank or another provider. They likely hit an extra fee and the exchange rate and you paid too much and if you didn't notice well that's the whole point. Transfer wise is different. You always get the real rate when you send to over seventy countries or when you convert currencies using their multi-currency account you pay one super low fee and keep more of your money over six million customers already saving with transfer lies. Try them today and get your first transfer free by visiting transfer. Wise Dot com slash podcast? So let's talk about the hearing. That happened on Thursday in the Senate in front of the Banking Committee Pretty much fifty fifty Republicans and Democrats but I watched a bunch of it and it. Some of them are nice but most of them both sides would not nice to Judy Shelton. Who was one of the two nominees hitting that and then there was this other guy sitting two left who basically everyone ignored because they were like okay. You're you're you're respected fed economists. You've been at the Fed for years. Everyone kind of understands the Oh qualified. So why are you even here? And these are trump nominees for the Federal Reserve to be clear and what trump has done when he's nominated people to the federal because they really have fallen into two buckets. He's sometimes he just nominates the obvious technocrat. Who is good at their job? And probably Jay Powell would fall into that bucket but so Lael brainard and various other people who like sailed through the nominations had no problem and then yeah I mean I think we look at kind of early trump. It was still kind of normal and now we're moving a little bit into crazy trump. But but the point is that even with these two nominations. He's got one of each. Yes and that's true. Yeah the Was it Chris? Waller yes chriswell is. He's this Louis Fed He's always been on the dovish side He's buddies I believe with Larry Kudlow and they're both into the idea right now that they can keep on unemployment can go still much lower and it won't affect inflation so you know. This is a debate. That's happening in the Federal Reserve and basically every time that the Fed has worried. The unemployment has reached as low as it can go before inflation kicks in They've they've said like well. Let's try and see what happens if it goes even lower and then it goes even low. Inflation doesn't turn up so so it's an interesting debate in the central banking community. And there's lots of talk about this thing. Called the Phillips Curve and Chris Wallace right in that debate and he can add useful perspective to the Fed Board in terms of that debate and probably his conclusions are aligned with what Donald Trump would want them to be. Which is you can cut rates more. And that's fine but ultimately he's a relatively professional central banker and he'll be fine. Yeah the reason judy. Shelton is so worrying to people. I would say it's twofold. One is some of the things she said in the past specifically being a big fan of the gold standard believing that the Fed just shouldn't exist at all not believing in deposit insurance among just pause deposit insurance like Fdr deposit-insurance like the assurance. That I have that the money in the bank will be there tomorrow because I know that the federal government will make me whole. If I lose the money in my bank account who I was really surprised that a human person that is nominated for such an influential position. I mean I know. Gold bug is crazy too but for some reason I cannot stop thinking about that. This woman wants to get rid of the FDIC so as soon away by that. This is this is. This is not just by the way to fall point to be clear. This is not just something that she wrote once she this is something what she built her entire career around which is basically and this is not unique to Judy Shelton. This is a very very stand. The like hard libertarian view of monetary policy that the federal government should not be involved in monetary policy that we should just outsource the whole thing to a lump of gold and that Thanks and the banks. Should you know license full on their own merits? And they shouldn't be backed up by the federal government because the federal government like at interfering private comments and like the the crazy sort of rand's pool wing of the Republican Party has always had an affinity for this kind of thinking it has never been remotely. Mainstream is entirely counter to really the existence of Fed. And I would say what that's disturbing but I would argue that what's even more disturbing is her. Partisanship is the fact that she as you said. Felix built her career on this and then when she became clear that she was perhaps more aligned with trump that he was maybe going to appoint her now all of a sudden. She's a duff. When Obama was president she was out there saying that the Fed should raise rates and It was ruining the economy and now with trump residents. She wants the Fed to lower rate. And it's not just that she wants the Fed to lower rates he also seemingly wants the Fed to start getting in charge of the dollar in a way that like has historically been the rim of the Treasury Department and the Fed and she's like the Fed should lower rate specifically to weaken the dollar so that we can enter this currency war and expert model and this is a very very trump ist view and what is absolutely clear is that she has effectively jettison everything that she has ever said in the past after going to work for trump on the trump campaign in two thousand sixteen and is now a mouthpiece for whatever trump thinks this week and she would certainly just vote and act on the Fed Board in accordance with what trump wanted rather than in accordance with. Whatever wingnut libertarian ideals? She this would actually not so. I don't think it's so bad to keep rates low and keep juicing the economy and see how you can get unemployment for now. I guess the issue is trump wants. Trump leaves will the issue is twofold as one would say. I that she. If if trump gets reelected I think Felix has pointed out that she could be Put in charge of the whole thing could be mixed check next chair bad. And then second if trump gets voted out and she stays there then she and the Democrat. Who's president she could flip flop again and you know work. Put the brakes on the economy instead of using it the biggest issue is that she if she is on there and especially if she is the chair that starts to call into question the Independent. If is the chair. There is no funded infant. The rest of the board cut is I mean. It's not John me if she is shed. No I'm going to just come out and say if she is the chair then what the only way that she becomes the chairs trump is president so if she is a church the chair and trump is president there is no fed independence. The chair of the Fed just does the bidding of Donald Trump and maybe she has difficulty getting a majority of the votes on the Fed Board. Although at that point who knows you know on the Fed vote? But the fact is the multi decade history. Fed Independence has at that point. Come to an end and this is. This is incredibly dangerous like that to me. The reason why I think is actually won't happen is because of how dangerous that is. Having an independent central bank is so important for market participants to have faith in the dollar to have faith in our debt to have faith in the ability of our government to like have a function economy. It is so important when you look at times when the Fed independent owner when other countries have had their independence of their central banks questioned or clearly shown to be the case. The consequences are devastating. And we saw that even in the United States with other bands. You know when Fed independence goes that's harmful and what was super interesting in the hearing was at one point. Christopher Walla actually managed to get a wedding edgewise and he was talking about the ability of the Fed to keep on. Keep facing under control even when unemployment is very low and you have sort of full employment situation and he was like you know why we can do that. It's because no one expects inflation and no one expects inflation because everyone believes in head independent and everyone trusts the Fed and so long as people trust the Fed. No one's going to be like raising prices in expectation of inflation inflation to a large degree as a self self fulfilling prophecy like the the dynamics of inflation are the people ask for wage increases or increase their prices because they think that as inflation out there and they need to keep up with it and so long as you don't think that inflation is out there so long as you trust the Fed to keep inflation under control. Inflation doesn't appear well and also because I mean to be fair. Also you had a if you were just all of a sudden started printing money and you were printing money far in excess of increases into productive capacity the economy in theory. You would cause inflation right so that is why we have an independent central bank. So that governments won't do that because historically not necessarily always in the United States low can be in many other countries when countries want to print money so that they can spend more and then they degrade the value of the money and this is the dynamics of it. I mean so so yeah just to be clear here right now. Donald Trump. It's on a bit of a spending spree spending spree but suddenly like a fiscal stimulus free. He he cut taxes a lot and the way he's funding. That fiscal stimulus is by borrowing on the market and by issuing treasury bonds. It is conceivable if you lost the independent Central Bank. The he could just Clinton money instead. Instead of instead of going out and boring money from investors he would just say. Oh you know magic. I'm GONNA magic trillion dollars of you know new money out of thin air because you can do that when you have control of the printing presses and that you know as Anna says is super dangerous on a economic level you know. Do I worry that the Fed would be cut loose so much independence that they would go? That far probably not be. You never know I mean I agree with you. I'm not saying that I think that is my base case. I'm just saying that. That is the danger like when people say. Why does it matter if we have an independent? That is one of the reasons. The other reason is because let's say all of a sudden inflation for whatever reason does start to move up and if we do not have an independent fed they may be much less apt to actually act because the president will be like no if you raise rates. You're going to hurt the economy. I don't WanNa do that. So that's what the classic idea of. What what central bankers do they take away the punch bowl? Nobody likes the person who takes the punch bowl so they can't be body. The bigger picture here is that everything has become politicized. The Supreme Court is politicized which you know is meant to be like this the branch of government but has become just as his d in the way that it was never meant to You know the Senate was never really meant to be an office de body it has now become that and Justice. I think is a really apt example of justice. We know is happening this week. And if the Fed becomes politicized if you put Ponti political hacks onto the Fed such as Judy Sheldon though Stephen Moore Herman Cain that votes are going to be very very simple and very very predictable which is a simple if then if there's a Democrat in the White House I want to raise rates. If that's a Republican in the White House I wanted to raise and the Fed if you have that then what you wind up with is a fed whose basic job is to re elect Republican presidents and to make me crap so that democratic presidents wind up getting kicked out. You know conceivably it would be possible. I actually don't believe that there's anyone who would vote the other way like be like a Democratic Party hack and always for the to raise rates under Republican president. I can't think of any human being who would act that way but like ability of the possibility of the Fed board breaking along offices dealines rather than across lake hawks versus Devlin's is is so terrifying to any kind of economists that they just wanted to prevent that and I think that is ultimately. Why Judy shells and is going to withdraw nomination. She has got much further than the previous party. Hacks who who Trump nominated and the reason why they pulled out. I'm Cain and more previously was actually not because they were party hacks at least face but it was because they had like a personal problem and this is I actually think what's interesting is that because they had some kind of like me to issues that was kind of a fig-leaf that could be used so they didn't have to actually talk about the kind of independent issue or their their actual beliefs whereas with Shelton. You don't have that so then you really do have to say we are not nominating her. Because if you know we don't we think our ideas are not within the mainstream and we do not think she would hope hold the independence of the Fed and by doing that they now are going to raise the eye of Donald Trump. Which obviously people don't want to do. I guess the question is when people are listening to this episode. Is she still hanging around? We're not Also she did say something insane about she compared Some frauds financial fraudster to Rosa parks because of his audacity because he wanted to try to print his own currency and he went to jail and again in this late bonkers libertarian worldview. Everyone should be able to print around currency. The federal government shouldn't have monopoly on printing currency. And so she's like Y-. This man is the Rosa Parks Monetary Policy and that went down the stretch. We have that And I guess what I was GonNa say is it's interesting that more in can't like everything is partisan congress. The Senate will do whatever the president wants now. Doj is totally seems seems to be corrupt at this point. Bill Bar does whatever trump wants and his only upset if trump actually tweets about it. So it makes it harder to do it. Trump wants and the cord is partisan like like veal said but there's seems to be a slight line in the sand for a financial policy like what's his name. The guy with the gloves and the the wife that instagram Steve. Mnuchin still around. And he's like kind of a normal side is a super interesting one right. Is that like on the one hand? He is the most reliable trump surrogate puppet he will happily appear in front of television cameras and defend statements in shut off the Charlottesville or building wolves or pulling troops out of Syria or whatever like crazy from woke up this morning and wanted to do. Mnuchin can be relied upon to completely take. That is the most genius thing he's ever had in his life and this has made him slightly less credible in financial markets. But the one thing you are right about is that somehow treasury itself doesn't seem to have become that politicized. This is what I'm saying. There is some kind of you can do a lot in American politics and people don't care but if you you just don't mess with like the rich people system way to economic system to be to be generous the economic system. That's like the line you can't write for and I think I think you're right about that and I think you're right about that in almost any kind of pregnant mess with women. You can mess with minorities you can mess with racist you. Can you can do pretty much anything. But like don't mess with the money now. I mean I think you're right. I mean I think you're right you know and to me that's why. I I just have a very hard time imagining. Donald trump actually putting people like shelton or others because I think the market reaction would be so negative. And yet he did. He did nominate an reaction yet. But I think that's also because no one thinks it's really going to happen but maybe it will. I feel like anything goes now and like this post and well it also like everyone seems to have given up a little bit. It also depends on if she's just like one of the members or if she's the chair I think that's a big well. I mean it is a big difference. But let's not kid ourselves that if she is in those fed board meetings she will immediately turn around Intel Donald Trump. And Larry cudlow exactly what happened in those meetings. It's true but like just to maybe the last thing I'll say emily's making faces got now it's really bad and like maybe just last thing here like I don't want to try to say that the Fed is in no way political or that. There's not there's always been political pressure on the Fed but this this would be different. This you know this would really really be. Yeah I mean I think there is a conceptual and quite easy to understand. The difference between the Fed is an independent agency which is subject to political pressure on the one hand versus the the. Fed is a political agency on the other. And that's why we none of us want to go. If you can't see the whole picture how can you tell what you're looking at? Microsoft dynamics three sixty five brings the data of your entire business together on one platform for manufacturing and logistics to customer analytics and sales. And use his a I to help you unlock better. Business outcomes when you can see the whole picture. You can create your own possibilities. Learn more at Microsoft dot com slash dynamics slate? Money is sponsored this week by door dash which has something for every lifestyle if you are running around and you have no time and you need to eat door. Dash. Is that for you. It is more than just delivery. You can even just take out. You don't need to wait for people to come to you. You can just run up to pick up and PASTA LION though. That has everything I mean. It has pizza. 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Look at the mall and say well. Maybe facebook shouldn't have been allowed to buy instagram off tool which is so mind blowing and I I con. Imagine where that's GonNa end up and I'm fascinated way you guys think that's GonNa wind up. Meanwhile over the objections of various state attorney generals the courts ruled in favor of T. mobile being able to merge with sprint and thereby reducing competition in the cell phone space. Emily what's your take on all this. It's about time the FTC woke up and paid attention to the attack mergers. So even though they're doing it too late and it's a little weird and maybe it goes nowhere. Someone had to start thinking about what antitrust looks like in two thousand twenty some regulators? Did I mean other people have been thinking about it for a long time and I guess the inst- facebook instagram or Amazon. Whole food stuff like that. They weren't traditionally the kinds of things to get antitrust attention. Because you know it's not like standard oil owning all the the was hunt to prove consumer hard to thank you hard to prove consumer harmon. They're using the bork doctrine and there's no consumer harm than it's a good thing so they kind of like ignored this while everyone you know economists and others have been saying like you can't ignore this. These things are getting too powerful. You nuts and so finally it seems like people are starting to pay attention and think about what monopolies and what antitrust like. I Love I love the idea The FTC going back retroactively. And saying you know what Google should not have been allowed to buy Youtube now. Youtube is totally integrated technologically and manage early into Google Google. It's not a separate company in any way shape or form. When Google Youtube they went like we will operate as Adams lengthen. It will have its own no they. You know they using all of the data from Youtube as we talked about last week to inform their entire business And that is giving them a huge competitive advantage internationally And it is easy to with. Hindsight look at much like that or look at facebook buying instagram. And say yeah like that's given you an enormous amount of power and probably too much power and we would be better off if you hadn't been able to but then what do you do right because I think that's important because I don't think this exercise is in any way designed at this point to undo these mergers. I think this is more informational exercise of looking back but I do think obviously if you look back and you say well. Many of these things were mistakes. Now number one. That's obviously going to affect what happens. Moving forward and number two than it does raise the question. Okay well if you can prove now that there is some type of harm that we didn't see before does that mean then you do have to act. I mean I think people are thinking about it. We have some of the Democratic candidates talking about breaking up some of these companies. We Have David Cecil Leans you know subcommittee on antitrust having hearings about Amazon where small businesses come in. And they're like this is how Amazon destroyed my small business And I think there's like conversations at least about in Amazon's case Lake separating the platform from the the vendors right because that's the issue. The antitrust issue with Amazon is that it controls controls. Both where you sell the stuff and the stuff the so yes so this is Elizabeth Warren's big thing about Amazon which is that on the one hand anyone can sell on Amazon but on the other hand Amazon sales on Amazon and Amazon is giving itself an unfair advantage versus everybody else Which is probably fat. But it doesn't it doesn't it isn't as compelling to me as something like like completely stifling turmoil youtube well yeah but it is really stifling to any innovation or new business because not only is it like is it. I mean do we have actual evidence of that? There has been some testimony in the in the hearings where it's like. Some company has some device that they've invented like I think one example was You know those things as you put on the back of your phone. Pop-up thingamajig is the proper packaging is yeah so and then. I mustn't started telling pop thing. The thing which company started losing sales. Yeah I mean all birds. His the classic example of this right is that they started making the sneakers and then Amazon has knockoff right. I mean that happens all the time in the real world too but I think what's interesting with Amazon and we can turn back to facebook and instagram. And everything is that. They have control over the data. They really have granular. Deep Knowledge of of how these companies operate who buys the stuff and they know more about the market. I think than just your average. I think that that's actually been a decent point that it does make it a little different than the normal world is that they have so much information on their competition in a way that would be very hard and kind of an yeah log probably illegal but also this as retail becomes increasingly digital. This is going to become a bigger and bigger issue right now. It's about ten percent retail sales around line which means that ninety percent of retail sales not online and you can run a small business without relying on online sales but at the same time You know if it's clear that if you're starting an online business right now you're going to want to be primarily online. That's where the big money is. You know that's how Kylie Jenner becomes a billionaire. And if you're going to be selling things online then you aren't going to be reliant on Amazon or else you're going to have to make a very very consequential decision to Amazon. Either way you're Amazon. Is The elephant in the room. And so either you just say and by the way if you avoid Amazon if you decide that you're not going to sell an Amazon then what that forces you to do is to run straight into the arms of instagram. That the only other way to sell things online is just a huge amount of money on instagram ads Which works and you know people can make a lot of money by signing things on instagram. I the way I the you wind up being reliant on Amazon. All your reliant on facebook and it doesn't feel like I feel like the Internet in some because I'm old and I remember when the Internet wasn't controlled by big trillion dollar companies. You ought to be able to just go onto the internet and sell things on the Internet without relying on Amazon facebook bad. So that gets US BACK TO I. Guess these antitrust probes Should we touch back on? Sprint and T. Mobile like do we care that? They'll be fewer cell phone honestly sprint a good cell phone company. No that that's not. The whole point sprints what would have died anyway. I honestly think this was completely ruled correctly. Sprint would have died anyways you still and they also do have to sell Part of the business to I believe dish it's on. I don't think this is a bad thing. Okay so there was the super interesting experiment which I wrote about in my newsletter. This week the ruling was a surprise to the market sprint. Stock Literally went up by seventy five percent after the ruling came out like three dollars to find but but the point is the win win. A major piece of news hits the market and the market reacts. You can see whether the market like the old didn't like it and specifically what you can do is you can look at the share prices of. At and T. in verizon if the merger is good for competition it should reduce the prophets of eighteen variety. Neshat price should go down. If it's bad for competition then that prices would go up because they will get to make more money because there's competition and so we get to then look at what happened to the verizon chef rises in the wake of this surprising court ruling and kind of nothing. It was kind of inconclusive. They went up after hours when they went back down again when the markets opened. And so probably yeah. It's it's it's a kind of toss up so they did. They did good. Bear antitrust went the right way and but I know that they win. The white right way if. At and T. chess had fallen. And I didn't. It didn't fall right. And then in the case of just two because it seems like in the world of antitrust were moving away from being concerned about things like sprint t mobile and moving towards being concerned about things like Google Youtube or Instagram fading in the easy thing is like the. Ftc also just came out and said they were going to prevent the magic of Shit crisis. With Harry Razors. What's up with that? And that's that's just like good old fashioned man. He drafted that has four raise companies. And you can't just merge three of them together and say the Oakland percents from what they did with T. Mobile and sprint. There was four cell phone companies. Fine when you die the idea there with the sprint wasn't really helping consumer competition because it was such a crap half company. Yeah Yeah Fascinating. I do wonder if they're Kinda if there's a sense of looking back to with the dollar Shave Club Unilever. I mean that was obviously a while ago I I was looking about. How can you justify barring edge? Welcome buying Harry's and still be okay with Unilever Buying dollarshaveclub. Why is because you didn't make raises? Yeah wasn't actually anticompetitive in that way and do you think that the maleness of the FTC makes them overly concerned with a razor company. Harry is in cooled singled Flamingo. Harry's also has razors that women can use because Harry's razors. I don't use the stupid female brand because it having razor Flamingo Racist Razor Prefer Orange so I like my razor. Can you imagine a world where women US paying a slate? Money is sponsored this week by Cola they make all manner of appliances for your home but most fabulously they make intelligent toilets. Do you want an intelligent toilet? Yes you do every moment that you spend in your bathroom can be dumb or it can be intelligent. Make it smart. Your Cola. Intelligent toilet comes with an APP. You can personalize your toilet. You can adjust the temperature. 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People can use right away and in those employees need because it has insights which they get directly from the linked in community. It all feeds down from Lincoln so visit linked in learning dot com slash slate money and sign up for a demo. Today that's linked in learning dot com slash sleet money. It's the return if the company we thought we thought that the thing had been set that the government said. I'm going to give this ten billion dollars. Cia intelligence contract to Microsoft. I'm not going to give it to Amazon. Everyone kind of new. That Amazon had the better bid. Kind of knew that the government awarded it to Microsoft just because Donald Trump Gates Jeff bezos. And yet somehow like this was just understood as this life under trump a now according to come along and said wait. Hang on site really. This is an instance where honestly. I don't think there's anything wrong with giving this to Microsoft like number one government contracts are always political. Always have been always will be now. This one is more publicly political. And that's not good but the idea that they're like oh no their politics and how you give out government contracts. I kind of Rome is at that and second. You already have Amazon. Having such a large market share in cloud computing and already being essentially in charge of I believe the cloud competing for the CIA in. Who actually think it makes more sense to have more than one company in there. Yeah this is one of those confusing title like everyone to lose yeah. I definitely didn't want Amazon to win. They're ready control too much. They have the majority of the cloud as Anna. Just said They're huge and like why should they have this ten billion dollar deal that could actually amount of forty billion dollars over you know if they get more and more business? Why not let Microsoft have it? Yeah I mean we just talking about Of things and now we're saying that it's okay to be political announcing it's okay. I'm saying it using I. Guess what I'm arguing. Is that look in theory of course procurement that none of this should be political whatsoever. But I guess I'm just saying like it always is so yes if they can find proof which with Donald Trump. It's entirely possible. We'll be able to or he is saying like I have this email. That says you can't do this then. That's bad and then they shouldn't allow it to go forward. I mean Mattis. His book that trump told him. I don't want I don't want Amazon to get that contract right but from what we've seen over the past month. We know that that's not going to do it like that. Will that will open the colds flu. I mean they can they can. They can cool maths a witness. That's true and so look if you can find actual evidence of it than yes. Of course you need to say like no. We don't allow. I guess what I'm saying is that is that. I just all government contracts or political. It's always about who's giving money to WHO and who has connections with here. It's just I don't believe I believe if maybe since it's less political than it was in the past but it certainly is the level of local government and you know it certainly is on the level of like international governments. You know the Europeans will give contracts to Airbus in. The Americans will give contracts to Boeing. There's Anna's right there's always a political overlay when it comes to government spending and often it's explicit and written into law that you know that if the American government spending money they need to spend it with American companies and and that kind of thing is often you know not just implicit or explicit. Amazon's really having a hard time this year. I mean there's the whole debacle doesn't your heart of lead. Well it does seem like Bezos by buying the Washington Post is kind of like made himself a target and a little bit of a new way with the president and the Jedi contract losing it and then a little bit. I mean even I guess. The Washington Post Angle doesn't really fit with what happened to him in New York. That was more just like we. Can we talk a little bit about Jeff Bezos Midlife crisis? Because it's kind of amazing. He's becoming John Lewis apart. He's spot that David Geffen House in Los Angeles. He bought the Old Wall Mr Estate in La for one hundred sixty five million there by beating the record for most expensive property purchase in L. A. Which had been held for just a couple of months by Lachlan Murdoch? He reportedly dropped fifty three million dollars. Which is a record for an ED? Reshape Painting Christie's last November bought a Cams Marshall at the same time and because I'm the him he's never been known as an art collector before you know you really do. This is super billionaire wins. He win. Let the first painting you by fifty three million dollars most of us. Yeah like a couple of hundred bucks extending twenty dollars. Poster probably But the the soup interesting thing to me about him. Buying A in Kerry. James Marshall at Christie's is the same Kerry James Marshall at both still alive and there are basically three different ways. You can buy out if you're an art collector. One is you can buy out by dead artists who are established in the Canon. And then if you're buying from that others but but we'll must by definition you're buying from someone who owns that And so whoever owns the gets the money in a trade you. They get the money. Alternatively with living on this you can go. Oh wow you have really like what you do. I like your work so I'm GonNa pay you money if you'll work and then that money get split between the artist and gallery only and then the autism. You'll supporting the artist and doing that. And then there's this new thing which is only really. It hasn't been around that long Just a few decades really where you can buy the work of living artists on the secondary market and auction houses. And stuff like that and so you go along you. By the Ad Rousse at Christie's and then all of that money goes to whoever just you know whoever selling me adversary and and you know if this doesn't see any of it and that's kind of the weird way to collect. It's like if you're going to collect living artists. Do you want to support the living artists and yet based off? That's how he's doing he's like. I'm going to spend this money on art by not going to spend any money on artists. That's just my model ran. Yeah no and I think it's a very very valid. I think probably also goes to the point that I don't think he cares anything about whatsoever. I think he's just like I guess. This is what you do. I mean he's truly seems to be having some kind of. I don't WANNA say MIDLIFE CRISIS. But it seems like he got his divorce and now he's just out there. Jeff bezos on the town buying mansions. He's like out in the teeth soldiers. That would parties. You sold four billion dollars Amazon stock in one week. He's like I just need some spending money so he's going out he's got to have the cash you know. He's got to buy the bottle and he's busy guy. This is why Bernie GonNA end up being our president but there was this great story which which we should link to about sort of inside the whole crazy. Hq To fiasco where the whole thing. Why Jeff bezos decided that he was going to run around trying to get massive. Subsidies from in North America was basically driven by Elon. Musk envy here's Elon. Musk actually subsidies if he can get subsidies why can I get subsidies? I'll grow up. And then he just took way over the top but that's how he's run his business all along in a way like no competitor. He can have no competitor. He buys them and push them out of business. Dominates everything like it is interesting. Like you've read biographies of previous entrepreneurs and early errors. I mean he fits the models so much you know which probably means at some point. He is going to run into an antitrust and he is. There are going to be real consequences because you. He doesn't seem to have any thing inside of him. That knows when to stop. I mean I think used to have a wife. Maybe she was. Yeah I mean maybe that explains it you know maybe she was like Hagia holding him back from something already. Have one hundred billion dollars. We don't need another one hundred million dollars. You are cramping lifestyle. I need to trade you in for someone else. There is a piece in the Times. I think I talked about this. A bunch a few weeks ago That talked about like married as os would like go online to make reservations at restaurants. Single bezos would never do that because that's so cheesy Murray Basil's had had said Hair married as US didn't have those hulking swollen. Is that what they call it? Swollen arms which nothing wrong with that. It's just interesting contrast little social experiment in front of our eyes. Sleep money is sponsored this week by. Hp S Kost H P is a leading global investment firm. In fact it is one of the most successful credit investment firms in the world and with hps cussed podcast. They will help you learn how they managed to get there. They have how I built this segment about the careers of successful business leaders. Aps class is presented by Colbert Cannon. Who's the managing director at HP INVESTMENT? Partners he interviews guests and worked sound. How business leaders drive value creation? They share stories advice and insights from successful careers. You can subscribe the hps cursed now for free wherever you download the podcast. How about a numbers round. I'll stop for change. One hundred fifty four dollars which the new price of a single to to Disneyland. If you WANNA go to Disneyland for the day it will cost you one hundred fifty bucks. What does that get you? It gets you into the park on a on a day and then I guess that I have to admit I haven't done the Disneyland thing in a while but yeah I think on the rise but you have to queue up. Yeah get to pay extra to like beat. The line is that a lot seems reasonable. Disneyland's Great Right. I don't have kids. I don't know what what's cheap expensive. My number is three hundred and sixty thousand dollars per week. That is the cost if you are going to charter. Daniel Yacht O. Three hundred sixty. That's like that's much definitely. Yeah so I mean I know million dollar week yachts like tweet sixty you get two-thirds off that's the reason we actually kind of. No this is because there's a bit of a scandal because someone who chartered. It apparently was putting their. They were in a UNESCO World Heritage site in this in Belize this coral and they actually had the anchor in the coral wrapped around it. Oh yeah that's that's awful. My number is really big. It is one trillion where wait hang on a second. I just want to follow up on this question. So when you say the person who taunted it lake correct me if I'm wrong here but when you hear about it comes with the captain and the crew. So it's Dan captain had I don't think we can blame. The person who taught to do that is true. Yeah okay. My number is large. It is one trillion. It is a number. I can't even conceptualize. Well in my brain to conceptualize one trillion. It's one trillion. That is the number of trees that President Charlton trees. Yeah into that endeavor. Wasn't he yes? He said he would plant a trillion trees to help the environment and there was A piece in the Times about this. That Mark Benny off the founder and CEO of salesforce. It was kind of like his doing he basically he said. I'm going to get trump to support this. I think L. SUPPORT IT I. It's it's devastating out in hotel. You're together and he he well. Benny off went through Kushner to do it and he said trees are the ultimate bipartisan issue. Everyone is pro tree. I don't know I agree. I'm not pro. I'm Ana I know of people who come chair. I mean there is there was him from. Reagan lays at once. You've seen one you've seen them. I mean I guess I mean I'm anti tree in the perimeter of my house. 'cause they don't want them to fall a house but apparently planning more trees is really good for the environment. It's a form of carbon capture would take like a century for the trees to actually start doing the carbon capture so trump would actually have to do other things besides plant the trees. But like I'll take what I can get right now and I'm not cynical. I'm just GONNA come out and say that like mathematically it's impossible to reach a trillion trees but it's just not exactly a bit late just just thinking about it. I mean like you. Should we do a quick back of the envelope? Good about the tree thing but fine go ahead. Sounds like one of the interview questions you get it like Goldman. Is it possible to let us Huma punting one tree a second? Okay and I'm just GONNA get Syria this pretty quick if you've ever planted a report scatter some seeds anyway. But let's now you have to do the whole Siri. How many years is one trillion seconds? That would be thirty. One thousand six hundred eighty eight point seven four years so one tree effect and it would take thirty thousand years just one person right across the globe. Twenty million trees a second. Ask theory that okay. If anyone has any idea whether it's remotely realistic than anyone will ever be able to plant and truly injuries. Please write in on slate money at slate dot com and we will Weed out the best. I'm just I'm just GONNA I'm here to dash your dreams. Emily blame Syria. I and yeah. Please good at answering every time we ask her a question at home. She's just like let me Google that for all right. Thanks Emily trillion number. And thanks for coming on things JESSICA PRODUCING. Thanks all of you. People listening keep those emails about how bigotry and everything else coming on eight as DOT COM. A week we'll talk you free late money.
Slate Money: Succession S2E1: "Silica Mud Treatment"
"What if abby was investigative reporter. I'm charles to hit the author of the power of habits and the host of a new slate podcast how oh to and how to we answer your toughest questions. Like how do i fire about employees. Or how do i donate a kidney to my mom. Or how do i tell the perfect joke or how do i rob a bank to listen. Subscribe to how to on apple spotify or wherever were you get your favorite podcasts. Hello and welcome welcome to the thing which have been most excited about for about the past year which is slate money extra the succession recap cat mini season of monday morning slate money shows where you have all of course stayed up watching succession last night because what else is there to doing sunday except for watching the greatest television show on t._v. Right now and we are going to just recap the entire episode and talk about what's going on with some of the most interesting people in media. I need to say this right up front. If you haven't seen episode one don't listen to this show. Go and watch episode one. It's fabulous and then you can listen to the show. All of these shows are going to be filled with spoilers for all of the episodes so don't listen listen to the show unless and until you've watched the show now i am of course felix salmond of axios i am joined by emily pack of the huffington post who is also also a succession stan and fit this first episode of this little mini season. I cannot imagine anyone anyone better to come on this. Show join us then ed lee of the new york times a hoy ed you have been covering all things media forever and ever forever and ever. I think it started somewhere in the seventeenth century. He knows everything about everything and most importantly you've been just as obsessed about the show is anyone i have. I mean i i watched the first season as they aired as they came out and i for the most part liked it but i definitely had some issues. I mean when you cover an issue so in-depth for so long. You're like that's kind of outright. Were you worried some of it wasn't quite very similitude sadness and a but that's the thing i actually adore just how geeky a got about finance and media and corporate over full stack. Oh absolutely like this is kind of great but then when you get it wrong you're like. Why did you have to go do that now right. It's almost better sometimes if they didn't quite go that deep. He's you're like. I mean maybe i wouldn't be as interested. I bet yeah so the thing which i was obsessed by more than anything else is who are these characters because everyone obviously sees maddox. Oh yeah you know <hes> there are two sons who has sort of rivals as the door to who's kind of out of it but kind of not out of it but there's the older. There's older son who's like who sort of not really involved in the family. That's prudence right but there's overlap with the redstone is to the family that controls c._b._s. Viacom where there had been a succession about for so long it doesn't quite line up in terms of the structure with the kids because sherry redstone is really sort of the only sort of <hes> biological heir apparent. There's an older son brent who basically sumner bought him out right and so he lives in colorado and a ranch right so that's that is connor kind of melding. It's very smart sort of milange of like all of avenue i know people who spent a lot of time working for the dolan family and they see a whole bunch orlands in here as well before we get into the comparisons we should just lay out who the characters are on the show and hit me. Tell me who is logan roy so logan. Roy is the patriarch he is mike. Edmonds said he is basically the rupert bert murdoch. He's i think he's eighty five years old when the series starts and he has some kind of health episode is it a stroke or heart attack or something bad happens bins to him and he has four children the oldest connor from his first marriage and then the three other ones two boys two boys and a girl from the second marriage and the two guys are called kendall and <hes> what's the other one cal- in roman and ship those are like the three heirs battling for the company because roy runs the company etienne which is like this massive media company of the health code wasted kgo tv but there's the parent company waste our royko that like it just again like how geek out on little details like that. We're like well. Actually there's this aaron company called waste ourika which is clearly a bunch of a merger between royko which is roy's company which logan roy company which he founded which is the media company. I'm waste our. She's clearly some kind of telecom thing that wound right maybe bought decades exactly and then and then one of the great subplots of the first season is they put like the fuck up son roman woman in charge of like a satellite launch which is clearly proud of the that was great. <hes> there was definitely sort of an armando <unk> nucci flavor to that scene like it said that you i'm gonna. I'm going to bring this end like jesse armstrong the show writer he had worked with armando on the thick of it in the loop which are these these bbc or british series at these really clever satirical tirico takes on power and government and how did veep and he did veep for which jesse was a writer had written a one or two and i have to say if we're talking thing about the first episode here there. There were definitely times like when candle you know turns around to his cousin greg. If my septum falls out i'm going to make you eat my except which which is just pure this and this is. You're talking about last night's episode. I episode the second season. There's a lot of great one one liners in there you can't i mean i have a whole list that is that that is everyone so before we get to the last episode we should say at the end of last season basically basically the sun kendall roy he tries to take over his father's company and then gets himself into this chappaquiddick scenario where he basically it gets this young waiter killed in a car accident and <hes> his whole project of taking over his father's company goes completely sideways and he winds up weeping weeping his father basically get him out of trouble and and that's kind of where we leave off with kendall roy going from about to become you know. The man took down his father to just this like broken. You know just mess of a human being the other thing which happened. It's all of this takes place at his sister's wedding. Yes breath the worst best wedding ever it ended up being a great finale that way where like this brutal kind of leveraging that the dad is on his son. Wow that's just so cold. You're taking advantage of this accident basically to like get over on his son who's been trying to take over the company and that bleeds into the first step is so we see the the the fallout from that and so we open this season with candle who is trying to break his drug habit and an and ice picks <hes> and i honestly say that this is not just my favorite line of the episode. I'm i have not seen the whole series as yet but i think it's my it's going to be my health. Favorite line avowals areas. I love this much which is when kendall gets pulled out of his spa and is told to go on the television to try and fight this takeover bid that he instigated and he looks kind of blankly at this icelandic apparatchik and he says i meant to have a silica mud treatment. I've only been here like forty eight hours and a meant to have a silica mud uh-huh treatment. Can i just i'm sorry sounds going to work the fact that you picked up up on that. It was iceland. I mean what's great. Is that it doesn't. It doesn't say they're a nice only if you had ever been there. Would you know that this is just the bleakness of it and the specific sorta setup of like being in that sauna in the middle of like this blank field right. We're just exactly how they do it. Over and also i mean just to your point at about like the the little title things on this being superfish silica mud treatment. I actually looked it up. It only exists in like the blue blue lagoon in iceland it apparently it is blue. Lagoon silica is a white mud known for strengthening the skin barrier skin newell and deep cleansing so i have actually been to the blue lagoon and i've actually put this silica on my body and it's great. It's brilliant so i totally get why he wanted. I'd like to have and i still have that please. He's so broken in this really the first few episodes. I don't wanna spoil anything going forward but he in that sort of reckoning that happened at the finale really plays into the start of the season and it works. It works really well. I think it's it's a really smart use where he's kind of. He's he's kind of on the sidelines but still a factor. There are so many lines where other people are describing candle as just utterly broken. <hes> shift calls him his sister historic sweaty corpse. Tom scams her new husband says he looks waxy like an unshaven candle which is one of my favorite lines another at another point. He's called a dead man. Walking his dad calls him mr potato head and my plastic adversary like he's just completely broken down like the sight of him dripping water being pulled out of that <hes> what is it feel like some kind of hot spring or something. I'm just dripping water and his white robe. He's just like he's like he's not even a person he's he's a wet rat and this is in stark contrast to season one episode one which opens with him psyching himself up in the back of a cub by you're listening to the beastie boys as he's going in to try and like do some deal with some hotshot tech company right and he's the man he's <hes> you know he's pumping himself up and he's also clean at that point and you know he's very proud of having you know concord his drug addiction demons but of course they come back. I mean my issue with that character. The way he sort of played out in the first season is that he was so stark where he was so the man all of a sudden like oh. I don't know what's happening next and then you you know my wife and i'm back on drugs and you know everything's falling apart well he. I just wish there were moments where he tried to fight back a little bit more and it didn't quite happen at least in this. I <hes> episode of the of of the second season you can. You totally get why he's broken right. You could see why he's just hollowed out and it's kind of interesting that way. It's just really kind of wow like this guy this is this is what a dead man walking really looks like so the the first season. Did this really quite clever thing where they set it up in the opening episode inside of logan roy has stroke the name of the show is succession which of his kids it's going to take over from him and then weirdly really you know that entire plotline gets resolved in episode four of season one and then it starts getting interesting. That was one of the things i loved about season one. It was the the thing that you thought would be the big driving plotline for the whole season is the internal infighting between the kids did not actually become that driving line in this season again. What we wind up with is this kind of. We'll start one hitchcock ian word for mcgovern. It's a macguffin win that you get this wonderful. Macguffin introduced the very beginning where logan roy of if i'm gonna fight back i'm gonna have to name a successor and like why no no one ever explains why he needs to name of success in order to fight back. I have a feeling this is also going to be one of those things. That gets resolved by about well i think i think there's more this idea that what you want. The the season needs to propel right so i think the idea of logan roy sort of jangling succession throughout the season i think is sort of a key driving force for like all the drama yeah that takes place. I would say the last episode what was really really smartly done. Was that whole setup around like well look. Are you going to sell like detect companies acquiring after you like it. It really captures what's been happening with in the real world what happened with rupert murdoch's company twenty first century factories sold the disney with all these other merger happening. It's because of big tech coming in and kind of stealing your son okay so this is why we invited you on you. Actually understand this stuff and you can explain it. There is this another line in the in the show is like tech has its hands around your throat says the banker to the patriarch so can you explain what that means and why why why is tech like an existential risk to media companies so i think that's what you're talking about really really vividly captures the state of play which is you're or a big media company that means you movie studios and cable networks and maybe some broadcast networks maybe some newspapers. We know what's happened in newspapers right. No one's reading print. That's die hi t._v. People are still watching but not the way they used to so there are fewer people paying cable bill now right that cuts into twentieth century fox and disney to some degree and a bunch of these other media. Why is that happening because everyone's on facebook and instagram and tech talking doing that thing so in terms of entertainment where you're distractions are cable is losing thing movie. Theaters are losing despite a few outliers like marvel and that hold media infrastructures just dying dying a slow death. That's what makes it sort of frustrating right. It's it's not a clear break. It's just every quarter. There's fewer people paying for television. Fewer people going to movie theaters and guys like rupert. Murdoch are like what the hell right so him selling out as surprising thing as it was for a lot of murdoch watchers just from a rational perspective like make complete sense and that was actually almost directly referenced in this episode owed when logan roy gets his family around the table and says late we can sell that you know his his adversaries this guy sandy he's overpaying. I'm for royko wasthe we will get ten billion dollars if we sell right now and that's clearly setting up at some point and what's great about zero great. That's a great deal ten billion. Guess what what did the murdoch family get out of that. Is he sale. They got twelve billion right sort of like this perfect like if you really wanna read deeply deeply into it like yeah. That's exactly that situation. Here's the thing though as we saw at the end of episode one what was a resolution skirt. We're going to stick with it so it departs from reality in that really specific molecules because if you just decide to sell the end of episode one that there's that we're over right like a clear departure from what's happened in real life but it's done in a in a smart way where the acknowledge what's going on in the world right. That's what's so smartly done about that terrible sweaty corpse yeah and it's like an unshaven candle but i mean you know the long the short of it is i saw their plan. My dad's plant better aw i'm david plots one of the hosts of the political gabfest and i'm in your ears right now to encourage you to sign up for slate plus. I know i know you've gotten this message before four but hear me out for a second you see slate plus is probably the best thirty five dollars. You'll spend this year. Not only we get more than thirty. That's right. I said thirty podcasts ad free for thirty five dollars but as a slate plus member you'll also get exclusive access to private cocktail hours with your favorite podcast hosts discounts on tickets to live events around the country less advertising. It's late dot com direct access to slate writers editors podcasters to a private it facebook group plus tons of extra podcast episodes and segments supports late journalism and give yourself a service. You'll actually use by signing up for slate plus us today. Just visit slate dot com slash podcast plus to sign up today again. That's slate dot com slash podcast plus. Thanks so before we get to the end. We should say where kendall went. We should talk about his t._v. Appearance briefly if not to just mention his talking point which comes up several several times of oh my god it's so awesome he gets passed a little like four by six cod in the back of the car in iceland and what does the cat ed say emily. I saw their plan. My dad's plan was better over pizza to everybody like he's automaton right to why am laid out. He can't say the truth which is like oh. I accidentally did a murder good idea for me and my dad covered it up for me so no i said no. I own everything. I'm like yeah. I'm basically his bitch and i can't do anything so that's why i say any of that so he says i saw their plan and my dad's plan was better. I think he says that at least three times he says and that woman has who issued that p._r. Communicate she's a communications person she has. She's sort of like this very ansel eric eric but just i president enough that like it's this believable structure of like this big corporate behemoth that has all these different facto dems going around so all these people around that sort sort of no more and that are just smarter obviously than any of the roy's that sort of no are competent actually that layer beneath them. There's the colin the the body man who basically helps cover up kendall's crime you know and these c._e._o.'s guys like murdoch have body. They've got these like sort of people who work for them security currency for like years and years and years. I'm not saying they're doing cover ups like that. I'm just saying like they're closing out saying that either but that that's an essential part of like this whole the mythos around these families and how they operate yet and i wanna get into that too because the way logan roy talks to his son candle about will little murder thing he did. It just really seems it's like he has so much empathy for him and i know that strategic but i also wonder like has he kills anyone. Maybe this is my question for you emily in season one famously well famously to me. I'm not sure how many other people picks up on this logan roy go swimming in a pool and you see that there's a whole bunch of just like scars on his back and i was like wow nets clearly gonna this means something at some point the the first thing i thought of when i saw the scars on logan noise back with actually sumner redstone hanging off the ledge of the hotel so austin some nurses sufficiency survived this hotel fire where he was you know gripping like and he was already an elderly man using the sixties and he was. There's a hotel fire. He went to the window. He opened it up and he sort hung off the ledge of the window for like a long time. Apparently until the the fire trucks came and rescued suffer dreadful bands he was in the hotel room with his mistress which makes it even better and his hand handed turned into a claw like he he there was some part of his hand he can really use ever for you know after bet that moment but yeah logan definitely has a moment like that or more in his background ground. I'm hoping that at some point we we get more of a taste of because there is that one scene where he tells the sun. It's natural that you're going to think about what happened but you just can't think about it. You can't think about it very much like you. Gotta put that to the side and it's clear kendall really can't do that and he's just gonna take the drugs tonight. It sounds like the data speaking from some kind of experience. It's right in their son yeah. Yes it's all very dark. I need to geek out just a little bit about this episode on the very very small little stock price subplot because in season one there was a whole bunch of people worrying about the share price jason wearing that it was going to go to low and if it went below a certain level and that would cause a whole bunch of chaos to the capital stack and the balance she blah blah blah blah blah and the loans that took out against his stock and all of this stuff and so people worried about the chef rice being look you come in season two episode one and everyone is worried about about the stock price for the opposite reason they're worried that it's too high and logan actually goes up to kendall his son and gives him an instruction to quote pour a bucket of cold old shit on the bid. That's on my list for me some pockets of cultured on the bit alright and like the idea of people judge the success of kendall's taylor parents based on if he was successful than the share price would have gone down and they're like well it went down from it and then it went back up again and so he wasn't successful for an opponent of course is that the bid that he's fighting off is at a high price and so if the share price goes up towards the bid price that means people think that the bed what is gonna happen if the share price fools down below the bit rice that means they think the logan roy is going to win so we're in this weird sort of bizarro world where everyone in the company wants to chef to be low. What's great also says they never explain it. They never get into like here's why like mostly. There's all this exposition when you see some kind and of movie or a d._v._d. Show this is like no. We're not gonna explain. All you have to do is read the emotions on their faces like yeah. This sucks right so like but that's a great geeky moment. Well you know for listeners who care about that stuff. You know that sort of risk arbitrage whenever deal is announced deal is in play between two companies. <hes> you know there are investors. Make bets are like you know. I think this deal is going to happen or is not going to happen and the price goes up or down accordingly. That's another great. I think this second season really really crackles with like business. Sophistication does a really really good job harking back to the first season that you mentioned. I did have an issue with that whole the macguffin in the first season which was like oh my god like he's is in the hospital and like you need to take over to tell you something. There's a debt situation that no one knows about what here's the thing. Though is that historically that kind of stuff does does happen. There was an example with <hes> national amusements sumner redstone parent company that owns c._b._s. Viacom where he took out loans apparent company took out loans against the price of c._b._s. Viacom and he kind of hit it and so when investors found out there like what the fuck and so he's like no it'll be fine. Don't worry so that scenario. Scenario has happened the thing that didn't quite ring true from the fictionalized version. Is that somehow. The debt exists on the public companies books. We're getting really geeky that would never ever happened. You would never happen in real life that if anything would have been better if like the debt holders actually owned the shares are holding onto them and they had a covenant to sell at a certain price which if they did like the family would start to lose control. There was a great phone call in the first season where like bet on the phone where candles is it. Kendall thinks can lease on the bank is like fuck off yeah i have. I have your nuts in advice. I can do whatever you want your gun. Talk yourself out of this. This is a running theme. I think in the whole show so it's kendall a really wants to be tough and he can act tough but like no one takes him. Seriously the setup is also sort of like as much as you might sort of despise the dad for whatever the reason shareholders believe in him. That's what they're buying into the him as much as the fundamentals of the company and like when there's a moment where can takes over there. Is this sort of. I don't know who who is this kid. Do i trust him as you're going to be a good leader and i think that sort of reverberates through the whole season which is like are the kids good enough not just in the eyes of the dad but like in the eyes of the world i i mean the kids are terrible. I think we need to talk about is the set piece of this episode. Yes so this is amanda innogy dna show we means the every single character is terrible and that kind of goes without saying but yeah if if you're talking about what i think you're talking about emily the best seen i think the <hes> succession has ever done is the scene between logan and chevron in the summer house in the hamptons. This is the moment let's talk about how we get to that moment so they all go go out to the hamptons to the summer palace or the shit pit as running calls it and when they get there you know it's just this like what's great right about succession. Is you know it's like this kind of its wealth porn but it's all kind of twisted and ugly looking so you know you have this beautiful. I think at one point point logan says it's like a two hundred million dollar house or something and it's really beautiful and you see everyone like unloading these gigantic stakes these lobsters and then everyone who walks into the mansions like oh what's that smell right and the smell turns out to be literally a bag of raccoons sti- wait wait can i mentioned another great line from the episode where logan in walks in to the to the house and he says it smells like the cheese manga died and left his dick in the yes that was on my list. Take the bag of raccoons. There's a bag of raccoons stuffed up the chimney so and that kind of hangs over everything and then when they finally find find the raccoons logan then makes them throw out all the beautiful food because it sat in the stink and then there's the shot where kendall is smoking outside and then behind him <hes> all these you know wait staff throwing out lobster steak shrimp. It's just like disgusting and they're getting. They're getting pizza to be fuck this shit. I just want the unchivalrous as chevanton roman start walking into the dining room and then talking about what's going to happen and she was like oh. Maybe we kill and eat kendall the pizza topic that was great yeah but no one needs even a bite of the food which i thought was hilarious like there's all this attention and money spent on all this food. It gets thrown away. They replace it with more stuff. Known needs any of it because no one actually cares about what money can buy. They just wanna they just during powerplays with each other nothing else even matters like all. This wealth is nothing. They're afraid to eat and they're afraid to talk right. That's the whole point of that. He gathers them razek isaac. What do you think i should do. Should i sell because he's responding to his banker sort of urging him. Look you should just sell like the smart place to sell and it's a serious it's it's not just some kind and if political moment it's like an actual here's what's happening in the real world if you don't sell now than your company is going to be worth much less than four or five years time so the smart move is to sell now exactly so he's earnestly asking the kids and the few executives in the room. What should i do and no one wants us to tell them what they really think. He's afraid of him right because there's this line for a moment where he's like. I like money and i'm afraid of you. I'm like that's it. That's that's all show and so then we get to the point where ah he'd has this sort of one on one with the kids right to see like where we're getting to this moment now like well fine. If we're gonna stick with it. How do we do that right right so succession is a part of that question and so yeah and so like he decided festival he brings in roman who act you know in classic roman airman fashion like talking about a bunch of words which he doesn't really know what they mean like <hes> sounding vaguely desperately trying to sound like he has a clue what business his dad is in and roman leaves incomes vaughn n._s. This unbelievable sort of game of catherine mouse between logan schivonne where logan basically kholsa beloved loved by threatening to tweet and this is the other thing which i love about this episode is the or the season even is. I think they're going to stop taking tiny. Little nods at the trump was very trumpy episode. There's a scene where logan roy kind of he stiffs the contractor. Dr that is out of donald trump's playbook one hundred percent where he says. I'm only going to pay you one hundred thousand but he owes more than twice that much yeah and he says just sue me my lawyers lawyers work for the justice department lawyers were right. Yes and the tweet thing is both a reference to trump also on musk right. Who like he's you know he's he basically got himself in a hot water like he actually had to pay a fine for tweeting things that weren't quite so but yeah so chevanton basically says yes sell you. You know honestly just do it just sell and he's okay and he's like if you don't want to take over. I'm going to fail and you can see this moment where she's just like no don't do it. It's this great great emotional moment. Where you exceeded our is our. She's like man. I want this. I do what i want. What i've decided i'd like to do is to formally ask you to come in and be the next chief executive of this company. I don't think i'm the right person. Will you know i'm pretty smart and i think you are you harsh. If you're the one sarah snook is the actor who plays vaasie. He's an osce. She's amazing. I think she's the ought to be the best actor on the show. She's so good. She's the most compelling character for sure because she's both awful but human right and is certainly the one you relate to the most in the sense that like oh you kind of you get where she's she's coming from and she seems to more or less down earth with the only exception if the one question which everyone has about she wanted to say. Why did she marry that guy. She's the only she's the only sibling that appears to be intelligent and knows what she's doing and competent at all so when he says she's the natural successor. It's actually pretty believable believable you like she's also the only sibling who's ever had a job for anyone of roy so yeah exactly talking about real world sort of muses or examples. I mean elizabeth murdoch who is the daughter of rupert murdoch for years and years and years media observers were always playing guessing game like who's is gonna who's going to win that one and she was always sort of put forth as she's the one most like her dad in that the smartest and most capable also did not work for her gag for for the longest time also worked at you know sort of in politics and sort of an appeal. She was famously married to matthew freud who is late p._r. Guy hang of p._r. Okay okay so he's dopey like the way tom moms gams dopey. Is that piece definitely a power player like he's not how yeah i think it's a sort of this sort of funny character. I think the guy who plays him. He's so brilliant. It's so it's not humid fagging. Oh my god it's just he's so like awful in this kind kind of obsequious way yeah so thomas definitely a character out veep. He's one of those character characters whose great for comic relief and for bringing a bunch of just sheer entertainment value into the show and like he's the guy he's wonderfully craven swallowing his own semen but yeah the the way they get him into the show is by getting him to marry cheval in the nap. It just doesn't really ring true. It doesn't but it's also kind of like he's such a known quantity to her that she knows she can control and that they have this open marriage and everything. I think it feels like you know it's more more of a control moved in it. Is i love this man kind of thing so yeah i think she she wants someone who can actually have power over like. She's so clearly in the pole position and doc. He doesn't mind what he does mind. I mean he's not he won't. He can't genuinely thinks that he is in line to become c._e._o. Oh like somewhere in that like mush of a brain of his is like this tiny little glimmer of ambition saying i want to be the c._e._o. Of voiced <hes> waco <hes> and anyone with the slightest glimmer self-awareness with no that was like zero possibility but he is so delusional so delusional but also because chevron herself sort of playing up to him to a little bit she has throughout the whole season and you can see in this one up until that moment that scene with her and her dad where she's like on the verge of tears like wait a minute. I think i want it but she doesn't want to want it. That's the thing you could eat interfaces like. Why do i want to want this kind of thing. Oh kokai also mentioned my other favorite here at little grace note about this episode about tom. In particular when the episode begins thomas honeymoon on that like two hundred and fifty foot yacht what in some lake glamorous location or something and the only people we ever see on this yard is chevron and tom and tom is getting i see the curtains are drawn on this boat. This beautiful view of the sea curtains trying to trying to watch candle on the ipad and she's very very bad wifi. We tried to go somewhere with that wifi but the thing which struck me about that scene is that tom on his honeymoon on the york in the middle of no way which doesn't even have wifi is wearing an absolutely immaculate seersucker suit. I feel you have a whole iraq. Come on late. You know you see suits of what you wet like in cities in the this is not on a yacht yachting wear crazy but he's from ohio like middle class tom who like you know this is how you do it like. He's this is outrageous era vs type who's just like this is this is the role we play right right exactly so yeah so so chevron gone finally allows herself to admit that she really wants to be the c._e._o. She accepts logan's. Obviously is this field she awesome. Is this real like eighteen meantime. See like this israel. He's like remember this launch of the light. This is the moment and that's like the emotional hot of the episode. It's just an absolutely beautifully shot and directed acted acted scene. I love that. I think that's really makes it. It makes you want more and i think you kind of get the sense that like you don't even believe it fully. You're so you're just like he's gonna dangle this he's going to do he's gonna please come in mass. You comes out first thing. She says to husband always like logan roy mind games. Even she on some level doesn't really believe right exactly but that was the you guys believe it. I don't believe i don't believe it either. I if anything it's like also come on. We need more show right to be a possibility of flexor over fox fox over the kids. He does the whole thing on some level. If you're logan roy you know that the sensible thing to do is to sell your logan roy so you can't sell an also you have an entire a season to fail so yukon you he is smart but he is in full possession of all his faculties the beginning of at this season as none of this whole like he's a you know vegetable kind of having a stroke steph he is he's in control of everything and he knows the chevron is is of all of his children the only one who could credibly take over the company and she has she's believable that way too because the way she talks about the show like why she really knows what she's talking about. She has in fact that in that moment and that's where he asked her. What would you do and she lays it all out. I'm like that's exactly right. You know it's almost like if you were in that real business those insteps you attend the big difference between what she wants to do. And what roman wants to do is the she wants to get rid of the news operation she he says it's a distraction. It's noise. It's a pain in the ass and let let's just kill news. Go big on like theme parks and blockbusters killer indie films everything that isn't massive. That's exactly right now. That's lohman meanwhile when he comes in he like we double down on us because that's where all of our political power comes from and there's is an interesting difference between them to feel like logan ultimately is always going to want to be an important player and therefore he's he's gonna want to keep the news of ration- this of course is a direct that's murtaugh jerry murdock talks to trump every day on the phone and the reason he talks trump every day on the phone and it's not because he's a media billionaires because he owns fox news right and so i think that's right. That's things. Which interesting is that murdoch innocence. We're using him. Mm-hmm is is a primer for a lot of this. If you look closely. He's actually very unsentimental. He's very very sort rigorous business mind the only time he becomes sentimental is when it comes to news he can't can't not own that that that's the one thing that like hil- pay for he'll just own it and eat it because he'll pay five billion dollars to the wall street journal and half of it your later or he'll continue to fund the new york post forty million dollar annual loss just because he needs to have it right. It's not clear how far that parallel is going to go like whoa whoa that different cell news or keep news. It's not clear to me which side logan will be on before. He gets anywhere near that he needs to festival. Have this a big fight with sandy and i'm curious when who savvy i think i have an idea whose handy dandy fairness is john malone on my. I was totally going to say that he's for listeners who may not know or care but you should care john. Malone basically invented the cable industry in the united states and is probably probably the most feared media executive on the planet al gore once referred to him as darth vader. That's how and there is a historical truth around this. Where there's a moment around early two thousands where he was quietly buying up shares of newscorp rupert murdoch's company to the point ain't where he actually threatened murdoch's ownership stake over controlling stake over the business and murdoch didn't know this is happening until it's too late what malone was trying to do and there's a there's a phrase in the first episode that you might have heard asset swap right. That's sort of interesting is exactly what meadow malone where basically malone said. You know what l. sell your shares back but i want direct t._v. Which murdoch had a significant stake murdoch was trying to turn he owned or once upon a time owned sky in the u._k. Okay which is a satellite tv service there. He tried to replicate that idea in the u._s. Through direct t._v. took a little bit longer. Malone spoiled his plans and they did this great assets what were based malone got control direct t._v. and that murdoch was able to buy shares back and afterwards like murdoch learned his lesson like he put poison pill in the company charter where you can do that. There are these like grand end figures of documents like john malone to a certain extent. Maybe charlie again as well and yeah. He's everyone is sort of like a mixture of characters but i think the closest first handy for john malone and the way that that first episode ends where you know we're kendall comes into deliver the message this is one of my i have a whole list of one of my favorite lines comes at the very end where he's just delivering this message but if properly done you know he aims to kill you. He's talking about logan to sandy's that he will go back up or go to jail before he lets you beat him. He will send meant to kill to your pets and fuck your wives and it will never be over so that's the message sandy fornesco. Let's get on with that process. Yes that's towers so well. It's a great final line. Yeah it really is. I think i really give the writers credit because i think especially in this episode there so many great details financially are the arcane of how financial deals work and boardroom procedures that like date they'd really nailed it but they also depart far enough from reality that like it's this escape that it's this fun thing that you would like it to happen that way kind of thing that he wanted me to tell you to say yeah. Obviously our public line will be that. We are considering the offer but it doesn't matter what you offer. He'll never recommend this to the board. You're going to bleed cash ashes. He's gonna lead cash. He will never end and maybe you'll kill him but if you don't he aims to kill you he will go bankrupt or go to jail before he lets you beat him. He will kill you on on the business and if that doesn't work he will send people around he will send men to kill your pets and fuck your wives and it will never be over so that's the message good well. Let's move ahead with that process. Shall we so that was episode episode one. We have nine months ago. This is going to be a roller coaster. I'm absolutely sure let's just end this without one favorite line. I'm from the house show emily. What was your one favorite line from the house. This is so hard to have so many written down. I'm gonna go with greg housing greg who didn't really talk about very much but he's in kendall's apartment. He's looking around and to greg's is this is an amazing amazing apartment to my eyes as well and and then he complimented and kendall's like couldn't get anything better. It's fashion week all the good penthouses. Take good governorship and does it yeah yeah he said oh. Oh yeah it could be way better. I just don't know how which to me is says everything about these vis grade yeah. If i need to come up with the line we haven't mentioned all say when kendall goes was into the meeting with andy and says his dad isn't coming in because he had to take a cool. That's like a nine thousand nine hundred eighty seven power move dude that was on my list line that was on my list. Nineteen eighty-seven is so true. It is true like we at the end of season one. Does this scene at logan is like keeping the president of the united states on hold and it's just like he does have this nineteen. The power moved thing when she can't quite become part of the twenty first century but that's exactly what trump does to you know. He still plays that old powerbook but that's exactly. I can follow that up my favorite line if i had to pick one. There's so many there's so many but it's in that same scene where again there's this great human moment where this is the the guy the private equity guy who is friends with kendall who when they first set this up the guy who's standing in front of the sandy unfairness character stealing. I'm human. I'm human being here. If you need a human being i'm here for what is going on right. There's this moment of like you could talk to me. Dude and i looked at the plan and my dad's plan is better than everything and he goes fuck you and he goes fuck you to you pulse ameinias piece of fool's gold fucking silver spoon fucking asshole like okay. That's yeah yeah. There's no. I'm an personally. I am always going to be a fan of any t._v. Show which uses piece of land mass oh because lee is one of my favorite right there in that first episode right <hes> in episode one so thanks staying with us through the episode one cat we will be back same time same channel next week with episode two and free much for listening to slate money extra <music>.
Big Business and Bailouts
"Welcomes the Big Business? Isn't bailouts edition of sleep money or guide to the business and finance news of the week and yet it's been another one of those weeks and it's only been a few days since Wednesday when we lost. Okay you but there's a lot to catch up on I'm Felix Salmond axios. I'm here with breaking views. I'm here with Emily Package. Huffpost hello and we even have a special guest. We have the CEO of BCG so many letters in Rich lesser is GonNa talk to us because he is a management consultant who talks to big business the whole time. So we're GONNA ask him about what on earth big business is thinking about going through right now. We're going to talk about the Fed and the exactly what it's doing in terms of trying to get the economy moving. We're GONNA talk about Amazon. And what they need to do to keep their workers safe because that will be a good example for the rest of us when every other business gets up and running again and we'll even have a slate plus segment on equal because we haven't had one of those new while. It's a mildly gloomy show. I mean it's a mildly gloomy time but I you'll like it. It's all coming up on slate money. This episode of slate money is brought to you by the relentless a new podcast from slate studios and century twenty one real estate hosted by Dr Clinical Psychology Julianna. She talks to leaders about the qualities that set them in how they approach success. And how honestly? They managed to get through the setbacks that all of us are experiencing right. Now you'll hear about what these people have learned from their triumphs how they've grown from rejection and how they continue to evolve even now listen and subscribe to the relentless today. Wherever you get your podcasts. This episode is brought to you by progressive. What would you do with an extra eight hundred dollars? Buy a plane ticket paid on your student. Loan treat yourself to those shoes. You've always been eyeing with progressive. You could find out drivers who switch and save save an average of seven hundred ninety six dollars on car insurance get your posts online at progressive dot com and see how much you could be saving national average annual car insurance savings by new customer survey who save with progressive in two thousand eighteen. So rich yes introduce yourself and tell us what you've been up to for the past couple of weeks. I'm rich less what I'm CEO BC G. Boston Consulting Group Basiji operates in fifty countries around the world is one of the leading management consulting firms looking across all industries public sector out huge range of topics and the news of the week. Is that your clients. The BIG BUSINESSES IN AMERICA. Four hundred and fifty four billion dollars of the stimulus bill is allocated basically to them. And then that's being leveraged up to something on the order of four trillion dollars by the Fed and we're GonNa talk a little bit about how that leverage works. But can you give us an indication of just? How much money is four trillion dollars? And where's IT? GonNa go and what's IT GONNA do? Tell you if you stack them on top of each other. How many how our planet it can reap I mean I did. I did a little bit of back of the envelope. I was like if you take the median wage. In America forty dollars would pay fifty million workers for like over a year and a half like it. Seems like an astonishing amount of money so the four trillion so I my understanding and again. I don't profess in any way to be an expert on the bill but but my understanding is that money is going to help business as well as to help state and local governments and the four trillion as I understand it is that It's actually about a little over. It's four hundred billion but because that's an equity infusion into treasury. The Fed can lend on top of this. So it's the power of being able to leverage that equity into A higher volume of loans and no one knows exactly how that volume is but the estimates we've seen as well fall into the three to four trillion dollar range. I think right. Now we've got a host of organizations that are facing massive costs and extraordinary losses and the risk of of going out of business or being in bankruptcy and by the way that includes I think state and local municipalities as well as many businesses if you think about some of the Sectors of the economy starting with travel and tourism. But but certainly going far beyond that Take away all the revenue for a very high percentage of it and leave the vast majority of the cost and even well capitalized. Well run Businesses. Don't last very long. And so the challenge is first and foremost help people get help and to support the potentially you know ten million plus unemployed that we're likely to see out of this And second to make sure that we have an economy to return to and frankly the group I worry the most about our small businesses And I'm so pleased that so much of the effort in that package was geared towards smaller businesses No one knows now. If that's enough as I can tell you no one can tell you but at least a lot scared. 'cause they're just facing massive but we need to keep businesses going to and loans should help and and hopefully they'll be able to be around Once we come out the other end of this so just to be very a broad brush about this the the general idea. Correct me if I'm wrong is the if I'm a big business and I'm losing money right now. I'm losing money in much. I'm losing money in April losing money in. May I can just go along to my bank or special purpose vehicle. Somehow I can borrow whatever those losses are could be one hundred million dollars or whatever and then that will cover the losses and then I don't need to pay that I get to pay that back very low interest rate over many many years and I couldn't afford to do that because my fundamental business is strong and so long as there's enough liquidity of you know these special purpose vehicles that are set up in the in the stimulus active sending out these trillions of dollars that should basically that should be fine for business right well except that those losses are real losses and those loans are we alone and it will pay probably a substantial amount of time for these industries to recover and probably some businesses within various sectors of the economy. Won't make it. I think we will still just as we did. In two thousand nine. We will see that. In some cases this leads the consolidation in some cases leads to restructuring in some cases. This leads to really healthy vibrant businesses. As you say it was a sharp drop but once the drop is passed they can reemerge strong and they can be on a path to recovery. my understanding. Is that a lot of this? Is now the treasury to figure out the rules that the big debate and who are the recipients and a lot of the debate that held up the legislation was the degree of transparency around the choices that are made with a fairly high level of transparency being in the final legislative session? And and but I don't think I think in a high level what you described is probably the overall direction but my understanding. Is there still a tunnel to work through? Everybody's been has been running this legislation. You would normally think would be crowded over many months or years at this volume with this complexity. It's been crafted over days. We can bet they haven't had a lot of time to the mechanics of exactly how this is going to play out in the weeks and months ahead and I guess one thing I'm kind of wondering too is even if we are able to kind of put the economy in this medically induced coma for a period of time and then kind of waking up again. It seems like behavior is going to change. It just seems like people are not only are they probably not gonna be buying much but they just might not be spending as much even if they have money coming in like. I'm just curious the effect that can have also on trying to get that economy working again right so I think neither core long-term questions that while we were in the midst of a crisis of shutting places down which by the way still going on in parts of the country and figuring out this legislation have not gotten much attention but are going to rapidly. Get much more attention. The first is your point. Which is how will consumers and other businesses in the B. Two B. World? Adjust their behaviors as this moves along and even when we're officially through it. What behaviors will be different from? We see today I will. They few vacations. How will they? Discretionary purchases how businesses you capital investment than investing to build capacity. That's one the more immediate question. However is how will we sustainably fighting the curve because as you put the medically induced coma when we are at risk of an acceleration that could kill hundreds of thousands or millions of people and completely overwhelmed healthcare system. You do whatever you can to try to arrest that curve. And the whatever you can in our case is socially distancing but we're probably at least a year away from a vaccine and a number of months away from any effective treatments that are proven unscaled and in that world. The big nearer term question is how will we flattened the curb in a way that sustainable for the economy so that we can get some sort of rebound even into the trajectory. We were on back in January and February. I think that's a huge question that businesses and governments are only beginning to wrestle it. Suddenly we saw that in Hong Kong right that they really did a great job of bringing the number of new cases down. But then the minute. They started relaxing of social distancing and some of the really hard core You know come flattening attempts that they were doing the number of cases started going straight back up again so it's not clear you know. I think there's a lot of and a lot of expectation that you might see. Sort of rebound in the economy in the third quarter or fourth quarter is not clear. How you how you can have that rebound with also keeping the number of new cases under control exactly and if you think about it and Hong Kong's a great Australian. There are two kinds of problems from a health standpoint. At least that will need to navigate through. One is if you don't bring the virus levels all the way down to zero and you start to restart the economy where in your local environment. You have small number of cases. Can you put the disciplines into keep that number low to spot issues early with more aggressive testing to use quarantining to use AI and digital tracking and all the technologies that are out there but not scaled yet in the US not even deployed in some cases to try to keep it low and manageable even as you we start the economy a non zero caseload then the second point is the one you refer to suppose yet to zero and I opened back up? My issue is not just my own community. It's all the influx into my community and Hong. Kong's Nice because it's kind of separate or much of the rest of the world and you know you fly in or you come in from mainland China which has done a good job so far of controlling more recently but the US if every community is on its own curve you open up this city or this stake. It's not just in that state it's inputs from other parts of the country that are on different cards and we have no history of doing what China did really segment of Hubei Province and to make that work. So you're exactly right to say that the challenges that we're going to be facing in the months ahead about we starting the economy and still keeping a sustainably flat and curved that will keep the level of infection within the capacity of the healthcare system to manage until we have a vaccine. These are huge unknown challenges. Where there's a ton of work that's going to be required rich? What are you telling businesses now to do to manage through this you know? What do you tell a relatively small business that has no customers right now? What are you advising them to do? Get a big loan. Lay off workers. It seems to me that part of the reason the government spending so much money on these companies so that they continue to employ people. Salat cheaper for us to have businesses employing and paying people than it is for us to just directly pay every worker in the country so keeping that in mind. What are you telling leaders now? What what is B. G.'s? Kind of advice. Show a couple things I is. I mean if you just backtrack and we're talking about backtracking like a month or maybe in some parts of the world two months not ten months. The first steps were about Reacting to the situation in terms of near-term first and foremost protecting workers and customers and second protecting core of the business model and that was the initial focus and there was huge focus on people and near-term actions to protect supply chains and other things. Now I think for many companies. It's somewhere between survival and you know just getting along for some industries. It's literally just about how to survive. Which has both an element of how to restructure the the PNL passed as possible at a time on revenues have dropped by huge double digit percentages. And what to do in terms of expenses and how to do it in a way that recognizes. There's a real chance of a rebound so it's not just. It isn't society's interest to keep those workers employed it is also in businesses interested. Keep relaxing you. Train the workforce you've got a high-performing business a shock as happened. The last thing you WanNa do is break the bond of trust you have with your employees and potentially lose employees. That are critical. So it's it's hard on both of Societal Dimension and the business dimension and the balance sheet challenges partly hopefully address through this legislation and legislative and other parts of the world will help to allow these companies to maintain a viable balance sheet to be able to get through this. The third element is the rebound element. And I would say there are a number of businesses but only in the last week or two. It's going so past. That are starting to turn their attention to what will I do to be able to come out of this strong? Actually if you look at China. That's a better example. Because they're like six weeks eight weeks ahead of us you know leading company started saying what do I need to do in terms of how I engage with customers more online behavior? How do I need to change by product and service offerings? I do I think about distribution models and other things and and actually a number of them have been quite forward thinking to retool their models to be able to not just to navigate the crisis period but to be able to come out strong in all honesty. I would say most businesses here are only at the early stages about we've been in shutdown mode and most parts of the country not in restart mode but I think over the next couple of months if I think what our clients are talking about. Now that's the big thing and then if you take the public sector part of our equation because we do a lot of public sector work to the two big topics have been. How do we just navigate the healthcare system crisis? We're facing whether it's with p. p. e. ventilators you know navigating you know how to keep people safe and how do we start the journey to think about what it will take to restart which you know? The president talks about you know the very short period of time I think most other leaders feel like that's very aggressive very very aggressive but but whether it's dot week or some number of weeks later at some point you know governments are going to be based all around the country With not just when? And where do I restart but how do I restart in a safely for my community? Rich thank you. This has been a super informative. Thanks for coming on sleep money and I as a New Yorker. I just want to say anything you can do for New York state and getting the government to take some of that fortunately and move it to Andrew Cuomo. We appreciate that. Well I'm a New Yorker to and I think about it every day and I think we really all feel for I mean unfortunately New York is is where it's hitting now but if you look at some of the other parts of the country they may be ten days behind New York. But I'm I think it's hard to look up doing tremendous concern at the challenges facing I think we all have responsibility from our own business and point to do whatever we can to support these communities whether it's helping them get supplies or helping them navigate through each have different capabilities to bring but it's on all of us to get through this crisis together. So thank you was a pleasure to be with you very much. It's a trying time. That challenges all of our basic assumptions. However one thing that brings us all together is our common humanity now more than ever teams must come together and work together to solve big challenges and Trello is here to help trello part of Atlassian collaborative sweet as an APP with an easy to understand visual format plus tons of features that make working with your team functional and just plain fun teams of all shapes and sizes in companies like Google fender and even costco all use Trello to collaborate and get work done with Trello. You can work with your team wherever you are whether it's at home or in an office no matter what device you're using computer tablet or phone. Trello sinks across all of them so you can stay up to date on all the things your team cares about. Keep your workflow going from wherever you are with Trello Trello for free and learn more at Trello DOT com. That's T. R. E. L. L. O. DOT COM TRELLO DOT COM. Let's talk about transfer wise the smartest way to send and receive money internationally. If you've ever had to move money across borders chances are you're haunted haunted by hidden fees whether we used your bank or another provider. They likely hit an extra fee and the exchange rate and you pay too much and if you didn't notice well that's the whole point. Transfer wise is different. You always get the real rate when you send to over seventy countries you pay one super low fee and hold onto more of your money. Transfer wise also offers VISI alternative to opening a bank account in the country. They're multi-currency account. Let you hold up to forty five currencies. Lots and convert between them anytime. You can get your own bank details for the US UK euro-zone and Australia. Meaning you receive money from those countries for Free. It's great for freelancers or anyone who works internationally but don't take my word for it. Transfer wise as over six million customers who save three million dollars every day in bad rates and hidden bank fees. That's over one billion dollars in savings every year. Try them out today and get your first transfer free by visiting transfer. Wise Dot com slash podcast? So rich was talking a bit about this owner delve into a little bit more because we a couple of requests over twitter which is basically. How does this whole fed thing work? We have two trillion dollars of stimulus. Bill and then fortunately in dollars of fed money where basically and this is this is the magic of loans is that because loans needs to be paid back you can leverage multiply and the Treasury puts four hundred billion dollars into this sort of bucket and then the Fed talks up the bucket with another three and a half trillion dollars of of money that just invents from nowhere and then all of that money goes out in the form of loans to businesses who then pay it back and then the Fed doesn't lose any money and it's all kind of weirdly magical and this is this is how capitalism works like this is fractional reserve banking best. Say Yeah very similar. I mean when we think of how a lot of money is created normally in the US system. I mean you have the Federal Reserve that creates like the monetary base and then of course they set rules for banks in terms of how much money is created. But you know if your bank you're if you're if someone comes in and you give them a loan you are essentially creating money you know and this is very similar to what we're seeing happen now that the Fed has this amount of money that the Treasury is given it and it's not as though we can only lend that amount of money it can basically keep lending out that same amount of money over and over again and so it's into creating all of these loans. It's creating all of this additional money in the system now eventually when that money is paid back in theory then that would come out of the system but the but the payback period is is GonNa be. What twenty is something? Enormous exactly and the Fed doesn't care because like the Fed. I mean it is actually a very profitable institution but it's not. The purpose of the Fed is not to make money and so the Fed is like yeah. We'll have that money out there in the form of loans and there are any actual losses on the loans than treasury will eat those losses. The Fed doesn't either. This is the Fed is doing risk free lending of trillions and trillions of dollars into the economy which seems amazing and that kind of makes me. Why do that like all the time just normally because that would that would not be good? Because if you're thinking about it right now you know. The the Fed is essentially going to be lending money to many investment a great companies and also potentially even small businesses here. But if you think about it so like if a lot of money is going to the people at the top and some of the best companies out the top then that means amount of money that a private investor would get to lend to them is going to be less because the risk is now going to be less because you have the Fed in the market so in not only the risk on that bigger company going to be less but the risk on all of the companies that are kind of down the line. The smaller riskier companies. You're also GONNA get less money for lending to them and something brilliant. Everyone gets to borrow for to you know now. It's not because for another reasons one. It's an like it's fine right now I am not criticising what the Fed is doing right now. This is a crisis but long term you want the market to allocate capital to the businesses. That can survive. You don't just want this kind of flow of money coming in so then you're not pricing risk which means investors are gonNA take horrible risks. You're not getting money to the place where it can be used the most effectively and also I mean we have the ability to do this right now because the United States is in a very unique position but if all of a sudden we started functioning very very differently in terms of how our Central Bank works. We would not be in that position anymore. We would be a very different type of economy and that is not how our economy works. Normally we are not going to talk about the platinum trillion dollar coins coins. Play once but we I think we we. I would like to just ask you one more question about the finances of big business and bailouts and stuff. There was a article in the Washington Post which we will put in the show notes Basically saying there's absolutely no point in bailing out the airlines because go buster. Hold time if you look at the history of airlines. This is all they do is they. Go Bust in. Remember who said if you WANNA make a million dollars? Just start with a billion dollars and stuff and airline and what happens when airlines go best. Is THEY CONSOLIDATE? They go through bankruptcy but ultimately as far as the routes being flied and the you know the pilots and the employees all seemed just continue with the same brands and the keep on getting their paychecks and the passengers keep on flying from A to B. And you know a bunch of shareholders become a bunch of bondholders become shareholders and this financial engineering and his death nece equity but is there any particular reason why having the airlines go to you know? Fifteenth BANKRUPTCY BOWS OF BANK ELLEN. Bankruptcies would be a bad thing right now. Yeah I mean I would probably argue that. Airlines are a really really significant part of the economy. Because not just because they're getting people that is still significant in terms of moving people but they're also moving goods. It is just now. You're not wrong that you could of course continued to operate while going through bankruptcy. But that's not seamless and to me over. Isn't that basically what we did? With the auto industry and the financial crisis it continued to operate while going through bankruptcy and seem to work quite well. It did although I would again though argue that it was definitely not seem less and and it would also mean that the airlines would have to make some very difficult choices. And I'm not saying that they perhaps shouldn't have to make some of those difficult choices. I just don't know if they should be doing those in a crisis. I think what probably makes the most sense is to get the airline industry through this but two then afterwards say okay in the same way that financial crisis taught us that the banks are too big to fail. We cannot allow them to kind of go under so that means there have to be more regulations around them. I think that this is the same with the airlines. I'm not saying we have to go back to like way back in the day with how we regulate airlines but I do think that right now. It is reasonable if we understand that every time there is a crisis the airlines are probably GonNa meet. Help that then. It's also possible that when this particular industry the government could have a little bit more. Say in what they do and you know. I don't always say that. But in this instance I will say that. I do think that we are seeing a very interesting lesson right now. In terms of how governments really do learn from previous crises. And what we're seeing in Korea and Hong Kong and Singapore in places like that is there reacting incredibly swiftly and effectively to cove it precisely because they went through size they went through the you know h one n one and MS and they know the playbook and and they can just basically fingers and make it happen and they Equipped to deal with this kind of crisis and I think that one of the little silver linings that we're seeing in this crisis is there is no banking crisis. We went through the financial crisis in two thousand eight. Two thousand nine we were like the banks are way too levered. We need to do something about that. We need to make sure they're much better capitalized. We did and they up as a capitalist and now we don't need to worry about. The bank says the one part of the economy. We don't need to worry about it. Worked now and in fact they have so much capital. Hey it's an emergency go and Linda capital grades. I think you're right. I mean granted. I think if this went on forever without any federal aid the banks could be in trouble at some point. But you're totally right. I mean clearly what we did work and I feel like that's important to say over and over again because once this is all over I give it a year or two. The banks are going to be complaining that they have to hold so much capital so I do feel like you can say wait a second. You know remember two years ago so I'm not saying there's anything good about this. Obviously there's nothing good about what's going on but you are correct. This definitely did teach us that lesson. I feel like that's the one. Bright spot is the banks are okay and that. Jerome Powell seems to be willing to do whatever he needs to do to keep capital flowing and it was reassuring to see him on the Today. Show on off everyone washed. It was like the first time the Fed chair has been on the today. Show I think Savannah Guthrie said in like forty years or something and he. He did a good job talking like a normal person to in the human language like for example he said very simply like the Fed can lend out ten dollars if it just has a dollar of backstop treasury. Which for me was like a lightbulb moment. I was like oh I get it. This is how they do the they make four hundred billion into whatever trillion dollars ten to one. Okay fine got it. Thanks Jerome And he was very smart and reassuring and the contrast to. What's been going on this past week or so with getting this third stimulus package passed was pretty striking. Because even though I think it's like a two trillion dollar bill and will provide all this money for loans too big and small businesses and has beefed up unemployment insurance and has payments going out to a lot of families households. It's still not enough. It's still not that good and they're still all this ridiculous squabbling over it like at some point. The bill was held up because a few conservative senators were worried. The unemployment benefits would incentivize people to work. Which is kind of literally what we're doing right now. We're telling people not to work. And actually they need to be incentivized not to work It's been really striking to me. Just how well the Fed works and how well all of that is kind of figured out in solving this crisis while at the same time there is this building Crisis for everyone else like the jobs numbers this week were terrifying you. All obviously saw the chart of unim- bone unemployment I I wish chart initial claims with the The the vertical line to shooting up like infinitely into the sky because it was three point. Three million clams. I put a call out on twitter. Like have you been laid off and I've never gotten such a big responses because the sample is so big there are so many people now without jobs and I feel like while you know pals doing everything he can like. He can't help all those people without jobs and even set on the today show. You know like I'm doing all I can but we really need congress to kind of kick it into gear and I still feel like the problem in the. Us Isn't just that we have an experienced a pandemic. It's just that like none of our our our government the foundations and values that these people hold do not jibe with what needs to be done and what needs to be done a pretty simple you stop the economy you give everyone money and you contain the virus like it's actually pretty simple like just give everyone the money. That's that's the thing which I was most gratified about if that's the right word in intensive Powell interview was that he was absolutely unambiguous. That the thing that you need to do to get the economy moving again and to help the economy is stop. The virus stand in he. He was our timetable. There's going to be set by the virus and when the virus when new infections go down to zero. When is our then we can start talking about like starting economy but we need to wait and do that fest. It's so great to hear that in plain language from someone like him when you know you're hearing something very different from Donald Trump and you'll see an I keep seeing these people doing opinion polls saying what's more important saving lives or restarting the economy. It's like it's the same thing away you received. The economy is by saving lives. I feel embarrassed for our country for having that debate at all even a little bit. It's like trump is is actually his own. He is a one man virus that's infected the public discourse and is like keeping us from solving the actual crisis of the real virus one last lesson. This is taught us as well maybe to move forward. Is that one. Part of modern monetary theory is that they say that basically. It shouldn't be. You shouldn't use monetary policy to control prices. You should use congress because it's so simple to get congress to just raise taxes or lower taxes. This is also taught as that would be an absolutely horrible idea. Slate money is sponsored this week by door dash which is a delivery service for meals and I can pretty much guarantee that no matter how much you love cooking at some point. You're going to just say I think I don't want to cook right now. And that's where it comes in if you want to treat yourself to meal made by someone else for a change just used all dash to get connected to your favorite restaurants wherever you live. It has over three hundred and forty thousand restaurants in three thousand three hundred cities across not only all fifty states but also Canada. So whatever you fancy you should be able to find it. A DOOR DASH and don't worry about dinner. Let dinner come to you right now. You can get five dollars off your first order fifteen dollars or more when you download the APP and into the Promo Code money. That's five dollars off your first order when you download the DASH APP from the APP store and into the Promo Code Money. Don't forget primer code money for five dollars off your first order from Jordache working remotely can be a challenge especially for teams. That are new to it. How do you deal with your work? Environment being the same as home while staying connected and productive and then there's your newest co worker the cat well your friends at Trello have been powering remote teams globally for almost a decade at a time when teams must come together more than ever to solve big challenges. Trello here to help trello part of Atlassian collaborative sweet is an APP with an easy to understand visual format plus tons of features that make working with your team functional and Just Plain Fun Cello keeps everyone organized and on the same page helping teams communicate focus and connect teams of all shapes and sizes at companies like Google Fender Costco. And likely your favorite neighborhood. Coffee shop all used trello to collaborate and get work done. Try Trello for free and learn more at TRELLO DOT com. That's T. R. E. L. L. O. DOT COM TRELLO DOT COM. Okay Emily you had a big story this week about Amazon and one of the things that has fascinated me about the way that this crisis has played out. Is the seventy four paged documents that you get from the state of California and the state of New York and stuff like that talking about all of the things that are essential and all of the services that turn out to be essential even under lockdown and you know people going to work to make the chips go into the radios the EMT's use to communicate with each other like the there's absolutely enormous parts of the economy which fall under essential services and supply chains clearly. Part of that Amazon is like the biggest and most visible incarnation of like modern supply chains. And so everyone else in is basically working. Allow right yes. Everyone at Amazon is working full out. The company announced. It's going to hire one hundred thousand more people Everyone's ordering Amazon right now and they're definitely an essential business and service. What I wrote about is given all that the company should be doing everything in its power to keep its workers as safe from this virus as they can and from my conversations with Warehouse workers and drivers Advocate they're not and I think that big businesses so far through this crisis have really shown how I mean. In my opinion that cannot be trusted to keep Americans safe and protected so like for example with Amazon. They're not in all cases telling workers when Someone in the warehouse has tested positive. Cove in nineteen. They don't have the protective equipment right now that everyone needs to save when they're working altogether And that's mostly because there's a shortage countrywide over that but even given that they're not social distancing necessarily and all the facilities Workers are really scared and the way they've set up their leave policy is kind of this distorted thing where they've raised. Pay Two dollars an hour for workers at least through April right to really incentivize people to work and come to work and they're I think they're even giving bonuses as well and then on the flip side there cove. Nineteen leave policy is that you can take unlimited sick-leave but not get paid so it's like thanks so the choices you know. Protect your health and go bankrupt or risk your finances or go into work and risk your health and there's no guarantee when you go in and risk your health that they're really doing as much as they need to do to keep you safe Amazon. Of course says it is. We should say. Jeff bezos wrote a lot. I am I feel like this is a little bit. A Pre cast what we're about where with rich lesser. Which is this conversation that you're having about Amazon right now. And how much can you do? And how much should you do? And what kind of measures can reasonably be taken? Is the exact conversation that pretty much. Every reopening business is going to be having in the next few months and you know people want to go back to work but also people don't want to go back to because the minute you go back to work you open yourself up to a greater number of potential infections and you know it does seem. I think you're absolutely right. The Amazon is in the perfect position to try and work out. What best practices in this kind of thing because everyone is going to have to go through this pretty soon. I think that's right. I mean I think that obviously no no company at least especially the United States has ever had to deal with anything quite like this and doesn't really as pretty much making everything up on the fly but for those companies like Amazon that as an enormous company and be. We're now very much. Seeing is also a vital part of our economy in many ways is going to have to figure out how to make this work. Not only for this crisis. But I just can't imagine that once this is over every single company is GonNa have to show how in the next crisis they will be able to keep their workers safe right and I mean these companies. I did a similar story about Walmart. Workers also going through a lot of the same things with just as bad of a paid sick leave policy. These companies should should have been doing better on this all along like you speak to these Walmart. Walmart has publicized. We give sick leave but when you speak to the workers. They're like Oh. Yeah earns eight hours of sick leave like it's it's meaningless stuff And it's not like we have a massive public health crisis all the time to deal with in this country but like there have been studies after studies that show les places that have paid sick leave have lower rates of of flu like these companies have never done enough to keep their workers safe and now this is coming home to roost. And policymakers still aren't like getting it either. And it's just like this rolling crisis of irresponsibility that as I see it before we get into this episode. We have a big favor to ask one of our advertise. His is conducting a survey. And we would be very grateful for your help with answering. If you're if that questions it will take less than ten minutes of your time and your participation helps her show so go to sleep study dot com to complete the short survey. Now thank you. Let's have a numbers round Emily Watson number five dollars my numbers five dollars That is what Insta- cart workers want per order for hazard pay now. We talked about Amazon markers but insecure workers are also the true heroes of the cove nineteen economy bringing groceries to all of us people holed up in our houses So on Friday Some insecure workers threatened to basically go on strike starting Monday. If they don't have their demands met by the company and their demands are five dollars per order hazard pay and Ten percent like to have the minimum tips at at ten percent instead of whatever it is now five percent And then some other protections while they are our nation's heroes delivering our milk and eggs to our doorsteps and I really need my insta- cart to keep flowing here up in Westchester. So this is my plea to Insta- cart to just meet the demands of these people and Just keep going like. They're making a lot of money right now. They're one of the few companies making tons of money. Right and support has never had business like this before. I would never have used instagram before. Maybe I would use it again but please like just give the workers what they want in start please. We need our milk and eggs here in Westchester. My is twenty four. Which is the number of days that elapsed between much three and much twenty-seven see that's that's how sophisticated. I am much twenty. Seven is the day that Boris Johnson announced. He had tested positive. For Corona Virus March. Three is the day that both Johnson came out on a press conference and said quote. I can tell you that I am shaking hands. I was at a hospital the other night. I think there were actually a few corona patients and I shook hands with everybody so twenty four days to from shaking hands with Greta virus patients to. I can't believe I've tested positive. I was hoping you would. All of the world leaders are GONNA have the current virus. But I mean it's kind of impressive. Britain has is managed to infect the actual head of state as well as the technical has got Prince Charles and Boris Johnson. Both have covert. Now you WANNA wish Boris Johnson. Good Health I'm not wishing him poor health or anything but like sometimes Karma's beautiful thing. Can I say that is that okay? It's true I can. I can see a little image of Harvey Weinstein going for your head. Right now. I mean not Harvey Weinstein but anyone who is out there telling an entire population that it's totally fine to shake hands with people with virus like life comes at you fast so my number. My number is one point. Three billion people. So that's the biggest shutdown that we have in the world right now which is an India. And Yeah I mean. I feel like we think it's rough here but like you know if you're thinking about a country like India where you have lots of parts of the country where you have people living very very close quarter you have a lot of migrant workers so you're telling everyone to go home and kind of close themselves off which is essentially almost impossible for a lot of people you also have such a large informal part of the economy. That isn't going to be really having any way to access basic necessities. Now I will say the Indian government is giving money and they're giving food so I don't want to say that they're not but like we think things are bad here like other and I'm not trying to downplay how bad things but they're worse than a lot of other places India. I mean not to find the point on it. It doesn't have everyone doing like Zoom Kohl's getting cut. Yeah like it's the fear is that they're gonNA have a hard time stopping it. I mean sarin reading a book on the Spanish flu but this the Spanish flu it was something like almost twenty million people in India were killed. I mean it was an enormous number that I mean the estimates are kind of all over the place but still you know and and the fear is that it's going to be very hard to contain it if it starts spread. I mean it's true. India is probably the most terrifying country. I mean 'cause you ably what goes India also go to Pakistan and Bangladesh and he has the subcontinent if it starts tearing through. India has very little in the Doobie on what it's doing already trying to look down the entire country and if that doesn't I have no idea what else they could do. It's absolutely terrifying. I think that's it for us this week. thanks to rich lesser as well as to ski and just mean. Molly and Emily Beck and all you guys listening. Do keep the emails coming slate money at slate dot com and we will talk to you next week on sleep money.
A New Entertainment World Order
"Welcome back this product. We'd take ten minutes to get you smarter on the collision of Tech Business Politics. I'M DEBORAH MAC and today show apple's new fight and the end of the WTO the first a new entertainment world order yesterday. The Golden Globes announced its nominations and on the television side the broadcast networks. Were shut out completely. And maybe even more notably there were twice as many nominations for streaming companies shows as the were from shows from premium cable networks. And then they're even less for shows from basic cable so a big day for Netflix and Hulu and Amazon and even apple which got three nominations for its critically show the morning show. Oh wait fewer cheers for. Hbo Showtime Fx and BBC. America at least for now since obviously it is possible. Streamers could get rolled once the actual envelopes are opened. Why the nominations matter beyond the Hollywood egos is that they reflect how? The entertainment industry's Power Center shifted. And would that shift is coming tons. Sons of investment new programs suggesting the golden age of television is really the platinum age with all of the streamers including new entrant Disney spending billions and billions of dollars to be the one with the little trophies at the end. The big question though is if these investments are actually worth it remember the Golden Globes themselves will still be broadcast on. NBC ABC a Broadcast Network. Because that's where it still easiest to get a live audience and no matter how many awards streaming show gets. We still have no clue if that show has more viewers than typical broadcast network Sitcom or a basic cable reality show the economics may be changing. But they're hardly decided added in fifteen seconds we'll go deeper with media reporter Sara Fischer but first this axiom chief. Technology correspondent Dana free shares breaking news in analysis on the most consequential companies players intact from the valley to DC. Subscribe to get smarter. Faster at sign-up dot axios Dot Com and now back to the program podcast. We're joined now by actually media reporter Sara Fischer Sarah. Let's start here. Why do these These companies whether they'd be streaming or cable. Why do they care so much about award? I mean is it just executive ego the ability to attract talent for future projects or or the really monetary value believed to be attached to it. I think they care about awards. First and foremost because there is monetary value attached to it. We've done some reporting that suggests just that before a movie wins an Oscar but after its nominated is when it makes most of its money so does how get some butts in seats. The other thing hanging to your point about talent it does help them. Recruit not just great actors but also producers great directors if they think that they are going to go to a studio and be able to create a hit where they can get recognized for it and then the last thing is I think it helps them control narrative. Were in a situation. Where a lot of these companies are trying to broker sponsorship some partnerships whether they'd be with commercial brands and if you have the ability to say look we want X. amount of Oscars last year? We're still relevant. That helps your company. drive results even throughout the rest of its business ventures it can be very powerful on the TV side is what we're seeing here with the Golden Globe nominations yesterday and the streaming companies really dominating certainly compared to broadcast but also compared to cable is what we're seeing basically just kind of twenty years later. The same thing we saw when cable started overtaking broadcast. Yeah I think that these things move in waves I think that when cable started to overcome broadcasts a large part of it was because it gives consumers choice consumers wanted to be able able to get niche access to something they're passionate about whether it was music and MTV and vh one or sports with ESPN. But now we're seeing sort of a rejection of that model consumers feel as though they are being forced to consume everything when they buy these big bulky expensive cable bundles and they actually probably just want the very generic few do things that they need. which typically is just you know the broadcast networks and then they'll pay all for the stuff they want whether that's a streaming subscription to espn plus or or maybe NFL network or? Maybe it's you know just an add on package but they don't WanNa have to be burdened with these heavy thick cable packages anymore we've seen seen obviously from the streaming companies led by Netflix but all of them huge investments in content. Over the past. Couple of years I mean just incredible investments the Golden Globe nominations yesterday is that a reflection reflection that the investment is paying off. And I don't just mean oh we're getting nominations but paying off in a call a return on investment way or is it more well if Throwing two hundred shows out there couple of we're going to get nominated. No it's definitely paying off investment perspective network suspending unprecedented amount of money to make sure that these films are going to be hits and the reason that they're doing that by the way is to help make sure that they stay relevant in the streaming wars. They'd know that they have a big bulky content library where could be hard to sift through to find the good stuff and what they do is invest in really high quality content noxious TV shows but also films like the Irishman so that you as a consumer consumer can associate Netflix with being a brand that houses quality content similar to the way people thought of H. B. O.. For a really long time. That's why they're spending really they want consumers to feel as though it's a place that can get deliver high quality content as well as a multitude of everyday content that you just need for utility if if you're say the broadcast networks which got shut out and as you write today obviously the the actual Golden Globe awards are going to be broadcast on NBC. Because that's still where you can get a live audience but is the way the broadcast nets respond to this. Did they start throwing huge amounts of cash or do they just say you know what that's not our game anymore. They can't these broadcasts. Networks are held to a different standard gender by Wall Street in many cases. You don't have the leverage if you are comcast NBC universal to dump whatever it is fifteen billion dollars net flicks is dumping into its streaming platform in content there. You just don't have the same type of leeway to do that so even if they wanted to they can't. I know I actually was laughing a little bit yesterday yesterday. Comcast came out and they said we're GONNA pour two billion dollars into our streaming service peacock and I was thinking to myself. Wow that's interesting. Because Disney's looking spend north of fifteen fifteen billion dollars net flicks suspending around that much and comcast does spend a lot of money. But you're going to have to spend unprecedented amount of money and if you're broadcast network that's owned by Telco Toko. Investors want to see Telco spending all that cash on content. Look what's happening with. At and T.. It used to be the way we judged television shows shows successor or the way at least the business world generally judged. It was ratings right. You know this is the number one show where it's the number one show on Thursday nights or whatever it is we still am. I correct. Reckon saying whether it be Netflix or Amazon Apple. TV They might win awards but we don't really know how many people are watching any of those programs whereas we still know how many people are watching something on ABC see your CBS or Fox. That's right and we have Nielsen. Ratings to measure television and even though they're imperfect they're the best we've got. They allow us to compare apples to apples Different different shows across broadcast television and cable. Television anything that you would watch linearly the problem with streaming is that these streamers will often dispute third party figures Nielsen has started it to measure streaming content. And instead they'll say well we'll selectively put out figures when we think that's right. It's hard to actually say whether or not x amount of People Watch Bird Erdman X.. Amount of people really watch the Irishman at think in the future. If the streamers WANNA be taken seriously by brand partners especially they're going to have to start coming coming up with a way to uniformly measure their content and there are a lot of vendors out there that are trying to measure streaming. But they don't have the buy in from the full industry until we get to a point where we can measure streaming uniformly with one trusted source. Maybe a few trusted sources the way that we can with television. I think it's going to hold the industry back Sir or Fisher axios media reporter thank you so much for joining us my final two right after this. There's more news out there than ever before but these days it's harder than ever to find it and to know what to trust axios. AM takes the effort of getting smart by synthesizing. The ten stories. That will drive the day and telling you I they matter subscribe at sign up dot axios Dot Com and now back to the podcast. Now it's time for my final two and I up his apple which in August due to former employees for breach of contract contract and specifically the ex employees left to launch a new server chip startup called Nubia and poached a bunch of his former apple colleagues thus pissing off apple so this is interesting for contract lawyers but the real intrigue is that Apple's complaint implies at accessed the ex employees phone records and text messages and that could could be a PR mess for a company so focused on positioning itself as pro privacy. That's even sometimes using animation that converts these stem. It's apple into the top of a lock and finally the White House. Today will effectively kill the World Trade Organization which was formed to settle trade disputes between nations. Around twenty five years ago specifically the trump administration has spent the past two years blocking the WTO from appointing new members to a seven person board. That's supposed to hear these cases leaving it now with a minimum of three members embers but two of those three have their terms expired today meaning the WTO process is for all intents and purposes dead at trump's hand now for the president this means he can now impose whatever tariffs he likes when he likes on the other hand no more. US victories in the WTO. Like the recent record seven and a half a billion dollar ruling after the US sued Europe for granting illegal subsidies to Airbus actually this is Felix Salmond puts it thusly quote. WTO was negotiated before China dominated international national trade and before the Internet disrupted all global commerce. A new agreement is desperately needed. And while there's no way that trump or his US trade representative will negotiate such such a deal trump successor might be able to and we're done big. Thanks for listening to my producers. Tim Show Shaven Have Ingrate National Dewey Decimal System Day. And we'll be back tomorrow with another for our podcast.
"Hello Hello Welcome to the media media addition of slate money or guide to the business and finance news of what what was a very busy week. I am Felix Salmond Axios. I'm joined by Emily Paphos. I'm joined by Anna Szymanski off breaking breaking views. Hello and because we love him so much we have the best person coming back to join us. Ed Lee from the New York Times the media media the media reporter covers all things media at the time and is here to talk to us about spotify in the Plus Aikman and also about the New York Times itself. He's getting very navel-gazing. In this particular issue has media reporters are are wanted. We're GONNA talk about instagram. We're going to talk about out youtube lots of media content this week but also of course Tesla content. Because what's gone. I'm a tesla if you want to know whether to buy you can do things you can either just google. Should I buy desert stuck or even listen to slay money. We will answer that question for you coming up on on slate. Many sleigh money is sponsored this week by the relentless in new podcast from Sleet Studios and century twenty one real estate. It's a podcast about extraordinary people. People and the mindsets and behaviors that drives them to achieve inspiring things hosted by Dr Cynical psychology. Julie GonNA and she talks to Thought leaders in venture capitalists and entrepreneurs about the qualities that set them apart. How they approach success? You'll hear about what they've learned from their triumphs how they've grown for rejection continuing to evolve and what they've learned from what they did right. Listen and subscribe to the relentless today. Wherever you get your podcasts so this is this is the segment where we talk about? Google fetches I I have my google up and we have old tried this with various degrees of logged in an anonymous in. What's browsing for me when I type should i? Hey buy into Google. The first auto fill is should. I Buy Tesla stock and then it's followed by. Should I buy apples talking July bitcoin so I get I all have two types. This should get US shoot. I buy stock. Wow but then after I get that I get should. I stay should go lyrics type should and I got should I buy Tesla's bliss stock and should college athletes be paid which yes and no respectively. Dubai has no. They shouldn't be it is also got. Should I buy Tesla stock and then I got. Should I get bangs. And should I text him all of those. Yeah absolutely no. That's that's good. I think people whether or not to get bang. I know I don't understand what kind of advice Google doesn't. I guess they know you. Well enough could just be no. You're knows you so well could you say not for you honey. So the answer to buy stock. It's obviously yes. Because it's what's crazy is how to make lots of money right now. I know you're contradicting yourself. I mean everyone reader newsletter and knows that you said what goes up really quickly must come down really must come down probably well I did say that if can behave like that if it can melt up and Basically doubling value in no time in the way that Tesla did it is equally capable of melting down and investment happened. Twenty four hours after it went up right. I mean so we had we had positive. Okay let's have a little brief history which Tessa was worth thirty. He one billion dollars back in June which is probably a reasonable amount of money for Tesla. If not a lot of money tesla we you know it's a car company. And that's how much he's call companies worth and then suddenly in twenty twenty. This has gone on absolute tat and they went up and up and up and then after going up it went opt not not and then suddenly this week is stopped going up and started screaming up and it would go up like ten billion dollars a day. Seventeen billion dollars. Twenty billion those day it hit a peak of like almost a thousand dollars and then because it's just that point of gambling vehicle love an actual combining. It's been a gambling vehicle for a long time. Actually so the other history on Tesla's talk beyond just being the new company and worth more than GM and Ford all these established a AH carmakers at producing million cars. A year versus task producing hundreds of thousands of year. There are a lot of short speculators against Tesla. In addition to bowls are basically people. You Bet that the stock will go down right and I think that had an effect this week when it's okay so so like I have done a bunch of Whoa. Let's get into this. I think the an-and I are in agreement on this one so I looked at the Tesla shot because that's how much of an lamb and I immediately said. This looks exactly the same as the CIA of Volkswagen. Chaz in two thousand eight. Because that's how much of a net I am and in those of us who remember Volkswagen in two thousand eight remember that it was the mother of all short-squeezes and it will it briefly became the most valuable. Oh Company on the planet and this was all to do with a bunch of financial engineering by Porsche which bought up a bunch of Lake options which gave it control control of the overwhelming majority of Volkswagen. HSIEH's so what you had was. You had twelve percent of the shares of Volkswagen with short and shortsellers had borrowed twelve percent of the ordinary shares have Volkswagen and then had to buy them back and they expected and hope that they would be able to biton lower price. They paid for them between them Porsche. And the state of Saxony in Germany owned ninety four percent of Volkswagen shares. And they want selling with the state of Saxony. I didn't know that state of sexy can own. Okay there you go so that you saw certain states attacks neon twenty percent of Volkswagen and they went about to sell so these Schwarzer's you basically twelve percent Volkswagen the short and only only six percent of Volkswagen available to buy so all of the shortsellers when they win the press release went out saying we control this much Volkswagen. They desperately tried to buy the stock back in order to be able to cover their shorts. Of course only half of them could get to the excess in time a now this insane short-squeeze and this is still to this day. Twelve years later later being litigated in various courts like Bam lobe and a whole bunch of people lost a fortune and it was great. That was short squeeze that is a classic. Yeah often anytime. There's any type of short-covering people like it's a short squeeze. No it's like yeah. It has an effect but it doesn't have that dramatic effect supply demand issue. With in this case. Influ sorry because I when you said Saxony. I just drifted off off with that. It was basically like they needed to buy the stock but the other people weren't Simon stock so it just exactly and then in general bail out of the ship in general the way the short-squeeze works. You don't need that kind of artificial artificial thing but in general the way the squeeze works is you borrow the stock and then sell it. The person who lent you the stock doc wants some kind of collateral because you're you're entering into a loan agreement and then if the value of the stock goes up the person who lent you the stock and his kids you what's known as a margin call and then let you have to put up a bunch of money in if you WANNA keep on being short this stock and then the more the stock goes up the more money you need to keep on putting up and more usually until eventually you end up capitulating and end up buying the stock at a crazy high level. All of that buying pressure from this shorts keeps on pushing the price up as this like dynamic where the more shorts there are the more buying pressure on stock because the more shorts. There are more people who I need to buy the stock that was not happening with Tesla. The Tesla short interest right now is lower than has been in years. The amount of activity in the stock means shorts can cover super easily without affecting the price because the amount of volume in Tesla is enormous so buying pressure. Russia from shorts doesn't affect the price because literally we had one day this week where there was sixty billion dollars of volume in one day in Tesla and and so no amount of short-covering going to really even be a drop in that bucket. So the the idea that the reason it was going up was because Schwartz covering I'm buying lying the stock and that was sending the stock up just doesn't pass the smelter meaning it even. If that were the case it wouldn't count for that much of a rise it would. We saw it count amount for maybe like the price going up by a buck or two. It doesn't account for the price going up by three hundred was it. It was just individual traitors on Robin. Okay so this is what was your what it was. I will tell you what I'm everyone here. Everyone wants to know. The answer is the stock went up. Wasn't a reason that is the best answer but it doesn't explain the phenomenon of I mean Hamilton. This hero explain. Why has your here? I'm just like looking at the movement of bitcoin overtime. Like there is not a tremendous there. You off you can get into these speculative bubbles and where they're just simply is no good reason and you can try to come up with a reason and you can come up with all these theories but they're all all going to be somewhat false. The reality is that in theory. The stock price is supposed to represent something about the value of a company. And when you have something moving this dramatically ethically. There's nothing possible that happened. That could have changed the market value of this company the intrinsic value of the company that dramatically even even technical factors you. Yeah I remember getting to a big discussion with Luc our Bloomberg about this. You know he had this whole theory about people buying Cole's Delta hedging out. That's that's whatever anybody starts telling you delta absolutely no but the point the point is that we as human beings absolutely lutely desperate for narratives in causation and we see something happened in the markets them must be a reason. They must be a narrative. The must be a causal relationship has somewhat and sometimes such isn't but isn't the. I agree with that but in this particular case like the velocity of trades the velocity of the movement was such that you kind of feel like there had been. Something I mean isn't as simple as I don't know was it robot arbitrage. Well how do you know that. How can you say that's it? That's it now. Where does that coming because okay this is? This is what I'm saying like I'm saying this stock price is Brandon's to cast it gambling vehicle thing which is just behaving like a demented rollercoaster. And there's no sort of causality causality. That and you're saying wait. This is so crazy that must be a reason. What I want you to do is to examine that statement and to say like what reason do you have to to believe the whenever that's crazy price activity there's always a reason because the market is not as diverse as we think it is in other words there are only so many like a lot of retail invest? Regular Mama pop there. Aren't that many of them. It's mostly big funds and Whether it's it's hedge funds and or you know calpers there's like retirement but there's just there's like maybe a hundred big players that move the market in so many ways every single day and it's not like hundreds of thousands of indigent people. Okay Kanaya night pen and all of a sudden when an interesting wrinkle history. What is the biggest largest most solid pot off? AWW long-term stock market investing capital in the world suddenly in America the onset is S. and P. Eighty five hundred index funds. They just sit there. They buy the entire index. They don't do anything sometimes. They'll repair it out. Sometimes they want passive index is very very no no. It's not not just passive in terms of buying the the passive market. which is what they do but passively buying the S&P Five Hundred Eight? Okay and Adam is GonNa tell you what is the the single biggest company that is not in the S. and P. Five Hundred Tesla Tesla. Tesla has always been weird outlet Tesla. Let's not any S. and P. Five hundred because it hasn't ever had four consecutive quarters of profit and so that means it's eligible for the S. and P. Five hundred and said that makes the the holders of Tesla much more diverse than holders of virtually any other stock. Oh there we go. I like that explanation. So it's more diverse diverse and there was no reason but maybe at first there was no reason when it first started going up but then as our Google search results show us people went nuts and that is part of the reason because people are like Tesla so cool Elon. Musk is like iron man. Oh my God like there is some some bit of that driving at any bubble has that type of elements. There's a kind of thing going on. But there's also what happens in this is is this bizarre phenomenon that you get in sort of late. Capitalism is to people think about think that the stock is a good investment decisively. Because it's is going up and and they see the stock going up and they're like. Oh yeah this is the market. Ratifying the thesis that everyone's going to be buying electric vehicles. That Tesla has an insurmountable lead in the AV market. That has this gigafactory and Shanghai which means it's going to have an insurmountable lead in China which is going to be the biggest calm in the world that there's this new news coming out from Panasonic saying the bathrooms. It's making a now a profit center and Dan all of these different data points coming together and then some random entity called arc research putting a price price target seven thousand dollars a share and and all of this kind of stuff and people like. Yeah this is GonNa this is GonNa be the the new big thing. And so Tesla at that point just becomes this dream almost like the financial equivalent of a lottery ticket. Yeah and you go in that and I'm going to buy the dream nights I just I don't know I I. I don't believe that there are that many. That's the that's all the articles. The Times robot story but journal also but then combine that with. Let's say the you. Are you own stock right. Let's say you're not mind that the severe just someone who happens to own it and it goes from you know two hundred two hundred dollars three hundred to four hundred five six seven eight nine you know and then some some of these retail investors typing. Should I by Tesla stock into Google. Come along to you in light. Can I buy Tesla's Doug Fuck no like this is what can listen. I'm loving this rocket ship. You even if it folds another fifty percents. I'm still up like a GAZILLION dollars. Why would I want to sell so what happens? Is it becomes harder and harder to find biased because polders late why while enough so and there are no robots in this there no hedges and there are no guys but there is huge volume contradicting myself because the volume was way too high for yeah. Of course they're going to be involved but I think you also have to be a little careful because there's a tendency anything weird happens in the market now for everyone to be like it's the robots. The thing is like the people who are making these are not like simplistic things that are just like. Oh this tells me to keep buying so I will keep buying. They're very complicated. So it's actually somewhat unlikely you're going to get that type of movement just from high frequency traders right. There are from like I duNno I concur for lots of weird moves. day-to-day move so not that type of move. So it's true that you can see high frequency trading move like these little mini flash crashes which happening in almost every major talk and pretty much every single day and they over time Pierre they loved for maybe but you know they're robots responding to other robots by mounting? What caused those those kind of cascades you can see them lost? You can see them every day and you and they love for seconds they don't loss in quad traders are it's not as simplistic I think at sometimes portrayed as though like oh well it one thing happens in the cascading effect. No like these are. These are very sophisticated. -tated I have. No sound are sophisticated. I think the outcomes aren't always sophisticated. That's the difference I think they're they're overly complicated at the outset. But the outcomes what it ends ends up executing doesn't always look like what you thought it was going to look like which explains which explains the complexity but at the same time. It doesn't suggest that the outcome is equally. Complex is what you're in any case my my big takeaway from all of this is that everyone is being including us being distracted by Tesla stock as this weird animal which behaves in very autumn peculiar way as the no one can really understand and it is a distraction to us. It is a distraction to Tesla. It is not actually helpful as a company and this only serves to ratify Elon Musk's desire in two thousand eighteen funding security like take the fucking company public private rather take take the fucking company private at four hundred twenty thousand which was a perfectly good price and then if he done nat like looks possibly maybe as though that might in hindsight. I've been reading and and bargain. And then he wouldn't have had all of this bullshit wouldn't be happening and he could just concentrate on making curves. Yeah but now. He's set to get some like insane payday if the stock price holds holds right so a hundred billion valuation over sixty six months and you can't fall below a certain amount gets he gets off but compared to how much he just like. Disguise network is up twenty billion dollars this year alone. So it's like it's a lot of money but it's less beano. Who else made a huge fortune this week? Jeff Larry Ellison Larry Ellison owns three million tests issues so that you know and the Saudis are they know I know they got out right before really. WHOA that was a bad trade? Good things they didn't know anything in any case Emily as as the closest thing we have in this room to Google. I'm GONNA ask you. Should I buy Tesla stuck. I mean it's come down now right from from the high now maybe it could bounce back up now. Don't do it unless you don't care about losing money I think don't we always say don't don't gamble on individual stocks. Is the new. Bitcoin join like yeah I think. It is plausibly I mean it has some more kind of a reality to its valuation bitcoin. There's something there they in fact do actually produce covers something. Bali seductive about the argument that like it has the lead in in like once the world finally stops relying on gas in switches over. It's going to have the all units like that is very value and the company. I don't think there's this much value in this country but you know look we've seen this with a lot of growth growth companies that have done very very well over the past ten years that you know when you're buying a company like this you are not buying it obviously based on earnings. You're buying it based on your lying it based on expected earnings. Your and you can't exactly put a great price on the future where you're just like I. It seems like it's at this moment. Where as you said either itself itself will become very large or at some point get acquired so one of the mechanisms here which I think the Tesla Bulls love to glum onto and suddenly Elon? Musk has. It's been banging this drama lot. Is this idea that it's the first car company with Lake Internet scale network effects that he has gazillion hours of data. Already firm caused has been driving around and no other. Auto manufacturer has anywhere near that much data and because he has that much data his comes become better and become closer to self driving more quickly. Because it's very data heavy kind of problem to solve twelve and so people wind up buying the Tesla because Tesla has better data and the more people who test because the best attested states have becomes the becomes as insurmountable lead. No one can compete. You know I think that probably false and I think that within a few years that will be of UH EV manufacturers competing with Tesla but it suddenly through right now the in terms of network effects not only in data but also intensive charging stations. Tesla has this huge. You lied and it does make a lot of rational sense for someone buying an e to buy a tesla just because network and I've also heard people say that when you're figuring out how you're you're valuing this thing that you're not you're looking at it not just like a normal car company you're almost looking at it like something like an apple where you have hardware in theory you. US software and you have services like you you have a combined. It's going to trade at a higher multiple. I'm talking about buying cars rather than stock here. I'm saying that people by talk about the actual car buell. Musk has been making this a K.. Through wild the car is an investment like at some point the day day to become so rich. The you're going to be able to rent your car out to the sites right. Yeah and that actually is very important. That is actually a big part of his idea behind this valuation attention is this kind of like robot taxi idea in these ideas that that yes exactly. You can actually make money when you're sitting at work because your your car is driving ours. The self-driving snake oil that that's not real that's not gonNA happen not for decades and decades. It might happen in highly artificial parts of you know the bit of Toronto. Google is building or something like that or if there's like a a special lane out of the airport that takes you a mile outside like terrifying you correct. That's basically mass transit. That's just a rail system without rails so a slave money sponsored this week by Ziprecruiter twenty twenty new year new opportunities. This could be the time when you take secure business to the next level by hiring the right people. Finding qualified candidates can be challenging. That's ZIPRECRUITER DOT com slash money. He comes in and makes it super easy and indeed flee they will send your job to over one hundred of the Web's leading job boards but they also just know who's looking looking for. 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I claim service with twenty four seven support online or by phone. It's no wonder why more than twenty million drivers trust progressive and why they recently climbed to third largest auto insurer in the country get a quote online at Progressive Dot Com in as little as five minutes and see how much you could be saving auto insurance from Progressive Casualty Insurance Company and affiliates. Home in Renter's insurance not available in all states provided in service by affiliated third party insurers discounts Sperry and are not available in all states and situations. Okay so you are. The media media media correspondent to rebrand myself is the media media reporter at the New York Times or is it the medium medium media reports because there is social social media. There's is there other media. I think social media. I feel like we've now. We can now splits media into media media in such media very well so the media media media story is getting interesting. The Neal Times you're very employer just came out with some pretty amazing subscription numbers. Oh Yeah I was surprised myself. Actually I mean I've been tracking the company for a while but I think we are now at five point two million subscribers altogether that includes print. But if you're looking at just the digital it's four point three and change which again. I'm surprised by and there was definitely the the trump in two thousand sixteen that if if you look at a chart there's this nice swoop up And then at levels a little bit but then it continues to go up so you could argue. That is still trump is he still in office but Even and after things like the Mullahs report. When that was a big disappointment for the left like subscription still kept going up you know there? Is this sense that Oh as soon as this sort of whole thing starts to fizzle one one way or the other no one will be interested and and in a show of Lake interesting show of confidence here the New York Times for the first time I think ever has decided to increase the price of the digital subscription like Netflix. Just did that last year for the first time the big digital price hike now the New York Times is doing and and moving up from fifteen to seventeen dollars a month right. which so these all? These prices are interesting right. Netflix is about fifteen sixteen or thirteen for for a basic subscription or the standard subscription New York Times about fifteen going up to seventeen. They're all similarly priced who spotify is. What is it ten? Yes yes spotify. Ten who who was like six you'd have to have sex with ads or twelve without pluses six grammy any pluses some differences between like Disney plus in the New York Times. Yes but I forget. The price point forces consumers Immediately compare them in a lot of ways and it's fascinating to me of all of those. The New York Times was basically at the top of the was the most expensive and now it's becoming even more expensive well but compared to like the Wall Street Journal and the Financial Times it was less expensive less expensive but I guess that's the other sort of value proposition right which is ah. FT In the Wall Street Journal which I think are great papers lady too but it's special professional where it's a niche or it's a it's a more specified market as opposed to potentially potentially everyone now they would disagree with that right. I'm sure the journal especially with Israel that no we are meant for all educator readers everywhere you're interested in living in the world and we live in a capitalist society. You want to read the Journal. I I think that's a fair pitch. But if you look at the the array of content I think part of what Helps Times frankly. He's all the nonpolitical coverage as well as a book right. I mean I think the the big story. That's really interesting. Is that the The New York Times a newspaper has managed to. I think we can say confident. We now transform itself from old media newspaper into a subscriber-based media. two-way digital media digital media are coming from advertiser driven because the advertiser advertising critizing revenue keeps falling falling falling to subscription based revenue. And this is now. It's not just you could. You could subscribe to the New York Times online. You can also subscribe the New York Times cooking the cooking and the crossword at both do and they're separate APPs to. Interestingly like and I was told this anecdote like the cooking APP A lot of the subscribers are not near times readers midwest an and people in the Midwest do read the New York but relative taste to it. It's not a subset cooking and crossword it's really subscribers and not entirely a sub so that was the other thing which was fascinating to me. He was the digital ad. Revenue went down so that is still a head scratcher. I'm surprised by that right because it's a it's a growing qualified audience right and you are not aren't doing as well and advertising against as you did the previous year so you have more readers this year than last year. But you're selling fewer ads. That surprising I don't know I wonder if what what's going on. There hasn't really gotten a good explanation for why that's happening bill. More broadly across digital media display advertising has started flat and I think I think more broadly the big trend in digital advertising. Which we've talked about many times on this show with and without Ed Lee is the? It is all just getting sucked into the gaping more of Google facebook. The the awfully no one else can fullerton. which is why subscriber revenues that much more important whether the New York Times or net flicks or almost anything else is at this point If you're not gonNA facebook the other thing about the New York Times we're talking about media old versus new print versus digital they did surpass Pretty important milestone that they had set for themselves selves eight hundred million digital revenue. which they just pass this? The ended the under last year a year ahead of their intended target. Despite the fact that digital ad revenue went down. They you were making so much money subscription revenue they hit and so they made a lot of money from the make a Lotta money from the daily podcast. That's the one area where sponsorship against that all right which is and they making money from from who from its its Hulu tiny little revenue. That's a relatively. Yeah that's a TV. Show the weekly show that airs both on Fx and on Hulu and they're both supplying the times with money to fund it so that's really helps the top line but it's it's it's very small. There's also the wire cutter. Which is the review site and there's affiliate revenue against that which certainly helps I mean it was a very photogenic. Eight hundred million that it hit eight hundred point eight million the precise precise number The more important context around that though is the you know the conceit around having a big enough digital business so that you don't use rely imprint. So we're printed just disappear tomorrow tomorrow which it won't but let's just happen all of a sudden you still have an eight hundred million dollar business. That's growing so I think that was the the sort of the mental hurdle to get past that can we we survive as a as an online only business. Yes most likely again and I think that's really interesting size reading a piece this morning in. I think it was BusinessWeek about Warren Buffett. Getting out of the newspaper the business and the way WHO's in it. I mean according to the he loves newspapers used to deliver them whatever. And he's listening you so brilliant. Brilliant right and there are all these like investors getting into The newspaper business managing its decline. And these guys are just. They're not. They're not sure smart hard about they could have re the times. Reinvented Muscial jump on you. Only one on New York Times. The Warren Buffett's newspapers all local newspapers. No local newspaper can do what New York Times said. You can't get a local newspaper with five million in digital subscribers obviously especially not charging William charging seventeen dollars a month which is in order to be able to find five million people paying seventeen dollars a month and as we've said that is not mass. Market price is a premium price. It you need to be targeting and one person who used to sell time subscriptions. They explained to me basically the top fifty percent of college graduate. That's who you're going after and most Americans aren't everyone should have done what the times to reinvent themselves. I'm saying the times had people running it. That cared about the times and they did and different stuff and not everything they did was successful to reinvent themselves. Meanwhile in the rest of America newspapers they just didn't didn't have the the people behind it to reinvent that have died is the reason and the reason. Why is that could have happened though? But the reason why that is not true through and as a very good reason why that's not true. Is that if you look at. Across America there are. Thousands of newspapers is across America. The valve which local newspapers only one newspaper has been able to do what Neo Times has done in New York Times and the New York Times is completely sweet generous onerous and you would think if what you're saying with true that like Oh you just need to try a few different things. Maybe one of them will work if if that was true. Then you would think those statistically speaking at at least maybe eight or nine if these little local places would have been able to have some success and you anything. If wasn't because as smart as everyone said he could have taken his wealth and his alleged strategical brilliance and. He had a bunch of newspapers because he he doesn't do that. Warren Buffett is not so much treats value in companies. He's he's his investment thesis is. I'm going to find value where other investors have not seen it then own own that versus. I'm going he's not a he's not a guy he doesn't and to be fair to his whole thing often like I am going to find something. That's an excellent brand that has a moat around around it Whereas that is decidedly not the case with a lot of these newspapers and also? I think it's important to like the success of the New York Times is also going to eat into all of those. It used to be that you had your local newspaper. And then that's what you're now you can get the New York Times and I think I think that's the Internet has sort of broken that barrier down where I mean sad to say like show for for every subscriber new subscribe the New York Times Gases potentially one fewer that the L. A. Times for the Chicago Tribune. Get right so we been the New York Times is set up really as a national final paper And and in railway in a very immediate way and so it's great for the Times but overall it kind of shrinks the news pie. Unfortunately and I think that's the bigger conundrum beyond just you know I think you're right. I think the only one that's really doing it had this brand. But you have these others trying to find. I think it's no. I think there's a clear second tier which is the Wall Street Journal and the Washington Post I think the posted probably argue with you and say hey actually no we are I here and and there are people who like are deciding between the Post and the Times you know. I think maybe the Journal is one of those who are like you know what I get the journal plus something else right whereas the post is trying to be a I hear in your I read set teams La Times. I think Chicago Tribune like they're in a complete different situation. Where the in order to all of these properties not have national ambition? Yes that is you have you have. And that's the thing. Maybe you can't be a local paper anymore. Maybe that whole concept doesn't exist. It's not not as a profit model. I mean I think the only way you could have local papers as if it was something that was like publicly funded as a not. Yeah yeah which that is something that you know like Laurien jobs who she's thinking about that working on it and trying to figure out ways that you can create a model around everyone is everyone is trying to make local news. Work like apparently patched still exists and is maybe it's crazy to me is maybe like making money somewhere doesn't doesn't interesting model going on in Berkeley side. They just opened a new publication covering Oakland and there are interesting interesting local news things now often based on some kind of non-profit model but the idea that you could have a public company with what the market cap of The New York Times now a billion plus from well over that no maybe it's getting closer to six But like feeling a few years ago. It wasn't a shirt like we're all looking at the time now. I think that this was the the inventiveness and The creativity put into reinventing. Their business is not not something seen at other in other places and other news outlets like the Washington Post. Maybe you can make that argument now but more. It's just like they figured out the Internet not a little bit I e but they haven't approached reinventing news media the way. The Times has which I think is interesting and I I don't I don't think that other. Do you think that the really inventive thing was that the Times did in terms of reinventing news media. I think the way they a a I think the daily was inventive. They weren't the first to do a daily news podcast but they kind of I mean everyone listens to that to that show because they did it really. Yeah well and no one else had sort of done before. Everyone has copied them since. I think the cooking APP is really smart. I think people had tried to do to subscriptions before and it hadn't the work I think they approached everything with a level of excellence that I I haven't seen in other places and I think they are almost more becoming like a like a lifestyle brand like it's not just news like the the The Washington Post is still fundamentally news and I think the Times has a lot of what they do is not really. Let's be honest like hard news. There's I mean it's it's stuff that's fun and it's it's it's stuff that you used to more get in magazines like in the are using video audio in really interesting ways but it is it is just such a different animal to compare it to almost any other. Newspaper doesn't make a lot of sense. I think I would everyone saying here. I think it's it's success is a hard hard thing to explain. Frankly beyond the excellence argument. I mean the journalists was charging people online from the first day being on the Internet. So it's not like it times. It's just sort of following following in the footsteps of what other companies had been doing. It's just the specific blend of things that it had. Maybe an at the specific time that it did it that allowed it Sir succeed need but again. It's hard to explain we. Yeah we should be happy that the New York Times the succeeding. But I think it's a stretch to then say well if you didn't manage the succeed Z.. Like New York Times did that. I'm just saying They tried really hard. And I don't know I think about people read her and then it makes you sad to see bees hedge funds coming in and buying up these newspapers and just managing their decline not and not even trying value out of newspapers still still generate a lot of cash flow. So I think that's what they're four. Unfortunately by the way six point two billion market the current market cap of the New York Times. The move is making money but people should know I mean it is a publicly traded company you can buy the shares and make money off of that but is firmly Armley controlled by the OC Salzburger family There's a second class of shares that you aren't Oakland traded that the family owns and those shared the media companies companies and it's to protect the journalism it's not just about profit and with family controls. two-thirds of the board so Carlos Slim could buy every single openly share and still only control a third of the board right. We don't need to worry about Gullikson controlling the town or anyone for that matter outside of the Family Furnao but I look forward to the day that the New York Times dog becomes like the new gambling vehicles contest. If you can't see the whole picture how can you tell what you're looking at. Microsoft dynamics three sixty five brings the data your entire business together on one platform for manufacturing and logistics customer analytics and sales and use his a I to help you unlock better. Business outcomes when you can see the whole picture you can create your own possibilities. Learn more at Microsoft dot com slash dynamics wanted or something amazing discover matches all the cash. Back you earn on your credit card at the end of your first year automatically with no limit on how much you can earn. How amazing that in fact? It's even more amazing because of all the places where discover is accepted at over ninety five percent of places in the US last take credit cards so when it comes to discover get used to hearing yes more often learn more at discover dot com slash. Yes two thousand nine hundred Neilson report limitations apply but let's talk about the social media the other side of the media coin which is where the real money real money media maybe ruining the New York Times annual revenue on on. Oh let's just say annual ad revenue where we at now I think the digital is something around two hundred and sixty and then another print about another two hundred sixty or three three hundred billion less than half a billion dollars or half a billion dollars for ad revenue. Now compare that to ad revenue at. Ah You tube which is fifteen point. One billion compare that to add revenue instagram which is twenty billion and these are subsidiaries of the real money business right facebook blue and Google search these are the actual of the daddy businesses Youtube and instagram are sort of these. One time errant hobbies turn into massive massive massive. Thanks I think however YouTube is not a real business I suspected for years that it loses money and I think even seeing his current financials I still think didn't didn't they didn't reveal whether right because this is the difference between obviously youtube and Instagram Youtube. Most of its revenue is going to the content producers which is not the case with instagram. Is it folks to fifty five cents at every dollar goes to the actual creators right. So the whole conceit of Youtube right. The original thesis are in Youtube is you. You don't need television anymore. You don't need to pay for programming. People create their own entertainment. And guess what they do. Five hundred hours of video uploaded to youtube every minute. That's insane insane. So there's a whole wealth of expression out there that just sort of lives on this on this repository gold youtube and so you know you play it. You let you download it. There's Advertising against it most of that then goes to the people creating the videos youtube increase. Anything right or most. Most of what's on there is not created by Youtube. So fifty sunset everydollar go see the actual creators. They take forty five cents so they they're real revenues more like seven billion. Let's say right so I looked at it thinking like all right. It's seven billion. How much does it cost to run? The fact that they didn't reveal that I think is very telling. Unfortunately we don't really have a comparison. The best comparison I think it's net flicks there. A similarly sized business in terms of a lot of video out of the Internet video on the Internet is actually very expensive. You know we tend to think of it being. Oh it's easy it's is relatively free and and date is is cheap But for large operation as it is the band with it sucks up the staffing everything cloud computing servers etcetera. So the close. Comparison being netflix. If you take out all the content cost what they spend on content. It's something like seven or eight billion that Netflix spends every year just to maintain its business right. So if it's if there's there's in any way a mirror of the costs at Youtube I think youtube loses money but it is this time suck for people with Google accounts amounts and it just keeps people inside the Google ecosystem. Put it this way. Google paid. What like four hundred million dollars youtube something? It was like one one billion dollars. uh-huh billion dollars like that. I mean that that has to be up there with instagram is one of the great acquisition. Oh absolutely it's it's. It's a fundamental the mental part of the Internet. We should just say the reason. We're talking about Youtube financials is. Because for the first time ever Google actually said what they were because now that the the boys are gone right yeah okay and and also just because we have similar new information from instagram. No one knew how much money instagram instagram was made. Well that was the timing of that was curious right because you know you google releases. Youtube financials right flex face and then all of a sudden it's like you know if you're insecure disagree like but my business is bigger. I want this no out there in one form or another. I think it was Bloomberg News report and they I think they have great reporters that difficult job but I do think the timing is is very interesting book so Instagram does not share is twenty billion dollars with its content creators. They keep most if there are still some portion of instagram that is similar to you to where they have creators and they pass along a book of the Ad Revenue Against US creators to to those people but for the most part instagram advertising in that works very much like facebook. Blue where it's it's just it's the inbetween space where these ads. Come Out Azer Amarah. I cannot stop clicking. I know my Own area well targeted. It is the only add that anyone is the only add unit online. Anyone talks on one hundred percents Shaw Fai is a multibillion dollar business basically basically on on the back of Instagram ads alone as far as I can make out. It is probably the most well-designed compelling ad unit the the entire AD industry or media industry has designed in decades. And what's fascinating to me is is the when facebook bought instagram. Everyone's like do you think they're going to be able to sell it and it turns out that it's so so much more powerful than Youtube ads so much more powerful than than like Um Standard Online banner ads so much more powerful than anything you see in your facebook feed it is just insane. How how especially luxury brands? Who don't advertise anywhere else online? A flocking to instagram. Because it's the beautiful platform. It's the thing that comes closest to what magazines ones right. In that way. I think a lot of luxury. Advertisers were lamenting just how the Internet was for them and all of a sudden an instagram comes along and it sort of the beautiful life platform basically and so it was tailor made for luxury brands. And you know fancy car commercials that kind of thing so yeah I think in that way it was sort of lightning bottle clips. FACEBOOK is a quarter of facebook's revenue. Right now I believe so I mean one day. Could we see a flip given how powerful powerful. I mean it's interesting. I mean I think they're also starting to a much better job about figuring out ECOMMERCE which I think is obviously something facebook general wants to do on many platforms but I think it makes or more sense on instagram. And and they do have a little bit of a head start. I know that's something that Youtube is also looking at but I think youtube has a much longer to go so I think if you were going to value if you were gonna a youtube versus Instagram I think no question. INSTAGRAM has a much more. Like if if I if I was a you know high end clothing company say an instagram came to me and said we want to do something with ecommerce with you I would. I would take that meeting in a second if you came to me and said I wanNA and do something with echo mess with you. I who go wait no right. I don't want to be next to beheading videos national There is a reason so so this whole youtube question which I like I said for years I suspected it had been losing money and I would anytime I come across the Google source at bugged them. Hey Do you think youtube like what I think it loses money and they sort of like turn their heads and not say anything and eventually like you know enough people sort of hinted that yeah it may not be profitable but there's a good reason why exists. I'm like what's the reason they're like the data right. We're talking about data earlier in terms of Tesla having this network so much of youtube viewing feeds into the algorithms and the and the data processing against advertising against search and their display ad network and so it's a gives them this extra edge otherwise wouldn't so the so the kind of videos goes I watch on YouTube help to determine the Ad Steig served on search and back the other way too right and so it is part of a larger ecosystem that it's it's hard to divorce in a Lotta ways if you really want value so they dominate the maps and maps is the most astonishing product and as far as I can make how revenue from maps is basically zero. I mean it might be tiny tiny tiny. It's a really important part of Google in in in ecosystem because of the data that they know about me because I give them from using Google maps that then feeds into all manner of other revenue streams. They can get somewhere else and also thinking talking about kind of data moving forward. I mean this is a slightly Dodo but I I think from zero to four set. Youtube has a lock on them and in a way that also does I. I have seen personally sell products like astounding to me right. But you're right you're absolutely right and it's just at every stage of of your life. There is something on there for you that it's hard to my daughter's fifteen and she does. She's got homework on occasion. And there's something there's YouTube video explains something and in some form or another everything from the math equations. Cordray to you know what happened to Charlemagne is this just. There's enough on there that there's a huge utility like my three year old nephew. All of the Christmas presents he wanted wanted. He saw youtube videos of kids playing with those Christmas presents or Christmas presents that my wife wants she gets from instagram okay. List of numbers round was in the family. My number is fifteen fifteen percent because that is the broker fee. I spent the first apartment in New York City which I think it was about like twelve hundred dollars back then because my first part was pretty cheap bells all all in but it was really hard to to come up with that twelve hundred dollars a lot of money on top of last month's rent on top of to find. Yeah how does anyone move to New York. I did it actually looking back but the good news is no more brokers fees in New York City. This sort of snuck it on on all of us. That is amazing that they snuck into the bill and that basically the trade group were caught unaware and they came out with with all of these like squeals painting but this is going to really hurt the rental breakfast industry. No one is praying for that. No one is trying and some people say oh but rent might go up. And it's like I always goes up. And second of all is the difference between trying to gather up that broker fee versus just a little bit extra every month but also but also the broken that what they're saying is that the brokers fee is going to be reflected in the Renton that is possibly Lee true but what they're not saying. The brophy is going to come down substantially because wind landlords weren't paying now that they're paying it they go into the price sensitive. Ha Remember. My number is four pounds and fifty pence. So this is he is. Maybe what the cost of the sandwiches that got the city trader firings. I've heard it was a sandwich. Now it may not as I've said head I could be wrong so there was this citigroup trader in London who apparently still possibly a sandwich from a canteen like there's like the cafeteria one one and got fires notions. I think he's suspended. I'm not sure if he's actually fired because they find him before bonuses payable. That's right so from the company the company's making military million or at least a million much. No one knows no one knows. He's an Herash. No I I mean I think there isn't it just the thrill like ultimately these guys they just like when Kendall stole is No no rider. I remember one time in Sun Valley like you know it's this is the big sort of mobile retreat and it was in the coffee shop and you know billionaires are going through there right so one of the billionaires that come in take a paper and walked out and not pay for the name names. Yeah I'll have to think about that So I've got a tricky number. It's a little bit of a cheat. One million that's my number okay. That is a number of subscribers that New York Times netted last year but the Delta that is the Delta okay one million is also the number of subscribers that Disney generated in two weeks again wearing right one million is also the number of subscribers. Netflix netted over ten days. Oh my gosh. Wow so it's a way to think about what we've been talking about earlier. Yeah my number is eighty billion because I leftback numbers. This is the I love number so much. Eighty billion Is the number of sea urchins. That ravaging the Norwegian Kelp forests. There's a bunch of Kelp in Norway and thanks to global warming and various other things. It's not just noise. Roy Wilson California's Wilson Australia basically around the world everywhere you find help there's this horrible invasion of CNN's and they're eighty billions agenda in Norway and it's super harmful for the life in the oceans because these count for support enormous numbers of fish and other things and urgent stuff coming on the Molin. Destroy them which means that. There is a huge opportunity here. New Food Food supply for us all to go completely bat shit bonkers eating earning. Yes that was about to say like when you And I'm like and so people are setting up. Uniforms affirms enlighten away all over the world to try and take these chains and tenement eight something delicious and profitable and good rather than just and then once as you start farming the actions that allows the kelp forests to grow back. So only is the best thing you can eat and we should all be eating. Let's have him with breakfast scrambled eggs it does taste good. Yeah Yeah I'm seeing a lot of blank. Stare on the other side are a bit like he can argument. They don't have a nervous system so if you're the kind of vegetarian who doesn't eat things with an I mean they're living things then. Carrots are living things right. It's all living so the question is where do you draw the line. Yeah okay maybe maybe I need some money four. I'll do it for save the CAL cope. nope okay wow on which note. I think we're going to wrap up slate money this week. Thank you ed Lee for coming in it was amazing to have always always a pleasure being Thank you jeff mean molly for producing. Thank you all listening. Do Stay tuned for the sleep plus about spotify and keep the mill creek sleep money sleep dot com. We will talk to you next week on sleep. Want to hear something. Amazing discover matches all the cash. Back you earn on your credit card at the end of your first year and it's even more amazing because discovers accepted at over ninety five percent of of places in the U._S.. That take credit cards. Learn more at discover dot com slash. Yes two thousand Nineteen Neilson report limitations apply.
The Riches of This Land
"Hello and welcome to the richest of this land edition. This leaked money or guy to the business and finance news of the week. I'm Felix Salmond of axios. I'm here with ANA chairman ski of breaking, News Hello and we are also here with Jim Tankersley for the New York Times who are you and what is your book Jim Tankersley Tax and economic policy. For The New York. Times. My book is called the riches of this land the untold true story of the American middle class. We have a great episode. This week we are GonNa talk to Jim About. His Book of course we'RE GONNA learn all about the middle class and how it got to where it is we are going to talk about China and whether Tiktok. Banned or whether Tiktok is going to wind up being merged into link tin, which would be quite a thing. We are going to talk about the digitization, the virtualization of the American economy whether that's going to last and we. Also enslaved US going to talk about Donald Trump and what kind of credit he can claim or blame we can let his feet for the state of the economy all of that. Coming up on. Slate money. Money is sponsored this week by Sam Adams a brewery in Boston Boston is loud and wonderful people who speak their mind that a kind of people you want to share a beer with especially when it's the hometown brew Sam Adams because there's nothing better than the crisp refreshing Boston Lug. So grab your favorite drinking buddy and crack open the Sam Adams. Beer that brings together New England is and non new Englanders alight. Just stay away when that watching sports. The Boston Beer Company Boston Massachusetts Savor the flavor responsibly. Jim You've written a whole book about the American Middle Classes and it's a book full of. People and. Lot of the people in your book as. With a lot of Americans. Had generally positive experiences up until a certain date, and then since that date they have had generally not so positive experiences. So what is the middle class from? When did things start going sideways? Great Question. The American. Middle Class is actually a relatively new phenomenon is this thing that Americans have in our minds that Oh we've always had this fabric middle class, but really wasn't true for decent part of the nation's history in really the big rise with middle class. The boom was after to starts with the war effort and continues in the decades that end somewhere in the late seventies early eighties when millions of Americans get pulled into what we think of perhaps somewhat arrogantly as the near the American dream you know. It's really I think about economic security being able to own a home the able to own a car being able to send your kids to school and have a retirement and just some sort of assurance that even if things get bad for a little while you're you have enough of a cushion that you're gonNA, make it and that period after World War, two win those decades that followed was the time in America when there really wasn't growing by middle class and since then it has not been like that at all has it been shrinking has it is it growing just more slowly than it was previously so there's this amazing debate in. Washington, and around the Community, about how to measure this there are people who will tell you that the middle class has been completely obliterated since nineteen eighty. There are people who tell you that Oh, no, it's it's been doing fine by the numbers that I see it's actually been going backwards in the twenty first century village people have been falling out of last millions of people and it has you know along. Those lines not been performing anywhere close to expectations people have which I think is the noncontroversial way to say this there is no question that the middle class grew and thrived much much more afterward to than it has since the Reagan era and particularly the twentieth century has been brutal the last grade stretch for the American middle class was the Clinton late nineties growth and since then we've had. Really, disappointing income growth, really disappointing job gains, and very little of what we would think of as labor markets that workers one of the things I found really interesting about your book was that you didn't just focus on white working class workers and especially white male working class workers. You certainly talked about them but I think one of the really interesting things that you bring up is the idea that the middle class has always involved people, of color, and women. It is this great myth that Americans so many white Americans have sold to the country is this idea that we have this leave it to beaver middle class and was certainly something that political reporters and I include myself in this criticism and talk about it. A lot of the book really overemphasize in two thousand sixteen, which was the role of white working class Americans. Truth is actually the real economic research shows us is that the reason the middle class grew and thrived in those decades after World War Two was that we opened up the American labor market and the highest skilled talent highest pay jobs in the country to non white guys to of all races to men of color who had been held back by overt discrimination by. Laws. From doing those jobs and in the struggle for civil rights and starting with the necessity of the war effort women and men of color gained entry to the patients. They didn't get full of quality that they still do not have about opportunity. But that simple progress of opportunity unleashed what economists call productivity boom does this reminds me very much of one of my favorite economics papers by Joe, Stiglitz where he looked to the effects of microfinance and. Dead Insofar as microfinance is really had a positive effect in poor countries it seems to be entirely a function of its ability to bring women into the workforce and to no one's great surprise if you bring millions of women into the workforce, then that creates economic activity and that and microfinance their ability to sort of employ themselves in the highly discriminatory environment web people want giving them jobs made a big difference even without creating equality, and this seems to be like a very similar story that you're telling about America absolutely and. It's just sort of so intuitive when you think about it, if you look if you were a an alien coming to earth and give nothing but sort of statistics about the economy saying here is the types of skills that are demanded in the modern economy and the types of people who hold the skills. You would assume the vast majority of of the top Americans in in top jobs are women they're more educated. They have dramatically improved their skill attainment over the last few decades. Particularly compared to men who have stagnated and that's not the case. Right. So that's to me I see that as a huge amount of opportunity we we have policies that hold women back whether it's childcare policies or or again the overt discrimination in boardrooms. But yeah, empowering women has this opportunity to put more talented people in jobs they should be in where they can contribute more to the economy in that lives everybody up and I. This is really interesting because it kind of cuts a little bit across the right and left divide 'cause I on. The you know kind of populist rate right now you have this idea of immigrants taking jobs, that kind of thing, and then on the left, you sometimes also have this idea that it's it's almost like a limited pie, the economy's a limited pie and while we do need better reallocation of wealth, we all know that it's also about growing the Pie. It's the idea of getting more people and also using people's skills in the most productive way possible. Yeah. No one I think again, that's it's both of the lesson of history of also i. Just, think it's it's a really intuitive end optimistic way of the economy. Now, if we better allocate the resources in the Pie, the pie will grow faster and what we know is that a faster growing pie at a time of low unemployment is the recipe for big income gains and so I think that the most sustainable version of that is these productivity gains and you're right. It's it's the first excerpt of this book. Got A lot of blowback from both of the populists left in populous, right? The populace right wanted to tell me. That now, immigrants don't actually lift the economy which I are you interested they clearly do and the populace left wanted to tell me that no, this is all just about taking money from billionaires and giving it to workers in that'll make everything fine. But I I I really think there's something in here. No matter how you view the economy that you could pursue. There's a path for market oriented policies. There's a path for government or policies to try to correct these productivity failures we have right now so I have a question about productivity and Looking at it more from maybe the capital side of the equation or the or the employee side of the equation above them labor side of the equation, which is the during the boom that you were talking to, which ended around nineteen. Eighty. Employers would. You know one to employ people who are coming more productive Nafez people became more productive as they had bargaining power thanks to unions. They could reap the fruits of those of that productivity and what I'm seeing now. For a lot of Americans especially for ones without college degrees is the when employers look at them and say like how much You know money. Can We? Can we make from these people lay? Maybe they can make a bunch of money but on the other hand has no real need to a lot of time to pay them because they can make even more money if they pay someone in Mexico instead like where we're in a very global world now, and so I guess my question for you about how to bring living wages back into the middle classes. Or to I, guess that would be. Ring. Living wages back into the people who who should by rights to the middle class. This is how. Did. Those people compete. With Mexico Vietnam China and the rest of the world. This may be a frustrating answer certainly been a frustrating answer for some of the people I've talked to about it but I actually, I don't think there's a very good chance that most of the jobs that have been outsourced are coming back I've covered this long enough I've seen enough politicians promises donald trump promised to repatriate all these jobs. And he's actually tried a bunch of different levers of trading tax policy and they haven't worked. So I don't when I talk to CEOS there's very, very low chance. They are actually bringing their supply chains back so. We've seen this in America before entire like groups jobs just dry up and never come back and usually what happens is they were pleased with something that makes better use of those workers over time you know when when farming technology made enormous amounts of the agricultural workforce redundant a lot of those workers moved onto factories where they were more productive. But what hasn't happened now as better jobs better uses of those people have appeared. So my argument is sort of really. Again frustrating to they're not gonna I can't tell you where it's GonNa come from but I really believe if you empower the people who actually have a view towards solving human problems with capital and want to invest in that in healthcare in in carbon mitigation in in a bunch of other industries where there are new frontiers of ways that putting people to work can be helpful and productive I think those will be good jobs and so I don't know where they'll be exactly or whether it be located but. I believe they'll be the sorts of things could put even the the workers you're talking about without college degrees to use it, and in ways that pay more and make better use of their skills, which are essentially not in demand right now in our economy. Well, one of the things I think it's really interesting about the kind of kind of golden age of the American middle class that we think of post World War Two was that you had a significant amount of government investment in basic science and Across the country kind of universities across the nation and as a result of that, you then had the private sector kind of jump on that investment from the public sector and create these incredibly dynamic productive industries that could afford to pay people a lot because they were so productive whereas now the government invest very very little in basic science and frankly the private sector is never going to invest in basic science because it doesn't make any sense you know, but they will they will jump off of it. So it seems to me that part of this could also be where the government is choosing to invest to kind of stir this productivity. Also the question is the even if you can afford to pay people a lot like what's your incentive as an employer to pay people a lot because? What we've seen is this massive explosion in corporate profits the. Balance between capital and Labour has has really favored capital for the past few decades and when companies make more money they go. That's great and we'll send out the shareholders. We'll spend on share buybacks rather than paying it out in terms of wage hike. So what's the incentive? How is? Profitability going to turn into increased wages? How does that happen I? Think it has to be mindset shift not in there's this sort of false choice between sort of prophets in labor I I actually think profits would be higher longer term if companies were investing more in their workers, I think that's it's sort of a sustainable resource you invest in kind of an argument and I don't think that that's how a lot of companies. See the world but I do think there are some companies that do that and who have reaped the benefits and we've seen it personally for highest skilled with the most in demand high skill workers. Clearly, they are. You know Google invests a lot of money in its very high skilled engineers I I think that we can get to a point where that is true of a lot of companies with a lot of very highly skilled workers. We just live in a in a time right now particularly when the when the labor market has been so loose for so much of the last twenty years where companies could view workers as eminently replaceable and disposable, and so they didn't want. Invest in them because there's always gonna be somebody else who needs a job who can work for less so that's why I think keeping the labor market tight is so important because it does generate that sort of bargaining power that allows workers to demand. Hey, you need to invest in the and we're seeing some of that right now by the way in the pandemic, some companies that really want to keep their work from home workers. Happy are trying take some steps to keep them engaged to keep them from jumping ship even at a time when when obviously, there's enormous unemployment. So I. Think it's possible is just not right now a win spread I agree with that I think. On the one hand when you have really productive industries, they pay their workers more for the simple fact that if they didn't, they wouldn't be able to find those workers like and they also because they are productive, very profitable, they're able to do that. But I do also think you're right that there's also a side of this probably is going to have to revolve around. Government policy or labor mobilization in some way so that you can start to get more of the Games of the economy to be more widely person I think I agree with both of you that by doing that, you probably would actually end up generating larger growth because part of the reason that you have a lot of companies not investing even though you have low tax rates capitals. Essentially free, but you don't invest because there's no demand. So why are you going to build a factory? Why? Why are you going to invest in training? If there's not a difficult demand if you can generate that demand by having the people actually spend money which are the lower income lyles having more than you could actually stimulate demand, which could perhaps create more of a virtuous cycle. Right, well, if you look at the stock market, people are desperate to find. Money. Losing companies to invest in like it's never been a better time to be a money losing company. Especially if you based in California the what fascinating to me is the The one type of losing money that the market doesn't like is like well, we're losing money because we're hiring a bunch of people and that's going to increase A. Macho. Of Long like the increase in full time salaried employees is exactly the kind of investment that the market really is disincentivising Veggie any other form of losing money even if it's just spending money online marketing is better right although. The market seems to have no problem with with increased compensation for executives. So I mean again, it's not necessarily paying people. The market doesn't like it's paying your typical worker. There's a real market bias toward paying your quote highest skilled workers in your company, and so again, I don't know I. I don't like to always argue it's easy to say, well, the market is just clearly wrong. There's clearly incentives that the market is responding to here and I think one of them is this shift away from this sort of corporate allegiance that is basically complete. Now, people very I don't know anybody who thinks they're gonNA spend their entire career with one company like a lot of people thought they did maybe in the in the fifties or sixties but you know on the flip side, I think that they're that fraying that relationship discern mercenary transactional ism between companies and their workers. Does rob everyone of a chance to build the kind of trust over time where'd where you really do feel that you're taking care of and then you really do feel a ugo the extra mile for your company right now companies can demand that you go the extra mile because if not, they'll kick you out and replace you. But if the again the labor markets tightened up, that's not some they can get away with. 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Ziprecruiter the smartest way to hire. Let's talk about the big news of the week, which is the ever worsening relationship between the United States and China Hannah what the Hell is going on here we're banning TIKTOK. WE'RE BANNING WE CHAT WITH SANCTIONING CARRIE LAM chief executive of Hong Kong. This is I. You know I thought things were bad like a week ago and suddenly things have seemed to get a hell of A. Lot Worse. Yeah. At this stage, it seems like the trump administration is simply throwing anything at the wall that they possibly can I think most likely as an election maneuver more than anything else. So Jim, you're the you're the political SAV on here. Can you explain to me because I have to say I am I find this a baby s how does banning TIKTOK help anyone politically I I would say two things. One that the president's has a core group of advisers who are true like actual true believer China Hawks in Peter Navarro. Absolutely has been pushing from day one for the president to take much more aggressive measures against all sorts of Chinese companies and. This is sort of a natural extension of that, but it is also true if you look at their political messaging that they think making a villain out of China is helpful for them in this election and I am going to go out on a limb here and wager that it is in part because they really see it as a way for them to deflect corona virus playing the more. That you can message us as China in least this virus on us. China has these Trojan horse companies trying to they're spying on US China. Is the is the enemy is a way to try to end insane Joe Biden his shot soft on China I mean that is a way to an I don't think anybody's GonNa vote on like Oh, I'm excited you took away talk that doesn't seem like. I do a lot of teenagers might complain to their parents. About it but I think that there is a political narrative that they are helping build here on top of true actual desires of the president's advisors to crack down on all sorts of the. Is. One hundred percent agree I I really think this is far more about that narrative that kind of Cova Narrative and it is actually economics and that isn't to say there are legitimate concerns about China that there are legitimate concerns about Carrie Lam but I don't think that this is a well reasoned policy to deal with them so. I I do think this is more just posturing. However, I do think it will probably have consequences. Far after hopefully, trump is out of office. I think that what has been done in the last few years and especially now what has been done in the last six months I don't think that is something you quickly fix even if Biden. Comes into office definitely not if tiktok disappears, it doesn't like spring back. You know on January twenty first if if Biden comes into office but it's even bigger than that I wrote a little bit in my newsletter this week about HSBC which has. Its the sixth biggest bank in the world and it has just imploded because it's I mean the it's in the name Hong. Kong. Shanghai. Banking Corporation and their UK Bank, they do most of that business in Hong Kong and China and the tension there between like do you support democracy to support the people of Hong Kong support that the Chinese party is irreconcilable is tearing my bank apart and is destroyed that banks prophets and the greater the geopolitical tensions between the US and China less money HSBC makes and I think HSBC. Is a little bit of a canary hit when it was while way, we didn't cab because they were like this a Chinese company and who cares right HSBC is a big UK company. Maybe we don't care about big UK companies, but I'm thinking about apple China's basically apple second biggest market apple. His is probably the most successful American company in China entirely. Thanks the fact that a lot of Chinese people like unused iphones if apple con keep we chat in its apps still then no one in China is going to use knife. It's as simple as that you did a mobile phone is we chat in? China. So without does no. Apple in China and I feel like the oft is obvious to me that no one in the administration has their story. If you take one look at the executive orders that trump it out incoherent, it is absolutely impossible to understand what they're saying but. There is going to be a huge number of on unintended consequences, many of which are gonNA fall on American. Companies. Yeah, absolutely, and I, think that the that the grand hope that other companies have had for for more than a decade now of the Chinese market being their next, you know the true great growth frontier and that's something they have to be thinking about reassessing right now what how tenable that's going to be just given us. One of the things I think is interesting too that I've heard for much of the past. Six months or even a year is that. In the Chinese government in a lot of ways despite all of this kind of nonsense would much rather have trump in office than by. Because what trump is doing is unfocused and its unilateral whereas when you get a Biden administration in. They're much more likely to work with the rest of the world and they're much more likely to be able to get real change out of China and the the model that we've had in the relationship between China, the way that been able to grow some of the things that China's been able to do. Those. That's probably done like that. That stage of globalization is is probably done regardless of who is elected this fallen. If anything if you do get a more reasonable administration that does not mean that all of a sudden, we go back to having this. Nice relationship. What to Goldman Sachs experts and leading thinkers have to say about trends, shaping markets, industries global economy. Stay informed with the latest insights from Goldman Sachs on economic and market implications of covid nineteen. Available on their podcasts at G. S. dot. com. Slash Kobe. or any of your favorite podcasts platforms. Jim. Can I talk to you about the New York Times for minute. Please you just had a digital milestone you now a making more money from. The electrons than you off from selling print. Ads, this is the D. Physical Education of the New York Times I mean when was the last time you went into the actual office I haven't been in in more than five months at the spend one hundred and forty eight days since I was in the office. So like offices disappearing print newspapers disappearing when. News doing great meanwhile. So my question to you is is this. Some kind of cynic Deke for the economy as a whole is this what is happening across the economy? We'll all economics is local, right? So I'm GonNa just wildly extrapolate from my employer. I do think that it is I. Think there's we had six, hundred, sixty, nine, thousand, new digital subscribers. Last quarter we are well on our way to the School of ten million digital subscribers and I think. It was not that long ago that people were criticizing the New York Times strategy of Digital, subscriptions in San you couldn't do it. You couldn't make that work on the Internet and and I feel like maybe in the pandemic, we have accelerated that shift clearly for the Times I think a other newspapers enlarge media outlets are going to be there with us the post in the journal and others and on. The flip side I. Don't think it's just a media story. I really don't I. Think you know brick and mortar retail is really struggling right now and the way that you're just in my neighborhood the way that so many restaurants have just kind of reinvented themselves away from their physical spaces debase largest kitchens were you pick things up on? You know they deliver to your pick things up right outside I. Think we are seeing a dramatic shift to a virtual economy that we all knew was coming slowly but has really picked up and I'm not sure we're we're fully anticipating or understanding just how many business models have been on totally reshuffled under is here. So is this permanent or temporary because this is the big question which I've been struggling with for the past couple of months says like obviously people change their. Behaviors during quarantine when there's lockdown when they go into the office, that kind of thing obviously, at some point, the pandemic will end when pandemic ends do we snap back to the status quo ante or something similar to it because we just hated this horrible pandemic period one nothing to do with it or do we suddenly realize that we kind of preferred this new life in some ways especially on retail i? I think I'm more in the snapback camp when it comes to shopping people like that more is physical activity and sure they might do the actual transaction online after having walked around all of the stores and it's a little Omni Channel on the store's ads for the. Or Front or whatever but ultimately. Especially, when it comes to clothes, you know people want to be able to walk twisters, touch them look around I. I think that is maybe more temporary. Maybe I, don't know I would I would have agreed with you two months ago I'm not sure that I agree with you. Now part of it is like I don't know I never WANNA go back into an electronic store again I just it's just easier to order a new computer speaker online now and have showed my door two days. Later I don't WanNa have to like get up and fight traffic at the mall or whatever and. I can think of the the stores I really liked going to I definitely will return to I really hope Rei does not go all virtual but I even think about things like that are beyond retail i. think we will see a lot more virtual. Innovation in the home buying spins like the way that that realtors have innovated with being able to stage a home virtually now. So you can put really cool furniture in doesn't actually exist, but they are on the on the tour I think we will see a lot more of that. Now I don't think that's going to be. There's nobody goes to an open house anymore, but it may dramatically change the way people buy homes and I wouldn't expect that fully snapback. I agree I think that number one, the longer this goes on obviously the more it's going to result in some type of permanent behavioral changes but I also think what will probably go back to will be a different model. One of the things I found really interesting I mean I've been someone who per a longtime has been like the New Yorker with Doorman building, that has everything delivered. Like but bill that was my reality long before the pandemic and it was interesting for me. Then to see my relatives who were not used to ordering groceries or these kind of things, all of a sudden start doing and being like this is great like why would I want to go back to the way things are done before? So I think as some of these models were. Moved beyond just kind of the urban centers I have a hard time believing we're just GONNA. Go back to you know pre covert world. So who are the losers here presumably, it's commercial real estate. Yes. Yeah, really feels like it talked to people commercial real estate and they'll give you these feels about. People are going to need more space because I'm social distancing like no. I commercial real estate is GonNa Struggle I think short-term. That's right and I think there's also just a bunch of big incumbent brick and mortars that are that we're seeing you know have have filed bankruptcy or. Close to it and they were not doing great before started but I'll tell you the other losers here. Are the smaller business brick and mortars who have not been able to adapt who who don't have the instant ability to go more virtual of like target or Walmart, and I think that they anecdotally that is one thing I'm also hearing from a lot of places like. We had a decent sized for US neighborhood market share from our hardware store. But you know we had closed for a few weeks and we haven't been able to figure out this like you know low contact curbside pickup model and you know Home Depot's blowing us away. So I worry about that because I think that a more dynamic more competitive market in those with with more local businesses better. But but I think there's a real chance will lose a lot of this permanently. What one thing we've definitely seen in the stock market is not just the S. and P. Five, hundred outperforming the market is a hall, the the the market but really just a handful of big digital companies dominating the rally and hitting new highs while the rest of the market is is lagging behind them and I do definitely worry that this is the winner takes all recession, and at the end of this recession, anyone who has an enormous is going to be dead and we are going to wind up in a world of monopolies. I think that's certainly certainly possible. I hope that is not the case. Yes. I think there is definitely a possibility of that. I would say I think that even though. While the economy is really really really struggling. You may not have quite the interest in antitrust despite what we saw with all the know congressional hearings. I think that once the economy starts recovering now that you are almost certainly going to have more government involvement in the economy moving forward I think that that is just a reality I do wonder if you're going to have more pushback on some of those companies that are experiencing essentially windfalls right now. If. You look historically, it wouldn't be surprising if we end up getting more government pushback and we end up having changes and I don't know if it results in a bunch of smaller really really small companies thriving obviously I have no way to say whether that's going to happen or not. But I don't necessarily think this means that it's just gonNa be you know Google facebook Microsoft Amazon and nothing else not even if Microsoft buys took took. Maybe Microsoft then all bets are off. Just seems like a world owning conglomerate right there. I have mentioned my my theory here, which is the Microsoft has really become the dominant enterprise computing company in the world. It's astonishing to me how Microsoft Office in particular retains ninety percent market share when. Google docs so much better but they they just haven't really made it into excel. Sorry. No. Excellent. It's not. Every day what I loath with a Thousand. Suns. But yet Microsoft also has a bunch of random. Consumer facing products like everyone kind of ignores at least when it comes to the stock market, but they really big things. minecraft is a huge thing. xbox is a huge thing on my idea. The reason they wanted to buy Tiktok is because if you have something as big as Tiktok and then you combine it with minecraft and Xbox, and maybe link thin I'm not sure about that. But a few of these more consumer facing things then spin that old out into consumer facing. Company. Then you create a bunch of value that way even though they probably couldn't do that kind of a spinout unless it was big anchor in the phone something like. This is not going to happen by the way. This is my fantasy but like this is my my mental model if Microsoft, I can't imagine scarier more horrifying thing than a linked in Tiktok. scenario right? I mean it's just. I, mean linked. I. I just like to scroll through linked in watching watching thirsty teens. This is. Excessive both worlds. Tovia. That's. Talking Dystopia my number this week is sixty, eight point, two percent, which is the. Latest homeownership rate from the Census Bureau it has absolutely skyrocketed in the last couple of months and there's lots of talk about why that might be this obviously, very low mortgage rates people when they aren't able to go to the office a go shopping and stuff like that. They really value. Personal home space much more, and so there's been this big sucking sound of people have been buying up property in the suburbs. Suburbs have much higher homeownership rates in cities do. So every time you buy in the suburbs tight increases the homeownership rate and all of these other similar things. But honestly, I also suspect that that we have some very noisy day to here and the Census Bureau isn't able to count as well during a pandemic as it was before they, they actually had a note in a release about that, and maybe that number might get revised down a bit because I still believe in my heart of hearts that homeownership is on the longtime secular decline. That's I. think that's really possible. I also think I mean we have seen this urgent home-buying but I also I wonder what how that all interplay with this sort of potential wave of evictions that we could see and whether those turn into landlords than trying to sell properties and feeds on itself, and there's Higher Rental Properties mostly remain rental properties, but if you are. From Your Brooklyn Apartment and then you wind up going back to Nebraska and buying way that increases the homeownership rate on the margin. Although I don't know if you're being a victim if you're probably GONNA go immediately by plane. The, overlapping. You. Could probably buy a place in Nebraska for the price of late six months. Rent in. Brooklyn. We live. But yeah. So my number is sadder my number is two, thousand, seven, hundred, fifty tonnes of is at the ammonium. Yes the ammonium nitrate I it really is just unbelievable and you start to dig into what actually happened, in Beirut, and the the fact that through complete incompetence and really criminal incompetence of the Lebanese government they have you know killed over one hundred people injured thousands of people I think there like three, hundred, thousand people. Are Homeless and the size of this was like twenty times larger than the largest non nuclear bomb and I heard like a shock wave was something like twenty or thirty percent of Kiro Shima's shockwave I mean just unbelievable and just through incompetence I? Mean I feel like not only should Lebanese just be created the entire world she just be like this is horrible. This is this is like it was not only foreseeable foreseen. No, it's a steady stream. Of letters from the ports people saying we are sitting on a bomb and it's going to explode unless we get this stuff out of here and the government was like, yeah we should probably do something about that and never did and it shouldn't in an in the sense it's not surprising because you have this is the same government couldn't pick up the trash on the street for how long have you had trash piling up that has completely destroyed their economy because they. Turns out you can't run a Ponzi scheme for that long before it breaks down it's just. The more about it the more I'm just like this the worst thing I've ever seen. In terms of foreseen disasters the other big one I'm really worried about right now is the Three Gorges Dam. which you know the Chinese government is coming out and saying the Three Gorges Dam is perfectly safe, which is the least reassuring thing you can possibly. But yeah. That would make the Beirut plus looked like a walk in the park. collapsed. Jim What's your them? All right. My number is a a gratuitous. Promo, but it's also of we love gratuitous book premise but Orleans. It's also an attempt to be just as depressing. As as you so. So. Numbers eighteen seventy, which is a year and it happens to be. The year that AH, some researchers including Marion. Wanamaker of the University of Tennessee who was on president trump's castle economic advisers. It's the year they looked back to. A big longitudinal study of economic mobility for black men and they were looking at to see how had changed over time and is it easier has never become easier for black men to get ahead of where there where they were born a do better than their fathers than win and and the depressing answer is since eighteen seventy, the penalty being black in America in terms of economic mobility. Has Not changed. It is just hard today for black men to get ahead as it was at during reconstruction and that I think is one of the more sobering and depressing statements on our economy right now in the midst of this summer of protests, end calls for equality that it is just still incredibly difficult and there is this deep deep penalty just for blackness in our country. I to jump in and say like the BusinessWeek had a really good cover package on this I think it was last week and best this general feeling among. My circle at least you know there's a lot of systemic racism and does a lot of room for improvement and the things are getting better fell too slowly for. Black Americans, but I, think what's not being realize it's there are definitely significant parts of the economy where things are getting worse. And Wall Street is one of those and it does really seem as though Wall Street was more welcoming to black Americans twenty years ago, and there were more black Americans in senior positions of Wall Street twenty years ago. Then there are now and there has been this backwards movement and I'm sure we'll street is not alone in that but there is this kind of complacency that well. At. least we're not getting worse I. Think we are getting less than significant parts of the economy. It's it's sobering but again, I mean the hopeful thing is that means there's opportunity if we can get better dramatically better, there's just all that talent to be unleashed on the economy and I. think that would be great for wall, Street frankly, and it would be great for the rest of the country. Which I think brings this episode of sleep money to close Jim Tankersley if neo times thank you so much for joining us. It's been great to have you here. Thanks to just mean molly for producing and thanks to all of you guys keeping the emails coming on sleep money at slate dot com. We will talk to you next week on sleep money.