The Big Mistake of the 2010s Edition

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S2: Hello and welcome to the big mistake of the 2010s edition of Slate.

S3: Money, your guide to the business and finance news not only of the week, but also of the decade. We’re going to be talking about the big news of the week this week, which is the latest conflagration in Iran, which is related to obviously the price of oil, which has gone up. We’re going to talk about whether it’s actually gone up over the long or whether it’s in Long-Term Decline. What happened to the price of oil over the past 10 years? What happened to other assets over the past 10 years? Whether things could have gone much better if only various governments in the U.S. and Europe had managed to get their act together. And we’re also going to talk about David Stern, who died this week. He ran the NBA, which is an organization which runs basketball games. You may or may not know about that.

S4: And and I have stuff to say about that. So all of that is coming up in Slate. Money.

S3: So, Anna, everyone is talking about geopolitical chaos right now. The U.S. is killing Iranians and this is causing oil to go up and stocks to go down and people to worry about war.

S5: And what I love is if you could help us just take about 30000 step backwards and put this in perspective for us in terms of like how important is, you know, Iranian oil supplies and that kind of thing to the global economy?

S3: And what’s happened to the price of oil and why does it matter? And what, you know, that kind of thing.

S6: Right. So, I mean, I think the number one thing to understand is that, you know, oil prices have been, you know, significantly lower than where they were. You know, about a decade ago, where, you know, when you had very, very high oil prices, then in 2014, oil prices really tanked. And now they’ve been in kind of this mid range. Right.

S7: And so me some numbers here. So oil prices recently, if you’re looking at Brent crude, which is like the global benchmark, it’s been, you know, just like around $70. If you’re looking at WTI, which is more like the U.S. benchmark, that’s been more like a little over $60. That’s like recently. Yeah. Exactly. And that’s basically where you’ve kind of seen oil prices stick. You know, they’ve gone up, but they’ve gone down. But that’s really around the range that you’ve seen. And so, you know, when you have movements like this where you have, you know, an Iranian general being killed and then you have Iran saying they’re going to retaliate. Obviously, that’s going to cause a spike in oil prices.

S3: People think supply could potentially decline and supply declines because there will be less Iranian oil on the world market.

S8: Yeah. And then also the idea that if there’s more tension in the Middle East that could just cause other countries oil supplies to potentially also be able to decline.

S3: So or by her compared to roughly $70 based price of oil, like how much is oil moved in, I think is about 4 percent for 5 percent.

S1: So it’s now another couple bucks. Yeah, it’s not enormous. It’s not an insignificant move.

S8: But I would also just always caution people that, you know, we’ve seen this happen before. Where where something happy, where, you know, when you had the idea that Iran had struck oil tankers and then you had oil move and then it kind of went back down or it kind of went back up depending on what was happening.

S3: So so put this in perspective for me. Just going back like ten years, like what’s been the range of oil prices? How much does it move over? Like a decade long time horizon?

S7: So over the past decade, you know, if you had oil prices before they fell in 2014, you had oil prices, you know, above $100 and then they fell. Thanksgiving of 2014. And then in 2015, 2016, they continue to be pretty low. I think the lowest was probably in 2016. I think it getting into the 20s.

S3: So we have seen, you know, in the not too distant past, we have seen massive plunge in the price of oil from well over $100 down to like 30 years in comparison to which any you like small moves right now on the order of a buck or two. You know, really not worth getting excited about.

S7: Yeah, that actually is what I believe. Now, if this does really escalate, this tension between the U.S. and Iran, which granted has been isolated for a while. But if it really, really escalates, then, yes, that actually could cause problems. But I would really argue that this is a little bit of a blip in a much longer trend. In the longer trend really has to do with the rise of shale oil in the United States as well as global demand concerns. So when you have, you know, your supplies increasing and demand is potentially not increasing, then that is obviously going to bring down prices. And also, as you have more concerns about climate change coming more and also as you have the price of renewable energy declining, that is just one more thing that can potentially weigh on oil prices. So I think that you have a much stronger long term trend and then you have these kind of blips. And I think obviously the long term trend is more important in the long term trend is down.

S9: I think what this Iran news today will show, I mean, yes. Oil prices go up a little bit and the stock market goes down a little bit. But longer term, the energy sector, the oil and gas sectors importance like in the S&P, for example, has really decreased over the past decade, as Anna said, with the shale boom. I think the number is oil and gas used to make up 15 percent of the S&P 500. Now it’s about 5 percent. And if you took out the two major energy companies, then it would be like 2 percent. Like it’s just not what it was because of the shale boom that’s begun in the 2010s that I’m sure we’ll talk about. Josh Brown’s piece and reformed broker. So even though this is major geopolitical news, it’s maybe not major economic news.

S7: Well, I mean, I would I would say that, you know, obviously because of shale. Now the U.S. is producing a lot more oil, obviously, than they were in the past. What we’re seeing now is we’re seeing a fractured market and this actually is kind of interesting. I think long term because traditionally you had oil has always been pretty concentrated. Whether you’re even talking about Standard Oil and then when you start getting into the nationalization of of that kind of oil industries and OPEC and the rise of OPEC and again, this really control over the oil market. And now really what we’re seeing when what we’ve been seeing since, again, like around that 2014, Mark, is this fracturing of the market. And that really is changing things. And I do think long term that is not only going to have economic consequences, but it is also going to have political consequences.

S3: And we talked about this a bunch and with Bethany McLean when she came in to talk about her book about shale. But it’s worth revisiting this. And I think Josh Brown did a really good job just zooming back and saying those there’s literally more than twice as much oil production in the US today as we thought there would be this time 10 years ago. No, it is an all time high. Last. I just pulled the figures for my newsletter and it’s twelve point seven million barrels a day, which is unprecedented. The U.S. has never produced as much oil. But Emily, to your point, it’s not Exxon Mobil who’s producing this oil. It’s a bunch of small little oil producers. And there’s so much oil that none of them are actually making that much money. And this flood of oil from the U.S., which was completely unexpected, has weakened the big oil producers. It’s weakened both whether they’re American or Brazilian or Saudi or anyone else. And it is May it is it is given less power to the people who hold on to the oil. And it has been largely overlooked. I think is like this incredibly dominant trend of the decade. And I think Josh, put your finger on exactly why. Because no one made money from it. You know, no one directly sort of like bought oil or shorted oil and made it. And there was no big like stock which zoomed up 100 times. It was just this background noise that quietly changed everything. And Josh makes a pretty compelling argument that it even explains the rise of Putin that, you know, without the oil and gas revenues that he used to be able to rely on, he started getting much more aggressive.

S8: So, yeah, that was actually the only part of the article I have some quibbles with because some of them, the aggressive movements that Putin took were before oil prices fell. And in a weird way, I actually think that some of the sanctions on Russia from the U.S. and the EU actually kind of gave Putin a little bit of cover as like the economy was really tanking in Russia after that point. He could blame it on the sanctions when really it was much more about other things. But but having said that, like I do think most of what you just said is very, very correct. I really do think that this this change is something that it relates to other trends that we’ll talk about later in terms of the kind of excess capital needing to find a home. Very low rates. That has really spurred this kind of growth of all of these small shale companies. But it is very, very similar to actually what happened before Standard Oil took over. Actually, like part of the reason that Standard Oil created that trust was because, well, you had a bunch of small oil companies. It was impossible for anyone to make money. It just it like it just there’s too many price swings. So I guess that just leads me to think that moving forward, it is going to be very hard to make this a stable market if you don’t have a major player.

S9: And then what I I guess my question going forward would be, given this recent attack in Iran and given how much the energy sector in the oil sector has changed over the past decade, like if there’s increasing, there is increasing. But if it gets even worse in the Middle East, like, well, how is that going to be different than it has been in the past, given sort of this evaporation of power in the energy sector, this kind of like dilution to all the smaller players? Right. Like right now.

S10: And this is going to be so different.

S3: I totally buy what I was saying here. And the natural implication of what Anna saying is that Middle Eastern wars, at least from an economic perspective and the least from an American economic perspective, become just less and less important over time. There’s no way we’re going to have a 70s style oil shock because America’s like energy independent to this point.

S6: Yeah, and I actually think it works the other way, too. Like I’ve always said that I think that we would never have been able to do the Iranian deal if it hadn’t been for shale oil. Granted, we obviously went out of their Radeon deal, so it ended up not making a huge bit of difference. But part of the reason we were able to do that was because we didn’t have to worry about the ink, about angering the Saudis as much as we would have had to in the past.

S9: I mean, Josh Brown called shale the most disruptive trend of the 2010s. I don’t know if that’s true.

S3: So, Emily, what’s your what would you nominate as the most disruptive trend of the 2010s now that we’ve seen the entire decade from beginning to end? How how would you sum it up in terms of one big trend if it’s not shale, what is it?

S9: I knew you were going to ask me that, and I should have one snappy answer, but I have to ask it. So the first is, is technology which upended everything. Like if you think about 2010, we didn’t really use iPhones the way we use them now. We didn’t have Google Maps, we barely use social media compared to now. Like it’s just changed everything from politics to the economy to our personal lives. 1 and 2, I’m sort of convinced by Jordan Weisman and Paul Krugman I know that the austerity, the reaction to the Great Recession, the muted reaction in government spending was also one of the most disruptive trends of the 2010s because it helped sort of pave the way for like the Donald Trump’s and the demagogues.

S3: Let’s unpack that a little bit, because I think I think most of our listeners wouldn’t understand that. I read Jordan’s family. I don’t fully understand that. So let’s put the personal technology and social media thing to one side for the time, having although you’re right, that was huge.

S11: And we’ll say that in the wake of the financial crisis, the Obama administration and the Fed did a bunch of things to stimulate the economy on in terms of fiscal and monetary policy. And people like Jordan Weisman and Paul Krugman say that they didn’t do enough, that they stimulated fiscally, but they didn’t stimulate enough that they stimulated in terms of monetary policy. But they didn’t stimulate enough and they should have done more. And I I totally buy the idea that they should have done more.

S3: And what I’m not really well, I would I don’t buy what I don’t entirely understand is this certainty. If they had done more, then things would have been radically different. And that was the lack of them doing more that really caused a bunch of X-Y-Z. And if you could be a bit clearer about those causal mechanisms that were be helpful.

S9: So yeah, it was the lack of doing more, the lack of government spending that slowed down the recovery. And it was also not the Obama people or the Democrats not doing enough, but it was also the opposition from the Tea Party and conservatives who pushed austerity in the 2010s and, you know, ground the government to a halt over things like that and made it sort of fashionable to cut rather than spend or even more fashionable. I think if there had been more government spending and more efforts to help Americans and not just banks, then we could have had sort of like a new era of even growth sort of bottom up growth in the country that we didn’t see and and said, you know, for most regular people, yeah, maybe they have jobs and unemployment’s low, but the recovery hasn’t just if it hasn’t been as spectacular as it could have been. And I think this fomented a lot of unease and unhappiness that sort of yadayada plus that social media thing I talked about before gets you to Donald Trump.

S8: Yeah. I mean, I think that there is a reasonable argument to be made that clearly post the Great Recession during the Great Recession. Obviously, there is a significant problem with aggregate demand. Right. And if you do have a problem with just in general thinking about demand in the country, having more kind of countercyclical fiscal policy, so having the government be have loose, looser fiscal policy to try to stimulate that demand makes sense in traditional Keynesian thought like that is what you do. And although there was obviously some stimulus, there was not many people think there really was probably not enough in the United States. And as a result, there probably was a slower like more muted recovery, especially for the average worker. And then I think on the other side in this to me is actually the biggest trend bar. None of the decade are incredibly low rates and very, very active central banks. This is really underlies almost everything. And partly it relates to this because all countries and the U.S. as well really relied on monetary policy as opposed to fiscal policy. And while on the one hand, there’s probably that worked in some ways. There are some negatives to that in the fact that when you are relying so much on monetary policy, you’re going to increase income inequality because you’re gonna inflate asset prices. Right. And the people who are holding most of the stocks and a lot of the real estate are obviously going to be wealthier. And so I think that these two things you could argue that, yes, they did some things it’s impossible to say that had they seemingly more fiscally 100 percent, everything would’ve been better. You know that you can never say that. But there is some I do give some credence to the argument that you may have had a stronger recovery for the average worker.

S9: Yeah, I think the mentality was you help those at the top and not those at the bottom. And where we saw how that shook out.

S3: I think that that actually puts a finger on it much better than that. It wasn’t a deliberate attempt to help the top problem. The bottom so much. It was a deliberate attempt to let the central bank do the heavy lifting rather than Congress, and given the tools of the central bank’s disposal, which is basically interest rates and not much else. If the central bank does the heavy lifting, then what you’re gonna have is the rich getting most of the benefit in contradistinction to. If Congress had done most of the heavy lifting with a large deficit financed stimulus package, then they could have targeted it much more. You know, the median household and even poor households, heaven forfend.

S9: There is really a sense, though, coming out of the Great Recession of sort of the like. If you remember how the the Tea Party started with Rick Santelli sort of ranting against people getting bailed out, you know, because they took on too big mortgages and how unfair that was. There was really the sense and it pervaded everything. I think that average workers and people at the bottom kind of like deserve this in a way. There was that anger against the banks, but it didn’t matter. There was still an impetus to help them that they’re glad it kind of got lost for average workers.

S11: And and the place where you see that most strongly is the place where we’re still austerity hit hardest was actually not in the US at all, but in Greece. And and so you look in that attitude of Rick Santelli to the, you know, homeowners who might get bailed out in the United States is basically exactly the same as the attitude of most Germans towards the idea of helping out the Greeks. And in both cases, what you had was governments shying away from making those kind of spending decisions because it was perceived as being, you know, unfair or something like, you know, bailing out the unworthy. And because governments didn’t make those spending decisions, things were much worse than they need otherwise have been. And. This is the story of austerity is missed opportunity story, I think, in the United States, but in Europe, it’s much worse than that. In Europe, we’re really seeing the story of austerity, having on some level just fractured the entire European project.

S6: And I would actually make an argument that you could even see this before the great financial crisis in the eurozone crisis. I mean, I would actually make the argument that, you know, part of Germany’s fiscal policy for, you know, since like the Hartz reforms of basically not spending any money to try to push up savings rates, to try and make this grand export economy really, really hurt Europe. It’s not seen as austerity. But I mean, it is you know, it is another form of austerity.

S11: And if you save if you save more, you spend less. And if you spend less, that’s austerity.

S1: Right. And also, obviously, then they’re gonna be importing less from other countries. I mean, so it’s like they. So as a result, those countries are going to take on more debt. These things are all are all connected.

S8: And I do think one thing we are definitely seeing now is the pushback from a lot of places, including even honestly, the IMF. You know, where you’re starting to question a little bit more this kind of dogma that the only answer to every, you know, debt problem is just massive austerity. Now, you know, immigrants, it’s complicated, obviously, because, you know, you do sometimes have governments that are have, you know, poor spending policies and they are wasting auto money. So like if this isn’t to say that, you know, there aren’t still some valid criticisms to govern Balz’s. However, I think that there is much more of a kind of a pushback now against that kind of pure kind of austerity driven dogma.

S12: I think you can see it in the Democrats running in 2020. Like I think sort of the tragedy of the austerity dogma was there was like a lack of creativity in what could be done to stimulate the economy in the kinds of new policies we could be looking at that finally now it’s 2020 and people are talking about sort of like new interesting kind of things like a green new deal or Medicare for all or like there’s finally some kind of like creativity to economic policy, except the I’m, you know, lucky enough now to work with some pretty plugged in political reporters on Capitol Hill.

S3: And that will unanimous the green you deal is dead on arrival, not just because of Republican opposition, although that is assured, but also because of Democratic opposition. You couldn’t even pass a green new deal among the Democrats, let alone among Congress as a whole.

S9: But but people are talking about these ideas.

S10: I think their people were talking about them after the financial crisis. I think they’re talking about them. Didn’t, though. I mean, it’s more of an opening and a realization that it was clearly Roma.

S13: Right. Christy Romer was talking about it in the White House after the financial crisis.

S5: And Larry Summers shut her down and said, no, don’t even talk about it. That the conversations have always been there and the outcome has always been, you know.

S6: Yeah. I mean, the one thing I will say and I do I mean, honestly, folks, I do kind of agree with you. I mean, I’ve actually heard the same thing out of people in who are talking to people in Frankfurt that say the same thing that everybody’s talking about about Germany is gonna start spending more in. The people say, yeah, you talk to some German politicians, they always laugh at you. So I do think that there is some truth to that. However, I guess the one thing, though, is that we are seeing that we’re getting to the limits of monetary policy. We are seeing that like monetary policy can only do so much. And once you get, you know, into negative rates and this kind of quantitative easing for forever, you’re honestly almost seeing more negative consequences than you are seeing positive consequences. So then that kind of brings up the question of, well, you’re going to have to do something else. Right. If we’ve kind of gotten to the point where you can’t just rely on monetary policy, then, you know, there aren’t that many other things left to do. So then there’s the possibility that fiscal stimulus could potentially become more of a reality in a number of countries, especially countries in Europe, that have more fiscal space.

S4: So, Anna.

S3: Yes, I know. As you know, as every listening to Slate thing about about sports school. Except that I know that not only team owners, but also players went from ludicrously rich to insanely ludicrously rich over the past decade. They had a great decade. And one of the prime architects of that has just died. And that’s about the limit of my knowledge. Help me out here.

S7: Yes. So David Stern passed away on New Year’s Day. He is the very longtime serving former commissioner of the NBA. He he was commissioner from 1984 to 2014. And the reason that he is so I mean, he’s well-regarded in one sense. I mean, there’s definitely some controversy, but he really changed the NBA. And honestly, I would argue he changed all of U.S. sports. So when he took over in the 80s, the NBA was kind of a afterthought. Like most of the teams were losing money.

S6: They were showing games on tape delay. They wouldn’t even showing some of them alive because nobody really cared. You know, teams were playing and like they all had, you know, only a little bit more than 50 percent of people in the arenas were filled. So really, this this was not a really good look. And at the same time, honestly, all U.S. sports really were still pretty domestic. You know, yes, you had some you know, and in Japan, there was a little interest in U.S. baseball. But for the most part, a lot of U.S. sports were very, very domestic.

S7: And then what David Stern really did was he did two things. One, he really leaned into the growing stardom of players. And this is important is this is actually something that the other leagues were kind of pushing back on because they were concerned about the power of these of this kind of growing stars and thus the money that they could kind of ask for. Whereas David Stern really leaned into that. It initially really very much Magic Johnson and Larry Bird.

S3: So how did he do that? Well, what do you mean when he leaned into it? Yeah, he do that.

S7: So there are a lot of kind of very player focused TV promotions. He really kind of hyped up the all star game again to really focus on these kind of players. He spent a lot more and really expanded their kind of entertainment wing to really like highlight and showcase players in terms of his relationship, in terms of the players actual like the unions, it’s a little bit complicated. But he was involved initially when they did get rid of the this option clause, which allowed free agency and basketball. And so you did have this kind of growth of the big star players being able to ask for a lot more money than they could in the past. And while, yes, he did push back against this, as all kind of leaders of these different leagues do, NBA players, because of a number of reasons, were able to get contracts that are actually quite a bit better than you see in other leaks. So that’s one thing in terms of this kind of growth of star driven industry. And then the other thing and probably honestly, maybe even more important but related is making this a global brand. So he really and this he did by setting up multiple kind of global NBA offices. The NBA was the first league to have a regular season game outside of North America. I was in Japan. And the other big thing he did was actually in ‘92 when he put together the dream team of, you know, it’s the first time that you had professional athletes in a U.S. Olympic basketball team. And that was another thing. It really brought all of these stars kind of to the world stage.

S3: And that was the first time he had professional athletes at the Olympics.

S7: Yes, exactly. Exactly. Yes. So that was the one way he kind of did it, where he really made it so that, you know, you could go to many, many, many places in the world and people would know who Michael Jordan was.

S3: You’re right about the branding. And one of the things I’ve noticed living in America as a foreigner is the people talk about the league brand all the time. They watch the NBA.

S14: They’re fans of the NBA. They know that. Is there an NBA game on today?

S5: And the phrase NBA always appears when and where I as like a naive foreigner, would expect people to use the term basketball.

S3: Like, I feel like people like people don’t even talk about basketball anymore, not nearly as much as they talk about NBA is like this. It’s almost like the sport is unto itself the league. And that’s astonishing to me. I find that super interesting. And every time anybody talks about basketball, they invariably mention NBA. And I always have to mentally try and remember what NBA stands for to try and work out which sport they’re talking about. Because for me, like the sport is the basketball.

S13: But it seems that exactly what you’re talking about, this sort of branding of the sport as NBA has just made everyone think of, is this branded professional thing.

S6: I will say I think you’re right. But I would say I think part of that actually, though, also has to do with college sports, because there’s a reason that people say, I’m watching the NBA or the NFL because they want to distinguish it from college basketball, college football. When people say they’re watching baseball, they do not usually say the MLB. Sometimes they do, but not as frequently. And I think that’s because people don’t watch as much college baseball.

S12: What I was going to say is in terms of the branding of the NBA. I think David Stern was really instrumental in branding the NBA and really in distinction from the NFL, not not only in elevating players into stars, but sort of letting players be themselves, letting them be a little more outspoken, have a little more personality and sort of branding the NBA as a progressive sports league. And I think the turning point there was Magic Johnson when he was diagnosed with HIV in the early 90s. This was like a very different time. AIDS and HIV was still pretty stigmatized. And when Magic Johnson got HIV and announced his diagnosis, it could have could have gone a lot of ways. But Stern really supported him and had him play in the All-Star Game. I think the following year, the same year, and that was very controversial decision at the time. But it turned out to be a huge boon not only for HIV awareness and sort of destigmatizing the disease, but also for Magic Johnson, who said had some quote they they had in the Times obit that was like David Stern saved my life basically by not, you know, shunting him off to this to the side, but like highlighting him in that game. And my husband is a sports fan, was like talking about that game and how Johnson, you know, everyone he he did phenomenally and they even like ended the game a little early. And it was like this very emotional thing. And it really sort of highlighted the NBA as sort of the more progressive sports league. And I think about that a lot, just in contrast with where we are with the NFL, which is just this like brutal this brutal sports league where, you know, players aren’t allowed to have distinct personalities. Men look what they did to the guy who nields. Right. I mean, Colin Kaepernick, I and how he’s been ostracized. It’s just such a distinction. And I think Stern was instrumental there.

S6: I think that that is that is definitely true. I mean, I know that there are you know, there definitely were some controversies over the years in terms of I know there was likely a dress code at one point that they tried to put it in that I know a lot of people thought was kind of basketball players. Yeah, well, it was when they were like going like they had to wear suits, you know, like when they were going at appearances and that kind of thing. And there was definitely some some pushback to that. And it, of course, whenever you you have an instance where you have a owner or EMSA commissioner who is white in a league, were always dominantly African-American, like they’re definitely going to be some some issues, you know. Having said that, like, you know, if you do listen to what a lot of the players have said, you know, since the death, I mean, there definitely are a lot of people coming out and really saying that, you know, he it was certainly not far from perfect. But in comparison to other leagues, he really did allow the players a lot more freedom. And I do think that part of the reason that it is a more progressive. I mean, I think you’re right about that. I mean, I do think he did set a kind of good understanding of what players could do, which I which I definitely think is a positive thing. And I definitely think that it’s another reason why the NBA, you know, continue to become so popular. You know, and because it’s he understood that stars are really why people watch professional sports often. I mean, yes, people watch professional sports because it’s their hometown team or whatever. But people get really excited in professional sports about players. And he understood that. And I think that’s something that other leagues sometimes still to this day don’t always understand.

S10: I was sad. No. I know what’s so sad.

S6: No, my sad number is eight thousand. That is the estimated number of koalas that have died in the Australian wildfires. So there have been something like I mean, an enormous number I think is like half a billion animals have been killed because of these wildfires. But that includes, they believe, about 8000 koalas. And there are like not that many quolls in the world and calls also cute. So I just saw this statistic and it made me very sad. Sad. Yeah. Happy, happy new year.

S4: I’m too sad to have them.

S15: Emily, do you have a number? I do have a number. I’ll tell it to you. Eleven point nine, seven billion. That is the amount in taxes that Jeff Bezos as a state would have to pay to Washington State if he died. And it would raise the state’s revenue, tax revenue overall, fifty two point one percent in just one year. And I got the number from this really interesting paper that I’m like halfway through was reading on the train over to Slate’s offices by Enrico Moretti of Berkeley and Daniel Wilson of the San Francisco Fed that looks at estate taxes and this change in the federal law.

S12: I guess in 2001, which made it sort of advantageous for millionaires and billionaires to move from states with estate taxes to states without state taxes. Anyway, it’s really interesting. And one of the more surprising conclusions they come to is that the estate tax is really worth it. Like even when millionaires and billionaires, some of them do move the money that states get when a rich person dies totally more money than they get just from like income taxes and other taxes with the exception of California. So anyway, it’s a really interesting paper and it shows the power of this really interesting death tax. And the only other thing I’ll say is that I read the paper thinking about knives out, which is really when you cut the bounce.

S10: You a good movie and it’s all about leg, what your guy does with his money after he dies.

S12: And these are very important and big questions and provide.

S13: So if if if The Descendants was a movie about the law against Perpetuities and probably the best movie ever made about the law against these knives out, it’s really a movie about the estate tax and then, yes, necessity for it being much bigger.

S3: My number is 25 percent, which is the proportion of all beer produced in the world that is consumed in China. Wow. This is up from basically nothing in the nineteen seventies. And then like the rise of China as an economic force has coincided with the rise of China as a beach drinking nation. So China overtook the United States in about 2004. United States historically had about 20 percent of the beer consumption in the world. Now it’s down to about 14. Germany has just plunged. It used to be like 18 and now it’s less than five. And China is taking all of it. You know, what about hard seltzer?

S10: The Chinese drinking. That’s the next. I mean, that’s the thing. This this explains the decline in American beer consumption because everyone’s drinking white Klaw, apparently.

S3: Apparently, the guy who started white glau is now worth $3.6 billion. And it seems track of your billionaires. Yeah, maybe that should be my number. In any case, I think that’s it for us this week. Many thanks. Jeremy Molly for producing. And especially to Jack phillimore, who’s sitting opposite me in a very cozy little room in Edinburgh, Scotland, and is recording me so that I can sound slightly congested. Many thanks to all of you for listening. You can keep the emails coming on Slate money at Slate dot com and we are going to have a Slate plus segment about call us Goan and his exfiltration on the words of a man.

S2: We’ll talk to you next week on Slate Money.

S4: OK. Carlos, gun going, going, gone with the Wind. Yeah. Carlos, go on.

S3: On Christmas Day, he was in Japan under house arrest, carefully being monitored by the Japanese authorities. He went to court that day, which is a normal working day in Japan, and got some disappointing news about not being allowed to talk to his wife and also the his trial being pushed off possibly to 2021. And it seems that he just made the decision to sort of push this exfiltrate button and may or may not have got smuggled out in a musical instrument box. Nobody really knows. But in any case, managed to take not one, but two private jets, first from Japan to Istanbul and then from Istanbul to Lebanon and is now basically living free in Lebanon. He he can’t get extradited from there. He’s a Lebanese citizen. He’s back to his wife. They can talk to each other as much as they like. And apparently, if you have as much money as Carlos gun and connections among Special Forces or Controlled Risks Group or someone like that, they can remove you from house arrest and and give you your life back, which doesn’t seem very fair.

S6: Yeah. I mean, it’s like on the one hand, I think that there are very valid criticisms of the Japanese justice system when you have like a 99 percent conviction rate. You’re like, yeah, things are messed up here. And they definitely do can hold people for a long time without charging them and do all these things. And so I think there are definitely valid, very valid criticisms. However, obviously, this does just show you how there are also very different justice systems, depending on how much money you have that, you know, you can have someone who can, you know, just literally escape. I mean, I even thought it was interesting when people were talking about the passports because, you know, a lot of people like I don’t understand, they had all these passports and I was like, you know, extremely wealthy people, you know, that they almost always have two passports. If they’re in like a U.K. citizen, felt like you can have one. Apparently, they had all three of his French passports that he gave him back. A French one, I thought because I thought he had me. That was the key that they had. Actually, he had multiple French passports, but they allowed him to keep one because he needed it. And that you know, but it was one of these things where, you know, when I was talking to people, people like, wait, you got more than one passport? I’m like to me was just like one more symptom of like this just shows you I get these like different worlds. People like it just have different, you know, do very different things that one of these worlds and this just is another example of that. And it’s it also is not going to help white collar criminals in Japan because he was let out on bail, which is actually very rare in Japan. And now people are saying, well, I know white collar criminals gonna be let out on bail in Japan.

S3: So tell me what this means about white collar criminals like in the rest of the world that we have. What’s the name? The daughter of the waterway founder who’s under house arrest in Canada. There’s all manner of white collar criminals like Harvey Weinstein, people like that in the U.S. Should we be re-examining all of their bail conditions as well and saying, well, any of them could theoretically just hop on a private jet and get accelerated, too?

S6: Yeah, I mean, like I again, kind of have I always do this have both sides here. Like on the one hand, I’m just not a very law and order person in the sense like I’m not a fan of whether it’s a white collar crime or not, a white collar crime being extremely, extremely harsh on people. However, I you know. Oh, yes. Well, the other thing, too, is that like you actually don’t necessarily hear about people as much like white collar criminals from the U.S. fleeing the justice system. So I’m not sure if that is a massive problem, however. Like, maybe, maybe this will kind of cause more countries to have to re-evaluate. I think it’s unlikely, though.

S15: I mean, for I mean, it’s unlikely in the U.S. that anyone who did what Goan did, which was like understate his income. Allegedly. Allegedly. And then put some of his personal income losses on the books of Nisson. Like in the U.S. that the person who did that would not be in jail. Like, it’s it’s insane to me that he was actually locked up. They put him in solitary. Yeah. There is no reason. I mean, yeah, I can’t believe I’m saying this, but like the guy should not have been locked up. That’s really it’s really not OK. And I feel like I’m not one of those liberals who’s like, you got to lock up the executives. I just think we we need to do a lot less locking up. And we would do a lot better if we treated most people the way we treat a group of white collar criminals. So I just feel like this is almost victimless. What’s happened here is like not that big a deal except for the private jet travels that are killing our climate.

S16: Yeah, I actually think that’s a hundred percent correct. I think that yeah. Well I think we’re very much in agreement listeners. Yeah. We’ve been we’ve agreed a number recently. I feel like. Yeah. Exactly. It’s it’s when he’s got a new decade. Yeah. 2020.

S3: New year. New agreement between sleep money hosts. You never know. It could last as many as like one.

S6: Yeah, exactly. So we start talking miles before. But but yeah. Yeah. I just think that, yes, it is unfair that someone who is extremely wealthy can do things that other people aren’t extremely wealthy. Yeah. GROWLING. However, I kind of think Carla’s going did have a lot of reasons for fleeing the Japanese justice system. So I you know, I can. Yeah.

S12: The punishment doesn’t seem to fit the crime at all.

S3: Every one should have a private jet so that a Japanese physicist and that’s that’s the clear lesson that I’ve learned.

S4: Agree.

S3: Let’s let’s see if we can agree on something else. Thinks we just. Guys.