S1: This ad free podcast is part of your Slate plus membership.
S2: Welcome to the quick bite edition of Slate Money, a guide to the business and finance news of the Week. This is your quick bite of information from me. Felix Salmon of Axios from Emily Peck of Huff Post. Hello. From Anna SHYMANSKY of Breakingviews. Hello. We are going to be talking about Robin Hood, day trading, stock market frothiness and just how bad it is or isn’t. We are going to be talking about quickly the streaming service that you almost certainly are not paying for. We are going to be talking about children’s nutrition and what has happened to that over the course of this pandemic and in the slate. Plus, we are going to be talking about peepee shaming and whether we should be upset about people who received money from the BPP who maybe didn’t deserve it. Or you might think didn’t deserve it. That’s this week. And next week we are going to be running a live show if you want to be part of the taping of the live show. Tune in to Slate Money Live on Wednesday evening at seven p.m. Eastern. The link for that is in the show notes. All of that coming up on Slate Money. We’re going to start with Robin Hood, which is the place where you go to trade stocks when you think they’re going up. Basically, it seems to have become that anyway. There’s a lot of stocks going up right now. Tesla being the one you’ve almost certainly heard of. It’s now trading at, I believe the technical term is eight gazillion dollars a share, something like that. It is bigger than every other car company in the world combined. The stock only ever goes up, just proves the barstool sports guys thesis that stocks only ever go up, especially if they’re Tesla. And there’s a whole bunch of others because Tesla is an electric car company. There’s been this halo effect on other electric car companies, even ones which have no products like Niccola, which was just an obvious Tesla knockoff, which is now worth 20 billion dollars, despite the fact that it has no product and basically no revenue and no revenue. That’s a SPAC. That’s it. That’s literally a company which doesn’t even own anything. One of these special purpose acquisition blank check companies which like doubled in price just on a rumor that it was going to buy Fisker, which is a bankrupt electric car company. It’s unbelievable. There’s so much frothiness. One of the things that I mentioned in my news earlier this week was lemonade, which I can say this on the podcast is a crappy home insurance startup, came out of the gates to this IPO and is now worth billions of dollars for no obvious reason except for something, something millennial IPO, something. And that’s all of these blank check companies which don’t own anything and have no revenues. And they’re all, you know, raising billions of dollars. And the place where all of the cool kids buying all of these stocks and shares is Robinhood, because Robinhood was the first company which allowed you to buy stocks and shares for free. So, Anna, what is your opinion on all of this?
S1: Well, pretty much bad. Just in a word, bad. I mean, I think this is an example of where sometimes friction is good. You know, in the same way that we probably don’t want to underprice things like cigarettes because we don’t want people to smoke so much. When you underpriced stock trading, especially for retail investors who have no idea what they’re doing, the consequences are not going to be good. Robin Hood was created with this idea that they’re going to democratize finance, that, you know, so many young people aren’t invested and thus they’re missing out on all of the gains in financial assets. And there’s some truth to that. The problem, of course, is that we do have a way to democratize finance. They’re called index funds. They’re cheap. You don’t have to constantly trade and lose money. They make perfect sense. What Robinhood is is simply a way for young people to lose money.
S2: And what they’ve done is they have built an incredibly addictive app with a bunch of gamification aspects to it where like confetti fills the screen every time you buy or sell anything. And they make it so that you really want to be trading a lot on the platform for reasons that we will go into. And that gamification is just really bad. And when I say really bad, I mean really, really bad as in. It looks like it actually caused one kid to commit suicide like that bad.
S1: Yeah. I mean I mean, I’m always cautious about, you know, saying any suicide is connected to any specific event.
S2: But there was clearly a. Major, major user interface fuckup with Robin Hood that basically this get started trading options on Robin Hood, which you like, you know, financial advice from Felix and Anna, never trade options. Anyway, this kid was quick trading options on Robin Hood. And Robin Hood is actually quite good about not allowing you to trade options in a way that would let you lose more money than you have in your account. But because of the way they displayed the results of one leg of a trade without displaying the results of another leg of a trade, he thought that he was down seven hundred and thirty thousand dollars or something like that. And it looks like that was a major contributor to his suicide. And Robin Hood obviously need to fix that now, but it is related to this kind of high speed, fast twitch gamification and basically stock trading being the new hot video game that the cool kids are playing.
S3: Yeah, I was gonna say the reason we’re talking about Robin Hood now and it’s been getting a lot of coverage now is since the pandemic started, it’s seen an uptick in business. And specifically, there’s that guy, the barstool sports guy. What’s his name? Dave Farr, who’s like made made this his thing. Right. He used to be betting heavily in sports and now he like live streams. His stock picks. He’s like a millennial. Cramer basically bringing a lot of attention to stocks for that go up and stocks that go down also and saying like crazy things about Warren Buffett and basically has made Robinhood and Celenk thing.
S2: My favorite part of my story. There’s this wonderful video online where he literally pulls letters outdrive out of a Scrabble bag and says, oh, here’s one letter, here’s another. That’s a stock ticker. I’m going to put two hundred thousand dollars into that stock ticker. It’s just pure trolling. All of the investment professionals out there. And because the stock market has been doing so well for the past three months, you know, basically anything you do makes money so long as you’re basically long rather than short. And so he is making money. And so he’s like, look, this makes money and everyone else wants to do it, too.
S3: Yeah, it seems like a very bad trend. It reminds me of back when day trading was was big during the dotcom boom. Right. And people were like, it’s so easy. No problem.
S2: And that was when it was like 12 dollars a trade. Now it’s zero dollars. The trade.
S1: Yeah, yeah, yeah. I mean, I think there are a few things that are scary about this. But one is that, you know, if you studied economic history, you know, when you start to see this kind of behavior, something is very, very wrong. I think that the Federal Reserve has acted very well in a lot of ways. However, there is so much liquidity in the system right now that equities are just so massively overvalued and it’s creating a lot of really bad behavior. And I think that if history is any guide, this is going to end very, very badly.
S2: The one thing we should talk about is this thing called payment for the flow. One of the complaints that people have about Robinhood is that the reason that they can offer free trades is that they get paid by Citadel and Vertue and other big like high frequency traders who take the other side of the customers trade and they say get money from HFT is rather than charging money directly to their customers for doing trades. This, I am 100 percent convinced, is not a problem. Every single brokerage basically does this. Robinhood does it a bit more. As in, they basically sell their trades to the highest bidder. But the one thing you need to know about this, the only thing you need to know about this is that if you do use Robinhood to buy and sell stock, then you will be getting what’s known as NBPA National Best Bid offer. You will get the official price on the ticker at the New York Stock Exchange. You will not get a worse price than that. Some other retail brokerages do give you what’s known as price improvement, and they will give you a tiny bit better than MBBS. But we’re talking like a fraction of a cent here. But share, it’s really nothing. So that is not a big problem as far as I’m concerned with, is basically anyone who knows what they’re talking about is concerned. But it does explain why Robin Hood has this strong incentive to maximize the amount of trading that happens on that platform because that’s where they get their revenue.
S1: Right. And in that sense, just like we’ve probably had this criticism of many social media outlets, is that when your business model is based on user activity and that user activity is actively hurting the users, like you might not be paying in commissions, but you’re paying in other ways because we only like this is just something that’s very well known. The more you trade, the worse your returns tend to be. This is often even the case with professional traders.
S2: It is the case that it isn’t fair. And Robinhood is the place where people do their gambling. Now, there’s definitely like one of the things that people do is they. Robin Hood compared to, say, Charles Schwab. And they say Charles Schwab people don’t trade this much even though they have zero dollar trades. Robin Hood people trade much more. But I think one of the reasons for that is because Charles Schwab is where you kind of put your safe, boring retirement funds. And then if you are bored during the pandemic and want to start gambling with a couple of thousand bucks, you take that couple thousand bucks out of Charles Schwab, put it in this little sandbox called Robin Hood, where you feel like this is gambling money, which you can afford to lose, and then you gamble with it and then you either make money or you lose money. And I do think that a lot of people are making a kind of category error here, that they are treating the investors in Robinhood as though they are, you know, investors in banks, target date funds or something, and then not the investors in Robinhood. You know, a lot of like young kids who are playing a game. And suddenly, when I was their age, I didn’t have any money in the stock market. And if these kids end up at the end of the day with no money in the stock market, that’s where all kids normally wind up, is with no money in the stock market. You know, they’re playing a game. It’s a gambling game and gambling games. Most people normally lose. And I think it while it’s definitely true that people are going to be losing money on this, I don’t think that the money they’re losing is like important retirement net worth so much as the stuff they are playing with on this game app that they have on their phone is what they’re doing, having like a distorting effect on the market, though, like like I think we talked about a few weeks ago.
S3: Bankrupt companies, stocks going up hurts. Right? Went bankrupt, but the stock went way, way, way, way up because of this kind of activity. And you were just saying that companies with no revenues or products, their stock is really high.
S2: Yeah. It’s a bit like bad boy. And there’s no like, you know, if there’s no value that it’s a pure gambling vehicle. And the Robinhood folks love pure gambling pools.
S3: So it doesn’t harm anyone to have those companies.
S1: Yeah. I mean, it’s I don’t know. It’s it’s hard to say. I mean, Felix, I mostly agree with you. I guess if it’s very clear that this is simply people who are playing around with money, they have to lose. That’s one thing. I’m just not entirely sure that’s actually the case. I don’t know. You know, I it’s possible I know that there are this kind of anick data about people using their stimulus checks and they don’t didn’t really need them. So they just go on Robinhood. And I guess, fine, if you were just going to, you know, use it to buy something you didn’t need and you’re gonna gamble it whatever, that’s fine. But I guess. My concern is that it does kind of. Create this belief that this is investing. This is how you, like, build wealth. And because people are you people talk about it as they are investing. And that’s not what this is.
S2: And I think that and you’re right, that is the other category. This error that’s happening is that like the kids who are playing this gambling game think that the gambling game that they’re doing is investing. And certainly I know a bunch of people who are like, I’m going to start investing in the stock market and I’m going to do something very sensible, like just buy a bunch of S&P 500 index funds and sit sit on them. But because they’re, you know, a certain age in a certain demographic, the place they choose to do that, buying and holding of index funds is Robinhood. And in principle, there’s no problem with that. But in practice, it’s kind of suboptimal place to do that because of the way that the app is designed to encourage you to trade, thinking about it a little bit.
S3: If people are actually spending their stimulus money on like garbage gambling of stock, that’s not what the stimulus money was supposed to do, is supposed to go to the real economy. And like, you know, stimulate it like buy goods, services, etc.. Like firework hami. This seems like not good for the economy at all. Yes. Buy fireworks. But this is, like, really bad. It doesn’t. It’s like it’s basically garbage sending money to high frequency traders. And this company, Robinhood. Right. I guess that’s theoretically good for the economy a little bit, but doesn’t seem.
S2: No. All you see right into your right. Dad, checks are being spent in the stock market. That was not the aim. Which is why, you know, the next round of stimulus really should be targeted in other ways. You know, like like, for instance, you know, really concentrate on things like restaurants and state and local governments and people who are going to spend the money in places where it needs to be spent in the economy rather than putting it into Tesla.
S1: Yeah, maybe spending more money, but giving it to the people who actually need it. And you’re looking at, like musk.
S2: So the one thing that we know for sure is that people are bored in a pandemic and they need, like, fun things to do on their phones. And they’re doing fun things on their phones and they’re playing games and they’re trading stocks. And so it turns out that this was perfect timing for Jeffrey Katzenberg and Meg Whitman, who launched this fun app for people to play on their phones, which was full of bite sized chunks of video content made by the hottest video creators in the world. And it launched with great fanfare and they raised one point seventy five billion dollars. And this is why me and you and everyone we know are glued to our phones, consuming, bite sized chunks of video content on Quimby, which is their app. Is that not the case, Emily?
S3: That is not the case, Felix.
S2: Maybe I got it wrong again.
S3: Sorry, man.
S2: Quimby, which stands for Quick Bites but is not Pronounce Queer by B and it’s going to announce it’s not pronounced on McCaskey either, which was the original name they wanted to call it.
S3: Right. So I guess it was a Katzenberg and women and there was fanfare. They made themselves out to be like the next second coming of Netflix. They pitched this as as it was going to compete with the big boys. But the reason we’re talking about it. One of the reasons is there was a great piece in New York magazine, sort of like giving you the inside story of what a disaster this startup has been. And it does seem like it’s been a disaster. People got free trials and they’re ending right now. And the estimates of those who actually signed up was really, really miniscule.
S2: Seventy two thousand during the one. So, yeah, no one is no one is paying for quickly. How many people downloaded it, I think was like five million or something. How many of those five million actually bothered to open it and watch something. I don’t know. But how many of those five million converted into paying customers? Looks like it’s been just painfully, embarrassingly low. And there’s a lot of schadenfreude going around in, you know, various communities enjoying the spectacle of Jeffrey Katzenberg falling flat on his face because it just it seems like they don’t understand the Internet or honestly, the 21st century.
S3: Like at one point in this Volter story, Galaga dad has a meeting with Jeffrey Katzenberg and he says something like, we want to make you the new Jane Fonda and have you do workout videos, which I mean, my God, that’s like a 1970s cultural touchpoint. And apparently, like her face fell and it was just a disaster. But I mean, they didn’t even if there’s one thing we all know and I’m not the most I’m not even a millennial. I’m not that savvy. But like, I know that if you want people to talk about your shows and 20/20, like, you make it easy to screenshot them so you can share them on social media. Quimby didn’t even make any of its bite sized content chunks of content.
S2: Screenshot Abal which are shareable in any way jaam. In fact, when they launched, they wouldn’t even let you watch their incredibly expensive video content on a television. They wouldn’t let you, like, stream it through your TV. They seemed determined to make this as hard to find and as hard to share as possible. And in fact, the only thing that went viral from Quimby, like in the entire history of Quimby, as far as I can make, Howe was like someone using one phone to video a second phone, which was showing Rachel Brosnahan, like Mrs. Masel, calls an arm with a golden arm saying, Bury me with my golden arm. And it was just this like incredibly cam so that everyone just started laughing how bad it was. So, yeah, it doesn’t seem to have worked. But one of the reasons why this is as fun story to me and not just pure schadenfreude, is that this was a company which did a one billion dollar series, a this company, please revenue. Became a unicorn. And not just became a unicorn. It became what I call a Minotaur. It became a company that raised over a billion dollars in cash in a single round with no product just based on the strength of. Here we have a couple live like boomers who are really in with what the kids are going to want. It was amazing.
S3: Katzenberg has a huge reputation, right? I mean, he was always near when they had their first run of huge hits in the 90s. And then he went to DreamWorks and like, did amazing things there with Shrek. So, like, he had that reputation, right. That he could do something amazing. And I think people bought it.
S1: And I think that that probably hurt him to a certain extent because he was very successful at a different time when he was in media. But in a sense, a different kind of video media. And it appears that he just assumed that because he had this brilliant idea, it must work, because previously these other ideas worked. And because we just have way too much liquidity in the system and he can raise a ton of money from it. That is just going to kind of justify his belief. And then they’re gonna throw so much money at these, like to create new content for a service that no one at that point was subscribe to. I mean, no part of it made sense.
S2: No part of it made sense, except like one of the other amazing things is they managed to raise hundreds of millions of dollars, if not actually close to a billion dollars. I think in actual revenue from advertisers, they sold ads against this content, you know, and the advertisers were bought in on the idea that people would be watching it.
S1: You can step back. And I remember when I first heard about this. I’ll never forget that that was done from the beginning. But I do remember that, you know, people are there’s, you know, want to watch, obviously good content. People spend a lot of time watching content on their phones. People do watch a lot of kind of, you know, shorter bits of video. That’s all true. It’s called tick tock. Yes, that’s exactly the thing is like they don’t seem to understand that, especially when you’re dealing with, like, smaller bites. You don’t need that to be like madmen. In fact, like you almost don’t want it to be like the whole point of usually when you’re watching short videos that you just want some stupid, funny thing.
S2: And as someone who has spent more hours than they care to admit, like just falling into tick tock holes and watching stupid funny things like that is exactly what you want with your phone. You’re absolutely right. I do not want to be watching the wire in like a three minute chunks.
S3: Yeah, you just want your quick bites to be funny and kind of raw. And, you know, you do want credits on your quick by a two to one golden arms really on your quick bite.
S2: I mean, the golden dome is very fine.
S1: It’s pretty funny.
S3: I mean, what does it tell us about the streaming wars? I mean, while Qube was flailing and failing, Disney plus seems to be so far a pretty big success.
S2: Like they just had they had come out big coup with Hamilton. Everyone was talking about Hamilton.
S3: Yeah. And the Mandalorian was a big hit, too. So they seem to be like everyone. Maybe me was saying that there wasn’t any more room for streaming services. But it seems like actually there was room.
S2: I think that really a very bad job. I think there’s room for two. I think there’s room for Disney and there’s room for Netflix. I doubt the jury is still very much out on HBO, Max, and on Hulu, which is also Disney. But it’s like a different bit of Disney, I guess. But the Disney Plus and Netflix are clearly the winners, and it remains to be seen whether people are really willing to pay for it. Three.
S1: Well, I mean, I think you could end up having, you know, a number of streaming services because certain ones will appeal to certain people. So everyone might not have all three of them, but people will have different groups of two of them or, you know, they’re five of them.
S2: But the one thing we’re pretty sure about is the one of them is not going to be quippy. Yes. None of them will be.
S3: Wait, did you read the part in the New York magazine story where they ask the author asks Meg Whitman, like, what’s a TV show you like? And she’s like, well, I don’t really like TV that much. And she says, Well, I like this TV show on the history network called Grant.
S2: It’s about President Crisan. Priceless. Emily, Felix, I want to talk a little bit about go back to this pandemic thing, because that’s still going on. You know, that’s raging stock markets and streaming wars notwithstanding. What has been the effect of the pandemic on this is going to be a big and nasty one, I’m afraid.
S3: Kids nutrition, it’s had a very outsized effect on kids nutrition. I wrote a story yesterday about census data that shows that almost 14 million children are living in households that are food insecure and they have gone hungry a few times some of the time. The snapshot was taken in June. So it’s thirteen point nine million children. And for context, that’s almost three times as many children going hungry as during the Great Recession. Like these numbers are absolutely unprecedented since they’ve been keeping track of the numbers, which was starting in 2001. So, like, I couldn’t tell you if it was worse than the Great Depression or anything like that. But there’s something really extraordinary and horrifying going on right now. We have a huge economic crisis going on, and I don’t feel like I’m seeing people pay enough attention to it. And when I saw these numbers this week, I was just really shocked and saddened by them.
S1: What jumped out at me about this was that it kind of revealed this somewhat larger issue, which is that part of the reason you have so many kids that are experiencing hunger is because so many kids get fed at school. And I think this just underscores how dependent so many kids are on getting, you know, again and getting their nutrition from school. And so that’s doesn’t really surprise me why you would see much bigger numbers now as opposed to the Great Recession, because obviously kids still went to school during the Great Recession.
S3: Then that’s only just part of it. Part of it is. Right. Kids are missing out on the free breakfast and the free lunch they normally would get at school, although some schools are providing you can go pick it up. But it’s also the unique pressures of this pandemic. So even people who still have money and jobs, their money isn’t going as far as it used to to buy groceries, that the cost of groceries has gone up like quite a bit like maybe you and I haven’t noticed that much. But like the staples eggs, you know, milk, butter me, it’s all gone up a lot, 10 percent in some categories. So there’s that aspect of it, too. So it’s really it’s not even just the school piece. It’s sort of like everything at once. And it’s really hitting families hard. I mean, we’ve all seen the lines, right? The lines for people at food banks. And so we like, you know, it’s a problem. But like, these numbers are really striking, too, because even families that are food insecure, usually parents will go without eating so that their kids can eat. So those numbers don’t usually get that high. But the fact that it is this high is really bad.
S2: And the bigger picture here is the food insecurity for children is basically the same thing as educational and cognitive harm. If you look at a lot of the talk about, quote unquote, bad schools and bad school districts and that kind of thing, a lot of time, if you kind of scratch the surface a little bit, really what you’re talking about is areas where a bunch of kids are going hungry and are not eating well enough. And when you have kids who are hungry, are not eating well enough, they will do badly at school. Whether or not you you know, even if they’re attending school, they will do badly. If they’re not attending school, then their educational achievement and attainment is just going to get destroyed. And I think this is going to be a hugely lasting consequence of this pandemic is that it is going to turn out to have really put a lot of kids like destroyed years of their education. You know, it’s not just that they aren’t getting new education is that they are losing some of their existing years of education. And it’s going to be terrible for, you know, an entire generation.
S3: Yeah. And I mean, the long term effects of going hungry when you’re a child, it’s your financial achievement as your social development, everything. It’s it’s to repeat myself. It’s very bad, long term, really terrible consequences for these children, for their lives basically. And the kind of preventable, in my opinion, like we have good. It’s not like we had to create something whole cloth to address the issue. We have you know, we have SNAP. We have food stamps. Right. And that the stimulus passed in March did expand snap a little bit. And that’s going to expire soon. We could have done more, I think. And the Trump administration slow walked a lot of the expansion and put limits on it. That left out like five million children. I think it’s it’s really shameful. And it shows just like how poorly we’ve handled this whole thing. There’s lots of ways to show how poorly we’ve handled this whole thing. But children going hungry. To me is like maybe the worst.
S2: Especially since, as you say, it’s such a. A problem like this is zapping, we know how to solve and we can solve it for relatively small amounts of fiscal stimulus. And what’s more, as we were talking about Robin Hood, this is the kind of money that would not wind up going into buying Tesla shares. This would go into feeding kids who need to be fed.
S1: And also, it’s not just that this wouldn’t cost a lot. It would have a negative cost in the sense. I mean, it would make the economy long term much more productive. That’s something they show over and over again, that when you invest in weather, talk about health or education of children, that has a like demonstrative impact on GDP far more than a lot of the ways the government tends to spend. So, number one, we should certainly be spending in this way. There’s absolutely no excuse not to. And if anything, I think food stamps are great. But I think shifting to a system, we are where we are simply giving people more money and allowing them to spend it on whatever they want as opposed to food stamps, which is like, well, you can buy them, but you can’t buy this. You can go this. Strobridge can’t go. This store doesn’t make a lot of sense, especially in a pandemic where everything’s more complicated.
S2: Right. I mean, the problem with that and I I’m totally down with the whole sort of unconditional cash transfers and that kind of thing. The problem is identifying these thirteen point nine million kids. You know, you can do sort of statistical techniques, as we just saw in June, to work out roughly how many of them there are. But there’s a big difference in knowing how many of them there there are knowing who they are. And so, by all means, if we can work out exactly who they are, then just give those families more money. That’s that’s a great thing to do.
S3: Some would say just give everyone more money like Chloris. Just send out. Exactly. Just keep giving the money out and people will spend it. Unfortunately, some will spend it at Robinhood. But like as we saw with stimulus checks, like people who really needed that money, spent it pretty quickly and they spent it on groceries, utility and Brenton’s.
S4: Let’s have a numbers round. I’m lost.
S2: My number is 400000, which is the number of people per day that crossed the Brooklyn Bridge when it was first opened, when it was first opened. It only had trains, bicycle’s and pedestrians. That was it. Now, as anyone who’s crossed the Brooklyn Bridge knows, it’s mostly cars. And the number of people who cross it everyday is less than half that, what it used to be. So there was a pair of articles in The New York Times this week, one by Michael Kimmelman and one by Farhad Manjoo, both talking about how New York City in particular and cities in general can and should be transformed by basically d covering them. And I feel like this was the week for ban cars. And I just I’m always there for any kind of bankcards rhetoric. And this is a good Ben cause week.
S1: Yeah. Well, two things I would say outside of pedestrians and people riding bikes. There was also an elephant that first crossed the Brooklyn Bridge jumbo, the elephant when they first opened Brooklyn Bridge. They had cross it so that people would realize that it wasn’t going to collapse. Fun fact. And I I’ll also say I am one of those people that crosses the Brooklyn Bridge frequently because I live close to it and I run it almost every day.
S2: How many selfie sticks, if you’ve been dodging, is the number of tourists way down?
S1: The number of tours is way down. You know, the issue is not selfie sticks so much as people taking their effing engagement photos. I can’t tell you how angry I think at having to dodge the idiots that are getting me.
S2: Last time I crossed the Brooklyn Bridge. There was this extremely pregnant person doing a photo shoot on the Brooklyn Bridge wearing nothing but a very flimsy negligee. And I don’t know, apparently it’s a thing to do like naked pregnancy pics on the Brooklyn Bridge now.
S2: Anyway, Anna, what’s your number?
S1: My number is 20 million. So 20 million is how much money Tuscaloosa, Alabama brings. And every weekend there is Alabama football game. And I’m just pointing this out because it’s going to be very interesting to see if college sports happen at all this year. My guess is most of them won’t. And if they do, they almost certainly will not have fans. You’ve already had I think the Ivy League has been canceling almost all of its sports. And while I know for people who aren’t as interested in sports, it may seem like this doesn’t matter whatsoever. But these are big businesses, not only kind of for the universities themselves, but for the surrounding communities, which these just bring in a tremendous amount of money.
S2: So the 20 million excludes the money they get from the television. Right. That’s just local spending.
S1: Yeah, exactly. This is just from the community itself. Yeah. Wow.
S3: Emily No. My number is three point two percent. That is the percent of research subjects in neurological studies who are left handed. Because apparently there is a prejudice against lefthanded people in brain studies that I thought was a charming thing to write. About 10 percent of the population is lefthanded, apparently. But when doing brain studies, scientists think that they have to keep it consistent because righties and lefties use their brains differently. So they don’t want to have lefthanded people kind of like polluting the data.
S2: It’s hard to control for that.
S3: Yeah, but there are it’s a really good piece and Vise is all about it. But but what this means is like they don’t know that much about righties and lefties are as much as they could about what sides of the brain are used for what. And there’s sort of this like black hole in the research that could be filled if they were a less biased against lefties. I’m personally a righty. If you’re wondering why I’ve chosen this as my number, I don’t know. I just thought I’d be kind of like a cheerful subject.
S2: Is this not a great opportunity for some fundamental research grants at the federal level if we need more fiscal stimulus? We just create a few hundred million dollars for neurological research into lefties?
S3: Yes, I think so. Oh, and then one other interesting thing was there are still a lot of people who are born left handed but are forced to become right handed. Does that still happen? According to this piece and Vice, it does still happen. And those people have different their brains work differently than the true lefties are the true righties, rather, if that makes sense and there’s no screening for that. They just ask you, like, are you ready, Lefty? They don’t ask, like, were you forced to be a righty? Because some people may not even know. Are you guys both right? Is I feel like you are. I am.
S2: I am right. And it. But now I you know, I feel for my more sinister brethren. On which note, I think we will wrap it up for this week. We are going to talk about pee pee pee shaming in Slate plus whatever, Matt. Thanks for listening. Thanks for e-mailing us. It’s Slate Monday and Slate dot com. Many thanks to Jessamine Molly for producing. And this. Wednesday, we have a live show, Slate Money Live is going to be recorded over Zoome or some equally fabulous app. And we’re going to have Margaret Sullivan on the great media reporter.
S5: We’re going to talk about news desert’s and all manner of other stuff. So if you want to join in and ask questions, do that on Wednesday at seven p.m.. If you’re not around that Wednesday, 7:00 p.m., that’s fine, because you get to listen to that next week on sleep.
S2: OK. This was the week for people shaming the government came out with a massive spreadsheet listing everyone who got more than a certain amount of P4P money, including a whole bunch of people who didn’t even get PBB money, because, of course, the government is incompetent. And as night follows day, the first thing that happens is everyone looks businesses that they think shouldn’t get the money and then shames them for taking their money. And this happened where the bunches of companies that were connected to senators or to the Trump administration or the Ayn Rand Institute for you name it. And I was looking at the rhetoric around all this. And something occurred to me that most people haven’t been following the ins and outs of the paycheck protection program that closely. And I think that most Americans, if you ask him anything about it, they’d say, oh, that was the thing where all the money went to big well-connected companies and the small people were left out. And as we know so well, people in the end, once it got rehabbed, were not really left out. There was one hundred and thirty billion dollars left over at the end of it. And more or less anyone who applied for it got it, with the exception of a few like sole proprietors and that kind of thing. So that kind of misapprehension that it was a zero sum game and that everyone who got money was taking money that could otherwise have gone to someone more deserving, I think wound up getting a an airing without the media doing a very good job of explaining what that was like. A fundamentally fallacious assumption.
S3: Yeah, I agree. I mean, when this first started, I, I feel like I have to come out and say, like I did do my share of BPP shaming and I kind of regret it. Like I was one of the people that said Shake Shack got a PDV loan and isn’t that terrible. But but since then, like, I just was talking to women this morning, who runs a daycare center out of her house, and she got a 24 hundred dollar PBB loan and it really helped her. And she is still in business right now. And that’s great. Like these loans, they weren’t they were kind of like quick and dirty. The whole stimulus was quick and dirty. It was sloppy. Their mistakes, dead people like talked about the other week. Dead people got stimulus checks. Shake Shack got, you know, peepee loan that they eventually gave back. Like mistakes were made, I guess. But overall, like, the idea was just send out money in and help people and businesses. And that actually did happen. And the reason I think David Graham said in the Atlantic, the reason we can’t have nice things in this country is because everyone wants to just shame people. You know, they take this these these, quote unquote handouts. But we need people to take the handouts to keep things going so we shouldn’t shame them.
S1: I agree. I mean, I feel like if we had an extremely limited pot of money and you had all of these people left out because you just had some of these bigger businesses that were taking it, I think that would be one reason to potentially criticize the program. But because clearly there was enough money for almost everyone who needed it. If anything, you want some of the more well-known companies to take it so that it doesn’t become this kind of stigma. So that’s something you can see sometimes that other programs when if it’s if it’s only a very small group or already like marginalized people are marginalized, but it’s businesses that take it, then moving forward, it will be seen as, oh, you know, we haven’t yet the next recession and we have had some type of similar program. People would be less apt to want to take it even if it would benefit them, because it came with the stigma.
S2: One of the other sort of category errors that I saw, well, not category error, but misapprehension was this whole idea of who it was, quote unquote, for. And there was definitely this idea. And people would point to like Jeff Koons or Kanye West or these other people who got BPP loans and said this wasn’t for you. You’re rich. You can afford to pay your employees. So just pay your employees without government money. This is for people who can’t afford to play their employees without government money. And my response to that is basically, well, yes, rich people can afford to pay their employees. But the question isn’t whether they can afford to, it’s whether they will. That is the purpose of the PDP was to ensure that people remain employed, rather. And rich people, just like most other employers, tend not to employ people. If doing so loses the money and said the PDP was a way of making sure those people remained employed even though they would normally get fired or lose their jobs because they had no jobs to do or there was no demand for the services or whatever it was.
S3: I think that actually touches that a legitimate criticism of PDP, which is that it wasn’t a very efficient way of getting companies to keep people on the payroll like we saw in European countries and the UK, people just got their salaries. The government helped pay their salaries. So, Michael, why did you do it? It’s much more efficient, like overall. This probably wasn’t a good idea. They should have just done that other thing, I think.
S2: But absolutely. Or do like a could survey thing. And there was this big and be paper by Raj Chetty and a bunch of other folks who look to companies, which was just a little bit bigger than the cut and companies a little bit smaller than a couple of basically, you know, who. Was eligible for it. Who wasn’t? And look to what happened to employment in those companies. And the fact is that employment in the people who got peepee was basically went down exactly the same amount as employment in the companies that didn’t get people. There’s really no evidence that people saved many, if any, jobs. So in that sense, it really was a badly designed program and we shouldn’t have done it that way. But, you know, so it’s not Carney’s fault. It’s not everything else that could be. Yeah. I mean, we could have a whole show on the things that Konietzko. This is not one of them.
S3: And the other thing, even even if we didn’t do the UK style program, that makes the most sense of paying people directly their paychecks. PBB, if they really wanted to use it to keep. They didn’t really do much to enforce the idea of keeping employees employed. Like, there’s no enforcement mechanism at all.
S2: They’re just more that. That hasn’t kicked in yet. Right. Did the enforcement mechanism comes in when you ask for forgiveness with the loan so you only get the loan forgiven if you have kept people employed? If you haven’t kept people employed, then the loan doesn’t get forgiven and it stays as a loan with one percent interest. You have to pay it back.
S3: I’m curious to see that, how that works, how that works out in the end. What percentage of employees you have to keep employed, yada, yada, yada.
S1: I’ll be kind of curious to see what happens, you know, in a year or so from now, because I do mostly agree with you that I think the kind of UK and European systems, especially for this particular type of just kind of dramatic economic shut down, made more sense. But in the long run, if a lot of those companies in Europe and the UK go under, they’re gonna end up firing people. A lot of the people that were temporarily laid off or furloughed that are or that are on unemployment now are being marked as unemployed in the United States. If the companies go under, they’re just gonna remain unemployed. If the companies come back, they’re going to come back on staff. So my point is that you could actually end up in a very similar place with both the U.S. and the kind of European and the UK system. It really depends on what happens with the underlying economy and the businesses themselves lie.
S2: I mean, I think I think the long term effects of the pandemic on business failures are ultimately what’s going to drive long term employment. You’re right about that. What is absolutely clear is that if you care much more about short term unemployment and that’s that’s the bit where the US is so much worse than UK, Germany, New Zealand, you name it, like short term unemployment has spiked you in a way that it hasn’t. In these other countries, they did a much better job of preventing short term unemployment and showed him unemployment is is important.
S1: Liet labeled are to my point. I guess my point would just be that if I’m being paid essentially by the government in the UK or in Germany, and if I’m being paid essentially by the government with stimulus checks or whatever in the United States, those actually aren’t that different, except that one of them. I’m still technically connected to my employer because of the European system or as I’m not technically connected in the U.S. But there actually could potentially be very similar.
S2: I feel like I said, I feel like you find two things here, because like the government paying people directly in the US does the unemployment checks. That’s not BPP. He is not going to individuals who have lost their jobs, that this is going to employers and employees, almost by definition, rich and much less likely to be unemployed.
S1: Yeah, sorry, man. I should’ve been clear. I wasn’t necessarily just saying specifically about. I’m just saying that when you’re looking at these two systems, what the UK and Europe are doing well is they’re keeping their headline unemployment like figure down, which I think psychologically is probably a good thing, especially in this particular type of crisis. But at the end of the day. It may end up being very similar, whether you’re kind of pretending people are employed because or being paid by the government, but if the company goes under, they’re gonna be unemployed anyway. Whether the United States or you’re saying they’re unemployed. But if the company comes back, they’re going to be employed anyway. You could end up in the same place.