Expendable Men
S1: This and free podcast is part of your Slate plus membership. Hello and welcome to the Expendible Men episode of Sleep Money, Your Guide to the Business and Finance News of the Week. I’m Felix Salmon of Axia Stacy-Marie. Ishmael is here loving the idea of expendible man. Delighted Emily Peck is here of Fundrise. And you kind of like the idea too, right? You kind of think that we should be going billionaires into space because we can afford to lose a few of them.
S2: One hundred percent. And I’ll explain it to you in just a minute, Felix.
S1: So we’re going to talk about billionaires and space and how expendable they are. We are going to talk about the Texas two step, the way that Johnson Johnson might be trying to avoid some of its tort liabilities. It’s more interesting than it sounds. Honestly, we have a great conversation about work expenses, meetings, all of that kind of stuff. And is it racist to ask people to put the expenses on their personal cards and then get it reimbursed from the company? Spoiler alert. Yes, it is. We have a Slate plus segment on private markets, basically where people can buy and sell shares in private companies. It’s all coming up on late money. So Emily, this was the week where everyone on Twitter competed to come up with the rudest thing they could think of to say about Jeff Bezos and his 11 minute ride into space. And in true Slate style, you’re going to take the contrarian point of view here and say it’s actually not that bad, even though his spaceship really did look like a penis.
S2: Yes, spaceship was like a penis he had to start on. Well, Jeff Bezos went and touched space, really dirty jokes. He’s going to have to open up your space. And he touched it and he came back down and it was as ludicrous as you could imagine. And this was one or two weeks after Richard Branson did the same thing and Branson hired Stephen Colbert to be there. And and Khaleed performed after. And it was a big thing. And everyone, yes, Felix everyone took to Twitter to be like people are still starving on Earth. There are real problems on earth and billionaires are going to space. These are the worst people in the world. They can’t stay on Earth and solve our problems. They’re going to space. And this is like rich man’s folly and this is just awful. And they should pay their taxes and on and on. And I’m sitting here and I’m thinking, look, billionaires can go to space and it’s fine. These men have so much money, they’re going to space isn’t what’s stopping them from using their money to pay taxes or to solve climate change or do or raise wages that their company is like it’s just it’s not a real argument to just be like they can’t go to space because they have stuff to do on Earth. They actually could do both a B going to space is dangerous. And I feel like if anyone’s going to take that risk on, it shouldn’t have to be like a Sally Ride figure. It should be like Jeff Bezos or Richard Branson, which I hope their relatives aren’t listening, but like, I’m not worried about them. I don’t care what happens to them when they go up into space like they’re building these risky rockets. Who better to test them than them, right? Who better to take their own dog food than them? The third thing I would say is and this might be I might be wrong. But look, going to space has some value, like NASA has been behind many interesting inventions and technologies that have helped us over the years, like hearing aid implants or memory foam or aluminum Gets or on or I mean, there’s like if you go to their website, has a big list of inventions. So maybe something good will come of this, like most technologies start out as something that rich people use. And I hate to use the word trickle down. And I’m sure you guys can rip me apart for this in a minute. But like the cell phone used to cost, what, two thousand dollars have a cell phone. Now we all have a cell phone. Strangely, they now also do that for some reason. That’s no longer an obstacle to most people having one. And they’re very important. It’s OK. Like rich billionaires can be absurd and go to space and risk their lives. And I just don’t see why we have to, like, get all upset about it. Like, there’s plenty of other stuff to get upset about it. I mean, I get you get upset because of that cowboy hat. And The Times has a piece out on Friday as we’re recording and the headlines like Don’t Be a Bezos and argues that Jeff Bezos is having like this mid-life crisis right in front of our eyes.
S1: He clearly is
S2: surely like a dentist buying a Lamborghini. Jeff Bezos takes the rocketships shaped like a penis to space, whatever. But bottom line, I get upset about a lot of stuff rich people do and like this one.
S1: So I think there are two different flavors of complaint. One is what I will call the Gil Scott Heron complaint, which you’ve you about and which, as you say, was all over Twitter. The the lyrics to YV on the Moon basically said, I can’t pay no dog to build, but Whitey’s on the moon. Ten years from now I’ll be paying still. But Whitey’s on the moon and you’re like, come on, can we get our priorities in order here? I understand that complaint. And I also totally understand your pushback against that complaint, which is this is not a zero sum game. And if Jeff Bezos didn’t go to space, he wouldn’t be paying Gil Scott Heron doctors Bill. So I can see both sides of that one. The more main complaint, I think, is specifically about Branson and Bezos and specifically not about Elon Musk, who is the actually successful SpaceX billionaire. SpaceX is a very valuable company that does actually useful things in terms of putting satellites into orbit and doing good things in space. Elon is a friend of Richard Branson’s and it’s like you do you go, Mr. Richard, and go into space and have fun. But that’s not his ambition. The thing that Bezos and Branson are talking about is this vision of humans in space, humans colonizing space. Bezos has this ludicrous idea. Moving all of Earth’s heavy industry into space so that nothing pollutes on planet Earth anymore. Oh, Elon, for that matter, you know, has this vision of colonizing Mars, all of this is completely ludicrous. All of this is incredibly stupid. At some point, we will have Manu’s saadia back on this show and he will be able to explain in chapter and verse just how unbelievably ludicrous and stupid it is. But the dream of putting humans into space is dumb. This is why we basically haven’t cared about it that much for the past 50 years, like it was a big deal to put Whity on the moon. But then we realized that space exploration is not something where you really need humans to do it. Most of the time you can do it much more effectively with machines and robots. And this seems like a retrograde step to me. All of this effort, all of this money devoted to allowing someone to say I went to space, which has no utility at all, gussied up in this idea that, like, at some point humanity will break free of the shackles of gravity holding us to Earth. And this is this is insane. It’s never going to happen. And I think it’s possibly harmful. If people believe that’s actually possible, maybe they won’t care about saving this planet we’re on because, hey, we can just move to another one.
S2: But didn’t sending whity to the moon lead down the road to technology that is really important, like satellites, for example, the stuff that the is doing. So like maybe this space race, the billionaire space race does lead to. I mean, you’re saying it’s stupid to think that, like, there could be some technological advances, but maybe I just don’t know enough.
S1: Space X has technological advances for sure, and people have been ordered the way that is. Rockets just land back down beautifully on landing pads and get to be reused. I 100 percent by the idea of innovation and technology coming out of the space race. I am seeing that with SpaceX. I’m frankly not seeing that with either Virgin Galactic or Blue Origin.
S2: Right. But it could be that like Blue Origin simply existing and Jeff Bezos being annoying and like trying to start a little competition with Elon Musk helps drive innovation somehow. I can’t believe I’m taking the side of the argument. But I mean, we do need to have innovation. And if it comes on the heels of people like that taking big risks with their lives to go to space, I say I’m all for it.
S1: All right, Stacy, you’re going to give us the final verdict here.
S3: I recommend that everyone read a novella by Nasdaq Jemisin called Emergency Skin, in which she extremely accurately, as she often does, parodies and describes this conversation that we’re having right now. Hilariously, it is only available on Amazon.
S2: Oh, no. Wow.
S1: That was that was also the point at which I think everyone downturned about Beezus was when he he landed back down and he says, I want to thank everyone who’s ever bought anything on Amazon because you paid for this. And we’re all the workers and the workers and you’re like, oh, my God. Like you are saying the quiet but out loud,
S2: completely delusional man at this point. Does anyone tell this man the truth? Probably not. Still, I am OK with all of it. It’s fine. I’m on record. Some of your hate mail. Don’t send me hate mail. I’m going to take it. It’s only going to
S1: send me the email for Emily and I will read it and burn it. And I won’t vote on the Emily.
S3: I take one for the team. Felix. Good job. Exactly.
S1: Let’s move on to Texas,
S3: because my favorite
S1: state is where Stacy is right now, it is where the Blue Origin rocket launched from. It is obviously at the forefront of technological innovation. And by technological innovation, I mean clever little things that people can do in bankruptcy, which don’t even look like bankruptcy, but managed to avoid paying out lots of money to women with Felix and ovarian cancer. What I am talking here about is this Reuters report Reuters has been at the forefront of reporting on. The baby powder, the Johnson and Johnson has made for decades, and that is made from talc and talc, is a naturally occurring ingredient that also often seems to be mixed up with asbestos. And there is credible evidence that there was asbestos in Johnson and Johnson baby powder and that asbestos wound up causing mesothelioma and ovarian cancer. That evidence is so credible that a recent case in Missouri, brought by 22 women, awarded over four billion dollars in damages against those women. And Johnson Johnson appealed it and it did get reduced to two women. There were 30000 women behind them who have already sued and who knows how many more after that, because these things take a long time to show up. This is obviously an existential risk to Johnson and Johnson. And so what is JNJ doing? But they are considering this thing called the Texas Two-Step, also known as basically they’re doing was well under Texas law. It’s called a divisive merger. Now, normally a merger is where you get two separate companies and turn them into one. This is a Texas version of that, which is what you think, one company and turn it into two. But it’s not a spin off, which would be a fraudulent conveyance. This is an amount of detail we don’t need to go into and would be completely illegal under bankruptcy law. It’s a merger, so it’s not a conveyance or a transfer at all. And the idea is the JNJ splits into two companies. One of them has a couple billion dollars to pay off the claimants and will then immediately file for bankruptcy. And then the rest of JNJ just gets to carry on with all of its wealth and all of its equity and is basically untouchable by any claimant. Stacey, what’s your view of how this is even possible in Texas?
S3: I have a lot of views about how things are possible in Texas. Very much confirms my prayers. I would say I do think it has been interesting. Governor Greg Abbott has been very explicitly pro all sorts of, hey, come here, do things right, whether it is launching rockets, build your electric car plants, file four different kinds of actually file for bankruptcy, or in this case, engage in this kind of maneuver in a way that is supposed to convey Texas’s general business friendliness. And that is part of kind of a years long attempt to see if you like money, but think the people around you are too liberal. Don’t go to California or New York, come to Texas instead,
S1: or even if you like money and just don’t much care about humans at all. Like the humans who live in VanHorn, Texas, where the rocket launch took place, they just get steamrolled, basically. And SpaceX has basically owns a town in Texas as well. And if you’re unlucky enough to be one of the humans in that in those towns, you just have to kind of vacate your home.
S3: Texas is regulation lite as it relates to the rights of individuals versus those in corporations. Unless, of course, you’re talking about trans kids and abortion, in which case the legislation gets very intense
S1: or the right to walk around with a gun anywhere you want to go.
S3: Well, that’s Superjail. You can do that like no permit needed. You know what?
S2: I don’t understand. I’m just riffing here. But like I was reading this morning, again, for the billionth time about Johnson and Johnson and how it is held up in like marketing classes as this example of a company that is trusted by consumers because once upon a time, Tylenol was tampered with and Johnson and Johnson was like up front about that and apologized for it.
S1: Blah, blah, blah, bla. All yeah.
S2: Recalled it all, didn’t keep it a secret. And this example is held up like in case studies and like business books, as look how trustworthy this company is for like taking responsibility. And now we’re sitting here in twenty, twenty one and we’re talking about how the company is essentially trying to escape responsibility for giving all these women cancer. Right. Fatal cancer. And yet I never read about that in the case studies of the business books that this Tylenol manouver lives on as this like legend of JNJ
S3: case and written by the victors baby
S2: and Jay and Jay is still doing all I mean, their name is in the news constantly lately.
S1: Five billion dollars. They paid to settle a lawsuit with state attorneys general about distributing opioids. And again, that was one of those things where they were like, we will not admit any guilt, but we will pay you five billion dollars on the proviso that we never need to pay another cent ever again. So capital that
S2: I just I think someone needs to go back and amend some of those business books because I don’t see why you’re still trusting this company.
S1: And we should say, like both in terms of what you’re talking about and also to provide Johnson and Johnson side of the story, like Johnson and Johnson still very vehemently denies that, like asbestos in. Baby powder caused any kind of illnesses at all, or cancer or measles or anything, so to your point about taking responsibility and saying, yes, this is on Earth and doing something about it. This is the exact opposite of what they’re doing. They’re denying that there was any connection. And this is just, you know, and I am not going to try and no, I don’t want to sit here and determine which side is right. But all I can say is that almost regardless of which side is right, the tort cases which are coming thick and fast against Johnson and Johnson are an existential risk because we have seen from Missouri, you don’t need to lose too many of those court cases and you really do have to like the entire company has to file for bankruptcy.
S2: And that’s what they should do instead of going to Texas and splitting up.
S1: Well, I’m not being normative here like I’m not. I mean, I think what they should do is a very interesting question and probably the answer to that question. The moral basis really does rest on whether or not they are morally culpable and whether or not that was the best choice in this baby powder and whether or not they knew about it. And all of these empirical questions on a purely financial engineering level, the bankruptcy maneuver makes perfect sense because it really caps their liabilities. And most importantly, they get to file for bankruptcy more or less wherever they want in the country, which means they can find a friendly judge who will be more sympathetic to their arguments about asbestos than the one in Missouri was. And so that alone is worth probably hundreds of billions of dollars to them.
S3: And Texas has various bankruptcy courts that are seen as being debtor friendly in that context.
S1: Yeah, Texas also. We have to ask you about this, Stacey, is the place that the NRA wanted to move to get the right. They wanted to move from New York to Texas and then file for bankruptcy in Texas, even though they weren’t insolvent. And it was only the New York attorney general who was like, no, you’re based in New York and no, you can’t do that. Who prevented that from happening?
S3: Indeed, their argument was, well, we’re going to reincorporate in Texas because we have strong nexus to people with guns who live there. And this makes total sense. But from a tier point, not a normative statement, what they were really trying to do was come to a state that is debtor friendly but also has really interesting legal homesteading protections, which basically says if you’re going to try to sue a Texas based company, you have to show residency ties in Texas to Texas, for example. And so it was very clever because you’re like, OK, well, all these people in New York are trying to sue you. Please move to Texas and then you will have standing right. Ultimately, to your point, Felix, the New York wasn’t having it. But I think, you know, and again, this was something that Governor Greg Abbott was like, please come by. We’re great. So I think that there is very much a series of attempts by Texas to be known for technical and financial innovation in a way that should probably get covered more frankly,
S1: the number of businesses moving to Texas being formed in Texas, being headquartered in Texas is amazing. And it’s happening in Dallas. It’s happening in Austin. That’s happening in Houston. And this kind of what a bleeding heart liberals who read Slate would call race to the bottom in terms of trying to give companies anything they want in this kind of zero sum game of who’s going to have the headquarters. Texas is doing pretty well on that front.
S2: Absolutely. Maybe it comes back and I can only think in curses today. Maybe it comes back and you can curse and bite them because
S1: whether does bite them Emily in which part of the anatomy, you
S2: know, in the rear, just like Stacy-Marie. But maybe that liberalises Texas even further. We’ve seen that in other places. Right, in Georgia
S3: a little bit. I don’t think there’s necessarily a correlation between rich people and liberal beliefs.
S2: I don’t know. I guess I’m the defender of the rich today.
S3: I mean, Texas is a really, really interesting state because it is absolutely at the forefront of conversations about the tension between climate and environment and the political conservatism on regulation, which actually companies themselves are like, no, actually regulators more because this thing is cheaper, like this degree of predictability is cheaper and politicians are still like, no, let’s not do that. You have conversations about, you know, the Felix this point. You know, do you have rights to not have the environment around you besmirched if a cement plant or something else moves into your backyard? What are your claims there? How are they thinking about transit? Austin, where I live, there’s been an endless conversation for years and years about like, why don’t we have a train? Why don’t we have better public transportation? And so I do think and I agree even more than the discussions happening in New York and California, it’s a state that people should really pay more attention to and kind of be more thoughtful about in understanding how these dynamics are playing out in at large scale.
S1: Stacy-Marie, hello. You had a big tweet, tell me about your big
S3: tweets, Carlotto vehicles, Alti a couple of weeks ago, it might have been a week. I don’t know what his time. There was a story in The Washington Post, one of their kind of work advice columns written by a person who’s like, I’m a director at work and my employer keeps trying to get me to incur thousands of dollars in expenses and then hopefully get it back later. And I share that story with a reflection that, you know, as a in my own career, particularly early in my career, when I genuinely had zero money. You’re being confronted with Felix. We talked about this like I moved to New York from London. I get a credit card that has a 250 dollar credit limit. I’m trying to figure out how to put moving expenses on this thing. I’m like, I genuinely have no way to absorb the first month last month and less deposit question. My employer is like, oh, you know, we just pay for it and we’ll give it back to you. I’m like, you’re not hearing me, though. Like, I physically cannot pay for this thing. And it just sparked this incredible outpouring of responses from people who work at very large companies, from people who work at non-profits saying, hang on a minute, how come it’s OK for your employer to get what is an interest free loan to them at the expense of employees personal finances? And so as I do, because everything is content, I wrote this up in a newsletter for Fortune called Eraserhead, which I think is as a connoisseur of newsletters, one of the best in the game,
S1: especially when it’s written by you.
S3: Absolutely. To be clear, a very good newsletter writer with excellent. You know, that kind of went more into detail on this, which is, you know, there are so many ways in which corporations, non-profits, organizations engage in structural and systemic discrimination through policy without even realizing it. And absolutely, some of the people who had feedback were like, well, I love my credit card points. I’m like, great, I had a two hundred fifty dollar credit limit. My card had no points. It had something like a twenty four point ninety nine interest rate before penalty were living in different worlds as it relates the conversation about who has access to what.
S1: To be clear about this, this is very much related to the income versus wealth, the way the. Absolutely, yes. Basically in white America, if you have a lot of income, you probably have quite a lot of wealth and you probably have a high credit limit. And you probably love those miles. You get on your credit card points are you probably pay off your credit card every month. So you love this idea of paying expenses yourself and getting it reimbursed because it just gets you like extra warm fuzzy from your bank who give you points and miles and stuff like that.
S3: Lounge access.
S1: If you are a high income black American, you’re likely to have very low wealth. You’re going to have much lower credit limits. You’re going to run up against overdraft and liquidity constraints and all of these things that the white, rich Americans like the black, rich Americans in terms of income often really hate. And it is a racial difference.
S2: And DC makes a great point towards the end of the newsletter. I think it’s the kicker where it’s like companies say they want to do something about racial inequality and like here’s a really easy place to start. Change your expense policy. Don’t have employees putting expenses on their personal credit cards. It’s not feasible and it disproportionately would impact your black employees. So just don’t do it, issue corporate cards, pay them off for people and take that out of the equation.
S3: Yeah. And don’t issue those corporate cards that are like fake corporate cards because you, the employee, still has to reimburse. Right. Or you get that reimbursement, which is an increasing trend and frustrating. And I think one of the other things about this is it’s not only at the point of when you’re already an employee, it often affects recruitment. Right. So as we’re talking about moving back to the office, there’s lots of people who are like, hey, please fly to X expensive capital for interviews. And I have personally known candidates who are like, I can’t afford to buy this plane ticket and book a hotel and then claim that back after from an entire department that my ghost me, if I don’t get this job and these things are often invisible to the people setting the policy, because if you are in a position at a company that’s like, yeah, I come in for an interview or a hiring manager, you are often from a background that’s like obviously someone will be able to afford or ingest the initial cost of a plane, train or hotel. Yeah, it’s
S2: like the conversation people have about unpaid internships. It’s very similar, like only a certain kind of person can take the unpaid internship.
S1: It’s also worth mentioning that we are living in a world where, for very good reasons, an increasing number of people entering the workforce or looking for jobs don’t have credit cards at all. There is this idea that it makes a lot of sense, which is true, to not have a credit card, to do everything on the debit card. If you are in a world where you’re doing everything on a debit card, the. And this all becomes even worse, the idea of credit cards is that at least if the company pays you back within the credit card cycle, it doesn’t hit you at all with a debit card. You can get all those overdraft fees, you can wipe out your check NewDeal, or you can be asked to check into a hotel where the employer has paid for the room. But when you check into the hotel, the hotel is like, well, we’re just going to put a hold on your debit card for any incidentals. And that holds on your card can again cause all of the overdraft fees and all the rest of it. These are things which really make it hard to accumulate wealth.
S2: Yeah. And really, I just loved just to hammer home the point again that Stacy-Marie, it’s like these are the real steps companies can take to do better on diversity more than any Instagram post or White Paper or Rainbow Nation to an age like these is the real concrete work that needs to be done. And it’s not it’s not that hard.
S3: Yeah. So if you think you are listening to save money and you have control over expensive policies, change them.
S2: Take a look. Are we not going to talk about meetings
S3: or even talking about meetings? Makes me so sad. Let’s talk about meetings, Emily. Why are there so many meetings?
S2: I don’t know. Stacy-Marie I used to be a humble reporter and I controlled my calendar pretty nicely and I would agree to meetings and calls, but then I’d be on deadline and I blow them off and everything was fine and no one asked of me to meet with them. No managers, no one cared to meet with me. Now I am not in journalism. I am in a different place. And it’s a meetings culture. A lot of work gets done in these meetings. I work remotely. They’re all happening over Google Me or Zoom or whatever. And I too took to Twitter because I wanted to know how people get work done when it’s like meeting, meeting, meeting, meeting. And I mean, I did get some advice
S3: which was basically cancel all the meetings.
S2: Yeah. It was like I mean, I could go through it if people are interested. But the advice is basically either like block time on your calendar so you can do work. So people think you’re in a meeting already, like make meetings with yourself is one piece of advice that’s pretty consistent. The other thing is like schedule shorter meetings because your Google calendar will default to thirty minutes or an hour. Like don’t do that, don’t ever do that. And someone else just said to me, the meetings aren’t getting in the way of the job. The meetings are your job, which was like, OK,
S3: we most demoralized
S2: their nonsense. Yeah. So those are like the three classes of advice. And then the other thing is there is a great piece in the journal just about meeting creep in that pandemic. Everyone’s working remotely and needs to like, show that they’re there doing work. So there are more of these like check ins happening over Zoom, which is an exhausting medium.
S1: It is much more exhausting to have a meeting in over Zoome than it is to have other meetings. Stacie’s former boss, Noah Bryar, had some good rules for meetings that percolate. I know I never work for Percolate. He worked for Berkeley. Are you on board with the Berkeley meeting rules?
S3: Stacy-Marie. One of the things I always took away from working there and look, I was there when we I think I was like the 11th and 12th employee. This was a point of dissension between me and this one back. An engineer over who got there first. You know, by the time I left, it was like a much bigger place. It had gotten to the point where we had like a scheduling system for the meeting rooms. But the big thing was always, what is the least number of people that have to be in this room right now? Right. And like, what is the shortest on this way that we can move forward with this?
S1: It was called no spectators invite people to the meeting unless they need to be in the meeting. They also had the fifteen minute default the Emily was talking about,
S3: which you can set in your Google calendar so strong.
S1: And so and then when we do go back into the office, if and when you start having meetings in meeting rooms again rather than on your computer, don’t bring your phone or your laptop into the meeting room. That’s a great way to keep the meeting short.
S3: Yeah. And as a person who, like, loves notebooks and writing things down, I’m like, yeah, this is great. I’ve got my prints out here. It’s all good. But I do think that Foma Emily zero point is a big driver of meetings. Right. And one of the things I’ve been fascinated in terms of, especially the CEO rhetoric about why we have to get back into the office is because they like knowing everything about what everybody’s doing at all times and not being able to see people and make sure they’re doing the job is really stressful if you have a command and control management style. And so these meetings start piling up not only because people are like, I don’t want to be neglecting my staff, but also because I like how else will I know if they’re doing any work? And that’s a trust problem more than it is a meeting problem or it’s a problem is not just solved by meetings.
S1: A lot of meetings should just be a phone call. A lot of meetings should just be a slack channel.
S3: You’re more more like things.
S2: There is value. I think in like I’ve worked in places where you never knew what was going on. No one’s ever telling you what the strategy is, what the plan is. Editorially, there is value, I think, and get. Together and like hearing about stuff, it doesn’t have to be like an all hands or something, but like it’s nice to kind of know what’s going on at the place where you’re working. It does feel
S1: good. Why does everyone need to learn what’s going on at exactly the same time of exactly the same day on a Zoome call with each other?
S3: Feel better about you not being a manager? This is the question that you ask. If you’ve never had somebody be like exceptionally upset that another person found out a thing seven hours before. Yeah, they’d
S2: like to know what’s up. That is definitely real.
S3: And I think the main thing is going back to kind of the rules of percolate. Have people imposed these kinds of rules because most people are bad in meetings? Right. Like, I had a strict rule at a lot of places where I’m like, do not put a meeting on my calendar with no agenda. It’s not happening. I’m not just going to show up in a room and then we’re going to be like, so what do we have to talk about? Absolutely not. And that was both because I like to be prepared and because I hate meetings. And so I figure if I have to be in one, I want it to be useful. And then you’ve got the power dynamics, right? I worked at a place where you might be working on projects that even your boss wouldn’t know about. And so you very quickly had to get over the idea of I’m being left out of all the meetings because like, yeah, you literally are being left out of meetings constantly. And that’s a good discipline. But again, that comes down to clarity about what you’re responsible for, how you will know the things that you are responsible for and how you will be rewarded for doing those things.
S2: One thing my new manager said to me because I was asking him like, how do I deal with this meeting situation? And he was like, don’t do standing meetings. That’s a recipe for a genderless like, hey, how are you? Yeah, yeah. Just take those off and make sure you have actually something to talk about. And you can tell people, I told you that and I was like, great.
S1: In terms of the management thing, I do think the in well functioning organizations, a large part of the job of a manager is to have meetings so that the direct employees do not have to.
S3: Yes. Yes, absolutely. If you are not protecting your people from drama, get a different job.
S1: Let’s have a numbers around Emily do you have a number?
S2: I have a number. I wrote it in a Google doc because I ran out of index cards. OK, disaster, seriously, very traumatic. My number is one hundred and fifty. That is one hundred and fifty euros, which is the amount each woman on the Norwegian volleyball team was fined because they wore shorts to play volleyball instead of bikini bottoms and
S3: almost no rules.
S2: Oh my God. Yeah. These women were like. So the rules stipulate that women must wear these skimpy little bikini bottoms that can’t be any more than four inches. Meanwhile, the men who play volleyball, their shorts can be four inches above the knee. That’s a lot more material. And the only other rule for the men is that the shorts be not too baggy. So the Norwegian volleyball team, the women’s handball, is it handball?
S3: Handball, OK, beach handball, which I learned is a different thing from volleyball.
S2: I didn’t realize. Thank you, Stacey Beach handball. They were like, this is absurd. And they protested by wearing shorts. They still have crop tops on, by the way, like they still look amazing and they were fined. And it doesn’t seem like there’s going to be any change in this area.
S1: I will quote the one and only Boris Johnson here. When the when the Olympics were in London in 2012, Boris Johnson was the mayor of London. And when he was trying to get Londoners enthused about the Olympics because Londoners are grumpy and they didn’t much like the idea of hosting the Olympics. And when he was getting into the full Olympics for his actual direct quote was, there are so many naked women playing beach volleyball, glistening like wet otters, that this is basically everything you need to know about.
S3: Why does Boris Johnson find us as attractive? There’s the question like, why is that the go to match for? I have questions.
S2: I could be a Netflix show about that. I know about people. And Otter’s not just the number three,
S3: but Oxfordshire is disturbing enough.
S1: My number is three hundred thousand dollars, which is the amount of money that Wal-Mart had to pay after they got found guilty of discrimination against a disabled employee and its employee had Down syndrome and really needed a bunch of very strict scheduling and routine. And then they just started mixing up the routine and the schedule for no particular reason. And it all ended very badly with them firing the employee. And the employee sued and won and the jury awarded a fine of one hundred and twenty five million dollars. And this was a clear message from the jury to Walmart saying, like, do not do this. Your employment behaviour is terrible and you have to stop doing it and pay one hundred twenty five dollars million. And Walmart sort of said, ha ha. Under federal law, our damages are kept to 300000. So I don’t care if you’ve awarded us one hundred and twenty five million, we’re just going to pay three hundred thousand and just keep on doing what we’re doing.
S3: Great. Yeah. Shout out to lawyers.
S1: Stacey, your number.
S3: My number is three hundred sixty three thousand three hundred, which is the new US median home price, which is an all time record. And I found out about this because I have never really been able to get off the mailing list of the National Association of Realtors for like the most, someone should write a book about the ability of this realtor association to be just like effusive, optimistic and enthusiastic about at all times, like at the height of the subprime crisis. They were like, it’s going to go back up. It’s fine. Turns out you can be right eventually.
S1: So this is actually fascinating that Lawrence Yun, who’s the chief performance of the National Association of Realtors, lovely guy, actually has for the past, I’m going to say two years or so been really sounding the alarm in terms of saying that house prices are too high. And this is a major problem in a way that the National Association of Realtors has never said in the past. And even the NRA is now coming out and saying, like, well, obviously on one point, on one level, self-serving. And there like we should build more houses because that’s the only way that we can get prices down, which is basically true. But also, it’s fascinating to me that they have basically moved away from their former position of home prices going up as always and everywhere. A good thing. Now, they like what there is a point at which it stops being a good thing and starts being a bad thing.
S3: And that point is three hundred sixty two thousand three hundred.
S2: I mean, we’re really in the midst of an astonishing housing boom. I mean, from everywhere there’s like a story in a newspaper every day about. People getting outbid on homes that don’t sell in
S3: cash, street
S2: cash like homes in Idaho that are like 400000 dollars and are just regular like little suburban whatevers are going for insane amounts of money.
S1: Yes, to be clear, it’s a house price boom. It is not a house construction boom, partly because of lumber prices. But they’ve come back down, but also just because of a bunch of constraints in the construction labor market. We are building more houses than we have done over the past few years, but we’re not building nearly enough houses. And the private sector,
S3: high density
S1: housing. Right. And the private sector is doing not as well as it should be in terms of building like a large number of multifamily dwellings in all of the other things that we need in order to be able to cover America’s housing shortage. The way I always like to think about this is that you are born the short housing, and you need to cover that short. And you can do it in one of two ways you can rent, in which case you cover it for like a year and then have to find a new way of covering it. Or you can buy, in which case you more or less have covered for life. But that’s very expensive. And we have, whatever it is, 250 million Americans. And we need to they all need to come out and cover that short somehow. And all of that money is chasing not enough houses. And you get this short squeeze, which is what we’re seeing right now.
S2: People should listen to our episode with Conor Dougherty for more on that. I would say
S1: so. That’s it, I think, for state money this week. Thanks so much for listening. We are going to have a weight loss, a staple of food forgotten. We are going to have a sleepless segment about all the ways that you can buy and sell shares in private companies. We know how to buy and sell shares in public companies. You can do it in private. Companies do. We can talk about that in Slate. Plus, we are back on Tuesday with a sleep money, goes to the movies episode with another one of Stacy’s former bosses. Ben Smith is
S3: just like, how many places are Stacy-Marie? Let’s get over.
S1: Ben Smith now of The New York Times, formerly of BuzzFeed, is going to talk about Citizen Kane and media moguls. And other than that, it just falls to me to think Jessamine Molli for producing and to ask you to keep those emails coming. So late Monday at Slate dot com will be back the following Saturday with another regular sleep money. Which is the you can buy and sell shares really easily in any company like you, just open up an app and boom, it’s done. Not go. If you want to buy shares in a company that isn’t public, how do you do that?
S2: That’s really tricky. Felix. I read a story that you wrote or a blurb in your newsletter, a story and a blurb in your newsletter about a new way that people can get access to private shares, because in my mind, it’s like, well, that’s not available to me. I can work at a company and get its shares if it’s private, but I don’t know how to do it if I don’t work there.
S1: And it is hard and companies do control the distribution of their shares quite closely. But if you start looking out there at startup land, there’s a huge number of companies and honestly, that’s dozens of them. But the biggest one is called Khater Equities in and many others and also, of course, a bunch of crowdfunding companies, which if people want to raise money on the Internet, they can now crowdfund their equity raise by selling shares to individuals. And this is huge business. And it’s not just like hot VC funded technology companies for people. I want to buy shares in this rocket ship. It’s also companies that have come out of bankruptcy are owned by their former creditors. And their former creditors are like, great, I have this equity in the company. It’s worth something. But I’m not someone who particularly wants to own all of this equity in this post bankruptcy company. I want to sell it to someone. And that equity has always sold in this very sort of opaque and mysterious market brokered by like distressed debt desks that sell side institutions. And it’s hard to find. And now everyone’s saying, well, OK, let’s create platforms where if everyone all goes to the same place at the same time with the stuff they want to sell and the stuff they’re interested in buying, we can have something approaching a stock market and it won’t be quite as liquid and it won’t be quite as transparent. And the companies will have a little bit more control over who’s allowed to buy and sell. But there’s a market there and we saw this with Facebook famously before the IPO. Facebook was one of the last companies to really give all of its employees stock. And the company employees, once they had all that stock, could sell it and they would sell it in these periodic auctions that were offered by a company called Second Market. Second market would like run the auction and people would make bids about how much they wanted to buy and how much they wanted to sell in the market would clear there was a downside to this, to Facebook, and it wound up basically with a gazillion shareholders and had to go public because it had so many shareholders after Facebook companies stopped giving their companies stock. Pretty much it almost never happens anymore. Now you get options or refuse or those that don’t have votes and rights. But the bigger picture of like people just wanting to either buy or sell the economic interest in the company that they have is something which has been like, I want to say, like the future of equity markets for many years. And it’s now beginning to look like it’s actually a real big thing because Carter just raised money at a seven point four billion dollar valuation, which is massive. And Nasdaq private market Nasdaq wound up buying second market, which was the platform that Facebook used. And now they’re spinning it off into this. I don’t know what it’s going to be called, but it’s going to be based on Nasdaq private market. But now they have Goldman Sachs and Morgan Stanley and Citibank and Silicon Valley Bank are all putting money into this, presumably hundreds of millions of dollars each. And it’s interesting to me that we could see a lot more liquidity and a lot more price discovery in private companies than we do right now.
S2: And you should mention also like players like Robin Hood who are selling shares of it, they’re selling shares of Robin Hood before the IPO to their customers.
S1: Well, at the IPO price, that’s just a standard IPO. That’s that’s exactly
S2: why their company is doing this, where they’re offering shares of themselves, even though they’re private to customers.
S1: True, if you’re a private company, you can give your shares to anyone you like. And those shares are really only valuable if you’re going to be able to sell them somehow anyway.
S2: What are you going to say, Stacy-Marie?
S3: Do you think this potentially increased liquidity will have any effect on Xbox? Because I remember in the very early days when I worked at a venture capital backed media organization that allowed employees to buy options, et cetera, et cetera, one of the big conversations was always, well, if they never IPO like, what’s the liquidity for the people involved? What’s the liquidity for employees? And I think there are lots of employees all over the place, primarily in Silicon Valley, but not exclusively, who have, you know, attempted to argue that, hey, actually, like, if I want to be able to have an access, I’d like it’s helpful for you to have an accident. I think sparks have helped solve that for certain of these considerations. If private market activity becomes more straightforward, is there going to be any knock on effect?
S1: Yeah, like one of the reasons why. Companies want to spark or want to go public is precisely because. Their employees are demanding access to that kind of liquidity, so if that liquidity exists in a non-public fashion, then there are definitely advantages to them remaining private. And one of the things that we often see on these platforms for trading private shares is that when you are vested as a private company employee, often, as I say these days, you don’t really own shares, you own options. And then what you have is the option to exercise those options and to buy shares at a certain price. That act of exercising your options and buying the shares at a certain price is very expensive. It’s expensive in terms that you need to find the money to pay for the shares at the strike price, but normally even more expensive as you need to pay taxes. This is a taxable income event. And so a lot of people don’t do it because they can’t afford to pay the taxes involved.
S3: Like me, for example, I did not buy buy shares.
S1: So a whole little you sub industry has now sprung up where individual investors who want exposure to these private companies will basically front you the money to pay the taxes on your option deal and make sure that you have the money to be able to buy the shares and pay the taxes. In return for that, they get an economic interest in those shares. And then once they have that economic interest in those shares or kind of they have the shares at that point, they get 20 percent of your shares or something like that, then they can turn around and sell those shares on these private markets. That’s one of the main ways that it happens.
S2: Makes sense to me. I mean, there’s all this money kind of all locked up and people money will find a way to get it right.
S1: It’s very much in the interest of the board and the CEO to. Try and make this difficult, but there’s so much pressure from would be investors and would be sellers that, yeah, I think this is going to happen more and more.
