“Dear Jay” Letter

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S1: This ad free podcast is part of your Slate plus membership.

S2: Hello, welcome to the Dear Jay Letter episode of Slate Money, Your Guide to the Business and Finance News of the Week Week in which Treasury Secretary Steve Mnuchin seems to have broken up with Fed Chair Jay Powell. I am Felix Salmon of Axios. I’m here with Emily Peck of Huff Post. Hello. I’m here with Anish Shamansky of Breakingviews. Hello. We are going to talk about this breakup, which came in the form of a letter from Manoogian to Powell, a letter which we’re going to unpack. We’re going to talk about a whole bunch of companies that have filed to go public this week. We’re going to talk about BMB. We can talk about AFIRM. We’re going to talk about Dorje Dash. We’re even sort of on Pessl. I’m going to talk about Pilton, which turns out to have been a large part of the firm’s business. And we have a Slate plus segment about traveling for the holidays. Should you do it, even if you think you’re going to be safe? Emily is shaking her head. Emily, should you travel for the holidays?

S3: Absolutely not. Do not travel for the holidays.

S2: The sleepless segment is a little bit more involved in that, but that’s the Delta. Stay tuned. All of that coming up on Slate money. So let’s talk about the Federal Reserve and this amazing dynamic duo that we’ve talked about before on this show of Jay Powell and Steven Mnuchin working hand in glove together to provide the kind of backstop that has undergirded a surprisingly strong recovery from our spring doldrums. Looks like suddenly this hand in glove, we love each other. Relationship between Stephen Manoogian and Jay Powell has become a massive, great fight. What on earth is going on, Emily? Do you have a clue?

S3: I have a clue. It appears that the honeymoon period between Steve and Jay is over, as you said, because on Thursday, Steve wrote him like a Dear John letter. Essentially, Steve Martin wrote to the Fed and said, everything seems like it’s not you, it’s me.

S2: Yeah.

S3: Yeah. Everything seems better now on the economy. Banks are doing well and we don’t need some of the emergency measures we put in place back in the spring. And Anna can talk more about the specifics of those measures because I’m probably not the best one to explain them. But they involved basically Congress letting the Fed lend out a bunch of money to organizations that normally doesn’t lend a bunch of money to it, didn’t even lend that much of the money. And again, I would defer to Anna’s expertise here, but it was providing like psychological insurance, I think, to broadly the markets.

S2: Yes, for the markets. But more to the point, like before we get into the specifics of the 13 three programs and all the rest of it, I want to just stay at the high level here, which is to say he really did do the deal. John, it’s not you, it’s me thing. He really did come out and say, listen, it’s not up to you. These programs are not up to you. It’s what Congress wants. Congress wants these things to expire, which you can debate that I’m taking my money back. I’m picking up my ball and going home. And he did this in a very unilateral way. And he did this in a way that for the first time that I can remember since the crisis started or even pre crisis, the Fed came out with the public statement saying, what in everloving fuck do you think you’re doing? And I’m you know, again, putting aside the whole question of what these programs are and how they work, I have never seen this much distance between Treasury and the Fed, like literally in, like, decades. It’s kind of amazing to me that he would create this rift like this.

S4: The way that Manoogian and Trump are doing this is just incredibly unwise, very, very poorly designed. We can get into whether what they may be intending to do is actually unwise. But I think the way they are doing it definitely is.

S3: One thing I couldn’t really figure out from reading the coverage was why? Why is he actually doing this? I mean, the Times framed it as this will weaken the incoming Biden administration, because if they want to tap this resource, they’ll have to sort of do more stuff to restart it. But I actually is that why, like, I don’t understand why not just let it go?

S4: I think there are two there are two ways to think about this. One can be to think this is just Trump and Manoogian being petty. This is just them saying, you know, we don’t care about the country. We want to screw over Biden. The other way to think about this. Is that potentially they want to be able to get some type of stimulus done and it is going to be easier for Republicans in Congress to say, oh, we’re not spending new money, we’re just reallocating money that we already spent. And it is possible that that is partly what they are doing. Now, that is still dumb because there is no reason to create the danger that you do by removing this money when you could simply just borrow more. But I do wonder if that’s actually maybe what’s behind this.

S2: So that’s the stated reason for Manoogian, who came out on CNBC on Friday morning and basically said, in as many words, this is a lot of money, which is just sitting there not doing anything. I want to take it back, bring it under the control of Congress and spend it on small businesses and people who really need that money, as you say, and like that seems a little bit weird because if Congress wanted to spend money on small businesses, they could just pass a bill spending money on small businesses. But that’s the stated reason for this. And then and then the opposite idea is that the Trump administration in the lame duck is deliberately setting a bunch of fires and salting the earth and basically making life as difficult as possible for success, a Biden administration and whether or not that is intent. There is no doubt that this move would be consistent with that reading.

S4: Yeah, although I do think it’s interesting to think about what these programs were designed for, though, outside of like, oh, we think Trump is crazy, OK, we all agree with that. But like looking at what these programs are actually designed for, the fact that they like quote unquote work being used is really not an accurate way to think about it, because these programs are designed to provide confidence to the market so that companies will go to the private banking sector to get funding. If these programs have been completely tapped, that actually would be a sign that they weren’t working.

S2: So the word we we need to use here is bazooka. This is this is a classic bazooka thing. Right. Which is dates back to the what I still think of as the financial crisis in 2008 when the Treasury secretary, Hank Paulson, and he said, if you have a bazooka, then you don’t need to use it. If you give yourself a huge amount of firepower, then that means that people are going to know that you’re there and you’re not going to need to use it. In fact, he gave himself a bazooka and then he needed to use it. It didn’t work back in 2008. It worked this time around. He gave the nomination and the Fed created this bazooka. And the proof of it working was that it didn’t need to be used. The idea is that in extremis, these nonbank companies, the Fed is now allowed to lend to under these 13 three programs could go to the Fed to borrow money from the main street lending facility, from the municipal lending facility and places like that. And because they could go to the Fed, the market knows that when push comes to shove, they’re not going to go bankrupt because they can always just borrow the money they need from the Fed or they’re not going to default. They’re not going to have, like, major debt distress because the Fed will always be there for them. If, you know, the borrower is never going to go into major that distress, then you feel much more comfortable lending to that borrower yourself. And that’s exactly what happened. The market just came in and lent to those borrowers themselves. Now, there’s a little bit more of a question about whether those borrowers will actually be able to borrow from the Fed if push came to shove. And we don’t know what the answer is anymore.

S4: That is the danger here. The danger is that markets will start to get very anxious, that spreads will blow out, that companies will have a harder time raising funding in the private market.

S3: I had been thinking it along a very personal lines because a few years ago we spent a bunch of money on a renovation at our home more than we had planned to. And Christmas was approaching.

S2: First of all, the renovations, they always cost more than you planned.

S3: It was the first time and yeah, it was bad. And so Christmas was approaching. Our bank account was also approaching like very low numbers, very terrifying numbers. But like it’s Christmas and we have kids. And like one day we know, like, everything will kind of work out. I’ll get paid, the money will come back or whatever. Nevertheless, we did borrow some money from a relative and we never used it. We just parked it in the bank account. And I know this is a very privileged take. We just park the money in the bank account and we like we’re able to spend money on like Christmas just with the, like, psychological knowledge that there was this, like, backstop in the bank account. And we knew we had to pay it back sometime. But like without that, I think we would have just not done anything. It was just like we needed the psychological reassurance.

S2: This is exactly what happened. And I have the exactly the same story. When my grandfather died, my grandmother was. She’d never really looked after their finances and she was worried about running out of money. There was no way she was going to run the money. She had all the money she needed. It was not a real problem. The money would come in, the money coming in with much more than what she was spending. It was fine, but she needed a little bit of psychological reassurance. So what we did was we sold a bunch of my grandfather’s wine, put it in the bank account. So there was an enormous amount of money in the bank account and then she was fine. Then she never worried again. She never touched that money. We knew she wasn’t never going to touch that money, but that money was still incredibly useful.

S3: Everyone needs, I guess, a rainy day wine collection to backstop them financially.

S4: I guess I would say, although I’m sure we can all agree that this is a dumb move, they should not be doing this. I do wonder, though, if they actually take the money and actually use it to engage in more stimulus that they may have not politically been able to do, even if they literally could have been able to do they may not have politically been able to do it. Is that not potentially a better use of the money if right now markets are functioning perfectly fine, if anything spreads are narrow, then they probably should be? Again, I’m not saying this is the ideal solution, but if that’s the only way you can get stimulus done in the next two months, maybe it’s not the worst thing in the world.

S2: Yeah, the answer to that is unambiguously yes. If if this brings the possibility of a second round of stimulus, you know, in the next two months up from whatever it was before, like, I don’t know, 10 percent to something more like 50 percent or 60 percent. Like if this really does assuage Republicans in the Senate to the degree that they’re like, oh, I already spent this money, of course we can do more stimulus. I was worried about deficits before. But now I’m not worried about, though, if if that works on any kind of political congressional politics level, then maybe it will have been worth it. But I have seen nothing from Congress, from either side of the aisle suggesting that like, oh, well, this is money we just took back from the Fed. So it’s easier to spend is really a part of the calculus.

S3: And was Manoogian on Friday talking about using the money for PPY, which to my mind is one of the least successful stimulus pieces of the stimulus that was that was absolutely was.

S1: You know, that just it’s still more useful, though I would argue that it would still be more useful. And anything we can do fiscally with this money is more useful than what we are currently doing. Again, not saying that we shouldn’t just do both, that we are there is a danger. There is a very real danger to the markets by removing this.

S2: There was definitely noises about like maybe what we do is we create like a special PTP program for restaurants or something like that. I don’t think that the people who would look exactly the same as the original people, but like there would be a headline about small business, something something because small businesses are the one sort of Venn diagram overlap when it comes to stimulus that the Republicans and the Democrats can agree on. Everyone wants to support small businesses. So that’s the easy bit. And if we can throw, you know, one hundred and fifty billion dollars, that small business is like, that’s better than nothing. So we had a bunch of IPO filings this week, which I wrote about in my newsletter and I want to talk about on the show, because it’s a fascinating set of companies, the one I know the best, which I’m going to start with just because I know it the best, is a firm which is an American version of a European company called Kloner, which is very, very successful. And it’s basically a kinder, gentler form of credit installment plan, rather than just having this single credit card, which you used to pay for everything. And it’s a payment device and also a borrowing device. And those two things get confused. A firm is much simpler. It’s like you are buying this specific item. You’re going to pay off this specific item over time. And then every month you will see a very predictable amount of money. Leave your bank account, which you can think of, which is you paying off that specific item which you still have and you’re getting benefit from. And it feels like there’s so much more connection there between I’m paying off this item and the amount and the connection between the money that you’re spending and the good that you bought than there is with credit cards. It’s an interesting and I think positive innovation. Emily, you with me on this one?

S3: Yeah, actually. I mean, I didn’t know that much about a firm, but basically it’s like if you’re checking out and you’re buying something online, you just decide to pay via this afirm. So you make monthly payments that could be as low as zero percent interest, which is really cool. Like if you pay something off over three months, there’s no interest, which you can’t do with a credit card, obviously. So it seems like a very reasonable and unsurprising option. Like apparently they tell you how much your payments are going to be. They tell you where your interest rate is, which is actually a little bit different sometimes than credit cards, which can surprise you. And then I just started thinking, wouldn’t it be great if people stopped buying stuff, you know, on credit like that, you know, with their credit cards, like, wouldn’t it be great if credit cards weren’t weren’t as popular? So it does seem like kind of a good a good thing.

S2: I think it is it is a good alternative to credit cards for people who don’t pay off their credit card every month. You know, you don’t have penalty fees, you don’t have late fees. You don’t have massive, great interest rates. And one of the interesting things about this is that the credit card companies don’t have, like, direct relationships with the merchants. Right. The merchants just go through a bunch of rails and that goes through. But it’s not like they have a direct relationship with the firm is very different. The reason why a firm can offer zero percent interest on, say, Pelton’s is not because like there’s zero credit risk, they’re lending you thousands of dollars to buy this Peladon. They’re taking credit risk. People will default. But it’s because Peloton pays a firm a bunch of money every time someone uses a firm to buy a peloton. Right. Every time you get zero percent financing from a firm, it’s not like a firm is doing that out of the goodness of its heart. It’s because they’re getting money from the merchant that there’s a little bit of that profit margin that is going from the merchant to a firm in order to pay for all of that credit risk and financing that firm is doing. And so the cost of the credit is being hidden in a way. And I don’t always love hiding things. I like things being more transparent. It’s not transparent how much is being paid and how much the actual credit is. But as far as the consumer is concerned, it’s all just bundled up into the sticker price of the product. And once you’ve paid the sticker price for the product, that’s all you’re paying. There’s no like extra surprise interest on top. And I think that’s good.

S1: I’m a little bit more skeptical in terms of using it on a broader base. Like I mean, I think if you’re talking about one or two expensive items that you might not buy otherwise and you will buy because it’s easier to eat these kind of smaller payments, then fine. If you’re talking about every individual product that you would normally buy with a credit card, all of a sudden having an individual loan that you’re paying off for every single different thing.

S2: Well, I don’t I don’t think I think I think that’s a straw man. I don’t think anyone is talking about that. Right. And I think that if you if you talk to Max Levchin, who’s the founder of a firm, he’s very clear that that’s not where he wants to go with this. He does not want people buying like restaurant meals with a firm because like that’s an experience that disappears. And if you’re still paying off a restaurant meal three months later, that feels really weird. He does not want it being spent on like small ticket items that you can just use the money in your checking account to buy. The idea is very much that it’s for a relatively small number of consumer durable goods will be things like, you know, an expensive mattress or an expensive item of clothing or something special. Like, maybe once upon a time, you might feel like you wanted to save up for, but now you’re just kind of saving up for it backwards.

S1: Yeah, it’s fine if we’re using it for not to replace credit cards, which we suggested a few minutes ago, but to say, OK, no, you’re using this for a limited number of goods and fine. Now, whether or not that makes sense for this company long term is another question.

S2: Well, no, I think so. So let’s just be clear about the replacing credit cards thing. Right. As I was saying, there’s this very unhelpful confusion about what a credit card is. It is a borrowing device and it is also a payment device. A firm is not trying to replace a credit card as a payment device. A firm is trying to replace a credit card as a borrowing device. Most of the things that we use credit cards for, we use credit cards for because we’re using the credit card as a payment device, not as a borrowing device. If I buy a five dollar sandwich on a credit card, it’s not because I want to borrow money to buy the sandwich is because I just want to pay for the sandwich and the credit card is convenient. So those kind of convenient transactions where I have the money, like what Max would say is like use your debit card for that, use your checking account for that, or for that matter, use your credit card for that if you’re going to pay off your credit card every month. It’s just if you want to borrow money to pay for something, if you specifically want to borrow money to pay for a specific thing, then that’s where reform comes in.

S3: Yeah, that’s what I meant. It was a good option for people who don’t pay off the credit card bill every month because they buy stuff, big items or whatever that they can’t afford. It’s better to have zero percent interest than like 18 percent or even higher, sometimes twenty nine percent. My one thought was we’re increasingly living in this like monthly fee world where everyone is people are subscribing to all different kinds of things like razors and the Palestine fitness app and Netflix and like six other streaming services, like if you looked at your credit card bill in a given month, you probably see so many different monthly figures, a monthly this than that. And it all starts to add up after a while. And even even like if you’re buying a peloton or another big ticket item now at this service, it’s like we’re heading into this world where you think you don’t know where your money is going anymore, because every month, like little fees are getting sucked out of your bank account or your credit card bill, that you it just seems like an explosion of this like monthly fee consumer world.

S2: Absolutely. Everything is becoming a subscription. You know, media is becoming a subscription, as you say, toothbrush. It’s a becoming a subscription. Everything is a subscription is great. And honestly, I’m yeah, I’m not sure I really want a subscription to toothbrushes, but there is it’s the model these days.

S1: Yeah. It’s no different. I mean, it’s just we’re shifting towards a more kind of intangible market where more of the things we buy are not necessarily some physical things. Some of them are like toothbrushes. So you’re going to pay more by subscriptions or otherwise. You may have paid for more physical things, but it’s the same thing. It’s just you. We happen to be purchasing different types of products now than we did.

S3: No, I mean, I think the point is demanding more money because you don’t have the keeping track of it. It’s not tangible anymore. And it’s more diffuse through like your system, like there’s more payments to keep track of. You’re not really having, like, tangible contact with the pen.

S2: I don’t think and I don’t think tangible vs. intangible is the question here. The question is, are you paying money for things one at a time or are you paying money for things as a monthly fee? And, you know, one look at the Microsoft share price will tell you that Microsoft is making a hell of a lot more money selling Microsoft Word and Microsoft Office as a subscription than it ever was. Selling Microsoft Office is something which you bought for however many hundred dollars in one of fee. And that kind of move from turning everything into a subscription, putting everything into the cloud, even toothbrushes. You know, we I’m quite sure that people spend a lot more money on toothbrushes when they have a toothbrush subscription than they ever did when they would have to actually go down to the drugstore and buy a new toothbrush when they wanted to replace that toothbrush. So, yeah, it’s the subscription economy is great for businesses. I do think I do agree with Emily that it does tend to lead to consumers spending more money overall.

S3: Should we talk about a firm’s IPO and how much of it hinges on peloton? Apparently like it’s 30 percent or something.

S2: So that yeah, that’s that’s the other big thing about a firm is that from the very early days, a firm in peloton had a very close relationship. The terms were extremely expensive. And so Peloton needed a way to allow people to pay them off. Over time, a firm came along and said, we can do that for you. And they put this relationship together then, as we all know. Peloton exploded, especially post pandemic, and now in the third quarter, peloton alone accounts for 30 percent of. The firm’s revenue, which is enormous and on some level, if you are being naive, just looking at the top line of a firm could be worrying like, wow, so much of a firm’s revenue. Is this one company that can’t be good for a firm? I think most people looking at the firm a little bit more sophisticated than that. They’re looking at the core, a firm product which is really not aimed at peloton consumers. It’s aimed at people with much less money than that. And they’re saying, well, that’s growing at a certain rate. And then on top of that, we have all of this amazing peloton gravy, which is great as long as it lasts.

S1: I don’t know if you look at what a firm has actually put out, they’ve made it very clear that they’re targeting luxury products. It’s millennials to buy luxury products. They’ve been very clear about that. So I actually do think that there is a concern that you have so much of it tied to one product that happens to blown up because of the pandemic and also of goods in general, that because a lot of people, they haven’t lost their jobs, have been stuck at home over the past eight months or whatever, they’re spending more on goods than they are because they’re not spending on services. So that can help a company like a firm look really good right now. Does that mean they’re going to look that good in another year or two? Probably not.

S2: It depends what the luxury products are, right? I mean, we’re buying polytunnels. We’re not buying, like, expensive dresses. Maybe in a year’s time we’ll be buying fewer Pelton’s and more like couture. But who knows? It’s true. Like there is this tension in if if you’re the kind of person who can afford something and just pay cash for it, then you’re not the core AFIRM customer. But I think a lot of the peloton buyers are in that category. Right. They probably did have enough money to just buy the peloton. They just didn’t want to write a two thousand dollar check so that they’d rather do it on a monthly basis because it’s zero percent interest.

S3: Do they do anything with cars? Because that’s obviously could be a big segment.

S2: That question. I think that’s that’s an obvious place for a firm to move into. They’re not doing it yet. So car the super interesting because they actually work the opposite way. If you buy peloton, then what happens is the peloton very quietly without you seeing it writes a check to the financing company that is a firm and that allows you to buy the peloton on an installment plan on paying a monthly fee. If you buy a car, it’s the other way around the financing company. The lender writes a check to the car dealership. And the car dealership uses the financing as a not as a cost center, but as a profit center. So a firm is going to find it incredibly difficult to compete in the cars because it can’t effectively bribe the dealerships to, say, use a firm, because the way it works is so clean and transparent in order to. Be able to compete in car dealerships. They basically need to get into the whole Civica financing world, which is very opaque and very scary. And so I’m not sure they’ll be able to break into cars, but it would be good if they could because it is much more transparent.

S1: Yeah, the auto the large auto companies also have their own financing arms, which are which are profit centers, right?

S2: Exactly. But that’s the point. My point is that the financing is very rarely a profit center immersions. So what we’re on the subject of IPOs, look at this erbium be the classic service in the hospitality and travel industry like services went off a cliff in the pandemic. Hospitality and travel went off a cliff in the pandemic. Suddenly, Airbnb is coming out with this IPO and it’s doing great. Who knew?

S3: Airbnb has a great, like pandemic comeback story in March and April. You know, when covid first heated up, their business fell off a cliff. Essentially, they did layoffs. They cut slashed costs. They did everything they could to lean down. And then what started happening in the summer is people still wanted to take vacations. They didn’t want to go really far. They didn’t want to go stay in hotels. So Airbnb is business actually picked back up and people were like taking, you know, like driving vacations to the town next door or whatever and booking Airbnb. And it actually managed to eke out like a little bit of profit even. And now the company has actually been able to hire a few people back from the layoffs. And it seems like some of the moves that CEO Chesky made, like slashing marketing costs, are going to be permanent, like maybe came to his senses about some of the hot tech companies spending too much money thing. He kind of like came to his senses from that and learned some big lessons from covid-19. And longer term, I feel like the company is in a good place to do well because I think people don’t want to stay in hotels and would prefer to stay alone in a house or something. And I know, Felix, you wrote about also how Airbnb is leveraging, like not being in big cities and being sort of more geographically diverse as well.

S2: Right. I had a summer holiday booked this summer in Denmark and we had bookings in hotels and we did not stay in any hotels in Copenhagen. We wound up getting into our car and driving off to an Airbnb in Maine. And that is exactly the covid story of Airbnb. In a nutshell, it was not like some glorious big city. It was a remote little cottage. And that’s where Airbnb shines is in that kind of long tale of much less dense areas. People who are working from quote unquote home are really just working remotely. And sometimes you get bored at home and you say, like, why can’t I work from a beautiful cabin in the woods? And so you Airbnb out a cabin in the woods and everyone wins. So the Airbnb business model turns out to have been much more robust to a pandemic than anyone really thought back in March and April and quite possibly will survive the pandemic as well. Like, you know, the. Extra range of possibility that you have from Airbnb, like once people have begun to understand how. Nisa is not to have to deal with all of the humans in hotels. Maybe they maybe they’re just going to start doing that.

S3: Yeah, maybe. And one thing I wanted to add from my research is that Airbnb also handled its layoffs pretty well. They laid off a quarter of their staff. They gave everyone a year of health insurance and let them keep their laptops and even created like a website listing all the laid off employees and I guess their resumes or whatever to make it easier for them to get hired. And there even some laid off workers quoted in the journal saying like they did a good job with this. So I thought that was nice because a lot of companies that are really bad job in March and April doing layoffs like en masse over Zoome calls or conference calls and things like that. So I just wanted to put that in there, too.

S1: I agree. I mean, I do think part of the reason they have the flexibility to kind of switch more towards maybe targeting the local stays or cutting expenses, doing this is partly because though they’re not the traditional hospitality company that might have a ton of employees, including a ton of low paid employees. So that’s also one of the reasons that they can they can do that.

S3: Yeah, for sure. Much lower overhead. Also, that whole working from home and a remote cottage thing made me think of we work, which is now trying to do some kind of like you can have a we work for an hour or an afternoon. Right. With an app or something.

S2: Yeah, exactly. But, you know, we work on demand app to find that we work. Yeah, I get that. I wish you guys could. We could see Emily’s face with her scrunched up nose going, no, I don’t want to wear a mask. You know, we work. No, I want the man to be my we work. The other company that really did well out of the pandemic was Dorda Ash, which also filed to go public this week. Everyone was stuck at home and they got sick of cooking and they started ordering in meals. And they actually, again, another company which turned a surprise profit for one quarter. They do have a bunch of low paid employees, a million of them, although they’re not technically employees, they’re called dashes. And you do have to wonder if those dashes were counted as employees rather than like independent contractors or whatever, like there would be no way that this business made sense. I’m still not even sure. To be honest, the business does make sense. I’m very skeptical that this sort of these three sided markets are particularly easy to navigate, because what DOD actually is trying to do is it’s trying to basically charge a bunch of money from customers for the convenience of having that food delivered, charge a bunch of money from restaurants for the supposedly excess revenues they get from food delivery, pay a bunch of money to the delivery people, but probably as little as they can, and then keep some money for itself and trying to optimize all of those different things at the same time. It’s hard in a world where historically a restaurant meal was just you went to a restaurant and you paid them money and there were only two individuals involved. Now you have a delivery person and or that, you know, that just raises costs for everyone. And it’s easy to see how people don’t want to pay those extra costs. And it’s easy to see how that’s just losing money.

S1: Jordache didn’t just benefit from the pandemic. They also benefited from the election in California where Prop 22 passed so that there these workers are exempted from being considered in place.

S3: We talked last week with Jacob about business changes stemming from the pandemic and which are going to stick and which aren’t going to stick. And I kind of feel like what door dash does which and a lot of remote suburbs is deliver fast food to people in their homes. I just think once we can, like, get back to normal, no one really wants delivery. McDonald’s or Taco Bell like those are I think most of the time it’s really convenient to just go to those places and getting them delivered. Like once the heat comes off of that food, it’s 7000 times worse. I just don’t I don’t think the demand I think the demand will evaporate a little bit, the high demand for that kind of delivery.

S2: There are reasons why historically delivery has been concentrated in Chinese food and pizza, you know, certain foods themselves to delivery other foods, not so much people don’t like. If you order a ravioli doesn’t work so well.

S3: French fries are historically and forever terrible, delivered because they steam. There’s no way to deliver a French fry. It’s and that’s like fifty percent of a fast fast food orders or French fries. Right. So right there. I just don’t think long term it’s happening for this company.

S1: I would just like to say that they burger I don’t know what they do, but they’re French fries arrive perfectly crispy. I don’t know if they put something on it. I have no idea. But this is my Friday meal. I have every right to get a right at a. Hamburger, and they’re always perfectly crispy and they’re the only ones to do it if you order from anywhere else, they’re not. So somebody have a picture of the container, because now I’m very curious. Yeah, I. Well, it works. I don’t know.

S2: How about a numbers round people, Emily, did you bring a number?

S3: I did. I did. You asked us to do it every week. So I like to prepare. And do you know, around the kitchen table at the household, everyone’s always like, what’s your number going to be? Oh, wow. Really into it. Yeah. So my number this week is five. That is the number of workers at a Waterloo, Iowa pork processing plant owned by Tyson that died of covid-19 or that we know have died of such a nasty story. Yeah, in a really nasty story, there was a wrongful death suit filed against Tyson over conditions in this plant. And I guess the headline nugget from the suit was that managers at the plant were actually betting money on how many workers would get sick. And on top of that, they were forcing workers who were sick to continue working, sending them back to the line, even if they were visibly ill. At the same time, you know, this is the company that was paying 500 dollar bonuses to people who had perfect attendance during a pandemic. When a local public health official came in and said, you know, I’ve never seen or I’ve seen conditions here are so awful. And you want to think the story is kind of like a one off. But I really think it is. It’s just an example of how our systems really failed these workers in this pandemic. I mean, it’s really tragic. So that’s my number.

S2: My number is eight, which is the position on the list of Airbnb top ten cities that you find Toronto, which is no one’s idea of a major tourist destination. It is the eighth biggest city in the Airbnb universe. And it’s on there with like San Diego, which is more of a tourist destination, but it’s also quite suburban. And I just I’m and also the other thing which you learn from reading the Airbnb filing is that none of these cities is the biggest city of all is London. But none of these cities account for more than like two and a half percent of Airbnb revenues. They really are very distributed and diverse company. And it does show that there’s a lot of demand from people who need a place to stay in Toronto. And there’s not a huge choice of hotels. And if there is that one in the city center and probably people want to live, you want to stay near their families in the suburbs. And so Airbnb is perfect.

S3: First, Felix, I feel like you’re going to get a lot of emails from people in Toronto upset with the way you have just described their city to name a single tourist attraction in Toronto. Name was C.N. Tower. Isn’t that a thing? I don’t know. I’ve been there. It’s a very nice city.

S2: Yeah, I have no I have no roaming Toronto. I’ve been I’ve been to Toronto many times. There’s some decent Indian restaurants there, but. Yeah, no.

S3: All right. Also, I had wanted to say in that earlier Airbnb, a conversation that a lot of cities have pretty strict restrictions on Airbnb are there. There’s like a push for that.

S2: So that’s another reason why New York is the biggest is the second biggest city in all of Airbnb. And it’s basically illegal to be anything in the UK, which is of No. One that says so.

S1: I have two different numbers and I think I’m gonna use the one that’s less finance related.

S2: So my number is new. OK, all right. With your weight, I want to ask, is the finance related one? Was that minus zero point one five two percent?

S1: It’s not, although I know that that’s the Chinese. You know, I think you are going to use that one. You know, it’s funny you mention that because I was actually going to say that I was like, no, I think you look back now, that was not the one, but the finance one was related to a carnival unsecured bond. But the no, I’m going to use is three hundred or technically more than three hundred, so. As many people may have heard, there were these people in Wayne County in Michigan who work in a refused to certify the election results in Wayne County. And so then they said, OK, we’re going to resume call. And it was originally supposed to be a 100 people, but so many people wanted to be able to zun call that it was ended up being slightly over three hundred people. And they just basically all screamed at these people who were saying that they weren’t going to certify the results. And so then they reversed themselves and said they would certify another win for Zoome.

S3: Yes.

S2: So this is a democracy subscription cloud services. They can they can host three hundred people screaming on election officials at the same time. I think that’s it for us this week, if you like. China managed to borrow money at minus zero point one five two percent. Congratulations, you’re getting free money otherwise. Thank you for listening. Thanks for e-mailing us all of your comments and questions to Slate Money, Slate dot com. Thank you also for coming to our live show. I should mention the live show. It is coming up on December the 2nd. So save the date, as they say, on Wednesday evening, December the 2nd. We’re going to do a slate. Many live.

S5: Many thanks to gentlemen Molly for producing this show. And we will talk to you next week on Slate Molly.

S2: Let’s have a sleepless about Thanksgiving, because obviously Thanksgiving is coming up by the time we have this show next week, Thanksgiving will be behind us. This is the classic collective action problem. I did a dangerous and possibly ill advised thing last week, which is I got on a plane and I flew to Dallas and I interviewed Gary Kelly, who’s the CEO of Southwest Airlines for AXIOS on HBO. And I felt like, you know, the plane was probably safe. I believe him when he says the air travel is safe. And I was wearing my mask and I was doing everything right. But that’s kind of not the point. We shouldn’t be traveling right now. No one should be traveling right now. Traveling is the way that covid spreads around the country and. Thanksgiving travel is down substantially from where it normally is, but it’s still a big travel period and I really worry that people are not thinking about this the right way. They’re saying, like, can I be safe? Am I going to be in my car or am I going to be in the plane? They’re thinking about it on the sort of me, me, me personal level. If I’m safe, then it’s fine. Whereas what we should be doing is thinking about this on a societal level and saying, like, basically society has to stop moving right now because the pandemic is out of control. And the way we stop the pandemic from raging as a society is as a society, we stop moving. We did that in March and April. We’re not doing that now. And that worries me.

S3: Yeah, I mean, did you see the chart from Canada and how cases rose after their Thanksgiving a little earlier this year? Speaking of Canada, again, it’s really worrying. Cases are really high right now. Deaths are increasing. And there are a lot of people in the country not only who are thinking individualistically, like Felix said, but who aren’t taking precautions. There are people who still don’t wear masks. There are people who still think this is a hoax and those people will get the people who think it’s real sick.

S1: I mean, I think this has been the problem. The entire pandemic, though, is that people may be making rational decisions for themselves, but it’s an irrational decision for society at large. And we haven’t had leadership kind of trying to get people all together so people feel like they are doing something for the common good and not just thinking, well, can I travel to X place and be fine?

S3: Yeah, I mean, I listen to an episode of The Daily earlier this week that was it made me so angry about just this because it was about how Europe was facing, you know, an increase of cases in October, just like we were. But the countries basically all issued new kind of lockdown rules and acted collectively and had buy in from most European citizens because they also combined the lockdown’s with benefits. I mean, my questions making a skeptical face.

S1: But yeah, because I listen to that same daily episode and I was like, really? Because if you’ve been out of Europe, they have not been good about wearing masks.

S2: They have nothing good about following rules to say it changes a lot from country to country like they were really doing better because of how badly in Spain, Europe. Yeah, Europe has really surprised me how much the virus is resurging and how complacent they got over the summer and how much travel that was over the summer. But this just reinforces my point. The driver of the current wave in Europe is clearly travel. Travel is really bad. And this was basically the big difference, I think, between me and Gary Kelly of Southwest Airlines. And you can you can see the interview on Monday was he just wasn’t willing to go there on a societal level. He wasn’t willing to say that flying in and of itself is bad, even if it’s safe to fly. Even if you don’t get covered on the plane, you shouldn’t be getting on planes because that just moves people around the country in a way that is very dangerous. I’m perfectly willing to go there.

S3: That’s why you have public health regulations and a government that steps in because companies this guy, Gary, they’re Mianzhu. We’re going to act in our own interests. You know, like this is the tension that has existed for all the times. Like, you need the regulators to step in and take measures to make everyone safer and to force people to do things they are not going to do on their own. And that’s so critical. And public health crisis. And it just really goes against American for lack of a better term. It goes against American values, which are all about individuals. And you can do it on your own and duded. But like, you cannot solve a pandemic on your own, making an individual decision, it’s like actually dangerous.

S1: You just I was just thinking back about like, you know, if you look at how people acted during the World Wars, you know, on the one hand you did sometimes, in fact, actually need the government to come in and say, you can do X, you cannot do Y because we need this material or whatever. But part of it was also creating this kind of cultural norm. And people didn’t want to break the cultural norm because that was seen as breaking American values. Yeah, and I do think, unfortunately, we’re at a point now where, again, we just don’t have the leadership that’s been able to do that.

S3: We don’t have shared norms anymore. I mean, look what’s happening with the election. It’s like a nightmare, really.

S2: I thought the slogan, the official slogan of Davos Twenty Twenty was shared norms for a new society. You telling me that Davos didn’t work? Shared norms? I feel like I feel so let down by Klaus Schwab.

S3: I mean, they’re usually right there and and very smart with the conventional wisdom. So that’s. That they got that wrong.

S2: If you have any knowledge, let us know. Thanks for being Slate plus members.