The Fiscal Genie

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

S2: Hello, welcome to the Fiscal Genie episode of Slate Money, your guide to oh my God, what a week was this?

S3: My name is Felix Salmon. I work for Axios. I am here with Emily Peck of Huff Post. Hello. I am here with Anna SHYMANSKY of Breakingviews. Hello. We have managed to get, I don’t know, probably about ten minutes sleep between us, but we have a surprisingly coherent show today given the general status of sleep deprivation. We, of course, are going to talk about the result of the presidential election and what it means we could do nothing else and you would expect us to. But there have been massive other news stories in business and finance this week that we also need to cover. So we are going to talk about the end IPO, which was meant to be the biggest IPO of all time, and then just didn’t happen. And we are going to talk about a huge antitrust lawsuit that the Department of Justice is bringing against Visa. These are big deals. And I know that all you’ve been looking at is a bunch of needles and election results. So we are going to bring you up to speed on what has been happening in the world of business and finance, as well as the election all coming up on slate money. So we have to start with the election, which let’s just work on the assumption here that we have a Biden presidency and the Republican Senate, which looks extremely likely, if not quite certain. What do you make of that, Emily?

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S4: So, yeah, we’re recording, we should say, Friday morning. And the results still aren’t a total lockdown, but it does look like Biden’s going to win. What I make of this is I mean, I think will be figuring out what to make of this for a long time. But the initial thought is I think Trump was repudiated. Pretty neat. Biden has a lock on the popular vote, but the fact that he’s going to be governing with a Republican Senate most likely is not a great sign for the country or for the economy. I mean, you wrote this, Felix, this week. I don’t want to steal your thunder, but it’s going to be tough getting this recovery to really stick and getting any stimulus passed. Mitch McConnell has already signaled, you know, he’s going to make life difficult for Joe Biden. And it may be sort of a Pyrrhic victory in a way for Biden if he can’t get anything done, right?

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S3: Absolutely. We’ve we’ve had gridlock for the past two years. Ever since the midterms, Trump hasn’t been able to get anything through Congress, really, except for one big stimulus bill that he was driven in large part by the Democrats. And now is that brief period where they were aligned. But there’s no way that McConnell is going to be aligned with another big Biden stimulus bill, let alone a three trillion dollar build back better, you know, green new deal, the kind of thing. And so the entire beating heart of Biden’s platform has actually, I think, been repudiated by the electorate. I mean, this is something which I did say in my newsletter this week. If you look at virtually all of the states where there were Senate races, Biden got more votes and sometimes a lot more votes than the Democratic Senate candidate. The American people voted against Biden controlling Senate and Democrats controlling the Senate. And I am disappointed in that from a sort of fiscal and economic perspective. But it does seem to be what the electorate wants on some level.

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S4: Well, I’m going to push back on that just a smidge, if you don’t mind. I think that a lot of progressive policies are popular and there are pieces of the Biden agenda that are popular. I mean, Florida voted for Trump, but they also passed a fifteen dollars an hour minimum wage. Another state, Colorado, passed, you know, paid family leave, red states passed marijuana legalization. I think there’s something going on where possibly the Biden message maybe didn’t get through and people maybe vote against Democrats not realizing or not seeing the policy advantages. They’re thinking these Democrats are socialists or whatever propaganda has been out there about them and not there’s some weird disconnect between reality and propaganda.

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S3: I think that that I’m going to see I want to push back on that, because I think that the it’s not it’s not that they’re wrong. I think that they’re right. I think that if you just think that Donald Trump is an unspeakable liar. Who needs to get kicked out of the White House, but you are also broadly against the Democratic agenda. This is exactly what you do and it’s entirely logical. And you don’t need to come up with the sort of the electorate has been misled kind of thesis. But, Anna, you where do you come down on this?

S1: I would say a few things. One, I do think that America is not an extremely liberal electorate. I think people on the left often want to believe America is more left than it actually is. So I don’t think this result is actually that surprising. I don’t think it’s surprising that people would support increasing a minimum wage in, say, Florida, but then in Illinois, not vote to raise their taxes. I think that is actually very much in line with a lot of the ways Americans think. I I would also say I don’t think that this result means we’re not going to have a significant stimulus or the economy isn’t going to get better. It is definitely going to be different than if we’d had a blue wave. But we’ve already had Mitch McConnell saying, I want to get something done by the end of the year. And I think moving forward with I don’t think we can just simply extrapolate from what happened the last two years or even from what happened in the Obama administration, because I do think because of covid, the fiscal genie has been let out of the bottle. I don’t think we’re simply going to go back exactly to the policies we had before.

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S5: Yeah, and I would add to that, actually, Anna, I spoke to a few Trump supporters this week, Trump voters, and though they were hostile, obviously, to Biden Harris, they and they talked about the economy being, you know, in kind of rough shape right now. But it was really good before covid, blah, blah, blah. But they all talked about wanting more stimulus. That’s just not that controversial just to know.

S3: So I agree with both of you that the Republicans are fine with stimulus. They did a big stimulus package in April. McConnell would be open to a stimulus package, as Anna says, before the end of the year. Trump has two more months as president and is more than capable if he puts his mind to it. And I don’t think he will. But if he wanted to push through a big stimulus bill, I really think he could he could just tell Steve Nation to go ahead and agree to whatever Nancy Pelosi wants and bang, there’s your stimulus bill. I am highly skeptical that the. McConnell openness to stimulus will last past the end of the year and into a Biden administration.

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S6: I think that the minute you have a Democrat in the White House and a bunch of Republicans have said this explicitly, including Ted Cruz just recently, to excuse his Jonathan one on our HBO show, the minute you have a Democrat in the White House, suddenly that’s when every single Republican senator gets religion on fiscal problems and deficits matter and that kind of thing. And that is the point at which another round of stimulus effectively becomes impossible.

S4: And and also to add to that, like we had jobs numbers today, that kind of signal things are getting better on their own. So I feel like the urgency is leaving, especially the Republican Party, because the jobs numbers are best for their base for four.

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S3: Absolutely. And if you if you look at what you had to have in order to get the Republicans to sign onto the first stimulus package in April, what you needed was, number one, a massive plunge in employment and a massive uptick in unemployment, combined with, number two, a massive plunge in the stock market. Right now, we don’t have either of those. So it becomes much harder to push through another round of stimulus.

S1: So right now, if some of the positive trends continue, then we probably could get away with having a smaller stimulus now if those trends reversed. We have obviously seen covid ramping up across the country. That certainly could have a major impact on both the economy and the stock market, then that would probably put pressure to have more stimulus. So I think the fact that we’re going to be arguing about a number is a good thing. We’re not arguing about whether or not we’re having it. We are just arguing about a no no.

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S3: It’s about whether or not we’re having it. I think I think while Trump is still in the in the White House during the lame duck, we might be arguing about a number of the January twenty first. I think we’re genuinely arguing about whether or not we’re having it.

S1: I disagree. I think that you are right that a lot of Republicans are probably going to shift their rhetoric back after we get some stimulus bill through. They will then probably try to shift back to being like, oh, now we care about budgets. I think that is probably likely. However, no one, as I said, I do think we will get stimulus through because I do think it is simply necessary and constituents wanted. And number two, I honestly think that even if Republicans want to keep doing this potentially tight fiscal policy, I don’t think they’re going to be able to. I think that we had a period in American history where you could rely significantly on monetary policy and Republicans were able to do that and the economy was able to do OK. I think that is over. I think that Republicans are going to be pushed by the reality of the on the ground reality moving forward. Huh, I don’t know Republicans, so you don’t often.

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S3: Yeah, I, I think there’s something else which is which I think we’re missing here. Is that the centerpiece of. What Jared Bernstein, who’s the big one of the top Biden economic advisers and what Biden has been talking about and certainly what Pelosi has been talking about, the centerpiece of any Biden led stimulus package is hundreds of billions of dollars, roughly five hundred billion dollars, possibly even more for state and local governments who are mostly democratic in big cities and cities are democratic. And that is just simply anathema to Mitch McConnell and the Republicans. They believe, genuinely believe, falsely but genuinely believe that all of these cities have been spending way beyond their means and far too profligate. And they’re looking to this pandemic as an excuse to get bailed out of a bunch of unsustainable fiscal stances and then just not going to stand for it. And they’re just not going to let it happen. I think that without massive help for state and local governments, no stimulus is going to be adequate. And I think that there’s no way that McConnell will ever bring help for state and local governments to the floor of the Senate.

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S4: And that’s a shame because we were talking about the economy kind of picking back up and so lawmakers would be less willing to do a stimulus. But one part of the economy that’s not picking back up is state and local government. There’s real budget shortfalls. People are losing their jobs. And as we saw with the Great Recession, when there’s not enough money going to state and local governments, the recovery is much, much slower and much more painful. And that is what you are setting up when you don’t send out letters from the federal.

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S3: And let’s look at the let’s look at the figures from the jobs report, the October jobs report that just came out. The headline number of jobs created were six hundred and thirty eight thousand. In fact, there were more than 900000 private sector jobs created. There was over 200000 reduction in government jobs. Governments are firing people in the hundreds of thousands, and that’s just beginning. If they don’t get a bailout, that two hundred thousand dollars a month number is going to go higher still.

S1: I agree those governments to fight the pandemic and to deal with the school’s crisis we’re in right now, too, I just wonder if we can simply extrapolate from what has happened recently to moving forward, because we we don’t know what’s going to be happening with the pandemic. And while I do think it is probably correct that you are going to have a lot of Republicans that are going to be looking to the midterms and people will say, oh, well, they’re going to be looking to the midterms, thus they aren’t going to want to be on board having having passed any stimulus. Well, maybe, but they probably also don’t want to have incredibly high unemployment rates when they’re trying to get re-elected in the midterms. I just think that. After you had the presidential election, then all of a sudden you’re going to have lots of things that both sides are going to want to get done. And while, yes, it is true that Republicans tend to often want to just be the side that doesn’t do anything, I still think it’s possible that Democrats are going to get slightly more done than people think.

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S3: And what you said, that is entirely rational on one level. But I think it’s also false when you said that Republicans don’t want to fight for re-election in the face of high unemployment. I think they kind of do. I think that if there’s high unemployment, they get to blame that on Biden. They get to blame that on the president, and they get to be the party of opposition and say, look at this, high unemployment. We have to you have to vote for the opposition in order for us to get it down. I don’t think that high unemployment hurts Republicans in the midterms.

S1: And I mean, that’s a fair argument. I maybe I’m just attempting to be more optimistic than everyone else.

S2: So, you know, where my optimism comes from.

S3: My optimism comes from two Senate seats in Georgia and conceivably possibly even the Senate seat in Alaska, that it is actually not a done deal, that the Republicans will control the Senate. Both of the Georgia seats are going to a runoff. There’s still a bunch of more voter registration in Georgia before that runoff happens. It is entirely possible, not probable, but possible that the Democrats will win both of those seats. If they win both of those seats, then they have 50 senators. And Kamala Harris is the tie vote. And suddenly everything all of the calculus in the Senate changes. Plus, it is also conceivably possible that we’ll have a Democratic Senate senator from Alaska, although that one’s even less likely. So I’m not giving up entirely on the whole like. Democrats controlling the Senate thing, although I have to admit it’s it’s a long shot.

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S4: One thing maybe we could get into in the plus is I’d really like in talking about the election some more. I’d really like to hear you guys talk about how Facebook, Twitter, YouTube all handled the election. If the social media sites got any better this year, if they made an impact, yes or no? I mean, it’s certainly been very different.

S3: And I do OK that we will do that. We will talk about that and the first good idea. But while we’re still in the main part of the show, we have to talk about the actual financial news of the week, which has nothing to do with the election and everything to do with the world’s biggest ever IPO being pulled 36 hours beforehand because the Chinese regulators suddenly got religion on and group being a bank. And they should and it should be regulated like a bank. This is one of the most amazing stories. And if there wasn’t a huge amount of election noise going on right now, it would be dominating the business and finance headlines. And what the hell is happening here?

S7: Yeah, this really is an amazing story. I mean, Ant Financial, which is this enormous Chinese payments company, is just connectable, don’t call it, and financial.

S3: It used to be and financial. And they changed their name to any group in order to seem less financial, in order to pretend that they’re not a finance company.

S7: But of course they are because they are tech, then not fintech, as Jack Ma likes to say. So they were going to be raising, I think, about thirty seven billion dollars. This is their valuation, I think was like over three hundred billion dollars. And before this was pulled, you have the news that you had had Chinese the Chinese government that had essentially pulled Jack Ma in for a meeting beforehand to apparently somewhat rake him over the coals or to argue that there are these new regulations that were being put in place. And then with very little time before the actual IPO was going to go through, they had to pull it because they said it was not going to be in line with these new regulations and these new regulations were not adequately disclosed to investors. I think that this is a very bad sign for Chinese tech, because to me, what this may signal is the end of this honeymoon between the private tech companies that have been spurring a lot of growth in China and the government that is very concerned about the power and independence of these companies. To me, I think part of this was the Chinese government trying to send a message to Jack Ma and to and so I half agree and half disagree on that one.

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S3: I think Chinese tech is just fine. We just saw headlines about bite dance raising money at one hundred and eighty billion dollar valuation. I don’t think the Chinese government is worried about the Chinese tech sector. I do think the Chinese government is worried about Alibaba and in particular and I think there’s a difference that possibly Tencent, but no one else. I think this is very much focused on Alibaba. And because they are not tech, they are systemically important financial institution. And the Chinese government is saying we cannot have, you know, sticking your finger in the eyes of regulators and saying you don’t need any new regulation and you shouldn’t be regulated at all because you are originating most of the personal loans in China. You are in charge of virtually all the well, most of the payments in China. You control finance in China to an astonishing degree. And the idea that you should get out of being regulated is insane. And I think that is a rational position for the Chinese government to be taking with regard to and and that it shouldn’t be extrapolated to other Chinese tech giants like Beeton’s.

S7: I do agree that there is some sense in saying that the way it runs its business should be very concerning for the financial stability of China, the fact that they’re originating all these loans and they keep almost none of them on their books, which then raises the question of what is their actual underwriting. Of course, they say that, you know, they had this amazing new tech form of underwriting that’s better than any other previous kind. But there are legitimate concerns here. But I think the way this was handled sends a very bad sign. We’ve also previously had Tencent being censored very publicly by the Chinese government. We also have this concern about the Chinese government trying to put forward their own digital currency that could compete potentially with what Ant is doing.

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S1: I think that what you’ve had in the Chinese government is a desire to kind of have it both ways about allowing these innovative companies that can create a lot of growth. But also really being able to control everything, and I think the more and more you have these companies just kind of gaining dominance, gaining even even outside of China, I think that is going to continue to concern the Chinese government in terms of rationality.

S5: I don’t see how the Chinese government was acting rationally or perhaps in hindsight it made sense to shut down this IPO, to sort of get more of a handle on regulation around FinTech. But what seems to me happened is, I mean, Reuters had this story about Jack Ma. And in October, October 24th, he gave the speech and he kind of trashed Chinese regulation and trashed Chinese banks. That was at some summit in Shanghai on October 24th. And it was the speech that he gave criticizing, you know, banks and regulation that kind of pissed off Beijing enough to kind of put a stop to this whole process. And that seems to me exactly not rational behavior. That seems to me a signal that, you know, investing in China and dealing with China right now is maybe not such a great idea. It’s maybe a little volatile. I mean, it makes it makes the Chinese government look a little trumpy, right? I mean, it doesn’t seem like one 100 percent.

S3: Yes. Yeah, I completely agree. This is this is this is certainly true that the Chinese government should have understood all of the problems with and being a systemically important financial institution months ago, long before it filed its IPO prospectus, not 36 hours before. Exactly. Yes. Well, the IPO was due to price after actually after the IPO price, but just before it was due to start trading. The insanity here is that the Chinese government let it go as far as this. And it really looks like they were acting with maximum sort of malice. They have they they waited until the last possible minute to pull the IPO. And then immediately they started putting a huge amount of pressure on Chinese banks, many of which are state owned, to stop dealing with and and to not buy the loans that aren’t as originating. And they’re really like cracking down on them in a very aggressive way, in a way that is not constructive and not helpful. And I totally agree that in that sense, what you’re seeing is a very almost childish reaction to this speech, which we all have to also agree was incredibly ill advised. And what the hell was I thinking giving that speech?

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S7: Right. But I also just like just to be clear, the regulations the Chinese government is putting forward would dramatically reduce the revenue that I can make. I mean, this could potentially cut its valuation in half. Exactly.

S3: And that’s not a good sign for private companies in China, although it is a I mean, I think that’s I think what we what we are seeing right here is the fact that and was making an insane amount of money by dint of its monopoly position in loan origination and payments. And it’s never healthy in any capitalist country for private sector monopolist to be able to just charge enormous billions and billions of dollars in rents to keep the financial sector going. That just isn’t healthy at all. So if the Chinese government wants to crack down on that and if that then in turn reduces the valuation of and I’m really fine with that. But they you know, obviously there’s a bunch of personal political stuff going on behind the scenes here. But yeah, if and groups market capitalization is reduced from three hundred billion to something slightly more normal, I think that’s probably good for the Chinese financial system.

S5: Can can I ask you guys some questions about and please do. OK, so my first question is it was either Reuters or Bloomberg said that in China, peer to peer lending was really popular and there were five thousand peer to peer lenders in the past few years. And now that’s narrowed down to just three. And I was like, wow, first and second. Do we have anything comparable in the United States to a product like and and what would it be? And is it regulated?

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S3: Oh, two very good questions. So the first answer is basically no, there’s nothing in the United States close to the what used to exist in China and really doesn’t exist in China anymore in terms of peer to peer lending. A couple of companies like Prosper and Lending Club tried it and they realized very quickly that it just didn’t work. The cost of funds was too high. And that’s what happened in a little bit. What happened in China is the individuals in China found it very hard to get loans. And so they wound up having to wind up effectively borrowing money from other individuals in China who were looking to invest and get an interest rate and return on their money. And what we have seen actually with the rise of any group is that now it is much easier for individuals to get loans or they need to do is go along to end and all originated the loan for them and those loans that they can get from and are much more attractive than the loans that they used to be able to, but they used to have to get from other individuals. And so they’re all going to end instead. So that’s that’s a good development. That’s a positive development. And then the other question, what is the equivalent of and in the United States? I think we can actually start touching on that in the next segment when we talk about Visa, because that is actually the closest company to and that I can think of.

S5: Oh, and why hasn’t an art like product taken off in the US because of the regulatory environment?

S7: Yeah, we have a very balkanized regulatory environment for finance in the United States. It is very, very complicated for a small company to gain a foothold because you’re dealing with all of these different agencies. You’re dealing with regulations that multiple different levels. It’s very different that even if you compare it to a country like Singapore or even the U.K. in terms of how they handle financial regulation, the United States makes it very hard for fintech companies.

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S3: But also, let’s just be clear about this. The reason why and had the field to itself was because Chinese banks were just not issuing loans to Chinese individuals. Right. And and it was like, great, we’ll do that. And in the United States, American banks are issuing loans to Americans. And so there’s no need for an end to step in and say you can get a loan now because we’ve always been able to get loans.

S7: That’s not you know, no, that is definitely true. And I do think you’re also thinking of just like the the kind of payments system in general, if you’re comparing to, like, what we see in China and generally even outside of AMP.

S3: But just like, obviously the digital play, no one no one in the United States is is paying with QR codes where it’s like there’s no other way of paying for anything in China. So it’s a very different system. But let’s talk about Visa because at heart and is a payments company and the biggest payments company in the world is Visa, the place where Visa has the most.

S6: I am glad Monopoly is in debit card payments. They have, what, three quarters of the market and debit card payment, something like that. And we talked about this on the show earlier. Visa recently announced that it was buying one of these fintech startups called planned for five point three billion dollars. And we all said, well, you know, something, something it was not clear to me why it was so strategically important for Visa to own. Gladdened Visa put out very vague press releases and now suddenly the other shoe has dropped because the Department of Justice has filed this incredible antitrust lawsuit against visa buying plaid. This is where government can do things that journalists and analysts just can’t. They found a whole bunch of communications from within Visa, which actually told us why Visa was buying Klatt. And well, Anna, you can explain why Visa is being paid and why it’s so problematic.

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S7: I mean, in this communication, you literally have people, advisors saying we are buying this as an insurance policy. We think this is a significant threat to our businesses. It’s like to have those scandals where people have Bloomberg messages where they’re like, I am committing fraud right now. It is very, very clear that Visa is buying this because they don’t want the competition. And that makes it very easy for the Department of Justice.

S3: So what’s super interesting is the visa was I think it was a minority investor in plaid and they started talking to plaid about maybe buying them. And they did a bunch of due diligence. And in the course of doing the due diligence in plaid, they wound up discovering a secret plan plan that plaid had never made public to really get into the payments business and to compete directly with Visa when it came to payments.

S6: And the minute the visa saw their secret plan, they were like, never mind buying the APIs as a service business that everyone thought they were buying. We need to buy plaid in order to stop this company from becoming what could be our single biggest competitor. And that’s just wow.

S4: The documents they found had a hand drawn illustration of an underwater volcano. Where you can just see the little tip, you know, at the top of the water, but underneath it’s like really rumbling, I just thought that was fun.

S3: The underground volcano that is planned and this is also where I should step in and do a little bit of payments. SHAKERI Because it’s important Visa and MasterCard have their own Visa and MasterCard rales the payments rales. If you use your debit card to buy something online or in the real world, Visa makes a little bit of money on that. Your bank makes a little bit of money on that and the merchant gets the rest. What plaid is making much easier is to allow money to come directly out of your bank account without going through Visa. So if you use Venmo, if you use PayPal, if you use cash, if you use like Zeil, if you use any of these services, what they are is their way of doing an end run around visa and taking money directly out of your bank account at the cost of like two cents for a 60 dollar transaction rather than a cost of like thirty five cents, which is what it would be on a debit transaction by a visa. And Plaid had a plan, has a plan, had a plan, I don’t know one or the other to really turn this into a service that people would use in the real world and online to buy things. This wouldn’t just be for peer-to-peer payments. This wouldn’t just be like paying your friends back for dinner or whatever. This would be like when you’re buying things on the Internet, you can pay directly out of your bank account instead of using a Visa card. And that would be a major threat to one of Visa’s most important and most valuable income streams. So end of payments. Wangary But basically what’s known as HGH, which is the direct bank account rales, would replace the Visa MasterCard rules.

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S4: And what’s interesting to me here is the Department of Justice just seems to have it’s ushered in this new era where it’s really paying attention to antitrust. In a way, I think it totally whiffed when it came to tech and social media. Maybe this isn’t a perfect analogy, but they just sat by and let Facebook buy up all its competitors without much happening. Right. WhatsApp, Instagram. It seems like we’re in a totally new era now where they’re actually taking more proactive measures to prevent something like that from happening again. And it’s impressive, weirdly.

S3: And if you look at the end situation through the eyes of this antitrust lawsuit, you can see the visa’s monopoly on debit card payments is problematic and the Department of Justice is worried about it and thinks that Visa is extracting monopolistic rents from the payment system. And it thinks that’s bad. And it hasn’t filed suit against Visa to try and break up Visa or anything like that. But it is saying like this is a problem and you have a monopoly. If Visa has a monopoly, then, oh, my God, what kind of a monopoly does it have in China? Because arms payments position in China is much bigger and much more far reaching than Visa’s situation in the United States.

S4: Yeah, and you can really see how it’s cutting off innovation, because what Plaid was planning does sound like a real great consumer, potentially innovation. And it just does seem like literally a case where Visa was just trying to stop that from happening. And the fact that DOJ is stepping in seems really remarkable.

S7: And a lot of ways this seems like a lot easier than what’s happening with tech in terms of regulation, because it’s fairly clear that you can make a pretty strong argument that consumers, merchants are being hurt by visa, not allowing these other competitors to emerge. It’s harder to make those you can make those arguments with big tech companies, but it’s harder. So I think this is a good start of the DOJ being a bit more proactive and not unwinding things that were done in the past, but saying, OK, now moving forward, we are going to look at this differently.

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S3: OK, so we have a numbers round. Emily, you have a number.

S4: I brought a number. Felix, what’s your number? My numbers for that is the number of states that legalized recreational marijuana on Tuesday, New Jersey, New Jersey, South Dakota, Montana and Arizona and then Mississippi legalized medical marijuana. There was a clear winner on Tuesday, despite what you may think. And that winner was drugs.

S3: The really hilarious thing about that clear winner being drugs. I am very proud of us for not talking about the market reaction to the presidential election. And everyone give yourself a pat on the back for that. But Khaldiya stocks went up for reasons that don’t really matter. The interesting part of that is that while the whole stock market had a really quite impressive rally this week, the one segment of the stock market that plunged was the big marijuana companies. They all went down. Why? Who knows? I have no idea.

S7: I mean, I think it’s been a little volatile. I think they initially went well. There are a number of reasons. A lot of stuff was already priced in.

S4: I mean, I think if Biden wants to come in and do something popular right away, I really don’t think he can go wrong with maybe legalizing marijuana because it just seems like these bills I mean, it’s 35 states now that have some kind of legal marijuana. There are state and local budget shortfalls. I mean, it just seems like a very popular idea. I tweeted some survey numbers that I don’t have in front of me right now, but it’s basically like at the beginning of the drug war, 90 percent of Americans opposed drugs and now about 90 percent of Americans favor legalizing marijuana, just like a total flip. And it’s pretty interesting.

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S3: I do agree with you on this one. There’s a huge problem in trying to build up any kind of marijuana industry or any kind of guardrails, so long as it’s illegal under federal law, you know, you can’t even be banks. You know, if you’re running a marijuana dispensary and you’re trying to get a bank account, that’s virtually impossible right now because of federal law. And so given how many states have legalized it, I think you’re right that the federal government can should just say, look, reality has changed, so we need to change the law. My number is actually I want I’m going to change my mind. I was going to do an airport number, but I’m not. I want to stick on this idea of, like, prices moving in the wrong direction. My number is seventy thousand, which is the number of Bitcoin that was sitting in a wallet for the past few years, just not moving.

S6: And that’s a large number of Bitcoin to sit in a wallet. It’s about a billion dollars worth. And then suddenly last week, they all moved to a different wallet. And everyone’s like, oh, that’s interesting what happened there. It turns out that that was a seizure by the United States government of a bunch of Bitcoin that was connected to Silk Road, the underground marketplace. And the government has now taken these billion dollars worth of Bitcoin from a person who remains unknown and may or may not be Ross Ulbricht, who who’s in jail and will end up selling those bitcoin.

S3: So basically what we’re seeing is a bunch of Bitcoin that were just sitting there basically off the market have now been seized by the government and presumptively about to get sold into the market for roughly a billion dollars. The reaction of the Bitcoin market to this was absolutely fascinating. The price of Bitcoin went up a lot to like fifteen thousand dollars. And you like, what the hell? Like when you see a massive position of Bitcoin, which, you know, is about to get dumped onto the market, wouldn’t the price of Bitcoin go down rather than up? Like this is another one of those things where you just look at it and you go, this makes no sense, is it?

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S4: Because the US government was basically legitimizing Bitcoin by saying it was going to sell some?

S7: No, I don’t think there’s much reason here or it’s just like because lots of other things were going up and it’s correlated with everything else. You know, I think trying to find a reason behind Bitcoin is a fool’s errand.

S3: Yeah. Never tried to make sense of moves in the Bitcoin market because it just never makes sense. And what’s your number?

S7: My number is 60 percent. So another big winner on election night was public transportation. So in Austin, Texas, around 60 percent of voters approved a ballot measure for a pretty ambitious public transportation plan. And if you look around the country, there were tons of public transportation measures. And like everything passed, people voted to increase their taxes to pay for better public transportation. So I thought that that was a nice thing. They came out of the election.

S3: Are we finally going to get that rail link between Dallas and Houston? We shall see. Yeah, I’m not holding my breath for that one. OK, I am really looking forward to the Slate plus segment on. Did Twitter actually do its job in this?

S2: And not to mention Facebook, that’s coming up through a slate plus member, otherwise, thank you to Jasmine Molly for producing from her undisclosed location in upstate New York. Thank you for writing in on Slate money at Slate dot com. And we will talk to you next week on Slate Money.

S3: Emily, talk to me about Facebook. We have a sleepless segment by your request on how did Facebook and Twitter do this election.

S4: So I think they did better. We know in 2016 they did not great and let a lot of propaganda propagate on their platforms. And they were basically blamed for wrecking that election. And they have done a lot over the past few years to make sure they weren’t going to screw it up again. And it’s early, but it does seem like they did a better job. So on Twitter, I mean, those of us who use it, are they slap labels on the president’s tweets when he tweeted lies and misinformation. And we could have a disagreement or discussion about whether those tweets should remain up or not. But I feel like they struck the right balance because you can’t taking down the president’s tweets would just inflame further, I think, the situation. So they’ve sort of found this balance. And over at Facebook, Kevin Rudd had a good piece out today about basically instead of relying on algorithms as much as they would like to and their master plan would have them do, they basically slowed their role on this election and tried to do much more human curation. And they moved quicker to take things down. Like, for example, the whole Stop the steel Facebook group that popped up during this painstaking vote count was taken down. I mean, I don’t know the damage was done or not. And there was Seip and spread from this misinformation group. But it seems like they were able to move a lot faster than in previous years. And I’m not saying they did an amazing job. And I still have probably I still think maybe we should ban these social networks altogether. I don’t know. But it does seem like they’ve done a better job in twenty twenty than they did in twenty sixteen.

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S7: When you’re talking about companies that are still relatively new and a relatively new industry, I think it’s fair to say that they can learn from mistakes. It doesn’t mean that you give them a pass. It doesn’t mean that you don’t still critique them or push them to be better. But I do think it’s fair to say that they definitely did strike a much better balance.

S3: Yeah, I think twenty twenty is better than twenty sixteen. Whether it’s good enough we can debate, but that clearly moving in the right direction. The one thing which gives me pause is the Q&A on the candidates being elected to Congress. Q And on is entirely a function of social media, and so long as that is still popular and conspiracy theory that it will get people elected with more votes than anyone else. There’s still clearly a big problem there. So I agree with you on both counts. Certainly, number one, that there’s been a significant improvement, but number two, that there’s still a long way to go, a really, really long way.

S4: I mean, just this week, Twitter and maybe Facebook to maybe YouTube ban Steve Bannon. I mean, he wasn’t bound already. Like, I couldn’t book it.

S3: Steve Bannon was I mean, he did manage to come out on YouTube and call for Fouche. His execution. Yes. Like this week. So, yeah, there’s still like massive loopholes.

S4: Yeah, there are massive loopholes Kuhnen alive and well and like maybe the damage has been done. Like the genie might be out of the bottle on this stuff, too, to a large extent that it makes it harder to rein it in.

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S7: Yeah. I mean, I do say, though, historically, when you have different communication developments, you often have a period of time where there’s a bit of a Wild West and then things can be reined in. And I think that that’s obviously what we’ve seen and we need a lot more reining in. But I don’t think that because you’ve had a lot of extreme things at the beginning, that means that can never get better. History doesn’t necessarily support that.

S4: It’s just that this this kind of not being reined in happens to possibly help destroy the fabric of democracy.

S3: The other thing I’ll add here, talking about the fabric of democracy is the almost hilarious pictures and footage of Donald Trump at his rallies railing against Section 230 and all of these like a sea of blank faces in the in the in the crowds going like, what the hell are you talking about? So much of the debate and what people care about when they’re extremely online is just completely alien to normal folks.

S6: And, you know, we can talk about whether these places are platforms or whether they’re publishing these opinions and all the rest of it. And Trump certainly seems to have internalized that debate. But most people have no clue, no clue at all.

S4: Yeah, it did seem like his campaign was a lot of extremely online talking points and stories that most people who either aren’t really online, who aren’t really conservative and right wing were just had no idea what he was talking about.

S3: All right. So there you go. I’m only asking you shall receive sleep less on social media.