Nerd EGOT

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

S2: Hello and welcome to the Nerd Egert edition of Slate Money, your guide to the Business and Finance News of the Week. I’m Felix Salmon of Axios and the Zamansky is here from Breakingviews. Hello. Emily Peck is here from Huff Post. Hello. We are going to be talking about the first person ever to probably we don’t know for sure, probably fell all three of the top economic rolls in the country. It’s the economic equivalent of the eagle. We will talk about that person. You can probably guess who that is. We are going to talk about a monopolistic merger or it looks very much like a monopolistic merger in the world of book publishing. And I need to ask you. Do you prefer random penguin or Penguin House? I don’t know. I still haven’t worked out which one of those two is better. Of course, neither of them actually exist. It’s called Penguin Random House. They are merging with Simon and Schuster. We are also going to talk about philanthropy and the United Way is giving Tuesday on Tuesday. Please give lots of money to wonderful causes. We’re not sure about the United Way, though. There’s a little bit of a scandal there, which Emily has written about at great length. I read that story. We have a slate plus on Brexit. And before we get there, I need to remind you that we also have a Slate Money Live show on Wednesday. So tune in for that over coming up on Slate Money. So the big story of the week is obviously Janet Yellen, the nerd egert, as I put it on Twitter, the first person ever to be chair of the Council of Economic Advisors and chair of the Federal Reserve and Treasury secretary, which makes her much more rare than any ego because there are, what, 14 or 15 egos and there’s only one Janet Yellen.

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S3: And if her nomination is confirmed, she will be the first woman treasury secretary ever, which is a whole other Category five. I don’t know. It’s not an EGOT, but it’s it’s big. It’s a big deal.

S2: It’s big. And there is this weird thing where finance ministers in particular, they tend not to be women, like most other cabinet minister posts. You find women in them quite frequently, but for some reason, it’s much more rare for women to be finance ministers. And so I’m super happy to see a woman being finance minister. I’m much more happy to see Janet Yellen be finance minister because she is incredibly qualified. And I have to say that there’s a little piece of me as well that is superb, particularly happy that it’s Janet Yellen who is the first person to get all three of these and not Larry Summers. That’s a very, very good point, because he came extremely close. And in the end, Barack Obama decided to nominate Yellen to be the chair of the Fed rather than Summers. He had the inside track. Everyone assumed it was going to be Summers, and he wound up getting basically knifed in the back one way or another. People debate whose fingerprints were on that knife, but he lost out on that job. Yellen got it. And people are talking a lot about does Yellen have the political nous to be treasury secretary? Because Fed chair is a much more technocratic job. CEA chair was an extremely technocratic job. It’s like let me go off into my office and do economics and then come out with wise words. Whereas Treasury Secretary is a very like get your hands dirty, meet with Congress, try and rustle bills through, react to news that’s happening on a daily basis, react to movements in the dollar, whatever it is. The Treasury secretary is a very fast paced and political role and people are like, can this quiet technocrat do this fast paced political role? And my answer to that is basically what she managed to get the Fed chair, which getting that job involves playing a non-zero amount of politics against Larry Summers.

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S1: Yeah, although honestly, I do think that is probably her biggest weakness. I’m sure she can do it, but it’s not something that most likely comes naturally to her based on what she has chosen to do in her entire career. And so I don’t think by any means that means she won’t be a very good Treasury secretary. My guess is she may delegate some of that and focus on the stuff that she really does excel at.

S2: I’m not sure how much of that is delegated, but to be honest, I mean, it is possible that she will create a whole new structure within Treasury where, like the undersecretary for domestic affairs or someone suddenly becomes like the go to person on Capitol Hill. But really, Treasury is one of those organizations, a little bit like many corporations, where basically everyone in the corporation works for the CEO and then the CEO is the one person who does the external relations to the major stakeholders. And Treasury is like that. It’s very rare to find anyone at Treasury giving interviews to the press or having high profile meetings with senators or members of Congress or even the president in the White House. So all of that stuff, the outward looking stuff at Treasury tends to happen at the actual Treasury secretary level. So it will be interesting to see her dry and delegated. But as far as I know, I can’t think of any previous secretary who’s really managed to do that.

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S3: I think one advantage Yellen might have in twenty twenty, I think the notion that we could have gotten a Treasury secretary that was really politically savvy and astute and could have gotten more than she could done in Congress now in this era is maybe misguided. I mean, I think she has an advantage in that she’s a known quantity in Congress and she’s respected on both sides for the most part. I mean, the senators, Republican senators might disagree with her about things, but I think everyone kind of agrees. This is a really smart woman who’s extremely qualified and she has the respect of lawmakers, which is no easy feat.

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S2: And she has the respect of like Donald Trump, who came very close to renominating her, you know, shook. Yeah. And then he changed his mind because he didn’t want to have a short person as Fed chair. You’re like, OK, whatever Donald like. But she is utterly, utterly respected economist. She has been proven right about a million different things over the years. She has been very ahead of the curve. Especially on gender issues and inequality, and she also has a little bit of history as a fiscal hawk, which may or may not be what the progressive wing of the Democratic Party wants, but should serve on some level to mollify the Republicans.

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S1: Although I do think the statement that she’s a fiscal hawk is a little bit overstated. I mean, a lot of this goes to some comments she made where she talked about the trajectory of the debt. She wasn’t even talking about the fact that 75 percent debt to GDP was so horrible. She was saying the trajectory of the debt, which essentially almost anyone would agree with except maybe Stephanie Kelton or otherwise. I think essentially everyone would agree with that. It is true that I think especially in the last maybe two years, I think she has listened to a lot of people, listen to a lot of experts as well, and shifted and become even more of a dove. But she’s always been a her entire career, although she was the one who raised interest rates. Right. Well, I’m talking about the difference of a fiscal hawk and a monetary hawk, which are separate. I would also argue that they’re similar. They’re related. But I think the idea that she raised interest rates as slowly as she did, based on the fact that almost anyone in that role would have been pushed by everyone in the Fed to raise interest rates, does not necessarily make her a hawk. It makes her a conventional monetary thinker. I also think it’s interesting that she shifted on that, too, because even before the pandemic, when Jay Powell was lowering rates, despite the fact that unemployment was very, very low, she was like, I think that’s the right thing to do. So I actually think some of these things are good just because it shows that she is clearly incredibly intelligent, but also willing to shift her opinions based on the facts on the ground, which is something that a lot of people actually don’t do.

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S2: And I think that she is not in any way, shape or form an ideologue. And I think this is the one thing which we can all be extremely or one of the many things that we can be extremely happy about in terms of Janet Yellen as treasury secretary is that she just reacts in the best possible way to the facts on the ground. And she is famously incredibly well prepared and on top of her brief. And she knows what the facts on the ground are better than any of her predecessors. Almost certainly she doesn’t have, like, favorite indicators that she looks at and she doesn’t ignore the ones that aren’t her favorites. So in that sense, she is going to be invaluable in trying to help steer the United States out of this crisis, especially once she has control of the four hundred and fifty five billion. Oh, wait, she’s not going to have control of the four hundred fifty five billion that her predecessor, Steve Manoogian, is clawing back from the Fed. We talked about this last week. It turns out now that he wants to basically put that four hundred and fifty five billion into a box that can’t be opened by yet. And only Congress can really authorize spending out of. If Manoogian had just kept it at the Fed, then she couldn’t have spent it because it would have been at the Fed if Manoogian close it back from the Fed. There’s two different places he can put it. One of them is in this like Congress authorization lockbox thing that I’m talking about. The other one is this place called the Exchange Stabilization Fund, which no one knew existed before, like the Mexico tequila crisis of the 1990s. And then suddenly it’s like, oh, my God. It turns out the White House has this amazingly useful slush fund of money that you can use in emergencies. And if it was Manoogian, like, put it this way, if Trump had won the election, ammunition had decided that this money was serving no purpose at the Fed and he wanted to bring it back, he would certainly have put it into the exchange stabilization fund, where he could then turn around and spend it on basically anything he wanted. Because the Exchange Stabilization Fund is this like executive branch controlled slush fund and he’s not putting it there. And the reason he’s not putting it there is because he does not believe in dealing the strongest possible hand to his elected successor.

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S3: That’s probably true. But some things we could say looking forward would be that Yellen successor is going to depend a lot on who’s in charge of the Senate and what the Biden administration can get done fiscally. She’s already said she testified before Congress this summer and she said the deficit is not a concern right now. Interest rates are very low. We should be spending more money. We’re in a big crisis. So I feel like a lot of the talk about how she is a deficit hawk. That might have been true, as Ana was saying at one point in time, but is not true in this moment when we need her not to be that.

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S2: And even if she was a deficit hawk, she’s certainly less of a deficit hawk than like the most dovish Republican in Congress. So the constraint is always going to be Congress and not Yellen.

S3: Right. And then another thing worth noting is a lot of people wanted Elizabeth Warren to be Treasury secretary. And I think we could all agree this is so much better and so much less disastrous, because if you would put Warren in this position, she would have just been this like lightning rod for criticism.

S1: She wouldn’t have gotten confirmed. There’s no way Elizabeth Warren would have gotten confirmed.

S3: It would have been insane. So we know that Yellen is a thousand million times better. Then Warren and I think everyone would agree with that, even Warren herself and the other thing I think is kind of interesting about Janet Yellen to think about now is that she has spoken out in support of automatic stabilisers, which I think would be so great if if she can make Biden care about that and that could actually get through Congress. This is when you don’t have to push to beef up unemployment insurance. When there is economic crisis, if rates cross a certain threshold, more benefits just start kicking in. So you kind of take these benefits out of politicians hands in a way. And I think a lot of economists see this as a really good idea. And it’s hopeful that Janet Yellen sees it as a good idea. And it’s just an indicator of how smart she can be about a lot of these policies. And I think the question is how influential can she be also? Right.

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S2: Basically, all governments have automatic stabilisers to some degree or another. Any like if you have any semblance of a welfare state, then as unemployment rises, you wind up spending more money on unemployment benefits and that kind of thing. So automatic stabilisers are part and parcel of what government does. But in this context, it’s really an attempt to try and formalize what’s known as a countercyclical fiscal policy, which is this wonderful word syllable salad, which basically just means that when the economy is doing badly, you spend more. And then when the economy is doing well, you spend less. And it’s a great idea. Emily, you’re absolutely right that most economists do support it. And in that sense, she’s far from out of the mainstream on this, like most economists would support this. What’s fascinating, of course, is that it is actually very uncommon for an economist to be Treasury secretary, most treasury secretary. In fact, I can’t even remember a Treasury secretary who is an economist. So it’s going to be great to have someone who actually understands macroeconomics on that kind of a level in charge of the Treasury Department for this reason and many others.

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S3: What a welcome breath of fresh air.

S2: And I am not someone to be nice about economists, but I think in this particular case, it’s good to have an economist there.

S1: And I think moving forward, I imagine that in the next not only just four years, for probably the next 10 to 20 years, fiscal policy is going to take a much more dominant role than it has in the last 20 years. So I think that Janet Yellen and whoever the Treasury secretary is after that is going to play a much more dominant role and have to play a much more dominant role than anyone has in the past, because we just simply aren’t going to be able to rely on monetary policy the way that we have.

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S2: OK, let’s talk about more deals, because we’re in there’s a bunch of business and deals in the stock market is hitting record highs and everyone is flush with cash and they’re all trying to spend it. And we now have a two point two billion dollar deal, which I guess by the standards of M&A transactions is quite small, but by the standards of book publishing is absolutely enormous. Whereby Random Penguin or Penguin House, I never know which one of those do I prefer, which is owned by this massive German publishing house called Bertelsmann, is going to buy or has said that they want to buy, has agreed to by Simon and Schuster, which is the third biggest publisher in America, fourteen point two billion dollars. And according to a statement from News Corp., which I don’t know if I take this at face value, but I haven’t seen anyone say that it’s not true. This will create a publishing house with 70 percent of all literary fiction. They basically have 70 percent of all decent novels in America and they have about a third of the entire book market. If this goes. Yes, this looks to me like a monopoly and it looks to me like Bertelsmann’s trying to create a monopoly. And does anyone disagree? And if they are, shouldn’t this be blocked?

S3: I don’t disagree. I think this could be very bad for book publishing in general, especially for authors. There’s one less house to compete for authors and titles. So that means lower advances. That means bigger titles. There’s already all this consolidation in the book business and there’s a tendency now the trend is, you know, big blockbuster titles. Simon and Schuster made a lot of money this year because they they had the John Bolton book and the Mary Trump book. Penguin Random House made a lot of money this year because they had the Obama book and the other Obama book. And so the consolidation isn’t really good news for people who care about, you know, interesting books getting published. It’s just more bad news and it is a monopoly. But at the same time, I sent around this piece that Franklin for wrote in The Atlantic about how this is actually not about book publishing, per say, or book publishing companies, but is actually about Amazon. Because while this combined company would have a third of the book publishing market, Amazon has about half of book publishing distribution. So it’s like maybe a counterweight to that. I don’t know how can.

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S2: Amazon is very like Amazon’s position in book sales is clearly monopolistic and as if you remember, back a million years to the episode where we talked about when they got into a big fight with Hachette, you know, they basically stopped shipping Hachette books and they were all marked as unavailable in this kind of thing in this big fight. They are not afraid to play dirty when it comes to fighting with book publishers. And it is culturally possible, I suppose, that a combined penguin, Random House and Simon and Schuster is going to be so big that they will be able to stand up to Amazon’s bullying a little bit better. And I kind of buy that. But everything else that Frank wrote in that piece is just like, oh, my God, you are such a fogey. And he was like and plus he was like, we need to do something about this Amazon monopoly without ever saying what it is that we need to do. It’s very hard to break up that monopoly at this point. There’s, you know, for all of us trying to buy a bookshop dot org instead of Amazon, like it’s not going to move the needle very far out and just has that monopoly. That monopoly, incidentally, is so entrenched in people’s minds that people simply assume that Amazon has a monopoly everywhere else as well. And it doesn’t. And this is one of the weird things about Amazon is that because it started as a bookstore and because it has such a powerful position in books, every time it makes an announcement like it did last week saying, oh, we’re moving into pharmaceuticals and prescriptions, everyone’s like, oh my God, it’s going to have a monopoly. And of course, it’s not going to have a monopoly in prescriptions. Books are unique. They’re very, very unique market. It does seem absolutely obvious that the big loser here is authors and especially authors of fiction, because we’re always used to happen is you’d have an auction your agent would like send out your manuscript to a bunch of different publishers and then the highest bidder would win. But now when all of those different publishers are all owned by the same company, they basically just agree between each other which one of them is going to make the bid. And then they don’t need to worry about what the other ones are going to bid because they all know that they’re not going to receive a competitive bid from one of the others. So it’s very bad for the advances. And is that enough for the DOJ to try and stop this on antimonopoly grounds? I don’t know.

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S1: Yeah, it’s a good question. I mean, I think from what we’ve seen recently, it seems like it’s definitely more likely than anyone probably would have said like five years ago. I mean, you had like the McGraw-Hill Sun Gauge and its textbooks, but still that was a merger that was stopped on antitrust grounds. So I think this will definitely be scrutinized quite a bit. Whether or not they consider they’ll consider it obviously a less competitive market, whether they consider it monopolistic is definitely up for debate. I would say the other losers here are going to be that you’re going have a lot of people going to lose their jobs if this goes through about specifically what they said in terms of where you get, you know, your your synergies, is that going to cut a bunch of sales and marketing jobs and then.

S2: Yeah, but more importantly, they’re going to cut a bunch of, like, weird back and like, you know, that whole infrastructure of printing and distribution now can be duplicated, which we East Coast media types don’t like to think about, like the truckers driving the books around to bookstores or whatever. But books are big, heavy physical objects, which way like a lot of physical weight, if you add them all up, something like the Obama book with the 700 pages and sold two million copies already. That’s a lot of just logistics of moving it around the country. And those logistics all get centralized. And that’s a bunch of savings right there. And one of the interesting things about the book industry right now is that the covid pandemic has hurt. Book printing plants at exactly the same time as everyone is reading more books, especially things like Mary Trump, and so there’s this incredible crunch. All of the publishers who who were meant to be publishing books right now, which have been scheduled for months or like a year, pushing them back because there’s just no capacity to print them, because you have people like Barack Obama and Mary Trump just dominating the printing presses. So we’re going to have a lot of books really crowding onto the bookshelves in the next year or two, which have been pushed back thanks to Kovik.

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S1: Yeah. You also had a lot of books pushback back because authors weren’t going to be able to do tours and so publishers were concerned about that. So they push some big names as well.

S3: The other losers here are readers because of the trend now continues to be towards these blockbuster books. I would like to speak for most readers of just regular fiction books or interesting nonfiction books or groundbreaking. But like we need a variety of books to feed the intellectual life of the country. And if all the books are going to be like the memoirs of various politicians or inside stories from the Trump administration, I feel like that hurts readers and again, the intellectual life of the country. There’s then sort of like a dearth of good ideas floating around. And it’s not dissimilar to what’s going on in the digital media industry, although someone actually paid money in this case, whereas some recent digital media companies were bought for no money. But what I’m saying is this trend toward consolidation in media is bad for everyone’s brains.

S1: Yeah. Though I don’t think that this change is going to be a huge difference. Like, I think that if this doesn’t happen, you’re going to get a lot of blockbuster books that are especially about politicians and celebrities. And if it does or doesn’t, you’re going to get. That doesn’t matter. True, true or fair.

S2: But still, I mean, I’ve definitely been hearing whispers of a bunch of people trying to start talking about starting new media companies both on the Internet and on TV. And I wouldn’t be at all surprised if this merger goes through if, like a few big name book editors decided to go off and start their new a new literary fiction imprint, now is a good time to start a publishing house precisely because you get much less competition. Now we all see. It is Thanksgiving, which means that Tuesday is giving Tuesday. This is the time of year, people, that we don’t go out and just start spending crazily on Black Friday. This is the time of year that we think about giving back and spending money a little bit more charitably and looking at the list of the biggest charities that people give money to in America. What is the number one charity on that list?

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S3: Emily Felix, the number one charity on that list is United Way Worldwide, which I wrote about this week, actually.

S2: So what does the United Way worldwide do?

S3: United Way is this big, sprawling thing. There are United Way branches and all the major cities in the U.S. and even internationally in each branch raises money for its local community to fight hunger. Lately, to do covid staff PPE help kids, you know, very basic, like local community charity stuff. And then on top of that is United Way worldwide, which kind of functions like a franchise owner, like a McDonald’s, almost. It’s a small office staffed with people who are paid a lot of money. Relatively speaking, the CEO makes, I think, over a million dollars and they kind of help centralize the organization. So each branch looks to them for guidance on what software to use or, you know, marketing materials and stuff like that. So it’s this it acts like this big company as the hub. And then there are all the branches all around the country doing local things for their community is that most people like. But what I wrote about this week is problems with the United Way worldwide office.

S2: And I’m going to come out and say that big charities in general, the really biggest, most popular charities in general, are rarely, if ever, a particularly smart way to donate money. If you look down this list where the United Way worldwide is number one, the rest of the top 10 is the Mayo Clinic, the Salvation Army, St. Jude’s Children’s Hospital, Harvard University, the American Red Cross, which any regular listeners sleep money will know is extremely problematic. Catholic Charities, which is right there in the name Stanford University, the Y and Columbia University, all of which have enormous amounts of money, obviously, because they’re at the top of the list, but none of which are at the top of any kind of bang for the buck or efficiency list, and also very few of which can really be claimed to be helping the lives of the neediest in you know, I mean, you give money to Harvard or Stanford or Columbia and it’s just like, yeah, you know, it’s like why they or they’re already richer than Crucis. And a little bit of thoughtfulness in where you give your money and how you give me your money, I think goes a long way. And I am not saying that you need to be. Fully dialed in to this idea of effective philanthropy and calculating the bang for the buck and, you know, trying to work out whether deworming pills are as effective as the randomized controlled trial, say, but I am saying that. This is a significant expense for most of us. If you were giving, you know, a thousand dollars to charity, then spend at least as much time thinking about that as you would thinking about like a purchase where you’d spend a thousand dollars on the thing, which is quite a lot of time.

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S3: So my story looked at three different complaints filed by women in that central office, all alleging that they’ve been retaliated against by the CEO after they reported sexual misconduct or sexual harassment as per policy. And this happened just in the past 18 months after me two after the United Way worldwide made did like so many other companies and said, you know, we believe women sexual harassment is bad. We have a policy. We’re going to beef it up. We’re going to send you to training. All this to the women I spoke to were like we were doing what we thought we were supposed to. We were reporting, you know, harassment to H.R. and instead they reported the harassment to H.R. and it was like their fortunes at this nonprofit sank one woman after she reported just following the policy. The CEO tried to get her fired multiple times, went to her boss and said, you have to fire her. The boss was like, but why? And all he would say, according to the complaint, is she’s bad for culture. What the other woman, she had a big team. They took away people from her team, gave the people to her harasser. So she complained about a guy and they took the complaint and then took people off her team and put them on the harassers team. And then in the third complaint, it’s pretty complicated. But basically, this woman, Anna Avendaño, discovered a pattern of sexual harassment throughout United Way in the branches between women who are trying to raise money and men in labor unions who have some control over those purse strings. And the women trying to raise money were basically getting sexually harassed, reporting it to their local United Way. No one was doing anything. Some of the women got retaliated against for even reporting. And she was trying to kind of fix that. And she was being really outspoken. And the head of the AFL-CIO runs all the labor unions got upset when the CEO was like, I don’t like this. And then this woman, Ana Avendaño, was suddenly persona non grata at United Way worldwide. So it’s a story about just retaliation, not really about harassment, like a lot of the Metoo stories are, but really about like what an organization does when someone speaks up about this kind of stuff and the kind of blowback they get. So to the women were fired and the other one was basically pushed out. So that’s why, Felix, you asked United Way, maybe not the ideal charity this year.

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S2: And I have to say that the philanthropic sector in general is not a great place to look if what you are looking for is organizations that do a really good job on this kind of thing. And the Metropolitan Opera is another key example. After, you know, countless complaints about the sexual harassment from the star conductor, James Levine, it took me years to react to that. And even then, they gave him this massive, great payoff and. You look at any other number of cultural institutions and non-profits, you can see that kind of story playing out over and over again, it’s almost as though if you are presumptively on the side of the angels because you’re some kind of a non-profit, then you don’t need to worry about such things. And yet we cannot talk about this entire subject without mentioning the Catholic Church, which is just like, you know, exhibit A and thing, which is where you want to talk about covering up of malfeasance. So it’s great to give money to charity and you should all do it and we should all do it. But it is also true that there are big problems in this sector and this sector does seem to be endemically bad facing up to those problems.

S1: I was just going to ask from the reporting you did, do you think there’s anything specific about the way United Way is structured that made this occur?

S3: That’s a good question. I do kind of feel like it’s all the the local branches are actively fundraising and working in the communities, whereas this United Way worldwide is really this like corporate office that’s kind of removed from that work one step. So I don’t know if that caused the problem here, but it does seem kind of like an interesting setup to me that is more could be more problematic. One thing that Felix said, it was hard to get people to talk about this because they see this nonprofit as doing good work and they’re really loathe to to put it in a bad light because then that puts donations at risk. So it’s different, I think, than like doing this reporting with companies, because people are no one really cares as much about like I did a story a few years ago on Monster Energy Drink, and not one person said to me, like, well, we don’t want to damage the brand. People will drink this stuff, you know? But everyone said to me, you know, just to be clear, this organization does good work, blah, blah, blah. We don’t want to damage the brand. But it’s like at the same time, the corporate structure, the CEO is making like a million dollars. All these people in the central office are really well paid. They should be held to a really high standard. And now they’re paying you know, they’re faced with these charges and complaints. They’re paying lawyers to deal with them. It’s a waste of of the nonprofit’s money, too. And I imagine that the nondisclosure agreements probably don’t help. No. And yeah, exactly. One thing Ana was saying she wants to do is maybe get some rule passed where non-profits aren’t allowed to kind of not force, but to coerce these women into into Enda’s and they would have to disclose their salaries.

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S2: There is no Denise in. There is absolutely no good reason why any nonprofit should ever ask anyone to sign an NDA that’s just completely bonkers. But the reason that they do is really instructive. And I think what you’re talking about donors is is just really key here that. Who is it that nonprofits work for, right on one level? The whole point of the nonprofit is to serve the people that it’s trying to serve or animals or cultural objects, whatever it is you’re trying to protect or help. And that’s your job. That should be priority number one. But realistically and practically, nonprofits, by their nature just shrivel up and die if they don’t get a steady stream of donations. And the people who ultimately control the fate of the nonprofit is the people who write the big checks and the people who write the big checks are going to be rich and powerful individuals, and they’re going to be able to twist arms. And I think that’s just, again, endemic to the sector. And it’s another reason why it’s super important for, you know, individual small donors to be able to. Be important and one of the rather more depressing things that we’ve seen in terms of charitable giving over the past 10 or 15 years is that the charitable sector has been getting more and more money from large foundations and endowments and less and less money from individuals. And that just gives, I think, too much power to utterly unaccountable individuals. You can, on some level hold united way to account, as Emily is doing with this journalism. It is basically impossible to take some, you know, almost unknown billion dollar endowment in wherever they are in Kansas and say, like, we’re going to hold you to account because. That foundation probably only has a couple of family members on the board. It does what it wants. There’s no accountability at all. And if we think the accountability in the charitable sector is bad, which is accountability at the foundation level is basically zero.

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S3: One thing that was interesting that I learned. Speaking of donors in this reporting, was United Way has this very kind of old fashioned, I guess you call it a business model, a nonprofit business model where employees of big corporations give money to United Way through their paychecks. Like that’s what the big union connection is. Union members, they automatically deduct a dollar ten dollars a week and goes to United Way. And this apparently brings in like two hundred and fifty million dollars a year to the organization, you know, across the country. And that’s like no joke for for the three billion dollars it’s making in revenue a year. And that’s why the AFL-CIO is so popular. But I guess the whole business model now is really threatened because people don’t start companies as long as they used to. And, you know, people the those crazy millennials, they don’t want to do this like paycheck tithing thing. So its business model is a little bit in danger, too. And then I was I don’t know if people have corporate matches at their companies or things like that right now. How people are donating is sort of interesting. If people still do that through their employers, I don’t know.

S2: I feel like, yeah, corporate matching from employers is something which is never totally caught on, but is you know, it’s been here and there and you find it at places like Google and big, you know, rich companies. I do like the idea on some level of encouraging people to choose, actively choose who and what they want to support rather than just like ticking off a box and saying, yeah, I’ll give a dollar or a paycheck to the United Way when the alternative is not giving a dollar a paycheck to Meselson Frontiere. You know, the alternative is just keeping that dollar a paycheck for yourself. And one of the things I like about Amazon smile, for instance, is that you get to really pick whichever charity you choose and that’s better than having some union use it for you for sure. I remember like every so often there will be some kind of campaign. Normally when there’s a natural disaster and you’ll go to like the ATM and get some cash out, the bank and the bank will be like, well, you’re here. Would you like to donate two dollars to the American Red Cross? And you like I would happily donate two dollars to any number of organizations, but not the American Red Cross. But there is this huge, big United Way American Red Cross type organizations which always find their way onto those default lists. And I just wish there was more diversity there.

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S3: Oh, actually, Felix, I have a question for you about sort of that, because I go to the supermarket, it’s it’s my big outing usually these days. And when I check out with my credit card, it always says, do you want to give money to feed the hungry? And then it’s like two, three, five dollars. And I always give whatever, two, three, five dollars seems really easy. And then I was told that, like, that benefits the supermarket more than if I gave this organization on my own, like they’re getting a write off.

S2: I know the answer for Wholefoods because I actually spent a few days reporting this once and I never really wrote it up because it was all very unsatisfactory. But Whole Foods does this campaign every so often like there’s like a couple of weeks, every few months where they’ll be like, do you want to give money to the Whole Foods Foundation? And so I was like, what is this Whole Foods Foundation and is it worth giving money to? And I kind of looked into it and it turns out to be what you would expect it to be, given that Whole Foods was set up by this sort of entrepreneur who believes in entrepreneurship and it gives loans out and we have kind of grants to, you know, something something micro entrepreneurship, something microfinance, something, you know, Africa, lots of photographs of smiling, you know, white Whole Foods employees in Kenya next to some woman who’s just bought a goat. You know, this kind of like very cliched charitable picture. And the more I looked into it, the more I was like, oh, this is just terrible. And the more I was like, I don’t want to, you know, give any money to the Whole Foods Foundation. But it is the case that the easier it is to give money, the more people wind up giving. And these things are not zero sum. If you don’t make that three dollar donation at the supermarket, it is almost certainly not like you will take that three dollars and you will spend it on a you know, you’ll give it to give well instead or some place really tries to optimize that they’re giving. It’s just that you’ll wind up not donating that three dollars. We don’t have a finite. Bucket of how much we give each year, we just kind of give here and they’re a little bit here, a little bit there, and it’s not really added up and it’s not really thought through in that sense. And so I think a little bit more thinking it through and a little bit more planning and a little bit less, just like throwing money in a bucket and someone coming along to you and saying, I’m going to run in circles for two hours, can you pledge some money? And you go, OK, like, you know, is would be good. But so much of the way that money is raised is based on those kind of personal relationships or corporate relationships. You know, it’s like you shop at our supermarkets or raise money from you or we’re friends. So give money to whatever charity I’ve managed to like. I want to run a marathon. And there’s this team which is paying my entrance thing, and then I need to repay them by raising money for charity. And there’s there’s a lot of transactional philanthropy going on and it’s always related to something else going on in the real world. And it’s a little bit impure, but it is the reality and it’s worth looking past their reality and just being a little bit more conscientious about how and when and how much we give.

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S1: I think I will say that the most money I’ve ever raised for anything was running a marathon. I never in a million years or been able to get that many people I know to raise as much money as I did if I had not been doing that.

S2: I will say and long term listeners of Slate Money will remember this. The most money I’ve ever raised for charity was when I decided on a whim one year to announce that I was going to match all of slate money listeners’ donations. Oh my God, Doctors Without Borders. And it started and it started like snowballing. And I thought I was going to have to write this like two thousand dollar check. And then in the end, I wound up writing like a twenty thousand dollar check. Oh, my God. Wow. That was a lot of money I wound up giving to Doctors Without Borders. Yeah, but I’m very happy I did.

S3: So what should I should I keep giving the little dollars each time I go food shopping? I feel like it’s good and you’re you’re right. I would never do that like that otherwise.

S1: It’s just it’s probably better than nothing but not the optimal.

S2: Do you even know what the charity is? You’re giving money?

S3: Yeah, I looked it up. It was a good I think it was I’d heard of the charity like I knew it. I’ve talked to them for stories before, one of the National Hunger Charities, so I felt good about it. It wasn’t just the Whole Foods Foundation.

S2: Yeah. I mean, if you’re giving it to my I have to say, if we want like advice right here, hunger charity, like, you know, in the age of covid, you cannot go wrong by giving to World Central Kitchen, which is Hasi Undresses charity, which is just absolutely amazing. He does spectacular work after disasters. He’s been doing spectacular work during the pandemic. He is not a heavy handed fundraiser at all and he tends to get like large checks from big institutional donors, which is great. But every penny you give to that particular charity is a it’s a great place to give. How about you guys? Do you have any do you have a favorite charity?

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S3: Felix? I don’t. I will say that there is a tax break this year, a one time three hundred dollar tax deduction that you can take on your twenty twenty federal taxes if you give to charity, even if you’re doing the standard deduction. So that’s an incentive to people maybe to give a little bit before the year is over.

S2: All right. Let’s have a numbers round. Emily, do you have a number?

S3: I have a number. It is five hundred dollars. That is the price of the America rides on Duncan. Tandem Bike is a bicycle built for two sold by Dunkin Donuts that has like the the bright orange logo on it. So Dunkin Donuts posted a picture of the America rides on Duncan tandem bike on the Internet. And quickly, people who ride bicycles were confused because it didn’t look like a real tandem bike. It looked like someone drawing something from their imagination, a picture of a tandem bike. So my colleague had a big investigation. Is the tandem bike real or not? And the answer is it is in fact real. It is a five hundred dollar tandem bike, but the picture is weird.

S2: And if you don’t want a Dunkin Donuts bicycle, they also sell many fridges, aprons, hoodies and scrunches, which I also learned my number is one hundred eight billion dollars, which is the amount that Elon Musk’s wealth has gone up this year. There has been, in case you hadn’t noticed, a major pandemic and recession and various other things. But somehow Elon Musk has managed to increase his net worth by one hundred and eight billion dollars. And he’s now the second richest man in the world. Congratulations, Elon, I suppose. Yeah, he has probably as Jay Powell to thank for that shikimic. Yeah, I should give him a tip. And what’s your number?

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S1: Number is one hundred, so Peru issued a century bond this week, which should actually be 101, the majority is actually 101 years, which is a weird century bond. I actually think you’re right. Yeah, I think you’re right about that, actually, because I try to think of what I looked at the bond price and looked at the maturity. I actually think I read about that one hundred one. I’ll change my number. So Peru issued a century bond. Peru is now on their third president in two weeks, their fifth president in five years. And yet they probably are actually a very, very low default risk. So it’s not completely insane. It’s only slight.

S2: I mean, would you lend money to Belgium? They basically don’t have a government at all and they’re perfectly credit worthy. I feel like in a weird way, countries like Peru or Italy or Belgium that have sort of weak governments can be strong credit risks then countries like Ecuador or Argentina or, you know, that have less turnover in the presidency. But where the incoming president can just feel the need to repudiate all of his predecessors and say, I’m not paying any of that debt, that if you have a kind of institutional civil service that effectively runs the country, then it doesn’t matter who the president is. That said, I would not be a long term buy and hold purchaser of the Peruvian century bonds. Quite clearly what’s going on here is that people are speculating that given its convexity, which we can look up in an investment dictionary if we’re so inclined, the value of this bonds could increase in the short term. I don’t think anyone is going, oh yeah, this is a great long term investment for my great, great grandkids. Yeah, probably not. All right. I think that is it for us this week. Thank you for listening. Thank you for giving us those amazing reviews on the Apple podcast app. Thank you to Jessamine Molly for producing. Thank you to just everyone who’s managed to help this show and all of their friends and all of their family get through a truly terrible year. We look forward to twenty, twenty one being a lot better, but this is the time of Thanksgiving. And so thanks to everyone who has been a great person in twenty twenty and thank you to especially to anyone who has emailed us, we love you all. The email address is Slate Money at Slate dot com. We do not reply to everything, but we do love all of your emails to keep those coming.

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S4: Do tune in on Wednesday for our Money Live show and I will be here next week on Sleep Money.

S2: OK, so for Slate plus this week, we’re going to do a Brexit check in because we haven’t had a Brexit chicken for a while. Emily, how’s Brexit going?

S3: Still bad. Felix There were there was a line of tell me if I get this right. There was a line of lorries, a lorry to a lorry queue, that five mile lorry queue that’s trucks for five miles backed up because they were testing the new post. Brexit regime in which all the trucks would have to be stopped and inspected and stuff in. pro-Brexit times they could just read through, but now no.

S2: So the big picture here is that the UK left the EU on January 30 past, but this saga is not over. They left, but to all intents and purposes, they didn’t. They still wound up being part of the EU for trade reasons and other stuff until the end of this year. Now, as we know, because it’s getting very dark out very early, the end of this year is fast approaching and. Everyone is desperately hoping that somehow the EU and the U.K. will manage to kick this can down the road a little bit longer, because if they don’t, it’s going to be disastrous. We had the governor of the Bank of England just coming out and saying the long term effects of a hard Brexit have a no deal. Brexit would be much worse than the long term effects of covid, which is undoubtedly true. We have had multiple opinion polls basically saying, wait, we voted for what? Hang on a sec. Can we have a do over? This is a really bad idea. We’d rather stay in because this is a disaster. And yet the prime minister, this floppy head guy who’s completely incompetent, seems to be going ahead with this idea of just crashing out on what they call it, Canadian terms or something, as though Canada is great at trading with Europe and people are really terrified about what will happen. And and you’re the international realpolitik person around here. The European Union is extremely good at kicking the can down the road. Can we hope that they will manage to do this one more time, please?

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S1: I would say it’s not unlikely, although I also wonder if I think the way this is being described as often as kind of a binary outcome, as though, like you have a hard Brexit or you have a deal. And I also think it’s entirely possible that they don’t get something done. There’s a short period where things are super chaotic and then they get something done. So I don’t necessarily think, you know, they don’t get something done on that date. That means it will inevitably be horrific. I might if I had to guess, I would say either it gets kicked, the can get kicked down the road or they within the next few months, at least come to some type of agreement.

S2: Right. So this is this is the idea, the. Downing Street is basically in denial about how bad it’s going to be, and if they do crash out at the end of the year, then within a couple of months, it’s going to be so bad that they’re going to be forced back to the negotiating table to agree to something. Although, as we have discussed a million times on this show, there’s basically nothing that is possible. And you can’t be out of the EU and also have. Free trade and, you know, ultimately it comes down to this question of do you have a border between the Republic of Ireland and Northern Ireland or do you have a border between Northern Ireland and the rest of the U.K.? You have to put the border somewhere and either one is unacceptable politically. So quite what shape any potential solution would look like is extremely unclear.

S1: Yeah, I mean, there’s there’s no solution that will be better than what they had before before there’s a Brexit. But they can hopefully come to at least the best of the worst options.

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S3: When we say horrific, what do we mean not just truck traffic? Right.

S1: That’s a good question, because honestly, it is a lot of estimating what will probably happen in terms of just the decline in trade, but also decline in just like basic goods. I mean, the UK imports every import a whole lot of stuff. So it becomes a real problem if all of a sudden they aren’t able because they don’t have anything in place to do a significant amount of trading with their largest trading partner. So that I mean, yes, if that went on for a significant period of time, yes, that could be really, really bad. I think there’s very little chance that that would go on for a really, really, really significant period.

S3: So that would be like food shortages. Medicine shortages.

S1: Yes. In there. Yeah, I mean, yeah, absolutely.

S2: Plus, like even the home grown food in the UK, which like there is a bunch of farms and stuff like Britain does produce a bunch of food. But the overwhelming majority of that food is produced by non-native Europeans who are working on the farms from Poland or Romania or Greece or Bulgaria or wherever they’re coming from. And so, like, everything just basically goes to shit if Britain leaves Europe, which apparently we’ve already done. So this is one of the reasons why I don’t live there anymore.

S3: Now you live here, which is very rational and sane, obviously.

S2: Yeah, I live in the great, rational, sane democracy. The best of the worst options. Yeah. Remind me to call it next week from New Zealand.