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S2: Welcome to The End of the World as we know it, edition of Slate Money, your guide to the Business and Finance news of what turns out to have been a pretty packed week of business and finance news. I’m Felix Salmon of axios and of South London, which was the last holdout in the British election that actually voted Labour. Virtually every whoever else in the U.K. managed to vote Tory, it seemed, except for Scotland, which went in a landslide for the Scottish Nationalists. We’re going to talk about that. Of course, we are going to talk about the end of the WTO, which is a story I covered in my newsletter this week, axios Edge, but which I feel hasn’t got enough attention because it’s a pretty big deal. We’re going to talk about other trade related stuff. We’re going to talk about Paul Volcker. Rest in peace. What else we can talk about, Emily?
S3: We are going to talk about when a suitcase company is more than a suitcase company.
S2: Emily, weigh. Emily Pack of Huffington Post is going to delve into the gender dynamics of away suitcases, which apparently is a thing.
S4: Who knew that a suitcase could have gender dynamics? But it does. And Anna Shmancy of Breakingviews is here. And you are going to basically be the trading it. I guess I know what it’s like.
S1: Let’s talk about all the boring.
S4: All of that coming up on Slate Money.
S5: So everything’s falling apart, Felix.
S2: Everything is falling apart. I had this thing in my news that was like about the Treaty of Westphalia, which I kind of like like it is a frame which is basically 16, 48, eight when nation states really became a thing. And the thing about nation states is they were all sovereign nations and no one and they they they answered to no one and they would make treaties with each other, but they wouldn’t install some kind of judicial system that they could take each other to court because that would violate their sovereignty. And basically, ever since then, for the past four hundred four hundred fifty years, it was. That way until something crazy happened in 1995, which is that the General Agreement on Tariffs and Trade GATT transmogrified into something called the WTO, the World Trade Organization, and the main difference between the two is the WTO had this court and the court was like you. Countries could take each other to court. They didn’t need to agree to be taken to court. They could just be taken to court. And the US just took Europe to court and said you were giving illegal subsidies to Airbus. And the court found in America’s favor and came down with a seven and a half billion dollar judgment. And this was a real thing. And Europe had to pay that. And this idea that there was a court where countries could take each other to court like that just didn’t exist before 1995, and now it doesn’t exist anymore.
S6: And that is because of of course, because of Donald Trump.
S2: And that is because of Donald Trump, who. Well, I mean, it is because of Donald Trump heads.
S1: The WTO has been coming increasingly irrelevant. And China also really kind of massively Birkitt. And the Donald Trump kind of actually broke it.
S4: So, yeah, it’s true that the Chinese relationship to the WTO has been quite fraught because in 1995, China was not the dominant player in international trade like they are now.
S2: And it were and quote unquote, developing countries had like a different status within the WTO than the main industrialized nations. And then since then, it’s been basically impossible to update the WTO rules to account for things like the Internet in China, which are kind of like me too, really.
S7: Was a pretty important thing that the WTO clearly needs to be updated and that hasn’t been updated.
S2: And and it’s absolutely right that it’s become more and more outdated, you know, as the years have gone on. But up until from selection, at least, it had this court that was the one thing that existed and that worked and that had seven judges on it. And they would make rulings and then those judges would cycle off their terms would come to an end. And the Trump administration just said, well, we’re not going to allow any more judges to be appointed. And so it went down from seven to three. And then this week, two of those three cycled off. And once again, the Trump administration said we’re not going to allow anyone to be reappointed in that place, which left one and one judge can’t make a binding ruling. And so therefore, there were no binding rulings anymore. And the one thing that the WTO was still kind of doing effectively, which was issuing binding rulings it now can’t do it is now basically I I used this. One of my favorite words, OTOH, is it means it just as useless does nothing.
S5: But the irony here, I guess, is and I think it was you had it in your newsletter or maybe the Times had in their piece.
S6: But the United States has won a majority of cases at the WTO. Like, yeah, it’s it’s hard to have a body that that hurts your sovereignty.
S5: But as far as the U.S. goes, where was the hurt? They were winning a majority of the cases like you just pointed out. Right.
S2: Airbus victory, although that’s backwards looking rather than forwards looking. So, you know, the Obama administration was unlikely to do stuff that violated WTO rules because they were like friendly globalists.
S8: And the Trump administration, on the other hand, and quote, you know, mr. Donald Tariff Man. Trump, he loves imposing crazy illegal tariffs on anyone for any reason. And that is much more likely to be found in violation of WTO rules. So going forwards. He has much more freedom to do that because someone can appeal whether he can appeal any ruling against him to the appellate body as it’s known. And since the appellate body can’t deliver a binding ruling, he can just keep on doing it.
S6: So this is just the one just one sign from the week that the world order created post-World War Two that sort of kept the peace globally is come crashing down and just crumbling all around us. And it’s not just Trump’s fault.
S9: I also know your people, my people. So it’s 100 percent. So I’m just saying, like Trump is, if anything, you could say probably a symptom of the. That all the stuff was already collapsing.
S6: A return to the west value away.
S8: Well, well, it’s I mean, the other the other big international institution that basically superseded the old preview of what’s fairly a system of nation states was, of course, the European Union. Right. Where a bunch of countries really did give up sovereignty to something above that. And the EU was above them. And, you know, it has it has a court that rules over just the EU met nation’s needs. And the Brits hated that. And they were like, we refuse to to be subservient to Bussel Brussels. We are proud nation and we will never allow. It happened, so we’re going to leave. And as Slate many listeners will know, that wasn’t exactly a smooth process, but it is now going to happen on January 21st in the wake of the election this week where Boris Johnson won in a landslide. He gets to push through Brexit. It will happen on January 21st. Britain will leave the EU. And that is, you know, it’s not in Britain’s economic interests to do that, but it’s clearly, as you say, as it’s a sort of atavistic reversion to this kind of, you know, everyone against everyone else. Hobbesian nightmare situation.
S1: OK, cool. That sounds great. Yeah. And I guess if you’re thinking of, you know, why this is happening. Because as you said, it’s not as though the U.K. was ever super excited about being in the EU. Now, they always kind of had one foot in, one foot out and in in a similar way. The Republican Party has always had issues with international bodies, you know, with the correct WTA being one of them. So I guess the question then is, but, you know, what is it? What has been happening now? Why is now the moment when all this stuff is actually falling apart?
S5: I think it’s because the argument for globalism lost the thread with people, with the humans, because globalism, while it’s good for peace and world order and cooperation. You know, normal’s on the ground. Workers really have been, especially since the financial crisis, just losing ground. Right. And they need something. And and I’m just bullshitting. I need as is a proud European.
S2: I’m not sure about that. When I travel in Europe, I meet a lot of proud Europeans. If you look at the marches that have been happening in London with people waving EU flags. People genuinely feel European. One of the problems is that a lot of Europeans in the UK, like non British citizens in the U.K., weren’t allowed to vote in the elections. And so that caused problems. And the other thing I have to say is that a majority of the U.K. is pro remain like every single opinion poll shows this even this latest election, the Tories got forty three point six percent of the vote. They didn’t even get a majority of the vote in England, which is the heartland where they got almost all of their seats. There are a lot of like boring electoral first past the post reasons why that still resulted in a landslide. But it’s not really the case that there’s this broad popular mandate to take Britain out of the EU. Most people in Britain want Britain to stay in the EU.
S1: But I mean, there’s a lost right. And I think that’s that’s a very good point. And there is general discontent. I mean, of course, in the case of the U.K., you know, it’s also Corbyn. And I think he you know, obviously. Is that a bad candidate? Yeah. And that’s a big part of it, too. But but I do think this fits into things that we’ve been talking about for months. All of these, you know, protests, this push back against this kind of global order, which, you know, has been gaining steam. And I. And Emily, I think there’s some truth to what you’re saying, that some of this is because of kind of the fallout of the financial crisis, that essentially none of these developed nations have really, really fully recovered from. And people at the ground have not felt like they’re. Benefiting from all of this.
S6: I think that the benefits of globalism haven’t been felt by everybody and the benefits that are sort of bigger picture that we’re now seeing go away like a return to the Hobbesian worlds. I don’t think people understood that, you know what I mean? I don’t think there was an appreciation for that. So that when it goes away, anyone’s really mourning the loss. People feel like they have been losing ground since the financial crisis. They see that people at the top haven’t lost ground and are doing better. And like on the left there, the solutions on the table haven’t been very good.
S2: I think also one of the main benefits of globalism is labor mobility, certainly in the EU, like the people who really benefited from the EU. The French and Spanish and Romanian and Polish people who like found it really hard to find well-paid work in their home countries and moved to London or other places in England and got much better paid work. And they were clear winners from the internationalist agenda. But one of the things we really found over the history of the EU is there was much less labour mobility than people thought there would be, that people didn’t really take advantage of it in quite the way that you thought they would. If you look at youth unemployment in Spain, for instance, it’s way higher than you’d think given any of those people can just leave Spain and find work somewhere else. And then the flipside of that was the people in, you know, the native born English people not in London, but in most of the rest of England, didn’t like the immigration. And they thought that, you know, they had this kind of nativist reaction against them. And so it didn’t work on either side. And without that kind of like successful labour mobility, I think a lot of the benefits of globalisation kind of have, you know, evaporate a little bit.
S1: Yeah. I mean, I think that pretty much everyone has benefited from globalisation. But the problem is they’ve benefited in ways that aren’t as easy to see as the ways that they might also be harmed. And, you know, and I think when a lot of these programs were put in place there, there was this idea that humans would behave in a fairly rational way, that somewhat unsurprisingly, they haven’t. As you say, that that’s the case in a lot of southern European countries. We have very high youth unemployment rates and people don’t move. Same thing in the U.S. you have areas of the country where there’s unemployment is significantly higher. And the question is, OK, well, then why don’t people move to where? To North Dakota. Right. Exactly. And where do you look? Well, there are variable reasons why people don’t do that. It’s because we’re not perfect economic actors.
S3: And I think also, look, maybe the biggest benefit of global trade is likes as two people as consumers. I’ve said this before. Things are really cheap.
S2: They’re just cheap. Like I’m sitting here in front of my iPhone. Everyone with a smartphone is benefiting from globalization. Smartphones couldn’t exist without globalization. But you don’t think of it as like, oh, this is a great neo liberal when you just think of it as your phone.
S6: Right. And like just because stuff is cheaper and you get to have an iPhone, there are all kinds of downsides that make those benefits less exciting.
S5: Like you don’t get paid as much money anymore. You know, struggle to live in a home, you know. And I mean, there are so many other economic struggles besides the lack of struggle you might feel as a consumer like, yeah. Talk is cheap, Ruggles.
S2: Always more salient. Struggles are more salient. And so, you know, if. And so, yeah, you noticed the struggles much more than you notice the things that are easy. There are so many things that are very easy that used to be hard, but you can do on your phone now so you don’t sort of think of those as is offsetting the struggles. And everyone has struggles.
S1: And there are some industries that jobs that wouldn’t exist, but we don’t think.
S5: Yeah. Nancy Voca. Yes, speaking of struggles. Exactly. What a great transition, right?
S2: So Paul Volcker. Really? And there was a interesting backlash against him among the sort of lefty Internet this week. I was under the general impression that he was this secular saint and that no one could possibly object to anything he had ever done. And he was the last uncontroversially, you know, great Fed chair who everyone could agree. Did the right thing. And that lasted for about 35 minutes. And then suddenly all of this sort of revisionist takes started coming out. He was undoubtedly a well. I mean, there was doubt over everything. I was going to say he was undoubtedly like a dedicated public servant. So and at it, I saw like Matt Stoller on Twitter saying, look at all the money he made as chairman of Wolfensohn and Company and revolving door, blah, blah, blah. So it’s interesting that the fact there’s even a debate over Paul Volcker, I think shows that there’s no one who isn’t problematic anymore.
S1: Right. And to a certain extent, no human being is obviously like, you know, you can really, really respect Paul Volcker and not necessarily agree with every single thing he ever did. But I do think this take now that like, oh, well, actually, you know, he really didn’t need to kill inflation and all, it would have just gone away any way at all. Well, you know, the the deep recessions we had in the 80s where, you know, they were so much worse than than what we would have had then, you know, he caused this. This is his fault. He did cause a deep recession.
S9: You know, let’s be clear.
S2: Let’s go back back up and just say, I got Zenker Warra. Emily, who is who is Paul Volcker? What is he most famous for?
S5: Paul Volcker was chair of the Federal Reserve during the Carter administration and then a little bit into Reagan. And he is famous from that time because he slayed the beast of inflation.
S2: Yet inflation is a mad inflation had gone up to like 15 percent. It was really he raised interest rates up to like 19 percent. He caused a really nasty recession. A lot of people lost their jobs. Unemployment went through the roof ten point eight percent.
S8: And he kept interest rates high despite the fact that there was high unemployment until inflation came down. And then everyone’s like, we’ve beaten inflation and now we can bring in interest rates down. And now people can have jobs. But we needed to put up with that high unemployment for as long as we did in order to bring rates down. And I guess now there’s sort of revisionist attempt to say, well, maybe we didn’t need to keep interest rates as high as we did for as long as we did, because there is certainly it certainly seems. And I think this is a fair criticism that in terms of the dual mandate that the Fed is charged with ensuring full employment. He didn’t seem to care a huge amount about ensuring full employment.
S1: Well, but it depends on what you mean. Does it mean ensuring full employment at that moment or trying to ensure full employment long term, which I think if you look at at what he did and if you look long term where unemployment rates went in the 20 years after, it is very hard to make an argument that what he did didn’t long term help that trend.
S6: But and stop me if I sound insane. But maybe inflation isn’t that big of a deal to the people with jobs who are getting raises year over year and like their money, they was going job.
S1: No one’s going to end.
S5: Inflation is something that like more like rich people care about because they’re the ones with all the money that, you know, in accounts, you know, that’s using money. Whereas like working people don’t really have to worry as much about inflation because they have what is it like 40 percent of people don’t even have $400 in the bank or something? I think I said like Slover, weighted concern for inflation was an overweighted concern for wealthier people and has underweighted concern for unemployment was an underweighted concern for working people.
S2: So a lot of it had to do with unions as well. But yeah, if you look at this broadly in the question of like weighing out labor versus capital, then obviously Labor is more interested in employment and obviously capital is more interested in inflation. Those are the dual mandates. And one mandate is like look after labor and the other mandate is look after capital. And he was clearly looking after capital. And Labor is to a point was actually doing fine.
S7: We’re doing OK. It was getting it was getting significant.
S2: Pay rise is in line with inflation. And there was a good case to be made that those pay rises were fueling inflation, making inflation even higher. And it became this kind of spiral where pay rises caused inflation and inflation goes pay rises. And it went on and on. And you can see how that’s not a great spiral to be in the middle of. And you can see how someone like Paul Volcker might want to come in and end it. But you can also see how so long as this so long as you keep on getting those pay rises, ultimately that spiral works out worse. The cap. It does for labor.
S1: I think that that is an accurate because I think that you can’t separate capital and labor and say that what happens to one doesn’t affect what happens. Obviously, back and forth, no. But the point is, part of the reason that inflation is such a big deal when you’re talking about really high levels of inflation is because it it stops the economy from moving. It stops people from investing. It stops you from hiring. It makes people fire people. It it it doesn’t allow the economy to move. So the idea that somehow you could just oh, inflation fighting, you just keep paying people paying more and more and it won’t have any effect like that has just never, ever been the case.
S4: But the fact is that when. Voca started bringing inflation down, unemployment went up. So you’re right, the unemployment. Unemployment was bad. You know, when when you took over. But it got much worse. He made it much worse. And you can and you have made the case that over the long term this turned out to be good for the labor and good for employment.
S2: And I will. You know, that is a 100 percent legitimate take, and that is totally the received opinion in the economic world. But it didn’t feel like that at the time.
S1: That goes back to what we were just saying. The last segment, though, is that yes, of course. Like when you have to go through a painful time and you see people who suffer the most paid are the most vulnerable. And that’s true. And no one thinks that that’s easy. And people feel that a lot more than they think about the benefit. But I think this kind of revisionist history to say that we’re not seeing you’re saying this, but some of the kind of lefty talk on Twitter of, well, what he did would have been better if he hadn’t done it. Actually, I just disagree with that thoroughly.
S10: I think one thing that’s sort of interesting about Paul Volcker and it kind of relates what we were just talking about with trade is that he was a technocrat. He saw numbers in this instance.
S5: Right. He wanted to slay the beast of inflation. He didn’t care in the moment that that kind of tough work would lead more people to lose jobs. And everyone kind of fell in line with his technocratic viewpoint, which is like, yeah, people matter, but this matters kind of more. And I think for a long time, everyone kind of bought into that a little bit. But now people are not buying into that anymore. And that’s why you see the revisionist takes. That’s why the global world order is falling apart, because people are like technocrats. No.
S2: Or as Michael Gove famously put it, I think we’ve had enough of experts.
S3: Right. I feel like Paul Volcker was he is a lionized expert. Right. I mean, I guess we should talk more about his more recent kind of legacy and the Volcker Rule.
S8: And he had and he had them he he introduced the Volcker Rule over the objections of the Treasury Department and, you know, Larry Summers types and the Obama administration, he did great work for the U.N. in terms of like investigating the shenanigans with oil for food in Iraq. He just wrote the forward for his autobiography, which the F.T. published with where he started talking a lot more about the, you know, importance of what we were just talking about, internationalism in the age of global warming and how like he was extremely depressed. But the idea that the point to which in global history we need international cooperation more than ever given this existential risk is exactly the point at which it seems to be falling apart. So he was much more than just like the Fed chair who who raised in absolute no.
S1: And I think the thing with him, I think we need more technocrats like him. Right. And the sense I got, he wasn’t a dogmatic technocrat. He was like, let’s find solutions to things. And he also was a devoted public servant in a way that I think he you know, he didn’t demonize government. He didn’t demonize business. He tried to find solutions to have a functioning economy. He wasn’t opposed to finance. However, he thought that there were tremendous excesses of finance. And I think we, in fact, need more figures like him.
S8: And I will just say that, like in terms of like Paul Volcker as a human being, my favorite Paul Volcker factoid is that there are many economists who believe that you can only be an economist if you have a p_h_d_ in economics. And he did go to the LSC in p_h_d_ program, but he never actually got his p_h_d_ because he wound up like chasing a girl instead. And I just let. Yeah. Get your priorities right.
S3: But then also we talked about what he did on inflation and maybe some people didn’t like it. But he said he told The New York Times that the greatest strategic regret of his life was to take my wife to Maine on our honeymoon on a fly fishing trip and his second wife. He didn’t make the same mistake. And they went to the Virgin Islands.
S1: His memoir is pretty good, but there’s a bit too much fly fishing. Well, that’s what I mean.
S2: Whole Voca is the reason why the big annual central banking conference happens in Jackson Hole every year because they they wanted to get make sure that Paul Volcker would turn up. And the only way they could make sure that Paul Volcker would turn up was by making it in Jackson Hole so he could go fly fishing trip back on. Emily, tell me about suitcases.
S5: So a suitcase isn’t just a suitcase anymore because of Instagram?
S8: Felix, this is my favorite thing about suitcases. It used to be that suitcase manufacturers made suitcases. Now suitcase manufacturers make Instagram posts.
S5: Yeah, they make lifestyle travel products. So we’re talking about these suitcase company. Away Away is known for its suitcases and Instagram posts and I guess the distinguishing feature of the away suitcases of battery, that removable battery.
S8: There was there was an earlier company that made a suitcase which had a battery that would recharge your phone. But then the airline said, you can check that suitcase because the battery is going to explode. And so then away came into the market very quickly and said, ah, but our battery, you can remove and put in your hand baggage and still check your bag. And then they did a lot of Instagram posts and everyone else and their mother came out with basically identical suitcases. Also, we tried your phone yet, but away had the Instagram post.
S5: So anyway, so last week the Virge published this piece about a way, specifically its founder and CEO, former CEO, now Steph Curry. And it was one of these pieces that said Awais has a toxic workplace culture. And you kind of look at that headline, you’re like, whatever. It’s just millennials complaining about something. Who cares? Then you read the piece and the piece is just so damning. So Steph Curry just you know, she is on slack talking to her are workers at 3:00 in the morning and yelling at them. They’re not getting to take any time off at all. There there’s bosses telling their coworkers who are making like forty thousand a year and doing like customer service work to take a picture of yourself in your pajamas while you’re still doing work in bed. Then the the lead anecdote is. So one of the more just disturbing or interesting parts about the workplace culture is Corey’s insistence that everyone be public on slack. And there they discourage any emailing between employees and they discourage even direct messages between employees. Everything has to be done in public on Slack, which leads to the CEO of the company jumping into slack conversations and just like ripping people apart. And it also leads to people getting fired because they started a slack channel called Hot Topics. LGBT workers and workers of color were in the slack channel like blowing off steam, which hello everyone does on slack if you have slack in your workplace. So apparently all these people of color and LGBT employees get fired for comments they made in the slack channel because they were deemed racist by, you know, Steph Curry and a panel of white people. A panel of white people. I mean, it’s just it was an outrageous story and it flew around pretty quickly. Blahblahblah, only a few days later, Awais announced that this woman, Steph Curry, is, you know, stepping down. She’s out. She’s going to be replaced by the former CEO of Lululemon. And it was a pretty speedy the timeline from damning Article 2 ouster was incredibly fast, although they had been hiring for SEO since late March.
S2: And yes, you can’t hire a new CEO from Lululemon that quickly SEO hires. And I think that’s what with hindsight, clearly what happened was this she or the board decided that she had to go a few months ago. Sure. They put in place a sort of a quiet C E O search, which eventually they managed to find this guy from Lululemon. And they were looking forward to like a relatively elegant, you know, transition of power. And then the Verge article just drops it just before they were about to announce him like, shit. And like, we can’t announcing yet if you haven’t got the whole thing finalized. They had to wait a week before all of the T’s were dotted and either crossed and probably he got like an extra couple million dollars because they he knew that they really needed him at that point. But yeah, it was I believe the technical term is a clusterfuck.
S5: Yeah. I mean it’s such a good it’s a really good story. I think it just reveals so many myths about tech companies and startup culture, starting with the myth of the like girl boss, which I feel like we’ve discussed before with the the company thinks member, its founder and CEO. Yeah. And so this is another one where, you know, people like to be like girl power o. A woman was leading this company, but she turns out to be as evidenced by this Virge story, just like an absolute monster.
S1: And I think I like the hypocrisy here, which just made it all the more infuriating. It’s like you’re reading some of these, like, messages they have. They’re all couched in this language of like we’re empowering you to work all these hours.
S5: Yeah, we’re empowering you. You should we’re teaching you something really important here.
S3: And all these like young entry level work. Here’s what was interesting to me was how they were so excited to work at this luggage company because of it. They had really bought into the marketing. Like, it’s just interesting and comes at a time when like I think Facebook and other tech companies have just dropped off the best places to work list or something. And it’s just like that weird thing where people go to work for companies just based on marketing and vibes.
S2: One. One of the that there’s a big difference between a way where people really bought into the marketing and work and kind of drank the Kool-Aid vs. My other favorite example is Supreme, which is, you know, supremely cool. And people line up around the block to buy hoodies and get decks and anything else they might drop because they really covet them. And if you walk into Supreme for a job interview and say like, oh my God, you guys are so cool, you do the coolest things in the world, they’ll just look there will never hire you because they actually like management to supreme is way more cynical. They’re like, no, we just take any old random T-shirt and slap a logo on it and sell it for eight thousand percent markup. And they understand the importance of like maintaining the marketing facade while at the same time optimizing, whereas.
S3: At away, they started hiring true believers, and I’m not sure that hiring true believers is always the right thing to do now because you can’t operate a company, you can’t operate from within in that idealized version of your company. You have to be much more cynical. Right.
S1: And also, if you’re a true believer in a way that like what’s wrong with you? Like they said, it’s true.
S3: Also, I thought one thing to point out was, yes, Steph Curry was a quote unquote, girl boss. But and we talk a lot about like getting more women to run companies and more women should be startup founders, but more poor people should somehow become startup founders. Like they point out in the Virge piece that Steph Curry grew up in a fifty five thousand square foot mansion in Ohio. That is so big. Her mom was quoted on some real estate site saying like, it’s a great place to live if you don’t want to go outside, but you still care about like getting walks. It has, you know, three dining rooms in it. There just needs to be more class diversity, I think, with some company. That’s true, if possible.
S11: Whatever you like. There’s a reason why worked to that. I mean, we used to live in a country.
S3: We used to live in a country where, like, someone could be poor and become rich by starting a company. But it feels like. But it does feel like the startup CEOs that we’re familiar with now, like none of them came from working class backgrounds or there’s much less what feels like bootstrapping going live.
S2: Let me ask you guys about a bit more about the gender dynamics and whether you worry that, you know, female founders of fast growing v.c backed startups somehow going to wind up sort of tarred with this Steph Curry brush in a way that male founders of feedback startups on Todd with say that Adam Neumann brush that there’s something there’s a bit of a double standard.
S6: There’s absolutely a double standard. And part of it is the sample size is small. So you have one Steph Curry. And there’s just not that many other women founders out there to say, no, no, no. She’s just one among many. You know, Adam Newman is just one among many, many, many men. It’s hard to stereotype men based on Adam Newman, though. I would try. So, yeah, I think there’s probably gonna be maybe a little bit of unfair bounce back. And I and I know you said the guy from Lululemon was kind of like waiting in the wings, but I still feel like it happened faster for this woman than the typical male founder. And I wouldn’t expect this woman to have the kind of comeback that’s, say, like a Mike Cagney from Sofya has had, you know, where he’s Alstead figure he has a new company.
S2: Go figure. And I have no idea what figure does, but they keep on e-mailing me.
S5: Right. He has a new company. Travis has a new company.
S2: Like I just feel like everything’s company is already worth five billion dollars.
S1: Yeah. How did that happen? And I think that’s a good point, because I feel like the reality is when you’re if you’re starting a company like the hours aren’t saying you’re probably gonna be an incredibly difficult person to work with. Like that is tends to be a reality of starting a company. But if a guy does that and the people are at a certain party like you’re a jerk, you’re out, they still have these other opportunities. Whereas for a lot of the female fighters that I don’t know if this is actually true. I don’t know if there’s what the data is to show, but it doesn’t seem like you’re given as many second chances if you’re female.
S10: I don’t think you even get as many first chances because I think the standards for women are so much higher in terms of how not nice they’re allowed to be that like you’re gonna get burned a lot faster.
S5: Like, who knows what the hell kind of emails Jeff Bezos was sending to people back in the day, right? I can’t imagine they were much better. But what is the richest, you know, one of the richest men in the world now? He wasn’t judge like that.
S2: What I want to know is what were the board discussions about why Corey needed to be replaced? Earlier this year, what was it that she did that caused them to decide that they needed to replace her? I’m assuming that it wasn’t her idea that she should step down and be replaced. And if a male founder had done those exact same things back in late March of twenty nineteen, this house, the board was concerned, would they have reacted in such a drastic way?
S6: Yeah. I mean I think those are really good questions and and not definite that a male CEO would have been treated. Exactly.
S1: How was the actual company doing.
S3: They have like a one point eight billion dollar valuation or something.
S1: Well God just cares because I mean, I is part of the reason she is being pushed out because of what was happening at the company versus her actual management style.
S2: I do think that suitcases became commoditized.
S1: Became I mean, it was.
S2: Well, I mean, to me, has a market cap just sold for like what was it, many billions of dollars? There was a long history going back to, you know, Louis Vuitton and even before that of suitcases being able to differentiate themselves, even though like ultimately it’s a box. And then the great innovation was put the box on wheels. And those literally that’s basically the extent of the innovation that suitcase world. But there was this period when people got into the idea of direct to consumer suitcases. That’s the thing. direct-to-consumer suitcases with hard shells which recharge your phone became a thing in a way was early to that game. And now there are eight million of them. And people have a choice in which if those hard shell recharge suitcases, they buy and there’s really nothing to choose between them with the way online retailing works now, a brand like a way or ever lane or what are the shoes?
S5: All birds like simple. You know, everyone knows the marketing has been so big that everyone associates, you know, suitcase. Oh, should I buy in a way? Oh, you know, Gene. Should I buy ever, Leon? Like there’s something kind of genius and first mover kind of good about a brand like a way versus like there really aren’t any other suitcase brands that we’re talking about beside me. And now that’s really important today online because online shopping not going to say it’s hard, but it’s like kind of hard. And it’s nice if you can just know, like you can go to one specific site and get one specific product.
S2: We did. The CEO of All Birds is very annoyed right now at Amazon because Amazon has a knockoff product. And he’s how dare you compete with my sneakers? And in my opinion, it’s like it’s probably good for him. They’re ratifying the category. And the bigger the category grows, the better all birds will perform. But it doesn’t stop him being annoyed. Let’s have a numbers round. Why not? Emily, what’s your number?
S3: My number is also a mayor culpa. My number is 160. OK. As the number of revenue generating Minority League Baseball teams in the United States and last week’s episode, I said that each major league team has only one.
S1: You mean minor?
S11: Minor league minor already league. Minor league. Oh, my God, that’s me. I’ll be back with another right here on Slate Money.
S5: No. 160 minor league baseball teams. And I will stop talking about baseball now that I have corrected my hair. Thank you.
S8: My number is forty three point six percent, which is the share of the popular vote. That is a conservative party. He got in the UK and yet managed to get an overwhelming majority in parliament. This is the biggest majority since Thatcher, suddenly the biggest Tory majority since Thatcher. And the idea that you can get such a huge majority one which will allow Boris Johnson to push through anything he likes with like, you know, like basically to win five votes is kind of interesting to me. And the UK had a referendum on this.
S2: Then they were like, do you want to keep this system? Would you want to move to a system of more proportional representation? And the referendum overwhelmingly voted in favour of keeping this system. So that’s what the Brits won.
S1: So my number isn’t saying it. There’s a possibility I’ve done this number before. But if I have, you know, whatever you’re gonna get again. So my number is 30 billion. That is the number of non-performing loans that Greece is expecting to remove from its banks books with their new Hercules Asset Securitization Program, where the number of loans while the value of loans sorry, the value of iSight.
S9: That’s a lot of thought about a lot of love. Yeah, that’s like a thousand loans.
S1: Yeah, the value of the loan. So Greece has had this massive problem with non-performing loans and you can not grow an economy if your banks have all of these on their books. So they’re pushing through this program, which is based on an Italian program and it was finally passed. And so hopefully it will work good for Greece.
S2: On which note. I think that’s it for Slate Money this week. Unless you’re going to be hanging out for the slate. Plus, I think we got to talk about hydrocarbons. There was, if you didn’t know. Amidst all of the other news of the week, the largest IPO in the history of the planet, a company raised twenty five and a half billion dollars. No company in the history of the world has ever raised more money in an IPO. And somehow the world just yawned. And we’re going to talk about what was all that about. So that’s coming up in Slate Plus.
S12: Otherwise, it just fools me to think just me money for producing this show to ask you to keep the e-mails coming on, sleep on the slate dot com. And we will talk to you next week on sleep money.
S2: Let’s talk about hydrocarbons. Yay! Yay or boo! There was this interesting story this week about Chevron, which wrote down the value of the hydrocarbons that it owns in the ground in the Gulf of Mexico and some shale fields and stuff like that by about 10 billion dollars. And they’re saying, yeah, the value of oil in the ground is not what we thought it was. And on some level, I find this to be a very hopeful move that they’re admitting that not all of the oil in the ground is going to be taken out of the ground and burned. And if it stays in the ground, that’s good, because we might have a planet in 100 years. But and it’s rolling her eyes already.
S1: Well, it’s a nice take. It’s just. Oh, yeah. This was mostly about natural gas. And fundamentally, this is about shareholder pressure. You’re seeing this in a number of industry is near, especially seeing this in with a lot of shale producers, that because there was just so much exploration in the last boom and then a lot. There was a lot of money lost and prices have come down significantly. Natural gas is at like 250 or something. You’re getting all of this shareholder pressure to divest non-core assets, to focus on your kind of performing your best performing assets and to also, I think, somewhat like rationalize your books in terms of what all of these things are actually worth. So I I would love the idea that this is just about people saying, you know what, like this actually is it is valuable because we’re never going to be able to bring to the ground. I just don’t think that’s true.
S5: But I have read I mean, the reporting said Chevron took this write down because there’s, you know, a boom in in getting gas. And so the prices are there is not a booming not a boom, a glut, glut, boom. There’s a glut now there’s a glut. So they price. Yeah. Right. Gluts. So the stuff’s not worth what it used to be. But also part of the reason the stuff’s not worth what it used to be is because clean energy is becoming kind of a factor here.
S8: And that’s almost becoming cheaper and cheaper.
S6: Yeah. Yeah. And that’s that’s so that’s sort of also part of the reason. And the oil and gas industry is becoming slightly smaller. And that fact is part of the reason that this big IPO happened, because Saudi is trying to diversify because it sees that clean energy is coming and it can’t just rely on oil and gas. Therefore, it did this massive IPO.
S2: So to finally come out with the news, her Saudi Aramco, which is the state owned oil company in Saudi Arabia, is no longer entirely state owned. It’s owned by the state. And like one of the whole entities owned by other Saudis, mostly frailest today, they friends of the state, they listed on the Saudi stock exchange, they listed in a way that really encouraged buyers to hold onto their shares for six months, which makes it incredibly hard to short the stock and that that was part of the reason why the stock went up. And so now Saudi Aramco is worth, what, one-point a trillion dollars? It’s by far the most valuable company in the world.
S4: If you take the official Saudi stock market valuation, which you probably shouldn’t, but it you know, they raised five and a half billion dollars, which were real dollars.
S2: I mean, admittedly, they could raise twenty five and a half billion dollars just by taking the, quote, the profits from Aramco for the quarter, because it, you know, throws off so much money every quarter that they don’t need to IPO it to raise that much money. They can just cash the checks that come from selling oil.
S4: But the obvious question here is what has happened to the value of the oil in the ground in Saudi Arabia?
S2: On some level, we now have a valuation for that and it’s one point eight trillion dollars.
S1: Yeah. And I think I think what Emily was saying previously, which ties into this, there is definitely a lot of truth in that in the sense that I think long term you do have a lot of energy companies, not just Aramco, that are saying, look, we know that there are going to be regulations. We know that we’re not able to do things the same as we did in the past. I think that’s true. And I do think that with Aramco, obviously, part of the reason they did this is because Mohamed bin SOLMAN does think that they can’t just rely on this income for the next 100 years. They are going to need to diversify. And that’s part of the reason he did this now. Are you really starting to see a lot of these firms saying, we think we are actually going to place a lower value on our assets? You’re not totally seeing that yet in terms of thinking of a long term perspective, in terms of where prices are right now. That’s a different thing.
S3: And it’s it’s sort of remarkable to think like it was like, what, a decade or a little more ago that people were stressing because they said we were going to run out of oil. And now we’re talking about like a gas glut and the end of oil. So, yeah, I mean, I have. Fascinating. IRA Yeah.
S2: Pete, remember peak oil? Yeah, remember peak oil, yeah.
S3: And I remember like when I was in school growing up, it was like one day all the oil will be gone and how we drive our cars and like there was like a low grade panic about that.
S1: And just it’s interesting how nasty I remember that early 2000s. People. Yeah. But then it was because nobody saw the shale boom. Really fundamentally what a lot of this is about.
S6: Also, some story I read had the delightful detail that some of the investors in Aramco were the same high wealth individuals from Saudi Arabia that MBBS locked up in the Ritz Carlton a few years ago.
S5: So I’m sure they’re very.
S1: Oh, it’s all like this, even though they say the state fund is not propping up prices every day. No. I mean, the state isn’t going to prop up prices like it’s the state says invest in this company.
S3: What a great opportunity. Like.
S9: Yeah, people people who who are locked up by m.b.a.s.
S2: My favorite factoid from news articles this week came in a Vanity Fair article about private jets which mentioned in passing that Prince Alwaleed, who is one of the people who got locked up in London. Yep. Obviously didn’t lose all of his money because he owns, get this, a private A380. You know, that massive lobby, great double decker plane that you see at the biggest airports in the world. He owns one of those just for himself.
S3: Must be nice. And you also said the Google guys own 7 9 9.
S8: Larry and Sergey owned nine planes between them, including two Boeing and two G 5s.
S5: Unbelievable. Yep. Why do you need nine planes? You can only bet on one plane at a time.
S1: True. Can I say one last thing? Well, there are two of them. That’s true. That’s true. I do think actually what we’re all talking about here in terms of this like just massive glut of money that you have in the Gulf states, it’s really interesting is if you do look at like how the essentially like world politics and economics was changed when all of a sudden you had, you know, a lot of these countries nationalizing their oil fields and developed so much money that came in. And I really do think it’s going to be very interesting to see what happens in the next 10, 20 years as that starts to change. Because I do think you are going to see just as big of a change. We just don’t know exactly what’s gonna happen. Everything’s so scary. It is scary.