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Felix Salmon: Hello. Welcome to the Platy Jubes episode of Sleep Money, Your Guide to the Business in Finance and Jubes News of the Week. I am Felix Salmon of Axios. Emily Peck of Axios is also here. Hello. Elizabeth Spiers is here. Hello. Hello. Oh, we’re enjoying this because we literally we can all touch each other. It’s kind of amazing. We are. We are in the small but beautiful recording studio in Brooklyn, and it feels good for us to be together if we sound particularly good. That’s all.
Felix Salmon: Thanks to see playing Hamada, we are going to talk about Clancy Jubes It’s going to be fun, but we are also going to talk about food shortages. We are going to talk about Sheryl Sandberg. We’re going to have a sleep class about CPI. It’s all coming up. And if you don’t know what a Platy Jubes is, I promise we will tell you honestly. Money. All right. Obviously, the only thing I want to talk about is Platy Jubes. We will get to the Platy Jubes. But I suppose we should cover the news first, which is Sheryl Sandberg is leaving out.
Host 2: That is correct. The Chief Operating Officer of. If you like, you’ll hate this of meta.
Felix Salmon: Meta platforms inc.
Host 2: Which used to be Facebook and still is. We will refer to it from here to four as Facebook on this episode. Shall we agree? Yes. Yes. Announced earlier this week that she was leaving Facebook, but she’s.
Felix Salmon: Leaving Matt. I think that’s part of the thing, right. That she was not really involved in the pivot to the metaverse. She felt excluded from all of that, from what I can tell from the reporting. And she’s like, you know, if you guys are going in this completely other direction that I’m not involved in and I’m already a billionaire, why should I stick around?
Host 2: Yeah. And there was a very juicy kind of report in the Wall Street Journal on Friday morning about, you know, she’s feeling burnt out. She’s feeling like a punching bag. She’s feeling unappreciated. Oh, and also was under investigation by Facebook slash media for using company resources to plan her wedding, which I feel like is a thing. That’s fine. Unless the company you work for hates you. Right.
Felix Salmon: Right. I mean, exactly. Like if you’re Sheryl Sandberg and you get one of your systems to draw up against this, your wedding like that is 100% normal unless things are irreparably broken and they’re like, Did you use your meta assistant in order to plan your personal wedding? You know?
Host 2: But I’m I’m interested. And she could have gone out on a high note if she had left the company pre 2016.
Speaker 3: And her longevity there is unusual by itself but speaks I suppose well of her ability to upwardly manage Zuckerberg but you know if she’s seeing all these signs that she’s sort of losing influence in the company and fewer people are reporting to her now, I think it went from something like 45% to 31%. You can imagine that slowly dawning on her that she’s maybe going to be pushed out eventually anyway. But, you know, I wonder when she started having this feeling that things were going so well.
Felix Salmon: I think probably she’s been feeling like a punching bag since 2016. Right. And since Cambridge Analytica and all of that. And at that point, she still felt like she was the grown up in the room and she was the one with the political nous. She obviously famously used to work at Treasury before she entered the private sector. And she’s I can deal with these governments, but then they brought in like an actual politician to deal with all of that.
Felix Salmon: And yeah, I don’t think she was going to necessarily be pushed out. But people bet successful and anyone who, you know, she grew a business. She was the one who really turned Facebook into $1,000,000,000,000 business. That was basically no advertising when she arrived. And now they make over $100 billion a year in ads. So. That ability to grow that from nothing to World B to is constantly in demand. And so she obviously has been asked to be many people CEO. I think most people probably would have become CEOs somewhere along the way. It’s kind of interesting that she didn’t, and my guess is that she probably won’t, that she’s going to try and run for Senate or something like that rather than take another corporate job.
Host 2: Yeah, I mean, it’s unclear, of course, and all the statements and interviews she said she does know what she’s going to do and if she didn’t do more work on her foundation, she’s going to fight for abortion rights or something. And there was a little smidge of reporting that Facebook slash Metta didn’t like her talking about that stuff. And we know Facebook internally like blocks the word abortion from its internal, like messaging and stuff.
Felix Salmon: No way.
Host 2: Yeah, there was a reporting, I think a couple of weeks ago about that. Yeah, you can’t say abortion on the Facebook internal messaging. And also apparently Mark Zuckerberg blamed her for the Cambridge Analytica situation, according to some reporting in the Journal. I think a few years later, like she took the heat for that, which I thought was interesting and I don’t know if it’s justified or not.
Felix Salmon: She was famously in charge of all that shit, you know, like like Mark Zuckerberg basically said to say, will let you’re in charge of everything. I am, you know, the founder, CEO, visionary product person but she was probably the most powerful non CEO in America for a long time. So yeah I think blaming her for like people telling her that there was bad shit going on and elections were maybe being undemocratic because there was underhanded stuff going on Facebook and then not really taking it seriously until it was way too late. And after long after the elections it happened. Yeah, that’s not a good look for her.
Host 2: It really messed with her reputation. I think that’s what I was trying to say before. If she had left before 2016 and taken one of those CEO jobs.
Felix Salmon: Possibly at Disney.
Host 2: Possibly at Disney, maybe things go better for her. But now she’s exiting the company. And I saw, like, I don’t know, like 15 pieces being like, what’s her legacy? Is it this is it that, you know.
Speaker 3: I think she kind of also just hit the limits of her expertise. You know, nobody knows what advertising’s going to look like in VR or where any of that’s going. And, you know, if she built the business on the back of Facebook’s data systems and they’re constantly being reformed to better give users more privacy, then where does her potential lie? You know, if she had stay and what else would she do? She’s not a product person. Building the ad business was the entirety of her business legacy there, so I’m not sure she would have had a future for where at least Zuckerberg wants to go.
Host 2: Right.
Host 2: Which kind of makes me think, what is the future of the Internet advertising business like? Our roots are in in Google, which is also like one of the most successful.
Felix Salmon: Yes, there is the duopoly. Right. So yeah, that’s super interesting question because Facebook seems to have been hurt much more by Apple’s pivot to privacy than Google has or other advertising platforms have. It seems to be, you know, moving more slowly, a little bit less nimble. Mark Zuckerberg is desperately trying to copy Tik Tok in Instagram and it doesn’t seem to be having a huge amount of success doing that and seems to be like breaking Instagram in the process. So yeah, it’s a little bit messy there right now. And she’s probably thinking Dianne Feinstein is going to step down in 2024 and that’s what she wants to do next. And do you think anyone in California would vote for her for Senate.
Host 2: Elizabeth? I think you.
Speaker 3: Would. And part of the deal is just having name ID and having people know who you are. That counts for a lot and it depends on what she decides to do in politics.
Host 2: So, I mean, she’s arguably the most well-known female executive in the Fortune 500 at a top public company like I can’t think of. She’s a one name. She’s the one name. Yeah.
Felix Salmon: She’s she’s not even the CEO and everyone knows who Sheryl is. Someone like Safra Catz, Oracle, like no one knows who she.
Host 2: Yeah. So that’s why I guess we’re talking about her.
Speaker 3: She could be the only person in politics who understands whether Facebook’s targeting system really works.
Host 2: So, yeah, you have an edge there, I guess.
Felix Salmon: But I mean, I remember when she wrote Lean In and she was on the book tour and she was like Swing through New York and invite all of the bloggers to have lunch with her. And everyone’s like, who? We get to have lunch with Sheryl Sandberg. And she had this kind of mystique and or to her back then, and she has definitely lost that.
Host 2: Oh, yeah, that’s point. I mean, back in even before the book launch, she had this like Ted talk where she talked about women need to be, they need to lean in, they need to sit at the table and all this. And like it was a real, like, thrilling. Like people were really into it and no one had been really talking about all that stuff very much. And I think she did make change, like make an impact. I think any time you talk to someone about how much money you make and then go ask your boss for a raise, I feel like she did that a little bit, even though she wouldn’t want you to do that at Facebook. Probably.
Speaker 3: I mean. It was kind of a double edged sword. It’s she sort of said, okay, part of the problem is that when women are as aggressive as men, they get penalized for it. But also it’s up to women to be more aggressive. And so depending on which side of that coin you’re you’re looking at, you know, Leon was either a positive development or just reinforces the idea that when women don’t succeed in a corporate environment, it’s really their fault.
Host 2: Oh, for sure. It was a lot of that. Like, it’s you, you’re the problem. Like, women are just too timid and all this, which was good that she was kind of saying like, do it anyway. There’s been so much backlash to her since then. Like, she only talks about women with partners, not single women she didn’t really consider. Like, black women can’t just lean in like there is racism, like all of that. So and then all the weird stuff happened with Elizabeth Holmes and like all those female CEOs, I just feel like her. Sheryl Sandberg’s initial premise just got so backlash out that I’ve been thinking the few days like.
Felix Salmon: Having a bigger.
Host 2: Name was really like a big deal and like, it was actually something.
Speaker 3: There’s a Girlboss backlash now. Right. There was just an era where I feel like people like Sandberg were on a pedestal a little bit. And you saw these younger CEOs coming up who were more visible in the system. And then you have one or two people like Holmes who sort of destroy the entire perception of like.
Felix Salmon: You know, there was a time when Facebook went public that Mark Zuckerberg was this great American success story and people were like, oh, my God, look about like he’s, you know, a millennial billionaire. Isn’t this amazing? I mean, it’s hard to remember these times. And, yeah, there have been a lot of girl bosses who’ve been tarnished. But it’s hard to think of even like gay bosses who people are like, Oh my God, what a great CEO. Like in general, the boss class seems to have lost its luster over the past couple of years.
Host 2: I think it kind of Steve Jobs I don’t know was there.
Felix Salmon: He was the last like universally admired boss.
Host 2: But yeah I forget that people used to think Mark Zuckerberg was like boygenius basically. And now everyone thinks he’s like, robot weirdo. I don’t know. I don’t have a good catchphrase for him.
Felix Salmon: So, yeah. So if Mark and Sheryl, the sort of avatars of who we should aspire to become anymore, is there anyone in business who’s, like, got that golden aura? Certainly not.
Speaker 3: Illusion was the least hated CEO.
Host 2: Everyone hates everyone now. Yeah. I mean, people do like you on it.
Felix Salmon: Some people like you.
Host 2: I’m like, No, we’re not supposed to talk.
Felix Salmon: About that, man. We’re not meant to talk about that.
Host 2: We don’t talk about that.
Felix Salmon: But yeah, it’s hard to think, right?
Speaker 3: I mean, does anybody I mean, Tim Cook, maybe you feel like people are neutral.
Felix Salmon: Yeah, people people are people are the. Yeah, he’s a good operator. They respect him, but he doesn’t have that sort of oh my God, Tim Cook fans and blah, blah, blah. You know.
Host 2: He’s a genius.
Felix Salmon: The credit still goes to Steve Jobs for that one.
Host 2: So I wonder what it is why people don’t idolize genius CEOs anymore. They kind of prove themselves to be terrible.
Speaker 3: Because some of them go on Twitter and demonstrate publicly that they’re not really genius.
Host 2: Yeah, that’s.
Felix Salmon: It’s partly that. And I think it’s also weirdly partly the fact that the broad stock market did so well during the pandemic that we realized that it wasn’t down to any individual CEO genius because everything went up and to the right. And now and now we’re going down into the red. But those are the things that went up the most are going down the most. Right. So you have like the Netflix and even Facebook is down like 50% from its highs. Yeah. So it’s hard to look like a genius when your stock is down so far, even if it’s up over the long.
Host 2: Term and all those like cool pandemic companies. I couldn’t tell you the names of their Peloton, Peloton, zoom, zoom. Yeah. I don’t know who the zoom CEOs. I feel like I read a profile, but it was like in one. Yeah, you’re out the other.
Felix Salmon: Let’s move on. Let’s talk about food. Apparently, there’s not enough of it. And this is causing a lot of suffering. I wrote about this a little bit a couple weeks ago in my newsletter. The. When we talk about food inflation in the United States, what we’re talking about is this basic race for people to buy something that there wasn’t enough of to go around. And the winners of the people who win that bidding war and the losers are the people who lose the bidding war and who just can’t afford to buy it and basically don’t have any food.
Felix Salmon: And in America, those people are still, thankfully, few and far between globally. They’re not. And we’re seeing riots in Sri Lanka. And there are lots of countries where there is genuine catastrophic food shortage, obviously Afghanistan. But even in relatively stable countries, you’re seeing this. And one of the drivers here is the war in Ukraine, because Ukraine was a massive exporter of wheat. Wheat is an absolute staple across much of the world. And if you lose those wheat exports from Ukraine, even though Russia is exporting more, they’re not nearly picking up the slack from what’s being lost in Ukraine. That’s just really hurting the world.
Host 2: Yeah, I mean, Russia and Ukraine together a quarter of the world’s wheat supplies as well.
Felix Salmon: So let’s be clear about this, because we I like this is one of the statistics that people get very confused about. There are a quarter of the world’s wheat export.
Host 2: Exports and not.
Felix Salmon: A quarter of the world’s wheat production. The world produces about 775 million tons of wheat each year. Look, we have exports about 200 million tonnes. So the point about the exports is the exports of what you need to even everything out because you can’t assume that everyone can feed themselves, especially not in the age of global warming. We’re seeing this right now in India especially is seeing a very bad year for agriculture because of the warming. So you need the exports and a significant change to the exports has a massive ripple effect.
Host 2: Yeah, because some countries, I think like Egypt and some other Middle Eastern and African countries, they’re importers of wheat, not exporters like they need the Russian and Ukrainian wheat, which I guess is cheaper than wheat from some other countries. So they’re like particularly vulnerable to what’s happening right now, which is Russia is essentially keeping Ukraine from exporting wheat that these countries need.
Felix Salmon: Right. Russia has it now controls all of Ukraine’s sea ports. So Ukraine finds it very difficult to to export anything right now.
Host 2: So the U.S. and its allies in the West, they’re running this economic war against Russia, and they’ve kind of trying to destroy the Russian economy and blocking all kinds of shutting down all kinds of business with Russia. And what Russia’s doing is they can’t really retaliate. I mean, they are retaining in a bit against the West, but their real retaliation is like hurting these really poor countries and these very vulnerable people who can’t now get food. Do you know what I mean?
Felix Salmon: I mean, they’re picking up their own wheat exports, Russian exports of wheat at an all time high right now because they need the money because they can. And other export, like Canada is doing, has record wheat exports as well. But yeah, like.
Host 2: But the prices are shooting up.
Felix Salmon: And also yeah, you want to exports as much if you can. It’s what you do right now because the prices are so attractive even for Russia, where a lot of Western countries refused to buy Russian wheat exports because it’s on the sanctions list. Other countries like Iran or whoever will happily buy that. We will pay slightly lower than international market prices, but still a lot of money for it.
Speaker 3: Also, there’s a potentially complicated way out of this, which is that you ease sanctions on Belarus and ship wheat through there, which everybody is hesitant to do because that sort of rewards Russian aggression there.
Felix Salmon: Yeah, there are short term fixes which aren’t real fixes, but there’s a couple of other things going on. One is the food is carbon in a kind of very profound way that most international agribusiness uses a huge amount of artificial fertilizer to grow its food. And artificial fertilizer is made via the Haber Bosch process. And the Haber Bosch process uses oil, right, so that you are literally turning oil into wheat and corn and rice, you know. So that’s one big picture thing that the world needs to grapple with. Obviously, when oil prices, when energy prices are high, that feeds through into food prices.
Felix Salmon: So then the second thing is just global warming, right? Which is if Russia, you invading Ukraine can have this much of an effect on global food prices, that’s big and important. But ultimately, compared to the kind of effect of like catastrophic global warming, it’s small. This is an interesting trial run, something that we’re going to have to start getting used to on a regular basis.
Host 2: That’s what’s interesting about India. You mentioned India. They’re a big wheat exporter. But I think two weeks ago they stopped exporting wheat because of climate change, because of a drought. There were they didn’t have enough. So they stopped exporting. And that’s. Driving up the cost of wheat even more so.
Felix Salmon: It’s like wheat is the new vaccines.
Host 2: Yeah. If you have like one crisis or something like a war and then global warming, is there climate change is there to kind of like exacerbate all problems at any time?
Felix Salmon: Not to mention the fact that it all feeds on itself and the global warming and the effect that it has on agricultural production causes wars, you know, and it causes international wasn’t it causes civil wars. And yeah, it’s a really nasty bunch of vicious cycles. And then you have the World Bank coming along and saying, well, we’re going to give $12 billion to try and smooth out dislocations in agricultural supply chains, you know? Yeah, that’s not going to help. I mean, it’ll help a little bit at the margin, but 12 billion isn’t going to get you very far.
Host 2: And then you go and you look back through history and bread starts, wars, shortages of bread are like behinds the Russian Revolution. The French Revolution. There are a few more that I saw Arab Spring. I mean, this is like it’s bad when you mess with people’s food.
Felix Salmon: It’s pretty basic. It’s definition of a basic, especially in Europe. And yeah. And it’s bread and water because wars.
Felix Salmon: Okay. But really what we want to talk about is Platy Jubes.
Host 2: Tell listeners what that is, because I didn’t use.
Speaker 3: Enough of an angle to intuitively know, so I had to Google it. I thought, Is this a new nifty that I should know about?
Felix Salmon: Basically, yeah. Basically, the Queen of England has amazing Jubes and this is the flattest of of the Jubes. So yeah, I’ve just been walking around Manhattan or biking around Manhattan, just saying Platy Jubes out loud because it’s such a great thing to say. So, yeah, I can’t explain it. Yes. I mean, what is what is a Platy Jubes right now?
Host 2: England is celebrating Queen Elizabeth’s platinum jubilee. It’s the platinum jubilee, which means 70 years she’s been reigning as the Queen of England for 70 years.
Felix Salmon: And this actually happened in February, but in a very English style, they’re like, We don’t want to celebrate anything in February when it’s cold and miserable. We’re going to wait until the summer and then we’re going to give ourselves a four day weekend, and we’re just going to have flags everywhere, and we’re going to have Prince Charles looking like an utter idiot on a horse and wearing a bearskin hat. And we’re going to have more pomp and circumstance than you can possibly imagine.
Felix Salmon: And the entire country of England and I’m saying England advisedly here has gone completely batshit and suddenly in the throes of her royalist fervor right now. I don’t think this is true of Scotland and Wales, and it’s I don’t see a lot of Platy Jubes fervor in Canada or Australia. It does seem to be a very English thing that seems to have been orchestrated specifically by Boris Johnson in a desperate attempt to boost his popularity ratings, which has failed because when he turned up to St Paul’s Cathedral for the Platy Jubes service, he got booed loudly and everyone’s like, Ooh, we didn’t expect that.
Host 2: And I guess there’s a. Well, first I wanted to say I got a little bummed out because. Okay, so there’s this Platy Jubes Platinum Jubilee. There was also a gold jubilee, right?
Felix Salmon: At 51, 20 years ago.
Host 2: Yeah, yeah, 50 years. And then there was something in between.
Felix Salmon: That was silver, which was over it, which was 25 and now and then was, it was like diamonds.
Host 2: Yeah, there was diamonds. Yeah, there was gold and diamond and now platinum. And I’m thinking to myself and this woman, this Elizabeth lady, she’s like 96 years old. Yeah. There’s the platinum jubilee. There’s nowhere to go.
Felix Salmon: No, this is.
Host 2: This is it.
Felix Salmon: This is it. This is the last hurrah. She’s made it to 96 or whatever, and she’s looking pretty good for 96, but she’s not going to stick around that long.
Host 2: It’s actually really dark. It’s a celebration of four day weekend and it has weird economic implications. I guess we can discuss, but like it’s really actually quite dark.
Felix Salmon: Well, you know how everyone like says judge a person by how many people turn up to that funeral, you know, which is the one thing that you can’t ever see right by that like this is Queen Elizabeth’s a she can look out and see basically how many people are going to turn out to her funeral. And this is like a way of showing that to her while she is still around to appreciate it.
Host 2: This is her funeral.
Speaker 3: So episode is just going very dark.
Host 2: Dark. It’s very end of the world feeling. But it’s fine because the UK won’t be in a recession because of this or something.
Speaker 3: They were going to have a little bit of a contraction because I guess the four day bank holiday weekend shaved half a point off of GDP.
Host 2: How? I don’t understand that. Well, GDP.
Felix Salmon: Is very flat and miserable right now. So if you throw in an extra four day weekend, that’s enough people not working to tip GDP into negative territory. But the good news is that because it bounces back from the negative territory in the third quarter, because you don’t have another jubilee in the third quarter, then you get positive growth from the second quarter to third quarter. And then everyone’s being like, well, in that case, it wasn’t really a recession, was it?
Host 2: Okay, so we talked about the economic part.
Host 2: Now let’s get back to the monarchy. Is this it for the British monarchy, like everyone hates.
Felix Salmon: Prince.
Host 2: Charles, right? So like once this lady Elizabeth goes, it’s all chaos and oh.
Speaker 3: So why do the English romanticize the monarchy to begin with? Yeah.
Felix Salmon: Felix It’s such a good question. I mean, it’s so I think the answer honestly is related to the answer to like why did they vote to leave the European Union? And I don’t understand that either. None of it makes any sense to me. I do think the white English people in particular, a lot of them, especially if they’re older, tend to like the idea of being British. And they have this idea that they they’re old enough to remember when Britain ruled the waves or something equally idiotic. And they look back fondly on the era of colonialism, basically.
Felix Salmon: And if you look at all of the pageantry that is associated with the monarchy, a lot of it was introduced. Under Victoria right at the height of the colonial era, in order to impress the natives, basically. And it’s disgusting in its own way. But this is an opportunity if you look at the pictures from the platinum jubilee of Prince Charles in his bearskin hat, on his horse with his basket and hat being 20% higher than anyone else’s bearskin hat because he he’s 20% more important, whatever, and he’s going to become king.
Felix Salmon: We have this weird nostalgia for colonialism, which I think you see in the pageantry, which was invented during the colonial era. And I think that’s why it’s not going down nearly as well in the rest of the world or even in the other nations of Great Britain. So I think Elizabeth is right that this is the beginning of the end of the monarchy. It seems to have contracted down to a kind of nativist English core. And once the queen isn’t around anymore and she’s been the glue holding this entire firm together, it’s hard to see a similar level of public support for Charles.
Host 2: The queen is like Sheryl Sandberg on steroids.
Felix Salmon: Okay, you can unpack that one. What?
Host 2: I don’t think I can. I was just riffing, but she’s a very powerful woman. Who? That’s it. I have nothing. I’m nothing. I’ll just cut this out. They’re not.
Speaker 3: Delina. And because she was born at the table, she’s.
Host 2: Been leaning and she is not stepping down. She is going out. You know what? Elizabeth.
Felix Salmon: Elizabeth, you and named after the queen.
Host 2: You have the same name?
Felix Salmon: Yeah. You’re the expert. You’re the expert on all things Elizabeth around me. So what? What is your take home?
Speaker 3: Platy Jubes English mystify me all the time. So this is this is just one more example.
Host 2: I did read an FTE column today where they were like just heaping praise on her for 70 years of not sharing her opinion, of just being there, of like just a steady presence and a smile that can solve problems. Like, I didn’t really get it. It just seems like.
Speaker 3: Her job definitely has the lowest possible minimum requirements. She has to stay alive, not say anything.
Host 2: Yeah.
Speaker 3: Show up to things.
Host 2: If you think about it though, because we were just talking about CEOs and these times and how social media run them all for us, because now we know that they’re actually the worst. But like Elizabeth, she has not revealed herself to be the worst. She keeps a tight hold on everything. We don’t have to.
Felix Salmon: She hasn’t been she her tweets.
Host 2: She she doesn’t she posts like maybe they’ve been canceled yet. Maybe there is something to be said about that in 2022 that she’s like off Twitter and doesn’t say like just the dumbest shit on social media and congratulations for her Platy Jubes.
Felix Salmon: Well done, queen. Congratulations on your Platy Jubes I hope the entire monarchy gets abolished the day after you die, but knowing my luck, it won’t because Britain is terrible and it never makes the right decision. That’s heaven on the ground.
Felix Salmon: Elizabeth Lucky number or million?
Speaker 3: 756,940. I’m going back to my having the giant numbers in the numbers round. That’s the number of Lego that fell off of a container ship in 1997. I also learned this was from a New Yorker article last week that the plural of Lego is just Lego. It’s like fish.
Felix Salmon: So what do you mean? It’s like fish in the sea. Therefore it’s like fish.
Speaker 3: No, the plural of Lego is just Lego. Oh, I like it here.
Host 2: Like, you know.
Felix Salmon: Gotcha. Okay, so there are 4.8 million Lego in the sea?
Host 2: Yes.
Speaker 3: No, somewhere around Cornwall, people collect them like little kids go looking for them because there’s a specific kind of dragon Lego. Also, hilariously, a lot of the Legos were ocean themed, so there were fish and scuba divers. Oh, that’s now they’re just all over the beaches. But this is part of a phenomenon where 1382 containers go overboard on ships every year with various things. And because they only get reported to the people who are ordering the containers, it’s probably more than that. That’s, that’s just an estimate.
Felix Salmon: A lot of the containers. Yeah. Are just part of supply chains and they’re on their way from the manufacturer to the wholesaler and they all just get sorted out with insurance. But some of them are people’s belongings. Well, remember when Tracey Galloway had her container stuck on the boat for months and eventually she got it? Well done, Tracy.
Host 2: I love the idea of going to the beach to hunt for Lego. Like you get your shells, you look for starfish and you pick up some Lego.
Felix Salmon: It’s a collector’s item. Once it’s been in the sea for a while, it gets a nice patina.
Host 2: I mean, I guess it’s not great for the environment, but sounds like a blast.
Speaker 3: It’s great if you’re under five.
Host 2: Yeah, yeah. Fish don’t, you know, walk. So they’re not going to hurt themselves. Stepping on the Lego, which is also.
Felix Salmon: That that famous meme of the shark that steps on the Lego.
Host 2: Right? The famous meme.
Felix Salmon: The famous meme. I’m just going to jump in here and say that for one of the first and possibly only time, my number is. Bigger than Elizabeth’s number. My number is 5.8 billion, which is the number of dollars that were owed to the US government by students who went to Corinthian Colleges, which was this evil, terrible for profit scam, basically, which barely taught anyone and certainly gave no transferable skills. There were 560,000 of these borrowers. Collectively, they owed $5.8 billion. And the American government has now said, you don’t owe a penny. We’ve cancelled the whole thing because it was unconscionable. Well done. American government. That’s good.
Host 2: Yeah, it’s really good. Meanwhile, they’re like trying to forgive a little bit of $10,000 or something of student loans. I feel like this is smart.
Felix Salmon: This? Yeah. I mean, for Corinthian Colleges, it makes sense. You know, we have been talking for months in like the slate money slack back like when and whether do we talk about student loan forgiveness and the general consensus seems to be when there seems to be an actual proposal on the table that might actually happen. But that’s been going on for ages and we don’t seem to be any closer.
Host 2: It’s true.
Speaker 3: I think smaller steps like this kind of get people inured to the idea that it could happen, you know, especially people who oppose it, because this story in particular highlights a really just systemic unfairness that I think even the people who are anti cancel student loans are somewhat sympathetic to. So maybe they can move sentiment in that direction.
Host 2: So it’s widening.
Felix Salmon: Baby steps.
Host 2: Window.
Felix Salmon: There you go. Overton Window. Well, then.
Host 2: My number is 42.
Felix Salmon: That’s the lowest.
Host 2: That’s the number of days. A four bedroom house in Starr, Idaho, has gone without even anyone looking at it. According to this real estate agent I spoke to a week and a half ago. I’m telling you this because.
Felix Salmon: Is that near Boise?
Host 2: Felix because because Boise was like the hottest real estate market in the pandemic, real estate boom. And it looks like, according to my reporting, that it’s no longer so hot or like Boise.
Felix Salmon: Real estate, the peloton of the real estate market. I think it is.
Speaker 3: Yes. Now, a lot of people are like, oh, we don’t have to move to Boise. Right? Right.
Host 2: Exactly. They’re like, oh, wait.
Speaker 3: I’m sure pause is wonderful too.
Host 2: But yeah. So the Idaho boom might be coming to an end. And I think I talked about Idaho like a few months ago, and I got a lot of messages from people who live there, who are thinking of living there, who have left there. So keep sending me your messages about Idaho. I’m super interested.
Felix Salmon: The Idaho property market is reversing. So, I mean, I feel like 42 days without a bed is wouldn’t have raised much of an eyebrow a couple of years ago.
Host 2: No, but in the boom it was like you say, we’re having an open house on Sunday and you’d have a line out the door and the thing would sell in days. The real estate agent I spoke to was like, This is really weird. Like for the past year or two, it’s just been like, go, go, go, go, go. And now it’s more like, wait, wait, wait, wait, wait. Just more normal. Yeah, which is fine.
Felix Salmon: Which is probably good.
Host 2: Because really good.
Felix Salmon: Honestly, if you’re buying a house, you should probably think about it before doing it. Have a minute to, like get your finances in order. Work out how close it is to the schools, whether you can afford it, how much the mortgage is due. An inspection?
Host 2: Yes. A lot of people were waiving inspections during the craze and then wound up with houses where everything’s, you know, falling apart. I read all those stories, of course. So, yeah, taking more time is a good idea.
Felix Salmon: So well done. Everyone who managed to avoid buying a house during the craze, with any luck, you get to be a bit more considered, even if you don’t get much of a price cut as of yet. And yeah, that’s it for Slate Money this week. Unless you one of the lovely, lovely people who subscribe to sleep. Plus if you are then we are going to talk about.
Host 2: Did you read my CPI.
Felix Salmon: Don’t talk about inflation. I could let’s talk about inflation. But yeah, because Emily has a wonderful piece about inflation and the measuring thereof. So we are going to talk about that in sleep less. Otherwise, just make sure you keep on sending us emails. We do love them very much. Sleep money at Slate.com and many thanks to the amazing Jessamine Molli who saved us today and hosted us in the glorious sea, playing them out in studios in Brooklyn, New York. So many thanks to her for putting this together. And we will be back next week with more sleep and money.
Felix Salmon: Okay.
Host 2: Emily Felix.
Felix Salmon: I love it when you get nerdy and you nerd it out this week on measuring CPI. And yeah, what I learned was that the way CPI is put together is that they send out a survey and a bunch of people they write down on the piece of paper how much they’re charging the stuff, and then they send it back to the government. And the government opens up all of these envelopes and says, Oh, I guess you’re charging this much. And then they add it all together and do a bit of long division, and then the number comes out and some, some very smart people. And this exists on the on the Internet already with the Million Prices Project and stuff like that and saying, well, we know how much things cost because it’s all on the Internet. Maybe we should start just looking at the Internet to find out how much things cost.
Host 2: Yes, exactly. I mean, it’s it’s a little more complicated than just like stores filling out surveys to tell the Bureau of Labor Statistics how much stuff costs. They have staff that go to the stores that are like picking up the butter. There’s a great Planet Money episode about this where, you know, they’re like, okay, unsalted butter. They write down the price and all that. That all got shot to hell during the pandemic, and they had to do a little bit online. But yeah, it’s still very manual and it’s weird. Exactly. For the reason you said, like, there’s all this data, there’s no reason not to do it. Other countries are using big data to figure out CPI. So it’s kind of like it’s time.
Felix Salmon: The thing which I mean, I think it is time and I really love the fact that the United States is going to slowly discover that the Internet exists and is going to use it in aggregating probably one of the most important, if not the most important economic statistic that we have. The only slight worry I have is there is so much conspiracy theorizing about CPI. I get incredibly intelligent and sophisticated people coming up to me and saying, well, officially CPI is 8%, but if they measured it the same way that they did back in the 1970s, it would be 15%. And people believe this stuff and it’s all based on absolutely nothing. But there’s all of this conspiracy theorizing about CPI. And if the government itself is coming out and saying, well, there are weaknesses with it, then that’s only going to make it even more likely that people are going to not believe the official figures.
Speaker 3: I think some of it here is if you’re talking to people of a certain age, they remember the Boskin Commission in 1996 were there for him the way that they calculate the CPI and they explicitly said they thought it was overstated. So now people kind of think the lower version of the CPI that we went with is somehow missing some things. And that yeah.
Felix Salmon: Just to be clear, like if inflation was overstated back then, that does not mean that if you measured inflation today the way you measured it back then, then it would be higher. Oh, sure.
Speaker 3: But it allows them to say, well, the bill has been wrong before.
Host 2: It’s not precise. Right? Like, one thing I learned doing this was different income groups might face different rates of inflation because like, if you’re very poor, a lot of your money you spend on food and gas and heating or whatever. So if those prices go up, your personal rate of inflation will be higher than a wealthy person’s who only spends a small fraction of their money in their income on that stuff. Like and depending where you live, you might face a higher rate. Yeah, I’ve.
Felix Salmon: Been reading a lot about how food and gas prices hurt. Rural and suburban. Yeah, much more than they hurt urban people. And there are lots of different KPI’s already. Right. The one we will talk about is this thing called CPI you. But there’s a billion that one not a billion, but there’s like a dozen others that people can look at if they want to. But you’re absolutely right that none of them are segmented according to income. But then again, like I like the idea of segmenting according to income. But clearly, as we were discussing, a poor person in rural Alabama who has to spend a lot of money on food and energy, is going to have a very different personal inflation rate than the poor person in New York City who has access to the subway and walks to the supermarket.
Host 2: Oh, and the other thing I learned about the difference between poor people and wealthier people’s rates of inflation is that poor people in wealth. This is so obvious when I say it out loud, but poor people and wealthier people just buy completely different kinds of things. Like we all buy food, but like.
Felix Salmon: We buy different food.
Host 2: We buy different food. Even when we buy butter, it’s like different butter and wealthier people are able to sort of like make more substitutions and stuff like that. So I don’t know, I think.
Felix Salmon: Wealthier people buy things. Yeah, they spend a lot more. One of the things that has gone up a lot over the past year is air travel.
Host 2: Right?
Felix Salmon: More people don’t generally spend a huge amount on air travel. Rich people generally spend quite a lot on air travel. So yeah, it changes.
Host 2: And it’s just so fun to learn about. And then I also learned that I’m sorry, you guys probably want to know. We love it. We love it. Okay. So I also learned like when the pandemic happened, the weights in the basket, like so that the BLS looks at a basket of goods and like figure out what percentage of your money goes to services versus stuff and the pandemic. Big hit and services spending went flatlined. No one went to restaurants, no one took planes, no one did anything. And they bought a lot of goods. Everyone knows this, but like the basket weighing process, only updates like every two years or something. So there’s this cool chart in this report I looked at where you see like airfare inflation kind of stays elevated after the pandemic, even though it wasn’t anymore, even though no one was flying, it just the weighing process hadn’t they hadn’t re weighed yet. So it was all kind of blue for a while. And that was really interesting, too.
Felix Salmon: We did have a major I wrote about this in, I think May 2020. Was there was this huge statistics crisis. Yeah, no one could know all of the historic ways that the government collected data to produce statistics. They weren’t able to do that. And CPI, it turns out, was just one of many. In hindsight, it was fine. CPI inflation was like the least of our worries in in April 2020. And if it was slightly off, no one really minds. But yeah, like getting back on to a stable footing, especially right now when we don’t really have a decent gauge for what is normal in terms of how much we spend on different things because everything is still very out of whack. Supply chains were weird and that kind of thing is it’s a really tough nut to crack and.
Felix Salmon: Inflation. Statisticians work incredibly hard. And the United States, I have to say, has some of the best in the world. There are some countries which are famously good inflation statistics and the US is one of them. We do it well and we’re going to get better with, you know, looking at the internet. But they move slowly because by their nature they’re very conservative. And when you’re in a world which is moving fast, then any statistical agency that moves slowly is going to be behind the curve. Mm.
Host 2: That’s true. They have a really cute blog for the BLS called Commissioner’s Corner. And in 2019, when they announced they were going to, like improve the CPI, which was an ill fated timing, right. December 2019, they said even the best teams like the world champion Washington Nationals can’t rest on their laurels. Yeah. So also the BLS really likes the Washington Nationals is something I learned. But they say like, we’re the best. We are the gold standard. But, you know, we could always get better. And I respected that. Wow. In our government in these times made me happy.
Felix Salmon: And that was 2019. That was under Trump.
Host 2: Yeah. Oh, and then the answers will be back to you in 2021 with the final results. And I was like, Oh, oh, that’s something you have no idea what is to come?