Is Inflation Ova?
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Felix Salmon: Hello and welcome to the is inflation over episode of Sleep Money, Your Guide to the Business and Finance News of the Week. I am Felix Salmon of Axios. I’m here with Emily Peck of Axios.
Emily, Emily Peck: Hello. Hello.
Felix Salmon: I’m here with Elizabeth Spiers. Hello Elizabeth. We are about to find out. Did not eat eggs for breakfast this morning. Emily is going to tell us that it’s because eggs are expensive. We are going to talk about the price of eggs and inflation more broadly, which seems to be coming down, which is good news. It’s not coming down in eggs. We are going to talk about gas stoves and induction. We are going to talk about Columbia Business School and how much it has managed to contrive to spend on its new campus. We are going to have a Slate Plus segment on Noma tasting menus and the economics of fine dining. It’s all coming up on sleep money.
Felix Salmon: So we had a negative inflation print on Thursday morning when the inflation numbers came out. Inflation went at prices. Consumer prices actually went down month on month. It looks like maybe Emily is inflation is over, except for those of us who like eggs.
Emily, Emily Peck: Yes, that’s that’s it. And the segment right there. But yeah, I mean, on Thursday last week, the CPI numbers came out and they showed inflation cooling. I mean, prices are still elevated, but they’re not elevated as much. But in the numbers, buried in the numbers is egg prices, which are up 59% year over year and rose 11% from November to December, mostly because of avian flu. So many chickens have died this year. You guys or this? Yeah, this year. In the past year will say because it’s 2023 now, it’s a little confusing. So many chickens have died. 44 million chickens have been killed. Well, they say they say the chickens have been depopulated.
Felix Salmon: Depopulated? Is that the term of art?
Emily, Emily Peck: Yeah.
Felix Salmon: So they’re not like getting the flu and dying of the flu. They’re getting the flu. And then the farmers are like, You’ve got the flu. If you have the flu, you’re not laying eggs. If you’re not laying eggs, all you are is a waste of bird feed. So I’m going to depopulate you.
Elizabeth, Elizabeth Spiers: Well, it’s also this is contagious. So they have to they have to kill them all. Repeat chickens.
Emily, Emily Peck: Yes. And it’s not like. Yeah, it would be like if someone in your family got COVID and then the government was like, well, you’re all going to die now and just kills you all.
Felix Salmon: I have to say, this is my other favorite part of this story is the shot of the hen to human ratio in the United States, which is apparently at a 15 year low right now. And I love the fact that the United States has a hen to human ratio, but we get three. What is it, like 300 eggs a year or something on average? We Americans.
Emily, Emily Peck: I believe it. And killing all these chickens has just decreased the egg supply month to month by about seven and a half percent, according to The New York Times. So there’s shortages in some supermarkets right now. Not only are the eggs more expensive, there’s fewer eggs to go around. And I feel like I mean, eggs are the cheapest one of the cheapest proteins that people buy, like everyone is used to them being extremely cheap, you know, like they used it not long ago, be like a dollar 39, a dozen.
Elizabeth, Elizabeth Spiers: They were a buck 39 in January, and in November they were 359 for 12 greedy eggs.
Emily, Emily Peck: Yeah.
Felix Salmon: Those of us who, you know, feel bad for the chickens and insist on buying organic free range eggs have never paid anything like that. I feel like the high end eggs haven’t gone up in price as much as the low end eggs.
Emily, Emily Peck: It’s all high end now. But I mean, do we want to talk more broadly about why inflation has fallen minus the eggs?
Felix Salmon: Well, yeah, the big picture is absolutely the inflation. It seems to be clear now was something that happened very much in the middle of 2022 after Russia invaded Ukraine. It hasn’t really been a thing for about six months now. It’s still showing up if you look at year on year prices, because it’s still, you know, some of the inflationary months were still within the last 12 months. And so that’s why the headline 12 month inflation rate is still a mildly scary 6.5%, but it’s coming down fast. And if you look at where inflation is over the past month, over the past six months, it’s completely benign at this point. As for the why, we can speculate, the causality is highly complex, but you have to probably give the Fed some credit, right?
Emily, Emily Peck: I don’t know. I wrote a piece this week and I convinced myself that actually the Biden administration did a lot to bring down inflation around energy prices because it opened up the Strategic Petroleum Reserve, pushed out a lot of oil that way and I think is recognized for having pushed gas prices down a lot.
Felix Salmon: Sure. But if we look at if we look at core inflation, which excludes food and energy, that was very high. It’s come down. And I think you can thank the Fed for that, partly because of the effect it had on the markets. Right. Because, you know, we had the new inflation that we had the new discount rate in the markets. You know, long term rates went up quite a lot. That meant the high duration assets like tech stocks went down quite a lot and that then caused a bunch of sort of cost cutting in corporate America that basically put an end to any incipient. Wage price spiral.
Emily, Emily Peck: That’s true. And I mean, one of the bummers to me is that wages have not kept pace with inflation, and food prices are still pretty elevated even. Not even just eggs, but a lot of the prices. So for you know, for most people, you’re kind of in a better or worse position now, Not the worse position. You know, most people still have jobs. The job market is still healthy, all that. But your dollar is not going as far. You didn’t your wages essentially fell and the cost of stuff went up.
Felix Salmon: Although I have to say like as. You know a consumer one of the. Amazing things to me has always been how unbelievably cheap eggs are like. They are amazing things. They are incredibly delicious. Like if they were some delicacy that cost $35 each, I would still spend $35 on an egg because eggs are just amazing things and they I love to cook them and they are great. I wouldn’t eat them nearly as often, obviously.
Felix Salmon: But the idea that you could buy a dozen eggs, a couple of bugs always just was this incredible piece of make capitalist success story to me. But it also, I think, reflected a bunch of incredibly horrible conditions for chickens. So if they go if the replacement hens are treated better and the prices stay high, I know maybe that’s a tradeoff worth worth making.
Elizabeth, Elizabeth Spiers: I have a personal opinion that American Breakfast is too heavily dominated by eggs and pastries, so if this breaks big eggs strong. Hold on breakfast, I won’t be that disappointed.
Felix Salmon: Well, what’s your what’s your beef with eggs?
Elizabeth, Elizabeth Spiers: Ambivalent about them? I don’t. I don’t not like them. I just, you know, it’s too much of a part of American breakfast.
Felix Salmon: Maybe you’ve just had too many because they’ve been so cheap. You’ve been over inundated with eggs.
Elizabeth, Elizabeth Spiers: Possible.
Emily, Emily Peck: Is breakfast a scam, Elizabeth?
Elizabeth, Elizabeth Spiers: It might be. I. I would go down that road.
Emily, Emily Peck: I do think brunch is a scam and that paying $15 for eggs at brunch is absurd. I’ll say that.
Felix Salmon: No, not if they come with free booze.
Emily, Emily Peck: Well, then you’re paying for the booze. But there’s a situation where you’d be asked to pay, you know, $17 for an omelet, knowing that eggs are. I mean, they used to be two bucks a dozen. It’s just. I know I’m not doing that. I refuse.
Felix Salmon: So we are going to talk about restaurant economics and slate Plus because Noma closed. Yes. Noma announced that it was closing this week, so we’re going to do a bit of ranting about restaurant economics. But I do think this is a good segway to the whole question of, you know, the way that restaurants cook their food, which is still overwhelmingly on gas stoves.
Emily, Emily Peck: Oh, dun dun, dun.
Felix Salmon: Gas stoves, for reasons I don’t entirely understand, became a major topic of conversation this week. I think there was one errant interview from one member of the Consumer Product Safety Commission, and as our colleague Matt Phillips wrote, like, there is nothing that Republicans love more than to find some new thing they can jump on the for culture wars. And so suddenly now, gas stoves, the parts of the culture war and like the nanny state, wants to take away your gas stoves and so on and so forth. But I think this is a good reminder. Like, first of all, let’s just be very clear about this. The nanny state does not want to take away anyone’s gas. Those if you have a gas stove, that’s fine. Literally, no one is suggesting that it should be taken away.
Felix Salmon: But number two, this is a good reminder that things that people grew up with and felt totally benign and wonderful can actually be bad. And as society evolves, we can learn about these things and try and get better. And gas stoves are bad, especially for small children. They create all manner of nasty particulate pollution. They cause asthma. And in the grand scheme of things, not to mention carbon emissions in the grand scheme of things, if and when we move away from Gastos and towards the wonderful utopia that is induction, that is something devoutly to be wished.
Emily, Emily Peck: Yeah, and let’s just back up and explain in case people haven’t been following what happened was Richard Trumka Jr who was the son of this big union guy who passed away recently was interviewed by Bloomberg. And he’s a member. He’s a commissioner on the Consumer Product safety Commission. And he said he’s been on an anti-gas stove kind of mission since at least last year. There was a video of him going around saying similar stuff, but he told Bloomberg, yeah, a ban is on the table. And that set off just a rage cycle, as Felix explained. And I learned I mean, I really didn’t know that gas stoves were a danger, apparently. A new research just published found more than 12% of childhood asthma cases attributable to gas stove use. I had no idea my daughter had asthma and we had a gas stove and I was like, Oh, and made me rethink because I don’t like our electric stove now. But maybe it’s a good thing that we have an electric stove now.
Felix Salmon: Electric stoves either terrible or wonderful, and if they work by heating up the stove top, they are terrible. And if they work via induction, they are wonderful.
Emily, Emily Peck: Can you tell people about induction?
Felix Salmon: It’s basically it’s basically the classic connection between magnetism and electricity. Right. Because if you if you remember back to your high school physics, those two things are like orthogonal to each other and you can convert one to the other. So basically, if you have a Ferris. Anything, anything magnetic, basically, if it’s made of iron or steel and you excited using magnetism, then that will it will then heat up. So what happens if you put a iron pot on a induction stovetop and you. And you get it all like magnetically excited. The pot heats up, but nothing else heats up. The stovetop itself does not heats up.
Felix Salmon: Well, there are these wonderful pictures you can see of people like, let’s go back to the eggs here. People like cutting a skillet in half and putting the skillet on of an induction stovetop and cracking an egg into the skillet. And the half of the egg, which is in the skillet, is like perfectly beautiful in the half of the egg, which is on the stove. Top is completely uncooked because the stove top does not heat up. The only thing that heats up is the pan. You can control the heat very, very minutely. To have incredibly low simmers or incredibly powerful rolling boils, anything in between. And it’s just it’s a glorious, wonderful thing. And I have been cooking on induction for the past seven years or so. And of all of the amazing household gadgets that I have bought over my lifetime, I’m going to come out and say that my induction stovetop is by far the greatest.
Emily, Emily Peck: Is it more expensive than electric or gas?
Felix Salmon: Yes, but it’s coming down.
Emily, Emily Peck: Hmm.
Felix Salmon: You can buy an induction cooking thing very cheaply now, so it’s come down a lot in price. But I don’t think it’s quite as cheap as the alternatives yet, but it probably will be soon.
Emily, Emily Peck: So to tell people you can’t have gas and then push them to electric and induction, you are kind of pushing them to higher priced items.
Felix Salmon: Yeah, electric stoves are not more expensive than gas stoves and. If less than half of America has gastos right? Like there’s millions and millions of households out in there out in America right now that don’t don’t have any natural gas hook ups at all. And they’ve, you know, haven’t been out there sort of calling up their sentences and complaining they don’t have a gas hookup. They just have electric stoves.
Elizabeth, Elizabeth Spiers: It’s also it’s it’s a it’s a weather issue to some extent. You know, I grew up in the Deep South where nobody had gas heating because you’re just wet and you’re in central air and heat. And so nobody had gas stoves either. You just everybody had electric, right.
Felix Salmon: If you if your if your house isn’t connected to gas for heating, it’s less likely to be connected to gas for cooking. Mm hmm. And so, yeah, like, as I say, no one is trying to ban these as if you have an amazing wolf stove and you get this really high flame and you can do high heat. What, cooking on it? That’s like all power to you. And you’ll be able to continue doing that for many decades to come. But certainly in New York from now on, new construction is not allowed to install such things. So if you want to have your big grand wool stove, you’re going to have to buy a house or an apartment that has one rather than buying a brand new condo, which won’t be allowed to have one.
Elizabeth, Elizabeth Spiers: I would replace our gas stove with induction if if it wasn’t so expensive.
Emily, Emily Peck: One more question about induction. Do you need to get a certain kind of pan? You mentioned iron, but.
Felix Salmon: Yes, it needs to be ferrous. The only the only pan pots and pans you can use are ones that are magnetic.
Emily, Emily Peck: I am a little bit on the side of of the angry conservatives.
Felix Salmon: I am a little bit on the side of the angry conservatives. It’s one of those things that, like you never really expect Emily to say, But I want you I want to hear what I’m going with.
Emily, Emily Peck: I mean.
Elizabeth, Elizabeth Spiers: It’s like if you want to give your kid asthma, give your kid asthma.
Emily, Emily Peck: I mean, it’s I don’t know, is it that I haven’t read the research paper? I only read the summaries of the research paper and the news coverage. It does sound bad. I don’t want anyone to get asthma. It’s 12%. I mean, just the politics right now are so polarized. Why are we making an issue out of stoves? The same could be said of straws, like just don’t feed the beast. You know what I mean? And I kind of feel like just leave it be for now. We have other things, right?
Felix Salmon: I mean, I feel I feel like we have a big problem with public health interventions in general in this country. And I think I’ve mentioned this in the past on the show that incredibly valuable public health interventions like putting iodine in salt or putting fluoride in the water are the kind of things that conservatives would be up in arms about if they were attempted right now and would probably never happen.
Felix Salmon: If you look at things like attempts by governments in sub-Saharan Africa to change the way that people light their homes and move away from dirty carbon fuels to solar lights and that kind of stuff, the public health implications of that are enormous.
Felix Salmon: And you really put years and sometimes decades onto people’s lives by changing the fuels that people use inside their homes. Burning carbon inside your home as a way of either cooking or heating your home is really dangerous and really unhealthy and you shouldn’t do it. And it’s atavistic and it dates back millennia. And, you know, in sort of a clean, sleek, modern world, like we can save lives by not doing that. And, you know, we’re not going to enter a world in our lifetimes, children’s lifetimes within our grandchildren’s lifetimes where people don’t have like open fireplaces. They’re lovely things. People like them, but they’re not something you live with every day, right? Cooking on gas is something you do every day, and it adds up over time and it’s not good for you.
Elizabeth, Elizabeth Spiers: All right. Well, the conservative heuristic is government should never do anything. So any kind of intervention, no matter how valuable, is always going to be portrayed by a certain segment as, you know, nanny state policy, even if it makes total sense.
Emily, Emily Peck: Yeah, but it just seems like there are other nanny state policies to prioritize right now. Like what, The switch over to electric vehicles, perhaps.
Felix Salmon: And by the way, like the switch of one of the big public health improvements that comes with the switch over to electric vehicles has nothing to do with carbon emissions and is entirely a function of the particulate emissions that they come down basically to zero when you move to an EV. And that’s, you know, if you’re in some kind of inner city area with a lot of freeways in it, you know, like the South Bronx or somewhere like that, the particular emissions from those freeways are really, really bad for public health. And if those cars will become EVs, then that will massively reduce the amount of asthma and other illnesses that you see in that population. And, you know, having a gas stove is basically the same. It’s not exactly the same, but it’s very similar. It’s about those particulates, emissions.
Emily, Emily Peck: Okay. Also, you got to get away from sticks and move to carrots with stuff like this. Like and the administration has done some of that. There’s money in the Inflation Reduction Act, you know, to subsidize people’s purchase of electric stoves. Yeah, I don’t know about induction, but induction. Just hearing us talk about it, it just if I was a conservative in a red state, I’d be like, listen to those liberals talk about their fancy stoves getting their new cookware. This is the latte sipping elite trying to shove, you know, blah, blah, blah down our throats.
Elizabeth, Elizabeth Spiers: Liberals are going to make us all buy new pots.
Emily, Emily Peck: Yeah, they’re just going to make you buy a new pot. There they.
Felix Salmon: So what’s next?
Elizabeth, Elizabeth Spiers: Columbia.
Felix Salmon: Huh? Oh.
Emily, Emily Peck: Your favorite Felix has been dying to talk about this. Listeners dying.
Felix Salmon: Okay, so I may or may not have put out a tweet about about this essay by a chap named James Russell in The New York Times calling it an early contender for worst critical essay of the 2020s. I think we’ll both try and put a link in the show notes so you can read it yourself and and see for yourself what you think of this.
Felix Salmon: The headline is at Columbia’s $600 Million Business School, Comma. Time to Rethink Capitalism. And then the subhead is On the developing Manhattanville Campus, The Architecture of Diller. Scofidio Renfro reinforces a social movement in business education to do good as well as make money.
Felix Salmon: So the entire thesis of this article, which is 2000 words long, is basically that you can spend $600 million on a new business school and do clever things with staircases, and that is going to be an effective way to reach to change the way that capitalism functions in America. Which is just so ludicrous on its face. But like I want to know because I don’t want this to be just a complete Felix Salmon like you guys read this article. Did did this article make you just see Red in the same way, or did you kind of like not along with it sometimes?
Emily, Emily Peck: Oh, no. It made it was crazy. It was like, here’s this very, very expensive building and the architecture is very special. And this is part of the business school’s efforts to do good. It didn’t it didn’t track at all.
Felix Salmon: Quoted Glenn Hubbard as like, Oh, yeah, The idea behind Columbia Business School is we’re going to rethink capitalism and make it less rapacious. And you’re like Glenn Hubbard. You remember him from inside Job being like, give me give it your best shot and being like the, you know, the rapacious capitalist. Like it it’s the weirdest article and they never really talk about.
Felix Salmon: The budget of this thing, which, you know, $600 million, if you work it out, works out to like $1,220 per square foot just on construction costs like that. That’s like not including the land. If you look up the cost of like building class-A office buildings in New York City, they top out at like 830. It’s like a 50% premium over like the most expensive construction costs that you can find in New York. How is it that some, like Uptown nonprofit has found so much money for this?
Emily, Emily Peck: Well, I mean, the business school makes makes money. It’s like one of the few areas of the nonprofit that’s like doing really well. Is that not correct? Business schools are a profit center for most universities, is my understanding.
Felix Salmon: They they they are very price insensitive. The business school can charge a huge amount of money for its MBAs. Meanwhile, its costs are, you know, a relatively small number of professors who can teach pretty large classes and be relatively productive in that sense. Well, one, I did the math a few different ways. One of the ratios here is that this business school, if you work it out in terms of like how much does it cost per professor’s office, it’s $4 million per professor.
Emily, Emily Peck: I mean, it’s a nice building.
Felix Salmon: It’s not, though, like this is the other thing. It looks like, you know, like have you guys ever driven around Southern California, you know, places like Irvine, California, or Costa mesa or Laguna Beach or places like that. And they have those kind of strip mall office parks with random software company logos on them. It looks like that. It looks like it looks like an exhibition, like a kind of like weirdly suburban satellite office of some software company somewhere, you know, And you see them all over America and they all look kind of shiny and kind of okay and kind of bland. But there’s nothing from the outside about these buildings that screams like super premium. Amazing. Like I don’t have any beef with with Liz Diller and Dylan Scofidio. But this is not their best work. It really isn’t.
Elizabeth, Elizabeth Spiers: There’s nothing really aesthetically about it that stands out. Like, how would you describe how would you describe it as authentically?
Emily, Emily Peck: You see, this is where the difference between you and I, Felix, will really come through is in my description of architecture. It has a lot of windows that that face out into the neighborhood, which was a big selling point in the piece, because the residents of the area, Manhattanville, where Columbia is, are very ah, poor. And you know, there’s always tension between the university and the surroundings.
Emily, Emily Peck: And I guess the previous iteration of the business school, it was kind of more like walled off, you know, like from the from the leaves. And this has a lot of windows and it’s very open. And, you know, you could see out into the neighborhood and there’s like zigzagging staircases or something, something there’s more interactions between faculty and staff, something something. I mean, to my eye as an untrained eye, you know, is just a poor basic lady. It just looks like a nice place to go. It’s kind of bright and shiny. I went to Columbia for graduate school for a year, and like every time I intersected with the business school, it was just like. A completely different vibe them from what I was doing. It was just like very shiny.
Felix Salmon: But that was the old business school, right? Which they were complaining about in this piece.
Emily, Emily Peck: But the vibe of the of the school and of the students is similar to what I’m seeing in this building, which is like completely different from what you’d expect from a university. It’s like very modern, like where you would go to work and everyone is very kind of loud and they’re like not dressed like students. And you know what I mean?
Elizabeth, Elizabeth Spiers: I think we have to actually read a couple of lines from the story so that you really get the sense of the argument they’re trying to make.
Felix Salmon: We can definitely read James Russell’s own description of the architectural merit of these things. And this is the lead, by the way. One zigs, the others zags. One teases the passer by with bands of translucent glass, wrapping a core of clear windows, the other with floors angled in and out, a gentle architectural mambo. What I mean, there’s certainly words.
Elizabeth, Elizabeth Spiers: There’s my. My favorite is the description of the stairs. So the appearing Wraith like appearing Wraith like behind the glass stairways both wind over and around themselves, like crinkly strands, strands of DNA as they ascend full height. These are what the architects working with a collaborative architecture firm called Network Stairs, twisting through ceiling surfaces curved and warp to accommodate them. They beg to be used.
Felix Salmon: Okay, so first of all, this is this is one thing that we should talk about in in all seriousness. If you’re going to build a state of the art building in 2021, I think they basically built it. And you’re going to talk about caring about the community. You have to care about inclusion and architecting an entire business school around stairs has obvious implication in terms of like who feels included and who feels excluded. And a friend of mine actually tells me that in one of these two buildings, there are two buildings there. The elevator doesn’t go to the ground floor. You have to kind of like take the stairs up to get the elevator. And if you, you know, are wheelchair user or something, it’s really difficult to get around these buildings.
Emily, Emily Peck: Wow. That’s that’s a really good point. That’s hugely un inclusive.
Felix Salmon: The other thing we should also mention is that the two buildings are both named after 79 year old billionaires. One of them well, one of them is named after Henry Kravis. The other one is named after David Geffen. And Henry Kravis in particular is the classic avatar of rapacious capitalism, you know, the private equity titan who buys and sells. So this idea that, like better capitalism through architecture is almost like bolide off the bat by the sponsors of these buildings.
Emily, Emily Peck: I mean, business school is all about capitalism, not better capitalism, just straight up death capitalism. That’s what it is. I think it’s interesting this effort to say, no, we’re it’s a better kind of capitalism. It’s win win capitalism. We’re going to do it. We’re going to make money and do good. Like that’s this new, I don’t know, whitewashing.
Felix Salmon: But the idea that you could do that through architecture.
Elizabeth, Elizabeth Spiers: It’s just austerity.
Felix Salmon: Completely bizarre to me, you know, and and like like I don’t understand whether this is like some bizarre spin that the architects came up with and then somehow James Russell fell for or whether people actually believe it.
Emily, Emily Peck: I think this.
Elizabeth, Elizabeth Spiers: Is also just a hyperbolic design writing or you have to find something interesting to say about the building. And there needs to be an underlying philosophy to everything. And it to me this reads like a lot of architectural criticism. It’s just weird when it’s in the middle of the times.
Felix Salmon: There are none of the trappings of schools that aggrandize the MBA aspirant as a master of the universe in waiting. Grand atriums, leather chair lounges, chandelier festooned ceilings. The buildings are seen as tools, Renfro said. They are about problem solving and being in the world. I’m like, I’ve been to a handful of business schools over my career, and I’m not sure I’ve ever seen this chandelier festooned ceiling in a business school anywhere. Maybe. Maybe you guys are going to write in and say, Oh yeah, I went to business school, which was full of chandelier festooned ceilings. Like, I don’t know. Have you guys ever seen one?
Elizabeth, Elizabeth Spiers: No.
Emily, Emily Peck: No, no.
Felix Salmon: It’s this weird thing, right? Is that when you run out of toys to buy for yourself, you know, you’re David Geffen, you have your mega yacht, and you are never going to be able to spend all of your money. The only thing left to do with your money. Is is to aggrandize yourself by slapping your name on architecture around the world. And when you’re a billionaire. You think the billionaires are good and that things that create billionaires are good? And so what you do is you wind up throwing money at business schools and you wind up with very rich and well-endowed business schools, not only at Columbia, but any other top business school in the world. You know, it finds it relatively easy to raise money, especially if that money buys some kind of a name, a naming. Right.
Emily, Emily Peck: This is why you need to tax rich people more, because when they choose what to do with their money for charity or philanthropy, they wind up giving it to business schools that don’t need it. So we need to tax them more to pay for our gas stove replacements. And that would be much better.
Felix Salmon: Exactly. Like like when whenever anyone talks about like, oh, you know, the charitable tax deduction is great because what we’re doing is, you know, the rich people are much better at helping society through their donations than the government is spending money to help society, you know, give rich people their druthers and they wind up giving money to. Business schools, which really don’t need it.
Elizabeth, Elizabeth Spiers: Vanity projects.
Emily, Emily Peck: One more question, Felix. Elizabeth, I know where Felix stands on like journalism school, for example. I believe he believes it’s a waste of money. Where do you guys stand on business schools? Do you think you need to go to business school to be a business person or to cover business? Are they worthwhile schools? Like thoughts?
Elizabeth, Elizabeth Spiers: I think it depends on what you want to do. I mean, there is specialized knowledge that you can acquire in business school, especially in the realm of finance, that, you know, it would be difficult to just absorb in a job. But if you want to start a company, no, you don’t need to go to business school.
Felix Salmon: Wait, wait. So you’re saying for entrepreneurs you don’t need it, but for who does need it?
Elizabeth, Elizabeth Spiers: You know, if you’re going into a specialized finance where you need to understand, you know, more technical skills than you know, you need to be trained in those things somewhere. And business schools do offer that. So it depends on what you want to do, I think.
Felix Salmon: Well, I mean, so there’s CUNY famously has a a quantitative finance degree that, you know, everyone is in huge demand and and is a vocational qualification in that sense. And like NYU Stern Business School also does like a deep dive into like financial mathematics and that kind of thing. I think that’s relatively rare, actually, a business school. I think the overwhelming majority of MBAs, an overwhelming overwhelming majority of business schools don’t teach that kind of thing. You know, they’ll teach you the basics of, you know, balance sheets and income statements and accounting and and that kind of stuff, but nothing particularly specialized.
Felix Salmon: It’s not I don’t see an MBA as the kind of vocational qualification that you need in order to get a certain type of job, like a like a medical degree, say, or a law degree. It’s almost impossible to think of any job where everybody in that job has an MBA, right? It’s very easy to think of a job where everybody in that job has a medical degree or a law degree. But it’s not it’s not a necessary qualification for pretty much anything. It is something that is valued by certain types of employer, often as a signaling mechanism, and often when it comes from a relative, a relatively small number of schools.
Felix Salmon: And where I stand on MBAs is that if you get a really good one, as in like one, the employers look at seek out, which would definitely include, you know, Harvard and INSEAD and LSC and probably Columbia as well, then that is worth it because employers really value that for whatever reason, even if it’s just, you know, credential ism and it’s a you know, it can pay off financially for the people who get it. The that is not true. I think for most MBAs, if you get, you know, some random MBA from some school that no one’s ever heard of, I’m not sure it’s obviously a good investment.
Emily, Emily Peck: So you’re not judging the quality of what people learn. You’re just saying, bottom line, you can go to some specific hard to get into schools. And if you do go into those schools, you come out and you make lots more money.
Felix Salmon: And yeah, in terms of the quality of what people learn, as I say, there are a handful of MBAs that really do specialize in things like finance and give and teach transferable skills that are very and those particular skills are valued in certain industries. But that number is even smaller than the number of top tier MBA schools.
Emily, Emily Peck: And there’s also the argument that the networking at the like a Harvard MBAs just like party for three years or something, and that’s like somehow very valuable.
Felix Salmon: If you look at like the most successful CEOs, the most successful entrepreneurs. Is it possible to find such people who have gone to Harvard Business School? Yes, but the vast majority of them didn’t. But it’s certainly not necessary.
Felix Salmon: Let’s have a numbers round. Elizabeth, did you bring a number this week?
Elizabeth, Elizabeth Spiers: My number is 252 $2.52. And that’s the amount the average amount you would pay for a slice of cheese pizza in New York City in 2014. And we know this because a guy named Liam Quigley has an Instagram account called NYC Slice where he’s been tracking the price of cheese pizza for seven years now. And so the average now is $3 per slice. And this sort of violates the New York City pizza principle, which says that a slice of cheese pizza should be roughly the same cost as a one way subway fare, which is 275 right now. So pizza prices are outpacing MTA subway fare pricing right now.
Felix Salmon: Wait, wait. How much was the pizza? Is it more or less than 275?
Elizabeth, Elizabeth Spiers: Yeah, it’s $3.
Felix Salmon: Of $3 now. Okay. Close enough.
Emily, Emily Peck: And doesn’t even have that.
Felix Salmon: My number is 1.4 million. Which is the number of English language copies of Prince Harry’s autobiography that was sold in two days. The first two days it was on sale. Kind of impressive, I’m going to say.
Emily, Emily Peck: Can I just say I want to ignore the Prince Harry and his book and his wife and all of it. And every time I see a link about that book or Prince Harry or his wife, I read the story. I could have done a segment on Harry and Meghan. No problem. Of course we didn’t, because we’re not going to pander to the the obvious interests of the public.
Felix Salmon: We don’t give.
Emily, Emily Peck: The people and I feel bad. I feel bad about it. Like when I read the story and I’m like and then he fell on his back and his necklace cut into his throat or whatever. And I’m just like, What am I doing? Or when I read, like. And then he did psychedelics with Monica from Friends. I’m like, again, I just feel bad about myself. But I keep reading them. I just do. I’m sorry.
Felix Salmon: Why?
Emily, Emily Peck: Why? Why?
Felix Salmon: Yeah, we shall. We shall put this behind us, Emily, by asking you for your number.
Emily, Emily Peck: Yes, my number. It is 6248. Any guesses?
Felix Salmon: No.
Emily, Emily Peck: No. Number of patents Samsung was awarded last year at the US Patent Office. It is the first time since 1993 that IBM was not the number one patent recipient in the United States. That is according to IBM. Deliberate. They’re focusing more on open source and collaboration now. But they were the leader for obviously quite a long time.
Felix Salmon: First time since when?
Emily, Emily Peck: 93.
Felix Salmon: Interesting.
Emily, Emily Peck: When I was famously running the IP magazine, I mean, IBM was like the gold standard for a company that knew how to profit from its patents, not intellectual property. But I guess it’s turning away a little bit from that strategy. I mean, it was number two.
Felix Salmon: Okay. That’s it for us this week, unless you’re a Slate plus member, in which case you will hear us rant about tasting menus and restaurant economics. We will be back next week with a wonderful episode with Felix Gillette, all about the media. Do let us know what you think about this. What you think about that by sending emails to sleep money. I think they’ll come if you want. You can thank Anna Phillips for producing because he’s awesome. And yeah, we will be back next week with more sleep money.
Felix Salmon: Okay, let’s have a sleepless segment about Noma Noma famously. One, the best restaurant in the world award for five years. Apparently, after five years, you can’t win it again. And it is closing down. And a couple of things interesting about this. And I’m going to try not to rant about how much I hate tasting menus. But the first thing that’s interesting about this is the even the $800 per person, it’s basically impossible for Noma to pay its workers a living wage.
Felix Salmon: The second thing that’s interesting about this is that by becoming some kind of weird corporate lab. It can still support a full time staff of like 60 people. And this idea that a restaurant can be more profitable and more sustainable by doing vague food lab R&D stuff for undisclosed clients than it can by serving meals to people paying $800 a person is really quite fascinating to me.
Emily, Emily Peck: How is it possible that they can’t pay a living wage when it costs 800 per person to eat there? That doesn’t make sense to me.
Felix Salmon: It’s because there are so many courses. These tasting menus have metastasized to the point at which they like 20 courses long, and each course is insanely labor intensive. You know, there was a woman in the article announcing the closure who worked there for three months and just made little mini beetles out of fruit leather the entire time she was there. And the amount of work that goes into making a mini beetle out of fruit leather is enormous. And that’s like three bites for the diner. But if you work out, you know, in terms of the value of her time, how much you would have to pay just for that one course is probably even more than the per course price that you’re paying at the mill.
Emily, Emily Peck: But I’m not an MBA or anything. But why wouldn’t you just cut the number of courses?
Elizabeth, Elizabeth Spiers: I think the extravagance is part of the deal.
Elizabeth, Elizabeth Spiers: Did you guys see the menu? The movie that just came out, it skewers high end molecular gastronomy, restaurants. It’s a sort of dark comedy, and it’s about a restaurant that’s very Noma like that’s on an island. And it’s a little bit of a thriller, but it mostly exists to kind of skewer the culture that produced these restaurants where every, you know, of course, has to be preceded by a big story about, you know, what the course means and where are the ingredients resource. And it’s more of a theatrical production than it is, you know, just a meal. Like, you’re not there to just eat. In theory.
Emily, Emily Peck: Hmm. So if you cut the courses, it wouldn’t be the production wouldn’t be any good anymore without the fruit leather beetle.
Elizabeth, Elizabeth Spiers: I think I’ve done like a 12 course tasting menu once, and it was exhausting. I think it starts out kind of fun and novel, and then it’s just by the end of it, you’re tired of it.
Felix Salmon: And by the time by the end of it, you’re, you know, you’ve drunk so much, you have no idea what you’ve been eating. And everything blurs into like this blur of. Nibbles and you don’t really get to enjoy anything because everything is only four bytes long and. You can’t even have a decent conversation with your dining companions because you’re constantly being interrupted by people telling you about the bread. And yeah, like it’s it’s just this it’s the apotheosis of experiential ism. You know, people are like, Oh, we want to pay for experiences. Well, yeah, but like, shouldn’t the experience be at least be, like, pleasurable?
Elizabeth, Elizabeth Spiers: Yeah, it’s it’s also just sensory overload. If the point is that it’s supposed to be an incredible tasting experience, it’s like, well, there’s too much of it that sort of sucks the fun out of it. And you don’t really remember what that experience was like, except the holistic experience of it being exhausting.
Emily, Emily Peck: So, so the framing around this was like, Oh, labor costs are so high, you can’t even have a fancy restaurant anymore. Like, that’s my takeaway from just reading the headlines and whatnot. But really, that’s not what’s going on at all. It’s like these restaurants just don’t make economic sense and probably aren’t very enjoyable either and aren’t really what fine dining should or could be.
Felix Salmon: Right. So in the in the grand old days of the Michelin, when they would hand out three stars to grand old piles in Paris, no one had 14 course tasting menus. Right. That is a modern invention. You know, people would serve, you know, tornadoes, museum or whatever, you know, with grand sources. And there would be you would go in there and you have a three, maybe four course meal. And it would and it would be delicious. And it is still possible to eat that way in Paris and New York and London and anywhere else you want, and often to spend quite a lot of money on such meals.
Felix Salmon: And then there is this whole parallel universe of gastronomic temples where you don’t even have a menu. You know, you just kind of tell them what your food restrictions are at the beginning, and then the courses are just served to you and you have no choice in the matter at all. And. It’s totally a new business model that cannot really be compared to the restaurants of old. And I think the restaurants of old, like if you’re serving three course meals for $200 a head or whatever, like, yeah, you can make money on that quite easily.
Emily, Emily Peck: Great. Good for them. And do this all start with that bully restaurant, El Bulli.
Felix Salmon: Outside Barcelona. Yeah, that was that kind of helped kick off that. And and the other one was the French Laundry in Napa Valley.
Emily, Emily Peck: Okay. Right. And they serve foam.
Felix Salmon: Oh, foam with big.
Emily, Emily Peck: Foam was big. Not anymore.
Felix Salmon: Yeah, we’re post foam now. Okay. And then Noma came along and moved it all into foraging, you know, wild, foraged moss and that kind of stuff. And the amount of, you know, like reindeer, penis and random stuff like that. And you’re like, okay, fine. But like, you can see how this stuff gets expensive.
Emily, Emily Peck: Yes, definitely. I mean, I, I know that Mos is quite expensive and we have really had to cut back. We no longer eat our moss omelet because obviously the reason sounds it sounds really awful. The economy is clearly in trouble.
Elizabeth, Elizabeth Spiers: No. And reindeer penis omelets for you are.
Emily, Emily Peck: The restaurant’s going away now. The tasting, is it over?
Felix Salmon: No, it will never go away. Is hit. I wish it was. I honestly is fine because, like, it’s a great way of segregating the douche bag.
Emily, Emily Peck: It.
Felix Salmon: Yes, it.