S1: This ad free podcast is part of your slate plus membership.
S2: Hell, no.
S3: Welcome to the Jeff Beezus, his midlife crisis edition of Slate Money or Guide to the Business and Finance?
S4: News of the Week in which Jeff Bezos dropped one hundred sixty five million dollars on a piano teacher in Los Angeles. And what else happened? Oh, there’s a major Fed chair brouhaha going on in Washington. We’re going to talk about that. We’re going to talk about antitrust issues, not only as pertaining to telecoms, but also as pertaining to technology. We’re going to talk about GDI. If you don’t know what GDI is, you’re about to find out. But it also involves big tech and the power thereof. And if you’re a slate plus member, can I just say you’re in for a treat this week because there is a truly magnificent. Emily Peck Rand. So all I have to do now is just introduce ourselves. My name is Felix Salmon of axios. Emily Peck, you are here from HuffPost’s. Hello. Alan SHYMANSKY, you are here from Breakingviews. Hello. And we are going to be talking about what manner of techno awesome things coming up on Slate. Money. So let’s talk about the hearing that happened on Thursday in the Senate in front of the Banking Committee. Pretty much 50 50 Republicans and Democrats. But I watched a bunch of it and some of them were nice, but most of them on both sides were not nice to Judy Shelton, who was one of the two nominees sitting there.
S5: And then there was this other guy sitting to her left who basically everyone ignored because they were like, OK, you’re not so bad. You’re a respected Fed economist. You’ve been at the Fed for years. Everyone kind of understands the unqualified. So why are you even here?
S6: Right. And these are Trump nominees for the Federal Reserve. To be clear.
S5: And what Trump has done when he’s nominated people to the Federal Reserve is they really have fallen into two buckets. He’s sometimes he just nominates the obvious technocrat who is good at their job. And probably Jay Powell would fall into that bucket. But so would like Lael Brainard and various other people who like sailed through the nominations had no problem.
S7: And then, yeah, I mean, I think we look at kind of early Trump. It was still kind of normal. And now we’re moving a little bit into crazy Trump. But but the point is that even with these two nominations, he’s got one of each. Yes. And that’s true. Yeah. The. Was it Chris Wallace?
S4: Yes. So Chris Wallace is here from the St. Louis Fed. He’s always been on the dovish side.
S1: He’s buddies, I believe, with Larry Kudlow. And they’re both into the idea right now that they can keep on it. Unemployment can go still much lower and it won’t affect inflation.
S5: So, you know, this is a debate that’s happening in the Federal Reserve. And and basically every time that the Fed has worried that unemployment has reached as low as it can go before inflation kicks in. They’ve they’ve said like, well, let’s try and see what happens if it goes even lower. And then it goes even lower and then inflation doesn’t turn up. So. So it’s an interesting debate in the central banking community. And there’s lots of talk about this thing called the Phillips Curve. And Chris was right in that debate. And he can add useful perspective to the Fed board in terms of that debate. And probably his conclusions are aligned with what Donald Trump want them to be, which is you can cut rates more and that’s fine. But ultimately, he’s a relatively professional central banker and he’ll be fine.
S1: Yeah, the reason Judy Shelton is so worrying to people, I would say, is twofold. One is some of the things she said in the past, specifically being a big fan of the gold standard, believing that the Fed just shouldn’t exist at all. Not believing in deposit insurance and not just pause.
S8: Yeah, the deposit insurance like FDR. Deposit insurance like the assurance that I have that the money in the bank will be there tomorrow because I know that the federal government will make me whole if I lose the money in my bank account. I was really surprised that a human person that is nominated for such an influential position. I mean, I know gold bug is crazy too, but for some reason I cannot stop thinking about that. This woman wants to get rid of the FDIC.
S9: So it’s so in a way by that this is this is part and parcel.
S10: This is not just, by the way, twofold point to to be clear, this is not just something that she wrote once. She. This is something which she built her entire career around, which is basically and this is not unique to Judy Shelton. This is a very, very standed, like, hard libertarian view of monetary policy that the federal government should not be involved in monetary policy, that we should just outsource the whole thing to a lump of gold and that you banks and the banks should, you know, rise and fall on their own merits. And they shouldn’t be backed up by the federal government because that’s the federal government interfering in private commerce. And like the the the crazy sort of like Rand Paul wing of the Republican Party has always had an affinity for this kind of thinking. It has never been remotely mainstream and it is entirely counter to really the existence of the Fed.
S1: Yeah. And I would say what that’s disturbing, but I would argue that what’s even more disturbing is her partisanship is the fact that she, as you said, Felix, built her career on this. And then when she it became clear that she was perhaps more aligned with Trump that he was maybe going to appoint or now all of a sudden she’s a dove.
S6: And so, yeah, when Obama was president, she was out there saying that the Fed should raise rates. Right. And it was ruining the economy. And now with Trump president, she wants the Fed to lower rates.
S10: And it’s not just that she wants the Fed to lower rates. She also seemingly wants the Fed to start getting in charge of the dollar in a way that like has historically been the remit of the Treasury Department and the Fed. And she’s like the Fed should lower rates specifically to weaken the dollar so that we can enter this currency war and export more. And this is a very, very Trump pist view. And what is absolutely clear is that she has effectively jettisoned everything that she has ever said in the past after going to work for Trump on the Trump campaign in 2016 and is now a mouthpiece for whatever Trump thinks this week. And she would certainly just vote and act on the Fed board in accordance with what Trump wanted rather than in accordance with whatever Wigton libertarian ideals she had.
S8: This would actually not. So I don’t think it’s so bad to keep rates low and keep juicing the economy and see how low you can get unemployment for now. I guess the issue is Trump once Trump leaves. Well, the issue is twofold, as one would say first, that she if if Trump gets re-elected, I think as Felix has pointed out, that she could be put in charge of the whole thing. She could be the next chair. The next chair. Bad. And then second, if Trump gets voted out and she stays there, then she and it’s a Democrat is president, she could flip flop again and, you know, work to put the brakes on the economy instead of using it.
S11: And the biggest yet the biggest issue is that she if she is on there and especially if she is the chair that starts to call into question the independent, doesn’t the whole if she is the chair, there is no Fed didn’t.
S3: Well, there’s the rest of the board. I mean, it’s not just me, her if she is the chair. No, I’m going to just come out of it.
S10: If she is the chair, then what? The only way that she becomes the chair of staff from this president. So if she is in the chair and Trump is president, there is no Fed independence. The chair of the Fed just does the bidding of Donald Trump. And, you know, maybe she has difficulty getting a majority of the votes on the Fed board, although at that point, who knows, you know, who’s on the Fed board. But the fact is the multi-decade history of Fed independence has at that point come to an end.
S11: Yeah. And this is this is incredibly dangerous like that to me. The reason why I think this actually won’t happen is because of how dangerous that is. Having an independent central bank is so important for market participants to have faith in the dollar, to have faith in our debt, to have faith in the ability of our government to have a functioning economy. It is so important when you look at times when the Fed independent or when other countries have had their independence, other central banks. Question are clearly shown to not be the case. The consequences are devastating.
S10: And we saw that even in the United States. You know, with Arthur Burns, you know, when Fed independence goes, that’s harmful. And what was super interesting in the hearing was at one point, Christopher Wallace actually managed to get a word in edgewise. And he was talking about the ability of the Fed to keep on, you know, to keep inflation under control even when unemployment is very low. You have a sort of full employment situation. And he was like, you know why we can do that? It’s because no one expects inflation and no one expects inflation because everyone believes in Fed independence. And everyone trusts the Fed. And so long as people trust the Fed, no one’s going to be like raising prices in expectation of inflation. Inflation, to a large degree is a of self-fulfilling prophecy, like the dynamics of inflation are that people ask for wage increases or increase their prices because they think that there’s inflation out there and they need to keep up with it. And so long as you don’t think that inflation is out there, so long as you trust the Fed to keep inflation under control, inflation just doesn’t appear well.
S11: And also because I mean, to be fair, if also if you if you had a if you were just all of a sudden started printing money and you were printing money far in excess of increases in the productive capacity of the economy, in theory you would cause inflation. Right. So that that is why we have an independent central bank so that governments won’t do that, because historically, not necessarily always the United States can be in many other countries when countries want to print money so that they can spend more and then they degrade the value of the money. And this is the dynamics of it.
S10: I mean, so so. Yeah, just to be clear here, right now, Donald Trump is on a bit of a spending spree, not spending spree, but suddenly like a fiscal stimulus free, he he cut taxes a lot. And in the way he’s funding that fiscal stimulus is by borrowing money in the market and by issuing treasury bonds. It is conceivable if you lost the independent central bank that he could just print money instead instead of instead of going out and borrowing money from investors. He would just say, oh, you know, magic, I’m going to magic had trillion dollars of, you know, new money out of thin air because you can do that when you have control of the printing presses. And that, you know, as as Anna says, is super dangerous. On the economic level. Do you worry that the Fed would be cut, would lose so much independence that they would go that far? Probably not, but you never know.
S1: I mean, I agree with you. I’m not saying that. I think that is my base case. I’m just saying that that is the danger. Like when people say, well, like, why does it matter if we have an independent fed? That is one of the reasons. The other reason is because let’s say it’s all of a sudden inflation for whatever reason, does start to move up. And then if we do not have an independent fed, they may be much less apt to actually act because the president be like, no, if you raise rates, you’re gonna hurt the economy. I don’t want to do that. So, you know, that’s what the classic idea of what what do central bankers do? They take away the punchbowl. Nobody likes the person who takes away the punchbowl so they can’t be a fruit body.
S5: The the the bigger picture here is that everything has become politicized. The Supreme Court is politicized, which, you know, is meant to be like this third branch of government. But it’s become just this is D in the way that it was never meant to. You know, the Senate was never really meant to be in office is the body, but it has now become that.
S12: And Department of Justice, I think is a really apt.
S13: The assignment of justice, as we know, is happening this week. And if the Fed becomes politicized, if you put party political hacks onto the Fed, such as Judy Shelton or Stephen Moore or Herman Cain, their votes are going to be very, very simple and very, very predictable, which is a simple if then if there’s a Democrat in the White House, I want to raise rates. If there’s a Republican in the White House, I want to cut rates. And the Fed, if you have that, then what you wind up with is a Fed whose basic job is to re-elect Republican presidents and to make the economy crap so that Democratic presidents wind up getting kicked out. You know, conceivably it would be possible. I actually don’t believe that there’s anyone who would vote the other way like that, be it like a Democratic Party hack and always vote for to raise rates under a Republican president. I can’t think of any human being who would act that way. But like. But just take the instance of the possibility of the possibility of the Fed board breaking along offices, D lines rather than the cross like Hawk vs. Dove lines is is so terrifying to any kind of economists that they just want to prevent that. And I think that is ultimately why Judy Shelton is going to withdraw her nomination. But she has got much further than the previous party hacks who who Trump nominated. And the reason why they pulled out Kane and Moore previously was actually not because they were party hacks, at least in the face of it, but it was because they had like, you know, personal life.
S1: And this is I actually think what’s interesting is that because they had some kind of like metoo issues, that was a kind of fig leaf that could be used. So they weren’t didn’t have to actually talk about the kind of independence issue or their their actual beliefs. Whereas with Shelton, you don’t have that. So then you really do have to say we are not nominating her because, you know, we don’t we think her ideas are not within the mainstream and we do not think she would uphold the independent, the Fed. And by doing that, they now are going to raise the ire of Donald Trump, which obviously people don’t want to do.
S8: I guess the question is, when people are listening to this episode, is she still hanging around or not? Also, she did say something insane about she compared some fraud’s financial fraud, stative Rosa Parks because of his audacity.
S4: Because, yeah, he wanted to. He tried to print his own currency and he went to jail. And again, in this late, bonkers libertarian world view, everyone should be able to print their own currency. The federal government shouldn’t have a monopoly on printing currency. And so she’s like, this man is the Rosa Parks of monetary policy.
S9: And that went down about what do we have that.
S6: And I guess what I was gonna say is it’s interesting that more and cain’t, like everything is partisan Congress. The Senate will do what ever the president wants. Now, DOJ is totally seems seems to be corrupt at this point. Bill Barr just does whatever Trump wants and is only upset if Trump actually tweets about it. So it makes it harder to do it. Trump wants in the court is partisan like like Felix said. But there’s seems to be a slight line in the sand for financial policy, like what’s his name, the guy with the gloves and the the wife that Instagram devolution of Manoogian still around. And he’s like kind of a mulish on the normal side.
S4: OK, so Manoogian is a super interesting one, right? Is that like on the one hand, he is the most reliable Trump surrogate and puppet. He will happily appear in front of television cameras and defend, you know, one statements in shut off the show. Charlottesville or building walls or pulling troops out of Syria. Or whatever, like crazy thing from woke up this morning and wanted to do, Manoogian can be relied upon to completely think that is the most genius thing he’s ever heard in his life. And this has made him slightly less credible in financial markets. But the one thing you are right about is that somehow Treasury itself doesn’t seem to have become that palaces. Exactly.
S6: This is what I’m saying. There is some kind of you can do a lot in American politics and people don’t care. But if you you just don’t mess with like the rich people’s system or the economic system to be to be generous. The economic system, that’s like the line you can’t.
S1: Right. And I think that and I think you’re right about that. And I think you’re right about that.
S6: And almost any kind of mess with women, you can mess with minorities you can mess with. Horrible to say, yes, I’m a racist. You can you can do pretty much anything. But like, don’t mess with the money.
S1: Yeah. I mean, I think you’re right. I think you’re right. You know, and to me, that’s why I I just have a very hard time imagining Donald Trump actually putting people like Shelton or others, because I think the market reaction would be so negative. And yet he did he did nominate him because there hasn’t been a reaction yet. But I think that’s also because no one thinks it’s really gonna happen.
S6: But maybe it will. I feel like anything goes now and like this post. Well, it also it’s like everyone seems to have given up a little bit.
S1: It also depends on if she’s just like one of the members or if she’s the chair. I think that’s a big worry.
S14: Well, I mean, it is a big difference. But but let’s not kid ourselves that if she is in those Fed board meetings, she will immediately turn around and tell Donald Trump and Larry Kudlow exactly what happened in those meetings.
S7: It’s true. But like just to maybe like last thing I’ll say, it’s you know, Emily is making faces in. You know, it’s it’s really bad. And like, maybe just last thing here, like, I don’t want to try to say that the Fed is in no way political or that there’s not there’s always been political pressure on the Fed. But this this would be different.
S13: This, you know, this would really, really be. Yeah. I mean, I think there is a conceptual and quite easy to understand difference between the Fed is an independent agency which is subject to political pressure. On the one hand vs. the Polat, the Fed is a political agency. On the other. And that’s where we. None of us want to go.
S14: Mergers, M&A. One of those things that used to be a big deal in the financial markets and maybe will hear we’ll be again, the big news this week or a couple of big news is this week, one of which was the FTC coming out and saying. You know, all those mergers that big tech has done over the past 15 years, we’re going to go back retroactively and look at them all and say, well, maybe Facebook shouldn’t have been allowed to buy Instagram after all, which is so mind blowing. And I I can’t imagine where that’s going to end up. I’m fascinated in a way you guys think that’s going to wind up.
S4: Meanwhile, over the objections of various state attorney generals, the courts ruled in favor of T-Mobile being able to merge with Sprint and thereby reducing competition in cell phone space. Emily, what’s your take on all this?
S8: It’s about time the FTC woke up and paid attention to the tech mergers. So even though they’re doing it too late and it’s a little weird and maybe it goes nowhere. Someone had to start thinking about what antitrust looks like in 2020. Some regulators did. I mean, other people have been thinking about it for a long time. And I guess the insta Facebook, Instagram or Amazon, Wholefoods, stuff like that. They weren’t traditionally the kinds of things to get antitrust attention because, you know, it’s not like Standard Oil owning all the data.
S3: It was hard to prove a consumer harm.
S8: Hard to put. Thank you. Hard to prove consumer harm. And they’re using the Bork Doctrine. And if there’s no consumer harm, then it’s a good thing. So they kind of like ignored this while everyone, you know, economists and others have been saying, like, you can’t ignore this, these things are getting too powerful, you nuts. And so finally, it seems like people are starting to pay attention and think about what is and what anti-trust looks like.
S10: I mean, I love I kind of love the idea of the FTC going back retroactively and saying, you know what, Google should not have been allowed to buy YouTube.
S5: Now, YouTube is totally integrated technologically and managerially into Google is a part of Google, it’s not a separate company in any way, shape or form. When Google bought YouTube, they weren’t like, we will operate at arm’s length and it will have its own paint. No, they you know, they are using all of the data from YouTube, as Ed Lee talked about last week, to inform their entire business.
S13: And that is giving them a huge competitive advantage internationally. And it is easy to say with hindsight, look at a merger like that or look at Facebook buying Instagram and say, yeah, like that’s giving you an enormous amount of power and probably too much power. And we would be better off if you hadn’t been able to do it.
S1: It’s funny. But then what do you do? Right. Because I think that that’s important, because I don’t think this exercise is in any way designed at this point to undo these mergers. I think this is more an informational exercise of looking back. But I do think, obviously, if you look back and you say, well, many of these things were mistakes. Now, no one that obviously can affect what happens moving forward. And number two, then it does raise the question, OK, well, if you can prove now that there is some type of harm that we didn’t see before. Does that mean then you do have to act?
S12: I mean, I think people are thinking about it. We have some of the Democratic candidates talking about breaking up some of these companies. We have David Sicilians, you know, subcommittee on anti-trust, having hearings about Amazon, where small businesses come in and they’re like, this is how Amazon destroyed my small business. And I think there’s like conversations at least about in Amazon’s case, like separating the platform from the vendors. Right. Because that’s the issue. The antitrust issue with Amazon is that it controls its controls, both where you sell the stuff and the stuff that.
S14: So, yeah. So this is Elizabeth Warren’s big thing about Amazon, which is that on the one hand, anyone can sell on Amazon, but on the other hand, Amazon sells on Amazon and Amazon is giving itself an unfair advantage vs. everybody else, which is probably fair. But it doesn’t it doesn’t it isn’t as compelling to me as something like like it’s completely safe Instagram or YouTube.
S8: Well, yeah, but it is really stifling to any innovation or new business because not only is it like, well, is it? I mean, do we have actual evidence of that? There has been some testimony in the in the hearings where it’s like some company has some device that they’ve invented. Like, I think one example was, you know, those thingamajigs you put on the back of your phone, the pop up thingamajigs, the pop up ping ridging is.
S14: Yeah. So and then Amazon started selling pop up thing when you gave them the thing, would you get a company started losing sales? Yeah. I mean all birds is the classic example of this right. Is that they started making the sneakers and then Amazon has knockoff.
S8: Right. I mean that happens all the time in the real world, too. But I think what’s interesting with Amazon and we can turn back to Facebook and Instagram and everything is that they have control over the data. They really have granular, deep knowledge of of how these companies operate. Who buys the stuff? And they had they know more about the market, I think, than just your average.
S1: Yeah. I mean, I think that that’s actually been a decent point, that it does make it a little different than the normal world, is that they have so much information on their competition in a way that would be very hard and kind of an analog, probably illegal.
S4: But also like as retail becomes increasingly digital, this is going to become a bigger and bigger issue. Right now, it’s about 10 percent of retail sales are online, which means that 90 percent of retail sales are not online. And you can run a small business without relying on online sales. But at the same time, you know, if it’s clear that if you were starting an online business right now, you’re going to want to be primarily online, that’s where the big money is. You know, that’s how. Kylie, Janet becomes a billionaire. And if you’re going to be selling things online, then you aren’t going to be reliant on Amazon or else you are going to have to make a very, very consequential decision to avoid Amazon. Either way, your Amazon is the elephant in the room. And so either you just say, and by the way, if you avoid Amazon, if you decide that you’re not going to sell an Amazon, then what that forces you to do is to run straight into the arms of Instagram. That’s the only other way to sell things online is to just spend a huge amount of money on Instagram ads, which works. And, you know, people can make a lot of money by selling things on Instagram. But either way, either you wind up being reliant on Amazon or you’re reliant on Facebook and it doesn’t feel like it. I feel like the Internet in some because I’m old and I remember when the Internet wasn’t controlled by big trillion dollar companies. You ought to be able to just go onto the Internet and sell things on the Internet without relying on Amazon and Facebook.
S6: Right. So that gets us back to, I guess, these anti-trust probes. Should we touch back on Sprint and T-Mobile? Yes. Do we care that there’ll be fewer cell phones? I mean, honestly, what sprint? A good cell phone company?
S1: No, that that’s not. No, but that’s the whole point. Sprint’s what Sprint would have died anyway. I honestly think this was completely world correctly. Sprint would have died anyway. So you still so. And they also do have to sell part of the business to I believe dear show it’s on. I don’t think it’s a bad thing.
S14: And so. So there was this super interesting experiment which I wrote about in my newsletter this week. The ruling was a surprise to the market. Sprint stock literally went up by 75 percent after the ruling came out like $3 to fund.
S9: But I went very slow.
S4: But the point is that when when a major piece of news hits the market and the market reacts, you can see whether the market like that or didn’t like it. And specifically, what you can do is you can look at the share prices of AT&T and Verizon. If the merger is good for competition, it should reduce the profits of AT&T and for rights and then their share price should go down. If it’s bad for competition. Then their share prices would go up because they will get to make more money because there’s less competition. And so we get to then look at what happened to the AT&T of rising share prices in the wake of this surprising court ruling and. Kind of nothing. It was kind of inconclusive. They went up after hours, but they when they went back down again when the markets opened. And so probably. Yes. It’s the kind of toss up.
S6: So they did they did good there. Yeah. Antitrust went the right way.
S14: And but I mean, we don’t know that they went the white right way. If AT&T and Verizon shares had fallen and they didn’t and they didn’t fall.
S8: Right. Yeah. And then and in the case of just two, because it seems like in the world of antitrust, we’re moving away from being concerned about things like Sprint, T-Mobile and moving towards being concerned about things like Google, YouTube or Instagram.
S14: Exactly. And the easy thing is, like the FTC also just came out and said they were going to prevent the merger of shit crazes with Harry Reid.
S9: Oh, yeah. What’s up with that? And that’s that’s just like good old fashioned anti-trust.
S3: Yeah, there are four razor companies and you can’t just merge three of them together and say that you’re going to preserve literally what they just did with T-Mobile and Sprint.
S9: There is four cell phone can’t exactly merge into three, but totally fine with every idea to die.
S14: The idea there was that Sprint wasn’t really helping consumer competition because it was such a crap tablet.
S1: Her open company is. Yeah. Yeah, fascinating. And I do wonder if they’re kind of if there’s a sense of looking back to with the Dollar Shakes Club Unilever. I mean, that was obviously a while ago.
S4: I mean, I was looking about how can you justify barring age well. From buying Herries and still be okay with Unilever buying all you’ve got. You know why? Because Unilever didn’t make Lees’s. Yeah. That it wasn’t actually anti-competitive in that way.
S8: And do you think that the malice of the FTC makes them overly concerned with a razor company?
S9: Well, Harris has this thing called this thing called Flamingo. You know, it here is also has razors that women can use because I use Harry’s razors. I don’t use the stupid female brand because I don’t yell.
S15: Filming gendered about it being razor like a flamingo raises a owns your razor if it’s not how you prefer orange. So I like my hair. He’s raised her.
S9: Imagine can you imagine a world where women use phrases that aren’t paying? I don’t know, man. That’s what I line of.
S16: It’s the return of the Jedi.
S4: We thought we thought that the Jedi thing had been set. The government said, I’m going to give this 10 billion dollar CIA intelligence contract to Microsoft. I’m not going to give it to Amazon. Everyone kind of knew that Amazon had the better bid. Everyone kind of knew that the government awarded it to Microsoft just because Donald Trump hates Jeff Bezos. And yet somehow, like this was just understood as this is life under Trump. And now a court has come along and said, wait, hang on a sec. Really?
S11: This is an instance where honestly, I don’t think there’s anything wrong with giving this to Microsoft like no one.
S1: Government contracts are always political. Always have been. Always will be. Now, this one is more publicly political, and that’s not good. But the idea that they’re like, oh, no, there are politics and how you give out government contracts, I kind of roll my eyes at that. And second, you already have Amazon having such a large market share in cloud computing and already being essentially in charge of, I believe, the cloud computing for the CIA. So I actually think it makes more sense to have more than one company in there. Yeah, this is one of those confusing time.
S14: Like you just want everyone to lose.
S8: Yeah, I definitely didn’t want Amazon to. When they already control too much, they have the majority of the cloud, as Anna just said, and they’re huge. And like, why should they have this $10 billion deal that could actually amount to $40 billion is over? You know, if they get more and more business, why not let Microsoft have it? Yeah, I mean, we just talking about politicization of things. And now we’re saying that it’s okay to be political.
S11: I’m not saying it’s OK. I’m saying it it’s confusing. I guess what I’m arguing is that, look, in theory, of course, procurement, that none of this should be political whatsoever. But I guess you’re saying like it always is. So, yes, if they can find proof, which with Donald Trump, it’s entirely possible they could be able to or he is saying, like, I have this email that says, you can’t do this, then that’s bad. And then they shouldn’t allow it to go forward.
S6: I mean, matters that it’s in his book that Trump told him, I don’t want I don’t want Amazon to get that contract right.
S7: But I from what we’ve seen over the past month, we know that that’s not going to do it like. Wait, wait. That won’t that will go up in the courts of law. I mean, but they could. They could. They can call mantises as a witness. That’s true. That’s true. And so, look, if you can find actual evidence of it, then, yes, of course, you need just say like, no, we don’t allow this. I guess what I’m more just saying is that is that just all government contracts are political. It’s always about like who’s giving money to who and who has connections with here. It’s just I don’t believe I believe it. Maybe some instances less political than it was in the past. But I don’t know.
S4: I mean, it certainly isn’t the level of local government in it. You know, it certainly is on the level of like international governments. You know, the Europeans will give contracts to Airbus and the Americans will give contracts to Boeing. And there’s others. Right. There’s always a political overlay when it comes to government spending. And often that’s explicit and written into law that, you know, that if the American government is spending money, they need to spend it with American companies. And that kind of thing is often, you know, not just implicit, but explicit.
S6: Amazon really having a hard time this year. I mean, there was the whole debacle.
S9: Doesn’t your heart just leave?
S6: Well, it does seem like Bezos, by buying The Washington Post is kind of like made himself a target and a little bit of a new way with the president and this Jedi contract losing it. And then a little bit. I mean, even, I guess The Washington Post angle doesn’t really fit with what happened to him in New York. That was more just like.
S14: But can we can we talk a little bit about Jeff Bezos, his midlife crisis?
S1: Because you have to kind of he’s amazing. He’s becoming John Hartley to. A thought that David Geffen house in Los Angeles.
S4: He bought the old Warner Mr. Estate in L.A. for one hundred and sixty five million, thereby beating the record for most expensive property purchase in L.A., which had been held for just a couple of months by Lachlan Murdoch. Nice. He reportedly dropped 53 million dollars, which is a record for an Edward Shea painting at Christie’s last November. But Kerry James Marshall at the same time. And because I’m the art him. He’s never been known as an art collector before. Like, you know, you really do. This is super billionaire whimsy when like the first painting you buy, it’s 50 most of us a lot.
S9: Yeah, like a couple of hundred bucks. That’s like spending $20 toaster dispensers. Probably just rubber. Probably.
S4: But the the super interesting thing to me about him buying the Russia and the Kerry James Marshall at Christie’s is the Edward Heinz Kerry. James Marshall are both still alive. And they were basically. Three different ways you can buy out if you’re an art collector. One is you can buy up by dead artists who are established in the canon and then, you know, if you’re buying them that others. But but almost by definition, you’re buying from someone who owns that. And so whoever owns the art gets the money. And then that’s a trade. You get the art. They get the money. Alternatively, with living artists, you can go like, oh, wow, you have. I really like what you do. I like your work. So I’m going to pay you money for your work. And then that money gets split between the artist in the gallery and onlyin and then the artist. You’re supporting the artist and doing it. And then there’s this new thing, which is only really it hasn’t been around that long. Just a few decades, really, where you can buy the work of living artists on the secondary market and auction houses and stuff like that. And so you go along and you buy the edu shei at Christie’s and then all of that money goes to whoever just, you know, whoever’s selling me, I’d say. And, you know, just doesn’t see any of it. And that’s kind of the weird way to collect. It’s like if you’re going to collect living artists, don’t you want to support the living artists? And yet Baz’s, that’s how he’s doing it. He’s like, I’m going to spend all of this money on art. I’m not gonna spend any money on artists. That’s just my my little man.
S1: Yeah. No. And I think that’s a very, very valid. I think it probably also goes to the point that I don’t think he cares anything about art whatsoever. I think he’s just like, I guess this is what you do.
S6: I mean, he’s truly seems to be having some kind of. I do want to say mid-life crisis, but it seems like he got his divorce and now he’s just out there. Jeff Bezos on the town buying mansions. He’s like that. He sold that Allwood party.
S14: He sold $4 billion of Amazon stock in one week. He’s like, I just need some spending money. So I’m good.
S17: I think the money is going out. He’s got to have the cash.
S8: You know, he’s got to buy the bottle. And he’s busy guy.
S9: This is why it’s so interesting and end up being our president.
S4: But there was this great story which which we should link to about sort of inside the whole crazy HQ to fiasco, where the whole thing where Jeff Bezos decided that he was going to run around trying to get massive subsidies from cities in North America was basically driven by Elon Musk envy. He’s like Elon Musk gets all these subsidies. If he can get subsidies, why can’t I get the subsidies like a crop?
S6: And then he just took it way over the top. Yeah, but that’s how he’s run his business all along. In a way, like no competitor, he can have no competitor. He buys them and pushes them out of business. He dominates everything.
S1: I mean, it is interesting, like, if you like, read biographies of previous entrepreneurs and early heirs. I mean, he fits the model so much, you know, which probably means at some point he is going to run into an antitrust and he is there are going to be real consequences because he doesn’t seem to have any thing inside of him that knows when to stop. I mean, I think he used to have a wife and may-.
S14: Maybe she was. Yeah. I mean, maybe that explains it. You know, maybe she was like, hey, Jeff. I mean, she was holding him back from something. We already have hundred billion dollars. We don’t need another hundred million dollars. He’s like, you are cramping my style. I need to trade you in for someone else.
S6: There is a piece in the Times I think I talked about this a bunch a few weeks ago that talked about like married. Bezos would like go online to make reservations at restaurants like single Bezos would like never do that because that’s so cheesy. Married bathos had hair business head hair married. Bezos didn’t have like those hulking swole. Is that what they call swole arms, which. Nothing wrong with that. Yeah, it’s just interesting. Contrasts little social experiment in front of our eyes.
S4: How about a numbers round? I’ll stop for change. One hundred and fifty four dollars, which is the new price of a single ticket to Disneyland. If you want to go to Disneyland for the day, it will cost you 150 bucks. What does that get you? It gets you into the park on an all night day. And then I guess that Inkley, I have to admit, I haven’t done the Disneyland thing in a while. But yeah, I think it gets you on the rise. BFE queue up.
S6: Yeah, they have to pay extra to like beat the line. Is that a lot? Seems reasonable to me. Disneyland’s great, right?
S4: I don’t have kids. I don’t know. I don’t know. What what’s cheaper? Expensive.
S1: My number is three hundred and sixty thousand dollars per week. That is the cost if you are going to charter. Daniel Loeb’s yacht.
S14: Oh, 360. That’s like that’s much less than the from does. Yeah. So I mean like. Yeah, I know. Million dollar a week yachts like 360. Like you get two thirds of the prize money and that’s a bad bet.
S1: The reason we actually kind of know this is because there’s a bit of a scandal because someone who chartered it apparently was putting there. They were in a UNESCO World Heritage site in this in Belize, this coral, and they actually had the anchor in the coral wrapped around it. So, yeah, that’s that’s awful.
S6: My number is really big. It is 1 trillion.
S13: Wait, wait, hang on a sec. Wait, let me. I just want to follow up on this one question. So, Anna, when you say the person who chartered it. Correct me if I’m wrong here, but when you chancer about it comes with the captain and the crew. So it’s Dan Loeb’s captain who did this. I dont think we can blame the person who chartered it. That is true. Yeah. OK.
S6: Emily, my number is large. It is 1 trillion. It is a number. I can’t even conceptualize that well in my brain.
S4: Hanton To conceptualize 1 trillion.
S6: It’s 1 trillion. That is the number of trees that President Sharlee in trees.
S9: Yeah. He was into that endeavor wasn’t he. Yes.
S8: He said he would plant a trillion trees to help the environment. And there was a piece in the Times about this that Marc Benioff, the founder and CEO of Salesforce. It was kind of like his doing. He basically he said, I’m going to get Trump to support this. I think he’ll support it.
S4: This is Davos thing. They were hanging out in the Hotel Europe together.
S6: Yeah. And he he while Benioff went through Kushner to do it and he said trees are the ultimate bipartisan issue. Everyone is pro tree. I don’t know. I agree. I’m. You’re not pro. No, no. I’m Putsch. And I know of people who are no country.
S4: I mean, there is. There was that famous quote from Ronald Reagan where he’s at once. You’ve seen one for you’ve seen them all.
S6: I mean, I guess now what, George? I mean, I’m anti-Tory in the perimeter of my house, and I want them to fall on my house. But apparently, planting more trees is really good for the environment. It’s a form of carbon capture. It would take like a century for the trees to actually start doing the carbon capture. So Trump would actually have to do other things besides plant the trees. But like I’ll take what I can get right now. And I was going to come out. I’m not cynical.
S14: I’m just going to come out and say that, like mathematically it’s impossible to reach a trillion trees.
S9: It’s just not exactly a bit late. Just just think of it. I mean, like, you should do a quick back of the envelope.
S6: Feel good about the tree thing. But fine. Go ahead.
S16: This sounds like one of the interview questions you got to go to.
S9: So you just I’m. I’m just get less.
S4: Let’s assume you’re planting one tree a second. OK. And I’m just gonna get Syria pretty quick.
S7: If you’ve ever planted a tree before, you don’t you just scatter some seeds anyway.
S4: But let’s now you have to plug the hole. Sorry. How many years is one trillion seconds?
S18: That would be thirty one thousand six hundred eighty eight point seven four years.
S9: So one tree a second. It would take 30000 years to plant one second. It could be more than one person.
S17: Yeah. You would have. Right across the globe, it could be like 20 million trees a second. Asiri that.
S16: Oh, OK.
S4: If if anyone has any idea whether it’s remotely realistic that anyone will ever be able to plant and truly injuries, please write in slate money. It’s late dot com and we will read out the best answers. I’m so unhappy now and everything. I’m just I’m just glad I’m here to dash your dreams. Emily blames Syria. And. Yeah. Yeah. Well, there is a series so good at answering.
S6: Every time we ask her a question at home, she’s just like, let me Google that for you.
S4: All right. Thanks, Emily, for your trillion number. And thanks. And for coming on, things just means of producing things, all of you lovely people for listening.
S19: Keep those e-mails about how bigotry and everything else coming on Slate Money at Slate.com and we will talk to you next week on Slate Money.
S4: Should we have a Slate Plus segment about the latest developments in banking and sexual harassment? Yeah, okay. So what are the latest developments in banking and sexual health?
S6: So this week, Wells Fargo, which I feel confident saying is one of perhaps the worst consumer bank there is one of the worse. They came out and under prodding from activist shareholders, they said, OK, if our employees are sexually harassed, they want to sue us. We won’t force them to go to arbitration. And they got a lot of credit for this making this announcement because they’re the only bank to do this. Banks have been really good at keeping sexual harassment, you know, secret and covered up with these forced arbitration clauses. They kind of pioneered the whole thing. Everyone we’ve talked about forced arbitration. Everyone knows what it is. Raised secret courtrooms. Wah, wah, wah, wah, wah. So I kind of saw it. I was like rolled my eyes and just moved on. I was like, not going to cover it or anything. And then I started thinking about Wells Fargo, Wells Fargo, Wells Fargo. Oh, right. This is the bank that opened up fake bank accounts and credit card accounts for people like Ade is great. Like you had one account with Wells Fargo. Then they opened like seven in your name. And like for some people, as in matabele, a lot of people’s credit scores went down. They owed fees on the account they never even wanted. And when Wells Fargo got caught and people tried to sue them, what did Wells Fargo do? Force them into arbitration? And it kept the whole scam going for longer than it would of if these people could go to open court. It took a really long time to expose Wells Fargo because of its forced arbitration policy for consumers. Then once it was caught, people tried to sue about the fake accounts. And Wells Fargo said, no. You have to go to arbitration because you signed arbitration clause for your real account saying that the thing you signed for the real account is going to cover the vague account, just like totally like unbelievable like arrogance and just scammy war. So this is Wells Fargo. This is what they have done with forced arbitration. They have used it to cover up just fraud and ripping off their customers. So now they come out this week and they’re like, we won’t make women who are accusing us of sexual harassment go to forced arbitration because we believe in accountability. They system they like forgot what they said. They believe in transparency.
S17: I mean, it was just like, are you kidding? Is anyone buying this? Well, everyone bought it. No, I didn’t see very much pushback on this. I mean, to be fair, I’m not done. Just one more thing.
S6: And then I started thinking, because Wells isn’t the first company to stop using force arbitration for sexual harassment. Facebook said it won’t do it anymore. Google said it won’t do it anymore. Uber said it won’t do any more. A couple of law firms. And I started thinking I cover sexual harassment lawsuits like a lot. Right. They’re never sexual harassment lawsuits. They’re sexual discrimination lawsuits, their pay equity lawsuits and their retaliation lawsuits. It’s very rare that you see a lawsuit that is simply sexual harassment. And guess what? These companies that are generously stopping, forcing women and sue arbitration for sexual harassment. They’re not stopping forcing them into arbitration for pay equity issues, retaliation or sexual discrimination, which means it’s total bullshit like do not. When a company says in a celebratory way with its virtue signalling that it’s doing this great thing for women and it won’t send these cases to arbitration anymore. As far as I can tell him, please write in. If you have an example where it’s not true, it’s complete bullshit.
S7: OK. You made a compelling argument. Yeah, I mean, look, I’ll agree with you.
S1: If it is the case that it is literally just one tiny sliver of something that they’re allowing are allowing everything else. Yes. And yes, that I’ll very much agree with you. I was just saying that, like, if. You know, pretend world, you know, if you have a company that did a lot of very, very bad things. And they’ve been caught and they are trying to reform than if they are actually making strides, then I don’t think that’s a bad thing in February. That’s what we would want to make strides. Everybody loves strike. Yes. If if they are just doing this as like a to enable them to keep doing another ways, then that’s obvious.
S6: And Wells Fargo’s problem wasn’t sexual harassment as far as we know. We don’t know because they cover it all up and forced arbitration. But the problem was they were ripping off their customers. So if they’re really trying to say we’re better, they would say we’re not going to make our customers go to forced arbitration anymore and they’re not doing that.
S4: Thank you for the for the Emily rant. We like those. They’re awesome. And we’ll have another one next week, perhaps.