It’s Finally Infrastructure Week

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

S2: Welcome to the It’s Finally Infrastructure Week episode of Slate Money, Your Guide to the Business and Finance News of Infrastructure Week. It was the week that Joe Biden came out with a two point something trillion dollar infrastructure plan that’s in two trillion less in two point twenty five trillion in two point eight trillion. Anyway, it’s a lot of trillions. We’re going to talk about where those trillions are going to go if the plan gets passed. We’re going to talk about unionization and Amazon and Alabama. We’re going to talk about Ichigo’s, the family of don’t stone-Cold hedge fund that blew up spectacularly and whether that’s a systemic risk. We have a slate plus on Broadway because we have a very special guest this week. I have to say, not only am I feeling family of Axios, and not only is Emily Peck here, I but this week is a particularly frabjous week because we are joined by Kurt Andersen. Kurt. Hello. Welcome.

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S1: Oh, Felix. And I’m so happy to be here. And, you know, we’ve been talking about this, getting to come on for a while and sort of pick this random weekend here. This random week turns out to be a the beginning of the new New Deal and B, the beginning of the new New Deal, another way with a potential epic unionization story and Broadway, which is also sort of thirty’s life. So it all worked out perfectly.

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S2: Everything old is new again. But for those of us for that one and a half listeners who don’t know who you are, you really do need no introduction to tell us who are you?

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S1: Oh, I’m a writer. I’m a writer who used to have a radio show called Studio 360. I write novels. I helped start Spy magazine. I used to write for The New Yorker. In addition to the novels I’ve written, I’ve lately pretended to be a historian. And my most recent Pretend history book is called Evil Geniuses The Unmaking of America, which is about how around 40 years ago and earlier, the economic right and big business decided to roll back the New Deal into what the world in which we now live

S2: makes you a perfect guest for slate money. It’s all coming up after this. So tell me about Infrastructure Week, is it here? Did we have it?

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S1: I think we are having it. And isn’t it amazing that after that has been, you know, a good, solid recurring joke for four years now, that here it is early in this administration, a genuine infrastructure week that I, for one, am excited about? I am a kind of infrastructure nerd. And here it is. It’s and it’s so perfect that here’s this thing that Trump constantly talked about and they talked and they talked about. Never happened, never happened. Never happened. And here it is. I mean, it’s almost as if, you know, if the Biden administration had no plans at all to have done a big infrastructure bill, they would have had to just have it be real, have this fantasy become real in their in their there.

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S2: So my question for you is the Republican talking point about the Biden infrastructure bill is this ain’t infrastructure like infrastructure only counts as infrastructure if you’re physically pouring concrete into bridges, roads and the thing about broadband or upgrading water, electricity grids or electric charging stations, that’s not infrastructure. Do you understand that at all or is that just pure politics?

S1: Well, there’s two things, if we can pardon the expression, unpack that a little bit. You know, there are roads, there are the gigantic economically important bridges that they have specified they’re going to be fixed. And there are the ten thousand worst smaller bridges that they’re going to fix. And there are all of those. And then there’s you know, when you look at there the abbreviated version of their plan, there’s all the lead pipes in Flint and elsewhere that they’re going to fix. There’s there’s the broadband in rural America, the many, many Trump voters will benefit from. There’s fixing all these electric lines that need repairing and the grid. There’s renovating schools. There’s fixing VA hospitals and other federal buildings. So there’s tons and tons of very specific things that are inarguably infrastructure. And then there’s also digital there’s physical broadband, which requires physical infrastructural work as well. And then there’s helping manufacturers, incentivizing them to build more in the Rust Belt. And here, semiconductor industry, you get your own. So there’s lots of physical thing. Now, there are also new facilities for disabled people and elderly people, buildings, facilities. Then there are things like also home based care for elderly people and disabled people. Well, Republicans, if that’s just not brick and mortar enough for you, I guess you’ll have to force that out. So they’re sure there’s some stuff that is an infrastructure. But by any reasonable, rational calculus, there’s a whole lot of hundreds of billions of dollars of infrastructure. And then they can argue if they want about, oh, this isn’t really infrastructure. Go ahead, argue. That’s an argument you can lose. And if this goes from two trillion to one point six trillion and you get six Republicans to vote for it, fine. But what a what a stupid semantic, you know, and largely untrue argument to make, in my view.

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S3: Yeah. And I think another way the Republicans will probably come after this bill is they will attack the framing around racial justice that the Bush administration has done a good job talking about, which has been so interesting and I think so smart because, of course, infrastructure is about more than physical objects or even Internet access. How you do infrastructure is how you do racial justice. I mean, our producer had a copy of the powerbroker behind her. We’ve all read it or pretended to. And so we know that when you build a highway or a bridge, you can really cause a lot of chaos. And we know the highways were built without any consideration to poor black people who are mostly displaced by this. And the Bush administration is actually talking about that now with this bill. And they say they want to redress some of those wrongs. And I think I would suspect some of. The bad faith attacks coming from the GOP would maybe come around this point, too.

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S1: Well, I’m sure that’s true, but of course, it’s framing when, for instance, you say, as they say, we’re going to spend 85 billion dollars on transit in, thank goodness, New York City and elsewhere. And that, of course, will help people of color because people of color disproportionately take the subway and the trains and so forth. I want to hear the Republicans say, yeah, we’re not going to do that because too many black and brown people are going to benefit from improving buses and subways around America. And so, yeah, go ahead and criticize that part of it, because it’s not just, you know, it’s not saying, oh, and yes, we’re going to spend 20 billion dollars on critical race theory as part of our infrastructure project. It’s we’re going to make subways better and 80 billion for Amtrak better. And and by the way, you know, it’s not just transit, you know, trains and stuff. Hundred and seventy odd billion for electric vehicles and all these charging stations that righteous, real Americans who have cars but electric cars should appreciate because they’ll benefit from.

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S2: So I have a question about do we need the government to build out electric charging stations? Do we need the government to build out rural broadband when, you know, Elon Musk seems to be doing both of them quite well. He’s got a big charging station network. He’s got Starlink. He’s going to create this big broadband network in the sky. Is there a case to be made that some of these things are things that the private sector is perfectly happy to do on its own and that we don’t need the government to come in and do for us?

S1: Well, go ahead.

S3: I’m sorry about the cut. I like to listen to you talk. So please.

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S1: Well, me too. Enormous is a good person to mention, of course, because without the federal government’s early stage investment in Tesla, he would not be a good zillionaire and have a successful company. Right. So it’s it’s not one or the other. It’s both. And and sure, if by doing all of the various investments, charging stations, extending the tax credits for buying electric car to individuals, all that stuff that is one hundred and seventy billion can go to helps more and more people get electric vehicles, helps it become more than instead of two percent of new car sales, whatever it should be soon, five, 10 or 20. Then then it’s good for Tesla and it’s good for. The environment is good for everybody, so, you know, this one or the other, I’ll leave it to the leave it to the private industry. No. Why must it be one or the other? And it never is, because whether it’s biotechnology or electric vehicles, the federal government is always there at the beginning as the the angel v.c that never gets sufficient credit for all of its early investments. And of course, there are some things that that are simply not economic for private business to do, like broadband apparently in northwest Connecticut where I am. And it’s really, really crappy. So but truly, there are places where it doesn’t make economic sense. It’s why the US Post Office has post offices in little places that sort of almost nobody in the middle of the Great Plains, for instance.

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S2: And that’s obviously why the government needed to come in with billions of dollars to kickstart vaccine research, for instance, like with the private sector. Have done all of that. Yes. Did Pfizer actually say, you know, let us just do this on our own? Yes. But there’s no doubt that the amount of money put into the vaccines by government and helping to pay for all of the testing helped to accelerate the fact that we’re all getting vaccines in our arms right now, at least those of us lucky enough to be in America. I have a question for Emily, though, which is take this the other direction from from the Republicans and take this from like the more the more progressive wing of the Democratic Party. To what degree is this basically agree new deal? How close are we to going to deal with this?

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S3: Well, I’m still trying to unpack everything in here, but it does seem like they have packaged a green new deal as a jobs and infrastructure plan, which is smart because you’re going to get more support for a jobs plan than you are for anything called the Green New Deal. But there is tons of money in here for, as already said, for electronic vehicles. You pointed out the charging stations, money for innovation in the sector. I don’t know if it’s the same as a green New Deal AOC. You’re looking so confused at me. AOC has already said it’s not enough. So I suspect it’s not enough.

S2: It’s definitely. Yeah. I mean, there’s a lot of people saying this should be 10 trillion. Not too good.

S1: But I mean, OK, I mean

S2: I mean, the Overton Window here seems to be extremely wide. The Republicans want it to be about like 50 million. And the and the advocates want it to be 10 trillion. It’s in there in the middle. There you go.

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S3: And the the one thing I wanted to echo something that Kurt was talking about. And your question, you know, should the private sector have done this, blah, blah, blah, like this two trillion dollars is for the private sector. This is going to help companies do their jobs, do their work. This is going to improve the roads they send trucks on. This is going to enable them to have more customers and more eyeballs for people who didn’t really have good Internet access before. This is an injection into the economy like we have not seen in decades. Like this bill is actually great for business. Like, I don’t really know.

S2: I mean, I think that no one’s doubting that it’s great for business. And a lot of that two trillion will go directly to private sector contractors to do all of the work. It’s not like the government is going to use its own employees to to pour the concrete necessarily. But the. The question is really, do we need to do that, given that some of it might happen anyway? And I think there’s no question that it didn’t handle it well and it didn’t declining.

S3: I mean, the infrastructure, it did not happen.

S1: Exactly. And who doesn’t drive around anywhere? Go to airports, go to whatever. Go man. And this is crap. And of course, we get inured to how terrible it is we Americans. But it’s terrible and everybody

S2: and it’s true like the people who realize how terrible it is of the people who are spending a lot of time flying back and forth to China or somewhere like that and seeing how wonderful it is in China. And that’s not your median voter. There’s not a huge number of people going around the world and seeing for themselves how behind the curve the United States really is in terms of infrastructure, I suppose.

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S1: But certainly, you know, a 65 year old person was 30 when bridges and roads and airports and everything were a lot better. So there is some memory of of when things were OK, better and spiffier in the United States.

S2: Let’s move on to our Keiko’s. But no. One last thing. Well, I

S1: just thought we should talk a little bit. How are we going to pay for this?

S2: Oh, the pay for.

S3: See what the business thing. They’re all upset because we’re going to pay for this or the Biden administration wants to do it, pay for by raising corporate taxes. But this is a boon for them and they should just pay up.

S2: So let’s talk about the pay for this for a minute, because it’s an interesting question, Emily. Obviously, there’s whenever you’re talking about pay for it, because talking about taxes and if you’re talking about taxes, people are going to wind up with more taxes. People don’t like paying more taxes and so they start lobbying and stuff. But broadly speaking, have you seen

S1: the

S2: business community come out and say, this is a terrible idea, we don’t want this infrastructure is all well and good, but. We would rather not have it if it means that we need to pay a higher rate of corporate income tax. I don’t know. I have seen that.

S3: No, I mean, I’ll just tell you what Jim Tankersley said today on The Daily that I listen to or on Friday, rather, the business community wants infrastructure. Everyone wants infrastructure, but they don’t want to pay for it through increased corporate tax rates. Some are even suggesting put the pay for us on the roads and the bridges and stuff, which strikes me as like a way to raise the regular people’s taxes for businesses benefit, which is crazy to me. But yeah, it seems like they support infrastructure and doing this kind of work, but they don’t want to pay for it through the taxes.

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S2: Do you think there should be a pay for or should this can we just deficit finance this?

S1: No, I love in many ways that there is a paid for one way the Republican Party. What did they used to be all about? Oh, right. Fiscal prudence and fiscal responsibility where you don’t just borrow money. I just love clopping that back in saying, look, yeah, we’re paying for it by by modestly raising the corporate income tax to halfway between where it was a few years ago and where it is now. And by the way, lower than it was during the grand years of American prosperity. From 1945 to 2017, the corporate income tax rate in the United States was higher than this proposed. Twenty eight percent. So what are you just you big companies have just gotten such a free ride for so long? Yes, of course. You’re going to complain and yell when and when. Oh, no, it’s going to go up to 28 percent, by the way. And that’s nominal rate. It’s really like eight percent or 10 percent or something. Well, for

S2: a lot of companies, it’s zero that one of them that just came out. Fifty five. Fifty five of the biggest companies in America, according to this new study, paid zero federal taxes on average over the past three years.

S1: And I just looked up yesterday, in 2000, not very long ago, corporate tax revenues to the governments as a share of GDP was two percent. What is it now? Just about one percent. So they were already doing well and getting great breaks from 1980 through 2000. And they’ve done that much better in the last 20 years or so. Dudes, time to pay your fair share.

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S2: It won’t be enough, though, right? You can’t pay for a bill of this magnitude with a few percentage points of corporate taxes. The thing that we didn’t see was raising the capital gains tax to the same level as income tax and actually doing stuff with individual income taxes and taxes rather than just corporate next round.

S1: That’s the next round. It is.

S2: And that’s what they’ve said. But you can only do reconciliation once per session. I don’t know how many rounds they have.

S1: Well, we don’t know that because of these Byzantine and arcane only once per year. Or is it once per Congress or maybe two or whatever. Yes. Instead of just big business rich people. Well, it is proposed would have their top marginal rate, the money they pay on the last millions or hundreds of thousands or billions or whatever they are from. Thirty seven percent back to where it was once again for most for much of the last thirty years, just under 40 percent, thirty nine point six percent. It’s this incredibly modest rate. Now, to your point, those may not pay for all of these grand spending. Seems OK then we can do what the Republicans want to do and just borrow more money or print more money. And because they’re they’re the monetary, you know, free money people these days. And let’s just do what they want.

S2: Emily, who do you think is the party of fiscal prudence? Is the party of fiscal prudence?

S3: This is I don’t think that is the thing anymore. It’s just out the window at this point. I mean, it’s definitely not the Biden administration. They’ve already spent a lot of money, as we know, and want to spend, what, four trillion more? And the Republicans lost that banner in the Trump years, if not before. So I don’t think anyone is fiscally prudent now except like normal people who have to actually spend real money and can’t just make the money machine gabber at home.

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S2: OK, let’s move on to OK, Goss, I don’t know how to pronounce it. I’m going to call it OK, Goss. I have a friend who’s married to a Greek woman. He says, OK, guys, I’m going to stick with that. Bill Wong, a tiger cub he used to work for Julian Robertson, came massively unstuck. He turns out to have had a net worth of, what, ten billion dollars, which is large even by hedge fund manager standards, especially for hedge fund managers that you haven’t really heard of. And he basically bet all of it on sort of seven stocks going up and in a massively leveraged way. And then when they didn’t go up, he lost it all. This is high finance at its highest, most crazy speculative. Would you agree?

S3: I agree. Yeah, I do agree. I think what’s interesting about this, there are a few things interesting about it. And I went on a journey yesterday to figure it out first. Wang did all of this from his family office, so no one essentially was keeping track. No regulators really watch family offices or pay that much attention to what they do. So he was able to take these big, risky bets and all over town, essentially, at all these big banks that loaned him money to bet on these stocks without anyone even like paying attention. And he got to do this despite having a track record of insider trading for which he got in trouble for, I think, in 2012.

S2: Right. Which is why he had to be a family office in the first place. Like the difference in the family of and the hedge fund is that hedge funds were allowed to invest other people’s money in family offices. You just invest your own money. Now, the rumor refuses to go away that maybe all of the money and goes was not Bill Wang’s own personal family money that he might have taken or been running someone else’s money in there. But no one is really proved that. And so for all we know, it was genuinely all of his money. And he really did turn two hundred million of his own money into ten billion of his own money by taking these crazy leawood bets. And intuitively, maybe you can write if you have a stock market which has gone up as much as it’s gone up, then maybe you and you left that up and you do the whole like Wall Street bets thing. If just buying all options and being super aggressive, then maybe you can make that much money. Although it is weird to me, the apparently the blow up happened when stocks were at an all time high and everything was frothy rather than when everything collapsed like a year ago. That makes no sense to me.

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S1: Well, yes, because as Emily said, it does and due to the fact that it was concentrated on such a few companies makes sense, especially in the case of Viacom, Viacom, CBS, I think it was was beat up so, so ridiculously high just as a company. It it was you know, if you’re betting on one giant bubble in that froth, you know, you’re going to get taken down as he was in addition to all that you’ve said, which is all true. And, you know, he pled guilty to insider trading. He just wasn’t just accused of it or anything and kept out of finance as part of his non prison involved. Punishment after that nine years ago leveraged Blue-Chip Banks, each lost a couple, three billion dollars themselves. The other thing and I will say this on this Good Friday that I find so interesting and perfect about this story is that he has this extremely devout Christian, has a Bible study class at his firm every Friday. Son of a pastor says that, you know, has many times said that God loves that he is making all these billions of dollars and that it’s part of his religious mission to make all these billions of dollars again all together. It’s it’s like an over-the-top fictional story that I would find entirely implausible if it were succession. The sequel, you know.

S2: Yeah, it is it is a crazy story. And there was this amazing story of a bunch of banks. So Morgan Stanley, Goldman Sachs, Credit Suisse, Nomura, Deutsche, they all basically had this emergency phone call with Bill Wang where they said, oh, shit, you know, he’s triggered the margin positions. We could all just try and. Make this the same margin call at the same time on the same stocks and all of us be out in the market selling massive lock trades of the same stocks at the same time, and that would just implode the market and send everything tumbling. Or on the other hand, we could all basically cooperate and agree that we’ll spend a couple of months slowly spend, you know, selling down these positions and try and not just, you know, cause chaos in the markets and. What happened was that basically Goldman and Morgan Stanley said, you know, we’re just going to go out and sell everything before everyone else and crash the markets, which is directly out of margin. Call the movie. Right. This is exactly the plot of margin. Call the movie, which is where the bank is like everything is going to shit. And the only way we survive is if we get out first. And that’s exactly what happened, is that Goldman and Morgan Stanley got out first. So no one’s reporting that they’re taking any losses on this mineral Credit Suisse Nomura, who are a little bit sleepy, facing three billion dollar losses.

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S1: I’m so happy you mentioned that movie, which is one, in my view, of the great movies about finance.

S2: And fortuitously, we’re going to be talking about Margin Call on Tuesday with Lizzie O’Leary. So you have that to look forward to now that it’s become a documentary about Bill Wanganella egos.

S3: One thing I thought was interesting because I saw a lot of people saying, you know what, this Ichigo’s thing, I mean, it’s kind of bad, but it’s fine. It’s not that the system was fine. This wasn’t a systemic issue. These banks are going to be OK. But I was speaking to a source of mine who is a former. She works at the Fed and on banking regulation. And I was like, but people are saying this is fine. It’s not systemic. And she was like, what are you talking about? She said, these banks lost Nomura lost two billion dollars. Her husband’s at Credit Suisse. She was like, we thought he might lose his job over this. A floor of traders could vanish because this happened. And it’s disturbing that this little corner of the investment world, these family offices, is responsible for these major, major losses at big banks, which are systemic, which are she called them public utilities in a way, because we’re so dependent on them. It didn’t make a systemic crash happen, but it’s a definite red flag at a time the market is so frothy. This is something to watch out for. A little corner, so sleepy corner. Felix wants to speak. I can see he’s getting all geared up.

S2: Go ahead. Yeah, I’m very geared up about this because you’re absolutely right that in principle this was a major systemic event in principle, the collapse of Greensill that we saw in the UK a couple of weeks ago where Credit Suisse also lost a few billion dollars, was a major systemic event in principle. And I wrote about this in my newsletter this week. These are precisely the systemic events that pop bubbles. And you see something like this happens and everyone realizes the bezzle is over, the free money is ended, stuff is going down rather than systemically important. Banks are losing money and everything falls apart in principle like this is exactly what you would expect. You would expect Greensill in chaos to be the catalyst that would mark the end of a particularly frothy bubble. In practice, none of that happened. The stock market kept on going up. It hit a new all time high. The S&P hit four thousand for the first time ever. The capital requirements for banks that everyone introduced after the last financial crisis in 2009 worked. Credit Suisse has lost billions of dollars, but is still fine in terms of its solvency. None of the other banks are in any real trouble at all. Credit Suisse, we all know it’s a terrible bank anyway, and we’ve talked about it on the show many times. And Credit Suisse, to one side, the system seems to be surprisingly robust. And this was the big surprise for me of this week. This bubble, if it is a bubble, this stock market strength, this capital market strength is financial strength that we’re seeing in the economy, in the world is real enough that it can withstand some pretty large body blows like Archos and Greensill. And that says to me that while these things have the potential to be real systemic risks in practice, it turns out that they weren’t.

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S1: So thank you, Bill Hwang, for this stress test.

S2: It was it was a stress test. It was a real stress test. And we passed we passed the test.

S3: These are red flags. And the next time we might not get so lucky.

S2: But the worst case scenario is stocks go down. I feel like the banking system in particular is working as it should. You know, if banks take on a bunch of risks with their eyes open and for all the regulators might not have known about ICOS, the prime brokers knew exactly what was going on in that fund. So they took a bunch of risks and they lose money. And that’s what happens when you take risk. Sometimes you make money, sometimes you lose money. This is capitalism working as it should. No one, no one thinks the banks are entirely entitled to all of their profits without having to take some losses once in a while. So let the banks lose money when their risks go bad. And if there is a pullback, if you’re right and this is a red flag and this like lots of other leverage in the economy, in the markets, that could blow up, then fine. You know, the S&P 500 goes back from like four thousand to three and a half thousand or something like no harm done.

S3: I don’t know, a lot of people have money in the market now that didn’t used to through places like Robin Hood, through sheer boredom, there’s a lot of corners like cargo’s like Greensill that I feel like aren’t well understood and I’m not sure. But did each prime broker at each of the banks know to the extent to which our was levered, like was Goldman Sachs aware that this guy had like he was loans all over town? Like, did they actually know?

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S2: They knew. Yes. I think the short the short answer is yes. They definitely knew how much leverage they were offering on their own terms, total return swaps. So if you’re offering, you know, eighty five to 15 leverage on total return swaps, which is standard for OK Go’s, apparently you’re the bank offering that amount of leverage. And so that’s you’re doing that 100 percent with your eyes open, but also as a prime broker, you are custodian. The assets, you are 100 percent right up in there. In terms of the balance sheet, I don’t think on that phone call when all of the banks had this massive conference call would go in and they were like, oh, shit, that shit’s just hit the fan. I don’t think there was a lot of people going, what? We’re shocked that there was so much leverage. They might have been a little bit surprised about some of the positions and some of the size. But I think anyone paying attention and it’s their job to pay attention knew what was going on. And I think the real sort of disconnect is probably between the prime brokerage firms who did know and the senior management of the banks, the CEOs and stuff who might not have known. But that’s an internal communication.

S1: I have a question for you. Actual experts in this realm, which is OK systemically then? Oh, my gosh, look what happened. Yes, we knew it. We we smart banks. We were responsible bankers. But but this guy was recklessly investing in too few companies, blah, blah, blah, blah. Is this enough of a warning light, a red flag, a thing that comes on your car and says, you know, check your oil or whatever for the system, the financial system of which is to say banks to say, you know, let’s look and see if there are other buildings around these family offices. Let’s spend the next few months checking this out and having some more caution. Does that happen next or do they forget about it next week?

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S2: And it doesn’t even take a few months. It takes one day every every single bank CEO who’s running a prime brokerage after this blow up went to the head of prime brokerage and said, give me a list of every concentrated fund out there who’s taking massive leverage on the stock market. And they got that list within, you know, by the end of the day. And if they’re then going back to those clients and saying, you know what, we’re a little bit worried about this, you’re going to we’re going to start rolling back some of that leverage, we wouldn’t know that. But if they did that, then that wouldn’t mean that some of those clients, if they were mostly in long positions like no one was, would have to be selling down some of their long positions in order to comply with a lower leverage requirements. And that’s not been a lot of evidence is selling right with hitting new highs. So if they did find people with that kind of leverage, then either they have given them a lot of time to deliver or else the stock market is just so strong that they can deliver without having any real effect on the markets as a whole.

S1: I’m so glad I listened to this podcast to learn things just like that. Let’s talk about

S2: Amazon, Emily. What’s the big news?

S3: Big news is we are seeing the biggest union election in decades down in Alabama at an Amazon warehouse in Bessemer, where workers have been voting on whether or not to unionize for the past few weeks. And the and the elections coming to a close soon. And like everyone is watching this union election because, as I said, biggest in years and because it’s Amazon, which has there’s been a lot of agitation in the past and workers have tried to unionize and organize and they haven’t been able to. And this is like the closest they’ve ever come. And it’s Amazon. So everyone is watching what’s going on down there right now.

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S2: Is Amazon going to wind up with a union on its hands?

S1: Well, fingers crossed that they will. In this case, every day some new thing happens in the world that, wow, this is this is like fiction, maybe too better than fiction. But the story of the Bessemer organization is great in many ways, including that the work force has many African-Americans as well as white people, middle Nowheresville, former manufacturing location in Alabama, and that Amazon, of course, has gotten lots of good credit the last couple of years for raising their minimum wage to a minimum wage of fifteen dollars. And so just like I think Henry Ford did one hundred plus years ago by raising the wages of his Ford employees and then spending the next twenty years fighting the unionization of the Ford Motor. When she finally capitulated to and Ford became a United Auto worker, Bashan, I see history repeating perhaps a century later. The other thing I think of as I see this one, why is it take so long to count the votes of these extolls? I mean, yeah, it’s a huge workforce down there, but 10000 votes or 8000 thousand votes. Why does it take so long?

S3: I think I know because it’s a pandemic. They did mail in voting and they kept it a longer period open because the post office isn’t good anymore, apparently. So that’s why it’s taken so long, dragged out any moment.

S1: We’re going to find out it’s going to be either way, a big and not just a symbolic yay or nay for the future of organized labor in this country. If if it works. And again, it was just some employees down there. It wasn’t some giant union came in and said, let us represent you. It was individuals that just started last summer and fall. And they Googled, where shall we how do we do this? How do you start a union? How do you unionize? And that’s where we are. So that makes it a beautiful Norma Rae story as well, if it is defeated, because among other things. Well, fifteen dollars an hour, that’s pretty good there. You know, they’re already doing OK, the workers of Amazon in this warehouse and elsewhere. So it’s interesting on that front if however, they win and the Bessemer warehouse for Amazon becomes a union operation workplace, it will be huge, actually, and symbolically. And I just realized, as I’ve been talking to you this morning, that it is practically the exact fortieth anniversary of when Ronald Reagan came into office and fired all the air traffic controllers, unionized air traffic controllers, for going on strike. And this union that had what was one of the few unions who had endorsed him a few months earlier. And that was really the key moment in the crushing of the American organized labor movement when Ronald Reagan said, now you’re gone, this is illegal, you’re gone, and gave the green light for big corporations to then treat their unionized strikers the same way. So if it goes and they say, yeah, we’re union here now, it will be unequivocally the the the bookend to that forty years ago moment.

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S2: So I’m fascinated about the long term trajectory here. The Stylize fact you’re absolutely right, is that unionized labor forces got less and less power from the Reagan era onwards, partly as the law gave employers a little bit more leverage over the unions and partly as non-union companies just grew faster and unionized companies or even shrank. What’s fascinating to me is we do have this seemingly new wave of unionization and we’ve seen it very much in the media industry recently. We’re seeing it in Amazon and there are definitely cases where unionization gets voted down. Ben Smith just wrote about how the Harpaz stuff like nonunionized, the medium stuff like narrowly voted against unionization, the Amazon workers investment could vote against. I’m interested. One of the weird things is which I don’t understand is if there is a unionization drive in your company, like, what is the reason to vote?

S3: No, I have thoughts on this. And I also talked to my former colleague, Dave Jamieson at Huff Post about this. And I think what’s going on is companies, especially a company like Amazon, they really want you to know. They want you to know if you work for them, that they are just not in favor of this union. They have these captive meetings where they bring employees in mandatory meetings and they tell you, you know, why it’s bad to have a union. It’s going to cost you a lot of money. You already make fifteen dollars an hour. Now you’re going to take a pay cut for what you know, and they they pay consultants three thousand dollars a day to drive home the message. And almost as a matter with the messages, the messages, I’m your boss and I want you to vote no. So, I mean, naturally, people are scared, especially people at Amazon, where they’re making fifteen dollars an hour, as we already said a couple of times in Alabama, that’s double the minimum wage. If they lose their Amazon job, there’s no other fifteen dollars an hour job. That’s it. They’re done. They get a 50 percent pay cut. So I think a lot of it is is simply fear. People don’t want to piss off their employer and they get afraid. They hear this loud message. And maybe because there’s so little I mean, unions at their peak, 30 percent of the American workforce was in a union. And now for all the media companies doing it, it’s like something like six percent. It’s just not a big deal. You don’t know people in unions anymore, so you might not realize what it could mean to even be in one. So I think it’s the lack of knowledge and familiarity. And I think it’s it’s a fear of I don’t know what’s going to happen if I piss off my boss at the best job I could possibly get. So I think there’s fear of taking that risk. Also, I want to point out in. I think of the South as very right to work and everything and antiunion, but actually in Alabama where Bessemer is, there’s a long history among the African-American population of unionizing, dating back to at least the 1930s when steel workers there, black steel workers, organize and were like very militant about it. So there’s a really long, rich history there of unionization that I think is interesting,

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S1: though I don’t want to plug other podcasts, but I will.

S2: The plug plug we love of the podcast

S1: on The New York Times the other day had a fantastic episode about this very subject, focusing on this one effectively. Norma Rae figure as black woman named Jennifer down there, who was part of the small group that began this process in Bessemer. And it’s really moving and fascinating. And her story, she was all just as you’ve said, Emily, and she was. Wow. Fifteen dollars an hour job. This is great. You know, I’ve had this job, this up. This is fantastic. It’s good. It’s clean. It’s the Amazon. We all we’re all Amazon customers, she said. And then as she goes into detail of the heartless, gratuitously surveillance capitalist nature of her job and how every second, whether it was going to the bathroom or or going to get a covered shot or whatever was taken was held against her, I don’t think anybody listening would say, yeah, I get it. How how else are you going to make this kind of extreme and gratuitous management by text from bosses you’ve never seen or met? How how are you going to get that under control without organized labor? But the other thing, when you said fear, Emily. Yeah, individuals are scared. Oh, my God. What if I lose this job? It is that kind of fear on a massive systemic level that big business has used since nineteen eighty in this country to keep crushing unions by. Wow, look, this international paper did this. Wow. Hormel did this and they got away with it. Replacement workers suddenly become permanent workers. New strikers are gone in less than a generation in the decade or so in the 80s and early 90s, it was just shown to workers who dared to unionize or were dared to strike if they were already in unions. This isn’t going to work for anymore. Sorry. This social contract has been revised and that fear is at work very, very effectively. So, you know, hats off to people in Bessemer and elsewhere who are brave enough to say, no, we’re not going to put up with this. And yeah, it’s good and nice that little media, the New York magazine in The New Yorker, a great. And that, of course, eventually will help change the general acceptance of and understanding that some kind of organized labor is necessary and good to have the system work in proper balance. But what you really need are these truly and thoroughly and genuinely traditionally working class jobs like the warehouse workers at Amazon saying, yeah, the job is fine, the jobs OK, and I’ll do it. But come on, don’t push me to the edge as they have done in the case of these warehouse workers in Bessemer.

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S2: I think we should have a numbers around and really, what’s your number?

S3: My number? Felix is ninety five thousand five hundred and ninety three. That is the number of new research articles on covid-19 that were published in 2020 on PubMed Central, which is like a site where all the research articles get published. This is according to an analysis I read on this website called The Pudding, which has these amazing infographics articles that I recommend to everyone. And it is a testament to the insane amount and fast work of researchers over the last year. And it comes down, if you’re like that, is that a lot? I don’t know. It’s 11 articles per hour, which is crazy and amazing. And I feel like we’ve talked a lot in the past year or so about like the end of globalism, Mallala. But like the research that got done on covid was astounding and collaborative. And researchers from different countries pulled together to do this work. And now we’re reaping the benefits with the vaccine. So, yeah,

S2: it’s been magnificent to watch. It’s impossible for a human being to keep up with. What’s been fascinating to me was watching all of these tech companies start trying to write eyes, to read all of the papers and summarize them and digest them, because no human is capable of doing that. You can’t read papers now. My number is one point nine is a very good number. It’s the number of percentage points that the unemployment rate dropped for people without a high school diploma. It went down from ten point one percent to eight point two percent, which is a massive drop in one month between February and March. Obviously, this is that segment of the population with the highest unemployment who find it the hardest to get work. And something happened in March and it’s not entirely obvious what, but they reaped the benefit. We had a fantastic employment report on Friday. We saw almost a million new jobs created, more than million. If you include revisions, the unemployment rate went down to six percent, but especially for people without a high school diploma, there was a massive drop. And that’s very encouraging.

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S3: That’s great. I wonder if it’s people just going back to work where they are in person and vaccination rates being what they are. There’s more of that happening. I don’t

S2: know. I hope so. What’s your number?

S1: My number is also a percentage, which is 23 percent, which is the amount by which the Dow Jones Industrial Average has increased since the day before last November’s election. 23 percent has gone up by electing the candidate who, of course, we heard again and again and again from the Republican nominee for president and other Republicans. The stock market is going to be crashed as soon as you elect this tax and spend socialist, 23 percent up now since November 2nd, which is almost, by the way, twice as much as the Dow increased during the exact same period in 2016, 2017, which, of course, President Trump then spent the rest of his term shouting about.

S2: I think it does prove that nobody knows anything when it comes to the stock market because everyone was convinced that a Trump victory would cause the stock market to crash and it didn’t. And if anyone was convinced the Biden victory would cause the stock market to crash, I don’t think was anywhere near as similarly consensus. They were proved wrong, too. Yeah, I think basically the stock market just loves all of that fiscal irresponsibility that we’ve been talking about.

S1: Well, or they also perhaps given that just totally the stock market doesn’t know anything. So I don’t use it as a metric for anything except the rich people. And to the degree my retirement funds are in the stock market, good when it goes up. But given that we had a presidential candidate and a party that uses the stock market as a metric for everything, even though it’s only a metric for how affluent people are doing, really, I think it’s an important number. I also, you know, even in the short term, I mean and certainly it’s it’s meaningless in the short term, along with our if that’s how I pronounce it correctly, that’s good enough of the last week. What is it done in the last week? About a week ago is when the administration infrastructure plan and it’s trillions of dollars of new taxes was reported once the stock market done in the last week, maybe a six point four percent or second number. So it is reassuring to me that, yes, the market likes to spend money. Good, good, good. But also is responding to this what I believe is good and necessary for fairness. And we’re not having to take a hit in the stock market from it. So that’s good.

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S2: We are having our cake and we are eating it.

S1: Precisely. Precisely. It’s one more way, again, I think politically important way in these first 100 days, people to go like, wow, yeah. Everybody said it’s going to kill the stock market. Is doing that, plus I have my fourteen hundred bucks, that’s all good in retraining Americans, many of half of whom never lived in a time of a economically fairer America, that this bogeyman that the right has been waving for 40 years turns out to be imaginary,

S2: on which no, I think we’ll wrap it up for the main bit of money this week. Thank you, Anderson, for coming on. That was awesome to have you on here. We have to have you back. Thanks to Jessamine, Molly, for producing. Thanks for all of you folks for writing in Slate Money and Slate dot com. We will be back on Tuesday with Lizzie O’Leary talking about Margin Call, which is a fantastic, very timely movie. And the following today, as ever, with more slaked money. So for Slate plus, I wanted to take advantage of Kurt’s presence, here you are, you’re a very cultured man. You’re a novelist. We don’t often have novelists on this show to ask what you think about what’s going to happen to Broadway, because I have been absolutely loving Broadway in recent years. I think it’s better than certainly any previous time that I’ve been in New York and I’ve been in New York for almost 25 years. Obviously, it came to a crashing overnight halt a year ago. How bad is that? Can it get back straight back to where it was? Am I wrong that it was particularly great precrisis? Has this interruption been a bit like the ever giving in the Suez Canal? It’s going to take a long time to recover from. Or can we just bounce back?

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S1: It’s a great question. I mean, in Broadway, of course, has for decades been referred to periodically as the invalid. Right. It’s it’s been on his deathbed in various ways. All the unions are killing it. Oh, this is killing it. Oh, it’s no longer interesting. It’s just and those are all real issues that Broadway has had to deal with. And of course, Broadway is, among other things, in addition to being a creative wellspring full of brilliant, talented actors and writers and directors. And the rest is part of and more than ever part of the hospitality industry and the New York hospitality industry, which is obviously taking a gigantic hit because of the pandemic. I don’t think it’s dead. I really don’t. I think later this year and certainly into twenty twenty two people are going to come back to New York as tourists, which is a huge part of what makes Broadway work as a business. And I think those of us in New York like you, who who think Broadway has been doing really great stuff as well as stuff the tourists like lately will use our our Excelsior Digital pass the state of New York has given us to prove that we’re vaccinated and and go to Broadway. And my daughter, one of my daughters, is already returned to a movie theater in the last days that my vaccinated daughter, that is. And so that wasn’t too scary. And yeah, I was two seats away from everybody else. So, you know, I think it’s going to come back. And one of the things about Broadway in a way that one way or another, the writers and directors and creative people who make theatre and Broadway theater happen have been getting by. And it’s not as though they’ve stopped being writers and actors and directors. They are making the writers are writing and the actors are getting by and they’ll be back. And the not the Broadway theaters themselves are owned by these big companies that own these Broadway theater. So it’s not as though they demolish them or about to demolish them. So the infrastructure, which is to say the physical theaters are OK, as far as I understand it, as far as I know, I am hopeful actually about Broadway coming back, for it has been in a kind of, I don’t know, some kind of cryogenic situation for the last year and a half to some degree, or at least that’s the hope of you. And it can be it can be awoken when the time comes and the theater goers are there. Of all the things one could worry about being dead and gone, I don’t think Broadway is one of those.

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S2: I think I agree. I think there was a big sort of multi decade low period for Broadway following the AIDS crisis, where, like just a huge proportion of Broadway literally died. And it was very hard to recover from that. And a lot of people, just a whole new generation that people needed to come up in terms of being able to write and direct and learn that craft again, you know, who were alive and not dead. And that took decades. And it finally happened. And we started seeing these shows. And, you know, one of the shows that was just transferring to Broadway when the pandemic hit and no one saw it on Broadway. But it’s fantastic is the Lehman trilogy, which I saw at the Park Avenue Armory. And it’s fantastic. I hope that makes it to Broadway along with the new company adaptation. You know, I just felt there was all of these sort of once in a decade phenomena. You know, I’m not just talking about Hamilton, but Hamilton would be included. I’m talking about the incredible Andrew Garfield Angels in America. There’s so many unbelievable shows. And I just really look forward to all of that creativity, managing to come back together. I know it’s hard like restaurants when they closed, they it’s so hard for them to reopen. You’ve got to get that magic back together, the team back together when the team hasn’t been together for years. It’s so hard. But I am ultimately optimistic like you that things will find a way.

S1: And there’s another part of the creative business psychology to Broadway and to big time theatre that is different now than it was even ten years ago is there’s a simultaneous surfeit of television streaming the ambitious television shows being made. To a number that was unimaginable not very long ago. So those writers and directors are being paid to do theater like good work on ambitious television that is more adjacent to what is going on in the theater than it ever has been before, which again gives me hope for livelihood’s not being having been destroyed. So I think that is a way in which, fingers crossed, theater has can and will survived and and still do great work that the people who do things like, yes, the Lehman trilogy was fantastic are also being hired by the the Hulu. Zinifex is an expose of the world to make television shows. So it’s it’s yeah, I am, I am many, many of my friends have been really challenged financially who work in theater in the last year to get by. But but people say, oh, that’s too bad. We’ve lost this person who used to write plays to Hollywood. It’s not such a thing anymore. It’s a yes. And the thing now and I think that will help.

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S3: It’ll be interesting just to see creatively what happens in the art world, like with theater, but everywhere, as the past year kind of filters through our brains and through artists minds, I think that’s obviously some kind of massive turning point for the culture. And it’ll take years and years to be understood through plays and movies and art. Like you said, the Lehman trilogy with twenty, twenty twelve years to get to the Lehman trilogy and kind of looking forward to the new ways people are going to see what just happened and digest it and spit it out back to me. I mean, I don’t I don’t need to see anything about covid or Lockdown’s or anything like that in the near future. But I’m expecting the art world to really, like, take it all in and reflect it back to me and really new kinds of ways. And so I’ll have, again, a new understanding

S2: of what it is to be. Oh, my God. I just I just have visions of a sort of Max Bialystock coming out and doing covid-19 exploration the musical.

S1: Yet it will be interesting. Yeah. I mean, you mentioned AIDS and its devastating effect on theatre and culture. I mean, there were lots of as at the height of a great age plays up into and beyond Angels in America happening. Whereas with the 1918 influenza epidemic, not so much, not like a lot of art and literature right after that about the flu, the pandemic of that time. So we’ll see which this is in the ways in which creative people interpret and respond to it.

S2: And it’s always amazing. You can throw any question at you and you’ll be fantastic. Thanks so much for coming on.

S1: Oh, couldn’t have been happier. And I often talk back to you guys as I listen. And now I actually got to talk back to you guys as I. So thank you.