Saving for the Second Coming

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

S2: Welcome to the Latter Day Saints edition of Slate Money, your guide to the business and Finance News of the Week. I’m Felix Salmon of axios. I’m here with Alicia Matzke of Breakingviews. Hello. I’m here with Emily Peck of HuffPost. Hello. And we going to talk about Latter-Day Saints. They are much richer than we thought they were. We are going to talk about Boeing, which is in I believe the technical term is a world of pain right now.

S3: They have stopped making the cash cow the 737 max, for obvious reasons. We what else we can talk about, Emily B?

S4: California Law, A, B, 5v5 cantilever A.B 5. And what this means for anyone who’s unfortunate enough to be a freelancer in California. We have a whole slate plus segment on books that we might recommend you read. If you are in the mood for reading a book this holiday season over a more coming up on Slate Money.

S5: Let’s start with Boeing. I was reading on the Internet this week that first quarter GDP is going to implode, that it was going to be like more than half a percentage point lower than everyone thought. Just because Boeing isn’t making planes anymore, Boeing is a massive part of the American economy. And it seems to be going from atrocious to still really bad.

S1: Yeah, I mean, it’s our largest manufacturing exporter. It employs a tremendous number of people. And then you also have to think of all of the suppliers who will also be affected by this. So, yeah, I mean, this is not a small deal.

S5: So, Emily, what’s this? What’s the news this week?

S6: So this week, Boeing said it was suspending production of a 737 max, which if you’ll recall, is the plane that was involved in two fatal crashes back in March when three hundred and forty six people died. And I don’t know what took so long to stop making it, but now they’re they’re suspending production. They’re not really saying when they expect to pick it back up again. And and yet maybe throws the economy a little bit of a a wrench in a sector that’s already struggling.

S7: Plus, we weren’t sick to being airplanes, manufacturing, manufacture. Yeah.

S1: Yeah. And also investment and exports to major parts of GDP that have been have been weak. Yes.

S5: So the question I have is they were making a 737, Max, which was clearly flawed in a deeply profound way. The obvious thing to me would be to stop making it while you work out how you’re going to fix the flaws. And then come January or so, you start making it again in a way where the flaws are fixed. And that seems to be the opposite of what they did. They kept on making it, even though they hadn’t worked out how to fix the flaws. And now that they’re getting to the point where they think they know how they might fix this, they stopped making it.

S1: Yeah. I mean, I think part of the problem. I mean, I think initially it is going to hurt them so much in order to start making this. I think they are trying everything they could to not have to stop making it. How does making it help them? Because they’re not selling it. I mean, that’s a fair point in the sense of like they’re just continuing to burn cash, but actually stopping making it and saying like, we might not make this thing again. Like, that’s a that’s an enormous step. Oh, is that a real. I mean, that’s a very real possibility. I mean, yes, it’s certainly possible that they will just be able to fix it or they’ll just rebrand it. Name it something else. But I mean, there is going to be significantly more regulation of this as as well. There should be. Right. So no one exactly knows what is going to happen here.

S8: And the other mystery which your colleague wrote about is and Primack, why the CEO is still the CEO is amazing. I didn’t write his name down, Bloomberg, Muhlenberg and Dennis Mullin, but I mean, he stepped down as executive chairman, I think from the board. Right. But he’s still in place as CEO. I mean, we just talked a few weeks ago about a woman who isn’t the CEO of a company anymore because she was mean to her workers. And Flack, this guy oversaw a company in which 346 people died under his watch. Right. On this directive, it’s still this way.

S5: Yeah, it was quite clearly his full. Yeah. If you look at the reporting, then there’s been a lot of excellent reporting from The Seattle Times and The Washington Post, The New York Times. A lot of people have been covering this as again and they should have done. Muhlenberg was the first CEO of Boeing to not come from the plane making side of it. He came from the defense contract, the side of it, and the defense contractor runs in a very different way that has fewer checks and balances. And he basically imported all of that kind of quick and dirty. We’ll just get this done somehow way of doing things into the plane making side. And the fact that he’s still there and the board hasn’t fired him. Dan raises a good question. I have like one vague conceivable theory, but I wonder if either of you two have a theory.

S1: I don’t have a theory. I think part of it is just a symptom of the problem with corporate governance that you’ve had at Boeing. I mean, that’s another issue. Boeing, actually, that they used to have mostly engineers on their board. Now, I think you know so and I think the fact that he’s connected with defense contracts might also be related to the.

S6: How he’s had a little bit more protection, I mean, I think, yeah, the same things that led to these fatal crashes and to bowings. Really? I thought it was slow in reacting and, you know, apologizing, taking the planes off that everything that made all that possible is why the guy is still in charge.

S3: Her first reaction was, oh, oh, I’ll play this.

S1: Fine, fine or. Oh, no. It was the pilot’s fault, basically, too. Right. Yeah. Well, it’s were killed.

S6: I mean just terrible. And so that. Yeah. It’s a it’s a maybe a rotten company in some way.

S5: So Dan’s theory I mean weakly held he has no idea. Right. Is is that they just feel that they can’t find anyone better. I don’t really buy that. I feel like you could more or less throw darts at the phone someone better. My theory is that they know and they have known for, you know, since March. They have been able to see this shitstorm coming and they know how much bad news there has been. Still to come and probably still is still to come. And they just want to wait until the bad news is all out before they hire someone else.

S1: There’s a possibility. I like that.

S6: I like that. So the new guy is untainted.

S5: So the new guy can come in and be the, you know, the grinning Derek Khosro show his right eye and say, hey, I’m not the one who has to go in front of Congress and be like.

S9: Right. We keep killing people.

S10: We apologize. And we did say, I’m going to be a guy. It’ll be a guy. Yeah. Just let me.

S5: Yeah, but it’s also an incredibly specialized and insular company. And I think the thing we’ve learned from Dennis Wallenberg is you can’t even bring people across from other bits of the company through underwriting. You really do want a Boeing aircraft person to be running Boeing aircraft. And it wouldn’t be surprise me if there is some relatively good candidates in that section. But now, of course, they’re all tainted because they were all working for Boeing aircraft when this happened. Yeah, they’re not gonna hire someone from Airbus.

S1: Certainly not. Yeah. Yeah, that’s you do. To an outsider. Yeah. Because well, slightly off topic, but like Airbus is probably not going to benefit from this. Well which I which is huge because I saw some people like initially Boeing the like, oh Airbus must be super happy. Like Airbus is not going to be happy. Like they have no ability to make up for this, like lost capacity. Like they didn’t have the planes. So they have eight years of backlogs of things they have to make. So they they can’t just, like, start making more to fill that. So what is most likely going to happen is just that we aren’t gonna have enough planes and travel costs are gonna go up.

S6: I saw some airlines were affected by this, too. Yeah. Grounded flights. Yeah.

S3: Well, yeah. I mean there were a bunch of routes. I know because I happen to live on one of them have just stopped flying because they were being served by the 737 Max.

S5: And then they the airlines grounded their 737 max. And now they’re like, well, we didn’t we can’t fly that route anyway. So. So are you hit out of luck?

S1: No, it’s it’s like incredibly capital intensive. It’s not something you can just someone else can just quickly start doing.

S11: What an absolute failure of regulation. I mean, yes, Boeing is to blame and Monberg is to blame here, but the FAA really fell down. And look at the ripple effects across an entire industry. It’s going to affect not only this company, but their 600 suppliers, airlines and then people who fly.

S8: I mean, it’s really something that connected to all these other pieces of the economy should be well regulated. This shouldn’t have happened at all.

S1: Now, I mean, when you have a national champ, I mean, when the problems with national champions often is the fact that they have any competition, you have all of these kind of cozy connections with government and so bad things can happen. But in theory, if your proper regulations you would you be able to be more on top of them because they essentially have, you know, so much control this industry. But this is not the first time his habit of the national champion. Right. I mean, it’s it’s not that uncommon. What’s a national champion, basically? I mean, it’s traditionally when you have a certain business that the government it’s it’s not technically state owned, but it is very state like support it. And this is something in the emerging market, there’s something emerging markets also stay down. But you often have these national champions where essentially the government’s going to ensure that they do well like a General Motors or something. And I mean. I mean, the thing with the auto industry is at least you’ve always had a few. Right. But but yeah, Boeing is like in the US is one of the few companies you probably would really call us national champion. That’s one of the reasons why doesn’t matter how bad things get for them, they’re not going to go out of business like they will get bailed out. They’ll get bailed out because they have defense contracts. And that’s also part of the problem, too. And when you have a company that is also it’s essentially too big to fail. So, you know, it’s not really surprising.

S5: I’d tell me about like the finances. Are they going to lose?

S1: Their margins are going to decline significantly. Yeah. I mean, like in it, they should be lose or they will burn slightly less cash. That bring a ton of cash. But it’s also been burning cash since the 737 stopped selling. Well, not even before that, but. Yeah. And also part of the way that they account for like their costs now they’re going to like they spread it over the amount of planes and because now fewer planes will have made that’s actually gonna make their books look worse. It’s a bit of an accounting thing, but it will affect how they’re valued. They’ve already lost like, I think, 50 billion in market cap. And it’s not inconceivable that they could lose 20 percent. I mean, like this is not a small thing.

S5: And this is and this is an industry with basically an, you know, unheard label, barriers to entry level like they start up.

S10: It’s not it’s not like it’s you guys in their garage. And there are only two.

S2: I mean, I mean, Brazil kind of has one, but really there are only two aircraft manufacturers on planet Earth. And then you just have to kind of pick one of them and go with it. Right.

S11: Well, if I was a country, I would make my own airplane company.

S5: So that’s what Brazil did with with Embraer and then. Wait, is Canadian. Yeah. So there’s a couple of like slightly smaller ones. But in terms of the big, long haul airplanes where you, you know, fly across oceans.

S1: I think you’re basically stuck with Boeing and just speak as absolute the capital intensity and also like the contracts that you need to have, the relationships you need to build. It’s just not an industry that you can get and you need to provide the entire fleet.

S4: So this is the other reason why airlines are not just buying Airbus. Quite aside from the fact that Airbus doesn’t have the planes to sell them. Is that you want your whole fleet to be, what, all Boeing. And that way all of your pilots can fly all of the planes and all it’s all in trouble. And that’s what caused the 737 max problem in the first place, is they had this old workhorse called the 737, which was reaching the end of its natural life. And they wanted to be able to replace it with a plane that didn’t require all of the pilots in all of the airlines and all of the world to get retrained. And that didn’t work very well.

S6: But maybe this is all part of your ultimate plan, Feliks, which is to stop private jets.

S10: So maybe this is more like stop all the jets, the Oil and Gas Act, climate change, maybe even ultimately a good thing, even with even better with banning banning private jets, his band 737s, 747s have way more carbon footprint than all of the private jets in the world combined. And.

S2: Emily, hi, eighty five. Do you even stand for Assembly Bill, Assembly Bill Five.

S11: It’s a California law that was passed on September 11th and it was meant to target Uber and Lyft. And it wants to force these companies to treat their workers, not as contractors, but as employees. Is the idea. Like you can’t have fake contractor workers that are actually just employees. So Uber and Lyft are fighting it there. They’re spending millions of dollars. They want to do some kind of like a statewide referendum next year, but the law is now in place.

S4: So they have to live with it for the time being.

S11: But they’re not going to they’re just going to, I think, ride it out and try and fight it. I would run like VOX Media. So, yeah. So the news this week was VOX Media, which owns the sports site SB Nation is sort of letting go all of its sports bloggers because according to a BFI of this law, if you employ a freelance writer, if they write more than 35 pieces for you in a year, then you are actually considered an employee. So Fox didn’t want to do that. And they have all these bloggers. So they said, you’re all done. And, Wolf, we’ll figure out a new way to do this with fewer people.

S9: This is what you know, when you’re talking about labor regulations, like there are always winners and losers. It’s not simple. Right. Because you understand why people would. Some people would be in favor of this law. But the downside of it is that you’re always going to have probably more people who then won’t be able to be employed. Now, those who are employed, like the new jobs are probably created vox to do this or better jobs and the ones they had before, but they’ll just be far fewer of them.

S6: It seems fine to me that these people I mean, it’s terrible to be laid off, really terrible. But if Fox has to raise its pay and standards and the people that they do hire have more protections, it seems ultimately better.

S2: I can tell you as something I use, I spent five years, five or six years freelancing mostly for Euromoney, basically with one main employer. I spent two years freelancing for Condé Nast Portfolio. I was their finance blogger, basically with one employer. I think I did a tiny bit of work for other people. And that idea of working more or less full time for a single employer on a freelance basis, it can actually work out for you in various ways. And there are reasons why some people would like to do that and would like to be in that situation. I’m not saying that like it’s it’s better than being an employee, but it’s different. And, you know, different people like different things. And it does worry me a little, too. But that is no longer an option in California.

S11: Yeah, it is. If you write fewer than 35 pieces, that’s not a Full-Time job, is it? If you are doing something full time for a company, they should you should be treated as a full time worker. I had a job at American Lawyer and for the first two years I was like a contractor, I guess, but it was a full time job. I had no other job, so I would build them. But I think once a month or twice a month or something. And like I worked alongside people who had health benefits, I had none. I worked alongside. People are putting away for there for one day. I couldn’t do that. Like it was just obviously not.

S10: But I think things have changed. And the larger chain. Our day as well.

S2: The other thing that the other big thing that has changed is the cost of private health insurance has just been going up enough and up to the point at which it becomes you need to persuade your employer to pay so much extra to cover things like health insurance that it it feels weird like on some level. Economically speaking, employers should pay more for freelancers and they do for full timers, but they never actually do.

S11: This is actually a good point. So it’s like the actual problem is that in the US and our employers are the ones taking care of things and a lot of other countries as a matter of policy, like health care. So in a way, like the target of the law is a little backwards. Like if you instead of targeted Uber and Lyft and forced them to change the way they treat their employees, you could pass a state law that raises the minimum wage no matter what industry or how you work and give everyone healthcare. And then it doesn’t matter that much how the company, what kind of benefits the company gives you if you get paid leave through a public policy, if you get sick, leave through a public policy.

S9: I actually really agree with that because I do think having a system where you’re not putting this burden on businesses that allows you to have a much more open labor market and having more open labor market is going to lead to almost like more business development. Whereas what they’re doing right now and again, you understand, because it is people are very sympathetic when they’re saying I’m working all these hours, I don’t access to health care. But the whole thing is like, right. But the company is not going to get health care, all those people. So just again, one more point of that problem. That’s why companies should not be doing that.

S4: Definitely. Isn’t this amazing? Like we have now officially reached the point where Anna is on slate money agitating for Medicare for all.

S10: Not necessarily Medicare for all. I just. I just think that you’re some kind of universal God. The Bible tells not.

S1: I’ve always thought that you need some type of it doesn’t make any sense. And also because it’s like it doesn’t help business. I mean, it doesn’t look like it does it make tremendous amount of sense that actually puts a burden on U.S. companies in comparison to others and, you know, an especially smaller company, surely? I don’t know. Does this bill apply to everyone or is it one of those like 50 or more kind of thing?

S11: No, Anna does not apply to everyone there. First, there’s like a three part test to see, like if the person actually would count as an employee. So if it’s like like you bring in a plumber once a month or something like that for your business, that’s outside the regular course of your business. They wouldn’t count. And then there are carve outs for doctors, real estate agents, lawyers and some kinds of therapists, but not all of them, because there are some people complaining. And there’s a Wall Street Journal piece where like checkers and therapists were getting very upset. Checkers are very upset about this because a lot of them are contractors. They don’t work for any particular company. And there’s a big feeling like they’re gonna lose some independence.

S9: Right. Yeah. I mean, and that is always the other issue, too, is that, you know, you do have you even heard this from like Uber and Lyft drivers that said like, well, you know, some of them like they like the flexibility. They don’t necessarily want to have to be told, okay, you just have to drive at this time. This time. And it’s the same thing with freelancers as well. I mean, it’s there there is a little bit of that push and pull. And the problem with these laws is that they’re kind of a one size fits all. And yeah, they might fix one part of the problem, but then it will come.

S5: So, Emily, what’s the role for Uber and Lyft? How much do I need to be working for Uber before this law kicks in?

S6: That’s a good question. The three part test is you have to be free from the control of the company.

S7: So that’s not an hourly requirement. Right. And the requirement is like Uber can’t tell me that I have to drive. Right. Right. Now, you drive when you want. Right. So in that sense, I’m free from their control. Right.

S11: And then the second part would be outside the usual course of business, which unbelievably, Uber argues that their drivers are outside.

S10: A tech company that will do that.

S2: I mean, this is this is the let’s quote Dan Primack edition to state money. It seems with Dan interview Daara on axios on HBO.

S4: And he was like, you seriously saying that, like, drivers are not part of the course of your business and they’re like, no, we’re a platform.

S11: Unbelievable. That is just so unbelievable. And then the third part of the test is like if they’re in like a trade, like the lawyers and the doctors or the plumber who comes and fixes your your offices or something.

S1: But in terms of the company itself, does it have to have a certain number of employees before it matters or has.

S10: I don’t know. Okay. You know everything about them. Why? I mean, they got fired. So you need to know everything. I can’t be fired, Felix, because I’m contract. I’m not even a contractor.

S12: I mean, it’s an interesting question, though. Like, if we had a Slate Money co-host in California who wasn’t employed by Slate and who came on more than thirty five times per year because we have 52 weeks per year, they would be covered by this.

S1: Yeah. I mean, and this is an issue where you’re having people in California saying, you know, we’re gonna we probably might get all screwed here because companies would just not hire people in California. You know, I’ll deal with it.

S12: Yeah, maybe that’s the silver lining to this one is we’ll finally have reasons for people to move out of California and move to Bentonville, Arkansas instead, which I’ve been reading up because of the great. Why is this interesting email newsletter who’s been writing about Bentonville, Arkansas, and how it’s this new sort of urbanist paradise and foolish like hipster hotels and restaurants and the Crystal Bridges Art Museum?

S4: And it’s all cool and trendy these days because of Wal-Mart. Wal-Mart has decided that it needs to be 21st century digital focused, blah, blah, blah, and it needs to attract the cool like engineering hipster types. And so it’s now turned Bentonville into a cool hipster town to live in.

S1: You know, as much as like, I don’t love all the in certain ways, but it’s not the worst thing in the world. If you have larger companies, if you don’t have some of these cities doing the things that they probably should be doing. If you have companies pushing them and saying like, okay, we’re going to invest in this type of infrastructure to make this a more livable city, to make this a city that’s going to attract well educated people, like that’s not a bad thing.

S4: One of the interesting things is it’s like, I would say 30 percent Wal-Mart building, like this new trendy campus, all to do all along, like modern urbanist guidelines with bike trails north, that kind of stuff. But then the other 70 percent has been mostly philanthropic money from the Waltons who don’t control Wal-Mart anymore, but have so much Wal-Mart money that they can do things like build 36 miles of bike trails and install a new fish market and that kind of stuff. And then all of that philanthropic money helps the town and that helps Bentonville become more attractive, its place to work and that ultimately helps Wal-Mart. But it’s this weird thing which it’s hard to replicate anywhere else.

S1: It also suggests that if they are getting tax deductions for that philanthropic money that they are then using in order to make a burtonsville better. Wal-Mart could do better as a company. Questions whether they should be getting those taxes. So many questions about tax deductions.

S5: I mean, we could talk about tax deductions that the Mormon Church.

S4: OK, I’m going to call an audible here and say, since we’re talking about tax deductions from the Walton family, I want to do a quick segment on.

S3: The tax free nature of the hundred billion dollars a company called Insane Peak advises has under management, which is more than the Harvard Endowment and the Gates Foundation combined and signed, Peake advises. Is this company that no one has ever heard of and it is basically a subsidiary of the Mormon Church. And every year, every Mormon needs to tie of 10 percent of their income to the Mormon Church. This widens up totaling about $7 billion. The Mormon Church then spends about 6 billion of that 7 billion paying pastors, sending people on missions, mowing the law, whatever they spend it on. And then they have a billion leftover and they throw that extra billion into this fund called end sign. And the fund just sits on it and invests it. And it’s this amazing fund which gets obviously investment returns in hedge funds, stocks, bonds, all of that kind of stuff. Plus, it gets an extra billion dollars of free cash every year and the amount of money it spends on charity. Zero. And yet it is tax exempt. And it just grows and grows and grows. And like the head of the Mormon Church was quoted in this complaint that was just filed as saying that.

S10: Well, yeah, we’re kind of saving it up for the second coming because the penalty that you need a hundred billion dollars in any stock is going to be a fee to get it.

S7: So they’re doing nothing with the money at all. Just sits there. It just sits there and there’s a launcher there like we might need it in case of emergency.

S4: But they they are very careful to always spend less than they take in every year. So there never isn’t a right to in a lawsuit now.

S3: So there’s now this whistleblower lawsuit saying you have a non-profit status and under IRS law, a charitable nonprofit needs to conduct charitable activities commensurate with its financial capabilities. And you clearly are not conducting any charitable activities at all, let alone ones commensurate with 100 billion dollars. Therefore, you shouldn’t have your tax exempt status. Therefore, you should have been paying taxes the whole time. And where’s that tax? You know, you owed the taxpayer a gazillion dollars and of course, the whistleblowers trying to get 30 percent of the kazillion dollars. But it’s it’s interesting, the chances of the IRS actually coming out and saying you owe billions of dollars of taxes, I think are low because churches always treated a bit differently. But it is kind of crazy that there’s this massive gap in the tax.

S1: So do they have. I mean, like, you know, if you’re an endowment, like a university down, you have to spend a certain amount in her. So 5 percent.

S2: So if you’re a foundational endowment, you basically need to spend at least 5 percent of your assets every year right now.

S1: So do they have any of their spending requirements? No.

S3: Churches are basically exempt from that. So if this was just part of the general money of the church and the church has like a bank account, you know, Citibank and it happened to have one hundred billion dollars in it. It’s like, you know, obviously this is not a situation where which happens very often. And so it’s hard to get a hard, clear view of the tax law here. But there is definitely a group of people who would give you the opinion. And clearly the Mormon Church has these lawyers who have given them this opinion that, yeah, that’s just the church money and the church doesn’t need to pay tax on its money.

S6: Did the Catholic Church have a similar stockpile of cash? And if so, do they do stuff with it?

S2: This is another really good question. What we know is that we don’t know like the fact is no one had a clue that the Mormon Church had anything like this, much money. And to be clear, the Mormon Church has not confirmed that it has a hundred billion dollars. It has no reporting requirement or it considers itself to have no reporting requirement.

S4: So up until the time that this complaint came out, no one had a clue that the Mormon Church had anything like this much money, including, by the way, all the people who would tithing 10 percent of their income every year. A lot of people who just like, you know, we’re really struggling to. Yeah, that’s a large chunk of their money that they give to the church, which has a hundred billion dollars.

S13: And they should be getting a debt like they should be more than that, right? Yeah. Is that Romney money that’s rolling in? Absolutely. 10 percent of Mitt Romney’s. Yeah. He’s like that’s most of it. Right.

S3: So. So one of the interesting questions which hasn’t been answered is whether the IRS even knew about the existence of this money, because I think that the way that the Mormon Church worked is that they were under the legal advice that they didn’t need to declare it. And I think a lot of other churches have been given that legal advice. And it’s entirely possible that even the IRS that loaned the rest of us literally have no idea how much money is sitting in various church slush funds. How much money do you think the Church of Scientology has so much?

S11: They have all Tom Cruise’s money, probably also not all of it.

S7: He probably has enough to tip the way to like the Mitt Romney of Hollywood. Right.

S2: And these these kind of you know, it’s inevitable.

S3: Under capitalism, the large amounts of money are going to accumulate in places where they are not taxed. And I mean, this is honestly one of the reasons why Berkshire Hathaway is so big, because it set itself up as an insurance company and insurance funds are not taxed. And so it makes sense to enormous amounts of money there because you get to not pay taxes on them. This is also like one of the reasons why Larry Page has put like billions of dollars into his personal foundation and literally billions like he’s put to billionaire. And I think it’s grown to about three billion in total. The total amount of money that foundation has ever given to charity is twenty one million dollars. Now, as Anna was saying, that foundation as a foundation and not as a church has an obligation to spend 5 percent of its assets on charitable activities every year. So what does Larry Page do? He just takes a chunk like a 5 percent chunk of the assets and he throws it into a donor advised fund and the donor advised fund that gives no money to charity, doesn’t ever need to give any money to charity and presto, everything is tax deductible or tax free.

S6: I don’t quite understand that because it’s not like he gets to say it’s not like he gets to spend the money he puts into his foundation. So why isn’t just pay the taxes?

S1: Like what’s the benefit of not what the money is to be able to grow, continue to grow and he’s not have to pay in the game. What does he do with that?

S2: Like he gets he gets to like his heirs, get to inherit the foundation and control the foundation. And eventually at some point don’t get the money. It’s still they can they can they can pay themselves a salary from the foundation.

S6: You know, the foundation is foundations provide a bunch of like useful gainful employment and purpose to a bunch of light and generation kazillion as you can go work at the foundation, get a huge salary forever and all your heirs forever and ever on this money that just sits there basically. Yes. It keeps growing. Yes. And how does this relate to the Trump Foundation?

S4: Well, the Trump Foundation just pay the two million dollar fine for being not charitable at all, basically.

S6: But it sounds like the standards are so low that they actually really, really screwed up incredibly to like get dinged for that.

S4: Also, the chances of the Trump’s getting dinged for that. Were he not like this highly polarizing political figure, a tiny Trump would totally have gotten away with that if if he hadn’t decided to run for president and even probably become president. I think even if he’d just run, he would have still got away with it. It’s amazing what you can get away with in this in this sector now.

S1: But I mean, it’s it’s an important point when you’re kind of talking about, you know, the need for potentially more spending and more tax revenue and that we do have these portions of the economy where we just have like just massive, massive, massive cuts. Money are just simply not taxed. And it it’s that this is the kind of path that I think people don’t talk about as much as they probably should, because I mean I mean, I understand to a certain point, like if you have an institution, it’s actually doing something like at least of your university. And you are in theory, actually like, you know, educating people. I have a little bit more sympathy for the fact that, okay, at least you’re actually doing something, but a lot of you don’t even do anything.

S3: Well, I mean, it’s not just nonprofits and charities like the NFL is a tax. It’s a tax free, untaxed organization.

S6: Yeah, that’s inexcusable. There’s no reason for that at all.

S2: You know, last year we wrote we put together this thing called the Slate 90, which is a list of the biggest revenue tax reorganizations. And most of them were not charities at all. You know that they’re like large businesses that somehow manage to, you know, get tax free for some reason. It’s it’s this huge loophole. But like the Mormon Church just looks like it’s way bigger than any of them. And no one you people knew had property. People knew Adler, 35 billion dollars of property. No one knew it had a hundred billion dollars of like investments in rich water.

S6: I mean, makes a point that you’re making before, though, like you have all these Democratic candidates coming in and saying, I want to do this new tax, that new tax. It’s like, can we just fix the system that we have now? Can we make it harder for the Mormon Church to just stockpile money that doesn’t get taxed, can abolish or like tax free?

S2: Certainly get rid of the charitable deduction, but way beyond that. Just make everything that is currently tax free. A taxpayer, every university, every hospital, every charity, every insurance company. Make them all pay taxes. And then like if there’s like a public interest purpose to make them a lot capable of continuing to do their business. And they can’t do their business because suddenly they they’re faced with this massive tax bill, then subsidize them, take some of that tax money and give it back to them as a clear subsidy and say we are paying you this clear subsidy so that you can do your job and make it transparent. Don’t do it like behind the scenes in the tax code.

S1: I mean, I think that makes lot of sense. Can you talk about economists and then you talk about kind of best practices in terms of tax policy? It’s very often this idea of, you know, kind of a lower rate, but a broad base.

S2: And in this kind of thing, I mean, that that does make it all even keep the higher rate and a broad base and then a bunch of like subsidies which go back to the entities that need it if they’re charities or hospitals or universities or anything like that, make it explicit. The seven numbers round.

S8: Oh, yeah. Yeah. Emily. Yes. Given number of a number. A number 17. Oh, well, seventeen.

S11: Seventeen is the number of Russell 3000 firms who have all male boards of directors. And that’s a good thing because it’s down from ninety three, which was the number in September. Twenty eighteen before California changed its law and required companies to have a woman on it on their boards. And the law worked. So now the numbers.

S2: So what you’re saying now you’re saying that like a good 70 year or so of those 93, we’re in California.

S6: No, I think some companies there were a bunch in California and then some companies just did it.

S3: The S&P 500 is down to zero now. Well, that happened last year.

S11: I think you’re right. Yeah. But there are still these holdouts, these 17 holdouts. And I think in the story, I think they The Wall Street Journal asked a couple of the holdouts. And instead of, like defending themselves, they’re like, we’re working on it. So, I mean, there’s very little company pushback on it.

S2: I work for a company with an all-male board of directors. This is very, very common among these yandi companies are public companies. And even my company, which is easy funded, is like we’re working on it.

S1: Everyone’s working. I talked to a Russian company that told me that when you’re talking about ESG things like we know we have issues with hiring women, but we’re totally working, not even joke.

S6: I feel like it’s very easy, like it’s not a hard fix. Like there are some things that companies, those they claim to be doing and they’ll never get it done, like closing their pay gaps or like hiring more female executives. But this is like a very concrete, fairly simple thing, like just put a woman on your board or maybe two, like it’s not that hard and they do it and like avoid a lot of criticism and it doesn’t really hurt them in any way. So it’s kind of like the easiest, lamest but no brainer est thing you can do. Yes.

S1: My my number is 80 million, 80 million locusts per square kilometer. So we are we have this.

S13: Is this a biblical thing? No, this is a place. What’s the minimum you need for it to be a place?

S1: That is a very good question, because right now we’re actually at the level it’s called an upsurge. It has not yet reached the level of plague. So, yeah. Right now in Ethiopia and Eritrea and the border in Pakistan and India and also in Somalia, you’re having these massive locust infestations. And I mean, these are horrible. It’s something because they eat like just so much. I mean, they get like one swarm can like consume as much as like twenty five hundred families would eat in a year. I mean, it’s devastating. Absolutely devastating. And one of the things they’ve said, too, is they think climate change could also be related to a little bit to what we’re seeing now. Also, what happened in Yemen. So we can kind of blame m.b.a.s for this. Like apparently that’s where the Ethiopian swarm came from. There’s like stagnant water. So it’s legitimate, like a really big problem. And I’ve only hearing it covered on the BBC. What’s the. Is there. How did the whole picture than everyone was cover. Yeah. Yeah. So I had to fight a plague of locusts. I mean I think part of it. Well actually this isn’t funny, but it’s a little funny is that you had I think it was in Ethiopia. People were trying to shoot them. Turns out it doesn’t work with GUNGUN. Yes. I mean 80 million. Perfect. There’s a lot of bullets. A lot of bullets. What about those tennis rackets? Electric smart. Yeah. Dead. I mean, I mean, I think a lot of it is, you know, pesticides. And I think part of this there was also some issues with I think where there were certain areas where if planes couldn’t fly and then that was part of the problem because then they weren’t able to release the pesticides. And then that’s also in itself a problem when you’re just massive pesticides. I mean, this is its image. And it is one of those things that when you say locust, people think of like John the Baptist in like the Bible, like you don’t think of like, no, this is actually a problem. It’s like I think it was like one tenth of the world’s population is affected like it has and it can be affected by locusts, like it’s a big problem.

S6: The Mormons should use their money to fix the locust problem, which is like vaguely biblical.

S2: Agreed. Agreed. That’s a good use of hundred billion dollars, I think. I think they’re a bunch of smart people with a hundred billion dollars. Could probably work out how to fix the Lucas Road.

S6: Yeah. Let’s get Bill Gates on this.

S4: Or whoever the head of the Mormon Church is that Mormon guy, that Mormon daughter.

S8: It’s not a lady.

S2: It’s probably a fair.

S4: My number is 25, which is the number of years it took for all I want for Christmas is you to become the billboard number one top selling single at Christmas. It was released in 1994 and it has of late, ever since streaming became part of the Billboard 100. It has been doing a little bit better every year. And then finally this year, the best Christmas song in the history of Christmas songs has finally reached the number one position that it always deserved, but spent 24 years not quite achieving.

S6: I actually had a good conversation about this. On Slate’s Culture Gabfest, I devoted a segment to Mariah Carey’s song, which I’m You, Felix. I just want you on the record. Believe is the best Christmas.

S1: It is the best Christmas gift. I don’t. It’s the best Christmas song of all time. But I would say it’s the best. Like Christmas song of the last 70 years. So wait, what was what pre-dates. I don’t know, like Silent Night.

S13: I mean, it’s definitely better than Jingle Bells Jingle. Randy, I’m actually a really fun Run-D.M.C..

S6: Oh, yeah. That is a good Christmas, huh? Christmas time in high school.

S2: I mean, you know, there is there is a case to be made for The Pogues, but ultimately, Mariah Carey has to win.

S6: It’s a relentlessly catchy ever since I listened to the Culture Gabfest segment. It’s in my head as soon as you said ma.

S2: So with any luck, we have no you into the minds of every single slate money listener. But at least it’s a good earworm. Yes. Yes. So holidays, everyone. Happy holidays to everyone. You can’t get away from Mariah Carey this year or next year or for the rest of your life. This is just going to never go away. But it could be a lot worse. Something which will never go away again.

S3: And with that, we’ll have one more special episode with Tim Harford next week on Slate Money. And then we will be back with you in January. Many thanks to just meet Molly for producing many things to our mysterious hosts for hosting us.

S14: We’re not meant to thank them, but they have been very, very nice. And we will talk to you next week on Slate Money.

S2: We’re going to do a listener question here, which is what book would you recommend from, I guess, Franklin, 19? It doesn’t need to be. Emily, did you have a good book this year?

S11: Yes, I did have a good book this year. Felix that I read it was she said I was about to say is that she said it was.

S6: She said it was. This is the book about from Jodi Kantor and Meghan to me about how they investigated Harvey Weinstein and and got that story. And it reads like a thriller. Like it’s like if you’ve read All the President’s Men, I’m here to tell you that the first three quarters of she said is to my mind, better just the the determination and the work they put into breaking that story. I guess I’m a little biased because I’m a reporter, allegedly, and a journalist. So it’s like reads like as trade craft. It’s really just interesting. Like she needs to talk to someone in Europe. She’s like on a plane. She’s staked out someone’s. This was, I think, Cantor. No, it was two heaths who, like, staked out someone’s house and just waited outside and, you know, knocked on the door, all that kind of like fun stuff. And there’s like Gwyneth Paltrow text messaging with Jodi Kantor from the bathroom because Harvey Weinstein has come to her house and at a party and she’s like freaking out. Does he know that I’m talking to you? And like, it was just like it’s just like really a dramatic and good book, even though you know how it ends. Right, with the publication of the story and just all the support these two women had behind them at the Times in reporting, the story was really magnificent because Wainstein and his lawyer, you know. Right. Boy, as David boys were so threatening and awful and the Times really had their back in protecting them from that and just fighting back against that. And I also read Ronan Farrow’s book this year. It’s called Catch and Kill. And it’s kind of the same it’s the same story, right? It’s how Ronan Farrow kind of did his Weinstein reporting. And it’s a really interesting contrast, the way the Times protected, counterintuitive and allowed them to really do their job. And now the story first and the way NBC just threw him under the bus. Yes, through Farrow under the bus and really kept him from doing his job and protected that people he was reporting about rather than the reporter himself. But at the end of the day, I would recommend, like she said, I just you know, people was addicted to this.

S10: Have you read it?

S4: I have not read Catch and Kill by have been listening to the podcast, which is excellent. I want to check that the Catch and Kill podcast I can definitely recommend. But there’s Farrow in the book. Talk much about The New Yorker and how they dealt with the whole boys.

S6: I mean, they were just the Yorker comes in like at the end as like a savior. I mean, this is the thing.

S2: It seems to me that for all the credit that The New York Times gets for standing up to Weinstein and boys, you know, on some level. Ronan Farrow just kind of waltzes into The New Yorker and says, will you publish this? And they say, yes. And then they publish it. And it’s maybe wait. How hard was that?

S6: I mean, they did a fact check and there was some back and forth with Weinstein and stuff, but yet it wasn’t that hard. Exactly. Because it was all that it had all been done and reported already. So there was less pushback. I mean, he was being followed and surveilled the whole time, which is really crazy in that book is fun because Farrow’s fiance say John Lovett, who people might know from parts of America, you know, work for Obama, whatever, he’s like the Greek chorus of football. He’s just there to like add color and be like, this is crazy what’s happening now. And it’s sort of fun to read. It’s more like personal book. But at the end of the day, I would say if you had to pick a wine scene book, she said it’s probably the wine.

S1: So the book I’m I recommend is the man who saw the market by him sideways. Yeah. The Jim Simons of Renaissance Technology. I really, really enjoyed this book. Actually reviewed it. But the thing I found so interesting about this book is actually honestly look less Jim Simons, the Robert Mercer, which which is interesting, like they’re interesting people. But the mouth figured into this book is really interesting, like the way that Simon’s views the market and like the kind of different models that he uses in terms of like how he understands it and then how the medallion model actually functions is like it is so fascinating. And I think I mean, like his their returns are insane. Like they’re so impressive. Rennaisance. Yeah. I mean, like, you know, it’s like over since like 80. It’s like 60 percent annual returns. I mean, like, it’s crazy. And, you know, there are a lot of reasons for that. If you kind of go and you can kind of see how they’re able to achieve that. I mean, partly it also goes in to like the kind of beginnings of the quant revolution and what he was doing a lot earlier than others. And then, you know, other things that they used in terms of different tax dollars. They used a little bit as well in a way that they were able to also use like I also just thought this was kind of brilliant, but they were able to use like a certain instrument that allowed them to become much, much more levered, except all the risk was with the counterparty, not with them. Like, that’s brilliant. And so, I mean, I think that just, you know, people just didn’t like math or just it in markets. Like it’s just one of the better books I’ve read.

S2: There’s light of all the sort of evil hedge fund billionaires out there. Jim Simons really has avoided any body being mean about him. Like, obviously, Bob Mercer is like everyone hates because he became super political and whack job. But Simons, especially if you know anyone who’s a mathematician, they almost certainly have got money from Simons at some point, like he he just loves mathematicians.

S1: I mean, that’s why he hires I mean, that was the thing to like. He basically wouldn’t hire people who had market experience, who didn’t know market experience. I mean, and it’s it’s just very into because like the way, if you like, if you spend a lot of time around people like in on the street in that market, people in the way that they think about things. And then you kind of see how he thinks about things. And it’s so different and so much smarter and like it. I’m not saying he doesn’t have other issues and what have you, but like he’s a he is an interesting figure. And just like his the way he sees things is fascinating.

S2: And I’m sure he has no one sort of sitting in the corner making GDP predictions. Right. I don’t really I it’s weird this this year was not a banner year for books for me. But at one point in the near the beginning of the year, this guy from Foreign Affairs phoned me up and said, Felix, you want to review this book called Darkness by Design, and it’s about the stock market boom. And I wound up sitting next to my bed for about a month unread because I went, oh, my God, I really wanted to read a book about market structure. It turned out to be really good. It turned out to be so much better than Flash Boys, which is the book about market structure that everyone has read. It was a very compelling book and they came out of it with the pretty strong conviction that the New York Stock Exchange should be a monopoly, which we talked about on Slate Monday. I bumped into the vice chairman of the New York Stock Exchange last week at a holiday party. And I told her that, you know, I thought she should become a monopoly. And she looked at me like I had eight heads and she ran away from me very fast. But, yeah, it’s it’s it’s a nice little contrarian read. It’s very short. It’s easy. It’s given that it’s university press, but easy to read. But yeah, I would probably recommend she said it like just.

S1: I think that there are some little gems at university press books that I don’t get like I read it. It was called The History of Doom. I honestly could not remove the author’s name, but this year and it was like I think from Princeton or something tiny book. But it was about like the how like the rise of corporate debt in early private debt in relationship to like each financial crisis since like the you know, the 18th century. I mean, it was really good. So I did think like look for university press books like One Nation Deep in Debt.

S5: James Macdonald book, which I recommend to everyone all the time.

S3: If you want to understand sovereign debt markets and how countries and and and sovereign debt and the destiny of countries is deeply connected to the debt markets. It’s amazing. Anyway, that’s her book recommendations that this year will probably be something next.