Homecoming

Listen to this episode

Felix Salmon: This ad free podcast is part of your sleep plus membership.

Felix Salmon: Hello. Welcome to the homecoming episode of Slate Running. Your Guide to the Business and Finance News of the Week. I’m Felix Salmon of Axios. Emily Peck is also here from Axios.

Emily Peck: Hello. Hello.

Felix Salmon: In the studio. Elizabeth Spiers is in the studio and also in the studio. We have an amazing, wonderful, brilliant, gorgeous, fabulous person. Rana Foroohar, welcome.

Advertisement

Team Biden: Thank you so much. Felix. I love you. Love all of you.

Felix Salmon: You’re about you’re about to get annoyed at me, but pushing back against that, this is a deal started.

Team Biden: Well.

Felix Salmon: But but before we do that, tell us what is this book that you have out?

Team Biden: So the book is called Homecoming The Path to Prosperity in a Post-Global World. And I am arguing that we are leaving the neoliberal era and entering a new world which is going to be somewhat less global, more regional and more local.

Felix Salmon: One of my favorite journalism stories when I first started out as a trainee at Euromoney magazine back in the 1990s with one of our star reporters, Ben Edwards filed a piece of copy, and the first sentence was The world is becoming increasingly global, and we all kind of laughed at him. But now I feel like your thesis is that the world is becoming decreasingly global.

Advertisement
Advertisement

Team Biden: Decreased. It is. The world is not flat.

Advertisement
Advertisement
Advertisement

Felix Salmon: So we’re going to talk about the the UN, the flatness, and decreasing the global nature of the world. We’re going to talk about. Rare earths, pharmaceuticals, China, Africa. It’s a glorious conversation. You’re going to love it. And we also have a slate plus segment on workplace surveillance. So it’s all coming up on Slate. Money.

Felix Salmon: So let’s start with the book. Obviously, congrats. You claim, Oh.

Team Biden: Wow, wait a minute. Already I feel antagonism.

Felix Salmon: You claim that we can reverse globalization and bring all of the goods and services and manufacturing and everything back like home. That’s the that’s the theme of the book. And yet also still have all of the jobs and growth and economic utopia that we failed to get under globalization. Is that is that basically the book?

Advertisement

Team Biden: Oh, Felix. You naughty, naughty boy. No, that’s not the book. So look, here’s the book. The book is that the last half century of neo liberal globalization. And I say that because, you know, look, over the millennia, there has been there have been many periods of globalization and globalization. In fact, that always goes like a pendulum and economic paradigms in general swing right? And when they swing too far, then they swing back a little. I’m arguing that the Washington consensus, the trickle down economics, the idea that, you know, capital goods and people were all going to flow freely and perfectly across borders and markets were always going to be efficient and everything was going to land. What is most productive that we’ve realize that that’s not working in part because capital always traveled so much faster than either goods or particularly people, which is essentially favored multinational companies.

Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

Team Biden: And China, for reasons we can tease out, it has favored big over small, it has favored efficient. And I put that in quotation marks over resilient in terms of our supply chains. And it has favored a very linear, one size fits all model for the global economy rather than the sort of heterodoxy that we need in order for nation states to be able to look after their own interests at the same time that they’re participating in global markets. So I’m talking about all that and giving you good news about how we can get back to a better balance.

Felix Salmon: Okay. So let’s say I agree with all of that about about like I’m.

Advertisement

Team Biden: Glad to know you’re a friend because otherwise I would be like WTO. Okay, go ahead.

Felix Salmon: No, no, I do. I think I think your diagnosis of globalization is exactly correct. And the winners from globalization are exactly the people you say it is. And the downsides of globalization are exactly the downsides that you limit, if that’s a good word in your book. The more interesting thing for me about the book is not so much the neoliberal globalization was bad thing, but the post neo liberal, you know, Post-Global world of, you know, home sharing or French or whatever you wanna call it is going to be better for like normal people. And that, I think is like that I think is the super interesting thesis. And can you just talk a little bit about what gives you confidence in that?

Advertisement

Team Biden: Yeah, sure. Absolutely. And I would say I think you’re being a little too linear in saying it’s not it’s not the globalist. That’s right. At least you’re not a neo liberal, I don’t think.

Advertisement
Advertisement
Advertisement
Advertisement

Felix Salmon: But what we don’t know, man, like, it’s hard to tell sometimes.

Team Biden: I know it is. It it really is. Look, we’re we’re going to a what I would say is a post neo liberal world. We don’t have a complete unified field theory for what that’s going to look like yet, although it’s interesting, people are starting to to pull up that and we can maybe talk a bit more about that. But my basic thought, and I think you’re seeing it play out every day in the news, is that the global markets have run too far ahead of the interests of the nation state.

Advertisement

Team Biden: And so that creates not only economic stagnation because, you know, in this country, for example, we’ve had policy decisions that have been telling us everybody can be a banker or software developer, and it really doesn’t matter if you have an industrial commons, It really doesn’t matter if you have if you have a variety of diverse sizes and types of businesses in your community. I don’t think that that works for average people. I think that you can see that at an economic level.

Team Biden: There’s a chart actually that Heather Bouchet at the Council on Economic Advisors often trots out, which is quite telling. If you go back to the late 1970s, which is, you know, pre Reagan Thatcher revolution, you could chart GDP growth in a in a nation with the sort of well-being of families, average per capita income and corporate growth and it would be roughly in line. So everything was kind of going in the same direction after the 1970s, you start to see those lines diverge and, you know, corporate profits might be way up here. The the wealth of a country might be somewhere in the middle and average incomes start to flatten. And that paradigm just, you know, can’t hold. That’s why you have stagnant economies. But it’s also why you have more polarized politics. Right.

Advertisement
Advertisement
Advertisement
Advertisement

Felix Salmon: But this is my question, right? Like 100%, those lines have diverged. Like, that’s just an empirical fact. My question is like, if we get rid of the neoliberal paradigm, then. What makes you think that they will converge? Yeah.

Team Biden: No silver bullet answer. But I would look at a country like Germany, for example. They have a lot of problems, as we know. I think you and I have maybe even talked about German banks at some point. I feel like we’ve I feel.

Felix Salmon: Like we had we had Adam Tooze on the World Bank, you know, talking about all the problems with Germany.

Team Biden: Oh, my God. But, you know, one thing that Germans got right is a more collective model about how capitalism should work. You know, you have the sort of co determination model where you’ve got the public sector, the private sector, labor working together. You’ve got a better balance of asset growth and income based growth. So why do I think we can go back to that? Well, there are several tailwinds fueling a sort of beginnings of globalization, regionalisation, localization, whatever you want to call it. And and here they are even before COVID, even before the war in Ukraine, you saw the sort of cheap capital, cheap labor bargain between Asia and the U.S. starting to flatten out.

Advertisement

Team Biden: So what do I mean by that? I mean that it no longer made any sense in terms of energy costs in carbon emissions, productivity, wage arbitrage to tote low margin goods all the way through the South China Seas into the U.S. or Europe, which is why industries like textiles and furniture furniture were already starting to localize and regionalize.

Advertisement
Advertisement
Advertisement

Team Biden: That then was put on steroids during COVID, during war in Ukraine, where you start to see all the things that the last half century was predicated on cheap capital, cheap labor and cheap energy coming from Russia into Europe, all that starts to go away and you start to see these highly again efficient, linear supply chains breaking down and you start to see that there is a politics in the political economy, right? It matters if you have outsourced your entire industrial commons and can no longer make basic PPE or have the ingredients for antibiotics, you know, or have a reliable energy supply or have food supply chains that talk to one another. And I think everybody understands that now. I mean, McKinsey Global Institute, which you can we can all hate on McKinsey, but the MGI does really great data. They say 92% of multinationals are now read, analyzing and localizing. The other reason for that is innovation.

Advertisement

Team Biden: Now, I grew up, my dad was an immigrant, was educated in this country. I grew up in rural Indiana in sort of, you know, farm communities slash industrial base for Detroit. He ran factories. It is so obvious to anyone in business that has actually been in manufacturing that you need to be on the ground locally in order to iterate and innovate. We had this crazy idea which a bunch of neoliberal economists who shall remain nameless came up with.

Felix Salmon: You can name them and I won’t.

Team Biden: You can guess.

Felix Salmon: They were among friends here.

Team Biden: Yeah. Oh, okay. I came up with that. Look, you know, we don’t have to actually make anything to have a functioning economy. That’s just not true. Look at Elon Musk again. Somebody that you can hate on or not. But I would say he’s at the cutting edge of how you get back to a very high end, innovative manufacturing environment. And it’s all about localization. It’s all about vertical integration. It’s kind of you’re going back to a model in which you keep small, tight supply chains nearby, which actually allows you to move faster and be more resilient.

Advertisement
Advertisement
Advertisement
Advertisement

Emily Peck: How does the political role what’s the role of, yeah, politics in this or governments in this? Because it seems like in a way, neoliberalism was all about outsourcing the nation state to like these, like the WTO or these, you know, international bodies and being all free market, blah, blah, blah. But what we’ve learned recently, especially with energy, is that the government intervenes like you can’t just go for it now with supply, with so many supply constraints now around energy and other goods, you need governments to be more muscular than before. And is that another pressure leading to sort of the falling apart leanness of neoliberalism?

Team Biden: Well, totally. And there’s there’s a kind of a big picture point there. And then a more practical point to me, the big picture point is something that we all kind of have really known since the financial crisis. But again, it’s become glaringly obvious in recent years, which is that markets aren’t always perfect, particularly when it comes to providing public commons type goods, health care, energy. You know, you you mentioned energy markets. There’s a reason that the U.S. and Europe and many countries actually have strategic petroleum reserves because the markets, particularly in energy, which are super financialized and super volatile, wouldn’t always provide that resource, that sort of, you know, capacity for an emergency situation. And so. Governments decided, alright, we need that strategic reserve.

Team Biden: I think what you’re going to see much more of, and you’ve already seen some of this with the vaccine efforts with PPE during during COVID, is government starting to provide a floor under certain strategic markets? You can see it with the CHIPS Act, right, you know, which is very bipartisan, but also with Europe starting to do more building of its own localised semiconductor industry, which piece like whatever your politics are, whether you’re neoliberal or not, Did any of us ever think it was a good idea to have 92% of all the world’s high end semiconductors made in Taiwan? Like, which is possibly the second most contentious place in the world after Ukraine. Like, that was not a safe decision, but that was a purely market decision.

Advertisement
Advertisement
Advertisement

Team Biden: So I think what’s going to happen now is governments and this could get risky are going to have to decide what is strategic, what is not strategic. And some of those conversations are being had not just around things like chips, but around things like rare earth minerals, lithium batteries, drugs and pharma, input of food, certain kind of basic apparel.

Team Biden: And so I’ve actually been it’s interesting in the last couple of weeks, I’ve been in a couple of big supply chain, like off the record background meetings with public sector officials and private business leaders. And they are desperately trying to figure out where is everything, where are the 15 supply chains that we really need and where is the stuff? Because there’s been so much outsourcing that people don’t even know how to make their own products anymore.

Felix Salmon: It’s I mean, Exhibit A here, of course, is the United Kingdom, which managed to outsource everything except for City of London Finance and then cut off all of their supply chains by Brexit, saying and then they’re like, Oh shit, now we can’t make anything. One of the one of the the classic things they couldn’t make was energy, because like, North Sea oil is dried up. And amazingly, this is my favorite thing about the UK. They had this massive natural gas reserve off the coast of Norfolk, I think it was. And then they just shut it down because they couldn’t. They decided it was too expensive to renovate and keep up. So they just so said like suddenly that one ability to like you have that the UK equivalent of the Strategic Petroleum Reserve just evaporated basically.

Advertisement
Advertisement
Advertisement

Team Biden: I totally agree with you. I think that the UK is like Exhibit A of just the backfiring of all possible neoliberal policies. You can just look at that. Liz Truss You know, blowing up post. Oh hey, let’s do trickle down economics again. Let’s give a huge tax cut to the wealthiest people at the same time that we’re actually going to do more government spending. It’s like the Reagan playbook, you know, And hello, 44 days later, 45. What was it? She’s she’s out of there.

Felix Salmon: So let me ask you about vaccines, because I think that was one of the one of the many, many things we learned over the course of the pandemic is the you know, the vaccines were the Exhibit A in where beautiful, global, seamless supply chains broke down. And you got this extreme vaccine nationalism, where if you were a country which manufactured the vaccine, you kept it all to yourself in the first place. And only once you’d vaccinated everyone in your country, even if they weren’t really at risk, would you export it to people who really needed it in even somewhere like Canada? So that explains why Canada got vaccinated so much later in the United States. Is the solution to this for like Canada to build its own pharmaceutical industry? Because that seems weird.

Team Biden: No, not at all. I think the solution is what a friend of mine, Barry Lynn, who runs the Open Markets Institute, has called the rule of four. And so I think that in really crucial areas and those are, you know, TBD, but we can kind of guess what they are food, fuel, you know, drugs, vaccines, antibiotics, important things like that. You need to have capacity in four geographies. You need to have capacity in for large players. It’s a general rule, but it’s a way of saying you need some redundancy in the system, in a world in which bad stuff is probably going to happen more often and not just geopolitically bad stuff, but viruses, climate events.

Advertisement
Advertisement
Advertisement

Team Biden: You know, this is another thing that even before COVID and and and Ukraine, you could track the number of supply chain disruptions that big companies and countries were dealing with was increasing exponentially because of the all everything from climate change to more fractious politics to the migration issues that would end then the political economy issues that would occur because of that. So we just we need to get a little stronger. We need to get a little more resilient. And that means more places. Now, in terms of Qantas, you know, you raise an important point, which is every single country should not be replicating every other country’s efforts, nor can they. But I think that you’re going to see a. Regionalism, You can actually already see it. I mean, speaking of Canada. Chrystia Freeland, former colleague, who’s the the deputy premier.

Felix Salmon: Deputy prime minister, the.

Team Biden: Deputy prime minister.

Felix Salmon: If you can call it that deputy premier.

Team Biden: But came out with a really interesting speech along these lines. And, you know, I would have said that Christy is pretty neoliberal, but she.

Felix Salmon: She hasn’t been neoliberal since she became an MP. Yeah.

Team Biden: Interesting. Yeah. Maybe you can’t get elected that way.

Emily Peck: Can I cut you guys off for a second? And can you define neoliberal? Because I feel like it gets tossed around a lot as it’s a slur in some circles and progressive circles at this point. So be good to.

Team Biden: I would say I would say it’s a slur.

Emily Peck: It’s a slur.

Team Biden: Yeah. Yeah. So. So let me define the word neoliberal, because you’re right, it does get tossed around a lot and it gets used in an economic way, but also in a political way. And it’s used quite differently sometimes in Europe versus the U.S. I’m actually defining it, and I do in my book, as the IMF does. And interestingly, the IMF, which kind of represents neoliberalism, has started hating on neoliberalism, too. That’s a separate threat. But they would define it as the economic philosophy, defined in some ways by the Washington consensus that capital goods and people should move transparently easily across borders and that, crucially, they would always land where it was most productive and best from a market perspective for them to do so.

Advertisement
Advertisement
Advertisement

Team Biden: So the I it’s the kind of totally laissez faire free markets lift all boats idea. And in fact that was true for for a while. You know and you take it all the way up from the eighties to you know the apex of global growth would be about between 2003 and 2007 which interesting that right in the middle of that is when Tom Friedman wrote The World is Flat, which is that’s the shorthand for neoliberalism. The world is flat, borders don’t matter, place doesn’t matter, messy humans don’t matter, Messy institutions don’t matter. Markets are perfect. That’s neoliberalism. And it’s just.

Emily Peck: Wrong. Yeah, that is wrong. I get. I get why.

Felix Salmon: And so and so instead the solution to that or like, you know, the post neoliberal consensus, which I’ve written about a little bit and as you said, doesn’t really exist yet, but is slowly coming together. What you’re saying is, especially for something like pharmaceuticals, which can be more sort of regionally based, they’ll be like something in Brazil, something in the US, something in Europe, something in Africa, obviously China, China’s always going to have everything. And then that will give the world the level of redundancy that it needs.

Team Biden: I think so. And you know, you mentioned China. When we talk about decoupling, one of the points that I really like to make is we often think about decoupling, globalization, regionalization, you know, economic warfare, as Biden is being accused of recently in terms of the chip chip ban, which we should talk about as something that the U.S. is driving and that the West is driving. I would argue that something that China decided quite a while ago, if you look back to 2015, they put out their Made in China 2025 plan, which said, look, we want to have what’s called in the very wonky way a dual circulation economy. What that means, that’s official Chinese state language.

Advertisement
Advertisement
Advertisement

Felix Salmon: It sounds like an emergency to.

Team Biden: It sounds something very engineering, which is sort of also very Chinese, but that they want to essentially produce and consume locally, that they are now rich enough that they don’t want to just be the exporting factory to the world, that they want to actually regionalized their supply chains and produce more for the domestic market and also more for the Asian market, which frankly put aside any crazy politics. Xi Jinping, Donald Trump, whatever. It makes sense. It makes sense for a lot of reasons. It makes sense environmentally shorter supply chains are better for climate. It makes sense from a resilience standpoint. It makes sense from a fuel standpoint. It makes sense from an upskilling standpoint. So they had decided way back in 2015 this is the way that they were going.

Team Biden: Then you have in the U.S. Trump coming into office and he had no coherent policy about anything really. But Bob Lighthizer, who was the USTR at that point, did something which I was actually for, and that is in putting tariffs on various products from China. He kind of pulled back the scrim and called bullshit on this willful blindness, which has been going on for years, decades, even between U.S. multinationals and policymakers, and Beijing, which is we’re all going to pretend here that China doesn’t have a totally different political economy than the U.S. or most parts of Europe, and that we’re all going to come seamlessly into the Washington consensus together. And. Everybody’s going to follow WTO rules and it’s all going to be great. No, that was never the case.

Team Biden: I remember going to China. It was actually around the time of the Edward Snowden leaks and talking to a Danish wind CEO who was at that time number one in the market in China. And I was like, So how are things going? How’s the next five years going to be? And he said, I think it will be pretty good. We’re going to be, I think in five years we’ll be in the number four spot. And I was like, Well, wait a minute. First of all, how do you know that so precisely? And secondly, why is that good news? You’re going from 1 to 4. And he’s like, well, that’s what Beijing has told us, how low that’s how things operate. So why were we always pretending that it was going to be different? So then you get Biden sort of coming in and basically agreeing with the trade policies of the Trump administration, but then adding what I think has been a very smart layer of let’s look at what’s happening domestically, let’s create more resiliency, let’s rethink our economy.

Advertisement
Advertisement
Advertisement

Felix Salmon: So there was an interesting tension between Biden and his Treasury secretary, Janet Yellen, over this issue. Right. With the we reported this Axios that when inflation started picking up, she was like, well, the obvious thing to do to bring inflation down is to get rid of all of those tariffs because all of the terrorists were inflationary and Biden was kind of just basically ignored her and never did it. And what you’re saying is in that. Tension between Biden and Yellen. You’re like team Biden.

Team Biden: Totally Team Biden. Now, it’s fair to say that decoupling is going to be somewhat inflationary in the short term. I actually think it’s going to be wildly deflationary in the mid to longer term. But this is the rub. This is the political problem we’ve gotten used to. The cheap is better, cheaper. You can drive down consumer prices. That’s all that matters. As long as consumer prices are falling and share prices are up, it’s all good.

Team Biden: Unfortunately, and this is a difficult thing to message, all those cheap flat screen TVs at Wal-Mart have not made up for the fact that the things that make you middle class education, health care, housing have been rising even before the latest couple of years of inflationary pressures were rising at three times the core inflation rate. Now they’re rising wildly faster. If you look actually with with the interest rate hikes, the price of carrying a mortgage from, you know, last year, year on year is up over 50%. So the truth of the matter is that that cheap stuff is going to make us all feel better and make us middle class.

Team Biden: That paradigm is tapped out, but it doesn’t solve the problem of the next few quarters and years, particularly for working people of holy cow, like putting a groceries on the table has just gotten wildly more expensive. Can I eat meat? Can I, you know, can I pay for my prescription drugs? These are structural problems. And so what I think when you say Team Biden, I am Team Biden on this on this conceptually. But I also think that as with every paradigm shift, it’s going to start with Biden, but it’s going to take another couple of presidencies, I think, to get to the other side of where we’re going. And there’s going to be a lot of bumps in between.

Advertisement
Advertisement
Advertisement

Speaker 4: You have a great line in the book where you say something like you’re comparing the increase of the hospitality industry with the decrease of manufacturing, and you say, you know, we’ve become a nation that doesn’t make things anymore. We just eat things. So what do you think about the weaknesses that we have? You know, what are we not making that we should be besides semiconductors?

Team Biden: That’s a great question. You know, I’ll actually flip it a little bit and say that one of the things that surprised me in my reporting is how we can still make things so. So let me give you an example from the textile industry. I followed textiles because I thought it was like a really cool Darwinian case study. When China came into the WTO in 2001, Apparel basically just went to Asia, full stop. What was left was like a Harvard Business School case study of how you want to run a business. There’s a very strong middle market, typically private, often family owned group of businesses in the Carolinas that still make certain kinds of apparel. And when COVID hit, nobody’s buying t shirts and, you know, even underwear. And we’re all sitting at home in our sweats.

Team Biden: And so these guys are like, oh, God, you know, okay, what are we going to do? Well, let’s make masks. So they turn on a dime and in 48 hours, basically come up with their own little homegrown industrial policy to make mask Piers with no help from Peter. You know, buy America go MAGA people. Navarro who didn’t even know anything about this supply chain this it’s almost like the counterexample that proves the rule.

Advertisement
Advertisement
Advertisement

Team Biden: What has survived in this country is small, mid-market, and below the radar of the pressures of Wall Street. How we bring that back and how we create scale in that is is going to involve a lot of different things. It’s going to involve, first of all, making sure that we enforce anti-trust policies so these companies that do still make things don’t get acquired by private equity, which is starting to I mid-market industrials in the U.S. and then government needs to decide.

Team Biden: All right, what is important, I would argue that there are somewhere between five and ten supply chains that you want to have a lot of resiliency in. Semiconductors and tech components are one of those rare earth minerals are one of those pharma and pharma inputs. Antibiotics are one of those. Certain amount of food would be part of that. And so we’re going to have to use antitrust policy. We’re going to have to have a little bit of industrial policy. California’s kind of leading the way on this.

Team Biden: And in an interesting sense, Alice Waters, you know, the famous restaurateur from Chez Panisse, who’s very big into the slow food movement and kind of localization of food, she’s actually doing a really interesting cutting edge experiment. She is trying to get the entire University of California system to buy it, to cut out middlemen. Big, large institutional middlemen like the Ciscos of the world and buy totally local food supply. And once she does that at University of California, which she’s on the way to doing, she wants to do it in K-through-12 in California. And then that becomes a model of how do you use government procurement to create that resiliency at a local level level.

Advertisement
Advertisement
Advertisement

Felix Salmon: Let me ask you about the tension here with environmentalism. You mentioned rare earths, and one of the great misnomers in the world is rare earths. Rare earths are not rare there in every piece of dirt in the world, pretty much. The problem with rare earths is not finding them. It’s the sheer filth, thinness and dirt of actually getting them out of the earth. And it is a horribly nasty, dirty thing to do. And so the places that do it are obviously China. And and, you know, somewhere like Japan will find some island that it isn’t inhabiting. And they’re like, we can just destroy this island and we can extract rare earths from it and they’ll be fine.

Felix Salmon: Yeah. It seems like, you know, as a globalist, that’s kind of like if you’re going to have to create a bunch of environmental destruction in order to get these threats out of the ground. Doing it in some uninhabited island in China Sea is probably the right place to do it rather than doing it in, you know, a national park in the United States. Right. I mean, do you really want that stuff to be happening onshore?

Team Biden: It’s a great question. It is already happening onshore. There are some mines in the west that do that, do get and in fact, you may have seen that Canada is ramping up and Australia are ramping.

Felix Salmon: Canada, you know, home of the tar sands and other Canada’s good at ripping itself up for commodities.

Team Biden: Yeah. Yeah. No. I mean, these are great questions. And actually it sort of touches on a point that came up in my book. One of the things I was looking at in agriculture is hyper localized farming. So Big AG is one of the most polluting things that you can do to the planet, basically. I mean, we’re as we all probably know, we’re incentivized to raise cash crops to feed cattle. You know, I mean, I grew up in farm country. All the corn around me was for feeding cattle, not people. It’s just a crazy model. And meanwhile, we are not producing enough fruits and vegetables.

Advertisement
Advertisement
Advertisement

Team Biden: Okay. So one of the solutions to this is something called vertical farming, which is it’s very cool. It’s done a lot, particularly in California, like Google serves all the produce on its campus in California from these vertical farms that you can grow up the side of walls or on buildings. And this is something that’s being trialled in cities and in urban areas. It can be a way to to cut energy usage and carbon emissions, but it also costs a lot to build these things environmentally and physically, and it costs a lot to run them energy wise.

Team Biden: So you start to get into that arbitrage of, all right, you want to make lithium batteries, you’ve got to dig up the stuff. Like what? What is the cost? What is the true holistic cost of a product? And I think that that’s actually really crucial to my thesis. We thought that cheap was just about price, but when you factor in the true cost of something, you know, even just this glass, which California’s also starting to do now with its green purchasing, what are the carbon emissions if this was made in Xinjiang to get this here, what are the labor standards, what is the tally and the cost of that versus if it was made in Tennessee? That’s something that we are just starting to tally up. The SCC is thinking about this. The White House is thinking about it because the Inflation Reduction Act, the carrots and sticks involved in that are going to require actually understanding the true cost of these things.

Team Biden: So at some point we’re going to have to grapple with will shoot, you know, is it worth it to dig up those rare minerals in Canada? You know, what does that mean in terms of the cost of an entire product? It also gets into the messy stakeholder versus shareholder debate. If low consumer prices and high stock prices are not the end all be all metric, what are the metrics? Messy questions.

Advertisement
Advertisement
Advertisement

Felix Salmon: I feel like you just made a great case for a carbon tax.

Team Biden: Oh, I think honestly, I think a price on carbon for first of all, it would be it’s such a no brainer. Like Hello Republicans, The way to both make America Great again and reduce Chinese mercantilism is to come up with a price on carbon because it would end Chinese mercantilism like overnight. So can we please get together with Europe and do that? Also, Democrats like it’s easier than the way we’re doing it now.

Emily Peck: Wait, Rana, so the argument that I think the neo liberals who I just learned what that means, but the one they always use and people like Felix, I think believe is that if there’s more globalism and there’s trade and you have to have relationships with these countries that politically are different from you, that’s good. It keeps the peace. You’re not going to go to war like like Thomas Friedman said, like, isn’t there.

Felix Salmon: Something The Golden Arches theory.

Team Biden: Stopped working when Yugoslavia fell apart?

Emily Peck: But but isn’t there some truth to that? Like, if you have these relationships, that does give you some to use. The the word everyone likes now is resiliency in your foreign relations. So what do you do about that?

Felix Salmon: Well, I mean, I mean, the thesis being basically and I’m not sure I do believe this, but, you know, I believe for the purposes of this podcast, because to me, that one’s a bit like the thesis, basically being that if it wasn’t for the fact that Taiwan produced 92% of the world’s semiconductors, China probably would have invaded them by now.

Advertisement
Advertisement
Advertisement

Emily Peck: Yeah.

Team Biden: Okay. So that’s a very interesting and difficult question. But let me start let me start with this idea. Does trade make us friendlier? Does trade make us freer? Like everything, this is not a binary conversation. I think to a certain extent relationships make sense. But I think where we fell down and this was particularly true, I would say, in the late Clinton administration, when you started seeing all kinds of trade deals being cut with countries that had pretty wildly different political systems, political economies and values, you start to get this kind of willful blindness to the idea that, well, we’re not playing by the same set of rules. That’s why you have a WTO that just doesn’t function anymore, because China is never going to play by the rules of the WTO, which would involve, as you, you know, come into this organization not subsidizing certain crucial industries. That’s just not going to happen.

Team Biden: Trade is necessary. But the idea that trade is going to make everybody be more like us, which was kind of the world is flat way of looking at thing things. I think it’s naive. And it’s also I have always found it quite arrogant. You know, I remember the first few times I went to China looking around just thinking, Oh my God, this is an amazing, diverse, crazy country with its own traditions and its and the idea that it’s ever going to really embrace our system. I always thought that was naive.

Emily Peck: I guess I just meant as a baseline for, like, not going to war or something.

Team Biden: Well, it hasn’t, though. I mean, it really I mean, as we’ve can kind of see and in fact, I would argue to me the conflict is around the fact that while trade created and neoliberal trade, let’s say, created more wealth at a global level than ever before, it also created more in-country inequality than ever before in most OECD countries, particularly in the Anglo-American world.

Advertisement
Advertisement
Advertisement

Felix Salmon: Pretty much all countries. I mean, in pretty.

Team Biden: Much all countries.

Felix Salmon: Including China.

Team Biden: Including China. Oh, yeah, absolutely. And so that in different ways started to create political fractures that undermined the entire system. So I guess that’s my push back to the world is flat argument.

Felix Salmon: And that’s one of the reasons why the Chinese government is now like pulling back on that entire policy is it’s presumably because they see the problems of inequality and the, you know, if they cut down the billionaires, then that will reduce inequality.

Team Biden: Yeah, no, it’s a really interesting point, too. And I’d be curious what you all think about this. But I’m fascinated by their common prosperity campaign, which again, let’s let’s take Xi Jinping out of the equation because he’s kind of the wild card. Is he the new Mao or is he actually kind of you know, he’s like a stealth populist that’s taking China to a better place. Common prosperity is is essentially about curbing Chinese elites. It’s about it’s the Chinese way of reducing the wealth gap. And maybe that’s not a bad thing.

Felix Salmon: So I wanted to to top this off by just like rolling out a Bono quote and letting you rip kiss.

Speaker 4: Oh, my God.

Team Biden: Big No. Because if this is about globalists, we have to have Bono.

Felix Salmon: We have to have we have to have Bono on. Now, I you know, one of my unpopular opinions is that Bono is arguably the most successful philanthropist of the modern era. I think he has absolutely done a huge amount of good in the world. Not everyone agrees with me on this one. But he also, as you know, you know, after hanging out with him for many decades at the World Economic Forum, again, is is it true, Is it true, globalist? And so I want you to I want I wanted this is a quote he gave to The New York Times.

Advertisement
Advertisement
Advertisement

Felix Salmon: He said, I ended up as an activist in a very different place from where I started. I thought that if we just redistributed resources, then we could solve every problem. I now know that’s not true. There’s a funny moment when you realize that as an activist, the off ramp out of extreme poverty is commerce, it’s entrepreneurial capitalism. I spend a lot of time in countries all over Africa and they’re like, Eh, we wouldn’t mind a little more. Globalization actually is. Is he right? Is he wrong?

Team Biden: Well, he’s right that commerce is where prosperity comes from in a capitalist system. I mean, business is how wealth is created. It’s funny when I talk to Africans, absolutely, they want more commerce, but increasingly they’re doing it in a regional way. Africa is actually in this new post neoliberal world. I think that they may have an opportunity. I don’t want to be sanguine or naive because they’ve got a lot of challenges, but because they are a place that has food, fuel and potentially more consumer demand, they’re well-placed for more regional humming. And you’re starting to see that now where a lot of African countries are coming together and doing cross-border business.

Team Biden: And there’s also and this is true in many in many developing countries, there’s an elite that has been educated abroad, maybe has worked abroad for a while, but is coming back. This was the case with my dad, by the way. It’s it’s my dad’s a Turkish immigrant. He came he was like the last generation of Turks to come to the U.S. and be educated here and stay here because it was going to be better economically, Turkey, until, you know, the recent crackdown over the last few decades was that you were more likely to get wealthy more quickly or have more opportunity there. Same with sea turtles in China. You know, these kind of expats going home.

Advertisement
Advertisement
Advertisement

Team Biden: So I see a lot of Africans, particularly South Africans, coming back and saying, you know, we want to develop regionally. We don’t want to just be a place that the Chinese or the Americans, frankly, come in and mine raw materials and, you know, have no infrastructure ourselves. They have a really strong digital economy, you know, So I think that they’re actually poised for a new kind of regionalism. So I guess if if it’s if it’s about a binary, you have to have a one size fits all globalism in order to be prosperous, then I would disagree with BARNO.

Felix Salmon: Yeah, I. I will push back on this optimism about African regionalism, mainly because I think that and this is getting a little bit nerdy, but mainly just because I think that in order to have a regional economy, you need strong like internal transportation ties, you need that interstate highway system, you need like the European rail system, something that basically just doesn’t exist in Africa. It has a coastline and you can get from the coast to anywhere in the world on a boat. But if you want to try to go from anywhere in Africa to anywhere else in Africa, especially over land, you basically can’t do it. And that, I think, is just going to prevent an African regional economy from ever. Maybe you could get a West African regional economy with let Nigeria and Ghana, Ivory Coast. But I feel like the continental one is the only way you’re going to get that, frankly, is through Belt and Road infrastructure investment from China.

Team Biden: Mm hmm. Mm hmm. No, I think that’s that’s an interesting case. I think you probably can make that argument about traditional goods and services, trade. The thing that’s interesting, though, is the way that the Africans have leapfrogged ahead in digital. I it’s it’s just fascinating because, I mean, it’s the classic thing where because they didn’t have old line infrastructure, they’re actually really kind of like the Chinese in some ways. They’re quite ahead in a lot of wireless innovation. There’s a super rich digital media landscape there. You know, you’ve got farmers doing things trading and doing things on apps that farmers in this country don’t do. So, you know, I can see it both ways. Maybe I’m being too optimistic about Africa, but I like to be optimistic about Africa. Nobody is. So I will be.

Advertisement
Advertisement
Advertisement

Speaker 4: Yeah, I think the problem with the butter quote is that it has a little bit of shades of, you know, learn to code if you’re in an area where people have social problems. And so, you know, if you assume that commerce is the solution to all of this, you know, how do you envision it scaling over time?

Team Biden: How do I envision African commerce scaling? Oh, gosh. Well, I mean, it kind of already is. Actually, I spent a while in Nigeria a few years back looking at the digital media landscape. And it’s really interesting. They have Nollywood, you know, it’s the third largest film industry in the world after after Hollywood and Bollywood. And it’s about creating content for three, I believe it’s €300 million best speakers globally. I mean, expats, this is now turning into an app economy. You’ve got Google and Apple over there seeding these entrepreneurs. Now, interestingly, the biggest roadblock is infrastructure. It’s what Felix was saying earlier. So you’ve got in Nigeria, you’ve got basically two infrastructure systems, one that’s kind of shoddy, that’s run by the state and one that’s really good, that’s run by a couple of billionaires. And so you need to you need to get bridge that gap.

Felix Salmon: I feel like we should have a numbers round. Emily, did you bring a number? Yes, you did.

Emily Peck: My number is 250,000. That is the maximum amount of dollars you could be fined for breaking New York City’s new salary transparency law, which went into effect this week. Yeah. So now employers who hire people who work in New York City, if you have more than four employer employees, you have to post salary ranges in your job listings in good faith. And that went into effect this week. And I recommend just going and looking at job listings for the company you work at because you can see how much they pay people. And it’s endlessly fascinating. And some companies post these ranges that are just one media company has like a listing for ED that pays between $50,000 a year and $180,000 a year.

Advertisement
Advertisement
Advertisement

Felix Salmon: So, yeah, I mean, that’s an interesting question. Like obviously a range like that is not particularly informative. I think it.

Emily Peck: Is actually informative because you kind of ignore the lower end of it if you’re an applicant and you say, Oh, okay, this you look from what i’ve heard from h.r. People and recruiters, everyone just looks at the top number. Anyway, so you look at the top number and you’re like, that’s my goal.

Team Biden: You know what that says to me, though? I’m fascinated by the range because it speaks to the nebulous way in which people are paid and what is not about who gets the 880. I think I can probably imagine what some of what goes into that.

Felix Salmon: Is always the women of color, I’m telling you.

Emily Peck: But to put that number out there is important for those people who never get the 180 because they probably they might not even have the one idea in their head as a possibility because, you know, the what happens down recruiting is that the employer asks you, what do you want to make? And you name your price. And typically women, people of color, they might name a price that’s a little lower. Now they have a high end. They can at least refer to that. That might help.

Speaker 4: Yeah, my number was from, I think, the same story, but it was it was a range and it was a 0 to $2 million. And this is where a Citigroup client service officer position and some of this is this was all supposed to go into effect on Tuesday. And some of these companies are just scrambling to add the data to the job listings are they just don’t really understand how the concept works. So if.

Advertisement
Advertisement
Advertisement

Felix Salmon: That was just a computer glitch.

Emily Peck: I emailed, they said, yeah.

Speaker 4: But they’re right as the ranges are so broad in a lot of cases, the, you know. They’re not telling you what what the intention of the law is.

Felix Salmon: But we interesting to see whether and when and how anyone actually gets fined for violating this law. I think it will take a couple of years before we get the first fines because, you know, we’re going to if ever. If ever. Yeah. Yeah. But it will be it will be companies who just don’t do it at all. I think in the first instance.

Emily Peck: There is some reporting the Journal had a good story that some companies are like, We’re just taking our listings down. Just call or you know just look at it is. Yeah, yeah. And we’ll do it. You know, word of mouth kind of a thing and just we’re not going to bother with the with this. But I mean, big employers can’t do that.

Felix Salmon: But that’s also like, you know, the way that C-suite executives have always been hired, right? No, no one’s ever posted a job listing for CEO.

Emily Peck: Right.

Team Biden: You know what I find interesting? I actually am writing a column about this topic. I think that this the transparency that’s coming out of all this is going to push not only greater transparency around other forms of compensation, you know, shares, not bonuses. What are those structures? But I think it’s also going to start to open up the corporate black box, which is something I’m becoming obsessed with, like the amount of legal structures that are in place that allow companies to hide almost everything that goes on except for the most basic financial information is kind of shocking. And I think that you’re going to see that start to to change.

Advertisement
Advertisement
Advertisement

Felix Salmon: Which is a perfect segue way into my number, which is 314 million, which is also an African number, which is the number of dollars that Glencore was fined this week for fining a bunch of African oil officials. Glencore is this massive commodities trading house, and between 2011 and 2016, the Serious Fraud Office in the U.K. found that it had bribed a bunch of agents in, get this, Nigeria, Cameroon, the Ivory Coast, Equatorial Guinea and South Sudan.

Felix Salmon: $29 million to, you know, facilitate movement of its oil over other people’s oil, that kind of thing. Interesting, actually, that this mine came from the UK. Normally, it’s the Americans who are cracking down on on on the FCPA stuff. But this is a global company and India.

Team Biden: Also need the money.

Felix Salmon: Yeah, the UK could do with that.

Speaker 4: We have an agency that’s still working in the UK. Exactly.

Felix Salmon: But Rana, what’s your number?

Team Biden: So I’m kind of a boring number, but I think it I think it opens up an interesting question, 261,000, which is the number of jobs created last month, which is a pretty robust number still. And it brings to mind why the heck are the Democrats not getting more credit for the fact that there’s so much still going right in the economy?

Emily Peck: Oh, my God. Have you guys saw lately, though? I mean, I have no costs so much money now does.

Team Biden: But so like, how how can you I’m thinking about this just like we have to perform this public service. Yes. Inflation is bad for all kinds of reasons, almost none of which have to do with the White House. Okay, let’s be honest. We’ve had 40 years of how.

Advertisement
Advertisement
Advertisement

Felix Salmon: Much how much of that 261,000 is thanks to the White House.

Speaker 4: Also, it doesn’t the average person doesn’t know about the 261,000.

Felix Salmon: You know, so so the the one thing that that we have the one thing that we’ve we’ve definitely been reporting and has become abundantly clear is that Americans care more about inflation than they do about employment.

Team Biden: Yeah, I think that that’s.

Emily Peck: Because as long as you have a job.

Team Biden: That’s all set it all. It also may speak to the fact that the employment numbers in general are so screwed up. I mean, we all how many of us have more than one job like me?

Felix Salmon: Well, I mean, well, you know, some of us moonlights as podcasters.

Team Biden: Because I came in count as a job. I feel like we’re just like hanging.

Emily Peck: I mean, have you entered your salary into the the BLS inflation calculator?

Team Biden: No.

Emily Peck: It’s brutal. Is it? And the wage inflation has not kept up with any other inflation.

Team Biden: No of corporate.

Emily Peck: Profits have far outpaced inflation while well they are working are losing money.

Felix Salmon: Corporate profits have not outpaced.

Emily Peck: In the oil industry, at least not quickly backtracked. But anyway, people’s wages have not kept up with inflation and that sucks. And that is why I Biden.

Team Biden: I was, you know, just to go back to Republicans for a minute, I was really Oren Cass, who’s at the American Enterprise Institute, wrote an interesting op ed in the F.T. recently, which I was fascinated by because he’s a conservative, thoughtful conservative. But but he was like, like WTF? Like, at what point do wages stop shrinking? At what point do companies stop saying we have to continue to pressure labor like the math doesn’t work.

Advertisement
Advertisement
Advertisement

Emily Peck: Speaking my language.

Speaker 4: I think this is also why there’s a, you know, an emerging labor movement here that’s really vital right now. And it’s it’s it’s growing. So I feel like your reaction.

Felix Salmon: I, I, I don’t think it is. I think you see like a million individual Starbucks stores all trying to individually unionize and that’s going to get you nowhere.

Team Biden: Well, that’s a huge problem with the American labor movement that you don’t have more kind of overall secular organizing.

Felix Salmon: I don’t see any actual like mass.

Speaker 4: I think the numbers are going up.

Felix Salmon: I mean, yeah, but not very fast.

Emily Peck: And that’s the problem. I mean, when you talk about supply chain resiliency and on shoring and da da da da da, we need to talk more about the human supply chain and how to make that more resilient. And I don’t see that happening.

Team Biden: Well, I’ll tell you. Okay. One, I don’t have the number for this, but one trend that I’m watching is the care economy. So if you and by that I mean not just health care, but education, child care, basically anything that is a kind of a heart job and a hand job, those are going to be. Sorry, did I just You’re going to cut that, right?

Emily Peck: We are we.

Felix Salmon: Are going to call this one the hands of additional labor.

Speaker 4: As I come right back, right in front of.

Felix Salmon: Me. The hands of the hands of a.

Speaker 4: I need to stop.

Team Biden: Stop.

Emily Peck: Stop. We can stop.

Advertisement
Advertisement
Advertisement

Felix Salmon: We can stop. I think. I think we can. I think. Leave it there. Those guys.

Speaker 4: Are awesome.

Felix Salmon: But yeah, thank you for coming on. It’s been so great. So great having you. And thank you all for listening. It’s been a fun one, obviously, because one has been here. We will be back next week with more state money. Send us what you want us to talk about Slate money at Slate.com. We’ll be back next week.

Felix Salmon: All right, workplace surveillance. Elizabeth, what’s the question?

Speaker 4: You had an interesting column about the growth of workplace surveillance, really sort of grew out of the pandemic and management leaders sort of deciding that they can’t really trust their employees. So they install, you know, surveillance software. They ask for reporting metrics that you wouldn’t have in the office. Now, do you think this is a temporary thing or do you think it’s just going to last? Like this is just what we have to deal with going forward?

Team Biden: You know, sadly, I think it’s going to last. And I’m actually less optimistic about this problem getting fixed than about the neoliberal world problem getting fixed. I’ll tell you why. Because it’s more opaque. You know, I mean, it’s this was the topic of my second book, which was dismal and didn’t sell as well as I hope this one will, because it was so depressing about big tech and the surveillance state, which is, you know, we talk about the Chinese surveillance state, the the capitalist surveillance state is all around us. And the amount of data that is being collected on all of us all the time is stunning. And it’s it’s I mean, as Felix and I have talked about this, it’s like the financial. It’s like the 2008 opacity problem on steroids, because you’ve got data, you’ve got algorithms, you’ve got a very tiny number of experts that can even kind of deconstruct and understand what’s going on here. And, you know, I’m just bummed because I see a lot of complaints, but absolutely no action.

Advertisement
Advertisement
Advertisement

Speaker 4: Do you think there’s any possibility that the U.S. moves to more of a European style data privacy regime where that, you know, some of the stuff that we’re talking about wouldn’t be legal anymore?

Team Biden: You know, it’s a great question. And it kind of again, not to always bring it back to neo liberalism, but it sort of dovetails with the national security aspects of decoupling, which is something I’m worried about a little bit. There’s a there’s a group of people just kind of national security hawks, but also some Democrats that want to keep big tech big because they feel that that’s, you know, how you have to compete with China. These are Google is our national champion. Believe me, Google is nobody’s national champion. Google is about Google. Sadly, I think that with everything that’s going on right now in this sort of decoupling world, that these kinds of issues are going to take a backseat.

Felix Salmon: Follow up to Elizabeth’s question now. Where, what, three or four years? I can’t even count. Time has no meaning. After GDPR got implemented in Europe, has it done any good.

Emily Peck: Except all the cookies?

Felix Salmon: Like like all I hear about GDPR is a bunch of people complaining about how they need to make cookie pop ups go away by accepting or rejecting. Like what? What? Like what actual good is it done except making navigating the web more annoying, huh?

Team Biden: On the consumer side, I think you’re probably right. On an advocacy side, it’s actually created much more of a paper trail that is going to help people that ever want to have cases against big tech. So I think it’s good for antitrust action, but that takes a long time to go.

Felix Salmon: It has a sort of potential good effects some point in the future when there’s then when there’s like antitrust from the Europeans.

Speaker 4: Exactly. Okay. Exactly.

Felix Salmon: All right. Thank you very much.

Team Biden: Thank you. Thank you, guys.