Slate Money: "Ab Roller with WiFi"

Date: August 31, 2019
Host: Felix Salmon (with co-hosts Anna Szymanski and Emily Peck)

Episode Overview

This Slate Money episode delivers a lively weekly roundup of major business and finance news. The main topics include Bill Dudley's controversial Fed op-ed, the IPO filings ("S-1s") of both Peloton and WeWork, and the fast-food media frenzy over the Popeyes Chicken Sandwich. The panel dissects each story with wit and candor, revealing the underlying business mechanics and cultural implications.

Key Discussion Points & Insights

1. Bill Dudley, the Federal Reserve, and Politics (00:17–10:57)

• Background: Bill Dudley, former NY Fed chair (ex-Goldman Sachs, FOMC), published a provocative Bloomberg Opinion piece suggesting the Fed should not cut interest rates to offset Trump's trade war—a stance that would have clear political overtones.

• The hosts recap how central banks have historically presented themselves as apolitical institutions, but Dudley’s suggestion inflames debate on the Fed's real and perceived independence.

• Key Metaphor: Emily likens the Fed’s role with Trump to parenting: even if a child (Trump) makes a mess, the "grownups" (Fed) still have to clean it up for the sake of the household (economy).

  “Donald Trump is a big child and he is making everything filthy with the economy and, like, the Fed just has to do its job and try and clean up the mess.” – Emily (06:42)

• Concerns Raised:

  • The risk of politicizing the Fed similar to the Supreme Court.
  • Historic examples where central banks acted with a political dimension.
  • Dangers in letting the Fed become an explicit tool to "punish" or "reward" political actors.

  "This fiction of high-minded public servant sitting on the FOMC and making technocratic decisions... is now from here on in going to be much harder to look at." – Felix (08:29)

Notable Quotes

• Felix: “Larry Summers said [the Dudley piece] was the craziest thing he'd read in like a decade.” (01:55)
• Emily: “The Fed just has to do its job and... try and clean up the mess.” (06:42)
• Anna: Drawing parallels to the ECB and the Supreme Court in terms of politicization. (09:04)

2. IPOs and S-1s: Peloton vs. WeWork (10:57–19:53)

• Trend Observed: Startup unicorns (WeWork, Peloton, Uber) filing to go public with mounting losses, but selling a story of high-margin core economics and future profits.

  "If this is such a great business, how come you're losing so much money? That's the thing which puzzles me." – Felix (13:11)

• Peloton’s Model:

  • High profit margins on bikes/treadmills.
  • Significant losses as customer acquisition costs ($1,300 per customer) outweigh current profits.
  • Challenges of fitness as a faddish industry with uncertain retention.

  “Peloton is basically like... an ab roller with WiFi.” – Emily (15:47)

• Critical Points:

  • Losses at Peloton are growing, not shrinking, as it scales—a red flag.
  • The business requires mass-market, long-term subscription retention, which is rare in fitness.
  • Abundance of home-exercise competitors, including much cheaper and/or free alternatives.

  “Their numbers really only make sense once you're starting to get to... millions and millions and millions of consumers.” – Anna (16:53)

• Industry Takeaways:

  • Exercise product fads have historically flamed out (step aerobics, Jane Fonda tapes, etc.).
  • Most gym/fitness companies profit precisely when customers don’t use their services.

3. Food Fad Frenzy: Popeyes Chicken Sandwich Hysteria (20:22–27:32)

• Story Recap:

  • Popeyes launches a chicken sandwich. A brief Twitter spat with Chick-fil-A ignites a viral craze.
  • Media and highbrow Twitter obsess over the sandwich, bringing in culture-war undertones.

  “As soon as Popeyes does this tweet, Twitter goes bonkers... they were tweeting about it with absolute love and adoration.” – Emily (22:15)

• Politics of Fast Food:

  • The rise of partisan food branding (Popeyes as a "liberal" alternative to Chick-fil-A).
  • Irony: Both use factory-farmed chicken and are owned by large conglomerates (Popeyes’ owner is 51% owned by 3G Capital via “Restaurant Brands”).

  “But people still like their [Chick-fil-A’s] sandwiches, so they eat the sandwiches but feel guilty. So I feel like Popeyes having this great sandwich now gives people a reason to abandon Chick-fil-A, which they felt bad about, and sets up a partisan chicken divide.” – Emily (23:49)

• Business Lessons:

  • Artificial scarcity and hype creation: Popeyes sells out of the sandwich, amplifying demand ("21st-century artificial scarcity culture").
  • Comparison to home-exercise products: “Which is the better business? …It's pretty obvious.” (27:09) – $3.99 sandwich > $2,000 bike.

Notable Quotes

• Felix: “This is the opposite. You have to understand the 21st-century artificial scarcity culture. Why do you think Supreme is such a big brand? It's precisely because you can't buy it.” (26:33)

4. Numbers Round & WeWork Details (27:32–31:44)

• University of Michigan’s Undergrad Enrollment: 30,318, including Sasha Obama. (27:36)

• WeWork S-1 Trivia:

  • Adam Neumann’s name appears 169 times (average for founders: 25).
  • Neumann was paid $5.9 million to transfer the “We” name to the company.
  • Leadership’s egotism, lack of board diversity.
  • Adam Newman's regulations (vegetarian policy), hypocrisy (private jet habit).
  • Panel skewer what they dub the “bro-tastic” culture.

  “Adam Newman was saving the planet by forcing WeWork to go vegetarian. And then it turns out he's got the biggest, like, private jet habit of anyone on the planet.” – Felix (30:46)

  “His wife is famous for saying that a big part of being a woman is to help men manifest their calling in life…” – Emily (30:19)

Memorable Moments & Quotes

| Time | Speaker | Quote / Moment | |---------|---------|----------------------------------------------------------------------------------| | 06:42 | Emily | "Donald Trump is a big child... the Fed just has to do its job and clean up." | | 13:11 | Felix | "If this is such a great business, how come you're losing so much money?" | | 15:47 | Emily | "Peloton is basically like... an ab roller with WiFi." | | 22:15 | Emily | "As soon as Popeyes does this tweet, Twitter goes bonkers..." | | 23:49 | Emily | "Popeyes... sets up a partisan chicken divide." | | 26:33 | Felix | "21st-century artificial scarcity culture. ...Why do you think Supreme is such a big brand? ...because you can't buy it." |

Important Timestamps

• 00:17 – Bill Dudley and the Fed’s political independence
• 10:57 – Peloton, WeWork, and the IPO/“S-1” loss-making startup trend
• 20:22 – Popeyes Chicken Sandwich media phenomenon
• 27:32 – Numbers round with WeWork trivia & Sasha Obama at Michigan
• 30:46 – WeWork’s “planet-saving” claims vs. private jet use

Episode Tone & Style

• Conversational, witty, informed by personal analogies and irreverent observations.
• Frequent references to recent news, pop culture, and deep dives into company filings.
• Blends humor with serious business journalism.

Conclusion

This episode exemplifies Slate Money's blend of sharp analysis and offbeat banter. The panel exposes the entanglement of politics and economics (Fed, food, and startups alike), unpacks the self-mythologizing of Silicon Valley unicorns, and lampoons our culture’s susceptibility to media and marketing frenzies.
Whether you want today’s hottest finance take, IPO red flags, or the anatomy of a viral fast food sensation, “Ab Roller with WiFi” delivers.