Slate Money – "Banana Disruptions" (April 4, 2020) – Episode Summary

Overview

The "Banana Disruptions" episode of Slate Money, hosted by Felix Salmon with Emily Peck and Anna Shymansky, dives into the chaos facing American business and finance as the COVID-19 pandemic hits. This week, the team analyzes the rocky rollout of the $350 billion small business stimulus, the massive market impact of President Trump's tweets on oil prices, and how supply chains for everyday items like toilet paper and bananas are unravelling in unexpected ways. The hosts also discuss the shifting landscape for unemployment insurance and paid sick leave, providing a snapshot of how current policies are (and aren't) supporting workers and businesses.

Main Topics & Key Points

1. The Small Business Stimulus Rollout

Timestamps: 00:00–15:10

• Central Issue: The $2 trillion US stimulus bill featured $350 billion for small businesses, structured as "forgivable loans" if payrolls are maintained—a "grant dressed up as a loan" (Felix Salmon, 01:12).
• Rollout Problems: Banks were unprepared: "By Thursday, banks were going public with their complaints saying they haven't gotten enough guidance to know how to actually do this...There's a lot of confusion" (Emily Peck, 02:11).
• Eligibility Confusion: Only businesses with prior borrowing relationships at certain banks could apply easily (03:47).
• Structural Problems: Anna observes, “The government wants to give out grants, but it can't say it's giving out grants. So it pretends it's giving out loans that are then going through private banks. But private banks aren't in the business of giving out grants” (Anna Shymansky, 04:19).
• Underlying Challenge: Banks have limited balance sheets and little incentive to make the loans, especially as these are not typical, profit-generating loans and are complicated by uncertain government guarantees (Felix Salmon, 04:52–06:02).
• Why Not Just Direct Grants?: Emily asks why the government doesn't just pay businesses directly. Felix explains that banks, not the Federal agencies, have the data and but acknowledges the fundamental complexity and fragmentation of US government agencies (06:55–09:13).
• Comparison to Other Countries: In places like New Zealand, governments simply deposited cash into business accounts—far simpler, but "I just cannot imagine how that would even be possible in the United States" (Felix Salmon, 09:28).
• Deeper Cultural Hurdle: Anna notes the US preference for channeling aid through private institutions, "which in this instance...is in fact not the right thing to do" (10:03).
• Contingencies: Only businesses that keep most employees on payroll get loan forgiveness. Felix doubts it will work well: “This is a complete disaster. I'm not saying that this is going to work out...” (12:59).
• Unemployment Disarray: Millions out of work or unable to access enhanced unemployment. Existing systems are overloaded, with delays in the strengthened benefits for gig and part-time workers (Emily Peck, 14:30).

2. Trump's Oil Tweets and Market Mayhem

Timestamps: 15:10–26:54

• Most Market-Moving Tweet Ever?: Trump tweets about production cuts after a call with Saudi and Russian leaders, causing a historic spike in oil prices (Felix Salmon, 15:10).
  • "In terms of the dollar value of assets affected, this is the most market moving tweet in the history of all time" (Felix Salmon, 17:26).
• Oil Market Background:
  • "No one's going anywhere, therefore, no one needs any of the oil. But...Saudi Arabia and Russia have decided to make more oil, to do more oiling" (Emily Peck, 17:54).
  • "The way that we are fighting the virus is by stopping moving...the number one job of oil is to move people" (Felix Salmon, 21:13).
• US Oil Producers' Problem: Expensive to cap wells; even when unprofitable, producers keep pumping to cover debt (Felix Salmon, 20:29).
• Conspiracy Theories: Did insiders profit from the tweet? Oil prices started moving minutes before, but "the price...moves for any or no reason all the time" (Felix Salmon, 24:24). Anna: "I think it would be very hard for the conspiracy theory here to actually work. I'm not saying it's impossible, but it's close" (24:00).
• Trump's Role: He is seen overtly trying to buoy markets by any means: "It does seem like that's what he...that's all he's good for is like trying to move the stock market with his tweets" (Emily Peck, 26:41).

3. Supply Chain Disruptions – Toilet Paper & Beyond

Timestamps: 26:59–33:38

• The Great Toilet Paper Shortage Explained:
  • Will Oremus’s theory: Everyone at home means sharply increased home toilet paper demand, but supply chains are built for predictable usage split between commercial (offices) and residential (homes) markets.
  • "There are two supply chains of toilet paper in the world...You can't cross the streams" (Emily Peck, 29:14).
  • "You get these massive rolls...which are kind of crappy toilet paper...That's not what people buy at home. You know, it's a whole different product." (Felix Salmon, 29:55)
• Broader Context: The two-supply-chain phenomenon is evident in food systems: items meant for restaurants can't just enter supermarket supply. Felix notes, "Similar things have been said about food...you can't redirect all of those burgers from McDonald's into Westchester homes" (31:07).
• Personal Observations: Grocery prices are spiking, pantry goods are scarce, and even Brooklyn may be swimming in (low-quality) TP, highlighting variability in local impacts (Anna Shymansky, 30:27, 32:25).

4. Numbers Round: Cruises, Sick Leave, and More

Timestamps: 34:18–39:58

• Carnival Cruise Debt: Anna: Carnival Cruise pricing new debt at 12%—shocking for an investment-grade company, but reflect crisis uncertainty (34:21).
• Bookings Post-Lockdown: Felix: 81% of September-onward cruise capacity for UK’s Saga is already booked—maybe we’re wrong to think post-pandemic travel won’t bounce back (34:52). Emily and Anna debate if it’s rebooking inertia or real optimism.
• Paid Sick Leave Failures: Emily: "9 million...is the number of healthcare workers that are being left out of the paid sick leave provisions...the Labor Department just went wild in defining what a healthcare worker is to the point where it's anyone who works any place that is even remotely healthcare. Ish." (38:05). She laments that those most at risk are excluded from relief—"on the scale of cock up to conspiracy, we're leaning conspiracy here" (40:44).

Notable Quotes & Moments

• On the PPP Chaos: "It's just another mess. The government, you know, tried to do something quickly and pass this multi trillion dollar stimulus, but getting this urgent relief out is proving to be...a mess so far." (Emily Peck, 02:11)
• On American Reluctance to Direct Payments: "I just cannot imagine how that would even be possible in the United States." (Felix Salmon, 09:28)
• On Structuring Aid as Loans: "Making it this complicated is so signature America." (Emily Peck, 11:22)
• On the Underlying Purpose: "The whole point of this program is to keep employees on payroll...if you just gave the small businesses money, it wouldn't achieve that purpose." (Felix Salmon, 11:44)
• On Oil Demand: "The number one job of oil is to move people." (Felix Salmon, 21:13)
• On Supply Chains: "It's not that the products themselves don't exist in sufficient quantities. It's that the supply chains we have set up...that is the issue." (Anna Shymansky, 33:38)
• On Excluded Healthcare Workers: "It's particularly galling because who is even working outside their homes right now besides these healthcare workers who are on the front lines...and they carve out this big exemption for them." (Emily Peck, 39:28)
• On Post-pandemic Psychology: "So many people have now had deeply ingrained paranoia about touching anything that anyone else has touched or being near anyone...I don't see it happening." (Felix Salmon, 36:43)

Structure & Flow

• The hosts maintain their signature blend of informality, deep expertise, and quippy banter (“doing more oiling”).
• Emily consistently challenges and clarifies technical points; Anna brings policy/banking insight; Felix ties themes together and adds context.
• The episode moves briskly from technical finance issues (PPP, oil) to relatable real-world disruptions (toilet paper, groceries) and ends with thoughtful, sometimes emotional, reflection (healthcare workers’ plight).

For Listeners Who Missed It

"Banana Disruptions" tackles how well-intentioned stimulus policy can run aground on America's fragmented bureaucracies and banking system. The hosts illuminate why small business relief was so confusing and so slow, how supply chains for essential goods are more fragile than we thought, and how even a single Trump tweet can jolt world markets. The show’s sharpest moments are when host skepticism highlights gaps between political promise and economic reality—especially for workers still left out in the cold.

If you want to understand why there’s still no toilet paper, why your favorite bakery can’t get flour, or why small businesses are panicking despite trillions of dollars in stimulus money, this episode connects the dots—and makes you laugh along the way.