Slate Money: Finance Blogger Reunion

Podcast: Slate Money
Air Date: August 7, 2021
Host: Felix Salmon
Guests: Stacy-Marie Ishmael, Cardiff Garcia

Episode Overview

In this special "Finance Blogger Reunion" episode, Felix Salmon brings together two fellow pioneering financial bloggers, Stacy-Marie Ishmael and Cardiff Garcia, for an energetic, insider discussion spanning the evolution of financial blogging, the recent tumult in Cuba, investment banking pay and incentives, and the state of bookstores—both independent and chain. True to their blogging roots, the trio chooses offbeat economic angles and dives deep, offering sharp, irreverent, and personal takes.

Key Discussion Points

1. The Blogging Era and Its Legacy

(00:00 – 02:33)

• Origins: The three guests reminisce about their origins as financial bloggers—Felix having contributed prolifically across platforms and Cardiff and Stacey as FT Alphaville alumni.
• Camaraderie Over Competition: Cardiff and Felix recall how, in the blogosphere, collaboration was often valued over competition:
  • “Bloggers didn't compete with each other, they iterated on each other. They fed off each other.” —Cardiff Garcia (02:21)
• Current Projects: Cardiff plugs his upcoming economics podcast, "The New Bazaar," emphasizing the continued spirit of independent inquiry.

2. What’s Happening in Cuba?

(03:33 – 14:13)

The Spark and Spread of Protests

• In July 2021, widespread protests erupted in Cuba, prompted by severe shortages of food, medicine, and basic goods. The spark occurred in San Antonio de los Baños and spread nationally, becoming the largest protests in decades.

The Role of Social Media

• Internet-enabled mobile phones, introduced in 2018, allowed Cubans to organize on platforms like Facebook—specifically through groups like La Via de l'Amor:
  • “This specific series of protests started on Facebook… And immediately after the protest started, the Cuban state run company Etexa shut down access to the Internet.” —Cardiff Garcia (06:26)

Economic Collapse and Hyperinflation

• Cuba's economy faces multiple crises:
  • Tourism collapse during COVID-19 (loss of foreign currency)
  • Venezuela (key oil supplier) collapsed
  • Termination of the dual-currency system led to severe currency instability and hyperinflation, estimated at 500–1,000%:
    • “Inflation now is estimated to be at roughly 500 to 1,000%… That is genuinely actual hyperinflation…” —Stacey-Marie Ishmael (11:01)

Misunderstandings in US Discourse

• Misattribution of Cuba’s problems to the US embargo frustrates real experts:
  • “Probably that what’s happening now has a lot to do with the US embargo. It really doesn’t… What the actual Cubans are protesting here is the basic and kind of longstanding incompetence of the Cuban government itself.” —Cardiff Garcia (11:22)
• Recommendations for US policy: Easing restrictions on humanitarian aid, possibly improving internet access, and allowing more travel can help Cubans directly. Support for lifting the embargo is seen as an American political football rather than a meaningful solution.
  • “I think the obvious answer is that you have a sort of a health care and a humanitarian catastrophe in Cuba. So one thing the US could do would just be to allow private aid channels to reach the island…” —Cardiff Garcia (12:40)

3. Investment Banking Pay and Incentives

(14:13 – 26:58)

Massive Salary Increases

• Entry-level Goldman Sachs associates' base pay jumped to $100–150k, partly catching up with competitors and responding to viral discontent over brutal hours (95+ hours/week).
  • “Amusingly, the response has been to throw more money at them instead of actually doing something about the lifestyle issues.” —Cardiff Garcia (15:24)

The Lifestyle Calculus

• The guests discuss the “implicit arrangement” of Wall Street: suffering through extreme hours is offset by high pay and future prospects.
• Cardiff calculates hourly pay for first-year associates (~$25/hour), less than the US average wage:
  • “If you actually take these analysts at their word… they are working 90-something hours a week and they're getting paid even at $110,000… in hourly terms, it’s a little bit below average.” —Cardiff Garcia (16:30)
• Many imagine a “two-year and out” strategy, but few escape the finance career ladder—opportunity cost and rising pay are hard to abandon:
  • “It gets really hard to get off that ladder once you’re on it because… spending all that time doing investment banking work doesn’t leave you with any time to develop any other skills.” —Cardiff Garcia (18:10)
• The Sell Side vs. Buy Side Dream: Investment bankers hope to become investors—“the promised land”—with higher pay and better hours.

Societal Impacts and Talent Allocation

• The group debates whether the smartest grads should be funneled into finance, echoing Adair Turner’s criticism of finance as “socially useless”:
  • “There’s the opportunity cost of a bunch of smart people entering what Adair Turner calls socially useless activities…” —Felix Salmon (21:17)
• Shift noted toward Silicon Valley and entrepreneurship, but finance remains a dominant (and risk-averse) aspiration.

Journalism as Banker Refuge

• Ex-bankers often find their way into financial journalism, but the group agrees that former bankers aren’t inherently better journalists.

The Hedonic Treadmill and Career Lock-In

• Once accustomed to high pay, shifting to a new field becomes financially and emotionally daunting—a “hedonic treadmill.”
  • “The opportunity cost of leaving your investment banking job just gets bigger and bigger the longer you stay.” —Felix Salmon (26:45)

4. The Bookstore Wars: Indies vs. Barnes & Noble

(26:58 – 38:59)

Cardiff vs. Stacey-Marie: In Defense of Big Chains

• Cardiff champions the revival of Barnes & Noble under James Daunt, highlighting its new, locally-empowered, independent-flavored strategy:
  • “He has devolved power to the local managers who run Barnes and Noble outlets. So… trying to mimic the independent bookstore approach, but with these really large retail outlets.” —Cardiff Garcia (29:12)
• Stacey-Marie remains loyal to independent bookstores, citing their community ties and role as cultural centers, despite being “fiscally ruinous.”

Felix’s Skepticism

Felix doubts Daunt’s Waterstones-based approach can work for Barnes & Noble given US retail geography and cultural differences:

• “My weakly held opinion… is that it doesn’t port… it’s going to be very hard for him to do a Waterstones in the United States…” —Felix Salmon (31:23)

Bookshop.org and Digital Resilience

• Stacey-Marie explains Bookshop.org's innovative partnership with indies and enhanced web presence, especially post-pandemic:
  • “Their proposition is fundamentally that if you buy through us, we will not be the big bad, we will be the big good. And we will funnel some percentage… back to local bookshops.” —Stacey-Marie Ishmael (34:27)
• Felix notes a broader willingness to spend more in support of values—applies to media (like Substack) and local shops.
  • “There’s definitely been a move to saying, I think it’s a good thing… to spend that spare money in this kind of place rather than at the bigger, cheaper place.” —Felix Salmon (35:18)

Barnes & Noble’s New Place in the Ecosystem

• Cardiff argues for rooting for Barnes & Noble as a healthy competitor to Amazon and a “national retail outlet” for books—not the villain it once was.

5. Numbers Round

(39:09 – 43:24)

• Cardiff’s Number: $25/hour—the calculated hourly wage (assuming 90 hours/week, 48 weeks) for first-year Goldman analyst, which is less than average US hourly wage.
  • “Yes, you’re getting paid a lot of money… but in those early youthful years, you are trading away something for it.” —Cardiff Garcia (40:18)
• Stacey-Marie’s Number: 8.2%—Black American unemployment rate, lowest since March 2020 but partly due to workforce decline, not just job gains.
• Felix’s Number: $1.7 billion—Rihanna’s net worth, almost entirely from her beauty and fashion lines.

Notable Quotes & Memorable Moments

• On Investment Banking Exit Fantasies:
  “After the financial crisis there are all these stories… they were like, there was like a lot of smoothie carts that got started in whatever your last golden handcuff payment was before your company filed for bankruptcy.” —Stacey-Marie Ishmael (24:33)
• On Bookstore Manager Choices:
  “Some people, okay, prefer limited selections and crowded aisles... MFA grads need a place to work. I get it, they need a place to yell at you because you’re not reading the right philosopher. Don’t send me hate mail, it’s fine.” —Cardiff Garcia (30:21)
• On the Old Blogosphere Spirit:
  “This show should be labeled the Bloggers Inevitably Become Podcasters Episode… we all came up in the blogosphere.” —Cardiff Garcia (43:58)
• On Internet Access as Protest Fuel:
  “Cubans first got the ability to have mobile online plans in 2018… the protest started on Facebook… the Cuban state run company… shut down access to the Internet.” —Cardiff Garcia (06:26)

Important Segment Timestamps

• 00:00 – Introductions & reminiscing about the finance blogging era
• 03:33 – Cuba’s protests: origins, causes, and US misconceptions
• 14:13 – Investment banker salaries & lifestyle calculus
• 26:58 – Bookstore wars: the comeback of Barnes & Noble
• 39:09 – Numbers round: inflection points in pay, jobs, and celebrity net worth
• 43:58 – Reflecting on bloggers becoming podcasters

Tone & Style

• Conversational, witty, blog-like irreverence
• Smart, critical analysis tempered with personal anecdotes and gentle ribbing
• Concerned with systems rather than headlines: from Cuba’s monetary history to bookstore logistics
• Open skepticism and debate—no easy consensus, but mutual respect

Summary by section last updated: [August 7, 2021].