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- [00:10]
A
Hello. Welcome to the free Britney episode of Slate Money, your guide to the business and finance news of the week. There has been a bunch of news about conservatorship this week. So I, Felix Hammond of Axios, along with Emily Peck.
- [00:29]
B
Hello.
- [00:30]
A
And along with Stacey Marie Ishmael.
- [00:32]
C
Hello.
- [00:32]
A
Are going to talk about conservatorship. We're going to talk a little bit about the conservatorship of Fannie Mae and Freddie Mac, but honestly, you don't want to hear about that. You want to know about the conservatorship of Britney Spears. So we're going to talk about the conservatorship of Britney Spears. We're going to talk about Covax, the noble attempt to vaccinate the world, which failed miserably. And we're going to talk a little bit about why it failed. We're going to talk about Peter Thiel's Roth ira, which is much bigger than anyone ever imagined. It turns out that he's much richer than anyone really ever imagined. And in Slate plus, which you can subscribe to for just $1 if you want an introductory membership, we will talk about small businesses because a lot of them have opened over the course of the pandemic, much more than you might think. So all of that is coming up on Slate Money. So let's talk about Britney, the one and only Britney Spears, whose pop music I love, but who has been imprisoned in a conservatorship for the past 13 years. Stacey, what's up with that?
- [01:42]
C
Well, why we know about exactly what she's been going through is there was a trial this week in which she had an opportunity to speak directly to the judge in the court and the assembled media about what she's been dealing with for the past 13 years. And one of the, to me, more terrifying details that came out of that was her saying that she, in addition to not having any control over the ability to decide, like dance moves in her choreography, she also has no bodily autonomy. And she shared the fact that she has an IUD that her conservatorship, her guardians, her lawyers, her doctors will not let her remove, even though, as she said, she wants to get married and have another kid. And I think that that really seemed to be the fact that jumped out to people about this nebulous idea that, you know, Britney's been going through some stuff, it seems bad, her dad's in charge, we don't really know what's up has now really been made concrete in a way that it wasn't before.
- [02:39]
B
Yeah, it was explosive. We heard Britney speak for the first time in a long time, for 20 minutes. She was so worked up, the judge had to tell her to slow down a couple of times. And the details of this conservatorship are just. They're shocking to me that this is what happened in 2021. Essentially, Britney Spears dad had control over her money and her, as Stacey said, her personal, her body, her movement, where she goes. This is a woman making millions and millions of dollars in Las Vegas, performing at the highest level. And she says so many times in her speech, she says, like, I'm excellent, I'm amazing. I don't need to be told these things like I'm making money and supporting a team and yet have no control over my comings and goings over anything. It was frankly, it was just shocking.
- [03:32]
A
She is working for the people who she is paying, correct?
- [03:36]
B
Exactly.
- [03:37]
A
It's the exact upside down of how it normally works. And to be clear, conservatorships were never designed for this kind of situation. They were designed for people who are just incapacitated and literally incapable of looking after themselves. People make bad decisions. Grownups make bad decisions. Grownups are allowed to make bad decisions. That's what being an adult is all the time. Like, celebrities make bad decisions. Johnny Depp makes terrible decisions. And no one's saying, well, you know, what we should really do is put Johnny Depp into a conservative ship. Or like, if any celebrity needed a conservative ship to like make sure that they were not doing terrible things with their body, like, it would be Michael Jackson, it wouldn't be Britney Spears. But no one ever suggested that he should be under a conservative ship. Right. There's clearly a massive double standard going on here. And I'm fascinated by not only how it managed to get put in place 13 years ago, but how it has managed to perpetuate itself for so long. Because you can kind of see if there's some very temporary thing that she needs to get through, how a court could maybe, you know, sign onto that. But then having no exit strategy just sort of completely infantilizes her and is clearly harmful to her.
- [04:53]
B
I think part of it, and she mentioned this in her speech on Wednesday, is she says, at one point I didn't come forward in part because I didn't think anyone would believe me. And the last time she went before a judge and asked to be let out of the conservatorship, I think she told the judge some of these things, like the facts were known then and she wasn't believed or taken seriously. And it's hard to not think that her media Persona and her image, which definitely gender is a big component of that. The way people see her plays into the fact that people aren't believing her or taking her seriously. At least these people in power who had the control over her money and.
- [05:34]
A
Her body, including, by the way, most of the judges involved have been women, I think.
- [05:39]
B
Yeah. I was thinking what, Felix, what you said about the people who make money off of her were in control of her work instead of the other way around. And that seems to be like the crux of this. Like, the people doing this to her, their interest was just to keep the cash cow moving and like to keep taking advantage of this woman. I think there's something bigger to discuss there possibly about how Hollywood works and treats certain kinds of people, or the.
- [06:04]
A
Music industry in particular, has always been notorious for, like, abusing the artists and making sure that they have very little control over their own intellectual property. One thing that does jump out at me here is that Britney writes very few of her own songs. She's not sort of celebrated as a songwriter. She's this performer. And performers are never or very rarely given the same level of respect in the music industry that songwriters are.
- [06:34]
C
I've been thinking a lot about the disability rights angle on this and it's interesting to kind of, as we talk about this, because one of the things that's come up, and I remember reading a story for the first time by Sarah Luterman in the New Republic around the time that the framing Britney Spears documentary came out, which I think also jump started some of this conversation. And she made the point that this isn't a Hollywood thing, this isn't a music industry thing, this is a disability rights thing. And that one of the ways in which Britney's bodily autonomy and other rights have been taken away is under the guise of she is not capable of making decisions because she has experienced a mental health crisis and that she is somebody who has struggled with anxiety, depression, et cetera. And what disability rights activists and advocates have been saying is those standards are nebulous and can be imposed upon people with a sort of catch 22 situation where it's like, well, if you're fine, you don't need this, but if you need this, you couldn't possibly be fine. Right. And there's sort of no way for you to get out of it in that context. And I also saw analogies being drawn this week between elder abuse. The New Yorker had a story in 2017 that talked about this. And, you know, if we want to talk about the Hollywood machinery, there were allegations of elder abuse lobbied at the family of Stan Lee. Right. The kind of the comic book mogul. We've seen this in the context of Summer Redstone, where people were around him were clearly making decisions that enriched them. And those two situations were different in that neither Stan Lee nor Summer Redstone appeared to be anywhere near as fully aware of what was happening to them as Britney Spears was in that testimony this week.
- [08:24]
B
Yeah, it seems like thinking about what you're saying, the conservatorship stigmatized her even more. And then there's like a spiral where, yeah, people aren't believing her because why would she need this if she didn't need this? So. Because she needs this. Nothing she says has any credibility and she never gets out of it. And she says, I'm just so angry when she's speaking, which was very relatable. And like, the more angry you get, especially if you are a woman, the less seriously you're gonna be taken. So it's just a nightmare that you become trapped in this endless cycle.
- [08:56]
C
And she talks specifically about that. Right. She talked about the fact that when she challenged a single move in a choreographed act that she had been putting together that was reported up as, oh, she's being non compliant, she's not following the terms of her conservatorship, there were allegations that spiraled into, well, you're not taking your medication. You can't be trusted. This is just another example of, like, why we have to do this to you for your own good. And that rhetoric is really similar to how we often talk about and down to people with other kinds of disabilities, like, you couldn't possibly know what's good for you, so you have to trust the benevolence of the state or your custodian.
- [09:38]
A
We have been so bad as a society at dealing with mental health, mental health issues and giving people with mental health issues any kind of agency. And it's always been a very shameful thing. And I'm reminded of the Queen's cousins who are like incarcerated in some terrible mental health facility and never talked of and just like being this sort of shameful family secret instead of something that people ever felt comfortable talking about. And I do think that is a big change between 13 years ago and now that people are much more comfortable being open about. This isn't illness. Lots of people have illnesses. Illnesses are treatable. They can get better, they can get worse, and we can try and address them. In a way that minimizes the amount of shame involved. And I'm hopeful that this petition will be granted and that Britney's life will no longer be controlled by her father. And that part of the reason why, like, 2021 is the time that this is going to happen is because that something has changed in the way that we think about mental health.
- [10:47]
B
Especially after this year, right? This past year, when everyone's mental health was sort of pushed to the edge of what is possible. And for the past 10 years, I mean, Britney Spears also talks about this in her speech. She's like Miley Cyrus when she. She says something like, miley Cyrus smokes joints on Stage at the VMAs and no one cares. Everyone gets away with everything now. And she's just like, what about me? But it's been remarkable to watch the change happen in the culture where, I mean, I'm not saying everything's great now and mental health issues aren't stigmatized, but it seems like we've moved on to a little more of an enlightened look.
- [11:22]
A
At what's happened with Kanye, right, who's very open about being bipolar. And everyone's like, you know, I think he's treated in a sort of respectful way as a absolute, like, musical genius who also struggles with serious mental health issues. And that is obviously bad for his marriage and stuff. But no one's suggesting that, like, the solution here is some kind of court orders, incarceration, or conservative ship.
- [11:49]
C
You know, let's talk about why that was okay for Britney, right? Because one of the other things, one of the other conversations that was sparked in the aftermath of the Britney Spears documentary was how the media treated her and other kind of woman performers across Hollywood and music. And that we had this entire industry led in part by tmz, that anything that Britney did, like when she shaved her head, anything that looked like a breakdown was very much specifically and deliberately stigmatized. And all of those things were used as evidence against her, right? There was the. Well, look, the media is saying that you're out of control and you need help. Like, we're gonna put that in our little. Our little file as evidence for why that is. And so public attitudes, to your point, Felix, do matter a lot here. I don't know if they will be able to retroactively help her, right? And I think there is a different kind of accounting that has to be done on the ongoing silence of a lot of mainstream media on disability rights and mental health and access, beyond, you know, kind of outright parody in a Lot of cases.
- [12:56]
A
It does remind me a little bit of Chrissy Teigen's recent apology about, like, how she was piling onto various, like, young women who didn't deserve it at the time. It definitely happened to, you know, Lindsay Lohan. It definitely happened to Taylor Swift. There is something about. About the way in which the media sort of asks incredibly inappropriate questions of young women when they become famous and then drives them into a place where they can then get torn down for being named or sin.
- [13:27]
C
It's the, like, woman in the attic syndrome.
- [13:29]
B
Yeah. I mean, the media is a reflection of the culture, and I think.
- [13:34]
C
And we shape it.
- [13:34]
B
Yes. And especially for Britney, we shape her story and played a role.
- [13:38]
A
I didn't cover Britney, but I did watch that documentary. But there was this just absolutely cringe interview she did with Diane Sawyer where they were like, so what did you do to Justin Timberlake to make him break up with you?
- [13:53]
C
Oh, do not get me started on Justin sodding Timberlake. And that statement that he put out when he was also a person who kind of contributed to the narrative about her. I mean, there's so much revisionist history happening here. It is wild to watch in real time.
- [14:07]
B
Like you were saying that women aren't allowed to have mental health issues publicly. Like, they just operate in a smaller box in our. In the culture. And if they go out of the box, it's, like, really bad. Yes, it's good that Kanye wasn't stigmatized for mental health issues, but, like, historically, men are allowed to go out of the box. They're allowed to get a little angry. They're allowed to get a little crazy. And everyone's, oh, they're just eccentric and brilliant geniuses. But like Britney Spears, no one was ever like, she's a genius. Look at her going crazy. Like, she's such a brilliant mind. That's just not really allowed for certain kinds of people, I think. And that plays a role. And I think that's so internalized too, because she said something about she tried to be so pretty and so good when she was in the conservatorship, as she was also angry. And I just feel like, who can't relate to that? You're trying to keep it all kind of together, even though you have every right to be, like, screaming at the top of your lungs. You know what I mean? You have to just play the part. And she even posted on Instagram on Friday saying she's apologizing to people, saying, I'm sorry I didn't say anything before. Like, as if it's, like, her fault, it's just like blaming herself and then saying, you know, I'm not used to. I'm used to pretending like nothing's wrong. That's what my mother did. That's what we do. We pretend nothing's wrong. We just put on a happy face. We don't have public breakdowns. And if we do, that's, like, bad. And then they lock us up.
- [15:25]
A
I do remember when she announced her residency in Las Vegas. I was very excited and I wanted to go see her, and I never did. And I'm very happy now that I never went to see her because with hindsight, that would have been just like eating the machine, you know, it's like going to see the captive animals at the circus performing for an audience against their will. It's just, like, absolutely terrible.
- [15:47]
B
It's like Black Mirror.
- [15:48]
C
I was thinking, too, about if you think about the lyrics to Lucky and just how sad that song actually is, because it's her performing a character who's actually Britney Spears and talking about, if she's so lucky and she's a star, then why does she cry herself to sleep every night? You're just like, ugh, right there.
- [16:19]
B
So what do we think of conservatorships? P.S. i know you said they're not supposed to be like this, but we hear a lot of horror stories. Are these actually good things? Is it typically like a loved one helping a loved one and they're not helping the money machine person in their life and it's fine? Like, I don't need to worry about conservatorships is what I'm asking.
- [16:37]
C
I will say from a mental health perspective. I've had multiple conversations with people who've told me that they will straight up lie to their therapists or their teachers or their doctors when asked certain kinds of questions because they're so afraid that they will be, for example, taken into involuntary commitment and, like, put in a mental health institution. And for some people, that starts them on a path to conservatorship. Their families might swoop in. There is a lot of ability to take advantage of people who are in a vulnerable position who might have less power. And while that is not necessarily an indictment of the notion of conservatorship as a whole. And, Felix, we can talk about financial conservatorship as well. It is very much a system ripe for bad actors. Right. And I think a lot of the more recent coverage, whether around elder abuse, whether around disability rights, has shown more of the, like, the industry of conservatorship that there are lawyers and doctors and institutions who specialize in making it really easy for people who might be saying that they care a lot about the folks involved to nonetheless profit at the expense of those folks.
- [17:49]
A
There was an interview in that documentary with a woman who's very much part of that industry and eventually wound up going to work for Jamie Spears, Britney's dad, who said that in her entire career she'd never seen conservatee someone under conservatorship successfully petitioned to leave conservatorship. It just doesn't happen. And Stacy, I mean to your point, there is a fascinating, weird parallel story going on here with Fannie Mae and Freddie Mac who are taken into conservatorship during the financial crisis in 2009 because they couldn't afford to pay their debts. Basically they're now controlled by the Treasury Department and the fhfa which is their regulator. And all of the shareholders in these companies who believe that own the company and have rights are just constantly being told by the courts. Actually no, it's just this conservatorship which can last forever, but no one's actually feeling sorry for them because they're shareholders in Fannie Mae and Freddie Mac. But there are interesting parallels here, right?
- [18:52]
C
It's the idea of you are, whether as a financial institution, a superstar or just a 92 year old, no longer fit for purpose and you need somebody to step in and take over.
- [19:04]
B
I feel like sometimes I criticize billionaires or other people, bad actors for being too self interested and acting always in their own self interest. But like being able to act in your self interest is pretty powerful. I don't want to give that up.
- [19:17]
C
Felix, your point about people never getting out of conservatorship? I was just looking up the FT Alphaville post from 2008 with the quote was the Federal Housing Finance Agency will manage the two government sponsored entities on a temporary basis. 2008, so interesting. Temporary, yeah.
- [19:37]
A
It was pretty obvious at the time that there was no exit strategy. And what was fascinating was the minute that Steve Mnuchin and the Trump administration came into power, they came out guns blazing saying we're going to appoint someone to run the FHFA who's going to take them out of conservatorship. We're going to stop this thing. We don't want them owned and controlled by the government. We're going to give them back to the private sector, we're going to give them back to their shareholders. And they were Very explicit about what they wanted to do and still it never happened because it's just so hard to do it well.
- [20:06]
C
Free Britney.
- [20:08]
A
Let's talk about Kovacs, because there's an amazing piece in the Lancet this week about how it was such a disaster. And I just want to sort of throw the softball to Stacey Marie Ishmael here and basically say, so when rich countries talk about getting together for the benefit of the planet as a whole, are they ever actually telling the truth?
- [20:33]
C
I know we're not on video, but I still rolled my eyes. Not as well as Emily. Emily's the best eye roller in the team. But what is Kovacs? Right? Kovacs was a mechanism that was effectively something between a mutual fund where the idea was rich companies would pay in upfront to facilitate the development and ultimately the delivery of vaccines in a way that would allow poorer countries, that is mostly the rest of the world outside of us, uk, Europe and Canada, to benefit from their goodwill and largesse. It was like, so mutual fund meet mutual aid. The reality is the mutual aid piece assumed a lack of selfishness, which in international relations has never proven to be true because.
- [21:19]
A
I think it assumed level of enlightened self interest, which didn't exist. The whole same thing. No, but this was it. Like when Covax was created, everyone was saying something which is absolutely true, which is that if you have a global pandemic, you need the solution to be global in order to address the pandemic. So long as you have the pandemic raging in countries like Brazil or India, the problem does not go away. It just keeps on getting worse. And we're seeing that right now with the delta variant, right, because we failed to get this pandemic, this disease under control in India, it wound up getting way worse there and creating a new variant there, which is now a major problem for the UK and will become a major problem for the us. And so the smart thing to do would have been to make sure that the people who needed the vaccine most, wherever they were in the world, got the vaccine first.
- [22:12]
C
And yeah, the smart thing to do globally, but all politics is local. And no, you know, UK and US politicians are not like, elected by dying Brazilians. And that's part of the problem, right? Where you had Canada, which gets a lot of undeserved credit, as the news headlines have shown us this week, for being supposedly the benchmark for that benevolent, self enlightened global, you know, preference was one of the worst offenders of negotiating a series of bilateral agreements. And also Taking what other countries perceived as more than their fair share of the Covax facility you had in the very earliest days of the Biden administration, when faced with the question of, hey, will you help Mexico by providing some vaccines to them, they were like, nope, absolutely not. Not until we vaccinated every single person in the United States with a preference for citizens.
- [23:06]
A
And to be very clear about this, the United States was sitting on a massive pile of AstraZeneca vaccine, which was approved by the FDA and was completely useless in the United States because no one was getting injected with the AstraZeneca vaccine. And even so, the United States was like, yeah, no, I think we want to sit on that just in case it might come in use for one day, even though it actually expires.
- [23:29]
C
It was wild. Right. And so what has happened as a result, I think, is in addition to the usual. And I think the Lancet piece did a good job of this, as everybody was like, well, what'd you expect? Rich countries? You've also seen some very savvy economic diplomacy from China and Russia because they have gone directly to various of the countries that were being underserved by Covax in the Caribbean and Latin America in particular, and said, we will get vaccines to you way faster and mostly for free than anything you can try to get out of Covax right now.
- [24:04]
A
And so mostly China, Yeah, the Sputnik vaccine has not really gone global in.
- [24:10]
C
The way that they had anticipated.
- [24:13]
A
But, yeah, like, Chile got basically fully vaccinated with the Chinese vaccine, which, sadly, is not as efficacious. Efficacious as the ones that we have here in the United States.
- [24:24]
C
But it is available. Right.
- [24:26]
A
And it's something it didn't do as much as we wanted to do. And clearly, Chile is much better off having its population vaccinated with the Chinese vaccine than if would be having its population not vaccinated at all, which is more or less what's happening next door in, say, Argentina or Brazil.
- [24:40]
B
I think one of you should say what Covax's goal was and how much it has fallen short.
- [24:45]
A
Yeah. To zoom back a little bit here, the big picture with Kovacs at the beginning of the pandemic was we don't know which vaccines are going to work, but we do know who needs the vaccines most. So what we're going to do is we're going to spend billions of dollars developing a whole bunch of different vaccines in a sort of collective way, and then whichever vaccines work out the best, we will collectively distribute them According to some sort of elaborate formula where the rich countries might get a little bit more than the poor countries in the.
- [25:18]
C
First instance, 50% to 20%.
- [25:22]
A
But poor countries would get the vaccine at the same time. And that would be the global mechanism whereby vaccines were distributed. And everyone kind of nominally signed onto this, except at the same time. It's very important to say the US government in particular and the uk, but mostly the US is by far the worst offender when it comes to this kind of vaccine nationalism. They were like, sure, we'll throw some money at Kovacs, but we're also going to very early on sign deals with Pfizer in particular and various others to make sure that, that we get first dibs on whatever they create. And we're going to put laws in place. And the EU did this as well and the UK did this, saying that if you make any vaccine within our borders, no matter what Kovac says, you're just not going to be allowed to export it. We're not going to allow that vaccine to leave the country. And so at that point, all the vaccine manufacturers basically had to let the US and the UK and then later the EU vaccinate their own citizens because the vaccine just wasn't allowed to leave the country. The EU let a little bit out, which is how Canada got the vaccine. Canada does not manufacture its own vaccine, but if you look at very rich countries like Japan and New Zealand, they have vaccination rates of 4 or 5%. It's not because they can't afford it. It's because the places where these vaccinations are being manufactured are just not allowing the vaccines beyond their borders. This is a really big issue with the Olympics that are coming up.
- [26:53]
C
Well, in addition to those laws, you also had the reality that, for example, India is a major vaccine producing hub for the world and one of the countries absolutely devastated by coronavirus. And that in addition to kind of like the mercenary effect that that has on supply chains, it's like India needs a lot of vaccines. Also, COVAX is 100 million vaccines behind its estimations for this stage of the coronavirus. I think one of the Lancet stats was they have only like Covax has only contributed to 4% of vaccines globally, which is way below their significantly more ambitious goals at the beginning of the pandemic.
- [27:32]
A
And you're the numbers are just to jump in with some actual numbers here. 2.1 billion doses of vaccines have been like gone into arms so far, of which 72 million have come from Kovacs.
- [27:44]
C
Correct.
- [27:45]
A
Covax wanted by this point to have 172 million. Meanwhile, 1.6 billion doses of vaccines were tied up in early contracts in the US and the EU and the UK in a way that basically ensured that they never found themselves getting exported to anywhere else. So there are orders of magnitude here.
- [28:08]
B
Related back to the Britney conversation. Self interest is powerful and nations rich ones are very self interested and I feel like it's not surprising and I guess my question is like, how are you supposed to correct for that?
- [28:22]
A
Because you're supposed to correct for that with self interest first.
- [28:26]
B
I wanna ask you one question.
- [28:27]
A
Okay.
- [28:28]
B
You're vaccinated. I think we all are vaccinated. Would you have waited if this plan had worked? It would have taken longer for you to get vaccinated.
- [28:36]
A
Correct.
- [28:36]
B
Are you okay with that? Would you have waited six more months?
- [28:39]
A
Well, it wouldn't have been up to me.
- [28:40]
B
Well, in all the countries, right. But aren't you glad you're vaccinated? Isn't part of you, if you're being honest, like glad the US is through it and vaccinated and aw that the country we acted in our own self interest and put our own interests first and therefore you could see your friends and family that much sooner. And like when you look at the map on the New York Times site and it's all light yellow, it feels good. Like that's hard to combat.
- [29:08]
A
I wanna say that, like ask someone in the UK that question. Right? What the United States is doing is it's vaccinating 13 year olds with vaccines that could be going into the arms of frontline medical professionals in India. And I'm sure those 13 year olds are very happy that they're vaccinated. But the fact is that in terms of the risks to Americans and Brits and anyone on the planet, what we really need is that vaccine going into the arms of frontline medical professionals in India because that's where the delta variant is raging and that is the real risk to the world, including all of us right now. And in case we didn't learn this the first time around back in March 2020, it's clear now, now that pandemics respect no borders. And if you want to attack a pandemic, you have to attack the pandemic wherever it is. You can't just pretend that it's a domestic problem.
- [30:02]
C
But Emily, the seed of your question very much relates to the idea of how you manage international institutions. Right? Because a 13 year old shouldn't have to care about someone else not being deprived of that access because the way that the system was set up was actually to make sure that deprivation was more equally distributed. Right. And to Felix's point, point, my getting the vaccine did not stop my family in Trinidad, who are still largely unvaccinated and who don't have access to that vaccine from getting it. And if I had the ability to control that, I would have probably taken different calculations because I know that I, as a person, while I might be individually in a high risk group, I can manage my contacts with the outside world. I don't have to see anybody. That's different for my friends and family who do have to see people as a function of their jobs. Yeah, put that individual agency on me and assume perfect information and, like, benevolence. And we can figure that out. But the mechanism for the international institutions is flawed in that it relies on what Felix described as that benevolent self interest. Right. Where the US and the UK and Canada should know that they are bordered by countries and that their borders are open to countries who will bring more strains of the pandemic in if they don't have equal access to those vaccinations. The problem from a governance perspective is that is an insufficiently strong incentive to counter the reality of, like, well, American voters are going to be mad if they feel like the UK's interests are sufficiently well served.
- [31:32]
A
And Justin Sandford had a really good piece about the role of the World bank here. And the World bank has been saying very explicitly, we need to get vaccines out to all of the countries in the world now, and it's urgent. And. And they had tens of billions, possibly over $100 billion at their disposal that they could have used to that purpose very early on in the pandemic. And they didn't. And on some level, the reason why they didn't is because the board of the World bank is dominated by the United States, which has veto power, and other rich countries. And for all that, they say that what they really want the World bank to do is help the poor or like, in practice, if that ever requires hobbling themselves in terms of something like access to vaccines, they don't do it.
- [32:18]
B
There's no question to me. Like, we talked about this back when the vaccines were rolling out, how we knew rich people would find a way to get them before everyone else, you know, by hook or crook. And rich countries too. Like, I feel like it's just so human to just want to, like, secure the supply for yourself. It's why we ran out of toilet paper. It's just. I don't understand. I guess I don't see how you work around that in a world that's built out of nationalism and countries, you know, humans.
- [32:45]
A
But Emily, but also look at what happened in the United States when we had a period of a couple months earlier this year when people could just basically self certify as having pre existing conditions which allowed them to get the vaccine even when they weren't like just by dint of their age eligible for it. You just needed to go up and say, I have high blood pressure. And then boom, you get the vaccine. And what was really impressive to me was that, yeah, I'm sure there were one or two people out there who lied about that and just said that they had high blood pressure and got the vaccine because they really wanted to. But the overwhelming majority of people didn't lie. They were totally honest and they were like, I really want the vaccine. I am desperate to have the vaccine, but I understand that it is right and proper for the people who need it most to get it first. And people more or less stood in line and waited until they were elected, eligible to get the vaccine. And even up to, and Stacy's rightly been critical of Canada here, but like this happened in Canada as well. Like, you know, the top members of the government there like waited their turn until it became the right time to take the vaccine. There were people who jumped the line and who got in trouble for that. But I think that happened much less than maybe we might have expected.
- [34:05]
B
I don't think that disproves my point though, though. It's like rich people don't pay taxes, but most people do.
- [34:11]
A
You know what I mean?
- [34:12]
B
I don't cheat on my taxes.
- [34:13]
C
But we gotta talk about that.
- [34:14]
B
We'll talk about that story in a second.
- [34:16]
A
Are we gonna talk about Peter Thiel? Because, yeah, we need to talk about Peter Thiel.
- [34:20]
C
Oh, yes. What a segue.
- [34:23]
A
No, we should. Let's talk about Peter Thiel. This was part of the great trove of tax data that ProPublica managed to find. And he has this Roth IRA, which he set up with, I think, $1,700. It was definitely less than $2,000. When he founded PayPal, he managed to persuade his accountant that his income that year was less than $110,000 or whatever the limit was for being able to open a Roth ira.
- [34:48]
C
I'm sure that wasn't very hard.
- [34:49]
A
And so he put a bunch of shares of PayPal into his Roth IRA and decided they were all worth, like A hundredth of a penny each because he was the founder and he could just declare that. And even though PayPal immediately then turns around and raises $50 million from investors who paid a hell of a lot more than that for the shares, and then he somehow contrives to use the umbrella of this Roth IRA to grow that $2,000 into $5 billion of. He basically pulled the same stunt three different times. He did it with PayPal, he did it with Palantir, and he did it with Facebook. And he has just amassed this insane fortune, which is because it's part of a Roth ira, never taxed.
- [35:39]
B
Well, wasn't he just a thrifty little guy just stashing his money away? It really is an inspiring story. I saw a tweet, guys. I saw a tweet from some bitcoin billionaire who basically said something along the lines of, look at Peter Thiel. He stashed away just a few thousand dollars in his IRA and got it to grow through prudent stock picking. And imagine the tweet said it was a thread. And imagine if he had been smart enough to actually invest in bitcoin.
- [36:11]
C
I will murder someone.
- [36:12]
B
But I feel like, because when I kind of read about it, I was like, well, how can I get in on this scam? Kind of a little bit. I think there are people who will read the ProPublica story and go directly to their financial advisor and be like, I want this.
- [36:27]
C
How can I start PayPal?
- [36:28]
B
Yeah, but I don't think that the scam is. That is not possible.
- [36:31]
A
The scam is something that we knew about out from when Mitt Romney was running for president because Romney did the same thing. He put like highly leveraged shares of companies in his Roth IRA and he wound up with a $30 million tax free retirement fund. And yeah, it's really bad. The one that really stood out at me.
- [36:49]
B
Wait, why is. But why is it really bad? They were exploiting the law, right? I mean, why is it bad?
- [36:55]
C
Feeling it speaks to the failure of the law from a non moral judgment perspective.
- [36:59]
A
Yeah, let's be clear about what, what IRAs in general, Roth IRAs, 401ks, all of these things are at heart, they are what's known as tax expenditures, right? It's the government spending a lot of money in the form of foregone taxes to try and incentivize people to save for their retirement. And that money could be used in lots of other ways and it isn't. It's a real expense of the government and, and the benefits of that money go overwhelmingly to the upper middle classes who can afford to save for retirement. So it's already a regressive sort of form of government expenditure because the people who max out their 401s are kind of the last people who we need to worry about when it comes to retirement security. But now it turns out that it's not just your sort of doctors and lawyers who are maxing out their 401s and getting this tax benefit. It's also the ultra rich. It's also the Peter Thiel's and Mitt Romney's and Ted Weschlers of this world who are getting not the benefit of not paying taxes on the $14,000 a year that they put into their 401ks, but are getting tax benefits worth millions, tens of millions, hundreds of millions even in the case of BTT or billions of dollars. This is a US tax expenditure. This is money that should be coming into the public fisc that isn't. And that I'm sure Peter Thiel, when he saw this article in ProPublica, did a little jig of happiness. He is proud of this. This is the kind of thing that he's like, I managed to get one over on the government. This shows how smart I am. But it just makes no sense at all from the point of view of public policy to be spending so much money on people who absolutely don't need.
- [38:54]
B
So there needs to be a policy fix here. Because what he did, although the dodginess of pricing the shares at 1/100th of a cent or whatever, you could look into that, but what he did was okay within the bounds of the policy. So you need to fix the policy, right?
- [39:09]
A
We don't know. You would need to audit the valuations and stuff. But if you look at someone like Ted Weschler, what he did was clearly okay, right? He only invested in public stocks, in public companies and he converted his normal IRA to a Roth ira. There's a bunch of technicalities that are going on there, but like the thing that jumped out at me, he just had a normal IRA right in. This is the guy who's now number two investment manager at Berkshire Hathaway underneath Warren Buffett. But in 1989 he had an IRA with $70,000 in it. By the time he then got a new job, he rolled that over into a Charles schwab tax free IRA account account and just started investing that $70,000 in the stock market, buying this stock, selling it after it went up, buying some other stock, blah, blah, blah. By 2012, he had managed to turn that $70,000 into $131 million.
- [40:06]
C
Now, to be clear, that is good stock picking.
- [40:09]
A
That is a level of stock picking that is just beyond amazing. If you put that $70,000 into Berkshire Hathaway, I did the math here. It would have been worth about 1 million. If you put it into Microsoft, it would have been worth about 3 million. If you put it into Apple, it would have been worth about 4 million. He made it worth $131 million.
- [40:30]
B
That's aspirational stuff. Like, I'm just like, how can I get a better wealth advisor? What can I do? Can I have, Can I. Is it too late for me to do this? I know it's bad and wrong, but like I want in. I'm very selfish today.
- [40:42]
C
But it's not necessarily bad and wrong.
- [40:44]
B
Right.
- [40:44]
A
It's just that why should it be tax free? That's the only question. And in fact, because that was a regular ira, he did actually cash it out, turn it into a Roth IRA, he paid $28 million of taxes. And so we can't be too upset about him. Since then it's been growing completely tax free. And yeah, there is a very easy fix for this, which is just to say the money we are spending to encourage people to save for retirement. Yeah, yeah, let it be tax free. Up to like 1 million, 2 million, I don't know, $5 million. Come up with some massive amount of money. But after a certain point, there is no reason to continue to spend money to subsidize gazillionaires.
- [41:27]
B
Yeah, they should just spend the expenditure on those retirement accounts, use it for Social Security, which is a very good thing that we have that actually works and could use. Everyone could use just higher Social Security benefits. Then you wouldn't have to worry about all these shenanigans with 401ks because regular people could know that they could just live on their Social Security when they retire.
- [41:48]
A
401S are up there with mortgage interest deduction and stuff like that as these tax laws that are aimed squarely at the rich. And this is just one example of just how, how much the rich benefit from these tax laws of many.
- [42:07]
B
I mean, come on, there's no more pensions and there's not enough Social Security to support you in your retirement. So like you have to do something like it's kind of just like a bogus system. I get that rich people benefit from it, but like there are middle class people who need stuff too. Right, right.
- [42:24]
A
So that's why I was saying, like, allow the middle class people to benefit up to a certain level.
- [42:28]
B
Okay.
- [42:28]
A
But don't let it. Don't keep it. Uncanny.
- [42:31]
C
Yeah. And I'm. To your point, Emily, I'm very interested in, and I think I said this when we first talked about this ProPublica series. I'm very interested in understanding ways in which the tax system could also benefit poor people. The people who file who. Whose income thresholds are so low that they qualify for free tax filing and. But don't know, first of all, don't know about that. And so pay, because Intuit has very good lobby and who look at all these other deductions that people qualify for but are unaware of the ones that they might. Right. Like everything about the implementation of the tax code skews to the benefits of people who, from a marginal perspective, need that money less.
- [43:16]
B
Yes. So true. 100% correct. Everything's made complicated. You have to pay for people to tell you what to do with your money. And if you're poor, you don't have the money to pay for people to tell you what to do with the money or get the benefits that you need. It's just so. It's just. Just rich people just accrue more money like they're magnets or something.
- [43:32]
A
I think it's time for a numbers round. Stacy's excited about this. I'm going to start off with a rich person number, which is 375, which is the ratio between the expected valuation of Buzzfeed, which is $1.5 billion, and the amount of money that Buzzfeed actually made last year, which. Which is $4 million. When it goes public, if it gets the valuation it wants, it's going to be trading on 375 dimes. 2020 earnings, which. What's fascinating if you look at the deck is that it basically says nothing at all about how much money BuzzFeed might have made or lost or brought in its revenue or anything any year before 2019. The entire 15 year history of Buzzfeed is completely invisible to investors. All they have to go on, because this is a SPAC and not an S1, is amazing projections about how it will be bringing in a billion dollars in 2024, which, if you believe that, you should probably buy the stock, I guess.
- [44:36]
C
Congratulations to Jonah.
- [44:37]
B
Really great news, who, by the way, so happy for those guys.
- [44:41]
A
Peter Kafka just reported this week that Jonah is also, by the way, classic rich person stuff. He is also going to make sure that he has control over the company through dual class share structure, so that even if he owns owns only a small percentage of that $1.5 billion of stock, he will still control the company.
- [44:59]
B
So great for him. I'm sure he'll do well no matter how BuzzFeed does.
- [45:03]
C
Congratulations to lawyers. Speaking of rich people, we do a lot of that, don't we? My number this week is 3.6 billion, which is how much bitcoin vanished in South Africa after these two brothers peaced out. So they set up a crypto investment platform, they raised all of this money, and now they have gone completely dark. It was called africrypt. And these two brothers, a couple of weeks ago, or actually back in April, sent an email to their investors and like, we've been hacked. But please don't tell anyone because we don't want any media attention because that will slow down our ability to get your money back. Turns out they have not been hacked. They have merely gone spectacularly mia.
- [45:54]
A
Wow.
- [45:55]
B
Wow. We've been hacked is the new excuse then.
- [45:58]
A
The classic place to disappear to if you want to make sure you don't get extradited, historically, especially for Americans, has been Namibia. But I feel like if you're in South Africa, you're going to fight. They're probably going to go somewhere that isn't Namibia.
- [46:11]
C
Yeah. Cayman Islands. Islands. Very, very pleasant this time of year.
- [46:15]
A
Or the other. The other one that I think, like, it was always like, Panama or Lebanon, places like that. I don't know what the new country is that you go to. I feel like Panama and Lebanon are not quite as attractive as they used to be.
- [46:28]
C
I will invite any of the tax shelter specialists listening to this episode to tell us what the new country is, the new hot country for this kind of behavior.
- [46:37]
A
I mean, I feel honestly that it's Russian. That's where the rich people disappear off to and know that they can never get extradited.
- [46:44]
C
But that's also where they disappear.
- [46:46]
B
Yeah, the disappear part plays a. That's a word. Doing a lot there.
- [46:50]
A
As long as you don't piss off Vladimir Putin, he'll, you know.
- [46:53]
C
Yeah, that's low risk.
- [46:54]
A
Pay him a bit of money and he'll leave you alone. I don't know. Emily, what's your number?
- [46:59]
B
My number is 11. That is the number of J1 cultural exchange visas issued to Romanians in April 20211 11. And that's compared to 2353 visas in 2019. And why I'm telling you this is because everyone's talking about the shortage of workers right now. Restaurant workers. Right. So this economist, Diane Lim, she put out a paper this week where she looked at why restaurants are struggling to hire workers and where that's happening, where the shortages are the worst. And one of she looked at at like resort towns that are like booming in the summer and need more people than usual to work in the restaurants. Typically, these cultural visas are used. Romanians come, people come from all around different countries come to work temporarily in these places. Usually hundreds of thousands of these visas get issued. But because of COVID they're not doing those and those workers aren't available. And that's one of the reasons there's this worker shortage. And so it's not really like this unemployment insurance issue that conservatives like to harp on, but it's immigration. These towns aren't places where there's already labor supply in the first place because they're, you know, fancy places. There's not a lot of people who need that kind of work. So just kind of an interesting little thing that's happening.
- [48:20]
A
Yeah, The J. The J1 visa is absolutely one that was used for that. And you can see, given immigration restrictions during COVID what I thought to get that visa these days. The other one that's worth mentioning is the H2 visa. Right. Which is the agricultural workers who was overwhelmingly used to come in from like, Central America and Mexico. And that's gone basically down to zero as well. And this has completely transformed American agriculture this year.
- [48:50]
B
And yet I feel like there is not a clamor around this. There's no clamor being like, get the immigrants back here in this country. It's never like that. It's stop giving poor people money. That's the story.
- [48:59]
A
It's almost as though what we needed is like Covax to make sure that the immigrants vaccinated and then it would have been fine.
- [49:07]
B
That's true. Okay, there you go. All right.
- [49:09]
C
That makes Texas has just used the immigration at the border to give Governor Abbott, like, more emergency powers to build a privately funded border wall. So the rhetoric is inflammatory in the opposite direction.
- [49:23]
B
Well, that's why you're waiting a long time for a restaurant. A seat at the table at the restaurant, Mr. Abbott.
- [49:29]
C
Well, that and because all your workers died. So it's going great here.
- [49:33]
A
And because the restaurants don't actually want to serve you in Austin. So many thoughts. We're going to talk about small business and, like, why so many of them seem to have been created during the pandemic in Slate Plus. But other than that. I think that's it for Slate Money this week. Thank you very much to Justin Molly for producing from Seaplane Armada. And thanks, all of you for, for writing in slatemoneylate.com we love the emails. And we'll be back on Tuesday with more Slate Money Goes to the movies. Stacey Marie Ishmael is very excited to listen to Slate Money Goes to see Magic Mike on Tuesday, the great Steven Soderbergh disquisition on modern capitalism that it is. We have the incredibly special and wonderful Shane Farrow coming on, talking about that. And then, yeah, back with another Slate Money next Saturday. See you then.