Slate Money Podcast Summary

Episode Title: How is Boeing Okay?

Date: May 2, 2020
Host: Felix Salmon (A), with Anna Shymansky (B) and Emily Peck (C)

Overview

In this episode, the Slate Money team tackles the surprising resilience of Boeing amid colossal challenges, discusses the reopening of parts of the U.S. economy after COVID-19 lockdowns, examines why big businesses seem to be surviving while small businesses are struggling, and critiques the relevance and limitations of GDP as an economic measure during the pandemic. The hosts engage in a lively, insightful conversation—with notable moments of humor and skepticism about both policy and economic fundamentals.

Key Discussion Points and Insights

1. The Challenge and Reality of Reopening America

• State-By-State Reopenings:
  • The U.S. is roughly half reopened, with states like Texas allowing limited in-person dining and theater attendance, but major systemic questions remain.
    • Felix (A): "You can go to a restaurant and sit down and have a meal under certain restrictions... We will start seeing a bounce back in the beginning of the summer. And now I guess it's the beginning of the summer in Texas." (01:16)
  • Ongoing issues: Insufficient testing, inadequate consideration for employees’ safety and childcare, and a fragmented state-level approach due to federalism.
• Employee Safety and Childcare Concerns:
  • Workers are pressured to return (risking unemployment benefits otherwise), often without support for childcare or health safety.
    • Emily (C): "If you're ordered back to work but you have no one to watch your children, like, what are you supposed to do?" (02:23–02:35)
  • “Reopening” is not simply economic—it’s deeply social and infrastructural.
• Federal vs. State Policy Dysfunction:
  • U.S. federalism complicates coordinated responses; states have neither the resources nor clear federal support for worker protections.
    • Felix (A): "Every other country can make these decisions at a national level. And in the United States, the shutdown were all done at the state level, which means the reopening is all going to be done at the state level." (06:03)
  • Political in-fighting and lack of strong federal guidance fuel uncertainty and inefficiency.

2. The Strange Strength of Big Business (and Boeing in Particular)

• Boeing’s Surprising Market Access:
  • Despite multiple crises—737 MAX disasters, plummeting demand due to halted air travel—Boeing raised $25 billion in new debt from private capital markets.
    • Felix (A): "You can't imagine, really, a company that is in worse straits than Boeing. And it just went out to the market and raised like $25 billion in new debt finance. So it has all the money it needs." (14:06)
• The Federal Reserve’s Indirect Bailout:
  • The Fed provides market liquidity, making investors more willing to finance companies like Boeing and major airlines.
    • Anna (B): "I would say that what we are seeing here is fundamentally a Fed bailout...you want the private capital markets to function." (15:50)
  • Low interest rates and corporate bond-buying programs (like the Main Street Lending Facility) lower default risk and incentivize lending to big firms, reinforcing a “too big to fail” environment.
    • Felix (A): "It kind of doesn't matter whether they are profitable or not, because they'll always just be able to borrow what they need to service their debts." (18:23)
• Why Are Investors Lining Up to Lend?
  • Implicit guarantee that the Fed will not let big corporate borrowers default, reducing risk perceptions and driving demand for their bonds, sometimes even before Fed buying ("front-running").
    • Anna (B): "...We now have this enormous buyer that's going to be coming into the market. So I want to front run that and buy some of these bonds..." (19:39)
• Small and Medium Businesses Still Suffer:
  • Fed’s programs are less effective for smaller firms, leaving them dependent on inconsistent or inadequate government help.
    • Emily (C): "It’s so interesting that the biggest businesses with sort of the most money get the most money and get to survive, and everyone else is like, to the wolves." (21:04)
• Inequality Deepens:
  • The hosts argue that the structure of stabilizing big business first, with little for small business or workers, accelerates inequality—mirroring post-2008 dynamics.
    • Anna (B): “…After the 2008 crisis…we were exacerbating inequality because we only use monetary policy…We did very little in terms of fiscal policy.” (23:57)

Memorable Exchange:

• Felix (A):
  • "Boeing this week turned around and said, actually, you know what? We have so much money from the bond market, we don't want anything from the government at all. You're like, what?" (22:04)

3. GDP: What It Reveals (and Conceals) During the Pandemic

• Historic Drop, Limited Relevance:
  • U.S. GDP shrank at an annualized 4.8% in Q1—and far worse numbers loom—but these figures, the hosts argue, miss the dramatic changes in unpaid labor and well-being during lockdown.
    • Felix (A): “The number is minus 4.8, which I think conceals much more than it reveals. It doesn't mean a huge amount.” (24:59)
• Unmeasured Home Production:
  • Examples abound of “hidden” productivity: home baking, homeschooling, and caregiving don’t appear in GDP, though their value may even exceed what’s lost in formal transactions.
    • Emily (C): “…All this uncounted productivity happening right now. And that's not even talking about the well being of Americans. That doesn't really show up in GDP because we're all staying home and not getting sick ideally. Right?" (26:18–26:38)
  • Felix (A): “On some level the thing that GDP measures is there's a huge amount of value added to a bag of flour when you turn it into a loaf of bread...but only one of those two types of value shows up in GDP figures." (27:03)
• GDP as a Flawed Proxy:
  • The hosts reflect on the limits of GDP as shorthand for social progress—suggesting alternatives (e.g., “gross domestic happiness,” as pursued by New Zealand under Jacinda Ardern (30:10–30:30)).
    • Anna (B): “We use GDP to represent so much more than it actually is... We could have some other means..." (29:35)

Memorable Moment:

• Emily (C), joking about the surge in home baking:
  • "My bread was terrible. The loaf I made, I just want you guys to know it was everyone's… Disgusting. I need not to do that again. I'm not into the bread." (32:12)

Notable Quotes and Moments

• On Inadequacy of U.S. Federal Response:

  • "It's not that we have a federal system, it's that we currently have an incompetent federal system in the sense that our states are at war with our executive because our executive is insane." – Anna (B), (08:58)

• On the Uncertainties of Reopening:

  • "You can open the doors, but will the people even come? Like, I don't know about you guys, but I'm not going to the movies for a long time." – Emily (C), (11:12)

• On Structural Inequality:

  • "Every piece of this crisis is reinforcing and widening inequality…big companies being able to…the Fed helping them get as much money as they need versus small companies who have not been served by any new policies really very well." – Emily (C), (23:08)

• On GDP’s Shortcomings:

  • “GDP is measuring expenditures, but we're going to count something where there's no monetary transaction involved because that's simply not what it's measuring…We could have some other means…” – Anna (B), (29:35)
  • “New Zealand has come out and said—or Jacinda Ardern, the Prime Minister—came out when she was elected and said, I am not going to be trying to maximize GDP. I’m going to be trying to maximize some other thing…” – Felix (A), (30:10)

Important Timestamps

• Reopening realities and issues: 01:16 – 11:12
• Boeing, big business, and the Fed: 14:06 – 24:59
• GDP critique and what’s missed by statistics: 24:59 – 33:09
• Numbers Round (fun segment): 33:09 – 39:25

Numbers Round – Fun & Noteworthy Stats

• 40%: Increase in sweatpants sales at Net-a-Porter during the lockdown.

  • Emily (C): "That was the percentage uptick in sweatpants sales at Net A Porter." (32:36)

• $24 billion: Quarterly loss posted by Mexican state oil company Pemex—double its total revenues.

  • Felix (A): "...how much money Pemex contrived to lose in one quarter... it's actually twice as large as its total revenues." (33:53)

• 55 million: Total viewers of the virtual NFL draft over three days.

  • Anna (B): "It was actually the total number of viewers over three days of the NFL draft..." (36:03)

Closing Tone

The episode blends sharp analysis with wit and exasperation—critiquing systems and statistics, marveling at corporate resilience, and poking fun at quarantine life. The hosts reflect on the lessons of past crises, the present state of American economic policy, and how both markets and measurements remain imperfect vehicles for resilience and recovery.

For anyone who missed the episode, this summary provides a substantive walkthrough of the hosts' arguments, relevant data, and the spirit of their exchange, skipping ads and keeping to the heart of the discussion.