A (3:24)

So my question for you is the Republican talking point about the Biden infrastructure bill is this ain't infrastructure. They're like infrastructure only counts as infrastructure if you're physically pouring concrete into bridges or roads and anything about broadband or upgrading water or electricity grids or electric charging stations, that's not infrastructure. Do you understand that at all or is that just pure politics?

B (3:53)

Well, there's two things, if we can pardon the expression, unpack that a little bit. You know, there are roads, there are the gigantic economically important bridges that they have specified they're going to fix. Then There are the 10,000 worst Smaller bridges that they're going to fix. There are all of those. And then there's, you know, when you look at their, the abbreviated version of their plan, there's all the lead pipes in Flint and elsewhere that they're going to fix. There's the broadband in rural America that many, many Trump voters will benefit from. There's fixing all these electric lines that need repairing in the grid. There's renovating schools, there's fixing VA hospitals and other federal buildings. So there's tons and tons of very specific things that are inarguably infrastructure. And then there's whoa, digital. There's physical broadband, which requires physical infrastructural work as well. And then the, there's helping manufacturers, incentivizing them to build more in the Rust Belt. And here semiconductor industry, you get your own. So there's lots of physical things. Now there are also new facilities for disabled people and elderly people, buildings, facilities. Then there are things like also home based care for elderly people and disabled people. Well, Republicans, if that's just not brick and mortar enough for you, I guess you'll have to force that out. So sure, there's some stuff that isn't infrastructure, but by any reasonable rational calculus, there's a whole lot of hundreds of billions of dollars of infrastructure. And then they can argue if they want about, oh, this isn't really infrastructure. Go ahead, argue. That's an argument you can lose. And if this goes from 2 trillion to 1.6 trillion and you get six Republicans to vote for it, fine. But what a stupid, semantic and largely untrue argument to make, in my view.

C (5:43)

Yeah. And I think another way the Republicans will probably come after this bill is they will attack the framing around racial justice that the Biden administration has done a good job talking about, which has been so interesting and I think so smart because of course, infrastructure is about more than physical objects or even Internet access. How you do infrastructure is how you do racial justice. I mean, our producer had a copy of the power broker behind her. We've all read it or pretended to. And so we know that when you build a highway or a bridge, you can really cause a lot of chaos. And we know the highways were built without any consideration to poor black people who are mostly displaced by this. And the Biden administration is actually talking about that now with this bill. And they say they want to redress some of those wrongs. And I think I would suspect some of the bad faith attacks coming from the GOP would maybe come around this point too.

B (6:43)

Well, I'm sure that's true. But of course, it's framing when, for instance, you say, as they say, we're going to spend $85 billion on transit in, thank goodness, New York City and elsewhere. And that of course, will help people of color because people of color disproportionately take the subway and the trains and so forth. I want to hear the Republicans say, yeah, we're not going to do that because too many black and brown people are going to benefit from improving buses and subways around Americ America. And so, yeah, go ahead, criticize that part of it. Because it's not just, you know, it's not saying, oh, and yes, we're going to spend $20 billion on critical race theory as part of our infrastructure project. It's we're going to make subways better and 80 billion for Amtrak better. And by the way, you know, it's not just transit, you know, and trains and stuff. 170 odd billion for electric vehicles and all these charging stations that righteous real Americans who have cars but electric cars should appreciate because they'll benefit from.

A (7:41)

So I have a question about do we need the government to build out electric charging stations? Do we need the government to build out rural broadband when, you know, Elon Musk seems to be doing both of them quite well? He's got a big charging station network. He's got starlink. He's going to create this big broadband network in the sky. Is there a case to be made that some of these things are Things that the private sector is perfectly happy to do on its own and that we don't need the government to come in and do for us.

B (8:12)

Well, we. Go ahead. I'm sorry?

C (8:14)

Oh, no, go ahead, Kurt. I like to listen to you talk, so please.

B (8:17)

Well, me too. Elon Musk is a good person to mention, of course, because without the federal government's early stage investment in Tesla, he would not be a gazillionaire and have a successful company. Right. So it's, it's not one of the other. Other. It's both. And sure, if by doing all of the various investments, charging stations, extending the tax credits for buying electric car to individuals, all that stuff that this 170 billion can go to helps more and more people get electric vehicles, helps it become more than. Instead of 2% of new car sales, whatever it should be soon, 5, 10, 20, then it's good for Tesla and it's good for the environment. It's good for everybody. So, you know, this one or the other. Oh, leave it to the. Leave it to the private industry. No, why must it be one or the other? And it never is? Because whether it's biotechnology or electric vehicles, the federal government is always there at the beginning as the, the angel, the VC that never gets sufficient credit for all of its early investments. And of course, there are some things that, that are simply not economic for private business to do, like broadband, apparently, in Northwest Connecticut, where I am, and it's really, really crappy, so. But truly, there are places where it doesn't make economic sense. It's why the US Post Office has post offices in little places that serve almost nobody in the middle of the Great Plains, for instance.

A (9:45)

And that's obviously why the government needed to come in with billions of dollars to kickstart vaccine research, for instance. Like, would the private sector have done all of that? Yes. Like, did Pfizer actually say, you know, let us just develop this on our own? Yes, but there's no doubt that the amount of money put into the vaccines by government and helping to pay for all of the testing helped to accelerate the fact that we're all getting vaccines in our arms right now, at least those of us lucky enough to be in America. I have a question for Emily, though, which is take this the other direction from the Republicans and take this from the more progressive wing of the Democratic Party. To what degree is this basically a Green New Deal? How close are we to Green New Deal with this?

C (10:36)

Well, I'm still trying to unpack everything in here, but it does seem like they have packaged a Green New Deal as a jobs and infrastructure plan, which is smart because you're going to get more support for jobs plan than you are for anything called the Green New Deal. But there is tons of money in here for, as Kurt already said, for electronic vehicles. You pointed out the charging stations, money for innovation in the sector. I don't know if it's the same as the Green New Deal. Aoc, you're looking so confused at me. AOC has already said it's not enough, so I suspect it's not enough.

A (11:10)

There's definitely. Yeah, I mean, there's a lot of people saying this should be 10 trillion, not 2 trillion.

B (11:14)

Good. I mean, okay.

A (11:16)

I mean, I mean, the Overton window here seems to be extremely wide. The Republicans want it to be about like 50 million and the. And the AOCs want it to be 10 trillion. It's in there, in the middle. There you go.

C (11:28)

And the one thing I wanted to echo something that Kurt was talking about and your question, you know, should the private sector have done this? Blah, blah, blah, like this $2 trillion is for the private sector. This is going to help companies do their jobs, do their work. This is going to improve the roads they send trucks on. This is going to enable them to have more customers and more eyeballs for people who didn't really have good Internet access before. This is an injection into the economy like we have not seen in decades. Like, this bill is actually great for business. Like, I don't really understand.

A (12:05)

No, I mean, I think that no one's doubting that it's great for business. And a lot of that 2 trillion will go directly to, you know, private sector contractors to do all of the work. It's not like the government is going to use its own employees to pour the concrete necessarily. But the, the question is really, do we need to do that, given that some of it might happen anyway? And I think I don't.

C (12:29)

There's no question it didn't happen.

A (12:31)

Credible case that it would. Exactly. It didn't.

C (12:33)

Declining paying infrastructure. It did not happen.

B (12:36)

Exactly. And who, who doesn't drive around anywhere, go to airports, go to whatever and go, man, man, this is crap. And of course we get inured to how terrible it is, we Americans, but it's terrible.

A (12:49)

And everybody. Right? And it's true. Like, the people who realize how terrible it is are the people who are, you know, spending a lot of time flying back and forth to China or somewhere like that and seeing how wonderful it is in China. And that's not Your median voter. There's not a huge number of people going around the world and seeing for themselves how behind the curve the United States really is in terms of infrastructure, I suppose.

B (13:14)

But certainly, you know, a 65 year old person was 30 when bridges and roads and airports and everything were a lot better. So there is some memory of when things were, okay, better and spiffier in the United States.

A (13:30)

Let's move on to Archegos. But no, Kurt, one last thing.

B (13:34)

Well, I just thought we should talk a little bit. How are we going to pay for this?

C (13:39)

Oh, the pay for get to with the business thing. They're all upset because we're going to pay for this. Or the Biden administration wants to do a pay for by raising corporate taxes, but this is a boon for them and they should just pay up.

A (13:50)

So let's talk about the pay fors for this for a minute because it's an interesting question. Emily. Obviously there's whenever you're talking about pay for, talking about taxes, and if you're talking about taxes, people are going to wind up with more taxes. People don't like paying more taxes and so they start lobbying and stuff. But broadly speaking, have you seen the business community come out and say this is a terrible idea. We don't want this. You know, infrastructure is all well and good, but we would rather not have it if it means that we need to pay a higher rate of corporate income tax. I don't think I have seen that.

C (14:31)

No, I mean I'll just tell you what Jim Tankersley said today on the daily that I listened to or on Friday rather. The business community wants infrastructure, everyone wants infrastructure, but they don't want to pay for it through increased corporate tax rates. Some are even suggesting put the pay fors on the roads and the bridges and stuff, which strikes me as like a way to raise the regular people's taxes for businesses benefit, which is crazy to me. But yeah, it seems like they support infrastructure and doing this kind of work, but they don't want to pay for it through the taxes.

A (15:05)

Kurt, do you think there should be a pay for or should this. Can we just deficit finance this?

B (15:09)

No, I love in many ways that there is a pay for one. Wait, the Republican Party, what did they used to be all about? Oh right, fiscal prudence and fiscal responsibility where you don't just borrow money. I just love slapping that back and saying, look, yeah, we're paying for it by modestly raising the corporate income income tax to halfway between where it was a few years ago and where it is now and by the way, lower than it was during the grand years of American prosperity. From 1945 to 2017, the corporate income tax rate in the United States was higher than this proposed 28%. So what are you. You've just. You big companies have just gotten such a free ride for so long. Yes, of course you're going to complain and yell when it. When. Oh no, it's going to go up to 28% by the way, that's nominal rate. It's really like 8% or 10% or something.

A (16:12)

Well, for a lot of companies it's zero productions of them. Yes, that just came out. 55. 55 of the biggest companies in America, according to this new study, paid zero federal taxes on average over the past three years.

B (16:26)

And I just looked up yesterday in 2000, not very long ago, corporate tax revenues to the governments as a share of GDP was 2%. What is it now? Just about 1%. So they were already doing well and getting great breaks from 1980 through 2000 and they've done that much better in the last 20 years. So dudes, time to pay your fair share.

A (16:50)

It won't be enough though, right? You can't pay for a bill of this magnitude with a few percentage points of corporate taxes. The thing that we didn't see was raising the capital gains tax to the same level as income tax. And they actually doing stuff with individual income taxes and taxes rather than just corporate next round.

B (17:12)

That's the next round.

A (17:13)

It is and that's what they've said. But you can only do reconciliation once per session. I don't know how many rounds they have.

B (17:20)

Well, we don't know that because of these Byzantine an arcane only once per year. Or is it once per Congress or maybe two if you Whatever. Yes. Instead of just big business rich people. Well, it is proposed would have their top marginal rate the money they pay on the last millions or hundreds of thousands or billions or whatever they are from 37% back to where it was once again for most for much of the last 30 years. Just under 40%. 39.6% like it's this incredibly modest rate. Now to your point, Felix, those may not pay for all of these grand spending schemes. Okay, then we can do what the Republicans want to do and just borrow more money or print more money because they're the monetary free money people these days and let's just do what they want.

A (18:09)

Emily, who do you think is the party of fiscal prudence these days? Is there a party of fiscal prudence these days?

C (18:16)

I don't think that is a thing anymore. It's just out the window at this point. I mean, it's definitely not the Biden administration. They've already spent a lot of money, as we know, and want to spend, what, 4 trillion more. And the Republicans lost that banner in the Trump years, if not before. So I don't think anyone's fiscally prudent now except, like, normal people who have to actually spend real money and can't just make the money machine go brrr at home.

A (18:42)

Okay, let's move on to RK Goss. I don't know how to pronounce it, but I'm going to call it RK Goss. I have a friend who's married to a Greek woman. He says, okigos. I'm just gonna stick with that. Bill Hwang, a tiger cub he used to work for Julian Robertson, came massively unstuck. He turns out to have had a net worth of what, $10 billion, which is large even by hedge fund manager standards, especially for hedge fund managers that you haven't really heard of. And he basically bet all of it on sort of seven stocks going up and in a massively leveraged way. And then when they didn't go up, he lost it all. This is high finance at its highest, most crazy speculative. Would you agree?

C (19:26)

I agree. Yeah, I do agree. I think what's interesting about this, there's a few things interesting about it, and I went on a journey yesterday to figure it out. First, Wang did all of this from his family office. So no one essentially was keeping track. No regulators really watch family offices or pay that much attention to what they do. So he was able to take these big risky bets and all over town, essentially, at all these big banks that loaned him money to bet on these stocks without anyone even, like, paying attention. And he got to do this despite having a track record of inside trading, for which he got in. In trouble for, I think, in 2012.

A (20:04)

Right. Which. Which is why he had to be a family office in the first place. Like, the difference between the family office and the hedge fund is that hedge funds are allowed to invest other people's money. And family offices, you just invest your own money. Now the rumor refuses to go away that maybe all of the money at Archegos was not Bill Hwang's own personal family money, that he might have taken or been running someone else's money in there. But no one has really proved that. And so for all we know, it was genuinely all of his money. And he really did turn 200 million of his own money into 10 billion of his own money by taking these crazy levered bets. And intuitively maybe you can, right, if you have a stock market which has gone up as much as it's gone up, then maybe you, and you lever that up and you do the whole like WallStreetBets thing of just you know, buying call options and being super aggressive, then maybe you can make that much money. Although it is weird to me that apparently the blow up happened when stocks were an all time high and everything was frothy rather than when everything collapsed like a year ago. That makes no sense to me.

B (21:10)

Well yes, because as Emily said, it does. And you too, the fact that it was concentrated on such a few companies makes sense actually in the case of Viacom, ViacomCBS I think it's now called was, was bid up so, so ridiculously high just as a company. It, it was, you know, if you're betting on one giant bubble in that froth, you know you're going to get taken down as he was in addition to all that you've said, which is all true and you know he pled guilty to insider trading. He just wasn't just accused of it or anything and, and, and kept out of finance as part of his non prison involved punishment. After that nine years ago, leveraged blue chip banks that each lost a couple $3 billion themselves. The other thing, and I will say this on this Good Friday that I find so interesting and perfect about this story is that he is this extremely devout Christian, has a Bible study class at his firm every Friday. Son of a pastor, says that you know, has many times said that God loves that he is making all these billions of dollars and that is part of his religious mission to make all these billions of dollars again altogether. It's like an over the top fictional story that I would find entirely implausible if it were Succession, the sequel.

A (22:31)

Yeah, it is a crazy story and there was this amazing story of a bunch of banks. So Morgan Stanley, Goldman Sachs, Credit Suisse, Nomura, Deutsche, they all basically had this emergency phone call with Bill Wang where they said oh shit, you know, he's triggered the margin positions. We could all just try and make this the same margin call at the same time on the same stocks and all of us be out in the market selling massive block trades of the same stocks at the same time and that would just implode the market and send everything tumbling. Or on the other hand we could all like basically cooperate and agree that we'll spend A couple of months, slowly spend, you know, selling down these positions and try and not just, you know, cause chaos in the markets. And what happened was that basically Goldman and Morgan Stanley said, yeah, no, we're just going to go out and sell everything before everyone else and crash the markets. Which is directly out of Margin Call the movie, Right? This is exactly the plot of Margin Call the movie, which is where the bank is like, everything is going to shit. And the only way we survive is if we get out first. And that's exactly what happened, is that Goldman and Morgan Stanley got out first. No one's reporting that they're taking any losses on this. Meanwhile, Credit Suisse and Nomura, who are a little bit sleepier, are facing $3 billion losses.

B (23:57)

I'm so happy you mentioned that movie, which is one, in my view, of the great movies about finance.

A (24:03)

And fortuitously, we're going to be talking about Margin Call on Tuesday with Lucy o'. Leary. So you have that to look forward to now that it's become a documentary about Bill Huang and Archegos.

C (24:13)

One thing I thought was interesting because I saw a lot of people saying, you know what? This Archegos thing, I mean, it's kind of bad, but it's fine. It's not. The system was fine. This wasn't a systemic issue. These banks are going to be okay. But I was speaking to a source of mine who is a former. She works at the Fed and on banking regulation. And I was like, but people are saying this is fine, it's not systemic. And she was like, what are you talking about? She said, these banks lost. Nomura lost $2 billion. Her husband's at Credit Suisse. She was like, we thought he might lose his job over this. A floor of traders could vanish because this happened. And it's disturbing that this little corner of the investment world, these family offices, is responsible for these major, major losses at big banks which are systemic, which are. She called them public utilities in a way, because we're so dependent on them. It didn't make a systemic crash happen. But it's a definite red flag at a time. The market is so frothy. This is something to watch out for, a little corner, a little sleepy corner. Felix wants to speak. I can see he's getting all geared up. Go ahead.

A (25:19)

I. Yeah, no, I'm very geared up about this because you're absolutely right that in principle this was a major systemic event. In principle. The collapse of Greensill that we saw in the UK a couple of weeks ago, where Credit Suisse Also lost a few billion dollars, was a major systemic event in principle. And I wrote about this in my newsletter this week. These are precisely the systemic events that pop bubbles. And you see something like this happens and everyone realizes the bezel is over, the free money has ended, stuff is going down rather than up. Systemically important banks are losing money and everything falls apart. In principle, this is exactly what you would expect. You would expect Greensill and Archegos to be the catalyst that would mark the end of, of a particularly frothy bubble. In practice, none of that happened. The stock market kept on going up. It hit a new all time high. The S and P hit 4000 for the first time ever. The capital requirements for banks that everyone introduced after the last financial crisis in 2009 worked. Credit Suisse has lost billions of dollars, but is still fine in terms of its solvency. None of the other banks are in any real trouble at all. Credit Suisse, we all know, is a terrible bank anyway, and we've talked about it on the show many times and put sweets to one side. The system seems to be surprisingly robust. And this was the big surprise for me of this week. This bubble, if it is a bubble, this stock market strength, this capital market strength, this financial strength that we're seeing in the economy, in the world is real enough that it can withstand some pretty large body blows like Archegos and Greensill. And that says to me that while these things have the potential to be, you know, real systemic risks, in practice it turns out that they weren't.

B (27:13)

So thank you, Bill Hwang, for this stress test.

A (27:16)

It was, it was a stress test. It was a real stress test. And we passed. We passed the test.

C (27:22)

These are red flags. And the next time we might not get so lucky.

A (27:26)

But the worst case scenario is stocks go down. I feel like the banking system in particular is working as it should. You know, if banks take on a bunch of risks with their eyes open. And for all that regulators might not have known about Archegos, the prime brokers knew exactly what was going on in that fund. So they took a bunch of risks and they lose money. And that's what happens when you take risk. Like sometimes you make money, sometimes you lose money. This is capitalism working as it should. No one thinks that banks are entirely entitled to all of their profits without having to take some losses once in a while. So, so let the banks lose money when their risks go bad. And if there is a pullback, if you're right and this is a red flag, and there's lots of other leverage in the economy and the markets that could blow up, then fine, the s and P500 goes back from 4,000 to 3,500 or something. No harm done.

B (28:22)

I don't know.

C (28:23)

A lot of people have money in the market now that didn't used to through places like Robinhood, through sheer boredom. There's a lot of corners like Archegos, like Greensill that I feel like aren't well understood. And I'm not sure. But did each prime broker at each of the banks know to the extent to which Archegos was levered? Like, was Goldman Sachs aware that this guy had like, he was loans all over town? Like, did they actually know that they knew?

A (28:52)

Yes. I think the short. The short answer is yes. They definitely knew how much leverage they were offering on their own terms of total return swaps. So if you're offering, you know, 85 to 15 leverage on total return swaps, which was standard for Archegos, apparently you're the bank offering that amount of leverage. And so that's. You're doing that 100% with your eyes open. But also as a prime broker, you are custodying the assets. You are 100% right up in there in terms of the balance sheet. I don't think on that phone call when all of the banks had this massive conference call with Bill Hwang and they were like, oh, shit. That shit's just. Just hit the fan. I don't think there was a lot of people going, what? We're shocked that there was so much leverage. They might have been a little bit surprised about some of the positions and some of the size. But I think anyone paying attention and it's their job to pay attention, knew what was going on. And I think the real sort of disconnect is probably between the prime brokerage arms who did know, and this sort of senior management of the banks, the CEOs and stuff, who might not have known. But that's an internal communication.

B (29:56)

I have a question for you. Actual experts in this realm, which is okay, systemically, then, oh my gosh, look what happened. Yes, we, we knew it. We, we smart banks, we responsible bankers. But. But this guy was recklessly investing in too few companies. Blah, blah, blah, blah. Is this enough of a warning light, a red flag? A thing that comes on your car and says, you know, check your oil or whatever for the system, the financial system, which is to say banks, to say, yeah, let's look and see if there are other Bill Hoangs around these family offices. Let's spend the Next few months checking this out and having some more caution. Does that happen next or do they forget about it next week?

A (30:35)

It doesn't even take a few months. It takes one day. Every single bank CEO who's running a prime brokerage after this blow up went to the head of prime brokerage and said, give me a list of every concentrated fund out there who's taking massive leverage on the stock market. And they got that list within, you know, by the end of the day. And if they're then going back to those clients and saying, you know what, we're a little bit worried about this, you're going to, we're going to start rolling back some of that leverage. We wouldn't know that, but if they did that, then that wouldn't mean that some of those clients, if they were mostly in long positions like Bill Wang was, would have to be selling down some of their long positions in order to comply with the lower leverage requirements. And there's not been a lot of evidence of selling right. We're sitting new highs. So if they did find people with that kind of leverage, then either they have given them a lot of time to delever or else the stock market is just so strong that they can delever without having any real effect on the markets as a whole.

B (31:41)

I'm so glad I listened to this podcast to learn things just like that.

A (31:47)

Let's talk about Amazon. Emily, what's the big news?

C (31:52)

Big news is we are seeing the biggest union election in decades down in Alabama at an Amazon warehouse in Bessemer where workers have been voting on whether or not to unionize for the past few weeks. And the election's coming to a close soon. And like everyone is watching this union election because, as I said, biggest in years. And because it's Amazon, which has. There's been a lot of agitation in the past and workers have tried to unionize and organize and they haven't been able to. And this is like the closest they've ever come. And it's Amazon. So everyone is watching what's going on down there right now.

A (32:32)

Is Amazon going to wind up with a union on its hands?

B (32:36)

Well, fingers crossed that they will in this case. Every day some new thing happens in the world that, wow, this is like fiction. Maybe too, better than fiction. But the story of the Bessemer organization is great in many ways, including that the workforce has many African Americans as well as white people. Middle nowhere Ville, former manufacturing location in Alabama. And that Amazon, of course, has gotten lots of good credit the last couple of years. For raising their minimum wage to a minimum wage of $15. And so just like I think Henry Ford did 100 plus years ago by raising the wages of his Ford employees and then spending the next 20 years fighting the unionization of the Ford Motor Company, which he finally capitulated to. And Ford became a United Auto Worker bastion. I see history repeating perhaps a century later. The other thing I think of as I see this one, why does it take so long to count the votes of these? I mean, yeah, okay, there's, it's a huge workforce down there, but 10,000 votes or 8,000 votes, why does that take so long?

C (33:43)

I think I know because it's a pandemic. They did mail in voting and they kept it a longer period open because the post office isn't good anymore, apparently. So that's why it's taken so long.

B (33:55)

Dragged out any moment we're going to find out it's going to be either way a big and not just a symbolic yay or nay for the future of organized labor in this country if it works. And again, it was just some employees down there. It wasn't some giant union came in and said, let us represent you. It was individuals that just started last summer and fall and they googled where should we, how do we do this? How do you start a union? How do you unionize? And that's where we are. So that makes it a beautiful normal race story as well. If it is defeated because among other things, well, $15 an hour, that's pretty good. They're already doing okay, the workers of the, of Amazon in this warehouse and elsewhere. So it's interesting on that front, if however, they win and the Bessemer warehouse for Amazon becomes a union operation workplace, it will be huge actually and symbolically. And I just realized as I've been talking to you this morning that it is practically the exact 40th anniversary of when Ronald Reagan came into office and fired all the air traffic controllers, unionized air traffic controllers for going on strike. And this union that had what was one of the few unions who had endorsed him a few months earlier. And that was really the key moment in the crushing of the American organized labor movement when Ronald Reagan said, now you're gone, this is illegal, you're gone, and gave the green light for big corporations to then treat their unionized strikers the same way. So if it goes and they say, yeah, we're union here now, it will be unequivocally the bookend to that 40 years ago moment.

A (35:41)

So I'm fascinated about the long term trajectory here, the stylized fact, you're absolutely right, is that unionized labor forces got less and less power from the Reagan era onwards, partly as the law gave employers a little bit more leverage over the unions, and partly as non union companies just grew faster and unionized companies grew slower or even shrank. What's fascinating to me is we do have this seemingly new wave of unionization and we've seen it very much in the media industry recently. We're seeing it in Amazon and there are definitely cases where unionization gets voted down. Ben Smith just wrote about how the Harper stuff like un unionized, the medium stuff like narrowly voted against unionization that Amazon workers in Bessemer could vote against. I'm interested. One of the weird things is, which I don't understand is if there is a unionization drive in your company, like what is the reason to vote no?

C (36:42)

I have thoughts on this and I also talked to my former colleague Dave Jamison at HuffPost about this. And I think what's going on is companies, especially a company like Amazon, they really want you to know, they want you to know if you work for them, that they are just not in favor of this union. They have these captive media where they bring employees in mandatory meetings and they tell you why it's bad to have a union. It's gonna cost you a lot of money. You already make $15 an hour. Now you're gonna take a pay cut, for what? And they pay consultants $3,000 a day to drive home the message. It almost doesn't matter what the message is. The message is, I'm your boss and I want you to vote no. So, I mean, naturally people are scared, especially people at Amazon and where they're making $15 an hour. As we already said a couple of times in Alabama, that's double the minimum wage. If they lose their Amazon job, There's no other $15 an hour job. That's it, they're done. They get a 50% pay cut. So I think a lot of it is simply fear. People don't want to piss off their employer and they get afraid and they hear this loud message. And maybe because there's so little, I mean, unions at their peak, 30% of the American workforce was in a union. And now for all the media companies doing it, it's like something like 6%. It's just not a big deal. You don't know people in unions anymore, so you might not realize what it could mean to even be in one. So I think it's the lack of knowledge and familiarity. And I think it's, it's a fear of I don't know what's going to happen if I piss off my boss at the best job I could possibly get. So I think there's fear of taking that risk. Also, I want to point out in Alabama, you think of the south as very right to work and everything, an anti union. But actually in Alabama, where Bessemer is, there's a long history among the African American population of unionizing dating back to at least the 1930s when steel workers there, black steelworkers organized and were like very militant about it. So there's a really long, rich history there of unionization that I think is interesting, though.

B (38:46)

I don't want to plug other podcasts, but I will plug, plug.

A (38:49)

We love other podcasts.

B (38:50)

The Daily on the New York Times the other day had a fantastic episode about this very subject, focusing on this one effectively, Norma Rae figure, this black woman named Jennifer down there who was part of the small group that began this process in Bessemer. And it's really moving and fascinating. And her story, she was all just as you've said, Emily. And she was, wow, $15 an hour job. This is great. You know, I've had this job, this job. This is fantastic. It's good, it's clean, it's Amazon. We all, we're all Amazon customers, she said. And then as she goes into detail of the heartless, gratuitously surveillance capitalist nature of her job and how every second, whether it was going to the bathroom or going to get a Covid shot or whatever was taken, was held against her, I don't think anybody listening would say, yeah, I get it. How else are you going to make this kind of extreme and gratuitous management by text from bosses you've never seen or met? How are you going to get that under control without organized labor? But the other thing when you said fear, Emily. Yeah, individuals are scared. Oh my God, what if I lose this job? It is that kind of fear on a massive systemic level that big business has used since 1980 in this country to keep crushing unions by wow, look this, you know, international paper did this. Wow, Hormel did this and they got away with it. Replacement workers suddenly become permanent workers. New strikers are gone in less than a generation. In a decade or so, in the 80s and early 90s, it was just shown to workers who dared to unionize or dare to strike if they were already in unions. This isn't going to work for anymore. Sorry. This social contract has been revised. And that fear is at work very, very effectively. So, you know, hats off to people in Bessemer and elsewhere who are brave enough to say, no, we're not going to put up with this. And yeah, it's good and nice that little media, the New York Magazine and the New Yorker are great. And that, of course, eventually will help change the general acceptance of and understanding that some kind of organized labor is necessary and good to have the system work in proper balance. But what you really need are these truly and thoroughly and genuinely traditionally working class jobs, like the warehouse workers at Amazon saying, yeah, the job is fine, the job's okay, and I'll do it. But come on, don't push me to the edge as they have done in the case of these warehouse workers in Bessemer.

A (41:28)

I think we should have a numbers round. Emily, what's your number?

C (41:32)

My number, Felix, is 95,593. That is the number of new research articles on COVID 19 that were published in 2020 on PubMed Central, which is like a site where all the research articles get pub. This is according to an analysis I read on this website called the Pudding, which has these amazing infographic articles that I recommend to everyone. And it is a testament to the insane amount and fast work of researchers over the last year. And it comes down if you're like, is that a lot? I don't know. It's 11 articles per hour, which is crazy and amazing. And I feel like we've talked a lot in the past year or so about, like, the end of globalism, la la la. But the research that got done on Covid was astounding and collab and researchers from different countries pulled together to do this work. And now we're reaping the benefits with the vaccine. So yay.

A (42:28)

It's been magnificent to watch. It's impossible for a human being to keep up with. And what's been fascinating to me was watching all of these, like, tech companies start trying to write AIs to read all of the papers and summarize them and digest them, because no human is capable of doing that. You can't read 11 papers an hour. My number is 1.9 is a very good number. It's the number of percentage points that the unemployment rate dropped for people without a high school diploma. It went down from 10.1% to 8.2%, which is a massive drop in one month between February and March. Obviously, this is the segment of the population with the highest unemployment who find it the hardest to get work and something happened in March, and it's not entirely obvious what, but they reaped the benefit. We had a fantastic employment report on Friday. We saw almost a million new jobs created, or more than a million, if you include revisions. The unemployment rate went down to 6%. But especially for people without a high school diploma, there was a massive drop. And that's very encouraging.

C (43:38)

That's great. I wonder if it's people just going back to work where they are in person and vaccination rates being what they are, there's more of that happening. I don't know.

A (43:48)

I hope so. Kurt, what's your number?

B (43:51)

My number is also a percentage, which is 23%, which is the amount by which the Dow Jones industrial average has increased since the day before last November's election. 23%. It's gone up. By electing the candidate who, of course, we heard again and again and again from the Republican nominee for president and other Republicans. The stock market is going to just be crashed as soon as you elect this tax and spend socialist. 23% up Dow since November 2, which is almost, by the way, twice as much as the Dow increased during the exact same period in 2016, 2017, which of course, President Trump then spent the rest of his term shouting about.

A (44:36)

I think it does prove that nobody knows anything when it comes to the stock market, because everyone was convinced that a Trump victory would cause the stock market to crash, and it didn't. And if anyone was convinced that a Biden victory would cause the stock market to crash, which I don't think was anywhere near as similarly consensus, they were proved wrong too. Yeah, I think basically the stock market just loves all of that fiscal irresponsibility that we've been talking about.

B (45:00)

Well, or they also perhaps, given that just totally the stock market doesn't know anything. So I, I don't use it as a metric for anything except the rich people. And to the degree my retirement funds are in the stock market, good when it goes up. But given that we had a presidential candidate and a party that uses the stock market as a metric for everything, even though it's only a metric for how affluent people are doing, really, I think it's an important number. I also, you know, even in the short term, I mean, and certainly it's meaningless in the short term, along with Archegos, if that's. How did I pronounce it correctly. Archegos, that's good enough of the last week. What has it done in the last week, about a week ago is when the Biden administration infrastructure plan and its trillions of dollars of new taxes was reported. What's the stock market done in the last week? 6.4% a second number. So it is reassuring to me that, yes, the market likes, yeah, spend money. Good, good, good. But also is responding to this what I believe is good and necessary for fairness and we're not having to take a hit in the stock market from it. So that's good.

A (46:13)

We are having our cake and we are eating it.

B (46:16)

Precisely. Precisely. It's one more way, again, I think, politically important way in these first hundred days for people to go like, wow, yeah, everybody said that it's going to kill the stock market. Doesn't seem like it's doing that. Plus I have my 1400 bucks. That's all good in retraining Americans, many of half of whom never lived in a time of a economically fairer America, that this boogeyman that the right has been waving for 40 years turns out to be imaginary.

A (46:47)

On which note, I think we'll wrap it up for the main bit of Slate Money this week. Thank you, Kurt Anderson, for coming on. That was awesome to have you on here. We have to have you back. Thanks to Jessamine Molly for producing, thanks for me having all of you folks for writing in. Slatemoneylate.com we will be back on Tuesday with Lizzie O' Leary talking about Margin Call, which is a fantastic, very timely movie. And the following Saturday, as ever, with more Slate Money.