Slate Money: "It’s Finally Infrastructure Week" (April 3, 2021)

Episode Theme and Purpose

This episode of Slate Money, hosted by Felix Salmon, Emily Peck, and guest Kurt Andersen, provides a sharp, wide-ranging discussion on President Biden’s $2T+ infrastructure plan, unionization efforts at Amazon’s Alabama warehouse, and the high-stakes implosion of the Archegos family office. The hosts discuss the broader economic, social, and political ramifications of these events with a lively, accessible tone. Notable themes include the evolving definition of infrastructure, intersections with racial justice, the real-world impact of mega-investing gambles, and the significance of labor movements in the 21st century.

Key Discussion Points and Insights

1. Biden’s Infrastructure Plan: Is It Finally "Infrastructure Week"?

• Recurring Joke Becomes Reality

  • Kurt Andersen ("I am a kind of infrastructure nerd. And here it is." — 02:39): He describes the Biden plan as "the fantasy become real," referencing years of political promises that never materialized.
  • The hosts tease out the wide scale of the plan (estimates range from $2T to $2.8T) and discuss why it marks such a break from the previous administration’s rhetoric and inaction.

• What Counts as Infrastructure?

  • Republican Critiques (03:24): Salmon notes, "The Republican talking point about the Biden infrastructure bill is: this ain’t infrastructure," objecting to items like broadband and electric grid upgrades.
  • Kurt Andersen rebuts: The bill covers "tons of very specific things that are inarguably infrastructure" including "lead pipes in Flint... broadband in rural America... fixing all these electric lines that need repairing in the grid... renovating schools, fixing VA hospitals..." (04:01).
  • The debate over physical vs. "softer" infrastructure is called a "largely untrue argument" and political posturing (05:40).

• Infrastructure and Racial Justice Framing

  • Emily Peck (05:43): "How you do infrastructure is how you do racial justice," pointing out the plan’s efforts to address historic disinvestment and displacement, such as highways built through Black neighborhoods.
  • Andersen adds: Public transit investment disproportionately benefits people of color (06:43).

• Private vs. Public Sector Debate

  • Salmon (07:41): Questions whether rural broadband and vehicle charging stations should be left to companies like Elon Musk/Tesla and Starlink.
  • Andersen counters: "Without the federal government's early stage investment in Tesla, [Elon Musk] would not be a gazillionaire..." He emphasizes public-private partnership origins and market failures in rural regions (08:17).
  • "Why must it be one or the other?" — Andersen (08:45)

• Is It the Green New Deal in Disguise?

  • Emily Peck (10:36): "It does seem like they have packaged a Green New Deal as a jobs and infrastructure plan, which is smart..." but notes progressives want much more spending.
  • Salmon: "Some are saying this should be $10 trillion, not $2 trillion..." (11:10)

• Paying for the Plan: Taxes and Deficit

  • Who Pays? (13:34): Salmon observes little corporate pushback against spending, but resistance to paying via increased corporate taxes.
  • Andersen: "They were already doing well... Time to pay your fair share." (16:26)
  • The hosts discuss historical tax rates, noting that the proposed 28% corporate rate remains lower than in earlier boom times.
  • Discussion of whether the plan should be deficit-financed or paid for (“pay-fors”) through tax reform; recognition that future rounds may address capital gains and individual income taxes (17:12).

Notable Quotes

• "By any reasonable, rational calculus, there's a whole lot of hundreds of billions of dollars of infrastructure. ... What a stupid, semantic and largely untrue argument to make, in my view." — Kurt Andersen (05:40)
• "How you do infrastructure is how you do racial justice." — Emily Peck (05:43)
• "Why must it be one or the other? And it never is ... the federal government is always there at the beginning as the, the angel, the VC that never gets sufficient credit..." — Kurt Andersen (08:45)

2. Archegos Family Office Meltdown: Wall Street’s Wild Side

• What Happened?

  • Felix Salmon summarizes: Bill Hwang’s family office ran highly leveraged positions in a handful of stocks via "total return swaps." When the stocks dropped, Hwang lost billions. ("He turns out to have had a net worth of what, $10 billion...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." — 18:42)

• Why Did It Matter?

  • Peck: "No regulators really watch family offices ... he was able to take these big risky bets ... despite having a track record of inside trading..." (19:26)
  • Andersen: Notes Hwang’s devout Christianity and compares the saga’s absurdity to a plotline from Succession (21:10).

• Systemic Risk?

  • Multiple major investment banks lost billions.
  • Peck, quoting a Fed regulator source, argues it was systemic: "A floor of traders could vanish because this happened." (24:13)
  • Salmon: "These are precisely the systemic events that pop bubbles... In practice, none of that happened. ... The stock market kept on going up. ... The system seems to be surprisingly robust." (25:19)
  • They credit post-2008 financial regulations for containing contagion.

• Risk Management in Action

  • Salmon narrates the rivalries between banks acting in their own interest, likening the scene to the film Margin Call.
  • Andersen: "Thank you, Bill Hwang, for this stress test." (27:13).

• Regulatory Blind Spots

  • There's consensus that family offices remain under-regulated, but prime brokers were not in the dark about their own exposures (28:23; 28:52).

Notable Quotes

• "It's like an over the top fictional story that I would find entirely implausible if it were Succession, the sequel." — Kurt Andersen (21:10)
• "The system seems to be surprisingly robust ... this financial strength that we're seeing ... is real enough that it can withstand some pretty large body blows like Archegos and Greensill. And that says to me that ... in practice, it turns out that they weren't [systemic]." — Felix Salmon (25:19)
• "Thank you, Bill Hwang, for this stress test." — Kurt Andersen (27:13)

3. Amazon in Alabama: A Historic Unionization Battle

• The Election at Bessemer

  • Emily Peck recaps: Amazon warehouse workers in Bessemer, Alabama, held a major vote to unionize, the largest such effort in years. The vote’s importance is magnified both for its size and for being at Amazon, a major, celebrated employer (31:47).
  • The workforce is notably racially diverse and located in a traditional manufacturing region with deep union history.

• Outcome and Symbolism

  • Andersen: Likens the moment to the New Deal era and draws parallels to Henry Ford’s legacy and the long struggle for unionization.
  • Notes the historic precedent of Reagan firing air traffic controllers in 1981, marking organized labor’s decline, and posits that successful unionization at Amazon would be a symbolic bookend (33:43).

• Why Vote "No" on Unionization?

  • Peck: Amazon, with significant resources, employs anti-union consultants, holds mandatory meetings, and underscores the risk of job loss, especially considering $15/hr is high for the region (36:42).
  • Many workers fear retaliation or simply don’t know what unions could do for them due to decades of declining union membership (38:46).
  • Points out Alabama’s deep Black labor union history, often overlooked in broader narratives.

• Broader Implications

  • Andersen and Peck agree that a successful union would be "huge ... not just symbolically," but as a meaningful challenge to 40 years of anti-union trends in America.

Notable Quotes

• "If it goes and they say, yeah, we're union here now, it will be unequivocally the bookend to that 40 years ago moment [of Reagan firing PATCO]." — Kurt Andersen (35:41)
• "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. ... There's so little ... unions at their peak, 30% of the American workforce was in a union... now ... it's like something like 6%." — Emily Peck (36:42)

4. The Numbers Round (41:28)

Each host presents a striking statistic from the week:

• Emily Peck:
  • 95,593 articles on COVID-19 published in 2020 on PubMed Central—"11 articles per hour" (41:32).
  • "It is a testament to the insane amount and fast work of researchers over the last year."
• Felix Salmon:
  • 1.9 — The drop in unemployment rate for people without a high school diploma, from 10.1% to 8.2% in one month (42:28).
  • "That's very encouraging."
• Kurt Andersen:
  • 23% — The increase in the Dow Jones Industrial Average since the day before the 2020 election (43:51).
  • Points out that the market, despite dire predictions from the right about Biden's policies, has soared.
  • "We are having our cake and we are eating it." (46:13)

Memorable Moments & Quotes (with Timestamps)

• Infrastructure as Racial Justice:

  • "How you do infrastructure is how you do racial justice." — Emily Peck (05:43)

• The ‘Semantic’ Infrastructure Debate:

  • "What a stupid, semantic and largely untrue argument to make, in my view." — Kurt Andersen (05:40)

• On Public-Private Partnerships:

  • "Why must it be one or the other? And it never is... the federal government is always there at the beginning as the, the angel, the VC that never gets sufficient credit..." — Kurt Andersen (08:45)

• Archegos & Wall Street Paranoia:

  • "It's like an over the top fictional story that I would find entirely implausible if it were Succession, the sequel." — Kurt Andersen (21:10)

• Systemic Risk Stress Test:

  • "Thank you, Bill Hwang, for this stress test." — Kurt Andersen (27:13)

• Union Effort’s Historical Resonance:

  • "If it goes and they say, yeah, we're union here now, it will be unequivocally the bookend to that 40 years ago moment." — Kurt Andersen (35:41)

• On Economic Fear and Labor:

  • "...it is that kind of fear on a massive systemic level that big business has used since 1980... to keep crushing unions..." — Kurt Andersen (39:22)

• Stock Market 'Murphy’s Law':

  • "Nobody knows anything when it comes to the stock market..." — Felix Salmon (44:36)

Important Timestamps

• 02:39: Kurt Andersen on becoming an "infrastructure nerd" and the significance of "infrastructure week"
• 05:43: Emily Peck outlines the racial justice angle on infrastructure
• 08:45: Kurt Andersen breaks down the public-private investment debate
• 13:34: Discussion of taxes and business opposition to corporate tax rate hikes
• 19:26: Emily Peck details the Archegos saga and regulatory loopholes
• 21:10: Andersen on the fictional quality of the Archegos saga
• 35:41: Andersen on the Amazon union drive’s historical significance
• 36:42: Emily Peck explains worker fear in union votes
• 41:32: Numbers round begins

Summary

With sharp banter, deep dives, and rich historical perspective, the Slate Money team unpacks some of the week’s biggest business stories. This episode’s highlights are the overdue realization of an American "infrastructure week," a detailed post-mortem of Wall Street's latest hedge fund unraveling, and the stakes of Amazon's union showdown. Crucially, the show draws connections between present action (or inaction) and historic patterns of economic policy, racial justice, and labor relations, all with Slate Money’s signature wit and insight.