McDonald's Fast Food Price War

Summary

Slate Money Podcast — "McDonald's Fast Food Price War"

Date: June 22, 2024
Host: Felix Salmon, with Elizabeth Spiers and Emily Peck

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Episode Overview

This episode unpacks the recent "price war" in fast food, particularly McDonald's $5 meal and its industry-wide ripple effects. The team debates whether this signals a meaningful shift in food pricing, explores the psychological and business implications, and expands on the unique cultural position of McDonald's versus competitors. Other major segments include the "quiet vacationing" trend and the return of "bond vigilantes" amid global political uncertainty. The episode maintains a conversational, witty, and insightful tone throughout.

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Key Discussion Points

1. McDonald’s $5 Meal and Fast Food Price Wars

(00:25–15:22)

• What’s Happening:

  • McDonald’s launches a $5 meal (burger, nuggets, fries, drink), with Burger King and Wendy’s quickly following suit. Even Starbucks joins with its own $6 deal.
  • The panel discusses the rationale: to attract customers who perceive fast food as no longer cheap due to significant post-pandemic price hikes.
  • Notable stat: Prices at McDonald’s are up around 40% since 2019 (Emily Peck [02:31]).

• Press and Cultural Reaction:

  • Viral meme of an $18 McDonald’s meal receipt sparks outrage, highlighting franchisee price variation.
  • McDonald’s receives outsized media attention and “earned media” from these promotions, reinforcing its brand dominance.
  • Quote:

    “It gets you... The media is just so interested and, I mean, this is our lead podcast item for the week. Is so interested in McDonald's. It's like they get all this earned media just for doing this deal... It’s got to trigger something in the psyche.”
    — Emily Peck (05:25)

  • Children as a driver: McDonald's markets directly to kids—Happy Meal, in-store playgrounds—reinforcing generational customer loyalty (07:22).

• Business Implications:

  • Loss leader strategy: McDonald’s expecting to lose money on the meal to recapture customer habits.
  • Franchisees struggle since corporate may not fully reimburse for losses; Coca-Cola helps subsidize the soft drink component (04:21–04:39).
  • Is this sustainable? Doubt remains that habitual customers will return once the deal ends.

• Value Meals & Discounting Culture:

  • The panel contrasts McDonald’s large-scale discounting power with smaller or upscale chains—Sweetgreen’s targeted offers, Starbucks luring regulars with temporary price cuts.
  • Psychology of pricing:

    “Knowing something is really cheap at a place you like to go makes you want to go there.”
    — Emily Peck (09:08)

  • For upscale venues, deep discounts risk undermining the aura of exclusivity (11:43–12:07).

• Non-Sticky Pricing & Consumer Uncertainty:

  • The hosts discuss the trend toward dynamic pricing, where actual costs are increasingly opaque.
  • “The idea that there is a price for a Big Mac... has basically gone out the window... There is no one singular price anymore.”
    — Felix Salmon (13:20)

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2. The Trend of “Quiet Vacationing”

(15:22–25:53)

• Trend Definition:

  • Quiet vacationing: employees taking time off without formally notifying their boss (15:23–15:37).
  • The Harris Poll claims millennials do this more; the panel questions the finding's statistical rigor.

• Work-Life Blend:

  • Stats from the poll:
    • 67% respond to work outside normal hours.
    • Majority take meetings during PTO.
  • Boundaries between work and life have eroded in the remote work era. Vacation is less a clear binary.

    “You don’t tell bosses you’re on vacation because you never are. You’re always working.”
    — Emily Peck (19:32)

• On Presenteeism and Gender:

  • Citing a 2015 paper, perception of “quiet vacationing” is gendered—men sneaking off are assumed to be out with clients, women assumed to be dealing with home matters (24:42–25:53).

• Wider Implications:

  • Post-pandemic shifts: many have never met their boss in person; formality increases.
  • Work culture expects near-constant availability, making classic “time off” harder to assert.

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3. Bond Vigilantes and Politics' Impact on Markets

(25:53–39:51)

• Context:

  • Bond markets are reacting to political risks in France (far-right election uncertainty) and the UK (upcoming Labour victory), echoing fiscal discipline concerns of the past.
  • The term "bond vigilantes" is explained—markets punishing government fiscal recklessness, as with the Liz Truss mini-budget collapse (28:58–30:04).
  • American fiscal woes: recent CBO report projects $50 trillion national debt by 2034.

• How Much Do Politicians Matter to Markets?

  • Uncertainty (who's in charge, what surprise policies might emerge) can roil bond markets, as shown by the UK example.
  • In the 2024 US context:

    “We have a matchup where both people have been president before... so the risks are a little bit already priced in.”
    — Elizabeth Spiers (32:18)

  • Yet, neither party has a credible plan for long-term fiscal challenges.

• Kicking the Can Down the Road:

  • The Social Security trust fund is on track to be depleted by 2033; the US tends to address crises with last-minute legislation (37:01–38:34).

  • “That panic debt ceiling kind of knee jerk response is clearly the worst way to do fiscal policy.”
    — Felix Salmon (38:27)

• Comparing Policy Environments:

  • UK’s expected Labour landslide seen as stabilizing: “If you have a massive majority, you can do whatever you want and there’s no fights and there’s no obstruction.”
  • US faces more gridlock and potential last-minute chaos, which markets dislike.

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Notable Quotes & Memorable Moments

• “McDonald's is the largest restaurant chain in the United States. So it just eclipses everyone else. And McDonald's targets... children. They literally have playgrounds in the restaurants.”
  — Emily Peck (07:22)

• “I don’t think this is a sign of disinflation... It’s more just a sign that the crazy times are over.”
  — Emily Peck (12:16)

• “Work is a little bit like traffic. You know, the law about how traffic expands to fill the amount of road space available. Like work expands to fill the amount of phone notifications and Internet bandwidth...”
  — Felix Salmon (19:32)

• “If you go to McDonald’s, Burger King, Wendy’s, you can get a meal for $5, it’s a real number... it’s comforting to see, like, $5 easy.”
  — Emily Peck (14:43)

• “The Big Mac index ... that concept of homogenous item having a single price, nationwide has basically gone out the window.”
  — Felix Salmon (13:20)

• (Re: hot-desking) “If you're going in even twice a week, you should have your own setup or something. It's just the right thing to do.”
  — Emily Peck (46:43)

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Timestamps for Major Segments

• McDonald’s Fast Food Price War: 00:25–15:22
• Quiet Vacationing: 15:22–25:53
• The Bond Vigilantes & Political Risk: 25:53–39:51
• Numbers Round (Fun statistics & rabbit holes): 39:51–46:52

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Episode Structure and Flow

• Opening & Lead Story (McDonald’s Price War):
  • Set the business and social context for new value meals, industry response, franchisee economics, and consumer psychology.
• Broader Discount Strategies in Dining:
  • Discusses parallels in other food and retail sectors.
• Work Culture Evolution (Quiet Vacationing):
  • Unpacks new trends in employee behavior, erosion of boundaries, and generational patterns.
• Global Political Risk and Market Response:
  • Explores recent and upcoming elections, government bond market anxieties, and fiscal policy implications.
• Fun Numbers Round:
  • Quirky stats on baby name trends, Sondheim memorabilia, and office seating culture.
• Closing:
  • Teases upcoming Slate Plus segment (not summarized here), wraps up show.

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Summary Takeaways

• The fast food industry’s price war centers less on returning to “cheap eating” than on rekindling customer habits and project pricing certainty amid years of volatility.
• Price transparency and consistency have largely dissolved in much of the consumer economy, replaced by highly variable, dynamic offers.
• The “quiet vacationing” phenomenon isn’t new but highlights the challenges of work-life boundaries in a remote-first, always-available culture.
• Political developments are once again able to rattle bond markets (“bond vigilantes” return), especially where sudden or unexpected fiscal policy changes are possible.
• Across themes, the episode emphasizes the shifting, often unstable nature of price, value, time, and economic certainty in today’s world—with the occasional need for levity and a good story (or Sondheim anecdote) along the way.

Transcript

[A]

Hello. Welcome to Slate Money, your guide to the business and finance news of the week. I'm Felix Hammond of Axios with Elizabeth Spires of the New York Times.

[B]

Hello.

[A]

With Emily Peck of Axios.

[C]

Hi, Felix.

[A]

We are going to talk about McDonald's. They have a $5 meal. Burger King has matched. What does this all mean? We are going to talk about this concept that the Harris Poll has come up with called quiet vacationing and whether it's a thing and whether we should be worried about it. We are going to talk about the Bond vigilantes and whether they're back in places like France and the uk. We have a Slate plus segment on Yankee Stadium and whether or not it's truly is accepting cash for payments. It's all coming up on Slate Money. So Emily, as the suburbanite among us, you are more attuned to chain restaurant prices than Elizabeth and I. I can tell you that non chain restaurant prices seem very high. But, but the vibe seems to be that eating out is expensive and even cheap eating out is expensive and it doesn't get much cheaper than McDonald's and Burger King. And now they're in a price war and They've announced these $5 meals where they're going to lose money on every meal and make it up in volume. Something like that.

[C]

Exactly. Yeah. There is a price war in fast food. Woo. Good for people, probably not good for these businesses, but bad for cows. Oh, pour one out for the cows. But McDonald's starting this coming Thursday I believe is going to be doing a $5 meal. It's gotten a lot of press. I think it's like a sandwich, a burger, some nuggets, fries and drink $5, which is a good price.

[A]

But you get burger and nuggets or burger or nuggets.

[C]

Burger and nuggets. According to my research. Yeah, it's only four nuggets. So I wouldn't get that excited about it. But I did think about like how, how did this become a thing? The burger and the nuggets and fries.

[A]

I think that was, I think that was Cactus Jack. I think Cactus Jack made the burger and nuggets combo popular. I am making this up.

[C]

What's Cactus Jack?

[A]

Oh, Emily, keep it.

[C]

Any who, but this is, this is apparently. And so McDonald's is doing a five dollar meal. Wendy's, Burger King, even Starbucks is doing, I mean they're doing a $6 thing where it's like some, a food, a food and a drink. I don't, don't ask me for more details, but this is basically a return to normal, is my understanding. Because during the pandemic years, these fast food outlets were just raising prices like having a great old time. Even in the McDonald's CEO wrote a little like, rejoinder to the haters recently saying, like, people say big Macs cost $18 now, and that's not true. And like, it's not that bad. And even buried in his rejoinder to the haters was the information that prices at McDonald's average for all menu items are up 40% since 2019, which is a lot of money. And like, you could maybe understand why people would be saying, I don't want to eat at McDonald's, it's too expensive, I might as well go eat at a, like, restaurant or something. Um, so now we're seeing a return to the idea that you have to compete on price if you're a proprietor of a restaurant that is known for selling cheap food. So I think that's what's happening here.

[B]

There's also people were upset because there was a kind of meme ified receipt where somebody at a franchise in Connecticut had paid like $18 for a burger meal.

[C]

Yes, $18 for a burger meal.

[A]

And so wait, was, was that a real receipt or is that, was that just like a viral misinformation?

[B]

I think no, I think it was real because sometimes there are. The franchisees are allowed some flexibility in how they package things. So I don't know what part of Connecticut this was, but.

[A]

But they do have to sign up for this five dollar meal deal, right? And then I guess McDonald's corporate will reimburse them for their losses.

[C]

I don't know that they're reimbursed for their losses. They've been complaining about it and I haven't seen anything about reimbursement. I know that the Coke is, is kicking in some money to help to make this deal happen. That was in one of the reports we read in the prep. Yeah, you gotta get a soft drink with your meal. It's. It's one of the items in, in.

[A]

The meal, which is why, which is why a $5 meal is still something that is even cheaper in a weird way than like a dollar burger. Because by the time you add in the Coke and the fries and whatever else the four nuggets, it's all, it all adds up. Anyway, the point being that there is a price war and this is a good old fashioned loss leader with the idea of getting people back into McDonald's restaurants and back into the habit of buying meals at McDonald's and once this special offer expires in six weeks or whenever it expires, people will be so habituated to going to McDonald's that they will just happily go in and buy the same thing and pay twice as much. Yeah. Do we believe that's gonna happen?

[C]

I don't know. I'll tell you this. I just read six articles about McDonald's $5 meal and I'm kind of like, maybe we should go to McDonald's. You know, like it just, it gets you these. The media is just so interested and I mean, this is our lead podcast item for the week. Is so interested in McDonald's. It's like they get all this earned media just for doing this deal. It's gotta trigger something in the psyche. I mean, there were some stat. I think the CEO of McDonald's mentioned it, like 80% of Americans eat, have eaten at McDonald's in the past year or something crazy like that. I should double check. So just being reminded of it, you already know what the experience is. And unless you're like Felix or something, you think like, well, it's kind of tasty, you know, oh, it's not good for me. But like those fries are good. So I feel like it could work.

[B]

Also if you have children and children. I have a 9 year old who sort of favorite thing is a Happy Meal. And you know, like every time we go in, there's a different item on the menu that seems directly marketed toward children. And right now his thing is like a frozen raspberry slushy. Something, something. It's one of those things where you're going to get dragged into McDonald's if you have a child no matter what.

[A]

Is this just the sort of competitive moat of McDonald's versus Burger King? Because Burger King is also doing a $5 meal, they're entering this price war with gusto. There is much less kind of memeing of Burger King prices. People don't complain, oh, it costs so much to go to Burger King. They complain that it costs so much to go to McDonald's. Burger King. I've never heard anyone talk about the Burger King Happy Meal. I'm sure they have some kids something, but it doesn't seem to have the same sort of cultural valence. And I feel like they're always going to just be an also ran to McDonald's and I don't quite understand why.

[B]

Yeah, there, well, there's so much. There are so many more McDonald's. I mean, the franchises are just more ubiquitous for McDonald's it's the largest restaurant.

[C]

Chain in the United States. So it just. Yeah, so it just eclipses. Eclipses everyone else. And McDonald's targets, it's weird to say targets children because it makes it sound really nefarious, but they do. They target children. They literally have playgrounds in the restaurants. And Burger King doesn't do that. Right. And I mean, for a time that a clown as a brand ambassador slash mascot, which I guess is meant to appeal to children, though many find clowns terrifying.

[A]

So the next question is, does this kind of tactic of if you reduce your prices, that's going to get people in the door? Does that work for much smaller chains? Like, would that work for Seraphina or Sweet Green or, you know, like someone like that? Or how big do you need to be in order for this kind of strategy to have a chance of working?

[B]

I think it's about whether they have items on the menu that are considered quote, unquote, value meals. You know, like, if you're going to sweetgreen, it's probably, you know, budget is probably less of a consideration, certainly at Seraphina, But a lot of people will go to fast food places, especially if they live in food deserts, because you can get some satiating protein of some sort pretty cheaply.

[A]

Yeah, I'll take the other side of that, I think. Well, I used to work next to a Sweetgreen back before Axios closed its New York office. And Sweetgreen would send me sale deals. They're like, today, get $5 off a kale salad. I'm like, okay, in that case, I'll buy the kale salad. And it totally worked.

[C]

Yeah, I think. I mean, a $5 meal is really cheap in these times. Right. I mean, where else could you get a five?

[A]

It's definitely cheaper than the kale salad at Sweet.

[C]

Knowing something is really cheap at a place you like to go makes you want to go there. Like, I have this weird addiction now to Starbucks chai lattes. And if they sent me a message and they were like, the chai lattes are $3. Like, I'm more likely to, like, hop in the car and get over there, because it's a good deal.

[B]

That's right. Dollar menus are really popular at pretty much all fast food places because people just. They're like, oh, you can get a whole piece of food for a dollar, which seems cheap no matter what it is, you know?

[C]

Yeah, I guess there are some. Like, for some restaurants, the idea of a discount item or a sale item would be like, a lot of restaurants are judged on their prices as a marker of quality?

[A]

Yeah, I think not. I mean, like one of the things I've noticed in the past year or two is a lot of people talking about especially sushi omakase in terms of value. Like it ranges so much in value. You can find a $50 omakase or a $500amakase. And they actually, you know, there's a lot of discussion is it worth it? Because there's really no limit to how much you can spend and there's no obvious correlation between price and quality. And so people are really sort of seeking out the good value on MacArthur and I think that's happening more broadly. One of the things I've seen taking off in New York recently, and I think it's in other places too, but not quite as ubiquitous, is this super interesting app called In Kind, which provides working capital to restaurants and they basically pay, repay that loan in kind in meals. So what you do as a diner is you kind of, you throw some money at the app and then they give you dining credits with that money. But if you put, if you give them like $500 of money, you get like $700 of dining credits. And it's an effective discount. And then what you do, you can use those dining credits at any of the restaurants that have received these loans and you wind up having an incentive to go to those restaurants because you, when you go to those restaurants, you're effectively eating at a discount and everyone kind of wins. I like it. And it's a, it's a way of sort of getting people in the door and doing discounting and also getting working capital and stuff without necessarily having a big visible sale of, you know, we have reduced our prices or something like that.

[C]

That's interesting. That reminds me of in high school, my friend, her parents had this like coupon book of for restaurants in the area and we'd be like, let's go out to dinner, let's see what coupons are in the book. And it would be like, you know, get $15 for one of your entrees or something like that. And we'd like tear out the coupon and go to the restaurant.

[B]

Do you think that for. To go back to Emily's point for really high end places like if Erewhon started selling $5 smoothies, would people be responsive to that or would they be like, oh well, that sucks the fun out of not paying, paying up for.

[C]

The Hailey Bieber whatever expensive Los Angeles.

[B]

Store, Whole Foods on steroids kind of Place where people will pay, you know, 20, 25 bucks for branded smoothies by celebrities.

[C]

I think if an expensive place has one cheap item that it's promoting that people would be into that. To answer your questions, yeah, I'm always.

[A]

Into my like oyster happy hours, but.

[C]

I think this is a good sign. I don't think this is a sign of disinflation. I feel like I read some takes that were like prices are actually coming down in fast food. It's more just a sign of the crazy times are over. And there was a long stretch where these a lot of places, not just fast food but other retailers could just raise prices and no one seemed aware of it. Like people were aware of inflation, but they were accepting of higher prices for a while. And those days are now over. I think for me.

[A]

I think it's yet another symptom of non sticky prices which is something that really came into its own. It started pre pandemic, but it really came into its own post pandemic, which is the ability of every single company selling stuff to humans to really optimize their prices. And we've talked about this in previous shows according to the time of the day and what kind of browser you're using and what city you're in. And the idea that there is a price for a Big Mac. You know, the Economist has its famous Big Mac index and they're like, how much does a Big Mac cost in Austria versus how much does it cost in Thailand? And then they work out some kind of purchasing power parity from that like that concept of like homogenous item. Having a single price, you know, nationwide has basically gone out the window that not only does it vary according to geography within a country, but it also just varies according to where, what day of the week you happen to walk into the restaurant and with these $5 meals like, you know you like. The Big Mac doesn't change in price, but if you combine it with a fry and a drink, then it does change in price, but only for six weeks and then it goes back up again and that kind of, I don't know how much it costs. There is no one singular price anymore. We are just always going to be trying to chase what happens to be cheap today and try and find out. And the people setting the prices have much more information than we are and we're always at a disadvantage. And we wind, you know, paying so much more for a plane ticket than the guy sitting next to us because it's just random at this point. And that feeling of like, not being in control of how much you're paying for something and not being able to have a rational expectation of how much something is going to cost before you buy it is, I think, just part of life now.

[C]

Maybe that's why this story is resonating and being so widely covered, because now, you know, if you go to McDonald's, Burger King, Wendy's, you can get a meal for $5. It's a real number. Like, I couldn't tell you how much it would cost to get a meal at those places otherwise. You know what I mean? Like, so to your point, Like, I don't. I don't know. Prices are always changing and they're weird, but it's comforting to see, like, $5 easy.

[A]

Emily, Shh.

[C]

Quiet vacation.

[A]

Don't tell anyone you're on vacation.

[C]

I'm on vacation. I'm not, though. But I wish I was, but. And if I was, I would tell people, Felix, I wouldn't do it this new way that we've coined a new term for quiet vacationing.

[A]

So there's this concept which Harris Pol is trying to make happen called quiet vacationing. And I'm not sure that it deserves to be, you know, promoted into the pantheon of quiet quitting and vibe session and all of these other, you know, things that we're talking about, this new world. The idea is that you take time off work without telling your boss. And what they did was they went along to a thousand people, you know, some subset of whom were millennials, and they asked, have you done this? Have you taken time off without communicating it to your manager, employer? And it turns out that in this poll, the number of millennials who say yes to that is much higher than the number of Gen Zs or Gen Xers who say yes to that. Which, you know, we can talk about why that might be or whether that's just a weird statistical artifact, but they also talk, you know, conversely, about, like, when you're on vacation, do you reply to emails from your boss? Do you wind up doing sort of worky things on vacation? And the big picture here really, is that for a lot of time off, not necessarily like the big vacation to Zambia that I just did, but, like, for a lot of time off where you're just, you know, taking a long weekend to go to the countryside or something. Yeah, you can do a little bit of, like, you can answer a quick email, you can check into Slack, you can put in an emoji or something, and that's actually worked, but it's no big deal. And it actually makes life, your life easier in terms of re entry once you come back because you don't have all of that random stuff that you need to catch up on. And so the flip side of that is, if you are officially working one day and you wind up doing a yoga class in the middle of the day, is that taking time off? Do you need to tell your manager or employer that you are taking them yoga class? Probably not, but I don't feel that that is quiet vacationing. I don't think that is. Like I have actually taken a vacation and my employer didn't know. So this is why I'm hesitant to embrace this quiet vacation concept.

[B]

Yeah, I mean, I guess it depends on how the survey respondents would define taking off. Like, do they mean going, you know, disappearing for an hour or two or being out the whole day?

[A]

Well, exactly. And that's why we were very careful to look at the actual question. Because when it doesn't say take an entire day off, it just says take time off.

[B]

But let's say. Let's say it does mean take an entire day off. The generational split kind of seems intuitive to me. Gen zers are less likely to do it, and I think it's because they have higher standards for what they do and don't owe their employers. They think that they're more likely to be open about the fact that they want work life balance and don't feel like they should have to worker on the clock. So they allowed vacation more.

[C]

Yeah, I think pulling back from, like the way the question was worded even, or even the generational differences. I mean, I think one thing that, that's kind of clear is that work and vacation or work and the rest of your life have become so melded. Like, another question in the crosstabs asks, like, do you respond to work messages outside of regular hours? And it's like 67% of people do that. Check, you know, messages while you're out to lunch. 65% do that. Do you respond to work requests outside of regular hours? Again, it's like low 60s. Do that. Take meetings during time off? Majority of people do that. So it's like, yeah, okay, you don't tell bosses you're on vacation because, like, you never are. You're always working. Why would you tell them, like, I'm not working? Because that's not even true anymore.

[A]

There's been a long history, and Emily Peck is the, you know, one of the acknowledged experts on this long history of a bunch of experts coming out and saying it is good to have boundaries and it's good to have like time when you are working and time when you are not working. And it is good to be very much not working and not responding to emails and not checking into Slack and et cetera, et cetera, when you're not working. And you know, to the point at which this kind of stuff was enshrined in French law, famously. And it's like illegal for people to reply to emails when they're, you know, not in their 9 to 5 window of work or whatever. You know, as a journalist responding to news, this is also completely alien to me. I'm like, well, obviously I'm just going to do stuff when it happens. But there's a big struggle. And this is. This dates back to pre pandemic. But then once we all started working from home, it became much more entrenched. It's like the work is a little bit like traffic. You know, the law about how traffic expands to fill the amount of road space available. Like work expands to fill the amount of like phone notifications and like Internet bandwidth and stuff that you have going on. And if you just turn all of that shit off and literally just disappear to the beach and you don't even take your phone with you, then, yeah, you're on vacation. And if you have your phone with you and someone pings you, then you're a little bit not on vacation. And the boundaries are not as clear as they used to be. And I feel like it's quixotic to try and create rigid boundaries in this world. You know, for all that there is an infinite number of academic experts who are saying it is very good to take time off and it is good to set boundaries and you should not be working outside the boundaries that you have set. And all of this kind of stuff. Like I've heard it a million times and I'm sure they're right. I just don't think that in the grand scheme of things it's actually particularly realistic.

[C]

Yeah, I mean, and you said it. When you start off the conversation like it, it makes sense to, to check these things and keep. Because it makes your re entry easier. And I think a lot of people think like that, you know, they're, they're not going to completely check out of email or Slack or whatever on vacation because then they're just making more work for themselves when they get back. And there's truth to that because I think a lot of organizations maybe are understaffed or they rely on people overworking and that's like part of the plan, you know, part of the budget. And there's rewards for overworking.

[A]

I don't even think it's that they rely on people overworking. They just rely on people having awareness of what is going on. You know, and if you spend two weeks with no awareness of what is going on, then you are going to have to do a huge amount of work to try and catch up on working out. What the hell happened in the past two weeks?

[C]

Fine. What about, what about people who aren't comfortable telling their boss, like, they're going to a yoga class in the middle of the day? You should be able to tell your boss you're going to yoga class in the middle of the day. Especially if you're like, working on weekends and checking and being available all the time. Like, you know, there should be a comfort there. And I think that's a problematic.

[A]

Yeah. And I do think that as well is a post pandemic thing where millions of people have literally never met their boss in person. That the relationship with the boss is a very kind of weird, attenuated thing and everything becomes sort of formalized. And there are KPIs and, you know, there's a question in this poll about like mouse jigglers and stuff. There is this feeling of like, am I being paid to do the job or am I being paid to try and tick a bunch of boxes off my performance review? And at that point you're like, I could ask permission to take this yoga class, but then they might say no, and so why not just take it? And then if they don't know, what they don't know won't hurt them.

[B]

I think there's also just. It's a work culture thing where most employers believe that even if you don't work a regular 9 to 5, that during regular office hours you are supposed to be available and that time really belongs to them. And, you know, some of it too is just we've gotten so accustomed to that that even doing normal things in the middle of the day feels a little off. Like, I read an essay by a woman a couple weeks ago who was newly retired, and she talked about how strange she felt reading a book in the middle of the day just to, like, read, you know, and it's. It's sort of crazy. I sometimes feel that way when I'm reading stuff that we have to read for the podcast because I'm so used to having to do the busy work and stuff in the middle of the day.

[C]

So everyone just expects that they're available to their work during business hours. And that's why you would cover it up.

[A]

Yeah. And it is the dumb availability. Back when I had a weekly newsletter, that new weekly newsletter would always get written between midnight and two in the morning on a Thursday night because that was the only time that I wasn't doing a bunch of random bullshit during the middle of the day.

[C]

And I think it was important to note, I think it was the Emily Stewart piece in Business Insider that noted, like this concept, quiet vacationing, taking time off but not telling your boss is like not a new, a new phenomenon. And she wrote about this paper that I still remember from 2015, where Erin Reed, I think was the, was the author and she looked at one consulting company and the gender differences between, you know, the differences between men and women in terms of like the perception of goofing off. So like both the, if, if men were out of the office early, like at 5 o' clock or in the middle of the day, the assumption was they were out with clients. But if the women were doing the same thing, the assumption was, you know, they were dealing with like childcare issues. And then it turned out that a lot of the men were like skiing in the middle of the day and no one was any the wiser. And they weren't penalized for it or anything. Like, they, they just were able to just go skiing and like. So I think, yeah, like maybe under explored in this Harris Pole or is just perceptions of the quiet vacationers who gets to do it and get away with it and who, who doesn't?

[A]

You know, we should all be like Patagonia and just like set the workday according to the surf in California. So let's move on to something which I've been thinking about quite a lot and I wanted to talk to you guys about, which is the effect of politics on economics and specifically the way in which the markets seem to be very worried about a potential far right victory in the French parliamentary elections, even though the President is not up for reelection. And they're still going to have this centrist president no matter what bond spreads are gapping out. France is considered to be riskier than Portugal. Now the stock market has sold off and there's this general fear of fiscal irresponsibility and that the Front national or whatever they're calling themselves these days will just wind up spending a whole bunch of money they don't have, and that will be bad for markets. And there's something similar going on in the UK election, which is an absolute certainty Everyone knows what the result is going to be. And so markets aren't really moving on it because it's been priced in forever. But the policies of the Labour Party, which is going to win, are clearly being put together in the shadow of the bond vigilantes. They're not making grand fiscal promises in the kind of way that they did the last time around under Jeremy Corbyn, precisely because they're like, we want the markets to not have a freakout like they did under Liz Truss. And the bond vigilantes are kind of back, and they're not back in the us, But I feel like it's only a matter of time until they come back in the us. We just got report from the CBO talking about a $50 trillion national debt in 2034 and interest costs rising to absolute record levels as a percentage of GDP, like 7% of GDP, something like that. And people are really worried about the way that politicians are affecting a really important part of the economy. And the government is roughly half the economy in all of these countries. So that's what I wanted to ask. It's like, to what degree does the difference between this politician and that politician, whether it's Rishi Sunak versus Keir Starmer, whether it's Emmanuel Macron versus Marine Le Pen, whether it's Donald Trump versus Joe Biden, to what extent does that make a big enough difference that markets will really care which one wins?

[C]

But first, before we get to the answer for your question, I think you need to remind listeners what you mean when you say bond vigilantes and also remind people what happened with Liz Truss.

[A]

So back in the Clinton years, James Carville reportedly said that he wanted to be reincarnated as the bond market because it's the most powerful thing in the world. And the bond vigilantes are basically. Whenever Bill Clinton would put forward a policy that the bond market considered to be recklessly profligate in some way fiscally irresponsible, the Yield on the 10 year treasury bond would go up and suddenly the cost of borrowing for the US government would go up. And this was basically the markets punishing the government and the executive for doing things that were irresponsible. And that mechanism became known as the bond vigilantes. Something very, very similar happened when Kwasi Kwateng and Liz Truss. You remember Liz Truss, he was the person who was UK Prime Minister for.

[C]

15 days or something. I remember the lettuce. I remember the head of lettuce.

[A]

She lasted less. Yeah. The Daily Star put a live cam of a head of lettuce on the Internet. And they're like, will Liz Truss last longer than this head of lettuce? And the answer is no, she did not.

[C]

She did not.

[A]

But the reason she did not is she came out with this massive tax cutting mini budget, it was called, and the bond market freaked out. And it turns out that there were non mini budget related reasons why the bond market freaked out in the way it did, why it sold off so much to do with pension fund asset liability management, which we do not need to get into. But the fact is there was a freak out and it cost both Kwasi Kwateng, the Chancellor, and Liz Truss their jobs. And bond yields are still relatively high in the uk and it is very clear that no one at treasury or the bank of England wants them to be any higher than they are. And so this worry about, you know, what will the bond markets do? Will we, you know, the government is being constrained by the bond market, seems to be coming back in a way that basically I don't remember happening at any time since the mid 2000s. And I feel like that's new.

[C]

So that's new. But you're asking something about, does it matter who is in charge? Does that affect the bond market? And I feel like you just answered your own question with the Liz Truss example. And the answer is, yeah, it matters sometimes, right? I mean, if a new person surprises people with something that no one was expecting in terms of fiscal policy, then it matters to bond markets.

[A]

And the UK, of course, has a parliamentary system where the executive and the legislature are basically the same things. If you have a majority in Parliament, you can just basically do whatever you like. They don't have the system that France and the US have, where the legislature can do what it likes, but it needs to get signed into law by the President. And the president can't really do anything on their own. But this is why, like, Mark Zandy of Moody's just came out with a forecast for, you know, various different economic forecasts under various different results of this coming election. And he's like, broadly speaking, Trump would be worse than Biden, but especially Trump would be worse than Biden if he has a majority in both houses, because then he will be able to do all of the tax cutting that we can't afford in the way that he wouldn't be able to if the Democrats retain at least one of those houses.

[B]

Yeah, it's also an unusual situation because we have a matchup where both people have been president before. So, you know, they're, they're both known quantities. We do have a record of what they do historically. So I think the risks are a little bit already priced in here.

[A]

Expand on that. Elizabeth, when you say the risks are priced in, obviously we don't know. We don't know who's going to win. Saying that economically speaking, there's not a big difference between the two.

[B]

Well, I'm saying that people are not as worried about being completely surprised by something either candidate does.

[C]

There's less uncertainty.

[B]

Yes.

[A]

So basically what you're saying is that we've seen one Trump presidency, it turned out not to be terrible from an economic perspective, and so everyone's just assuming that a second Trump presidency would play out in a similar fashion.

[B]

Yeah, it wasn't. I mean, it wasn't terrible for markets. It was terrible in a lot of other ways. But, you know, the markets will react based on a kind of overall perception of stability. And, and right now, I think, you know, you're looking at two candidates who we do have a historical record for. So people are not, as, I think, freaked out about either possibility from a market's perspective.

[A]

So be very specific here. Are you talking about the bond markets or the stock markets? Because I feel like the important one is the bond market, the important one is the treasury market. And I do think that the treasury market is worried about both candidates. And the general consensus of everyone I'm reading on Wall street is neither side has a real plan to get their fiscal ducks in a row. And this is a big long term problem. And you can say, well, yeah, the big long term problem is price in, because there's no difference between them and we're just pricing in a big long term problem. But given that there's a big long term problem, I feel like it's sort of intuitive that there might be a difference between the two.

[B]

Yeah, I think. No, I think there is. I think bond markets are always more sophisticated about these things. But would you, would you say that right now the concern in the bond market is really bond vigilantism the way that it is in Europe?

[A]

Well, I'm not even sure there's bond vigilantism in Europe. The French bond yields have gone up, but they haven't spiked to unprecedented levels. They're not basically forcing Marine Le Pen to backpedal on various promises. I do think, though, that bond yields are reacting to fiscal policy in a way that they just haven't for most of the past 15 years. It's like it's a new driver of bond Yields that didn't used to exist. It used to be really what they cared about was the future direction of interest rates. And they're like, what's going to happen to rates? And if you tell me what's going to happen to rates, I'll tell you what yield I should be. And now they're increasingly looking at fiscal as well.

[C]

Maybe this is really about the end of neoliberalism because we've had expansionary fiscal policies in the US at least, maybe not as much in Europe, where the government has spent a real lot of money without caring about deficits for the first time since the last time there were bond vigilantes. So it sort of makes sense that they would come back at a time when like, politicians don't seem to care about debt or deficits anymore. And for a while they did. So there didn't need to be a bond vigilante because politicians are doing that work themselves. But now there's less concern with all of that. So sort of would make sense that you need something to balance out that lack of concern.

[A]

Yeah, I think that's right. It's hard to think of a major national politician on either side of the aisle who seems to care at all about deficits or fiscal policy.

[C]

Yeah, like Donald Trump. I think I read this somewhere. He wants to get rid of the income tax or something and wants to replace it with just tariffs. Like that's bananas. And that terrorists would not. Bad idea. And like that would be very deficit producing. But I don't know, like he. I don't think his supporters would care about that. They'd be like, cool.

[A]

Yeah. But also like, he can say these things precisely because there is zero chance that that would ever get through the Senate. You know, even with a Republican majority, there's no way that the Senate is going to abolish the income tax. It's just like not going to happen.

[C]

Yeah, I was thinking like, well, there are a lot of really crazy candidates. You never know. But yeah, I'm pretty sure you're right. We'll have the income taxes here to stay though. It might get lower for the rich people. Yeah. Which is a bad idea.

[A]

I'll just say so. Yeah. So now I feel like for the first time I can remember, there are lots of sort of non politicians coming out. The Tax foundation, the Manhattan Institute, people like that. Basically saying his ways of trying to deal with this fiscal problem. We have, like the immediate fiscal problem, it's not that far away, is 2033, when the Social Security trust fund runs out. Congress needs to do something. It has no choice. Right. It can either give Social Security borrowing power to be able to borrow the money it needs to be able to pay out, or it needs to change Social Security or it needs to just fund Social Security itself somehow with some new taxes or something. But something needs to happen because I can pretty much guarantee you this is a little bit like the debt ceiling. If you come up to the 11th hour and tomorrow morning, absent any action, Social Security benefits are going to be cut by 20% across the board. Congress will do something to prevent that. We just have no idea what it is. And that kind of like panicked last minute response of oh shit, we need to do something right now, otherwise stuff is going to be really bad tomorrow. That panic debt ceiling kind of knee jerk response is clearly the worst way to do fiscal policy. You know, having like a thought out plan which you can implement in advance and you know, allow people to read before it's voted on would be vastly superior.

[C]

Yeah. That's not how we do it in the United States anymore though.

[A]

Right.

[C]

I mean, it's just not.

[B]

We also have a Republican Party that believes that they benefit from obstruction. So last minute shenanigans they think accrue benefits to them.

[A]

I don't think they accrued any benefit from the debt ceiling. Bullshit.

[B]

They believe they do because they believe that voters are basically evaluating the executive and not them.

[C]

I guess they think when voters believe that the government is all messed up, they vote for Republicans because Republicans don't like the government.

[B]

Yeah. And they blame the President even if he's not the source of the chaos.

[A]

So maybe, maybe.

[C]

But that's what markets don't like that last minute Jim Jam. And that's what we have more of now.

[A]

And maybe we're going to have more of it in France. And that's why, and maybe that's why markets are so sanguine about this massive labor majority that we're going to see in the UK is there, there will be no last minute anything because you know, if you have a massive majority, you can do whatever you want and there's no fights and there's no obstruction.

[C]

And they're also talking very, in a very fiscally responsible way. Right. That was my sense from reading the coverage. Like they learned a big lesson, like you said, from Liz Truss. And they're not going to, they're not going to do anything crazy even though they're labor and that's what they're supposed to do. So what is happening?

[A]

Let's have a numbers Round, shall we? Elizabeth, do you have a number?

[B]

Yeah, my number is one, and it's a sort of number in a number. It's a one in four. And that's the number of American men who have a name that ends in N. So I was reading about a piece in the Washington Post about baby name trends, and apparently you can sort of tell when somebody's born by the ending of a name or when they peaked. So just for an example, girl names that end in ly peaked in 1970, and then in 87, names that end in L, E, Y peaked. And then in 2019, names that end in L, E, I, G, H peaked. And so some of it is people trying to give their child a unique name that's distinctive enough that people would differentiate it from whatever the traditional spelling of it is. And so there are these trends that come and go. And the woman who is studying this phenomenon refers to this as username creation mentality, which is why you can see like Lindsay or Caden or whatever spelled 40 different ways. Because people have this mentality that if they spelled it in a common way, that name's already kind of taken, you know?

[C]

No, don't always spell it in the common way.

[A]

Emily, I need to ask you, have you ever come across an Emily spelled E, M, I, L, E, I, G, H? Like, is that something that even exists?

[C]

I hope it doesn't exist.

[B]

I bet they do. I can.

[C]

I don't like when the coffee place spells. Spells my name E, M, I, L, I, E. I'm like, who? Whose name is that? I'm so sorry. For any listener's name, that's a standard French name.

[A]

Okay.

[C]

But it's. My name is spelled the correct way.

[A]

But yeah, I feel like an Emily with, even with an ey is something I have never seen.

[C]

I have not seen that. No. What are the boys names that end in N, Elizabeth?

[B]

Well, one example was there's something that the scientists looking at this called the Jason curve. Like around 1980s, there was Pete, Jason, and now a lot of those people are having kids and so they like names that end in S O, n. Like Mason, Jackson, Grayson, Carson. Yes.

[C]

There's so many of those in the kids schools. Mason and Jackson. Oh, my God.

[A]

Wait.

[C]

Jason, Beget, Jackson and Mason.

[A]

Yeah.

[C]

Okay.

[B]

That's the theory.

[A]

It's the begetting and the begassing. Absolutely. I'm going to move on very quickly here because I feel like this rabbit.

[B]

Hole is not going to help.

[C]

Is there ever an ix time frame? I mean, is Felix just.

[B]

I don't think so. I think that actually is pretty rare. Maybe not Felix's specifically, but IX my.

[A]

Number is 25,600, which is the amount of money that a wonderful woman, who is my new favorite woman, paid for two different sets of Stephen Sondheim's thesauruses at auction this week. A bunch of Sondheim's personal effects were auctioned off at Doyle's, and there were a couple of lots, like, down in the sort of bidding order. The first one was, like, four Thesauruses, and the second one was, like, one thesaurus and a bunch of dictionaries or something like that. And they were both estimated at $300 to $600. So just like, old books, basically. And this woman, like, the auctioneer was like, do I hear $500? And she, like, immediately just puts up a hand and says, I'll be 20,000.

[C]

What?

[A]

And everyone was like, what? Exactly. And the entire. And the entire room was full of, like, musical theater nerds. And, like, they all went silent. And musical theater nerds never go silent, so that was amazing. And then she did the same thing again for the second lot, and then 20,000 again, because it's sometimes thesaurus, it's great. But all of these lot. I mean, there's his pencils. He had a bunch of these things called Blackwing pencils. The pencils sold for $6,400. I think my favorite one was he got a royalty check when he was 18. He. His first musical was called Finney's Rainbow, and a couple of the songs were recorded, and he got a royalty check for 74 cents. And in a nice little, you know, sentimental act, he never checked. He never cashed it. He just kept it. And that got auctioned off for $20,480. What? So people love their Sondheim men, and they are right to love their Sondheim, bless them.

[C]

But it's just. At thesaurus, does it have scribblings or circled words or anything?

[A]

But it's Stephen Sondheim's thesaurus. And if you've listened to his lyrics, you know that he spent a lot of time in those thesauruses.

[C]

I can't beat that. Should I just not go?

[A]

Yeah, just. Just don't go, Emily. You can't be. You can't be my number.

[C]

My number is 17. 17%. That's the share of office seating that is unassigned in 2024, which means, like, people have to go into work and, like, pick a seat and adjust the seat and, like, mess around and make sure the monitor looks good. Now this number is down 2 points from 19% in 2022, when, like, hybrid was happening and, you know, people weren't going the office. And then offices were just like, come, you sit wherever. But it's. It's gone down a little bit because. And I don't know if this is obvious, but, like, that sucks. You want an assigned seat in an office. Hot desking is bad. I'm just going to come out and say it, like, be biased, but I am.

[A]

Yes.

[C]

Ergonomically, just for your emotional health. It's just terrible. And the number in 2019 was only 5%. Only 5% of office seating was unassigned back in the good old days of 2019. But now it's, you know, more than tripled. And that's a bad thing. And this piece in Bloomberg was saying, you know, it's coming down because everyone hates it, but it hasn't really come down that much. And, you know, I just want to plant my flag in saying, this is bad. This is bad.

[B]

We talked about hot desking before. I think we've covered Felix's strategy for hot desking, which is to just leave a bunch of your shit at desk, and then you're working.

[C]

No one ever sat in his seat when we had an office. They would be like, oh, that's Felix's seat. And then he wouldn't come in, but no one would get to sit there.

[A]

Well, this is. This is. There's a whole. I don't know if you guys have seen the great BBC comedy W1A. I believe it's available on Netflix. It's the funniest thing on tv. Go watch it. But one of the great scenes at the beginning of that show is, you know, the new guy coming in quite high up in the organization is, like, introduced to the workspace and told that everyone just hot desks. And you can. We can work from anywhere. But then he goes around desk after open desk after open desk after open desk, and each of them, like, has a pair of shoes underneath it or like a little rubber duck on it or something. Oh, you can't sit there. You can't sit there. He winds up being unable to work anywhere.

[C]

Yeah, it's bad. People should have. If you're going in even twice a week, you should have your own setup or something. It's just. It's just the right thing to do.

[A]

On which note, let's wrap it up for this week. Many thanks to Shayna Roth and Jarrod Downing. Many thanks to all of you for listening and emailing us. On sleepmoneylate.com we are going to have a slate plus segment on the war on Cash. We're going to have a Slate plus segment on the war on Cash and how that's faring in New York City. But if you're not a Slate plus listener, then we'll see you next week with more Slate money.