Protection Money

Summary

Slate Money – "Protection Money" (May 1, 2021)

Hosts: Felix Salmon (Axios), Emily Peck, with new co-host Stacey Marie Ishmael
Episode Focus:
A lively analysis of the week's biggest business and finance stories: Big Tech’s bonkers earnings, the Apple v. Facebook privacy war, the Basecamp workplace controversy, and why used car prices are exploding.

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Main Theme & Episode Overview

This episode brings on Stacey Marie Ishmael (formerly of Texas Tribune and FT Tilt) as a recurring co-host. The team dives deep into why Big Tech’s financial performance is “bonkers,” the escalating clash between Apple and Facebook over privacy, the Basecamp debacle on workplace politics, and the bizarre spike in used car prices. They also touch on privilege in tech founder culture, corporate leadership dynamics, and the pandemic's disruptive impact on supply chains.

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Key Discussion Points & Insights

1. Tech Giants’ "Bonkers" Earnings (00:28–08:45)

• Tech Earnings Defy Expectations: All three hosts express awe at how Apple, Google, and Facebook’s profits are not just massive, but growing at unprecedented rates.
  • “It’s just the scale of these companies is hard to compare to anything else.” – Stacey (03:15)
• Apple’s Strategy: Apple’s revenue surge stems both from hardware (Macs up 70% yoy) and strong growth in services (up nearly 30%), pointing to successful ecosystem expansion.
  • “You don't spend as much money as they are spending on original Apple Television…without having a grander ambition for what is often called inside the company, like the ecosystem.” – Stacey (05:43)
• Pandemic Effect: The hosts agree the stay-at-home dynamic fueled purchases of devices and digital services.
  • “People were home and needed more Apple products…students needed new stuff.” – Emily (06:20)
• Apple’s Chip Shift: The new M1 chips are lauded as a game-changer both for performance and profit margins. (07:02)

2. Apple vs Facebook: Privacy, Profit, and Power (07:37–18:29)

• Core Conflict: Apple’s iOS update forces apps to request user consent for tracking, threatening Facebook’s ad model.
  • “Apple is absolutely militantly religiously committed to privacy and Facebook is absolutely militantly committed to scale.” – Stacey (09:12)
• Is Apple’s Privacy Zealotry Self-Serving?
  • Felix questions Apple’s motives: “It does feel more than a little self-serving…were it not for the 30% app store take.” (10:29)
  • Stacey explains Apple’s argument: Users trust the app store’s guarded ecosystem—and that “protection” is what the fees buy.
    • “It’s protection money.” – Felix (11:50)
• Public Attitude to Privacy: Debate over whether average users care about privacy or just retargeted ads.
  • “It’s also not clear to me that anyone cares that much about privacy.” – Emily (13:03)
  • “I think there’s like a hopelessness or a…‘I have no way of opting out.’” – Stacey (16:45)

Notable Exchange on Privacy (14:03):
Felix: “In the real world of, you know, normal people who are scrolling through their Instagram feeds, they are not sitting there going, ‘oh no, every time I like an Instagram post, I’m giving up a quantum of privacy to Mark Zuckerberg.’”

3. Basecamp: When Founders Ban “Politics” at Work (18:42–33:58)

• Background: Basecamp (makers of project management tools) banned “societal and political discussions” on internal platforms after conflict over “funny names” customer lists, many perceived as racist.
  • “What counts as political and who gets to talk about it?” – Emily (20:04)
• Founder-Centric Power: Critique of tech’s “monarchical” startup culture—founders making sweeping decisions unilaterally.
  • “He basically considers himself to be the company.” – Felix on Patreon’s CEO, tying into Basecamp’s situation (22:09)
• Privilege & Identity at Work: Discussion of how white/unprivileged founders can separate “politics” from professional life, something less possible for BIPOC employees.
  • “He can separate political in a way that a black person coming to work can’t.” – Emily (25:47)
  • Stacey: “Most people…in powerful positions…have been so far removed from the reality of being uncomfortable…that the mere fact of someone saying…‘othering other people through their names…’ makes them feel bad. And that is worse to them than the conversation about…why this is challenging.” (28:07)
• Structural Diversity Challenges: The risk of “glass cliff” hires and how middle management resistance undermines change, even with diverse leadership.
  • “Every change that they make, every suggestion that they make is received fundamentally differently, even if it would have been the exact same thing…a Jake or a Mark or a Tim or a Steve might have suggested.” – Stacey (31:15)

[Timely Epilogue Update – 47:30]

• Emily: One-third of Basecamp’s employees quit in protest after recording, proving the policy wasn’t just a Twitter controversy.

4. Used Cars Cost More Than Ever—Why? (33:58–41:17)

• Skyrocketing Prices: The team discusses data showing the median used car price essentially doubling due to pandemic-driven demand and ongoing chip shortages limiting new car supply.
  • “Used cars have gone through the roof, especially pickup trucks...Some of them are worth substantially more now than they cost when they were new.” – Felix (33:58)
• Pandemic Supply Chains: The cascading impact of pandemic “retrenchment” orders, especially for tech components, and how Tesla out-maneuvered legacy carmakers by not cutting production.
• Bike Shortages Parallel: Not just cars—bike prices and availability are also out of whack.
  • “As a person who is a committed bike commuter, experienced a version of this with bike shortages.” – Stacey (38:36)
• Revealing Supply Fragility: Residents and workers in all fields are suddenly aware of how delicate supply chains are.

5. Numbers Round & Final Thoughts (41:23–46:14)

• Felix: $80 billion – Biden’s proposed IRS funding could yield $700B in recovered taxes. “Most obvious low-hanging fruit of fiscal policy…those dollars pay for themselves ten times over.” (41:23)
• Emily: 529 – The number in Jamie Dimon’s secret Instagram handle (uncovered by journalist Ashley Feinberg).
• Stacey: 0.6% – Q1 contraction in eurozone economy, reflecting US-Europe divergence in pandemic recovery. (44:36)
  • “Just seeing the sort of divergent paths…has really surprised some people.” – Stacey (44:36)

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Notable Quotes & Memorable Moments

• “It’s protection money.” – Felix (11:50)
• “Apple is absolutely militantly religiously committed to privacy, and Facebook is absolutely militantly committed to scale.” – Stacey (09:12)
• “Most people…in powerful positions…have been so far removed from the reality of being uncomfortable for such a long time that…[these discussions] feel like some kind of aggression or some kind of violence.” – Stacey (28:07)
• “Basecamp…was all over Twitter this week because…they have decided…there’s just altogether too much political discussion on this here platform.” – Felix (18:42)
• Breaking news update: “About a third of Basecamp employees accepted buyouts today after a contentious meeting about the policy.” – Emily (47:30)

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Timestamps for Major Segments

• 00:28 – Introduction to Stacey Marie Ishmael
• 03:09 – Big Tech’s “bonkers” earnings
• 07:37 – Apple v. Facebook privacy war explained
• 13:03 – Do people actually care about privacy?
• 18:42 – Basecamp: Banning politics at work, controversy unpacked
• 28:07 – Privilege, power, and workplace discomfort
• 33:58 – Used cars: Why prices are at record highs
• 38:36 – Bike shortage parallel, supply chains under strain
• 41:23 – Numbers round (IRS funding, Jamie Dimon’s “finsta,” Eurozone contraction)
• 47:30 – Epilogue: One-third of Basecamp staff quits in response to policy

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Conclusion

Flow & Tone:
Slate Money delivers an energetic, in-depth, and irreverent guide to the intersection of tech, culture, and business. The hosts challenge each other openly, with a mix of skepticism, humor, and real world insight, making potentially arcane topics like app store fees, supply chain logistics, and corporate politics engaging for all listeners.

For further discussion:
Episode teases a future deep dive into targeted advertising’s actual effectiveness and an exploration of why the US and European economic recoveries have diverged.

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Transcript

[A]

Hello. Welcome to the Protection Money episode of Slate Money, your guide to the business and finance news of the week. I'm Felix Salmon of Axios. I'm here with Emily Peck. Hello. And Emily, do you want to do the honors? Who are we introducing here?

[B]

I'm so excited to introduce Stacey Marie Ismail.

[C]

Hello.

[B]

Most recently editor in chief of the Texas Tribune and prior to that a bunch of stuff. And a bunch of stuff.

[A]

I'm going to do the deep cut and say FT Tilt, which was the greatest publication that the world has barely ever read.

[B]

Aw.

[C]

We were certainly under read for the time.

[A]

It was so good. You were at the FT for a long time and then you embarked upon a long and illustrious career in a bunch of different places. And the highlight of your career, 100% is now slate Money. Congratulations for sure.

[C]

I, you know, the single best thing I've ever done. Yay.

[A]

You're not just here this week, you're going to be here for a while.

[C]

Yeah, I'm really excited.

[A]

We have a Texas based co host so you can be a Texas correspondent.

[C]

I'm happy to be a Texas correspondent. This is a fascinating state.

[A]

So welcome. Stacey, we are going to talk to you about the crazy tech earnings that we've seen this week and this quarter and what that means in terms of the great fight between Tim, Apple and Mark, Facebook over privacy and other things. We're going to talk about cars, how much they cost and why they cost so much and how long that's going to last. And we're going to talk about Basecamp, Patreon, the privilege of white founders and whether they can understand what the hell their employees are talking about. It's a great one. And I have to say, if you're not a Slate plus member, you probably want to become one because Stacy is an expert on all things Wirecard and we talk a lot about wirecard in Germany and what's been going on about short selling bands. It's a fun little Slate plus segment. It's all coming up in this week's episode of Slate Money. So Stacy, I have been watching the rise and rise of the big tech giants for a long time and as often happens, their market capitalizations reached the roof a while ago. But now it seems that their earnings are sort of growing into their capitalizations and they are making profits the like of which just boggle my mind. I wrote about Google's earnings this week which were up like $3 billion or something from the fourth quarter. Like the first quarter never increases from the fourth quarter, but they Did. And Apple just had record earnings. Facebook is up there. Can you explain to me, like, what is going on?

[C]

Yesterday I was reading a story from Shira Ovid in the New York Times, and there's a word that she used which I fundamentally agree with and which I think explains like, your head explode feeling, which is like, bonkers. And the kind of both the rate of growth that you've described, but also just the scale of these companies is hard to compare to anything else. Even aside from our usual complaints about comparing stocks and flows, I think one of the things that was interesting, particularly for Apple, is kind of the tripling or quadrupling down on services and the idea that they have fully embraced the complementarity of hardware and software, realizing that there are hard caps on the number of $1,200 phones that you can necessarily sell, but there's almost an infinite number of games, books, movies, apps that folks all around the world are willing to engage with. And what I'm really interested in seeing if I could imagine what the future would look like, is to what extent these numbers really represent the consumption shift that we've all had over the past 12 months, where it's like, okay, if you're not going out, but you will rent or buy a movie, or if you're not going out, but you will rent or buy a game, or you're spending so much more time on Facebook and Instagram. You know, there's. At least in my friend circles, there's been a lot of anecdotal. Yeah, like Instagram targeted me really aggressively with this, like, really cool linen outfit and I 100% bought it in a way that was. Was not a conversation before.

[A]

I want to unpack this a little bit. As someone who has spent a large amount of money on movies, thanks largely to sleep Money goes to the movies. Second season coming up soon. This all rings true to me, but are you saying that there is a real possibility that Apple's what you call services, revenues, things like movie rentals, app store cut and that kind of thing could actually, really genuinely start rivaling the amount of money they are making from selling hardware?

[C]

That is certainly something that Apple would be interested in having be true. And I don't think it's.

[A]

But it's not true yet. Right?

[C]

I think that there is still a lot. And it's one of the reasons that I've been paying a lot of attention to their bundling strategy. Right. So if you have spent more than five seconds on Twitter, you've probably been targeted with Apple Fitness plus or Apple tv. No. Emily has.

[A]

Emily's like, no, I wonder why I.

[B]

Don'T get that stuff.

[A]

It's just you, Emily.

[C]

We will look into your psychographic profile and see why Apple doesn't think you should be targeted.

[A]

Apple's given up on me completely.

[C]

You don't spend as much money as they are spending on original Apple Television and Apple TV content without having a grander ambition for what is often called inside the company, like the ecosystem. Right. It's like you want somebody watching Apple TV on an Apple TV, second screening on an iPad, third screening on an iPhone where they might be playing kind of a game that they've downloaded. That's kind of the dream of really holistic services and hardware integration in a way that I think even Microsoft would be envious of.

[B]

I do think though that their blockbuster bonkers revenue and profits for the first quarter was a lot to do with. People were home and needed more Apple products. A lot of people bought phones, a lot of people bought computers. Especially in the education realm. Students needed new stuff. And I think that drove a lot of the money that Apple made. Like the long term plan is to make more money from services. But right now, what happened just recently was people bought a lot of stuff, a lot of products from Apple.

[C]

You see that in the earnings breakdown. Revenue from Mac, like straight hardware, was up 70% year over year. And revenue from services was up like just under 30% year over year.

[A]

Wow. So the hardware is growing even faster than this, like supposedly fast growing software. Although the services stuff might be a bit more recurring. The other thing, of course that's happened, the big change in Apple is that they've started making their own chips and that is fantastic for profits. The new M1 chip, which everyone just adores and thinks is amazing, is much, much faster than anything they can buy from intel or Motorola or anyone else. But more to the point, it's also cheaper. So it helps them really increase their profit margins and become even more versatile.

[B]

But to Stacey's point, and we wanted to talk about this too, I think the big rumble now between Tim Apple and Mark Facebook is to do with, as Lizzie o' Leary titled her recent episode of what's Next tbd, their feud has to do with this push into services. I think Apple and we can go into this now if we like. Apple just released a new iOS update and the big news is that now apps have to ask your permission to track you. And long term, it seems like part of the reason Apple is doing this, besides its like, stance on Privacy is that it's going to try, and this is what Facebook kind of is saying, it's going to try to make more money from apps. So like, if apps aren't able to track you and make money and please stop me if this sounds insane, if apps aren't able to track you and advertisers can't make money that way, then somehow the apps will now start charging you more money on the front end and that benefits Apple. Is that why they're doing this?

[C]

That is one of the more convoluted explanations that is floating around. I listened to Lizzie's podcast and I thought that is one of the things that is true is this is also kind of a clash of worldviews. Right. And one of the things that I often have to remind myself about large tech companies is, and this is something that she emphasized in the podcast is like they really do believe in the message, right. And sometimes the message almost defines the strategy. And so Apple is absolutely militantly religiously committed to privacy and Facebook is absolutely militantly committed to scale. And those are and have been positioned as really fundamentally opposite worldviews. And I do think that when Apple says we want people to be aware of the privacy trade offs that they're making in as much as there are potential benefits to their own services ecosystem, that's also really true. Right. It's also very true that Apple's privacy lawyers are not to be messed with. That there are entire teams of people who are always looking at things and saying, how are we making sure that this is good for the consumer? And there are absolutely legitimate criticisms about when and under what circumstances. You know, Apple is willing to make certain kinds of trade offs for whatever those things might be. But I do think that they have shown themselves much more than Facebook to have privacy as a value in the way that Facebook has had connecting people and increasingly connecting people with advertisers as a value.

[A]

So I feel like this is absolutely true and no one's really disputing that, but it does feel more than a little self serving for Apple. Like people would take this privacy zealotry from Apple. I think there would be more, there would be more admiration of it were it not for the 30% app store take. So Stacy, can you just bring us up to speed on why people like, why that feels a little bit icky, the combination of that with the high minded devotion to privacy.

[C]

I want to go back to something that Emily said, which is the idea that there's this trade off between privacy and the upfront Cost. Right. And the phrase that everybody has been throwing around for years and years is like, if you're not paying for the product, then you are the product. And one of the things that Apple has argued, and that is very much kind of part of the internal discussion, is that the services fee, which their lawyers and testimony will also say most developers on the App Store never pay because they're not selling the kinds of things through the App Store that require you to pay 30% or they're paying the lower rates of 15%. But that is very much kind of a reflection. This is the Apple perspective on this. It's very much a reflection of we are keeping you safe.

[A]

It's protection money.

[C]

No comment. One of the things I've always found interesting is when you look at the Android Store versus the Apple App Store is kind of like the Wild Westy versus very curated nature of the Apple App Store versus the Android App Store to an extent that Apple will argue. Well, one of the things is you can feel pretty confident again from a privacy perspective, that when you download an app or you buy an app or you sign up for a subscription, it's less likely to be something that, you know, silently is stealing all of your information or that you're going to end up with $499 that you weren't expecting on a credit card. And that's the argument about the trade off. It's like you trust us to provide you with a certain kind of protected ecosystem that has your privacy at heart and that's expensive. Whether it's actually 30% expensive is what a lot of developers have a real hard time believing.

[A]

This reminds me a little bit of the interchange fee for American Express cards. We will charge the merchants more because the people just trust using the Amex more. So they're going to spend. They're happy to spend money in a way they're not if they're just using a MasterCard.

[B]

It's also not clear to me that anyone cares that much about privacy.

[C]

I mean, ooh, I disagree.

[A]

No, I. Okay, I'm totally Team Emily on this one. Like, there is. There are journalists who 100% care about this. There are like a bunch of sort of open source zealots at EFF and places like that. But in the real world of, you know, normal people who are scrolling through their Instagram feeds, they are not sitting there going, oh, no. Every time I like an Instagram post, I'm giving up a quantum of privacy to Mark Zuckerberg.

[C]

Well, I think we're about to Find out. Right, because one of the reasons you didn't know that is because one, there's a bunch of research that shows that even since Instagram rebranded with the like brought to you by Facebook, there's a large number of people who don't know that Instagram and WhatsApp are Facebook apps. If you recall, WhatsApp was trying to do an update and they had all of this messaging about, by opting into this update, certain elements of your data will be available to other people. And that's when Signal saw a significant uptick from normal non journalist types, non open source types switching to Signal. And Facebook and WhatsApp were sufficiently aware of the move away from WhatsApp that they kind of one delayed the timing of the privacy updates. And then when they reintroduced it, if you use WhatsApp, you'd have seen some new messaging. They communicated a lot more explicitly and clearly what it was actually about. And I think with this Apple change in iOS in the latest iOS updates, when people are going to be confronted with, hey, by the way, did you know this was happening kind of in the same way that in a previous update it was like, did you know that literally everyone is tracking your location at all times? I'll be interested to see whether that increase of awareness also translates to more assertive, you know, desire for privacy as opposed to just the absence of awareness. And you're like, eh.

[B]

I think there's a difference though between I don't want someone messing with my messages, like the aversion to WhatsApp knowing what you're typing to your friend, versus I don't want someone targeting ads at me because, you know, all my Instagram ads are for investing sites, which is my personal present day situation. Or I'm looking for snow boots and now there's snow boots everywhere. I don't think people care about that stuff that much.

[A]

Well, I think actually weirdly, that's the one part of Internet privacy that people do care about, the retargeting. And the idea of like, why is this pair of shoes following me around the Internet? It's so obviously creepy and it's so obviously personalized in a really stupid way that people are like, I hate that. And it's, there's this massive ad tech ecosystem. There's huge amounts of personal information that Facebook, Google and a bunch of other people you've never heard of or have about you. Your privacy is invaded in a million ways. As Stacy was saying, like these apps are literally following you geographically around the world. But the one time the One little glimpse of that we get is, you know, the pair of shoes that's following us around the Web. And people hate that. People genuinely hate that. And they. They're creeped out by it. And I'm just. I feel like everything else, because it's so theoretical and it's so, like, invisible, people find it hard to get worked up about. And if you can just. If you could snap your fingers and turn the retargeting off, then people just wouldn't care at all, because they wouldn't even. There would be no visibility to this, to these privacy invasions.

[C]

And I also. One of the things I really worry about has been the normalization of data breaches and the feeling, this kind of resignation and despair that people have that, well, that was my Social Security number. That's my home address. My credit card is out there. My entire address history is out there. There's been both a. Like a fiduciary failure of a lot of the organizations that are nominally charged with securing your privacy and your data, and kind of. Well, nothing bad has happened to most people who have had their privacy invaded in this way. And it sort of leads to this idea of, well, did it really matter anyway? So I do think, Emily, that there is a kind of privacy cynicism, but I don't know if it's necessarily the same as people don't care. I think there's like a hopelessness or a. I have no way of opting out. Okay?

[A]

I mean, I think in a real way, the horses bolted the stable years ago. Like, my personal information is in so many databases belonging to so many companies, which has been obtained by either perfectly licit ways or through data breaches or any number of other ways that, you know, the entire world could crack down tomorrow and say, you know, you are now embraced in a cocoon of full privacy, and it wouldn't make any difference, because it's all out there. My entire phone book, my address book, my contacts, my social graph, everything. You know, my friend Kashmir Hill has done amazing work showing that, like Facebook, if you have never signed up for Facebook, if you have never signed up for Instagram, Facebook still knows everything about you, who your friends are, what your phone number is. It's amazing. And it's, you know, apparently entirely legal. And so at this point, what does it matter? Maybe it would have made sense to try and build in more privacy 15, 20 years ago, but isn't it too late now?

[B]

Probably. And that leads me to my other question. In thinking about this targeted advertising situation. Targeted advertising is it even good? Like, why does it even.

[A]

This is an unbelievably good question. I have done a bunch of deep dives into this, and I actually know someone who can answer that question. So I'm gonna try and get this person on the show and we can have a whole segment about that question, because it is one of the most interesting questions on the Internet. So on the subject of corporate culture, Emily, we had this company Basecamp, which not a lot of people have heard of, partly because it doesn't put its name on any of its products. They're called things like hey and 37 signals. But this company, Basecamp, was all over Twitter this week because it basically said, we have a product that we make, which is, you know, a slack like product for chatting among ourselves and doing our work. And we have decided, and by we, I mean the two co founders have decided, that there's just altogether too much political discussion on this here platform. And while you guys are welcome to have political discussions on any platform you like, just not that one. Please, can you please stop with the politics on our Basecamp platform? And Twitter went bazonkers. And this happened in the wake of Coinbase making a similar proclamation that, like, we are. We do what we do. And you can be political in your own time, but not when you're at work. Can you explain what the controversy is here?

[B]

So, I mean, this is kind of, I think, boils down to what counts as political and who gets to talk about it. So the founders, the co CEOs of Basecamp, Jason Fried and David Hanson. These aren't like guys that were holed up not talking about politics or social issues and then got really bothered because their employees were talking about social issues. These two guys have been out there with books about management, and they've taken stances before, but apparently what happen inside this company, and we know what happened because of Casey Newton, is that for years inside Basecamp, workers there had been compiling lists of quote unquote, funny names of customers. And a lot of times the funny names were ethnic names or, you know, not white guy names or whatever. They had kind of a reckoning over the list of names and realized, okay, well, this is kind of an offensive thing to do into racism. And there was a whole internal discussion about it. And apparently the two CEOs, they agreed that this was kind of like a bad, racist Y adjacent kind of thing to do and didn't want to do it anymore. And the employees kind of wanted to keep talking about it. And these two guys were like, you Know what? That's enough talking about it. And then the next thing that happened was the co CEO said, we're not going to talk about politics anymore. Essentially seems to me having a little tantrum. Like we are the ones, we founders get to decide what we talk about. And now we're telling you you can't talk about X, Y and Z, which is sort of reasserting the simple fact that, like, you can't really bring your whole self to work like tech companies have always told you you could. The founders are in charge. They get to tell you what you can talk about and control what counts as political. And in this case, that's kind of what happened.

[A]

I think that's exactly correct. I think they have basically drawn lines to suit themselves. They're like, certain types of political expression are the kind of political expression that we've been doing all along and that we would encourage you to do because we're comfortable with it. Other types of political expression we're not comfortable with. And so therefore we're not going to let you do it. And it's part of. I wrote about this a little bit in Axios markets on Friday. The, what I call the like, monarchical nature of modern tech companies. We had this guy, Jack Conte, who's the CEO of Patreon, came out with an absolutely astonishing YouTube video this week where he said, we're doing great. We just raised $155 million. We're zooming ahead, we're great, but we're firing 36 people. And in the context of this YouTube video, which is about six minutes long, he used the words I or me or my. I counted it 31 separate times. It's like once every 12 seconds on average. He's the CEO, he's the founder, and he basically considers himself to be the company. The Basecamp guys are basically the same. They famously don't give any equity to their employees. They're like, we own the company, it's our company. We can do what we like. And they made that very clear this week. And this goes all the way back to Mark Zuckerberg when Facebook went public. And he's like, I'm going to set this up in a way that I control the whole company and not just me, like my heirs and successes and assigns, like it could be his daughter, winds up having the exact same degree of control that he does. And it does feel very much like old school emperors and monarchs, does it not, Stacey?

[C]

Not only does it feel very much like old school emperors and monarchs, but the People who are in charge then are very similar to the people who are in charge now.

[A]

Do you think that Elon is a latter day Napoleon?

[C]

Elon is certainly something interesting. Going back to kind of what Emily was saying about, you know, when you think about who was being made fun of and the demographics of the people making the fun. Right. It's very much the same split in how you saw people respond to the we are no longer political post where a bunch of people who are like, well, I as a black person, my identity is politicized by default regardless of what I do about it. And one of the things I didn't see discussed yesterday because time on Twitter is meaningless, but dhh, one of the founders is also one of the people who got a lot of attention by calling out Apple's Apple card algorithm as being sexist because his wife was offered a lower credit limit than he was. This is like the same.

[B]

We talked about that.

[C]

Yes, yes. And he was able to identify ways in which, you know, non identity based decisions have meaningful consequences for people who are from backgrounds that are often like marginalized or excluded in some way. And so, you know, this is not a person who is operating without the understanding and context of how identity and politics are often intertwined in ways that are more complex than. We're just not going to talk about this because this is not material to the work. Because sometimes that is the work. Right. He sparked a whole resurgence of discussion and frankly, his wife's extremely well written blog post sparked a resurgence of discussion about algorithmic sexism and you know, the fact that like embedded biases manifest in products. And so now to have a blog post that's essentially arguing those kinds of things aren't work just strikes me as really unselfaware.

[B]

Yeah, he doesn't realize how much privilege his identity affords him in what counts as political. He can separate political in a way that a black person coming to work can't. Or even there was a quote in Casey Newton's piece from a parent who was like, can I not talk about school stuff? Is that political? If I talk about public school issues, like there are so many issues that are actually political that some people don't ever have to deal with, or at least partisan.

[A]

Yeah, yeah, I think like to take his side of it, like his, his blog post as opposed to Jason's was, was slightly more thoughtful about this. What he would say is, look, you know, if you want to talk about scheduling issues that are part of the work from home pandemic, homeschooling Nexus, like, of course that is something that can and should happen in basecamp. And even if you want to talk about, you know, Black Lives Matter as marches or anything else, like, it's not like we are creating some kind of a firing offense. But. And what he was basically saying was the. There was a feeling, and this is where things get a little bit sketchy. And I don't know, he was like, there has been a feeling that what happens is that these conversations go on too long. They escalate to a point of people starting talking about genocide and whatnot. And. And there are certain, like, white folks who maybe feel a bit uncomfortable about, like, not saying anything in these discussions in case for fear that they're going to perceived as being a bad ally. And you're like, well, smallest violin comes.

[B]

In, so don't say anything.

[A]

But that's the whole point. They're saying, if I don't say anything, then that's. That's maybe bad. But, like, the point is, and this is the big question, which I don't think anyone has been able to answer, is like, the people being made to feel uncomfortable here, the people who, like, felt uncomfortable when people started talking about, like, this is, you know, how totalitarian companies begin, or the people who felt uncomfortable about what happens if I don't participate in this conversation, Will people think I'm a bad ally? All of those people who are ostensibly being protected by that rule. Is that set of people larger than just the two co founders, or is it really just the two co founders who felt uncomfortable and are saying, yeah, we don't like being uncomfortable, so we're going to do this and claim that it's for the great, the good of everyone.

[C]

What I can say, having been involved in so many of these discussions in both tech and media companies, is most people, and specifically most white people who've been in powerful positions in either of those organizations have been so far removed from the reality of being uncomfortable for such a long time that to them it really feels, to use our favorite word on Twitter, like some kind of aggression or some kind of violence. Right? That the mere fact of someone saying, you know, othering other people through their names is a kind of a slippery slope, a long slope, but still a slippery slope to totalitarianism makes them feel bad. And that is worse to them than the conversation about, like, why this is challenging. And I have been so struck that this, you know, when they talk about the escalation and the discomfort, that these are the same conversations that are happening about, like, moderation on social media platforms, it's very similar to the conversations about what kind of speech, at what level and what threshold and what intensity is allowed or allowable. You know, like the story the other day about Facebook removing posts about the houses that were recently bought by a Black Lives Matter founder, but leaving up certain other kinds of things. And all of this is the same conversation. It's the same conversation about, do we accept that actually the status quo in and of itself is an encapsulation of certain kinds of political and identity based standards that we consider to be uncontroversial and therefore comfortable? Or do we start to say, why do those things get to be the default? Right? Like, why is it that this discussion, this particular slice of discussion is not political? But the second you start to say, hey, maybe it's not okay to laugh at people with Chinese or Indian surnames, that becomes political. Whereas jokes are like, why do we have more Brads than women are more on the acceptable end of the discourse threshold. And so much of it has to do with a lot of the people who have been in charge, have been surrounded for a long time by people for whom all of the frames of reference were the same. And you just have not had your worldview challenged by people you trust to challenge you. And now you're having your worldview challenged by subordinates, and you're like, no, this is not your place and we are in charge here.

[A]

So, Stacey, I have a question for you, which is we are definitely seeing this take place in companies with white male co founders with names like David and Jason and Jack. Then at some point, companies, when they get bigger, they go public, they have boards of directors. The boards are often, you know, more diverse than just like the white co founders. Sometimes they bring in professional CEOs with names like Sundar or Satya. And when that happens, do things actually get better?

[C]

Folks are familiar, I hope, with the phenomenon of what is called the glass cliff, which is like, you bring a woman in to try to clean things up, and then when it inevitably doesn't work, you push her out and you're like, let's go back to the male scene CEOs. And there is a very similar phenomenon being researched. I can't remember the name of it, but there. I'm sure there's like a pithy slogan of the idea of you bring in the brown and black people to try to really fundamentally change a lot of the way that the company has been organized. But what often does not happen is the recognition that those folks come with less political and social capital out of the gate. And so every change that they make, every suggestion that they make is received fundamentally differently, even if it would have been the exact same thing, the exact same strategic plan that a Jake or a Mark or a Tim or a Steve might have suggested. And I think one of the biggest institutional failings of corporations large and small is bringing people in at the top and not understanding that the challenge is often your middle management layer who are both optimizing for managing up. So they do want to keep the people that they're reporting to happy, but also for keeping themselves safe and comfy and in kind of relatively cushy positions. And don't necessarily want to do things that will be perceived as unpopular.

[A]

Right.

[C]

Don't necessarily want to do things that they might feel uncomfortable with, don't necessarily want to push through changes that will be hard or will make them seem like they're on the side of the new folks who are trying to drive all of these changes through. And not that I will ever write a management book, but I do think that if there were more studies of both tech companies and media companies, you would find that a lot of this institutional dissatisfaction is actually the dissatisfaction with the people who employees report to, who are taking their cues, certainly from leaders on one end of the spectrum or the other, who lack either the skill, the interest, or the cultural competency to translate those things in ways that can move forward. They might be really good at product vision. They might be really good at sales and advertising. They're less good at, hey, here is how we take a message that we should not make fun of people with last names that are different from ours and not turn that into something that is going to be received as an attack on other people's identity.

[A]

So let's talk about cars. I found this amazing data point this week from a company called Manheim, which looks at used car sales and has literally millions and millions of data points. And they've managed to create this algorithm which basically adjusts for what the car is and just says, what is the median used car worth these days? And it normally, for the past few years, has been floating around 7, 8, 9, $10,000. It's now like $17,000. It's basically doubled. Used cars have gone through the roof, especially pickup trucks. Everyone wants used pickup trucks. Some of them are worth substantially more now than they cost when they were new. And this was just like an incredibly striking data point to me. It has a bunch of implications for, like, used car dealerships, for mobility in general, but I guess my first question for you, Emily, is, do you think this is sustainable, or is this just a weird artifact of this chip shortage and these prices are going to crash down the minute that we start getting more chips for cars?

[C]

Yeah.

[B]

I mean, I think we're in a very unique moment for cars. Besides used cars costing lots more than they're supposed to cost, it's hard to get a new car right now because of the chip shortage. Meanwhile, a lot of people are buying cars. Demand is really high and supply is really constrained. So I think at some point, this all does resolve and the price of the used car does. Yeah, does come back to Earth. But right now it's pretty wild. Like, there used to be this thing people would say, like, if you buy a new car, as soon as you drive it off the lot, it's worth half as much, you know, blah, blah, blah. And now that's just not. It's not true. There's all these cars you buy, used cars that are worth almost close to what you originally paid for them, or more like Felix said, they retain, like, 79% of value.

[A]

If you're lucky enough to get a Ford Bronco at retail price, you can turn around and sell it for, like, a $10,000 premium the following day.

[B]

Yeah. Or if you're driving a. It's like a pair of Yeezys Tacoma. Yeah, yeah. No, there. I mean, it's just. It's a unique time. It's. It's just like another pandemic weirdness, I think.

[A]

Well, it is a pandemic weirdness because this is something that Max Cho mentioned in an earlier episode, that a lot of this is just when the pandemic hit. There was this massive sort of sucking sound of every single company in the world retrenching. And what that manifested itself in was all of these car companies around the world basically massively slashing their orders for these chips because they thought that everyone was going to lose money and be in a massive recession, basically. And so when it turned out that actually demand for cars was rising, all the chip manufacturers were like, wait, no, you said you didn't want these chips. We're going to make chips for something else. Thank you very much. And it's going to take us a while to start making them again. And they're like, shit. And the upshot is literally that Ford has just announced that its car production in Q2 is going to be 50% of what it normally is.

[B]

It's a real contrast, actually, the cars versus what we started talking about at the top of this Slate Money episode, which is the tech companies. Seems like demand went up for tech companies. Either Apple's products or Facebook's Instagram. Facebook or Instagram. And they rose to the occasion. They quickly scaled.

[C]

Services are non rival, right? It's like you can download Infinite apps.

[A]

Elon Musk came out this week and said, I think the Model Y is going to be the best selling car in the world. And you're like number one, yeah, probably not. But number two, if that is true, like it's only because everyone else is playing with one hand tied behind their back, right? Because they just can't produce as many cars as they want to be able to.

[B]

But I mean, if that happens, then he's the carmaker that wins the pandemic, right? I mean, those kinds of gains stay once you buy the first Tesla you're going to buy.

[A]

In terms of carmakers, 100% Tesla's won the pandemic. They were the one who didn't, you know, scale back a year ago. They just made, well, according to general accounting principles, they made record profits in the last quarter. If you actually look at the profits, this is one of the more interesting things about Tesla. More than 100% of the car profits from a combination of A, selling electric vehicle credits to other companies and B, selling bitcoin. If you strip out the bitcoin profits and the EV credits, they are actually losing money on every car that they sell. But hey, they're still worth $700 billion.

[C]

Everything is financial engineering. I, as a person who is a committed bike commuter, experienced a version of this with like bike shortages.

[A]

Oh, that was huge a year ago.

[C]

It's still a problem. Yeah, yeah, it's still a problem. And I was reading the. One of my favorite things to look forward to every year and which is always expensive, is like Bicycling magazine does the like. Here are the best bikes that you should get. And there's an editor's note at the beginning of that where they say we could not get any bikes that were, you know, quote unquote, cost effective because there was just no supply. And so like the overwhelming majority of the bikes they're reviewing are like $5,000, $8,000, $14,000, because that was like those were the bikes that they were able to get in hand. And I remember when the kind of the car shortage and the car rental shortage discussion was happening, some of my, you know, city urban planner friends were like, this is another good reason why we need to be investing in infrastructure that allows for Cyclists and pedestrians. And all the cyclists were like, can't buy a bike. What am I supposed to be doing here? But truly, one of the fascinating bits of the pandemic has been revealing supply chains to people who had just never had to think about those things before. Like, across. And not even just like, you know, a normal person who doesn't work in journalism or in finance, whatever. It's just like people in different industries being like, wow, I have to care about the Suez Canal. What is this, the twenties?

[A]

Emily, you made that point when we talked about Ever given, right? Was that, like, the minute you start thinking about supply chains, like, the whole system is broken. It should be something that is completely invisible.

[B]

You shouldn't have to think about the chips in the car, and that's why you can't get a car.

[C]

Like, what?

[A]

But literally everyone who's trying to buy a car right now is acutely conscious of supply chains and the curious importance of these tiny little $5 chips.

[B]

Amazon pulled off the supply chain thing. Also, like, at the beginning of the pandemic, if you ordered something on Amazon, it would take forever. And now they're pretty much back to where it was. I mean, it's not perfect, but they also scaled up and got things moving, and that wasn't just online. I mean, they hired, what, like, hundreds of thousands of people?

[A]

So much of this is expectations management, though, as well. You know, I ordered my airtags from Apple because, you know, I'm a sheep. And they were like, they'll arrive on, like, May 8th. Well, actually, they're gonna arrive on April 30th, but we just didn't want to promise that.

[B]

Wait, I'm gonna say. I don't know what your. What are airtags that.

[A]

What?

[B]

I don't know.

[C]

Do you know, Tile the.

[A]

Like, the little Bluetooth trackers, Basically, like, this company that is devoted to privacy is allowing you to track yourself and all of your things wherever you go. Oh, I saw this.

[B]

Yes. Yes.

[C]

Okay.

[A]

And as someone who loses things on a regular basis, I'm hopeful that this is going to be a good thing for me. We will find out. I will report back. Anyway, I think we should have a numbers round. I think I'm going to kick off this one by saying my number is $80 billion, which was my favorite bit of the latest Joe Biden fiscal proposals. He wants to throw $80 billion at the IRS over the next 10 years for them to just go ahead and do their job and catch tax evaders, which he reckons will bring in about $700 billion in extra taxes that we're not being able to collect right now. That is like taxes that people should be paying but aren't. I reckon that's a bit like the 100 million doses in 100 days thing. A massive underestimate. And if you throw $80 billion at the IRS, they could possibly conceivably get $700 billion in one year, let alone in 10. I think this is the most obvious low hanging fruit of fiscal policy you can possibly imagine is just giving the IRS more money because those dollars pay for themselves ten times over easily.

[B]

That sounds great. I'm all for every proposal that's taxed the rich a little bit more. And then I love to read every Bloomberg story that's like, rich people are freaking out.

[A]

That's the whole thing. You don't even need to tax them more, right?

[B]

Yes, yes, you don't.

[A]

There was this Gabriel Zugman paper where he was like, even when you audit the rich, you miss the taxes. They're evading.

[B]

Yeah. So, yeah, you had that data point in your newsletter and it was a little shocking.

[A]

Emily, what's your number?

[B]

Well, I had a Biden number too, but now I'm on the Internet now because I'll do a different number. I don't want to be like a copycat.

[A]

Are you going to do a GDP number instead? No.

[C]

Oh, no, that's mine. Don't do that.

[B]

Here is my number. My number is 529. No, it's not the college savings plan.

[A]

It is college savings plan.

[B]

It's not back end of a Instagram handle. Jackmason529. Who's Jack Mason529? Well, ladies and gentlemen.

[A]

Wait, I know this Jack Mason529 is, I'm gonna say Jamie Dimon.

[C]

Correct.

[B]

That is Jamie Dimon's secret Instagram account.

[C]

Jamie Dimon has a finster.

[B]

Just discovered by the one and only Ashley Feinberg, who has a really great newsletter.

[C]

Unbelievable.

[A]

Ashley Feinberg, formerly of this parish, now off doing her own thing, which is Trashburg, which is beautiful. Go subscribe. We like Ashley. She's great.

[B]

She's really great. Yeah. So Jamie diamond, in an interview, I think, with Business Insider mentioned that he was on Instagram. Just a mention, and Feinberg is just on it. And he says something like, you'll never be able to find it, which is like just catnip.

[C]

Famous last words. So she dug deep, accepted.

[B]

And it didn't seem like it took her that long. She found his secret Instagram account and Secret Twitter. He has a secret Twitter as well. And she does make it seem easy. She is dogged.

[C]

That's incredible. Incredible.

[A]

All right, Stacy, what's your number?

[C]

0.6%. In honor of Felix's European ancestry, I wanted to talk about the. This is the contraction in the eurozone economy in Q1 and the kind of the contrast between the expansion that we're seeing in the US and the relative contraction that we're seeing in Europe and how it is. If you think back to the early days of lockdown, when there was so much concern about whether the European model would be economically positive or negative or the US Model would be economically positive or negative, and where you should do stimulus and how you should do stimulus. Stimulus. And just seeing the sort of the divergent paths of the Eurozone economy versus the US Economy and how it's really surprised some people. Actually, I'm really fascinated to kind of be paying attention to, again, macro in a way that feels new and interesting and just to be kind of back in the vibe of trying to understand what different central banks are up to. I've been paying so much attention to Italy because their turnaround story has just been incredible. Not enough to help with overall European economic growth.

[A]

Well, they do have a central banker as prime minister.

[C]

Now they have a central banker in charge. And who knew that not having a Berlusconi or affiliate would have a significant effect. I definitely think that in the same way that we are now more aware of supply chains, one of the things I've really been doing during the pandemic is just kind of getting back into really paying attention to macroeconomic factors and trying to understand different paths and different runways.

[A]

Okay, Stacey, I feel like this is what we're going to talk about next week now, because, okay, maybe not next week, but at some point, maybe we should get like, Adam Tooze or someone on and really try and understand this. You're absolutely right. What is it that explains how the US economy grew at a 6.4% pace in the first quarter while the European economy shrank? Is it fiscal stimulus? Is it different attitudes towards lockdowns and coronavirus deaths and willingness to accept them? Is it actually not the case that you need to get the coronavirus under control in order for the economy to start growing again, which everyone thought was the case this time last year? And did Europe do something wrong? And if so, what did it do wrong, and how could it have done it better? These are really interesting questions, and I definitely want to have a segment about them, but we're not going to have it this week because we're done with the show this week. Thanks very much for listening, for writing in on slatemoneylate.com thanks to Jessamyn Molly for producing from her amazing seaplane Armada Studios in deepest Brooklyn. We will be back next week with even more Slate Money.

[B]

Hey, it's Emily. So after we recorded today, we learned that Basecamp employees are so disgusted by this new policy that we discussed on the podcast today that they are voluntarily leaving the company. As I'm recording this at about 4 o' clock Friday afternoon, Casey Newton, who's been all over this story, tweeted that about a third of Basecamp employees accepted buyouts today after a contentious meeting about the policy. And the people leaving are longtime employees, some who've been there for 10 years, important people at this company. I mean, It's a small 60 person company, so this is a significant chunk of people. Felix and Stacey couldn't come and record this with me, but I can tell you that Felix and Stacy were both very surprised by this news. It's pretty astonishing. And as Felix said, it proves that it's not just woke Twitter that had a problem with the new policies. When a third of your employees look at a new policy and quit, that's probably not a good policy. So as I'm recording this, one third of Basecamp employees are leaving the company. They're so upset about these new changes and there might be more to come. And if there is more to come, we will discuss it next week on Slate Money. Thanks for listening. Bye bye.

[A]

It.