Slate Money — "Saving for the Second Coming" (December 21, 2019)

Hosted by Felix Salmon (Axios), Anna Szymanski (Breaking Views), and Emily Peck (HuffPost)

Episode Overview

In this lively episode, the Slate Money crew dives into three headline-grabbing topics in business and finance:

• The ongoing crisis at Boeing and its economic ramifications
• The fallout surrounding California's new AB5 law for gig and freelance workers
• The revelation of the Mormon Church's $100 billion investment fund and broader questions about tax-exempt organizations

With their signature blend of insight, skepticism, and wry humor, the hosts examine how these stories illuminate deeper issues in corporate governance, labor policy, regulatory effectiveness, and the murky ethics of tax exemption.

Key Discussion Points

1. Boeing in Crisis: The 737 Max Debacle

[00:53 – 12:14]

• Production Halt and Economic Impact

  • Boeing suspends production of the 737 Max after two fatal crashes (346 deaths).
  • The decision comes late; production continued even as the fundamental flaws remained unresolved, worsening the crisis.
  • Felix: "Now that they're getting to the point where they think they know how they might fix this, they stop making it." [02:29]
  • The suspension could shave half a percentage point off first quarter GDP.

• Corporate Culture & Governance Failures

  • CEO Dennis Muilenburg remains in place despite the scandal.
  • Anna: “He was the first CEO of Boeing to not come from the plane making side… He basically imported all of that kind of quick and dirty, we'll just get this done somehow way of doing things into the planemaking side.” [04:18]
  • The board shifted from mostly engineers to very few, undermining oversight.

• “National Champion” Problem & Regulation

  • Boeing's close ties to government and status as the chief American aircraft manufacturer contributed to lack of accountability.
  • Anna: "One of the problems with national champions is... cozy connections with government and so bad things can happen.” [08:33]
  • FAA's regulatory failure echoed as a root cause of the industry-wide ripple effect.
  • Emily: “...an absolute failure of regulation… look at the ripple effects across an entire industry. It's going to affect not only this company, but their 600 suppliers, airlines and then people who fly.” [08:10]

• Industry Structure & Inescapable Market Power

  • For big jets, there are only two major global players: Boeing and Airbus.
  • Constraints like massive capital investment mean even Airbus, with years of backlog, can’t pick up Boeing’s lost business.
  • Anna: “You're not gonna have like startup making your own... two guys in their garage are not making the next Boeing.” [10:31]

• Accounting & Financial Fallout

  • Boeing has lost $50 billion in market cap and could lose another 20%.
  • Financial distress is further complicated by “unhurdlable barriers to entry.”
  • Anna: “Their margins are going to decline significantly... they've already lost like 50 billion in market cap.” [09:40]

2. California's AB5 and the Gig Economy

[12:17 – 21:00]

• What is AB5?

  • New California law forcing companies to treat many freelancers/gig workers as employees rather than contractors.
  • Meant to target Uber and Lyft, but effects have rippled across industries.
  • Emily: “Assembly Bill 5... wants to force these companies to treat their workers not as contractors, but as employees.” [12:22]

• Corporate and Freelancer Fallout

  • Vox Media cut ties with hundreds of SB Nation bloggers, rather than convert them to employees.
  • Writers who produce more than 35 pieces a year for a company are considered employees under AB5.
  • Differing opinions on whether this "upgrade" in worker status is ultimately beneficial.
    • Emily: “If Vox has to raise its pay and standards... the people that they do hire have more protections, it seems ultimately better.” [13:53]
    • Felix: “It does worry me a little bit that [the freelance/near-full time gig] is no longer an option in California.” [14:38]

• Broader Labor Market Implications

  • U.S. employer-provided health insurance is a key issue.
    • Emily: "The actual problem is that in the US our employers are the ones taking care of things in a lot of other countries is a matter of policy like health care." [16:02]
  • Anna: “Having a system where you’re not putting this burden on businesses then allows you to have a much more open labor market.” [16:39]
  • Discussion veers into the need for health care decoupled from employment: “Anna is on slate money agitating for Medicare for All.” [17:06]

• The Messy Test for Classification

  • AB5 uses a three-part test to determine employment status. Exceptions include doctors, lawyers, real estate agents.
  • Emily: “There are carve outs for doctors, real estate agents, lawyers and some kinds of therapists... But not all of them.” [17:35]
  • Uber/Lyft claim drivers aren't core to their business because they're a "platform." [19:08]
  • Companies may avoid hiring California-based freelancers to escape compliance.

3. The Mormon Church's $100 Billion “Second Coming” Fund

[22:08 – 32:27]

• Ensign Peak Advisors: The Mormon Church’s Secret Fund

  • Whistleblower reveals the Mormon Church has amassed $100 billion through Ensign Peak Advisors, with zero spent on charity.
  • “Every Mormon needs to give 10% of their income... The Church then spends about $6 billion a year, and throws the extra $1 billion into Ensign... The amount of money it spends on charity is zero. And yet it is tax exempt.” — Felix [22:44]

• Why Save Up All that Money?

  • Church leaders say it’s “for the second coming.”
  • Felix: “Apparently that you need $100 billion... for the second coming because apparently that you need $100 billion of like... what?” [23:41]
  • Anna: “God’s gonna be like, fee to get in.” [23:53]

• Legal and Ethical Questions

  • Whistleblower lawsuit claims Mormon fund fails IRS rules that charities must conduct “charitable activities commensurate with financial capabilities.”
  • Emily: "Do the Catholic Church have a similar stockpile of cash?... What we know is that we don’t know." [25:55]
  • The lack of reporting requirements allows huge sums to accumulate unmonitored.

• Tax Loopholes & Systemic Problems

  • Foundations must spend at least 5% of assets annually; churches are exempt.
  • Similar techniques used by university endowments, private foundations, even non-charities (NFL).
  • Felix: “It’s amazing what you can get away with in this. In this sector.” [29:52]
  • Anna: “This is the kind of part that I think people don’t talk about as much that they probably should.” [30:28]
  • Hosts propose “make everything that is currently tax free a taxpayer” and then subsidize public goods explicitly. [31:44–32:27]

Notable Quotes and Memorable Moments

• Felix on Boeing’s management failure:

  “They just want to wait until the bad news is all out before they hire someone else.” [06:07]

• Emily on the systemic risk of weak regulation:

  “It's going to affect not only this company, but their 600 suppliers, airlines and then people who fly. I mean, it's really something that connected to all these other pieces of the economy should be well regulated. This shouldn't have happened at all.” [08:10]

• Anna, wryly, on 'national champion' companies:

  “That's one of the reasons why no matter how bad things get for them, they're not going to go out of business. Like, they will get bailed out. They'll get bailed out because they have defense contracts. And that's also part of the problem too.” [09:16]

• Emily, on AB5 and the real issue:

  "The actual problem is that in the US our employers are the ones taking care of things... So in a way like the target of the law is a little backwards." [16:02]

• Felix on the Mormon fund:

  "The head of the Mormon Church was quoted in this complaint that was just filed as saying that, well, yeah, we’re kind of saving it up for the second coming because apparently that you need $100 billion..." [23:41]

• Anna on tax-dodging nonprofits:

  "We do have these portions of the economy where we just have, like, just massive, massive, mass amounts of money are just simply not taxed." [30:28]

• Felix on reforming charity tax status:

  "Make everything that is currently tax free a taxpayer. Every university, every hospital, every charity, every insurance company, make them all pay taxes. And then... subsidize them... and make it transparent." [31:44]

Noteworthy Timestamps

• Boeing segment: [00:53 – 12:14]
• AB5 segment: [12:17 – 21:00]
• Mormon Church/Tax Exempt segment: [22:08 – 32:27]
• Numbers round / lighter fare: [32:54 – End]

Numbers Round & Lighter Fare

[32:54 – 38:41]

• Emily: "17" — Only 17 Russell 3000 public companies have all-male boards, down from 93 in 2018, showing progress from imposed diversity mandates. [32:57]
• Anna: "80 million" — Massive locust upsurge in East Africa and beyond; climate and geopolitical factors at play. “It's something because... one swarm can consume as much as 2,500 families would eat in a year.” [34:45]
• Felix: "25" — 25 years for Mariah Carey’s “All I Want For Christmas Is You” to reach #1 on the Billboard charts, sparking a playful round of what makes the "best Christmas song." [37:03]
  • Emily: “It's relentlessly catchy... As soon as you said muh, it started just playing.” [38:22]

Tone and Takeaways

With sharp analysis, skepticism, and punchy humor, this episode examines how systems and policies intended to protect us — from aviation safety regulations to labor law to charitable tax exemption — often flounder when confronted by entrenched interests, regulatory capture, and outdated paradigms. The wide-ranging discussion offers deep dives and laugh-out-loud asides, combining business savvy with social conscience.

Highlights for new listeners:

• The scale and opacity of the Mormon Church’s fund is jaw-dropping and emblematic of broader loopholes in the US tax code.
• The Boeing crisis exposes the dangers of weak corporate governance and captured regulators.
• AB5’s effects reveal the trade-offs and unintended consequences of well-intentioned legislation in a broken benefits system.

Memorable sign-off:

“With any luck, we have now put an earworm into the minds of every single Slate Money listener. But at least it’s a good earworm.” — Felix [38:32]

Next week: A special episode with Tim Harford before the show returns in January.