Saving for the Second Coming

Summary

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

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

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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.

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Key Discussion Points

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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]

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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.

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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]

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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]

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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]

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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]

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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.

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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]

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

Transcript

[A]

Hello, and welcome to the Latter Day Saints edition of Slate Money, your guide to the business and finance news of the week. I'm Felix Salmond of Axios. I'm here with Anna Shymanski of Breaking Views.

[B]

Hello.

[A]

I'm here with Emily Peck of HuffPost. Hello. And we are going to talk about latter day scenes. They are much richer than we thought they were. We are going to talk about Boeing, which is in, I believe the technical term is a world of pain right now. They have stopped making their cash cow, the 737 Max, for obvious reasons. What else are we gonna talk about, Emily?

[C]

The California law, AB5.

[A]

AB5. We're gonna talk about AB5 and what, what this means for anyone who's unfortunate enough to be a freelancer in California. We have a whole Slate plus segment on books that we might recommend you read if you are in the mood for reading a book this holiday season. All that and more coming up on Slate Money. Let's start with Boeing. I was reading on the Internet this week that first quarter GDP is going to implode, that it was going to be like more than half a percentage point lower than everyone thought just because Boeing isn't making planes anymore. Boeing is a massive part of the American economy and it seems to be going from atrocious to still really bad.

[B]

Yeah, I mean, it's our largest manufacturing exporter. It employs a tremendous number of people. And then you also have to think of all of the suppliers who will also be affected by this. So, yeah, I mean, this is not a small deal.

[A]

So, Emily, what's the, this, what's the news this week?

[C]

So this week, Boeing said it was suspending production of the 737 Max, which, if you'll recall, is the plane that was involved in two fatal crashes back in March when 346 people died. And I don't know what took so long to stop making it, but now they're suspending production. They're not really saying when they expect to pick it back up again. And yeah, maybe throws the economy a little bit of another wrench in a sector that's already struggling.

[A]

Plus the sector being airplanes.

[C]

Manufacturing.

[A]

Manufacturing, yeah.

[B]

Yeah. And also investment and exports, two major parts of GDP that have been, have been weak.

[C]

Yeah.

[A]

So the question I have is they were making a 737 Max, which was clearly flawed in a deeply profound way. The obvious thing to me would be to stop making it while you work out how you're going to fix the flaws and then come like January or so, you Start making it again in a way where the flaws are fixed. And then that seems to be the opposite of what they did. They kept on making it even though they hadn't worked out how to fix the flaws. And now that they're getting to the point where they think they know how they might fix this, they stop making it.

[B]

Yeah, I mean, I think part of the problem, I mean, I think initially it is going to hurt them so much in order to stop making this that I think they're trying everything they could to not have to stop making it.

[A]

How does making it help them? Because they're not selling it.

[B]

I mean, that's a fair point in the sense of like they're just continuing to burn cash, but actually stopping making it and saying like, we might not make this thing again, like that's an enormous step.

[A]

Oh, is that a real possibility?

[B]

Yeah, I mean, that's a very real possibility. I mean, yes, it's certainly possible that they will just be able to fix it or they'll just rebrand it and name it something else. But I mean there is going to be significantly more regulation of this as well there should be. Right. So no one exactly knows what is going to happen here.

[C]

And the other mystery which your colleague wrote about is Dan Primek, why the CEO is still the CEO.

[B]

It's amazing.

[C]

I didn't write his name down.

[B]

Mullenberg.

[C]

Mullenberg. Dennis Mullenberg.

[A]

Dennis Mullenberg.

[C]

I mean he stepped down as a executive chairman, I think from the board. Right, but he's still in place as CEO. I mean, we just talked a few weeks ago about a woman who isn't the CEO of a company anymore cuz she was mean to her workers in Slack. This guy oversaw a company in which 346 people died under his watch. Right on this defective plane. He is still the CEO.

[A]

And it was quite clearly his fault. But if you look at the reporting, there's been a lot of excellent reporting from the Seattle Times and the Washington Post and the New York Times. A lot of people have been covering this as again, they should have done. Muhlenberg was the first CEO of Boeing to not come from the plane making side of it. He came from the defense contractor side of it. And the defense contractor runs in a very different way that has fewer checks and balances. And 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. And the fact that he's still there and the board hasn't Fired him. Dan raises a good question. I have one vague, conceivable theory, but I want to know if either of you two have a theory.

[C]

I don't have a theory.

[B]

I think part of it is just a symptom of the problem with corporate governance that you've had at Boeing. That's another issue on Boeing, actually, that they used to have mostly engineers on their board. Now, I think one. And I think the fact that he's connected with defense contracts might also be related to the fact of how he's had a little bit more protection.

[C]

I mean, I think, yeah, the same things that led to these fatal crashes and to Boeing's really. I thought it was slow in reacting and apologizing, taking the planes off, everything that made all that possible is why the guy is still in charge.

[A]

Their first reaction was, oh, oh, our plane is fine.

[C]

Yeah, it's totally fine.

[B]

Or, no, it was the pilot's fault basically, too. Right? Yeah, the pilots were killed.

[C]

Yeah. I mean, just terrible. And so that. Yeah, it's maybe a rotten company in some way.

[A]

So Dan's theory, I mean, weakly held. He has no idea either, is that they just feel that they can't find anyone better. I don't really buy that. I feel like you could more or less throw a dart at the phone door and find someone better. My theory is that they know, and they have known for. Since March. They have been able to see this shitstorm coming, and they know how much bad news there has been still to come and probably still is still to come, and they just want to wait until the bad news is all out before they hire someone else.

[B]

There's a possibility that that's true.

[C]

I like that. I like that. So the new guy isn't tainted.

[A]

So the new guy can come in and be the, you know, the grinning Dara Khosrow Shahi type and say, hey.

[B]

Not the one who has to go in front of Congress and be like, right, we keep killing people.

[C]

Sorry.

[A]

Apologies to all the people who died.

[C]

And we did say, try not to do it again.

[A]

It'll be a guy. Yeah. But it's also an incredibly specialized and insular company. And I think the thing we've learned from Dennis Muilenberg is you can't even bring people across from other bits of the company to run. You really do want a Boeing Aircraft person to be running Boeing Aircraft. And it wouldn't surprise me if there are some relatively good candidates in that section. But now, of course, they're all tainted because they were all working for Boeing Aircraft when this happened. Yeah, they're not gonna hire someone from Airbus, you know.

[B]

Certainly not. Yeah, yeah, that's interesting.

[C]

Too outsider.

[B]

Yeah. Cause, well, slightly off topic, but like, Airbus is probably not going to benefit from this mostly. Which I, which is interesting because I saw some people, like initially when Boeing, they're like, oh, Airbus must be super happy. And you're like, airbus is not gonna be happy. Like, they have no ability to make up for this, like lost capacity.

[A]

Like, they don't have the planes.

[B]

They have eight years of backlogs of things they have to make.

[A]

Oh, no.

[B]

So they can't just like start making more to fill this. So what is most likely going to happen is just that we aren't gonna have enough planes and travel costs are gonna go up.

[C]

I saw some airlines were affected by this too. Grounding flights.

[A]

Yeah, well, yeah, I mean, there are a bunch of routes I know because I happen to live on one of them that have just stopped flying because they were being served by the 737 Max and then the airlines grounded their 737 Max and now they're like, well, we can't fly that route anymore. So, so shit out of, like.

[B]

Yeah, it's like incredibly capital intensive. It's not something you can just, someone else can just quickly start doing what.

[C]

An absolute failure of regulation. I mean, yes, Boeing is to blame and Muhlenberg is to blame here, but the FAA really fell down and 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. 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.

[B]

No, I mean, when you have a national champ, I mean, one of the problem national champions often is the fact, you know, they have any competition. You're, you have all of these kind of cozy connections with government and so bad things can happen. But in theory, if you had proper regulations, you would, you'd be able to be more on top of them because they essentially have, you know, so much control this industry. But this is not the first time this has happened with a national champion. Right. I mean, it's not that uncommon.

[C]

What's a national champion?

[B]

Basically? I mean, like, it's traditionally when you have a certain business that the government, it's, it's not technically state owned, but it is very state like support it. And this is something in the emerging markets and something emerging markets also state owned. But you often have these national champions where essentially the government is going to ensure that they do well, like a.

[C]

General Motors or something.

[B]

I mean, I mean the thing with the auto industry is at least you've always had a few. Right? But, but yeah, Boeing is like in the US is one of the few companies that you probably would really call us national champion. That's one of the reasons why doesn't matter how bad things get for them, they're not going to go out 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. And when you have a company that is also, it's essentially too big to fail. So you know, it's not overly surprising.

[A]

Tell me about like the finances, are they going to lose?

[B]

Their margins are going to decline significantly? Yeah, I mean like they should be lose or they will burn slightly less cash because they've been burning a ton of cash.

[A]

But also they've been burning cash since the 737 stopped selling.

[B]

Yeah, well not even before that. But yeah. And also part of the way that they account for like their costs now they're going like they spread it over the amount of planes and because now fewer planes will have made, that's actually gonna make their books look worse. It's a bit of an accounting thing, but it will affect how they're valued. I mean they've already lost like I think 50 billion in market cap and it's not inconceivable that they could lose 20%. I mean like this is not a small thing, right?

[A]

And this is, and this is an industry with basically unhurdlable barriers to entry.

[B]

You're not gonna have like startup making your own.

[C]

It's not like two guys in their garage are not making the next Boeing.

[A]

There are only two. I mean Brazil kind of has one, but really there are only two aircraft manufacturers on planet Earth. And you just have to kind of pick one of them and go with it.

[B]

Right?

[C]

Well if I was a country I would make my own airplane company.

[A]

So that's what Brazil did with, with Embraer and then wait, Bombardiers, Canadian. Yeah. So there's a couple of like slightly smaller ones. But in terms of the big long haul airplanes where you, you know, fly across oceans, I think you're basically stuck with Boeing.

[B]

And it's just because obviously the capital intensity and also like the contracts that you need to have, the relationships you need to build, it's just not an industry that you can get.

[A]

And you need to Provide entire fleets like this is the other reason why airlines are. Are not just buying Airbus, Quite aside from the fact that Airbus doesn't have the planes to sell them, is that you want your whole fleet to be all Boeing, and that way all of your pilots can fly all of the planes, and it's all interoperable. And that's what caused the 737 Max problem in the first place, is they had this old workhorse called the 737, which was reaching the end of its natural life, and they wanted to be able to replace it with a plane that didn't require all of the pilots in all of the airlines in all of the world to get retrained. And that didn't work very well.

[C]

But maybe this is all part of your ultimate plan, Felix, which is to stop private jets. So maybe this is more like stop all the jets, stop all the climate change. Maybe that's ultimately a good thing.

[A]

Even better, even better with banning private jets is ban 737s. The 737s have way more carbon footprint than all of the private jets in the world. Combine.

[C]

This is Good.

[A]

Emily. Hi, AB5. Do you know what it even stands for? Assembly Bill, Something like that.

[C]

Assembly Bill 5. It's a California law that was passed on September 11th, and it was meant to target Uber and Lyft, and it wants to force these companies to treat their workers not as contractors, but as employees. Is the idea, like, you can't have fake contractor workers that are actually just employees. So Uber and Lyft are fighting it. They're spending millions of dollars. They want to do some kind of, like, statewide referendum next year, but the.

[A]

Law is now in place, so they have to comply with it for the time being.

[C]

But they're not going to. They're just gonna, I think, ride it out and try and fight it, from what I read.

[A]

Unlike Vox Media.

[C]

So, yeah, so the news this week was Vox Media, which owns the sports site SB Nation, is sort of letting go all of its sports bloggers, because according to AB5, this law, if you employ a freelance writer, if they write more than 35 pieces for you in a year, then you are actually considered an employee. So Vox didn't want to do that, and they have all these bloggers, so they said, you're all done, and we'll. We'll figure out a new way to do this with fewer people.

[B]

This is what you know when you're talking about labor regulations, like, there are always winners and losers. It's not simple, right? Because you Understand why people would. Some people would be in favor of this law. But the downside of it is that you're always going to have probably more people who then won't be able to be employed. Now those who are employed, like the new jobs will probably create at VOX to do this or have better jobs than the ones they had before, but there'll just be far fewer of them.

[C]

It seems fine to me that these people, I mean, it's terrible to be laid off, really terrible. But if VOX has to raise its pay and standards and the people that they do hire have more protections, it seems ultimately better.

[A]

I can tell you as someone I use, I spent five years, five or six years freelancing, mostly for Euromoney, basically with one main employer. I spent two years freelancing for Conde Nast Portfolio. I was their finance blogger, basically with one employer. I think I did like a tiny bit of work for other people. And that idea of working more or less full time for a single employer on a freelance basis, it can actually work out for you in various ways. And there are reasons why some people would like to do that and would like to be in that situation. I'm not saying that like it's, it's better than being an employee, but it's different and you know, different people like different things. And I, it does worry me a little bit that that is no longer an option in California.

[C]

Well, it is if you write fewer than 35 pieces.

[A]

Right. But that's not a full time job, is it?

[C]

If you are doing something full time for a company, you should be treated as a full time worker. Like I had a job at American Lawyer and for the first two years I was like a contractor, I guess, but it was a full time job. I had no other job. So I would bill them, I think once a month or twice a month or something. And like I worked alongside people who had health benefits. I had none. I worked alongside people who were putting away for their 401k. I couldn't do that. Like it was just obviously not.

[A]

And I do think things have changed. The law did change and since our day as well. The other thing though, the other big thing that has changed is the cost of private health insurance. It's just been going up and up and up to the point at which it becomes you need to persuade your employer to pay so much extra to cover things like health insurance that it feels weird. Like on some level, economically speaking, employers should pay more for freelancers than they do for full timers. But they never actually do this is.

[C]

Actually a good point. So it's like 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. So in a way like the target of the law is a little backwards. Like if you instead of targeted Uber and Lyft and force them to change the way they treat their employees, you could pass a state law that raises the minimum wage no matter what industry or how you work and give everyone health care. And then it doesn't matter that much how the company, what kind of benefits the company gives you. If you get paid leave through a public policy. If you get sick leave through a public policy.

[B]

I actually really agree with that because I do think having a system where you're not putting this burden on businesses then allows you to have a much more open labor market. And having more open labor market is going to lead to almost like more business development. Development. Whereas what they're doing right now, I mean again you understand because it is, people are very sympathetic when they're saying I'm working all these hours and I don't have access to health care. But then the whole thing is like. Right, but the company is not going to be able to get health care to all those people. So just again, one more point of that problem of that's why companies should not be doing that.

[A]

Emily, isn't this amazing? Like we have now officially reached the point where Anna is on slate money agitating for Medicare for All.

[B]

Not necessarily Medicare for All. I just, yeah, I just think that you.

[A]

Some kind of universal government provider.

[B]

I've always thought that you need some type of. It doesn't make any sense. And also because it's like it doesn't help business. I mean it doesn't, like it doesn't make tremendous amount of sense. It actually puts a burden on US companies in comparison to others and you know, and especially smaller companies too. I don't know, does this bill apply to everyone or is it one of those like 50 or more kind of things?

[C]

No, Anna, it does not apply to everyone. There. First there's like a three part test to see like if the person actually would count as an employee. So if it's like you bring in a plumber once a month or something like that for your business that's outside the regular course of your business, they wouldn't count. And then there are carve outs for doctors, real estate agents, lawyers and some kinds of therapists. But not all of them because there were some People complaining. And there's a Wall Street Journal piece where like truckers and therapists were getting very upset. Truckers are very upset about this because a lot of them are contractors, they don't work for any particular company. And there's a big feeling like they're going to lose some independence.

[B]

Right?

[A]

Yeah.

[B]

And I mean, and that is always the other issue too is that, you know, you do have, and you even heard this from like Uber and Lyft drivers. That said, like, well, you know, some of them, like, they like the flexibility. They don't necessarily want to have to be told, okay, you just have to drive at this time. This time. And it's the same thing with freelancers as well. I mean, it's there, there is a little bit of that push and pull. And the problem with these laws is that they're kind of a one size fits all. And yeah, they might fix one part of the problem, but then it will create.

[A]

So, Emily, what's the rule for Uber and Lyft? How much do I need to be working for Uber before this law kicks in?

[C]

That's a good question. The three part test is you have to be free from the control of the company. So that's not an hourly requirement. I don't know what the hourly requirement is.

[A]

Like, Uber can't tell me that I have to drive.

[B]

Right?

[C]

Right now you drive when you want to drive.

[A]

So in that sense, I'm free from their control.

[C]

Right. And then the second part would be outside the usual course of business, which unbelievably, Uber argues that their drivers are outside the course of digital business because they're a tech company.

[A]

Yeah, we do air quotes. I mean, this is the let's quote Dan Primack edition of State Money, it seems. But Dan interviewed Dara on Axios, on hbo and he was like, are you seriously saying that drivers are not part of the course of your business? And Dara's like, no, we're a platform.

[C]

Unbelievable. That is just so unbelievable. And then the third part of the test is like, if they're in a trade, like the lawyers and the doctors or the plumber who comes and fixes your offices or something.

[B]

But in terms of the company itself, does it have to have a certain number of employees before it matters for guys?

[C]

I don't know.

[B]

Okay, no worries. Why don't you know everything about this?

[A]

I'm sorry, Emily, you're fired. Seriously, you need to know everything.

[C]

I can't be fired, Felix, because I'm contractor for Slate. I'm actually not Even a contractor.

[A]

I mean, it's an interesting question though. If we had a slate money co host in California who wasn't employed by a slate and who came on more than 35 times per year because we have 52 weeks per year, they would be covered by this. Yeah.

[B]

I mean, and this is an issue where you're having people in California saying we probably might get a little screwed here because companies will just not hire people in California. They don't wanna deal with it.

[A]

Yeah, maybe that's the silver lining to this one, is we'll finally have reasons for people to move out of California and move to Bentonville, Arkansas instead. Which I've been reading up because of the great why is this interesting email newsletter has been writing about Bentonville, Arkansas and how it's this new sort of urbanist paradise and full of like hipster hotels and restaurants and the Crystal Bridges Art Museum. And it's all cool and trendy these.

[C]

Days because of Walmart.

[A]

Walmart has decided that it needs to be 21st century, digital focused, blah, blah, blah, and it needs to attract the cool like engineering hipster types. And so it's now turned Bentonville into a cool hipster town to live in.

[B]

And you know, as much as like, I don't love Walmart in certain ways, but it's not the worst thing in the world if you have larger companies, if you don't have some of these cities doing the things that they probably should be doing, if you have companies pushing them and saying like, okay, we're going to invest in this type of infrastructure to make this a more livable city, to make this a city that's going to attract well educated people. Like that's not a bad thing.

[A]

One of the interesting things is it's like I would say 30% Walmart building like this new trendy campus all to do all along, like modern urbanist guidelines with bike trails and all of that kind of stuff. But then the other 70% has been mostly philanthropic money from the Waltons, who don't control Walmart anymore, but have so much Walmart money that they can do Things like build 36 miles of bike trails and install a new fish market and that kind of stuff. And all of that philanthropic money helps the town and that helps Bentonville become more attractive as a place to work and that ultimately helps Walmart. But it's this weird thing which it's hard to replicate anywhere else.

[B]

It also suggests though, if they are getting tax deductions for that philanthropic money that they are then using in order to make Bentonville better so Walmart can do better as a company. Questions whether they should be getting some of those tax deductions.

[A]

So many questions about tax deductions. I mean, we could talk about tax deductions at the Mormon Church if you wanted to. Okay, I'm going to call an audible here and say, since we're talking about tax deductions from the Walton family, I want to do a quick segment on the tax free nature of the hundred billion dollars that a company called Ensign Peak Advisors has under management, which is more than the Harvard Endowment and the Gates foundation combined. Ensign Peak Advisors is this company that no one has ever heard of. And it is basically a subsidiary of the Mormon Church. And every year every Mormon needs to give 10% of their income to the Mormon Church. This winds up totaling about $7 billion. The Mormon Church then spends about 6 billion of that 7 billion paying pastors, sending people on missions, mowing the lawn, whatever they spend it on. And then they have a billion left over and they throw that extra billion into this fund called Ensign. And the fund just sits on it and invests it. And it's this amazing fund which gets obviously investment returns, hedge funds, stocks, bonds, all of that kind of stuff. Plus it gets an extra billion dollars of free cash every year. And the amount of money it spends on charity is zero. And yet it is tax exempt. And it just grows and grows and grows. And like 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 of like, what?

[B]

Because God's gonna be like, fee to get in.

[C]

So they're doing nothing with the money at all. Just sits there.

[A]

It just sits there.

[B]

And it's like a long term plan of what they're going to.

[A]

They're like, we might need it in case of emergency, but they are very careful to always spend less than they take in every year. So there never is an emergency.

[C]

So what is the lawsuit now?

[A]

So there's now this whistleblower lawsuit saying you have a nonprofit status and under IRS law, a charitable nonprofit needs to conduct charitable activities commensurate with its financial capabilities. Clearly are not conducting any charitable activities at all, let alone ones commensurate with $100 billion. Therefore you shouldn't have your tax exempt status, therefore you should have been paying taxes the whole time. And where's that tax? You owe the taxpayer a gazillion dollars. And of course, the Whistleblower is trying to get 30% of the gazillion dollars. But it's interesting. The chances of the IRS actually coming out and saying you owe billions of dollars of PAC taxes, I think are low because churches are always treated a bit differently. But it is kind of crazy that there's this massive gap in the tax.

[B]

So do they have. I mean, like, you know, if you're an endowment, like a university endowment, you have to spend a certain amount, correct?

[A]

5%. Well, so if you're a foundational endowment, you basically need to spend at least 5% of your assets every year right now.

[B]

So do they have any of those spending requirements?

[A]

No. Churches are basically exempt from that. So if this was just part of the general money of the church, and the church has, like a bank account, you know, Citibank, and it happened to have $100 billion in. It's like, you know, obviously this is not a situation which happens very often, and so it's hard to get a hard, clear view of the tax law here. But there is definitely a group of people who would give you the opinion. And clearly the Mormon Church has these lawyers who have given them this opinion that, yeah, that's just the church money, and the church doesn't need to pay tax on its money.

[C]

Do the Catholic Church have a similar stockpile of cash? And if so, do they do stuff with it?

[A]

This is another really good question. What we know is that we don't know. The fact is, no one had a clue that the Mormon Church had anything like this much money. And to be clear, the Mormon Church has not confirmed that it has $100 billion. It has no reporting requirement, or it considers itself to have no reporting requirement. So up until the time that this complaint came out, no one had a clue that the Mormon Church had anything like this much money, including, by the way, all the people who were tithing 10% of their income every year. A lot of people who just, like, you know, were really struggling to, you know, that's a large chunk of their money that they give to the church, which has $100 billion, and they should.

[C]

Be getting a dip, like, they should.

[A]

Be getting a dividend.

[C]

And then more people would be Mormons at that.

[A]

Right?

[B]

It's true. Yeah.

[C]

Is that Romney money in there?

[A]

That's Romney money in there, absolutely.

[B]

Yeah. 10% of Mitt Romney's.

[A]

Yeah.

[C]

He's like, that's. That's most of it. Right.

[A]

So one of the interesting questions which hasn't been answered is whether the IRS even knew about the existence of this money. Because I think that the way that the Mormon church worked is that they were under the legal advice that they didn't need to declare it. And I think a lot of other churches have been given that legal advice. And it's entirely possible that even the irs, let alone the rest of us, literally have no idea how much money is sitting in various church slush funds. How much money do you think the Church of Scientology has?

[C]

So much. They have all Tom Cruise's money. Probably also not all of it.

[B]

A good chunk.

[A]

He probably has enough to tip the waiter.

[C]

He's like the Mitt Romney of Hollywood, right?

[A]

And these kind of, you know, it's inevitable under capitalism that large amounts of money are going to accumulate in places where they are not taxed. And I mean, this is honestly one of the reasons why Berkshire Hathaway is so big, because it set itself up as an insurance company and insurance funds are not taxed. And so it makes sense to put enormous amounts of money there because you get to not pay taxes on them. This is also like, one of the reasons why Larry Page has put like billions of dollars into his personal foundation. And literally billions. Like, he's put 2 billion in. I think it's grown to about 3 billion in total. The total amount of money that foundation has ever given to charity is $21 million. Now, as Anna was saying, that foundation, as a foundation and not as a church, has an obligation to spend 5% of its assets on charitable activities every year. So what does Larry Page do? He just takes a chunk, like a 5% chunk of the assets and he throws it into a donor advised fund. And the donor advised fund gives no money to charity, doesn't ever need to give any money to charity, and presto, like, everything is tax deductible or tax free, rather.

[C]

I don't quite understand that because it's not like he gets to. It's not like he gets to spend the money he puts into his foundation. So why doesn't he just pay the taxes? Like, what's the benefit of not paying?

[B]

But the money's gonna be able to continue to grow and he's not gonna have to pay on the gains.

[C]

Well, what does he do with the.

[A]

He gets to, like, his heirs get to inherit the foundation and control the foundation, and eventually at some point, they.

[C]

Still don't get the money. It's still.

[A]

They can, they can pay themselves a salary from the foundation. You know, the foundation. Foundations provide a bunch of like, useful, gainful employment and purpose to a bunch of like nth generation gazillionaires, you can.

[C]

Go work at the foundation and get a huge salary forever and all your heirs forever and ever on this money that just sits there, basically.

[A]

Yes.

[C]

And keeps growing.

[A]

Yes.

[C]

And how does this relate to the Trump Foundation?

[A]

Well, the Trump foundation just paid a $2 million fine for being not charitable at all, basically.

[C]

But it sounds like the standards are so low that Trump really screwed up incredibly to get dinged for that.

[A]

Also, the chances of the Trumps getting dinged for that were he not, like, this highly polarizing political figure, are tiny. Trump would totally have got away with that if he hadn't decided to run for president and even probably become president. I think even if he'd just run, he would have still got away with it. It's amazing what you can get away with in this. In this sector.

[B]

No, but I mean, it's an important point when you're kind of talking about, you know, the need for potentially more spending and more tax revenue and that 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. And this is the kind of part that I think people don't talk about as much that they probably should, because, I mean, I mean, I understand to a certain point, like, if you have an institution that's actually doing something, like, at least if you're a university and you are, in theory, actually, like, you know, educating people, I have a little bit more sympathy for the fact that, okay, at least you're actually doing something. But a lot of these don't even do anything.

[A]

Well, I mean, and it's not just nonprofits and charities. Like, the NFL is a tax deduct. Is a tax free, untaxed organization.

[C]

Yeah. That's inexcusable. There's no reason for that at all.

[A]

You know, last year we put together this thing called the slate 90, which is a list of the biggest revenue tax reorganizations. And most of them were not charities at all. You know, they're like large businesses that somehow managed to get tax free for some reason. It's this huge loophole. But the Mormon Church just looks like it's way bigger than any of them. And no one knew. And people knew it had property. People knew it had, like, $35 billion of property. No one knew it had $100 billion of investments in Bridgewater.

[B]

But, I mean, it makes sense.

[C]

It's such a good point that you were making before, though. Like, you have all these Democratic candidates coming in and saying, I want to do this new tax or that new tax. It's like, can we just fix the system that we have now? Can we make it harder for the Mormon Church to just stockpile money that doesn't get taxed?

[A]

Can we abolish all tax free? Certainly get rid of the charitable deduction, but way beyond that, just 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, like, if there's like a public interest purpose to make them capable of continuing to do their business, and they can't do their business because suddenly they're faced with this massive tax bill, then subsidize them, take some of that tax money and give it back to them as a clear subsidy and say, we are paying you this clear subsidy so that you can do your job and make it transparent. Don't do it like, behind the scenes in the tax code.

[B]

No, I mean, I think that makes a lot of sense because you're talking about economists, and they talk about kind of best practices in terms of tax policy. It's very often this idea of kind of a lower rate but a broad bas. And then this kind of thing. I mean, that does make a lot of sense.

[A]

Or even keep the higher rate and a broad base and then a bunch of, like, subsidies which go back to the entities that need it. If they're charities or hospitals or universities or anything like that. Make it explicit. Let's have a numbers round. Oh, right, yeah, yeah. Emily?

[C]

Yes.

[A]

Do you have a number? I have a number. What's your number?

[C]

17.

[A]

Ooh, what's 17?

[C]

17 is the number of Russell 3000 firms who have all male boards of directors. And that's a good thing because it's down from 93, which was the number in September 2018 before California changed its law and required companies to have a woman on their boards. And the law worked. So now the numbers.

[A]

So wait, you're saying way down. You're saying that, like a good 70 or so of those 93 were in California?

[C]

No, I think some companies. There were a bunch in California, and then some companies just did it.

[A]

The s and P500 is down to zero now as well. That happened last year, I think.

[C]

I think you're right.

[A]

Yeah.

[C]

But there are still these holdouts, these 17 holdouts. And in the story, I think the Wall Street Journal asks a couple of the holdouts, and instead of defending themselves, they're like, we're working on it. So, I mean, there's very little company pushback on this.

[A]

I work for a company with an all male board of directors. This is very, very common among VC funded companies.

[C]

These are public companies.

[A]

And even my company, which is VC funded, is like, we're working on it.

[C]

Yeah, everyone's working on it.

[B]

I talk a Russian company that told me that when you're talking about ESG things, we're like, yeah, we know we have issues with hiring a woman, but we're totally working on it. I'm not even joking.

[C]

I feel like it's very easy. Like, it's not a hard fix. Like, there are some things that companies, they claim to be doing and they'll never get it done, like closing their pay gaps or like hiring more female executives. But this is like a very concrete, fairly simple thing. Like just put a woman on your board or maybe two. Like, it's not that hard and they could do it and like avoid a lot of criticism and it doesn't really hurt them in any way. So it's kind of like the easiest, lamest, but no brainerist thing you can do.

[B]

My number is 80 million. 80 million locusts per square kilometer. So we have this. No.

[A]

Is this a biblical thing? No, that is a. What's the minimum you need for it to be a plague?

[B]

That is a very good question. Because right now we are actually at the level. It's called an upsurge. It has not yet reached the level of plague. So, yeah, right now in Ethiopia, I think in Eritrea and the border in Pakistan and India and also in Somalia, you're having these massive locust infestations. And I mean, and these are horrible. It's something because they eat, like just so much. I mean, they could, like, one swarm can like consume as much as like 2,500 families would eat in a year. I mean, they're devastating, absolutely devastating. And one of the things they've said too is they think climate change could also be related to a little bit to what we're seeing now also what happened in Yemen. So we can kind of blame MBS for this. Like, apparently that's where the Ethiopian swarm came from because there was like stagnant water. So it's legitimate, like a really big problem. And I've only hearing it covered on the BBC.

[A]

What's the.

[C]

Is there a cool picture? Then everyone will cover it.

[B]

Yeah.

[A]

So how do you fight a plague of locusts?

[B]

I mean, I think part of it. Well, actually. Okay, this isn't funny, but it's a little funny is that you had. I think it was in Ethiopia where people were trying to shoot them. Turns out that doesn't work with guns. Yes.

[A]

I mean, 80 million per square. That's a lot of bullets.

[B]

A lot of bullets.

[C]

What about those tennis rackets with the electric spark in it? You can kind of.

[B]

Yeah, I mean, I mean, I think a lot of it is, you know, pesticides. And I think part of this, there was also some issues with, I think where there were certain areas where if planes couldn't fly, and then that was part of the problem because then they weren't able to release the pesticides. And then that's also in itself a problem when you have just massive pesticides. I mean, this is. It's a major. And it is one of those things that. And when you say locusts, people think of, like, John the Baptist and like the Bible. Like, you don't think of, like. No, this is actually a problem. It's like, I think it was like one tenth of the world's population is affected. Like, it can be affected by locusts. Like, it's a big problem.

[C]

The Mormons should use their money to fix the locust problem, which is, like, vaguely biblical.

[A]

Agreed, Agreed. That's a good use of $100 billion, I think. I think that a bunch of Smart people with $100 billion could probably work out how to fix the locust problem.

[C]

Yeah, let's get Bill Gates on this.

[B]

Agreed.

[A]

Or whoever the head of the Mormon Church is.

[C]

That Mormon guy.

[A]

That Mormon guy.

[C]

I'm sure it's not a lady.

[B]

It's probably a fair guess.

[A]

My number is 25, which is the number of years it took for All I want for Christmas is you to become the Billboard number one top selling single at Christmas. It was released in 1994, and it has of late, ever since streaming became part of the Billboard 100, it has been doing a little bit better every year. And then finally this year, the best Christmas song in the history of Christmas songs has finally reached the number one position that it always deserved, but spent 24 years not quite achieving.

[C]

I actually had a good conversation about this on Slate's Culture Gab Fest. They devoted a segment to Mariah Carey, which I'm you, Felix. I just want you on the record. Believe is the best Christmas song.

[A]

It is the best Christmas song.

[B]

Okay, I don't know if I'd say it's the best Christmas song of all time, but I would say it's the best, like, Christmas song of the last 70 years.

[A]

So wait, what was. What predates?

[B]

I don't know, like, Silent Night.

[A]

I mean, it's definitely better than Jingle Bells.

[B]

It's better than Jingle Bell.

[C]

Run dmc. Run dmc.

[A]

Oh, yeah.

[C]

Oh, yeah.

[B]

That is a good Christmas song.

[C]

Christmas time in Hollis, Queens.

[A]

I mean, you know, there is a case to be made for the Pogues, but ultimately, Mariah Carey has to win.

[C]

It's relentlessly catchy. Ever since I listened to the Culture Gabfest segment, it's in my head. As soon as you said muh, it started just playing.

[A]

So, 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.

[B]

Yes.

[A]

Yes.

[C]

Happy holidays, everyone.

[A]

Happy holidays to everyone. You can't get away from Mariah Carey this year or next year or for the rest of your life. This is just going to never go away. But it could be a lot worse for something which will never go away, like Logan. And with that, we'll have one more special episode with Tim Harford next week on Slate Money. And then we will be back with you in January. Many thanks to Jessamine and Molly for producing. Many thanks to our mysterious hosts for hosting us. We're not meant to thank them, but they have been very, very nice. And we will talk to you next week on Slate.