Speaking of Terrifying...

Summary

Slate Money – "Speaking of Terrifying…" (Jan 25, 2020)

Host: Felix Salmon
Guests: Anna Szymanski, Emily Peck

Overview

This episode of Slate Money, titled “Speaking of Terrifying...”, offers a round-up of recent stories in business and finance that tap into contemporary anxieties—ranging from the early outbreak of the coronavirus, the ethical and civil liberty dilemmas of facial recognition company Clearview, to the financial and emotional response to the Australian bushfires. The tone is sharp, skeptical, and laced with dry humor as the panel unpacks the intersection of panic, technology, and collective action.

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Key Discussion Points & Insights

1. The Coronavirus Panic and Economic Ripple Effects

[00:48-12:25]

• Cable News Cycle and Panic: The hosts discuss how periodic outbreaks (like anthrax, Ebola, SARS, and now coronavirus) generate cable news-driven “nationwide panic,” which often outpaces real risk and is forgotten after a few weeks.

  • “And there's this weird sort of nationwide panic, which may or may not be based in reality. And then a few weeks later, everyone's kind of forgotten about it.” – Felix [01:44]

• Economic Impact vs. Real Risk: Anna points out that historic outbreaks caused substantial economic hits due to panic, not just the disease, referencing SARS taking “a percent off China’s GDP,” less because of mortality, more because of travel and commerce disruptions.

• Timing with Lunar New Year: Felix highlights how the timing of coronavirus with the Lunar New Year, China’s biggest travel and gift-giving holiday, “is going to magnify the effects of the virus compared to if it had happened any other week of the year.” [05:01]

• Public Health Funding & Pharma Incentives: Emily explores how the U.S. underfunds pandemic research and how pharma under-invests in diseases that are unlikely to yield blockbuster drugs.

  • “Big pharma is not that interested in curing these things. So they don't devote that much money relative to other problems like say like cancer…” [06:40]

• Disease Preparedness in China: Anna notes misaligned funding in China between research and basic public health, which can create breeding grounds for outbreaks.

• System Limits—Quarantine Feasibility: The hosts contrast China’s ability to quarantine cities with the U.S., referencing political structures and past failures in timely outbreak acknowledgment by local authorities.

• Media’s Role in Panic: Emily and the others joke about media tropes fueling apocalyptic thinking—"Every zombie movie starts off with like, shot of like the news, the TV news, and there's like a map and there's little red dots on the map about the virus that's coming.” [10:12]

• Environmental & Social Factors: Anna connects increased outbreaks to “more people, more travel, higher animal-human contact, and climate change making things worse.”

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2. Clearview and the Dystopian Rise of Face Recognition

[12:25-23:44]

• Clearview AI Exposé: Felix introduces Clearview, which “has amassed a huge database of people’s faces and is peddling it to law enforcement agencies everywhere around the country.” [13:32]

  • Clearview’s founder is described as “sketchy,” with ties to alt-right figures.

• Tech Progress and Irreversibility:

  • “It’s toothpaste that cannot be put back in the tube… The technical challenge of being able to recognize whose face is whose is a solved problem—this is now mathematically not a difficult thing to do.” – Felix [15:09]

• Law Enforcement Use: Clearview only succeeded once it started targeting police departments. The hosts voice concern over the regulatory and civil rights challenges this poses.

  • “You could try and pass a law saying no one use face recognition, but that’s not gonna stop, like, the NSA from using face recognition. They’re just gonna do whatever they can do anyway.” – Felix [17:00]

• Accuracy and Risks: The database is “stunningly accurate,” but panelists highlight fears about privacy and the potential for “Tom Cruise movie” scenarios, where ads and denied services are triggered by facial data.

• Corporate vs. Rogue Startups:

  • Felix points out, “It’s much easier… to talk to Google and stay on top of what they’re doing… If it’s sketchy companies like Clearview, that’s even worse.” [20:03]

• Regulatory Complexity: Anna suggests it’s easier to regulate a few big tech firms, but breaking them up could disperse power and make regulation harder, creating a dilemma for policymakers.

• Potential for Corporate Crackdown: Ultimately, Felix expects platforms like Facebook to block Clearview for violating terms of service, potentially causing Clearview to implode, though illicit facial databases likely persist elsewhere.

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3. Charity and the Australian Bushfires – Good Intentions, Complex Outcomes

[23:44-32:22]

• Bushfire Donations – Philanthropy or Policy Gap? Felix explores the oddity of donating en masse to Australia’s volunteer firefighters—essentially a government agency—questioning if public giving might let government off the funding hook.

  • “You have this very interesting phenomenon of people basically donating money to the Australian government, which is not what you would consider to be a cash constrained cause.” [24:37]

• Red Cross: Efficiency and Controversy:

  • Wide skepticism toward the Red Cross, with Felix critical of the American branch but affording the Australian version more benefit of the doubt.

• Should Charities Save for the Future? The team discusses whether it’s “okay” for the Red Cross to save part of disaster donations for future crises.

  • “You should want them to [save]... The most important time for an agency like the Red Cross to be able to respond to a disaster is immediately and not after the money comes in.” – Felix [28:11]

• Earmarking and Donor Emotions: Past incidents (e.g., 9/11 donations) created pressure to spend money directly on named disasters, even when inefficient. The group argues donor trust, not earmarks, should guide giving.

• Emotional Parallels to Pandemic Panic: Emily draws a tie between panic-driven giving and fear-based behaviors around coronavirus—each derived from “reacting to things that are sort of just absolutely out of your control…” [31:18]

• Climate Change and Individual Action:

  • “The answer isn’t give money to charities. The answer is…pay more taxes, vote, get the government involved because that’s who can really take collective action.” – Emily [32:04]

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4. Numbers Round

[32:45–38:55]
Lightning round with quirky business numbers and discussion.

• Goldman Sachs’ Diversity Mandate:

  • Emily’s number: “One” — Goldman won’t take companies public without at least one non-white, non-male board member.
  • “They’ll take any token black person. They put sexual orientation as one too...” – Emily [34:13]
  • Felix: “When Goldman Sachs went public, they had seven board members, four of them were named John, and none were a woman.” [34:25]

• Mexico’s Unsellable Presidential Plane:

  • Anna’s number: “$130 million” — the price of Mexico’s presidential plane, which no one wants, inspiring viral short stories starting, “And when he woke up, he discovered he had won the presidential plane.” [36:14]

• Chick-fil-A’s Ultra-Low Franchise Acceptance:

  • Felix’s number: “0.513%” — The acceptance rate for Chick-fil-A franchisees (60,000 apply yearly, only 80 accepted) is lower than getting into Stanford.
  • Highlights Chick-fil-A’s unique franchise model and thin fast-food profit margins.
  • “Average revenue per store… $4.2 million, which is way higher than KFC or McDonald's…” [38:21]

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Notable Quotes & Memorable Moments

• On Pandemic News Coverage:

  • “Every zombie movie starts off with like, shot of like the news, the TV news, and there's like a map and there's little red dots on the map about the virus that's coming.” – Emily [10:12]

• On Donating During Bushfires:

  • "People basically donating money to the Australian government, which is not what you would consider to be a cash-constrained cause.” – Felix [24:37]

• On Facial Recognition's Inescapability:

  • "It’s toothpaste that cannot be put back in the tube… The technical challenge of being able to recognize whose face is whose is a solved problem.” – Felix [15:09]

• On Individual vs. Collective Action:

  • “The answer isn’t give money to charities. The answer is…pay more taxes, vote, get the government involved because that’s who can really take collective action.” – Emily [32:04]

• On Corporate Diversity Initiatives:

  • “When it’s one, you’re the token whatever.” – Emily [33:56]

• On the Absurdity of the Unsold Presidential Jet:

  • “And when he woke up, he discovered he had won the presidential plane.” – Anna [36:14]

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Tone & Style

The episode is conversational, irreverent, and informed by a blend of skepticism and dry wit. The hosts challenge surface-level panic, question the system behind the headlines, and are frank about industry and policy shortcomings. Jokes and pop culture references (Tom Cruise, zombie movies) add levity to what could otherwise be a bleak survey of dangers, disasters, and dystopias.

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Timestamps at a Glance

• [00:48] – Coronavirus panic and media cycles
• [05:01] – Lunar New Year and economic consequences
• [06:40] – Pandemic preparedness & pharma funding
• [10:12] – Zombie apocalypse/Media tropes
• [12:25] – Clearview AI discussion begins
• [20:03] – Google and facial recognition moratorium
• [23:44] – Bushfire philanthropy & Red Cross debate begins
• [28:11] – Why charities must save for future disasters
• [31:18] – Parallels between panic-giving & pandemic panic
• [32:45] – Numbers round: Goldman, Mexican jet, Chick-fil-A

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This summary covers all major themes and memorable moments for listeners seeking a comprehensive overview of this Slate Money episode.

Transcript

[A]

This ad free podcast is part of your Slate plus membership. Hello, welcome to the Speaking of Terrifying edition of Slate Money, your guide to the business and finance news of the week. I'm Felix Salmon of Axios. I Anna Shymansky is here from Breaking Views.

[B]

Hello.

[A]

Emily Peck is here from HuffPost.

[C]

Hello.

[A]

We are going to talk about many terrifying things. There are terrified people who are terrified.

[C]

Of fires, fires, disease, disease, bad or.

[B]

Facial recognition, face recognition.

[A]

This is going to be a particularly dystopian edition. We're going to talk about what CNBC calls in its chiron, the mystery virus, which as far as I can make out, has no mystery about it at all. Coronavirus. We know exactly what the virus is. We know where it is, we know how it spreads. But it's scarier if you call it a mystery virus, right? So we're going to talk about the virus and how bad it is. We're going to talk about the bushfires in Australia and why people are giving money to try and help out, whether they're doing any good. We're going to talk about Clearview, which is a terrifying company and much more. We're going to talk about Smile Direct Club in Slate Plus. All that coming up on Sleet Money. So let's start with coronavirus, because it's the most newsy, according to Emily Bagg.

[C]

I just got a news alert about it right just now. It's literally, literally in the news at this moment.

[A]

So I feel like every so often there's a sort of disease, trendy, highly infectious disease, which breaks across the cable news, breaks into the cable news consciousness, and then suddenly everyone is petrified about whatever it is that week, whether it's, you know, anthrax or Ebola or SARS or now I guess it's coronavirus. And there's this weird sort of nationwide panic, which may or may not be based in reality. And then a few weeks later, everyone's kind of forgotten about it.

[B]

So I kind of agree with you and kind of don't in that on the one hand, yes, I often think that these are just panics. And especially in the United States, I would say right now there is still just a lot of panic. However, like SARS took like a percentage of GDP of off of China's gdp. Like, this was not a small thing, but it was like 800 people.

[A]

Well, yeah, but 800 people dying does not take a percent off China's GDP. It's panic that takes a percent off China's GDP. You know, 800 people die in China every Day because it has a billion people. And that's just what happens in China. It's, it's the way that it affects transportation and commerce and all of that kind of thing. And some of those things are entirely rational. And they've quarantined Wuhan because, you know, it's smart to do that. And some of those things, especially in America, are not rational.

[C]

Well, let's just back up, okay, and talk about what's going on. We're talking about coronavirus, which originated in Wuhan in China. Probably one of these animal to human kind of viruses, you know, like SARS1mers, I think. Yeah.

[A]

And there's a pig flu, there's a bird flu. Who knows what this is? The Earth?

[B]

It tells me a bat.

[A]

Maybe it's bat flu.

[C]

And this was like in some kind of open market where the animal, human interaction is. There's a lot of it. And So I guess 12 cities have been kind of put on lockdown by China, which is scary, I think. Like, I think that's part of what's feeding the panic.

[B]

40 million people you're talking about.

[C]

I mean, which is apparently the size of Canada's population. Fun fact. Anyway, so that's what's going on. There's been two cases diagnosed in the US so far. Just two. And then to put this in context, in the US in any given year, 200,000 people are hospitalized for the flu and 35,000 people die from the flu every year. But no one's panicking about that. Just fun thought for you. And people don't even get their flu shots.

[A]

Get your flu shots, people. If you haven't got your flu shot this year yet, you're not too late. You should have got it by now. But I'm not going to shame you. Just go out and get it.

[C]

So I think you have a point. It's, it's, it's not the actual pandemic or disease. It's the, it's the chaos and the fear and the panic that causes the economic problems. Are there economic problems? We should clarify that.

[A]

So I think one of the unlucky things that is happening here is that the height of the panic happens to have coincided with Lunar New Year, which is literally today. Happy New Year, people.

[C]

Yay.

[A]

And that is the biggest holiday in China. Everyone travels back home to see their family. There's a huge amount of gift giving. There's a lot of commerce, there's a lot of traveling. And so the effect of coronavirus on that is number one. It's going to reduce travel number two, it's going to reduce commerce, it's going to reduce, you know, the economic activity. And all of that is going to magnify the effects of the virus compared to if it had happened any other week of the year.

[B]

That's true. I mean, I also would say that having something happen now as opposed to SARS in like 2003, you're probably going to have a larger impact just because travel, consumption, services, that's all a larger part of China's economy now than it was in the past. So that means the impact could be magnified. And I think that ultimately you are correct that a lot of the negative economic impact is a result of the panic. However humans panic, I just, I don't feel like we're ever going to be able to undo that.

[C]

Right Primal?

[B]

Yeah, I mean it's, it's like market cycles, like they happen and the central bank can't make people stop panicking about a virus.

[C]

Panic does fuel a lot of economic problems, doesn't it really? If we could eliminate this panic thing.

[A]

If there was no panic, there would never be any bank funds and we wouldn't need the fdic.

[C]

Yeah, it'd be all fine. And then there were a couple of interesting pieces cuz everyone had tons of pieces about this cuz people get really, really interested, they put on their face masks, they start freaking out, but again, get your flu shot. Anyway, there was a good, a couple of good pieces in Bloomberg just about what the US is doing around pandemics which, you know, everyone kind of expects more of these and you know, people are more resistant to antibiotics now than they used to be. And apparently one issue for the US and being prepared for these things is there's not enough public funding for research. But also big pharma is not that interested in curing these things. So they don't devote that much money relative to other problems like say like cancer, to, to R and D on treating these kinds of pandemics. It's really interesting.

[B]

Yeah, and that is often the case with a lot of these, is that if something's gonna happen, rarely it's not gonna be the type of blockbuster drug that you're gonna be putting a lot of money behind. So that does obviously suggest that you need more funding from the public sector.

[A]

And pharma in general just doesn't love infectious diseases. It's just not what they like to fund, what they like to put money into. And so you wind up, you know, getting weird coalitions cobbled together by the who and that kind of thing saying, like, you know, we have to work on these infectious diseases. But yeah, it's true. Like it's, it definitely seems to be a weak spot of the pharmaceutical industry in general.

[B]

It'll be interesting too, because in China, I mean, part of the reason you had this, at least a part of the reason people think in Wuhan was because you actually didn't have almost any funding or. No, you had, sorry, you had a lot less funding going into public health and actually a lot more money going into scientific research, which scientific research is good. But if you're not funding basic public health and you have like a university area where you have a lot of people moving back and forth, you can have this type of thing happen. And that's something in China in general that the hope is that this could actually spur more investment in actual public health.

[C]

Yeah, one thing I was thinking was, I mean, the Chinese, they can, they can like quarantine a city. It's like no big, I guess. But in the U.S. i mean, when.

[A]

You'Re, you know, communist dictatorship, you can do what you like, right?

[C]

But in the U.S. i mean, that's not gonna happen.

[B]

Well, I will say it was slightly, and I don't wanna say funny because people are dying, but I did read a report where they were like, we are going to build another hospital in Wuhan in like six days. You know, it's funny, it's not funny, but you hear these things and I think sometimes it's like planned economies, man. But then on the other hand. But then on the other hand, you know, part of the reason that these infectious diseases tend to can be made worse is because you have officials at the local level who don't want to say when something bad is happening because of the way this planned economy works, because of the fact that you have one government state. I mean, that happened in sars. And people think that that actually is why it took a little while for this to come out. Now, even though you had Chinese scientists saying there was a problem, but the local officials didn't really want to get in trouble.

[C]

So the numbers that we're seeing reported might be on the low side. Then like, I think like 35 deaths or something like that could be much higher. We just don't know.

[B]

I think that's the assumption because it was also like the number was very low and then it kind of spiked fairly quickly. And I think it's not just because a bunch of people automatically just died. It was that all of a sudden things were coming out but again, like.

[A]

You know, you're comparing it to the number of flu deaths. I mean, it's even lower than this time last year, I feel was when we were at the height of the measles epidemic or pandemic. I can't remember what it got counted as in the end in the United States, which again, killed more people than that. The problem with coronavirus is just the same with all of these other things like Ebola, is that it's just eek. We don't know how to cure it. Although, you know, quietly, without anyone really noticing, there is no a cure for Ebola.

[B]

I mean, and so I guess maybe that is somewhat of the hope that some of these panics bring. That they bring attention to things and then they can bring funding and then that can actually, in the long run, make people often who live outside of the United States actually live longer.

[C]

I mean, and also, every zombie movie starts off with like, shot of like the news, the TV news, and there's like a map and there's little red dots on the map about the virus that's coming. And then all of a sudden, someone in America coughs and then the zombies take over. And it does. The way these things are covered, it does trigger in me at least a feeling of like, this is it. This is the zombie apocalypse.

[A]

The zombie apocalypse.

[C]

Even though I know it's not, but it can be.

[A]

My colleague Eileen O'Reilly went to a simulation a couple weeks ago about what happens if a virus spreads from China. And a whole bunch of international agencies took part in this and tried to contain this hypothetical virus. And I think at the end, 93 million people had died or something. I mean, you can get there quite easily. Let us not forget the Black Death literally killed half of Europe. These things, I mean, granted, things have.

[B]

Improved a little bit.

[A]

Medicine is a little bit better since the 12th century.

[C]

But, you know, I mean, the flu, influenza pandemic killed more people than. Am I right about this? Than World War died in World War I. Am I right?

[A]

I think that's right. You know, not to mention, like, more than 90% of Native Americans got killed off by, you know.

[C]

Yeah. I mean, these are serious things and you can understand a lot why people panic.

[B]

And also, I think, you know, when you have a period of time where you have more travel, when you have more people who are making more money, so they're eating more protein, so then you just are going to have more animal, human contact. You have climate change making higher temperatures and just also just messing with things in general. It seems like these things are going to happen more frequently. And I wonder if you're ever going to get to a point where we will try to get out ahead of these. I mean, I know in China, in theory, I have heard that they are, they're going to like certain tech companies are saying they're going to try to fund, you know, algorithms that are going to be able to determine where the possibly go wrong. I know, exactly. And that's kind of how I feel as well.

[A]

But yeah, Google has had its flu index for a long time because they measure how many searches there are for I've got a temperature or something, and they can work out where the flu is.

[B]

It's a little terrifying, though. Probably a good segue.

[C]

Speaking of terrifying.

[A]

Speaking of terrifying, let's talk about Clearview.

[B]

Okay. Being tracked.

[C]

Yeah, let's talk about it. Big story over the weekend in the New York Times, a little newspaper headquartered in midtown.

[A]

It's, yeah, Cash Hill, who's, you know, an awesome reporter I used to work with back in the day, she finally cracked open the Clearview story, which is a very, very sketchy company run by a very, very sketchy founder CEO who I can recommend, you know, googling what Gorkha used to write about him back in the day. But. And I think one of the reasons he got funding from Peter Thiel was because they like, bonded over, like, hating Gorka and being having had mean things written about them by Gorka.

[C]

Should you say his name to complete your smear of this guy?

[A]

No, if you want. Yeah, let's. Let's out this man. Okay.

[C]

I think it's pronounced hone ton that. Do I have that right?

[A]

I think so, yeah.

[C]

So he's the sketchy is Felix's word fellow that's founded Clearview, the sketchy company that has amassed a huge database of people's faces and is peddling it to law enforcement agencies everywhere around the country.

[A]

And BuzzFeed had another little baby investigation into him and his weird ties to sort of the alt. Right.

[B]

And this also happened at the same time where you had Google come out and say that they want there to be a delay on investing more in facial recognition.

[A]

So facial recognition is a thing that exists. Anyone who has. I am literally sitting here in front of my new iPhone and my face unlocks my phone and I've had my face recognized. Last time I came into the country through global entry and they just, oh, yeah, we know who you are. Just come in. I'm like, that's kind of terrifying.

[C]

But wait, that sounds awesome as well.

[B]

This is the issue was it.

[A]

It was. Be honest, it felt weirder than it felt awesome. Although I did get through the, you know, customs and immigration incredibly quickly because they were like, yeah, we've recognized your face, come on through. And it's toothpaste that cannot be put back in the tube. And there are literally billions of faces on the Internet that people have uploaded on Instagram, on Facebook, I mean it's literally called Facebook and on a bunch of other places. And those billions of images have been scraped not only by Clearview AI, but I'm sure by many, many other companies. And the technical challenge of being able to recognize whose face is whose is a solved problem like this is now mathematically not a difficult thing to do. And so it's probably on some level comes as no surprise that there is a company which is saying, hey, we can do this. We may have violated every single terms of service of Facebook and Instagram and everyone else in order to be able to do it, but we have done it and if you give us a face, we will tell you whose face it is. And then now what?

[C]

And now one more thing. I think I read this just this morning that in London they just announced that they're going to be using facial recklessness recognition technology in real time. So like when the London police are looking for someone, a suspect, they can, and someone's walking down the street, they can apparently do it right away. They can nab you on the street. So it's really everywhere.

[B]

But as you say, like the cat is out of the bag, like we're not going to go back here. So then I guess the idea is how do you regulate it? And how do you regulate it? Also with the idea that other countries are going to regulate it differently because it does seem like you could very easily get a kind of facial recognition, you know, AI arms race where the US government and national security is not going to want to fall behind in this, is not going to want regulations to get in the way of advancing.

[A]

However, straight out of Dr. Strangelove, isn't it? We cannot have a mineshaft gap spare.

[C]

I mean, I think you have to, I think you have to regulate it with civil rights in mind, right? I mean, that's the most important thing here. You don't want law enforcement agencies like running roughshod with this information, just using it willy nilly. Like there needs to be real laws and regulations around how this information can be used to take away people's rights.

[A]

And the kind of interesting but probably with hindsight, inevitable. Part of this is that Clearview tried to use its technology in various ways, which never really got off the ground until they hit upon the one which really worked, which was selling it to police departments. And the police department's like, this is awesome. I have like a cctv, you know, still image of someone, you know, committing an assault. I'll just plug that into this database and boom, I get a name and then if I'll investigate that person, if it looks like they were in that place at that time and they had the motive and blah, blah, blah, then I'll arrest them and case solved. You can see why this is incredibly attractive to police. And the police are, on some level, the hardest part of civil society to constrain with laws. And it's, you know, you could try and pass a law saying no one used face recognition, but that's not gonna stop, like the NSA from using face recognition. They're just gonna do whatever they can do anyway.

[B]

Right.

[C]

But I think you can set boundaries on. Like, you can't just use face recognition to. I mean, there was some of that kinds of other evidence besides facial recognition piece.

[A]

Sure. I mean, I don't think. I don't think anyone. I don't think we've yet reached the point at which, you know, a match on Clearview is going to be enough to get a guilty verdict in the court of law.

[B]

Right.

[A]

That's a separate issue. But the question is, can the police use the database in the first place? And I'm kind of with Anna on this one. I think that it's going to be incredibly hard now that you have multiple police departments already using it, it's going to be very hard to get them to stop using it.

[B]

And you might not agree with me on this, but, like, there also probably are some benefits for them using it. Right. You know what I mean? Like, it isn't all bad. And, you know, obviously we want to make sure that it's accurate and we want to make sure it's not being used properly.

[A]

And cashier, like, the one thing which she was quite clear about, especially on Twitter, but also in her article, is like, it's accurate. It's stunningly accurate. You put faces in and he can't. He'll tell you exactly who it is. And more to the point, she managed to get this database of like thousands of artificial faces from this person does not exist. And she put all of those into the database, and every single time the database said, nope, this person, no match. And it's amazing. How, how accurate it is now.

[C]

So we talked about how law enforcement might use it, how might be used in the criminal justice system. But what awful things will America's biggest companies use this for? I mean, Apple's using it for the good, so you can.

[B]

But also a good thing.

[C]

But, like, am I going to live in some, like, Tom Cruise movie where I walk into the mall and like, all the screens start, like, giving messages to me through my AirPods about what I should buy tailored to me? And, like, are they going to do, like, creepy stuff once they know my face? So they're not going to let me, I don't know, drive my car because they see my face and they know, like, I'm delinquent on my auto loan, like, what terrible things are in store for us.

[A]

Because all of that. And the interesting question is, as you say, there's been this announcement this week from Google saying we're putting a moratorium on face recognition. This is a deeply problematic technology. We want to make sure that anything we do is ethical. All of this kind of stuff. And I can see why they said that in no way disapprove of them saying that, but it's much easier on some level to talk to Google and try and stay on top of what they're doing and how their stuff is being used. And if it winds up being like, sketchy companies like Clearview, that's in some way even worse.

[C]

Right. Although maybe some of what we think we know about Clearview is exaggerated. That story you sent around that said the company is claiming X number of law enforcement agencies use its technology, but really it's just sending tips in to the police and saying, oh, we caught your guy. And then they count that maybe. So it might not be.

[A]

So, yeah, there's no, there's no real evidence that Clearview is itself like a massively successful or valuable company.

[B]

Okay, but I think what you just said is really interesting in terms of thinking of the role of these larger tech companies moving forward, because it does seem like it would, in fact be easier to regulate a small number of companies that have access to a lot of these most advanced technology. But then on the other hand, if we think that's going to give those companies a lot of power, so then, you know, if you break them up, then they will have less power, but then it may actually be harder to regulate.

[A]

I mean, I do think on some level, like, you know, Cambridge Analytica famously did all of its evil things by using data that it had illegally scraped from Facebook. And eventually Facebook realized That and effectively shut them down and said, you know, you violated our terms of service. You need to destroy all of this data. And now Cambridge analytics is not really a thing anymore. I feel it's inevitable that Facebook is going to crack down on Clearview and say, you violated a gazillion of our terms of service and you have to just stop operating. And I wouldn't be at all surprised to see Clearview basically implode in the next few weeks just because they have no rights to any of these images that they've managed to put into this database. So, you know, that particular company, on some level, I'm not worried about. And although it is almost certainly true that these images are now out there and that Clearview is not the only company to have this database of 3 billion images, I do think that the idea of this making its way into the open world every time you walk into a shopping mall, every time you walk into your car, that kind of thing, for that, you're going to need, you know, the shopping mall companies and the auto companies to be dealing with legitimate legal vendors. And right now, there's no legitimate legal vendor that has access to a database of 3 billion images because none of those databases are legitimate or legal.

[C]

I would like to walk into my. To get in my car and it just starts because my face. Some of this stuff does sound really.

[B]

It really kind of does appeal.

[C]

Like, no more passwords. That would be a miracle. I mean, I'm getting there. Getting there.

[A]

You want to. You want to live in a world of no car keys?

[C]

Oh, yeah. I mean, actually, having a car key has not proven to be an inconvenience for me in the least. It's the passwords that I hate the most. All the many, many passwords.

[B]

You need to pull out cards like and car.

[C]

Yeah. I want to just be free by being shackled to my face and having everyone in the world know who I am all the time. Time.

[B]

And if all of that wasn't scary enough, let's talk about bushfires.

[A]

Bushfires are destroying Australia. And someone sent me a tweet.

[C]

Yes.

[A]

And I'm going to call up the tweet.

[C]

Felix sent the tweet around and said, let's talk about this.

[A]

It's from Jason Morrison in Australia. And it says this. It says $95 million donated to Red Cross Bushfire Fund. But, quote, some of the funds would be saved to spend towards disasters in the future, unquote. People didn't donate so the Red Cross could bank. There are people living in tents who've lost homes and whole communities in distress spend the money.

[C]

So, Felix.

[A]

Yes.

[C]

What is your take on this? Because a few weeks ago, I was just remembered this morning you wrote kind of about how donations to the bushfires, though well intentioned, perhaps aren't necessary. So I'm very curious to hear what you think.

[A]

So I had. So there are two different stories here, both of which on some level are, you know, squarely in the Felix Philanthrogeek wheelhouse. One of them is what you just said, which is a huge proportion of the donations has gone to the volunteer firefighters in New South Wales who are effectively a government agency. And what you have is this very interesting phenomenon of people basically donating money to the Australian government, which is not what you would consider to be a cash constrained cause. If they need more money, they can just raise taxes or they can just take or borrow money on the international bond markets and give it to the fire department. The government obviously has some kind of budget constraints and does or doesn't fund the fire department. But this fire department in particular has not actually complained about being underfunded. But there is just this very deep seated feeling of I want to do something. All I can really think of to do is give money. Who should I give money to? Well, the people who are putting themselves in harm's way and fighting the fire, at least volunteer firefighters. They are literally unpaid. And so I'm going to help support them. And it's really quite effective in terms of making the giver feel better and feel that they have done something. And I just worry a little bit that on some level, especially with the current Australian government, that this is going to mean that the government is going to turn around and go, huh, we don't even need to fund this fire department anymore because there's so much money just coming in from American film stars who are the Golden Globes.

[C]

I mean, the Australian government recently agreed, I believe, to start paying some of the volunteer firefighters because they're working so much. Yes, but then is the Red Cross. Then it's tangential to what you just said.

[A]

And then the Red Cross is a separate issue.

[C]

People love to hate the Red Cross. Am I right with that?

[A]

So the American Red Cross is something we have talked about many times on Slate Money and is, I am just gonna come out and say a bad charity and do not give money to the American Red Cross because they are bad.

[C]

Okay?

[A]

Although that said, they are getting better and they are doing less bad stuff and more good stuff. And when I was down in Houston After Hurricane Harvey, they were actually pretty effective at just going out and giving $400 in cash to everyone who was affected, which is a pretty effective way of dealing with it, rather than what they used to do, which is trying to get a bunch of ambulances and blankets. And remember after Sandy how they served a whole bunch of, like, pork dinners to the Jews? It was. It was great. But, yeah, the Australian Red Cross. It's not the American Red Cross. Do not tie the Australian Red Cross with the American Red Cross brush or most national Red Cross agencies are actually quite good. I have no reason to believe the Australian one isn't. So that's fine. Just like as an institution. The question then is, should you be worried that if you give money to the Australian Red Cross to help them respond to the wildfires that they might not spend all of that and they might keep some back for future disasters? And the answer is, you should not be worried about that. You should hope and expect that they do that.

[B]

Right.

[A]

You should want them to do that. You know why? Right? Do we need to spell this one out?

[C]

Because more disasters are coming and so there.

[A]

Yes. I mean, so that's part of it. I mean, obviously we're living in the age of global warming. These are not going to be the last wildfires in Australia. And the most important time for an agency like the Red Cross to be able to respond to a disaster is immediately and not after the money comes in. So you want them to be. To have the money they need to be able to respond immediately. And then you use some of the money from the last campaign to spend immediately with this one, and then the money will come in and you're basically paying it forward.

[B]

And I think that you understand where the anger comes from. And I think just in the same way that people want to give money because they feel like they can't do anything else, I think people want someone to blame for this, and it's hard to blame nature. So they have. Now, okay, it's the Australian Red Cross.

[A]

But there's. But there's something else going on. There's a bigger reason here. And this actually goes back to one of the reasons why the American Red Cross is bad. It's mostly its own fault. But there's one reason which is not its own fault, which is that after 9 11, the American red Cross got a huge number of donations and there were actually very few places where they could effectively spend that money.

[B]

Right.

[A]

Because virtually everyone who was injured in 911 died. You know, and like, the effect, the eventual, like Lung disease and stuff happened years and years later. But there was a lot of people who died and you can't really help the people who've died. And the job of the Red Cross is not to sort of help the victims families, that kind of thing.

[C]

No, I remember they had like the tent set up for survivors and they were just empty. Yeah, my, my friend was working for a hospital at the time and she's.

[A]

Like, we just sit there and. And what you wound up with was the Red Cross saying, great, we have all of this money and we're going to put it to really good use, but we're not going to put it to great use at ground zero because there's really not much we can do down there. And there was the mother of all uproars and everyone's, we gave money to 911 and we want it spent on 911 and not on anything else. And then that created this earmarking crisis basically where the Red Cross got shamed into feeling like it had to spend all money related to a certain disaster on that disaster and not on anything else. And that in turn created an internal accounting chaos which was incredibly unhelpful and created a lot of problems. And it's again what we're seeing in Australia. And just in general, if you give money to a charity, you have to believe in that charity, you have to trust that charity to spend that money well. If you don't trust the charity to spend the money well, do not give money to that charity. And if you do trust a charity to spend that money well, don't try and second guess where and how they're spending it.

[B]

Yeah, I mean, it kind of reminds me of even like when people are giving to universities and you get certain departments that are massively overfunded, whereas because people say, I am giving money to this one department. And so I think it's always the business school. It's always the business school. Yeah, it's very true. So this is one of these instances where this desire people have to have control over their giving actually makes the giving less, less effective.

[C]

I also wanna point out a similarity between this story, people rushing to give money out of kind of a sense of panic and, and powerlessness and just wanting to do something. With the segment we did on the pandemic, which is a similar kind of emotion in people reacting to things that are sort of just absolutely out of your control and you're trying to put your arms around something or trying to control it. And so it's like almost like the same Motivation behind like giving during a crisis like this when it's maybe not even useful and kind of like, I don't know, like wearing a mask in downtown New York City because you're afraid of getting this respiratory illness from China that only two people.

[A]

Right. Or for that matter, you know, the people who are convinced that if they spend a little bit more effort on recycling, that's going to help save the planet.

[C]

Yeah. And I think this, this also points out, like, if we're going to deal with climate change and global warming, like, the answer isn't give money to charities. The answer is, you know, pay taxes, pay more taxes, vote, get the government involved because that's, that's who can really take collective action to.

[A]

I'm going to write more about this next week in Axios Edge, but Union Square Ventures has just invested in a venture backed for profit carbon offset company. And you're like, oh great, you know, like no good can come of this.

[C]

Yikes.

[A]

Let's have a numbers round.

[C]

Okay.

[A]

What's your number, Emily?

[C]

I guess it's one.

[A]

You guess it's one?

[C]

Yeah. I don't know.

[A]

Do you want to like, you know, worry about this number?

[C]

It's one. It's Goldman Sachs. They said at Davos on Thursday that they won't take your company public if you don't have at least one unwhite, un male person on your board of directors. Could be a woman. Could be.

[A]

It was a little bit weird about whether she needs to be on the board of directors or just like on the list of maybe becoming on the.

[B]

Board or board adjacent.

[A]

Board adjacent.

[C]

So, I mean, people are very excited about this. They think it's to be going great. Will the other one, the other underwriter banks follow? It is kind of interesting to me how quickly this board diversity push has kind of like taken off. Like, it does seem like there's some kind of progress, which kind of just then makes me skeptical about the whole thing as like anything more than just window dressing.

[A]

Well, I mean, what David Solomon, Goldman CEO, said is that they're going to start with one and then in a couple of years they're going to move it to 2, which is, I think, 2. When you get to 2, it starts actually being.

[C]

Yes, it does. When it's 1, you're the token whatever. And I mean Goldman in setting its rules couldn't be clear. Like they'll take any token black person. They put sexual orientation as, as a one too. So that sounds, you can have a white man, but if he is gay, Then.

[A]

So when Goldman Sachs went public, I went back to look this up. When Goldman Sachs went public, they had bought. They had seven board members. Four of them were named John, and none of them were a woman.

[C]

That wasn't that long ago.

[A]

And it wasn't that long ago. But I think they would count because one of the johns was John Brown, who was gay.

[C]

There you go.

[A]

He wasn't out, but he was gay.

[C]

Well, then does that count?

[B]

That's a big question.

[A]

That's a big question. Maybe he could have just been out to his lead underwriter, and that would be a nerve.

[C]

But then they would get all the media calls of outrage, and they would have to be like, can you go on background?

[A]

They're like, we are going to attest that at least one of our seven men is okay. We're just going to tell you which one.

[C]

Yeah, I don't think that's working. I don't think that would have worked. So there you go.

[B]

So My number is 130 million. This number kind of made me think of you. Oh, this is the value of the presidential plane in Mexico. So the Mexican president, Andre Manuel Lopez Obrador, has decided he does not need this plane. They should not have this plane. And he wants to sell this plane. So he tried to sell the plane. The problem is he couldn't get any bid that actually matched the value of the plane. So then he came up with some other ideas. He was going to have, like, maybe just give it to the US and the US Would give Mexico a bunch of, like, medical supplies or he was going to give to a bunch of different companies. Or then came to my personal favorite, having a raffle.

[A]

He's raffling off.

[B]

He was going to raffle off the presidential plane. And it just keeps getting better. And so, like, and granted, obviously, the presidential plane costs like a million and a half dollars a year to surface. So he's like, we'll give you, like, one or two years of free service. You're like, that's not enough. But then my absolute favorite part of this story is that it kind of blew up on, like, Mexican social media. And so this literary magazine started this contest. And the contest was the best short story that began with these lines. And when he woke up, he discovered he had won the presidential plane.

[C]

Is it too late to submit?

[B]

Okay, look, I don't actually think they're doing the raffle. It was just. It was one of the things he said, and it was amazing.

[A]

So. Yeah, what do you. I mean, yeah, what do you do With a secondhand plane that nobody wants.

[B]

It's apparently a very nice plane.

[A]

So why does nobody want it?

[C]

Well, someone.

[B]

It's probably just overhauled.

[C]

It's not priced right.

[B]

That's exactly right.

[C]

Yeah.

[B]

Yeah.

[A]

My number is 0.513%, which is the acceptance rate for becoming a Chick Fil a franchisee. Apparently 60,000 people a year apply to become Chick Fil A franchisees, and they accept 80 of them, which is way lower than it is. It's way harder to get that than it is to get a job at Google or get into Stanford or anything like that. And one of the reasons is all other franchises, you pay millions of dollars and then you basically own the franchise and you get all the profits and you have to pay like 5% of revenues or something up to the parent company. Chick Fil A pays everything pretty much. And it can pay up to like $2 million. They pay the cost of opening up the store. They pay for the real estate, the equipment, but then they take 50% of the profit and 15% of sales. All you need. The franchisee pays like $10,000. That's it. It's a completely separate model.

[C]

So is it a good deal for the franchisee?

[A]

There's much less downside, but there's also much less upside.

[C]

So how much do they make most.

[A]

And this is the other. This is fascinating article. The majority of fast food franchise restaurant owners make less than $50,000 a year per franchise. It's like, if you own a lot of them and they're big in major cities, then you can get like a multimillion dollar revenue stream from them. But most of these are really small in terms of profits, so the margins are tiny.

[B]

Yeah. But although I would imagine, though, that this is gonna. It's gonna be higher barriers of entry, though, for there to be new Chick Fil A's. So I would think that that would make it a slightly better deal for those who are able to jump through all the hoops to get to actually start a franchise.

[A]

Yeah, I mean, it's. It's a. Like Chick Fil A has an average revenue per store of $4.2 million, which is way higher than any. Like, KFC is 1.2. McDonald's is 2.8. It's like way, way higher. But that precisely because of that, they're like, we want to keep that money. We don't want to just let our franchisees keep it. So they have a very different system.

[C]

That's so interesting. And have we ever talked about the law where it's like companies like McDonald's don't want to be responsible for like labor violations, their franchise restaurants, the franchisees.

[A]

Yeah.

[C]

I wonder how it is for Chick Fil A if they're taking 50% like they have to be responsible for the behavior then for the labor violations and things from the stores. Right. You have to look into that.

[A]

You don't look like you've convinced even yourself.

[C]

We can cut this. I'm just interested.

[A]

We will look into this. We might have a Chick Fil A segment on some future episode of Slate Money. But for the time being, I think that's it for us. This week we are going to have Slate plus segment on Smile Direct. So that's coming up if you're a Slate plus listener. Otherwise, thank you for listening. Thank you for emailing slatemoney.com thank you to Jessamine Molly for producing and we will talk to you next week on Slate Money.