Super Pumped

Summary

Slate Money: Super Pumped (Air Date: September 21, 2019)

Host: Felix Salmon (Axios)
Co-hosts: Emily Peck (Huffington Post), Anna Szymanski, Guest: Mike Isaac (New York Times)

Episode Overview

This episode of Slate Money revolves around the explosive rise and messiness of Uber, based on Mike Isaac’s new book Super Pumped: The Battle for Uber, with wider discussions on Silicon Valley culture, new labor laws in tech, WeWork’s bizarre saga, and the resurgence of worker power across industries. The hosts and guest explore how outsized personalities shape companies, the underlying mechanics of tech business models, and the shifting sands of modern labor relations.

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Key Discussion Points & Insights

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1. Mike Isaac’s Book: "Super Pumped" and the Uber Story

[01:05 - 04:43]

• Mike Isaac, NYT reporter, discusses writing Super Pumped, a deep dive into Uber’s ascent and infamous founder, Travis Kalanick.
• Felix notes the book’s narrative style and its use of footnotes for personal asides.
• The group discusses how Travis’s brand of “bro culture” at Uber was simultaneously a selling point and, ultimately, his downfall:
  • Quote [03:43] (Mike Isaac): "I think people don't really realize how bad it was until you look at how condensed the number of gnarly things that came out happened, you know, like, in very short order."
• The hosts link the Uber implosion to the increased scrutiny tech companies faced post-2016 Trump election, referencing events like #DeleteUber.

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2. Techlash and the Role of Cultural Reckonings

[04:43 - 08:45]

• Emily Peck observes that behavior at Uber echoed patterns in other tech companies, but Uber’s exposure was catalyzed by heightened media attention and shifting cultural attitudes toward misogyny.
• Mike asserts that Trump's election fundamentally changed public scrutiny of tech, making Uber a prime candidate for backlash.
  • Quote [05:14] (C): "I really do think the election of Trump gave people more...scrutiny of tech just increased after that."
• Travis Kalanick is often described as "Trumpian" for his reality-distorting charisma and command over his environment.
  • Quote [06:52] (C): "They kept calling him Trump, Trumpian, weirdly...he created his own reality, but had this charisma that kept people around him..."
• The group debates whether Uber’s troubles were unique or symptomatic of a broader tech reckoning.

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3. California’s AB5: Employment Status, Gig Economy, and Uber’s Existential Threat

[08:45 - 13:44]

• Discussion turns to California’s AB5 law, classifying gig workers as employees.
• The hosts ponder whether anti-Uber sentiment helped get the law passed and explore its ambiguous consequences.
  • Many gig workers value flexibility but crave better pay and consistency.
  • Mike notes Uber might be forced to schedule drivers like employees, undermining the core gig model.
  • Quote [13:03] (C): "The whole company is based on the idea of paying people less and not giving them the benefits of an employee...extrapolate that out...it's a death blow, you know."
• Uber’s global business model relies on low labor costs; the threat of similar laws elsewhere could become existential.

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4. Uber’s Unprofitable Pursuit of Growth and Ride-Hail Economics

[13:44 - 17:06]

• Despite taking a hefty cut of each fare, Uber has never achieved profitability, largely due to heavy subsidies of both drivers and riders—first with rides, now with food delivery (Uber Eats).
  • Quote [14:21] (C): "They just moved into food delivery as their major area of growth and they're like setting money on fire trying to subsidize that sort of growth."
• The hosts note that ridehailing in mature cities is marginally profitable, but investors expect growth, pushing Uber into other loss-making ventures.
• Felix suggests a merger with Lyft; Mike recounts how Lyft's near-demise was averted after Travis's departure and the #DeleteUber campaign.

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5. WeWork and Adam Neumann: Hubris of Silicon Valley Leadership

[17:06 - 24:48]

• The focus shifts to WeWork’s disastrous IPO and the erratic, grandiose behavior of founder Adam Neumann.
  • Memorable moment: Neumann’s ambitions: "Trillionaire baby, President of the United States, President of the world." ([17:48])
• The Wall Street Journal’s revelations of Neumann’s personal excesses (smoking weed on a private jet, self-dealing real estate) tarnished WeWork.
  • Quote [19:02] (D): "No, he comes across as an idiot, I think."
• Discussion of dual-class shares and how investors failed to learn from Uber, repeating mistakes regarding founder control.
  • Quote [21:09] (A): "We're not going to give Adam Neumann super voting shares of 20 votes per share. We're going to give him super voting shares of only 10 votes per share. That's fine."
• The crew reflect on how excessive venture capital (SoftBank’s Vision Fund) led to reckless investments and reinforced outsized founder personalities, observing that sociopathy can now get rewarded even without profits.
  • Quote [21:36] (A): "Business and capitalism reward sociopaths...And especially very charming sociopaths who can persuade people to give them attention and money..."

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6. Private Market Madness and the Limits of Capital Glut

[23:42 - 24:44]

• The SoftBank Vision Fund’s magnitude has changed the game: "If you have $100 billion and you need to park it places quickly, you need to go to the companies that require the most capital..."
• The WeWork debacle threatens confidence in SoftBank and signals cooling capital enthusiasm.

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7. Adam Neumann: Entrepreneurial Oddities & Shifting Corporate Narratives

[24:21 - 26:29]

• Neumann’s prior ventures were wild (e.g., baby knee pads, collapsible high heels)—described as "stoned fever dreams."
• The "no-meat" policy at WeWork is cited as an example of arbitrary, ego-driven management.
  • Quote [26:26] (C): "He just wanted to, like, dick measure that much more than the last guy. Basically."
  • Emily Peck: "It's like woke dick measure." ([26:37])

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8. Rise of Worker Power: Unions and Collective Organization

[27:00 - 36:38]

• Turning to real labor — GM’s worker strike and AB5 signal a turning point for employee leverage:
  • GM workers strike over temp hiring, benefits, and a sense of broken promises since the Great Recession.
    • Quote [28:36] (D): "We've had more strike activity last year than we have had in a decade at least or more..."
• Discussion of tech labor: Kickstarter’s unionization push may become the first in tech, exposing the hypocrisy of "public benefit corporations."
• The debate over whether tech workers want or need old-school union contracts, and how collective action might take new forms in modern companies.
  • Quote [32:15] (C): "Workers are starting to figure out that they have power...they're starting to really recognize that coming together and pushing for that for change is something they can do."

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9. Profits, Public Companies and B Corps

[36:10 - 37:03]

• Felix and co-hosts discuss the pressure for public companies and B Corps to pursue not just profit but growth, and challenge whether perpetual profit growth should be a requirement for all public companies.
  • Quote [36:38] (B): "The ability to just continue to be—to not be profitable in the newer economy, I think is going to be challenged more and more."

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Memorable Quotes & Moments

• On Uber’s Dysfunction:
  • "It was like misogyny, like sprayed with Axe body spray or whatever." (Mike Isaac, [07:40])
• On Adam Neumann’s Leadership:
  • "His businesses are all like stoned fever dreams." ([25:02])
• On WeWork’s governance:
  • "We're not going to give Adam Neumann super voting shares of 20 votes per share. We're going to give him super voting shares of only 10 votes per share. That's fine." (Felix Salmon, [21:09])
• On Silicon Valley founders:
  • "Business and capitalism reward sociopaths...especially very charming sociopaths..." (Felix Salmon, [21:36])

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Important Timestamps

• [01:05] Introduction of Mike Isaac and his Uber book
• [03:43] The collapse of Uber’s culture
• [05:14] Impact of Trump’s election on tech scrutiny
• [06:52] The “Trumpian” style of Travis Kalanick
• [08:45] Discussion of California’s AB5 and gig work
• [13:03] Uber’s existential threat from employee classification
• [14:21] Uber subsidizing food delivery
• [17:06] Introduction to WeWork and Adam Neumann
• [19:02] Neumann’s effect on WeWork’s IPO perception
• [21:09] WeWork’s dual-class shares governance farce
• [23:42] Discussion of capital glut and Vision Fund
• [26:26] "Woke dick measure" moment with WeWork policies
• [27:00] GM strike as a sign of worker power resurgence
• [32:15] Tech worker organizing for collective action
• [36:38] Discussion on profitability in the "new economy"

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Numbers Round ([37:27 - 44:54])

• 2020: Year of Airbnb’s planned IPO; motivations and timing discussed ([37:29])
• €80 million: Amount scammed by using a lifelike mask of a French defense minister on Skype ([39:15])
• 2.9 billion: Number of birds lost in North America in 50 years—lament on environmental decline ([40:43])
• $500 million: Adam Neumann’s personal credit line, now at risk as WeWork’s valuation collapses ([41:48])

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Final Thoughts

This episode masterfully weaves together tales of tech excess, structural weaknesses in new economy business models, and the re-emergence of worker solidarity. With salty anecdotes, sharp industry analysis, and candid humor (not least “woke dick measure” as a corporate strategy), Slate Money makes financial headlines vividly accessible and relevant, exposing how personal foibles and macro forces interlock in today’s economy.

Transcript

[A]

Hello and welcome to this super pumped edition of Slate Money, your guide to the business and finance news of the week. I'm Felix Hammond of Axios. I am here with Emily Peck of the Huffington Post. Hello, I am here with our other co host, Anna Shymansky, who amazingly has a. Affiliation. Yes, you are no longer the mysterious.

[B]

Working at the mysterious company. I have shifted now officially to financial journalism. So are you.

[A]

Why would anyone voluntarily become a journalist?

[B]

It's a very good question. Yeah, most people don't finish their CFA and then they'd be like, I'm going to go into journalism.

[A]

But welcome, welcome to the tribe.

[B]

So, yes, I'm going to be working with Reuters. Breaking Views.

[C]

All right. Your alma mater.

[A]

So now we have four journalists around the table because we also have Mr. Mike Isaac of the New York Times.

[C]

Hello.

[A]

Hello, welcome. You are here because you are on bookdoor. You've written an amazing new book called.

[C]

This is called super the Battle for Uber.

[A]

It's great. It's in all good bookstores. It's a fun read. And so, yeah, we're going to talk to Mike about his book and about Uber and about Travis Kalanick and then about the new Travis Kalanick, who's Adam Newman of WeWork, and about what on earth is going on with all of the we work crazy. We are going to be talking about the power that workers are beginning to show over companies like GM and maybe even Uber, thanks to Californian legislation. It's a fun conversation. You should stick around for it. We're even going to talk about Repo and Slate plus because, you know, we have to. All that coming up in Slate Plus Money. So, Mike, congratulations on the book.

[C]

Thank you.

[A]

How's it doing?

[C]

It's. I think it's doing all right. We hit the bestseller list, which was nice. The New York Times bestseller list. And like, people seem to actually be reading it. They're like tweeting shots at. At the airport, at me. So I guess that's a measure of success.

[A]

So what's the subject that they mostly glom onto? Is it basically, oh, my God, Travis was amazingly evil.

[C]

The weird thing is everyone seems to like my penchant for footnotes.

[B]

Your footnotes are fantastic.

[C]

That is literally what everyone is tweeting more than like crazy Google affair footnotes.

[A]

It's always about you, right? It's when it's actually when Mike winds up going, oh, shit, I'm have to insert myself into the book here.

[C]

That's basically it. I think that's where I like, I can't tweet in book form, so I had to get it out in the footnotes.

[D]

For me, it felt like being transported back into another. But the era was just a few years ago. Just all the stuff about Travis and the culture was just. It was almost like more shocking to read about now than it was to live through it, because you had put it all in one place and you opened the book right, with that big party.

[A]

Yeah, you've got to open with a party. That was the other great book that we had on. What was it last year?

[D]

The Billion Dollar Whale also opens with a party.

[A]

And I feel like the Billion Dollar Whale party can possibly outdo even Travis. Although it was close. They didn't have Beyonce.

[B]

Right.

[C]

Beyonce was the icing on the cake for Travis Party. And that it cost $25 million.

[A]

And she got. And she got, like, $6 million of equity.

[C]

Right.

[A]

And then after IPO that was worth, like, less than $6 million. It's like she got in early in the private round. Like, that doesn't really help you when the stock falls off a cliff.

[C]

Oh, God.

[D]

But. And then the culture was his sell. Selling point, and then it was ultimately his downfall, wouldn't you say?

[C]

Yeah, no, I think the. No, no, no. I do think that. I think that people don't really realize how bad it was until you go look how condensed the, like, number of gnarly things that came out happen, you know, like, in very short order. Like, it was just sort of the election and then his Trump counsel problem and then Fowler memo and then Google getting sued and all this stuff, like, really quickly. And I think that, like, 10 years or probably like seven or eight years of crap all came to bear in early 2017 and ended up being the thing that just.

[B]

I was curious because definitely reading it in the condensed form, it just seemed like, wow, this is kind of unprecedented. But it made me think because last year we had this oral history of Silicon Valley that we read and talked about. And. And as I was reading your book, it. There were things in it that I was like, this actually reminds me of stuff that happened at other companies. But I think part of the difference was that, you know, no one was covering. There wasn't as much media. And also, like, people didn't care about the misogyny in a way that they do now.

[C]

My thesis on this. So I totally agree. I think my thesis on this is like. And I say this in the book, like, I really do think the election of Trump gave people more. And, like, some of the thing, the threads around it. Even if there isn't a direct through line from like, say, Cambridge Analytica or Russian interference to we elected Donald Trump or we got Brexit. I still think it made people think about tech in a different way than they had before. And like, oh, people might be able to manipulate my thoughts or whatever based on the news feed. And so I do think that scrutiny of tech just increased after that. And then. And my guess is if Uber wasn't such a shit show, it would have been Facebook to get its reckoning right after, you know, but then Uber imploded and Facebook got it deferred to 2018.

[D]

It was just unfair because you go through almost unfair. Well, just the delete Uber like movement and hashtag the way you lay it out. I was surprised to kind of realize that Uber really.

[A]

It's not clear what they did wrong in that particular.

[D]

They didn't really do anything that wrong for once. But that was like the catalyst for then basically their demise. It really hurt them. But all they had done was turn off surge pricing.

[C]

It really was. It was.

[A]

People really hated surge pricing. And then when they turned them off, that's even worse.

[D]

If they had kept it on, I feel like you could have had the same outcome. It actually wouldn't have mattered at all because if they had it on, they.

[A]

Would have been profiting from. Yeah, profiting from getting people. There's literally no good way to navigate that. But that's the problem. When you are in that situation where everyone is primed to hate you. Then it's a little bit like when you're being canceled on Twitter. Nothing you say is going to help.

[C]

That's right. And it started with a tweet. So.

[B]

And does that maybe also suggest that, like, Travis was almost that figure, that, like, if he hadn't existed, we'd have had to invent him? Almost in the sense of, especially like, as you said, like in this kind of post Trump period where people just had so much anger and wanted to do something and he, you know, in so many ways, he was this Trumpish figure that people could attack.

[C]

So one thing that kept coming up as I was reporting this book from people who worked with him or under him or continued to work with him, is that they kept calling him Trump, Trumpian, weirdly, like, like. Or just sort of how he created his own reality, but had this charisma that kept people around him, but also was surrounded by people, people who wouldn't really challenge him in direct ways. And it was just very. The way that he ran it was supposedly very Trumpy. And.

[A]

Yeah, so. So my question is, is Uber the poster child of the tech clash? Was, was Uber the big company to. To really suffer from the tech clash, or was Uber idiosyncratic in that way and related to the Trump election and Travis personally? And you can't really extrapolate to anyone else.

[C]

I think it's. This is probably unsatisfying, but I think it's a little bit of both. I think that, like, part of their getting caught up in this gnarliness was basically timing and the fact that Travis is the Uber bro and kind of was an avatar for a lot of the things that people hate about tech in the abstract, you know, but. But some things were very specific to them. You know, like, you can talk about a culture of misogyny throughout the tech industry, but I think at Uber it was just that times 100, it was like misogyny, like sprayed with Axe body spray or whatever. And. But I think that, that being like Paramount has still opened the door for that criticism at every other company. And we're starting to see that in different ways. And like, see internally the workers actually being upset or pushing back more than they have in the past. So I think, I think that's also like, probably a good thing or a fair game at least. Like, maybe they had too much of a grace period for too long. And so this might be a good moment to at least look at it, if not, like, fully condemn all of it. Just sort of be like, all right, what are we okay with?

[A]

Which brings me to. It's called AB5, the law in California.

[C]

Yeah.

[A]

Which is this law basically saying that the people who drive for Uber need to be considered to be employees. We've talked about this kind of issue for literally for years on Slate Money. The first question I have for you about that is, is the reason that it managed to get passed in what is meant to be the most tech friendly state in the union, Is that Uber specific as well? Was there a feeling that just because people really hated Uber and they wanted Uber drivers to be employees, that they would pass this bill? Or is it again, like a much broader tech clash?

[D]

The bill, the impetus for the bill, according to what I just read in the Times yesterday, was actually a dispute with a driver for a company. I can't remember if it was delivery company or Dynamax.

[C]

Right. Oh, that started in Dynamics.

[D]

I think so, yeah. And he was misclassified and there was a lawsuit. And then that was the inspiration for AB5. It wasn't actually right But I guess the question is fired. Although Uber will obviously be quite affected and might have to spend like a half cost.

[B]

Right, Exactly. I mean, I think, yes, definitely. Like, it wasn't an Uber bill, but I think, Felix, I think you're probably right.

[C]

What?

[B]

Got it over the line, willing to rule in that way. It does seem like you can't. Uber is a ginormous elephant in the room.

[A]

Well, it's.

[C]

You can look at the. There are stories, stories of drivers who, like, sleep in their cars or have to pee in bottles on the side of the road or just like, really gnarly conditions for folks like that. The interesting thing for me is that I've talked to as many drivers who are upset at it passing than. Than they're the as. As well as the ones who are in support of it. Right. Because, like, a lot of folks, and those are the people that Uber pushes out to say, like, look, they want to be flexible and not be employees or whatever.

[B]

And I think that is. It is. It is complicated. I think that's the issue. It's not actually super simple because the vast majority of Uber drivers don't actually drive that many hours. The issue is people want the flexibility. They just want to be paid a little bit better and they want to have a little bit more consistency.

[A]

So. So, I mean, I need to ask you about this bill because I don't entirely understand. I don't think anyone entirely understands what the consequences will be, but is it a rational, reasonable worry for people who are currently working very flexible hours for Uber to worry that they will no longer be able to work flexible hours?

[C]

Yeah, I think Uber has said that they would have to do some intense scheduling, like when, like, tell when certain people can drive or whatever. I mean, it would basically look a lot more like shifts, essentially. And unless, like, I can turn my phone on now and just work whenever and then turn it off. And. And it's based on sort of a supply and demand.

[A]

And why would they need to do that? Because they would be legally obliged to do that or would they need to do that because somehow, like, if you make them employees, then you need to start scheduling them.

[C]

I don't know if it's a legal stipulation of you have to work this many hours per day or whatever. You know, I think it's more. I think it's. There are a few things like they can't just have all of these people working at once, and it. And you have to sort of stagger the amount of time each one works. And because I think that's.

[A]

That's the problem. Right. Is that what you want to avoid when you have employees is them all working at the times they all want to work and they do all the.

[C]

Work at the same time, because those are how the cycles of people going places work. Right.

[B]

And we're already seeing a little bit of this in New York because I know they changed the law and there's like a, like a minimum guarantee if you are working. And so as a result, I know, I think like Lyft, they've said that, okay, that means you actually can't drive in certain areas because you wouldn't be able to make enough. So then they don't want to guarantee you that minimum. So if you're a driver, you can't drive at that time in that area. And. And I think that this will inevitably be this kind of push and pull between flexibility and support. And I think it's going to be finding that equilibrium, not necessarily saying it has to be 100%, one or the other.

[A]

But, Anna, I mean that. So I guess the question which I have for you or Mike, I don't know, is, is this just going to be like another little complicated complicating factor? What's that one full term that Jeff Bezos uses? Something like that?

[D]

Complex.

[A]

Complex, yeah. Is it going to be like a complexifier for the Uber algorithm or is this actually like an existential risk to the entire business model?

[B]

And I think, I mean, you know better than I do about probably the latter. Right.

[C]

I think it's existential in the sense that, like, so this is how I think they're looking at it right now. Right now, this is only California. I think they're worried that other states are going to take the lead and do the same thing. I was in Seattle last week and talking to some driver who was saying that the. They're already meeting to try to get ahead of an idea of this bill and come to some sort of compromise, I guess. But, yeah, I mean, the whole. The whole company is based on the idea of paying people less and not giving them the benefits of an employee. And so I think if you do that, extrapolate that out to every city that they operate in across the world, it's. It's a death blow, you know, so.

[D]

It couldn't have gotten so big. I mean, the company was premised on using a workforce that it can't really pay.

[C]

Yeah.

[A]

But also, the company has never made money. I mean, even. Even with this, like, underpaid freelance workforce, it's still never made.

[D]

Yeah, yeah.

[A]

Which, I mean, it's kind of amazing. I mean, can you explain that one to me? Because they take, what is it like north of 30% now of every fare.

[C]

Yeah.

[A]

Their overhead is just like a bunch of computers.

[C]

Yeah.

[A]

How do you, how do you contrive to lose money?

[D]

Is it the balloons?

[C]

That was the best. The birthday balloons inside.

[D]

They cut the spending on balloons.

[C]

Things are such a good anecdote. So it's subsidies. I mean, like, just remember back when they started here or whatever, like every ride was artificially deflated for the amount that you're going to pay. And then like drivers were paid more to get them incentivized to use the platform. So the original reasoning was, well, once we get to equilibrium in our cities, we're going to stop doing these subsidies and things will be good. The problem is they just moved into food delivery as like their major area of growth and they're like setting money on fire trying to subsidize that sort of growth. And food delivery, I would say is where we were with riot hailing three to five years ago, where it's like you have softbank backing all of these players in food delivery, not only in the US but like around the world, and they're all spending crazy amounts of money to give food away for free. So people use the service and like habituate them, but like, I don't see that abating anytime soon. It's only going to get worse.

[A]

So in terms of the, like the core ride hailing product in mature cities like London or New York, is that actually profitable?

[C]

Yeah. So they are. And this is what they'll, you know, stress. Then they can be profit. They can break even. If they turned off all the things that were burning the cash, which is.

[A]

Yeah.

[C]

Which is like, okay, but also there are cities in.

[A]

But would the stock market mind like if they turned off Uber Eats or whatever?

[C]

This is the, the growth versus profitability thing. Like, I think this is like just a classic, like, what do investors value more? Right. And I think their, their ride hailing business is starting to level off in terms of growth because they've saturated the world. Right. And, and they're like a lot of other competitors. So where are they going to find that growth? They're going into food delivery for the next area of growth. That growth is costing them the same amount that it cost them initially with ride hailing. So it's totally a. I think if they turned it all off, then the investors would be like, where's your growth? You're doomed.

[D]

If I was Uber, I would not do the food delivery. I would buy merge with Lyft because then they have so much more illegal.

[A]

Right.

[D]

That's what I would do. That would be my plan.

[B]

Okay, Rockefeller.

[A]

No, but I mean, I. I do think that's like the. That's actually what on. On a weird level, they've been trying to do, like, not merge with Lyft because that really would be illegal, but drive them out of business so they no longer have that competition.

[C]

Yeah, that was almost what happened until 2017. Like, Lyft was literally at death's door. And then Travis had his reckoning and delete Uber happen. And then they came. They had a second wind and now they're a public company. It's actually. They were so close to an alternate history of having no Lyft. Tragic.

[A]

Let's talk about the new Uber and the new Travis. Who's the new man, literally that I checked this with? Former employee of WeWork. It is pronounced new man. It's not pronounced Neumann or anything like that.

[D]

Not new man.

[A]

Newman or Newman.

[B]

But anyway, so we have Newman makes the better. Like Ayn Rand.

[A]

He is the new man. He bestrides the world on his Gulfstream G650.

[D]

Say who you're talking about.

[A]

We're talking about Mr. Newman.

[D]

Adam Newman.

[A]

Adam Neumann, the founder of WeWork. The man who says that he wants to a be the world's first trillionaire baby, be President of the United States, even though he was born in Israel.

[B]

President of the world.

[A]

And c wants to be president of the world, which is a job title that doesn't even exist. But he's like, yeah, President of the world. That sounds good.

[D]

Sounds amazing.

[A]

That sounds good.

[D]

A little. We work kind of White House kind of a thing.

[B]

Weed dictatorship.

[C]

Weed despot. That's perfect.

[A]

And also weed smoker, because.

[C]

Nice, Nice.

[A]

On his Gulf Stream, he would smoke a lot of weed, according to the Wall Street Journal, and then leave the weed on the Gul for the owner of the plane to suffer major criminal liability.

[C]

Let's just consider it.

[D]

Everyone should go read this. Wall street journalist Elliot Brown.

[C]

He knocked it out of the park.

[B]

Yes.

[D]

It opens with the smoking on the plane, and I think it ends with a smoking somewhere else.

[B]

I don't know.

[D]

There's a lot of marijuana.

[A]

There's a lot of marijuana. And I remember talking to my Axios colleague Dan Primack about that piece, and he was like, I'm not sure there's that much new information in this story. And I was like, it kind of doesn't matter if you're talking about something like an ipo. The only thing that matters is what do investors think that other investors are going to think about WeWork. And when you get a story like this, like, who wants to buy those shares?

[D]

No, he comes across as an idiot, I think.

[A]

I mean, and that ridiculous grin that he always wears.

[B]

Yeah, no, I agree. Completely agree.

[D]

And also we should say WeWork delayed its IPO this week.

[B]

Yeah. And the news. But I think what was interesting from the article, and this goes back a little bit in your book as well, this idea of people being drawn to him, though, that, like, he was the main selling point of this company, to try to convince people that this was not just a real estate company with maturity mismatches, but that it was, in fact, this platform that was going to change the world.

[A]

They can elevate the world consciousness.

[C]

I mean, that. I guess. Yeah, that flies in the private markets when you put them in front of them and are like, blah, blah, blah. And then when you actually have to show your financials.

[A]

But Mike, I mean, you know, a bunch of Silicon Valley venture capitalists. If you went up to a Silicon Valley venture capitalist and said, you know, what I want to do is I want to get $1 billion from you so that I can elevate the world's consciousness. I mean, how far would you get?

[C]

I don't know, man. Like, this is the. I've never met Adam Newman. I met Travis, but I've never met Adam. And, like, I feel like the reality distortion field really goes far with some. And maybe we give some of these investors more credit than they're due. I think some are very smart, and then I think some of the money they raise is also very dumb. Right.

[A]

Which side of the ledger is Massasan on?

[C]

I would read a whole book on Massasan. I want to know, what the hell is that guy? He's either a genius or not totally insane. Maybe part of both. But I would read. I don't know. I honestly don't know.

[D]

What was interesting about Adam Neumann is one of the things you write about in the book is the shares and the difference in the shares that Travis holds versus everybody else and how it made it almost impossible to outlaw. And so I thought, well, everyone must have read Mike's book and followed this news and knew not to do that again. But they've done it again with Adam Newman. He also has, but he's so common in tech.

[A]

This is my favorite thing about the whole WeWork story when there was a pushback on governance from potential investors, we worked. Oh, you know what? We're not going to give Adam Neumann super voting shares of 20 votes per share. We're going to give him super voting shares of only 10 votes per share. That's fine.

[D]

They've learned. It just seems like investors really learn nothing from Travis, from that whole experience.

[B]

But I really do. I think you're right, though. I mean, I think some of this is just people have capital that they need to deploy and they're willing to believe these people. And I think you're also right that like these, like the, the Travis and the Adam Newman, they seem like, you know, these kind of crazy figures. But then when you read about Silicon Valley figures of the past, when you read about industrials of the past, when you read about certain politicians, like this actually is not an uncommon personality.

[A]

Well, no, the personality type. I think the, you know, the personality type. And I wrote about this in, in Axios age this week. The business and capitalism reward sociopaths. And yeah, I like that. And you see this in a bunch of different areas. And especially very charming sociopaths who can persuade people to give them attention and money and, you know, all the rest of it. And this is true of most investment bankers, but it's also true of Travis and Adam Newman, and it's also true of Jeffrey Epstein. You know, like, you see this in a bunch of different areas.

[B]

I mean, it's true of politicians too. Like, I'm about halfway through the Robert Caro Lyndon Johnson books.

[C]

Oh, God.

[B]

And like Lyndon Johnson is a monster.

[A]

But the big difference I think now is that between, you know, today's sociopaths, the new man, and the sociopaths of old is that the sociopaths of old felt this need to make money. And today's sociopaths can become incredibly wealthy by losing money. When was that ever possible?

[D]

They're still making money. Adam Newman is still scamming. We work out of money. He's sold shares, something Travis Kalanick didn't sell.

[A]

He owns hundreds of millions of dollars of real estate.

[D]

He trademarked the word we and sold it to the company, which just needs to be repeated many times because it's just so devilish.

[C]

I do think though, the. To your point about deploying capital like soft. I think SoftBank's Vision Fund just changed everything. And like they have. If you have a hundred billion dollars and you need to park it places quickly, very fast, before you raise your next fund right, you need to go to the companies that require the most capital. And that's why they had to get into Uber. That's why we work. Even though we work is stupid or it doesn't make actual sense to me. Like they still want to ingest billion dollar slugs of money at a time. And so I'm wondering what the next, like, where, where those other things are.

[B]

I agree. No, I mean, you have, it's a matter of like, you know, again, you have incredibly low rates. You have a lot of people going into riskier and riskier things. You have like such a glut of savings that need to find homes.

[C]

Yeah.

[B]

It's not surprising that this is what we're seeing.

[A]

But what we're seeing now is I think this part, this era of the economy sort of screeching to. To a Halt. Vision Fund 2 was meant to come along with 100, another $100 billion, because, like, what can you do with a hundred billion? You really need like at least $200 billion. Vision Fund do was meant to come along. And it really looks as though the WeWork IPO has single handedly made that much, much less likely because people are like, wait, you're really not that smart. After all, you bought into WeWork at a $47 billion valuation and now they're talking about IPOing at like 10.

[C]

God.

[D]

There's two other things I wanted to mention. First is Adam Newman's businesses before we work. I don't know if we've talked about the crawlies.

[A]

Whatever.

[C]

Wait, what did he do? No, I don't know.

[D]

He did the crawlies, which is like knee pads for babies. Because what is the slogan? It's like, because they hurt even though.

[B]

They can't tell you they are in pain or something.

[C]

Oh, my God. That's my therapy slogan.

[B]

They can tell you, they start crying, like.

[D]

And then the other one was collapsible high heels for women.

[C]

No.

[B]

What?

[D]

That is the worst. I mean, you're walking down the street and your collapsible heel collapses by accident.

[B]

I mean, I guess it's the idea that like. Yeah, I mean, like, there's a part of that was thinking through that. I was like, well, maybe, but I'm like, you could make that work. But no, no, it just didn't make sense.

[D]

His businesses are all like stoned fever dreams.

[C]

I bet.

[D]

Babies, really? I couldn't believe it.

[A]

My friend Lindsay Robertson had used to have this occasional series on Twitter called High Dears. You know, you just kind of get stone and like, come up with a awesome idea which makes Perfect sense when.

[D]

You'Re saying Adam Newman has many good ideas. And the last thing I wanted to mention, because we talked about the meat policy before, which is wework said it would no longer pay for meat consumption for its employees. And Adam Newman in the Wall Street Journal, they concede he still is eating meat.

[A]

Not still going on, but better yet.

[D]

Better yet, he's buying private jets.

[A]

Okay, so my favorite thing about the meat eating thing and this came out in the Journal story was that again, it was one of those ideas. Basically he just woke up one morning and said, we're banning meat. And then the whole corporate communications edifice had to swing in to come up ex post with some rationale for it. And they're like, it's because we believe in sustainability or something. But it wasn't, it was just because Adam came up with it one morning when he was done.

[C]

It was literally right after the Starbucks. So I was like, this is total ego shot. It was after was Schultz doing the Starbucks straw thing or whoever seceded him came up with the no plastic straws at Starbucks. Like literally the next day. Newman did that. I was like, he just wanted to like, it was, you know, I don't know how much I can cuss on.

[A]

Here, but he just wanted, he just.

[C]

Wanted to like dick measure that much more than the last guy. Basically. That was my.

[B]

It's like woke dick measure.

[C]

Yeah, exactly.

[A]

So much worker than yours. You can't say that. You can't talk about woke dicks. Sleep money. You can talk about woke dicks. Meanwhile, back in the real world, a whole bunch of General Motors employees are going on strike.

[B]

Indeed.

[A]

Which is a little bit unexpected.

[B]

Yeah, it is a bit unexpected. It's been quite a while. And I think there was also a thought that the negotiations were, you know, getting to a point that this wasn't necessarily going to lead to a strike. And, and then it did. And it's, you know, we're still, we're multiple days into this strike there at this stage. You know, we, we aren't seeing, at least as far as I know of this morning, we, we aren't seeing a tremendous amount of positive signs, shall we say. So it'll be interesting to see what happens because you basically have a lot of GM workers who, I mean the workers that, the, the actual union members kind of saying they're concerned about a lot of temporary workers being brought in. I mean, it had there a things, but that's one of the main issues. And then on the GM side, I mean, the initial deal, they came out with, in a lot of ways, wasn't a horrible deal, if you kind of look at all the details in it. But it didn't really address this main concern. And then the other issue you have are the heads of the union who are involved in this corruption scandal and embezzlement scandal, which is part of the reason that they think GM actually made their deal public, because they didn't trust the union leadership. So it's a bit of a mess.

[A]

But the bigger picture here, I think is just that again, are we reaching a turning point between AB5 in California, the strikes in GM, we had the teacher strikes which worked last year across the country. There's this other story going on right now right here in New York where Kickstarter, this very crunchy granola tech company, is trying to unionize and management is being a bit crap about that. The, you know, have we finally, finally reached the point at like 3.5% unemployment where like workers are managing to get a little bit of.

[D]

I mean, we saw, I think it was in the summer that some data came out that said we've had more strike activity last year than we have had in a decade at least or more so. And it's true that the economy's doing great and wages and salaries haven't really moved. So I think that you are seeing more labor agitation and especially a GM where one of the lines from the workers that we're seeing is like, we sacrificed for you during the Great Recession, like we made concessions and now gm, you're doing great, you're doing fine now. So like.

[B]

Right, but the problem is bad. Yeah. And this is where it gets complicated though, because the reality is like they're not doing fantastically well. And if you kind of look at long like the kind of where trends are going, their GM is not particularly well placed. Although part of the reason they're not well placed, I would argue is because of management. A lot of the kind of strategy they waited way too long to restructure. They have way too many plants that are underutilized. So I think it's perfectly reasonable for people to criticize management to say, why is Mary Bearer being paid so much money considering what is actually going on. However, it doesn't change the fact that the auto industry is changing. And this isn't just gm, it's all of the big players. Like, they are going to have to be a bit more nimble. And how do we balance that with the need of workers for some security? It's not a simple solution.

[D]

No, it's not. And Businessweek just ran a cover story with Mary Barra and they profiled her. And it's really interesting because she's trying to catch up and pivot the company to become like an. God forbid, like an Uber, like a Tesla. Like, she wants to go to electric really fast. She wants to go to self driving. She sees the writing on the wall. So. But it's like, yeah, how do you. Can you actually make that transition? It seems to me a huge open question. And I think there's some quote in the piece that's like, GM doesn't want to be Kodak.

[A]

You know, one of, one of the interesting things about the Kickstarter story is that. And I had no idea there are zero unionized tech companies.

[D]

Yes, they will be the first.

[A]

And it's like, what? And so this is. And so part of this whole, like, when Mary Barra looks to Tesla or Uber, what she sees is an ununionized workforce. And she's like, that looks good. Can I have that? And if you look at what happens, I mean, there's been multiple, multiple stories about how miserable the life is for Tesla workers and how hard they need to work and, you know, and how easy they get fired just because, you know, they looked at Elon Musk the wrong way one day.

[C]

And that kind of thing, that's not even fake. That's true.

[A]

Which, by the way, also happened. We work. Except for they looked at Adam Neumann's wife the wrong way.

[C]

Really?

[A]

Yeah.

[B]

She didn't like their energy.

[A]

She didn't like their energy.

[C]

Oh, yeah, that's right. That's right.

[A]

But so, Mike, like, how and why is it that none of these companies have managed to unionize? And do you think that we are going to see this happening soon?

[C]

No, I think that that's. You're totally getting a point. That has been a weird grand irony to me is that workers are starting to figure out that they have power. You know, like, I think. I think in the Valley or in tech specifically, I think companies are really screwed when their employees start pushing back and like that. And that's when leak starts happening. That's when people start doing walkouts. Google has gone through some, like, deep shit for the past few years now because all this gnarly stuff is coming out about the executives. And so it's, you know, I don't want to be patronizing, but it's funny to me that they're starting to discover the idea of unionizing or like, or like just the idea of like that they have a voice and I think it's a positive thing. But it's just they, they're starting to really recognize that coming together and pushing for that for change is something they can do.

[A]

Except in Google, in Google's point of view, they come together and push for change by like doing a one day walkout, right? It's like, wouldn't it be more effective to actually union?

[B]

Not necessarily though. And I, and I think that this is actually like, I think when you're talking about kind of old school unionization, I think that that can make a tremendous amount of, and it did obviously historically make a tremendous amount of sense, especially when you had industrial kind of jobs. When you're starting to get into kind of like higher level jobs at places like Google, you are going to have a lot of employees who are not necessarily going to want to go on the kind of, of unionized pay scales and that kind of thing that comes with unionization. It is not, it is, it is a little bit more complicated.

[A]

And so I see, I'm not 100% sure that I think this is something I hear a lot from management companies which unionize is that, well, if you unionize and everything becomes like lots of you. Look, look at these union contracts. And God knows I used to work at a company which had, you know, a union contract which was 500 pages thick and was just, it was, there was no flexibility and no nimble anything and it was horrible. But, but clearly as you say, the workers at companies like Google don't want that kind of union contract. And if the workers don't want it then, and if the management doesn't want it, then that's not the contract you're going to wind up with.

[B]

And I agree with that. I mean I do think that there can be a form of collective action that in a form of, you know, unionization or whatever that isn't the same as it was at gm. Right? Like these are different models. And I do think that when you're at kind of a new economy company, like you are probably going to need different standards and people are going to probably want that. But I think that we are probably getting to a point now where people are like rethinking how workers can gain power and I think that that's good. I just think that sometimes there's a desire to always do like, well, let's do what worked 65 years ago. And it's like, well no, let's maybe think about what actually could work now.

[A]

What could work now?

[D]

I don't Know what could work now? I'm sorry, I was gonna say something totally different. I was gonna say, what I like about Kickstarter trying to unionize is that it exposes the hypocrisy of tech companies and their supposed and ideals. Because Kickstarter is a public benefit corporation that's, you know, has lofty ideals about who it is and how it works in the world. But at the end of the day, now that their workers are trying to unionize, Kickstarter said, like, we don't support that.

[A]

I actually, I actually did some reporting on this, which is something I very rarely do. I try not to. I tried to.

[D]

You're on a roll.

[A]

I'm on a roll. I actually sent an email to B Lab, which is the company which, which certifies all of the benefit corporations, and they said, oh yeah, this could be a real problem for your B corp status. And if you are being evil to unionization attempts, then that can threaten your B corp status. And if you just go back a couple of years ago to 2017, the other grand crunchy granola company, which is very proud of being a B corp, Etsy, gave up its B corp status because it wanted to be evil instead. And it turns out that, you know, when push comes to show like it turns out that they're all evil, that this B corp status is like, it's, it's this lovely little bad you can hold on to for as long as it is, as long as it feels good. And then the minute it doesn't feel good, you can throw it away.

[B]

We don't need to get into the entire argument about B Corpse. You can go back in the podcast libraries, just be going my rants about B Corpse. But, you know, I do think that this is also the reality as companies become a little bit more mature and also as if, you know, we're getting to a place where capital isn't quite as easy to get as it was in the past. And maybe there's actually going to be a push for companies to make a tad bit more money or if, if you're in an industry like where you're shifting that, yeah, you do have to make difficult choices. And I fully, I think it's great that we are getting to a point where workers are pushing back, but I also think that that doesn't mean that there aren't concerns that management would also have on the other side of that. It's not, doesn't mean you're evil. I mean, it just means like you also want to run a Profitable company. Like it's.

[A]

Maybe I feel it. No, wait.

[D]

But actually, no, I feel like they don't want to run a profitable company. We just spent this, the previous segment, discussing how none of these companies are profitable.

[A]

And that was the thing. Right?

[B]

That's my point, is that, like, this is shifting. Like, you're starting to get more. The ability to just continue to be. To not be profitable in the newer economy, I think is going to be challenged more and more. And people see that. And I think in the old economy, that's not the case. You, in fact, do actually have to be profitable.

[A]

You need to be profitable, but you don't need. I think this is the thing that a lot of people running B Corps, especially the established ones like Patagonia, which have been around for decades, you'd need profits to be sustainable, but you don't need to grow your profits every year.

[B]

If you're a publicly traded company, then, yes, you do.

[A]

You actually don't.

[B]

Yes, you do. If you're a growth company, and that's.

[A]

The only way to invest in you.

[B]

Because no one's going to invest in you and your market cap is going to go and your ability to get capital is going to be much, much lower.

[A]

Okay, we've had this. We've had this conversation on this show before, but you don't need to have a growing share price just because you are a public company anyway.

[B]

Pure utility.

[A]

We.

[C]

We.

[A]

I think. I think we're just going to wait this one out and move on to a numbers round. Mike, did you bring a number this week?

[C]

I did.

[A]

Awesome. What's Your number?

[C]

It's 2020. Do I explain it?

[D]

Please do.

[A]

Is that the year of the next presidential election?

[C]

God, I'm not that dumb.

[D]

Is that your vision? You're not wearing glasses.

[C]

No, that's.

[D]

That.

[C]

I'm not.

[A]

That is not.

[D]

The glasses are on the table.

[B]

Sorry.

[C]

Listeners, 2020 is the year that Airbnb announced it intends to go public.

[A]

Correct.

[C]

And I have no idea why they did that or why they announced it, but it was very weird.

[A]

Yeah, it was.

[D]

Offer equity to the hosts. And if you want to offer equity to the hosts, apparently. This is what I read in your paper, I think.

[C]

Well, don't tell my colleagues about renew work.

[D]

I think it was you. It may be.

[B]

It was.

[C]

No, it probably was.

[D]

Who can say? But that's why. Then they had to be public. That's what.

[C]

So they're getting ahead of. Of. Oh, because they want to sec. They have to. Okay, got it, Got it. Got It.

[B]

Got it.

[C]

Got it.

[D]

How's that going to go?

[C]

I don't know. They waited too long, Brian. Actually, a lot of the employees are very mad that they waited this long. And, like, now the markets are not conducive to.

[A]

What's been interesting to me about Airbnb is that they are one of the rare private companies who's managed to do some pretty significant M and A while still remaining private. One of the reasons to go public has always been one. Then you get this acquisition currency, and you can go around and do things like buy hotel tonight. Or they just bought. Or they just took a huge stake in Atlas Obscura and.

[C]

Really? Yeah, I didn't see that. Crazy.

[B]

David Plotz.

[A]

David. Yeah.

[C]

Which. Which is.

[A]

Which is run by the former editor.

[D]

Of Slate and the current host of Political Gabfest.

[A]

And the current host of Political Gabfest. So. Yeah.

[C]

So.

[A]

But they. It's interesting to me how long they've been able to do those kind of deals without going public.

[B]

I mean, I think that's, though. It's an. It's, again, another indication of this kind of bizarre private market we've had because of raids. And again, all of the capital needing a home.

[A]

My number is 80 million euros, which is my favorite story of the week, which is these guys did a scan. They did the best crime ever, where they basically, you know those, like, weird rubber face masks they have in the Mission Impossible stories where you change your face? They made a rubber face mask of the French defense minister, and then they would like, Skype all of these, like, art dealers and other rich people in France, and they'd be like, we want you for a secret mission. You've got to, like, send me, like, 20 million euros, and then I will bail out these hostages, and then. And the French state will pay you back, and you'll get, you know, a knighthood or something. And then all these people fell for it. They managed to raise 80 million euros.

[C]

Oh, my God. That's amazing.

[B]

And we were talking about this earlier, actually, with Jordan Weissman and bringing. He was bringing up the idea that, like, in order to make this scam work, you have to target people who are wealthy enough to think that. That the finance minister would actually contact them. It's very well thought.

[A]

Through Defense minister.

[B]

Defense minister. Sorry.

[A]

Yeah, yeah. Because the finance minister has access to. Yeah. It's such a glorious crime. It really is. Someone has to make this into a movie.

[C]

Agreed.

[B]

Agreed.

[D]

Mine is, like, a bummer, and I don't want us to end on a bummer okay, okay. So mine is 2.9 billion birds. It's the birds nightmare.

[C]

I'm glad I didn't pick that.

[D]

2.9 billion fewer birds now than there was 50 years ago, according to a new study published in Science that. But I just. That's just damn sad. And it's because the climate is changing and the birds are dying and it's not just like is it because of cats? It's not cats.

[A]

It's not the. Because Jonathan Franzen does. According to Jonathan Pranson, you just put the bells on the cats and it solves the problem.

[D]

Well, that was the saddest part of the piece. Was like, what can I do? Like Emily Peck to help the birds live is just like there's things you can do to your windows in your house so they don't fly into the window. That is not the problem. It's like pesticide, global warming and it's not fancy birds that are dying. It's not like exotic birds. It's just like your everyday every day.

[A]

It's not the sexy duck in Central Perk.

[C]

The hot duck.

[D]

The sexy duck is going to be okay.

[C]

I looked for the hot duck the other day. I couldn't find it.

[A]

I think the hot duck is gone. I'm sorry.

[C]

I hope it's not.

[D]

Oh, see, we made it light.

[A]

Yeah, There you go.

[B]

Let's see why not for now is.

[A]

Just not that good.

[B]

So mine is 500 million. So this is actually goes back to we work. So Adam Newman has a credit line. It's actually a personal credit line and he uses his wework private shares as collateral. So now his collateral has markedly declined in value. So his ability to take on addition. So you're actually probably going to have the banks coming in saying he's going to have to pay back money or he's going to have to post liquidity because his collateral has declined so much. So I thought that was an interesting part.

[A]

Doesn't your heart just bleed? Poor Adam Newman in his private jet. Who really cares about global sustainability while flying in the private. In his private jet.

[B]

Yes.

[A]

I've decided this is going to be one of like a repeated feature in my newsletter. It's going to be like ban private jets because this was not my idea. I hasten to add, I got this idea from Izzy Kaminska at FT Alphaville and she's like, this will be great. It would totally cut down on like the Kardashian industrial complex. But I'm like, that's like there are so many other advantages to banning private jets, including. I'm kind of convinced that if you banned private jets, then the Epstein scam could never have happened. He used his private jets so much to get into people's good graces.

[D]

Also, succession wouldn't be as good without private jets.

[A]

Succession, like a lot of very important scenes in succession do take place on private jets.

[D]

If someone offered you a ride on their private jet, would you say no because of principle, or would you just take the ride? Be honest.

[A]

So I definitely remember when I started out as a financial journalist, you know, in the 20th century, many, many years ago, there was this thing. And it still goes on, but, like, it was when I was very young and I was like, oh, this is what happens, is you're profiling a CEO and then they bring you onto the private jet and it's all very glamorous and you're very impressed. And. And I was like. And in the back of my head, I was like, yeah, I kind of want one of those profiles. So I get to lay Jed around in the private jet. Or, like. Or when you're interviewing the oligarch, and he's like, I'm sorry, I'm in my dasher for all of August, so I'm just gonna have to send my private jet and pick you up, which, like, does happen. And now I think, you know, now that I'm old and grumpy, maybe I would be less prone to sort of jump at that.

[B]

Also, I had a friend who.

[C]

Good for you.

[B]

Yeah, I know. I. In fact. Yeah, no, I have a friend. It is actually, it's not me. In fact, it is a friend.

[C]

Who?

[B]

Her. And she said, so her. The company she works for, her boss does have a private jet. And she said she hates when she has to fly, particularly because she's like, then you have to sit and talk to your boss for the entire time that you're on the plane. She's like, I would just much rather take the commercial flight and not have to interact with my boss for this entire flight.

[D]

We're going to get it on Twitter for this whole conversation about our bubble. One of the problems with my job is I have to fly in the park private jet with my bop. So awkward.

[B]

Fair.

[A]

I mean, that's like 0.1% world problem.

[B]

Yes, it's very true.

[A]

I think that's it. Thank you for listening to the amazing Mike Isaac episode of Slate Money this week. Email address, as ever, is slatemoneylate.com Many thanks to Jessamine Molly for producing and we will talk to you next week on Sleep Money.