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- [00:10]
Felix Hamlin
Hello and welcome to Sleep Money, your guide to the business and finance news of the week. I'm Felix Hamlin of Axios. I'm here with Elizabeth Spires of the New York Times. Hello. I'm here with Emily Peck of Axios. Hi.
- [00:25]
Elizabeth Spires
Hi.
- [00:25]
Felix Hamlin
Should we talk about my, my native country this week, the United Kingdom? We did a trade deal with you Yanks. So let's talk about that. We shall talk about Bill Gates, who is speeding up his philanthropy and wants to die with nothing. We are going to talk about OpenAI and the degree to which it is actually a nonprofit or not. We have a Slate plus on movies, tariffs, Hollywood and boilers about thunderbolts. It's exciting. It's all coming up on Sleep Money. So I think we should start this week with the art of the deal and Donald Trump's astonishing success in agreeing to a trade deal with Keir Starmer, the Prime Minister of Great Britain, or I should say of the United Kingdom should be precise here on Slate Money. And it's a very interesting deal because the American tariffs on Britain didn't really come down, but the British tariffs on America did come down. And Kia's like, yeah, we can do this. But the American tariffs on Britain did come down in one particular respect. In particular there was a couple, but the main one is cars because there was this like across the board tariff of 10% that Trump is putting on everyone and that seems to be non negotiable and no one can lower that. And Britain was always at 10% from the beginning. So it had very little down room below that to go. But there was also a 25% tariff on cars and Britain exports a non negligible number of cars. And those cars, it now turns out it's cheaper for Britain to export cars to America now than it is for US Companies to assemble cars in Canada and ship them across the Canadian border. So that's interesting. It doesn't really make a huge difference to America because number one, Britain is like the 11th largest exporter to the United States of goods. It's just not a huge player. And number two, these cars are not everyday cars. They're like Rolls Royces and Bentleys and McLarens and Jaguars and stuff like that. But it's an interesting sort of indication of the weirdness that we are going to be in. As Trump does more and more of these trade deals.
- [02:48]
Emily Peck
It really does seem like this just isn't that much of a deal. People are excited because it's the first one and the markets liked it because it's okay, they can make deals. This will relax now, but like you said, doesn't change the 10% tariff, which, you know, six months ago would have been considered insane and high. It's a deal with our closest ally. As everyone said a million times when this was announced Thursday, we have a spin special relationship with the uk this was the easiest deal to get done. So I don't know that it tells us. I mean, it tells us a lot. It tells us that the administration isn't looking to compromise on that 10% flat tariff. It's going to make a whole big to do about nothing. I don't know what it. What else it tells us. It tells us that Rolls Royces are going to be okay.
- [03:38]
Felix Hamlin
Great.
- [03:39]
Elizabeth Spires
I think it's just indicative of the fact that the entire world has Stockholm syndrome with regard to Trump's trade policies. If he does across the tariffs. And we all sort of get used to it and decide that this is the new normal, any advancement away from that feels like a win, even if it's something that's incredibly stupid, never should have happened in the first place.
- [03:59]
Emily Peck
Yeah, he changed the way we look at everything in, like, put it in his own frame so that he could have these wins, which wouldn't in normal times be wins.
- [04:09]
Elizabeth Spires
They would be extreme, catastrophic problems.
- [04:12]
Emily Peck
Yeah.
- [04:13]
Felix Hamlin
The thing that he's really done is he's set this effective 10% baseline, and then the negotiations are, what kind of tariffs is the United States going to levy over and above the 10% baseline on things like cars or just everything from a certain country? Like, he's saying, maybe we'll bring China down from 145% to 80% or whatever, but it's all about how far can we bring it down above 10%. And I think that's really important because once the world has internalized a 10% tariff, Universal Global tariff on everything, it actually becomes pretty difficult for any future U.S. administration to bring that 10% back down to, like, you know, zero, which is where it was before. There was no universal tariff on everything before Trump, too.
- [05:02]
Emily Peck
So let's play this out. Is Trump a mastermind negotiator? Because he didn't. He could have just come out and said, I'm going to put a 10% tax tariff on every country in the world. And people would have flipped out. But instead he said, I'm going to do a 10% tariff plus all these other crazy higher tariffs. And then the markets flip out. Countries are still scared, running to the administration, trying to make deals. But he's reset the baseline, just like you're saying. So that they're like, well, 10% would be okay. Just get rid of all those higher things.
- [05:35]
Felix Hamlin
I don't know, Emily, because I remember on April 2nd when there was the press call on Liberation Day where they were kind of. They did this sort of embargoed press call where they were explaining what the tariffs were going to be. And these press calls were always kind of very leaky. And what happened was they said, you know, we're going to have this universal across the board tariff of 10%. And the general reaction to that was, oh, my God, this is so much better than we thought it could be. Like, this is. This is like, this is great news. And if he'd just come out and said, universal across the board 10%, I think probably you would have seen the stock market just jump sharply the following day. It was only when he then came out and said, and then on top of that, we're going to do reciprocal tariffs and bring Vietnam up to 46% or whatever, that everyone went, okay, this is insane.
- [06:25]
Elizabeth Spires
Well, I'm not sure. Tariffs have never been popular with voters, even when Trump was sort of saying, okay, we're going to do limited tariffs on China. And I found that the only people who really liked that story were people who were already solidly in his base and they did not understand how terrorists work. But now that they've been implemented and people are feeling the effects, they're deeply unpopular. So I think it would be easy for a candidate to roll them back in another administration.
- [06:53]
Felix Hamlin
Let me ask you, let me ask you, since you're the politics person, if it's true that tariffs aren't popular with voters, why did Biden keep all of the tariffs?
- [07:05]
Elizabeth Spires
That I think because they were very narrow in scope. They weren't, you know, this broad tariff everything kind of thing. And I don't think that most people.
- [07:13]
Felix Hamlin
I mean, maybe not by today's standards.
- [07:15]
Elizabeth Spires
Most voters were not aware that Biden kept those terrorists because they weren't seeing the, you know, the everyday price increases on stuff that they were actually buying.
- [07:25]
Emily Peck
I think actually to push back only slightly on Elizabeth, because you mostly right. There are a lot of narrow groups in certain industries that like tariffs. I spoke to the Teamsters person a few weeks ago who was like, this is great for us.
- [07:39]
Felix Hamlin
You know, yeah, the UAW is basically pro tariff.
- [07:42]
Emily Peck
UAW is pro tariff. Don't sleep on the shrimp people. They are insanely excited because most of the shrimp in our country comes from Asia. But if you, you know, tariff that to 100% or whatever it is, they can actually sell their products again with much higher prices. So they like them. There's that, that well known research paper that farmers like tariffs, even though they recognize that they haven't helped them, they just like sticking it to China. So there are these like narrow groups that do like them.
- [08:12]
Elizabeth Spires
Well, that's, that's true and it wasn't suggesting otherwise. But I think, you know, you look at Trump's approvals, they're the lowest of any president since approval ratings have been tracked in the first 100 days. I mean, that's an incredible fall. Even if we all think that he won by a slim margin to begin with. And when you ask voters why they're turning against him, it's entirely the economic chaos. They don't like it and they're starting to see it really filter into their daily lives.
- [08:41]
Emily Peck
I think the stock market plays a really big role there, maybe more than tariffs because for all we've talked about tariffs so far, correct me if I'm wrong, they haven't really impacted. When I go to the store.
- [08:52]
Elizabeth Spires
I'm still, I was going to push.
- [08:54]
Felix Hamlin
Back on that as well because, Elizabeth, just, I like, I want to ask you about this because you're saying people are seeing this. I'm not like, I, I think that's.
- [09:01]
Elizabeth Spires
Because you're not close. You know, a lot of people I know from where I grew up in Alabama run small businesses and a lot of fashion oriented things and you know, they, they were importing a lot of stuff from China for very cheaply and now they, they can't.
- [09:17]
Felix Hamlin
And so I feel, I feel like in terms of the percentage of the electorate, the number of people who import things from China is small. Like on a day to day level. Like we aren't seeing, we haven't seen this yet in inflation, in like final price goods inflation. We will, but we haven't seen it yet.
- [09:32]
Elizabeth Spires
Here's what I'm saying. Like, I'm not saying that, you know, everybody who is impacted is by definition a small business owner, but it touches so many industries. You know, my uncle owns a auto body shop and they import parts. You know, so it's people making small observations about things getting more expensive that they are reliant on to do their jobs and to, you know, run their business or in their household.
- [09:56]
Emily Peck
Yeah, I, that makes a lot of sense. Small business owners are not thrilled. On the whole though, there are again, a few that are glad about this. But the ones I've also spoken to.
- [10:06]
Felix Hamlin
Are not happy in general, they don't like it. But then. Yeah, and then as Emily says, the other side of this is the stock market, which we should probably talk about because there really was this feeling in the first week after the tariffs were announced that the stock market was falling out of bed and that Donald Trump was single handedly responsible for trillions of dollars worth of wealth going up in smoke. And now the stocks are back to where they were before the tariffs were announced, I guess. Emily, I have a question for you, which is, does this mean that people don't feel that way anymore because the stocks have come back or is it really the headlines that do the work of worrying people? And there were many more headlines about stocks going down than there have been about stocks going up. And so people kind of think that they've lost money in the stock market even if they haven't.
- [10:56]
Emily Peck
I do think it might be the latter. Plus losing the money is worse and more jarring or quote unquote. Losing the money if you didn't do anything with your 401k like most people is worse and more jarring, I think, than the gradual return to baseline. You know, it. That doesn't feel version bias, loss aversion. Yes, exactly. It doesn't feel the same. And I was just going to mention I look at like morning consult polling and maybe some other polling on consumer sentiment and you can really see because they'll break it out by income. So you can see like those earning more than a hundred thousand dollars post Liberation Day, their sentiment just like dropping fast. And it's all the stock market, it's just all a feeling because you look at your holdings or whatever and you see them go down and you're like, God damn it, everything's terrible, you know, But I don't know, it, it'll take like a real rise beyond that Liberation Day baseline, I think, to change that dynamic.
- [11:50]
Felix Hamlin
It's all very tentative at the moment and I think the stock market is pricing in a relatively rapid series of trade deals, including something with China. Scott Bessant is in Switzerland talking to the Chinese. It looks like a significant reduction in tariffs on China is going to happen pretty damn soon. Now we don't know how big it's going to be. It might be down to 80%, it might be down to 60%, it might be down to 50%. And one of the things that I genuinely don't know is whether that makes any difference when you have a 50% error. If that's already so enormous that it kind of brings Imports down to zero. The difference between 50% and 145% doesn't seem huge to me, but maybe it makes a difference.
- [12:37]
Emily Peck
I mean, it is a difference. It is still really high. It does, but maybe it's like big companies can work with that and the smaller businesses who are already upset probably can't. Like, I spoke to a guy this week who owns like this little company that they make these cool cosmetic bags that you can lay them flat and then you pick them up and the drawstring closes. Their whole business is getting these bags made really cheap in China and then importing them and selling them in the US really cheap. And like, they can't stay in business. And they used to be able to do deals with your Target and your, you know, whoever retailers to sell on the shelves, but the retailers won't let the price of the good come up too much, so you can't sell there anymore. But the retailers, what I'm saying are okay. It's just that this small, little, small business that like lives off of China can't operate anymore. So maybe that's kind of an effect.
- [13:31]
Felix Hamlin
That reminds me of this thing that Chris Waller said, About 10% tariffs. 10% tariffs, absorbable. That basically, you know, on a stylized level, the importer like eats about 3% of that, and then the retailer eats about 3% of that, AND then the final price goes up by about 3% and everyone has like 3% of wiggle room and you get 3% inflation. But all of this is within the realm of we can live with that, you know, and that's where we are right now, to be clear, because Trump paused all of the reciprocal tariffs over 10%. So right now everyone's in the 10% range except for China. And so everything is kind of working. And then the big question is, like, what happens at the end of Trump's 90 day pause? I have to say, I think the market expectation, and kind of my expectation too, is that the 90 day pause on tariffs is going to be a bit like the 90 day pause on enforcing the TikTok rules. You know, it's just going to keep on getting kicked down the road.
- [14:34]
Emily Peck
That sounds right. Because it would just be too extreme to do those reciprocal tariffs. I mean, it just seems like out of the realm of possibility, even for this White House. Even though they suggested it.
- [14:43]
Felix Hamlin
Yeah. And I think all of the way that everyone was laughing at the way that they were calculated, everyone's like, they're not going to bring back that insane formula that made no sense.
- [14:52]
Emily Peck
Yeah. That sounds right, but they're still talking about 80% tariffs on China, which is that absorbable, I guess, is the question we don't quite know the answer to yet.
- [15:00]
Felix Hamlin
No, I think that's not absorbable. In that case, you wind up moving a lot of your imports from somewhere else. We've already seen Apple saying they're going to import all of their iPhones into the US From India rather than China. You wind up reconfiguring supply chains enormously, and probably you wind up with various forms of leakage where China exports to countries that have a 10% tariff rate and then US imports from them as it had been.
- [15:29]
Emily Peck
Because the tariff, even before Trump started monkeying around, was, I think, 25% or 20%. Right.
- [15:35]
Felix Hamlin
It was a normal tariff regime, which was, like, incredibly complicated, and all done on, you know, long numerical codes, and all depended on which code you fell under. And there were country of origin rules. And, yeah, like, tariffs are very fucking complicated, which is why it takes a decade to create a new WTO agreement or more. And this is why free trade agreements and whatnot, or even bilateral trade agreements take years and years and years to negotiate. Right, because there's devils in the details. There's a lot of fighting print. They go on for thousands of pages. It's not something you can just announce in the Rose Garden one morning and then suddenly it's universal. Except for that now seems to be the world we're in. It does seem, and we've talked about this on the part in the past, that that is actually illegal. There's lots of very good legal arguments saying, like, no, you can't do that. But how long it takes the legal cases to bubble up from the International Trade Court to the Federal Court of Appeals to the Supreme Court. And what happens at the Supreme Court, like, I have no idea how to handicap that.
- [16:35]
Emily Peck
Right. And the plaintiffs filing suits are so far, basically just small businesses. It's not like power players who can, like, move things faster through the courts, you know, it's not like the Chamber of Commerce.
- [16:44]
Felix Hamlin
I'm not even sure power players can move things faster through the courts. Like, the courts just move at the speed of the courts. Talking of power players, oh, my God, my Segway game is on fleek today.
- [17:08]
Emily Peck
People still say that.
- [17:09]
Elizabeth Spires
Please.
- [17:10]
Felix Hamlin
No, no one says that.
- [17:11]
Emily Peck
You're bringing it back.
- [17:14]
Felix Hamlin
Bill Gates, big announcement. Elizabeth, what do we think?
- [17:18]
Elizabeth Spires
Well, so Gates has decided that he's winding down his foundation and the last day of operation will be December 31, 2045. I think this makes sense given the current situation of usaid to other countries, which the Gates foundation is so heavily involved in, especially around the issues of public health. There was an interview with Gates recently where he was talking about this and he seems kind of low key, outraged.
- [17:43]
Felix Hamlin
I don't think he's low key. This is like the most outraged that I've ever seen him.
- [17:48]
Elizabeth Spires
Yeah, I guess that's fair. But I think billionaire, you know, tech guy, outraged looks a little bit differently than, you know.
- [17:55]
Felix Hamlin
No, I mean, this is Bill Gates with his hair on fire and specifically targeting Elon Musk and saying, like, here's me, Bill Gates, I used to be the richest man in the world. I decided that I was going to help the planet and save millions of lives, and I did. And like, that's just what it behooves the ultra rich to do that. And then Elon Musk supplants me as the richest man in the world and instead of saving millions of lives, he's actually killing millions of children by, you know, slashing usaid. And what the actual fuck.
- [18:23]
Emily Peck
The world's richest man responsible really for the deaths of the poorest children in the world. It's mind blowing.
- [18:32]
Felix Hamlin
And this is the man who worries about that we're not having enough babies. It's like letting children die unnecessarily by cutting off, like very basic aid is just, it's evil. And Bill Gates is coming out very angry. And just to be clear about this, he's not just saying, we're going to accelerate the speed at which we give away the money in the foundation so that it ends in 2045. He's also doubling the money in the foundation. He's taking all of his personal net worth, which is on the order of $100 billion, over and above the money that's already in the foundation. And he's saying, I'm giving all of that to the foundation as well. And so he's doubling the amount of money in the foundation and he's speeding up the amount of money that the foundation gives per year, which winds up really front loading the amount of money that the foundation can spend, which makes a huge amount of sense. Because basically what he's saying is, no, obviously the Gates foundation cannot replace the amount of money that the US is cutting from foreign aid, or that the UK is cutting from foreign aid, or that France is cutting from foreign aid. These are much, much larger sums and private philanthropy. We cannot and should not try and step in and to fill that gap. But what he is saying Is that as the US and the UK and France and everyone else do start pulling away in the foreign aid game, what that does is it increases the bang for your buck that you get as a private philanthropy. He was saying, like, you know, over the past few years we've been saving lives at a cost of like 2 to $3,000 per life. And that amount of money is going to come down because like now there's like lower hanging fruit that we can come and address because there's this big vacuum and we can come in and save lives at a lower cost now because the governments aren't pouring money into the field anymore.
- [20:24]
Emily Peck
So I was looking at the Bloomberg Billionaires Index as one does, and you know, Bill Gates year to date increased his wealth by nine and a half billion dollars. And we all know famously Mackenzie Scott, Jeff Bezos's ex wife, you know, she's trying to give away money really fast, but she keeps making more money really hard. Problem. The nonna's spaghetti pop problem or whatever. Bill Gates is saying he wants to spend all this more money, put more money into his foundation, spend it all before, you know, over the next 25 years. How much money is Bill Gates going to die with?
- [20:58]
Felix Hamlin
He says he's going to die with zero. That's his plan. Or very close to like Chuck Feeney did it. He's like, Chuck Feeney is my hero. I want to pull a Chuck Feeney.
- [21:05]
Emily Peck
How do you do that though? Because you're super old. You need to live somewhere. You need, you know, people to take care of you. You probably still have dependents or adult children who are still asking you for money all the time. Like really, really? You die with nothing or is nothing, quote unquote.
- [21:19]
Elizabeth Spires
He doesn't mean like a literal nothing. I think he means beyond living expenses, you know?
- [21:25]
Felix Hamlin
Yeah, he will live. Yeah, he will die with like $5 million. He will have kids who look after him. Like, he's gonna be just fine.
- [21:32]
Elizabeth Spires
He.
- [21:32]
Emily Peck
But really, like, won't he just keep running into this problem of like his wealth making more money for him? And like, even if he tries to give it all away, he's still going to wind up like in the year he dies with, you know, his holdings earning whatever million, billion.
- [21:46]
Felix Hamlin
Because he's not giving away his dividend income, Emily. He's giving away his principal.
- [21:51]
Elizabeth Spires
Okay?
- [21:51]
Felix Hamlin
That's the whole point. So like, if you give away your principal, if you give away the actual Microsoft stock or whatever, then you can't.
- [21:57]
Emily Peck
Make money off of it.
- [21:58]
Felix Hamlin
Then you can't make Money off it. There's a popular discourse in various bits of the philanthropy world which is basically saying, like, if Bill Gates hadn't been giving away so much money over the past 20 or 30 years, he would be worth $500 billion right now and he would be the richest man in the world and look how much it's cost him to give away that money. And he's like, fuck you. No, like, this is, this is the dumbest fucking. Like watching a number go up is the stupidest thing you can possibly do.
- [22:27]
Elizabeth Spires
Yeah, well, I want to go back to Elon because Gates had the most withering quote. He said he put USAID into wood chipper because he didn't go to a party that weekend. Which is totally plausible, by the way.
- [22:39]
Felix Hamlin
I think Elon went to plenty of parties that weekend. And Elon just likes putting USAID into a wood chipper. And Elon has a whole chip on his shoulder about the whole concept of foreign aid in general and aid to Africa in particular. As an African, you know, he comes from a very, very weird place when it comes to aid. And I do, I do agree with Gates that the enormous cuts to USAID really can be laid at the feet of Musk more than any other individual.
- [23:04]
Emily Peck
Because.
- [23:05]
Felix Hamlin
Because that is the thing where Musk really, that's the first place Musk turned to. It's the first place he turned off the money. He was very aggressive about that with Max Cruelty, Max, you know, chainsaw. And as Gates said, like, historically speaking, he's had quite a lot of support from Congress. So things like PEPFAR and the Global Fund and, you know, all the rest of it. It's a case that he can and has made many times. And the only way that USAID gets cut so drastically is when Elon does this massive end run round Congress and says, I'm just going to kill it unilaterally and there's nothing you can do to stop me.
- [23:43]
Emily Peck
Right. That was the first thing he did and probably the most successful thing he did before people started sort of waking up and suing and putting a stop to some of the chainsaw mechanisms.
- [23:54]
Felix Hamlin
And one of the things that Gates is saying as well, which I think is smart, is that, you know, nothing is forever. He's like, right now there is this massive hole in funding because it's not just the U.S. you see this, you know, in other countries too, there's a massive decrease in foreign aid and we need to sort of get through the right now as quickly as we can. But in the long term, you know, people are good. And I. And he has, like, faith in humanity over the next, you know, 50 years or whatever. And so he's like, let's just try and spend as much money as we can to make things, to try and improve things as much as possible, at least stop things getting worse as much as possible in the next sort of five to 10 years, and then trust in, like, tomorrow's billionaires and tomorrow's governments to pick up the bat on once the Gates money runs out. I don't know.
- [24:42]
Emily Peck
He also seemed negative about this, you know, when he was talking about aid being squeezed everywhere. And in the UK aid budget was 0.7% of GDP, then 0.5%, and now 0.3%. As part of, like, just talking to Trump makes countries, like, lower their foreign aid.
- [24:56]
Felix Hamlin
Apparently Trump forces them to spend more on defense because he's, like, pulling out of NATO.
- [25:01]
Emily Peck
And he also makes this point. Your pension and health costs are going up in aging societies. So with willingness to raise taxes modest, you're kind of headed toward this big problem where you have to turn inward to deal with, you know, fiscal issues at home as people get older and you need to care for them and blah, blah, blah, blah, blah. Like, the idea of looking outward to help people is going to be long term, perhaps less appealing for these, like, rich countries.
- [25:26]
Elizabeth Spires
He also pointed to a kind of longer systemic problem with debt in Africa that he sort of suggested that you need a kind of collaborative effort to fix with, you know, other countries. And if they're already pulling back on aid spending, then how is that possibly going to happen?
- [25:42]
Felix Hamlin
And the US because aid and debt forgiveness are two different things. What he's saying is, like, in 2000, we had the HIPAA initiative, which he was a big fan of and I'm a big fan of, and it worked really well. Stands for heavily indebted poor countries. And a bunch of poor countries did see their debts wiped out at the beginning of the century, and it did do a huge amount of good. And Gates is saying, like, we need something like that again. And there's no political appetite for that right now. And he's right. There's no political appetite for that right now. And he's also understating the difficulty of doing it again because the makeup of the debt is very different now from where it was. You know, there was a lot, especially for the poor countries, it was a lot of IMF and World bank debt. It was a lot of bilateral debt. So you could get a couple of, you know, a couple of big Rich countries like the US Push this thing, take the lead in forgiving debts. And it would happen now. The debt, there's more private sector debt, and most importantly, there's more China debt. China has sort of taken the lead in lending to these countries. And so it's much, much harder for a country like the US or anyone except for China, frankly, to take the lead on sort of big across the board sovereign debt reduction program.
- [26:56]
Emily Peck
But I do agree that optimism, I mean, optimism feels like the only choice here for someone like Bill Gates.
- [27:02]
Felix Hamlin
You know, and he makes a really good point. And when I say a really good point is what he's doing is saying something that I've said many, many times on this show in other places over the past, which is there will be future billionaires. This idea that we had for many years when people would set up foundations that, like, I need to set up my foundation as a perpetuity because I need this group of people that I want to help to be helped forever. And when my money runs out, then they won't be helped anymore, is a deep fallacy. The total amount of philanthropic capital in the world only ever goes up. There will be new billionaires who replace and they will step into his shoes and help people. And it behooves him to spend the money now and, like, trust in the future rich to do good things in the future, because the future world is going to be richer than the present.
- [27:55]
Elizabeth Spires
Trust the rich.
- [27:56]
Felix Hamlin
The number of poor people in the future is going to be lower than the number of poor people today. The urgency, if we could go back in time a hundred years and address poverty a hundred years ago, like, our money today would go much further than it does right now. Money always becomes less effective over time, so you always have this incentive to spend it now rather than tomorrow.
- [28:17]
Elizabeth Spires
What happens, though, if our future billionaires are all more like Elon Musk and less like Bill Gates?
- [28:22]
Emily Peck
That's a good question.
- [28:23]
Felix Hamlin
They always are. The overwhelming majority of billionaires basically do little, if any, philanthropy.
- [28:29]
Elizabeth Spires
I'm saying, what if it gets worse? What if there are no Bill Gates?
- [28:33]
Felix Hamlin
Okay, you can be this, like, extremist corner solution. What if everything goes terribly. Yeah, of course. But like, if you just look at human history, if you look at the history of capitalism over the past 200 years, this has never happened. You've never had a series where, like, the number of generous billionaires has gone to zero. The number of generous billionaires does not need to be big. Like, if you look at the number of billionaires who are really active in global health. It's really one, you know, it's Bill Gates and to a certain extent Warren Buffett who like, you know, really helped him for many, many years. You can probably make a case for Dustin Moskowitz, but like there aren't that many. You don't need that many.
- [29:11]
Emily Peck
Who will be the billionaire, the next billionaire to save the world?
- [29:15]
Felix Hamlin
There will be a next billionaire to save the world and that billionaire probably won't even be American. You know, there will be an African billionaire.
- [29:21]
Emily Peck
Wait, Mackenzie Bezos. But she's not focused on the globe, is she?
- [29:25]
Felix Hamlin
I mean she's giving some, but like she's not, she's not single handedly focused. She's not trying to be the change agent. She has a very different philosophy and we've talked about her in previous podcasts. She's much more like distributed in her giving away rather than like having a singular goal and trying to prosecute it individually.
- [29:42]
Emily Peck
You say singular and I think Bill Gates is pretty singular.
- [29:45]
Felix Hamlin
Yeah.
- [29:45]
Emily Peck
The idea that there's going to be another Bill Gates, like you're probably right, Felix. There's always like one billionaire guy who does good philanthropy stuff. I'm sorry to generalize and say it just that glibly, but he's pretty singular and targeted in the work he did. And I feel like you see a lot of other billionaires try to do good philanthropy stuff and sort of fumble around. Like Mark Zuckerberg for a while I feel like was trying to do a Gates thing.
- [30:12]
Felix Hamlin
Yeah, Mark Zuckerberg has been fumbling. He will get somewhere eventually, but he's definitely fumbled so far. The one I have the most hope for, I think is Vitalik Buterin. He seems to be quite focused on global health, global development. He's very global. He cares about the plight of the poor and he has absolutely enormous amounts of money. This is the guy who founded Ethereum. And I think that someone like Vitalik could easily become the next Bill Gates. It's not impossible at all. Talking of nonprofits, there was a big announcement from OpenAI this week which basically said, yeah, we're still going to remain a nonprofit. And I think this is a big deal because, you know, go back a few months ago, they made this big announcement that it just didn't work. They couldn't make it work as a nonprofit. So they were going to spin off the for profit subsidiary into its own public benefit corporation and they were going to give the nonprofit shares in the for profit, but they were going to be two separate organizations and the nonprofit was just going to own shares and try and do good in the world with the wealth that it had from the shares, but wouldn't really have any control over the for profit. They have now completely backtracked on that and said, no, no, the nonprofit will continue to control the for profit. It will have majority voting control, and it will appoint all of the directors of the for profit. And this seems to me to be a big deal.
- [31:48]
Elizabeth Spires
It's probably good, but I don't think it's a principled move. I think their originally byzantine capital structure was really inhibiting fundraising. Microsoft didn't like it. Other potential investors didn't like it. This simplifies it and, you know, reduces that objection that some of the people who wanted to put money into OpenAI had. Yeah, yeah.
- [32:07]
Felix Hamlin
That was the stated reason why they wanted to make the change in the first place, because no one liked the capped profit model, where, you know, your profits were capped at 100x what you put in or whatever. And so they were like, we're just going to spin it out and make it much more something that funders are used to funding. That was why they wanted to do this.
- [32:25]
Emily Peck
So are they keeping the capped model?
- [32:27]
Felix Hamlin
No, they're getting rid of the capped profit model, and the for profit is becoming a PBC public benefit corporation, which is the same as, like, anthropic and perplexity and, you know, the standard way of setting up an AI company. But importantly, the board of the for profit is entirely nominated by the nonprofit. It's not just, you know, people trying to maximize the amount of money they make.
- [32:49]
Emily Peck
But reading between the lines on the piece you wrote, it seemed like kind of a question mark. Whether or not just this ability for the nonprofit board to appoint the for profit board was meaningful or not. I didn't get the sense that it necessarily de facto was.
- [33:05]
Elizabeth Spires
It's sort of the only thing the nonprofit does, which is kind of odd for a charity. It's almost like you have the optics of the kind of oversight that you would have with a nonprofit. But aside from appointing board members, it's not clear what the nonprofit really does. It doesn't really have programs to.
- [33:21]
Felix Hamlin
Well, the nonprofit has no revenues. Right. So, like, you can't go out and, you know, give money for antimalarial bed nets. In the world, if you don't have any money to pay for bed nets and OpenAI loses money, it doesn' make money. So the nonprofit doesn't have any money to spend. So there's not much it can do except for just Provide oversight of the for profit.
- [33:40]
Emily Peck
So I don't understand. So the people who do the research to update ChatGPT every few months and everyone gets excited about it, who do they work for?
- [33:49]
Felix Hamlin
The for profit.
- [33:50]
Emily Peck
And so, so what is the. Yeah, I guess I'm. I'm asking the same question as Elizabeth. What does the nonprofit do?
- [33:57]
Elizabeth Spires
Yeah, not having revenues is a choice. Ostensibly, the nonprofit is designed to constrain the for profit if it wants to do things that are bad for humanity. And there are a lot of organizations who have lobbied for this structure because they are also interested in providing oversight of AI development so that nothing bad happens. So the idea that the nonprofit can't do anything, it's. Yeah, it can. It can raise money and, you know, actually do things that fulfill that mission. Besides.
- [34:26]
Felix Hamlin
Wait, wait, wait, Elizabeth, what are you suggesting that the OpenAI nonprofit do and how are you suggesting that it raise money?
- [34:33]
Elizabeth Spires
Well, its mission is that it's supposed to make sure that OpenAI's efforts do things that are fundamentally good for society and not destructive.
- [34:42]
Felix Hamlin
Yes.
- [34:42]
Elizabeth Spires
So there are plenty of other models for that. There are plenty of organizations that work on that and they have programs that are specifically directed toward oversight. Right now, the OpenAI nonprofit, literally, the only thing it's doing is picking board members and trying to make sure that they stay in line with the organizational mission.
- [34:59]
Emily Peck
How do they do that? Just literally try make sure the board members are in line with the organizational mission. They're not themselves, like producing data reports or like looking at how open eyes OpenAI is being used and whether or not it's, you know, equitable or blah, blah, blah.
- [35:13]
Felix Hamlin
I think this is, I think this is entirely reasonable. Right. As Elizabeth says, there's no shortage of high minded foundations and nonprofits who are putting out white papers and think pieces about how to develop AI safely. Does the world need another one of those? Probably not.
- [35:29]
Emily Peck
Yes. If the OpenAI nonprofit would have presumably access to real data coming from OpenAI that those other organizations wouldn't have. Right. Like they would actually be able to do deep analysis into the products that OpenAI is putting out. Right. If they had a true partnership and a oversight role.
- [35:48]
Felix Hamlin
And they can, they can definitely ask for that. But the. Yeah, I did.
- [35:53]
Elizabeth Spires
I think this is the optics of oversight with. Without real teeth.
- [35:56]
Emily Peck
I got this idea from reading your story, Felix.
- [36:00]
Felix Hamlin
So, okay. I mean, it is certainly possible that OpenAI has no teeth. I mean, it's unlikely given the fact that it has actually bared its teeth once in the past. Right. And it fired Sam Altman So, like, these people do have power and they have used it in the past. The new board is much less likely to do something drastic like that than the old board was because last time they tried it, it didn't work out very well.
- [36:22]
Elizabeth Spires
But the fact that the old board was a casualty of that is kind of indicative of the fact that Altman does have power there. We, you know, he had this quote that said OpenAI is not a normal company and never will be, which if I were an investor would give me pause. But.
- [36:36]
Felix Hamlin
But I mean, as Matt Levine pointed out, every single tech founder has said that. Right. You know, the Google people said that. Mark Zuckerberg said that that's a very normal thing for a founder to say. And there's absolutely no doubt that in the real world, Sam Altman has a huge amount of power. He has a huge amount of control over OpenAI, the for profit, and frankly over the nonprofit board as well. The, there is a very large chance that the for profit board will be the nonprofit board, at least in the first instance. The nonprofit board will just nominate themselves to be the for profit board. And that creates a weird tension in terms of incentives. And between that incentives tension and the fact that Altman personally just has de facto massive amounts of power. Yeah. Can we trust that? OpenAI's nonprofit Mission Wisconsin no, this is what I'm saying. Like, is it certainly going to constrain OpenAI AI the for profit in everything it does? No, there's no certainty here. But equally, are we certain that it won't and it's going to be totally otos and just a sort of like little feather on the cap of the cap structure that does nothing and everyone can ignore, like, probably we don't know anything for sure. Like, nothing is certain. And the fact that the company is actually governed by a nonprofit is going to possibly make some kind of a difference going forward. Like, there are pharmaceutical companies in the UK and Switzerland who are broadly governed by nonprofits rather than for profits, and they wind up behaving in sort of interestingly different ways. There's a lot of research into the way that for profit hospitals compared to nonprofit hospitals and nonprofit hospitals do behave in different ways. I think you can dial up the cynicism very quickly and you can decide, I believe it's going to do nothing and that this thing is going to just behave like a for profit company and the nonprofit structure is going to do nothing. But I think what we've learned, if you look at the difference between for profit universities and nonprofit universities and so.
- [38:36]
Emily Peck
On and so forth difference there. Good point.
- [38:38]
Felix Hamlin
There is a real world difference, and I think that we don't know exactly what that difference is going to look like, but it's going to be not nothing.
- [38:46]
Elizabeth Spires
Well, I hope so. But I think nonprofit's oversight is only as good as the board members and the people want it to be. And so I think the top level nonprofit organization will have basically as much power as Altman wants it to. And it really does boil down to what he wants, maybe.
- [39:03]
Felix Hamlin
I mean, I feel like the people on the nonprofit board, while they are certainly less idealistic than the ones who fired Altman, are also not exactly pushovers. God knows I'm not the world's biggest fan of Larry Summers, but I don't think he's just going to do whatever Sam wants him to do.
- [39:19]
Emily Peck
How much do you make if you're on the Nonprofit board of OpenAI? What's that going for?
- [39:23]
Felix Hamlin
Nothing. It is very, very rare for a nonprofit board member to make money. What is interesting, of course, is if they nominate themselves to be on the board of the for profit, then they can make money as board members of the for profit, even if they're not making money as board members of the nonprofit. So that's one of the conflicts I was talking about.
- [39:40]
Emily Peck
That would seem so shady.
- [39:42]
Felix Hamlin
But also if you are, you know, Larry Samuel, Brett Taylor, probably the kind of money that you'll pay yourself to be a board member of the for profit is not going to be, you know, life changing money for those people. Yes. We should have a numbers round. Emily, do you have a number?
- [40:11]
Emily Peck
Yes. Oh, you want to know what it is?
- [40:13]
Felix Hamlin
I would love to know what it is.
- [40:15]
Emily Peck
All right, I'm going to tell you. My number is 70,000.
- [40:17]
Elizabeth Spires
Oh, no, that was my number.
- [40:20]
Emily Peck
I'm sorry. That is the number of dum dums lollipops that were mailed to the home of a Lexington, Kentucky mom named Holly LeFevers. Her 8 year old son Liam went a little wild on Amazon and he ordered 30 boxes of the dum dums. She used to let her son browse Amazon under. Honestly, this was a mistake. I can't believe a parent would do this. Elizabeth can chime in in a second, but like, she would let her child, who is eight, look around on Amazon and put stuff in her shopping cart on her account and she was just like, don't buy anything. How easy is it to mess that up? Even an adult, you just click one button. Amazon made this famous buy it now, bing bong. It's Bought. Don't do this. Don't let your children just browse Amazon for fun. Like, bad idea. Anyway, the lollipops, they start showing up all these boxes at the lady's house. She says, Amazon, I didn't mean to order all these dum dums. Please take them back. Amazon's like, sorry, it's food. We won't take it back. She sees her bank account is down over $4,000 in the red now because of the lollipops. Again, do not have your child play around on Amazon. If it's attached. If your account is attached to literally your bank account, like, what are you doing? Anyway, she goes on Facebook to the neighborhood and says, will anyone buy my lollipops? My dum dums? And it goes viral. And then Amazon, guess what, lets her get her refund. And even I think, keep the lollipops.
- [41:48]
Elizabeth Spires
It was a little unclear after a little bit of public pressure, though, because they argued that lollipops are food and you can't return food to Amazon.
- [41:55]
Felix Hamlin
I mean, they're not wrong.
- [41:58]
Emily Peck
They're dumb dumbs. They're just dumb dumbs. They're wrapped in a bottle.
- [42:01]
Felix Hamlin
But we all know who the dum dum is in this story.
- [42:04]
Elizabeth Spires
They last forever.
- [42:05]
Emily Peck
Everyone makes mistakes. She says in the story that he no longer has the access to the Amazon account.
- [42:10]
Felix Hamlin
Oh, you think?
- [42:11]
Emily Peck
But then there's all these other stories of parents are like, my son bought this. My daughter bought this online. I'm like, people, what are you doing?
- [42:17]
Elizabeth Spires
You know when Amazon had those buttons you could order where you just press the button and it reorders whatever. My husband was like, well, maybe we should get one of those for, like, paper towels or something. And at the time, my kid was three and loved pressing buttons.
- [42:30]
Felix Hamlin
No.
- [42:31]
Elizabeth Spires
And so I just thought, no, because we'll end up with 100,000 rolls of paper towels.
- [42:35]
Felix Hamlin
Bad idea.
- [42:36]
Emily Peck
Although you'll wind up using paper towels are handy like dum dums. I don't know how you get. You're not going to consume 70,000 dum dums, like, in your lifetime.
- [42:44]
Felix Hamlin
I always thought that one of the better business ideas out there on the Internet with these apps where you would take a photograph of the wine that you're drinking with your meal at a restaurant because you really like it. And then it would. You would be able to look it up and say, these are the wines I drank and this is what I like and I should try and buy it again. But then if you're a smart app, like, the minute you take a photograph of the wine. The app then comes back to you and goes, you know, you can buy this, this bottle of wine that you just spent $100 for in the restaurant. You can buy this for, like, 27 bucks. Do you want to buy a case? And because you're drunk and in a restaurant, you're like, yeah, that sounds like a great idea. And you just maximize the amount of drunk shopping.
- [43:23]
Elizabeth Spires
This is your version of the Amazon button.
- [43:25]
Felix Hamlin
Exactly.
- [43:26]
Emily Peck
Are you going to start up this company?
- [43:28]
Felix Hamlin
There was a company that tried this. I don't think the kit actually did very well because there's just too many bottles of wine out there. But I think it's, in principle, it's a good idea. Elizabeth, what's your number?
- [43:38]
Elizabeth Spires
Well, now I have a new number. It's two. And that's because in two hours, I'm going to get my real ID after putting it off for however long they've been telling us to do this. And it took me, like a month to get an appointment.
- [43:52]
Emily Peck
I have your back here, Elizabeth.
- [43:54]
Felix Hamlin
This is one of these things that astonishes me, and it's one of these things where I kind of out myself as being a foreigner, even though I've lived in this country well over half my life. Like, I was looking at the data, right? So something like 48% of Americans have passports. Something like 44% of Americans take at least one flight per year. And so you're like, okay, those aren't completely overlapping, but you would kind of imagine that the vast majority of people who take at least one flight per year have a valid passport. And so they don't have a problem. They don't need a real id. They can just use their passport. On top of that, the passports with real ID have been available since 2011. It's been around a long time. So a lot of people have real IDs already. And so I'm like, how many people can this really affect people who, A, are taking flights, B, over the past decade, haven't managed to upgrade their driver's license to a real id, and C, don't have a passport. Like, there can't be that many people.
- [44:52]
Elizabeth Spires
I think that's actually probably half the country, for one thing. I think it's unusual, at least in America, for people to use passports on domestic flights, right?
- [45:01]
Felix Hamlin
That's because they normally use their driver's license. But if you aren't allowed to, you still have a passport, right?
- [45:05]
Elizabeth Spires
I think the way people think about it is you don't want to lose A passport, it's much more of a pain in the ass to replace. Whereas with an id, you can just, at least in New York State, just do it online and they'll send you a new one.
- [45:15]
Emily Peck
People, just Americans aren't in the habit of, like, passport culture. I think we have a really big, big country and you can travel all over it and you don't need a passport. As opposed to Europeans who live in tiny countries and are much more, like, globally minded, internationally minded, because they're hopping all around.
- [45:33]
Felix Hamlin
No, I mean, it's true that when Americans travel, they're much less likely to need their passport than when Europeans travel. But that doesn't mean you can't pick it out your drawer and travel with it if you need to.
- [45:45]
Emily Peck
Plus, you said half the country doesn't have a passport. More than half. You said 48% have.
- [45:49]
Felix Hamlin
Half the country doesn't ever get on a plane.
- [45:51]
Elizabeth Spires
That's not true. I don't know a single person who's never gotten on a plane, even if they did it late in life.
- [45:56]
Felix Hamlin
Never. But in any given year, the number of Americans who get on a plane is smaller than the number of Americans who have a passport.
- [46:03]
Emily Peck
I think also, just this deadline, a lot of people just didn't know. I didn't even know about it until this week. Then I had a panic attack. Then I looked at my driver's license and it said it was enhanced. Then I googled it and it was like this. The same thing as real id. And then I said, okay, forget it. So I didn't. But like I'm saying, people aren't paying that much attention.
- [46:18]
Felix Hamlin
Yeah. Elizabeth, maybe you have an enhanced ID and you don't even need a real id.
- [46:22]
Elizabeth Spires
I don't. I checked. Sadly for me, it's too bad.
- [46:25]
Emily Peck
And now all these women are having problems. The women who changed their names when they got married are having problems getting real IDs. The receptionist at the doctor's office told me about this. She was like, married women, they're not getting those real IDs. And then she gave me this really meaningful look in my eyes, and I was like, is this the beginning of the Handmaid's Tale? Like, they're taking away the women's IDs or something. So that disturbed me.
- [46:47]
Felix Hamlin
Yeah, don't change your name when you get married, man. That's. All manner of bad things happen when you do that.
- [46:52]
Emily Peck
I think it's nice.
- [46:53]
Felix Hamlin
As Emily Friedlander will test.
- [46:55]
Elizabeth Spires
My mom is still annoyed that I didn't change my name when I Got married because she changed hers. And now I have a good practical reason to be like, well, I made a rational decision. I can get my real id.
- [47:06]
Emily Peck
I would have had trouble getting my real id. It's just annoying, all those hurdles to proving your identity. And I think it's becoming more and more of an issue as we have these more conservative leaning people in office who want more proof of ID for various things and who are also cracking down on immigrants. And we're like moving into this, like, show us your papers kind of country. And that is stressful for a lot of people. People don't always have all their birth certificate, their marriage certificate, their this. They're that. Like, people don't know where they are necessarily. It's not so easy.
- [47:39]
Felix Hamlin
But Sam Altman has a solution for that. Emily.
- [47:41]
Elizabeth Spires
Oh, God. Scan your eyeball.
- [47:43]
Felix Hamlin
You know, he doesn't just run OpenAI. He also runs this thing called Worldcoin where they scan your IRS and they give you a crypto something, and then that's your proof of your id.
- [47:52]
Emily Peck
It's not a bad idea, is it, to be fair?
- [47:55]
Felix Hamlin
Because I sign up for all of these things because I've given up on having any privacy for years at this point. Getting onto planes now, getting through immigration, JFK is so easy. I just look at a camera and they're like, yep, come on through. I don't even take my passport out.
- [48:10]
Emily Peck
That's incredible. Wait, because your eyeballs.
- [48:12]
Felix Hamlin
Because of my. Yeah, it's some kind of biometric something. It's just.
- [48:15]
Emily Peck
Yeah, that is kind of amazing. You never have to worry, did I forget my eyes? You know, you never have to check, like wallet keys, eyes, like, you're good.
- [48:22]
Felix Hamlin
I guess I should have a number two. I'm going to go for 100. Which is the percentage difference that a lawsuit claims that the amount of meat in a Burger King burger looks in the ad versus what it is in reality. And they're suing Burger King and they're saying you have this ad with a very large burger. But then in reality, and this is the bit that really gets me. In reality, the burger is very much smaller. And so that's misleading advertising. And so you have to pay us lots of money. But this is what they say in the complaint, which I love this so much. They're like, the burger in the picture is 35% larger, which means it has 100% more meat. And I'm like, what if it's 35% larger? That means it has 35% more meat. If it's if it has 100% more meat, then that means it's 100% larger. Like you have to just pick one metric and go with it, people.
- [49:19]
Emily Peck
That's really confusing. I don't think the suit's going to go anywhere.
- [49:22]
Felix Hamlin
Felix, I agree with you that this is going to go nowhere big because it's innumerable. But obviously they're trying to do some kind of weird thing that like the surface area is like or the diameter is 35% larger or the area of the, I don't know, the whole thing. They need to work on their dimensions. They need to work out are they working in one dimensional, two dimensions or three dimensions? And then just stick with it.
- [49:43]
Emily Peck
Remember the footlong? I mean, sometimes people get really hyped about this stuff.
- [49:47]
Felix Hamlin
You remember the guys who were weighing Chipotle bowls?
- [49:49]
Emily Peck
Yeah. The weighing of the Chipotle labels. There was the measuring of the five dollar footlong to only to discover, lo and behold, was not a foot long.
- [49:57]
Felix Hamlin
It was not a foot long.
- [49:58]
Emily Peck
Freak out about that stuff. Even though the fast food and advertisements looks nothing like what you get when you actually get the food. Nothing. It's always misleading.
- [50:07]
Felix Hamlin
Yeah, it's always misleading.
- [50:08]
Emily Peck
Why are we nitpicking?
- [50:10]
Felix Hamlin
Because sometimes what the world needs, Emily, is a hero who will stand up against something that we all know is bad and we all know is wrong. And instead of just saying will, I guess it's always misleading. We will take them to court and we will change the world.
- [50:27]
Elizabeth Spires
We need a litigious, burger loving, fast food connoisseur.
- [50:32]
Felix Hamlin
I think that's all we have time for this week. Thanks so much for listening to Slate Money. Thanks very much to Merritt, Jacob and Jesmyn, Molly and Shayna Roth for producing. Thanks for being a Slate plus member. If you're a Slate plus member. And we will talk about more Hollywood tariffs in Slate Plus. Other than that, we will be back next week with more more Slate Money.