Slate Money: The 5th Birthday Edition

Date: May 11, 2019
Host: Felix Salmon (Axios)
Co-Hosts/Guests: Emily Peck (Huffington Post), Anna Szymanski, Jordan Weissman (Slate)

Overview

To celebrate its fifth anniversary, the Slate Money team reunites original member Jordan Weissman with regulars Felix Salmon, Emily Peck, and Anna Szymanski. The episode dives deep into three major business and finance stories:

• The intensifying U.S.-China trade war and Trump's tariffs,
• The surge of “short-termism” discourse in the stock market (sparked by a listener question),
• Uber’s massive, controversial IPO and its implications for drivers, investors, and the wider gig economy.

The hosts maintain their signature sharp, conversational, and at times sardonic tone, blending data-rich analysis with punchy takes and memorable humor.

Main Topic 1: Trump's $100 Billion in Tariffs and the U.S.-China Trade War

[02:15–16:31]

Key Discussion Points

• Trump Escalates Tariffs: Tariffs on Chinese goods expanded from 10% on $200B to 25% on all $250B worth [03:06].

  • Jordan: “Now it’s 25% on all $250 billion of Chinese goods that are coming into the country” [03:19].

• Who Pays for the Tariffs?

  • The consensus (except for Trump): U.S. businesses and consumers bear the cost.
  • Cites two academic studies showing tariff costs are not successfully passed back to China [03:53].
  • Peak consumer pass-through could mean price hikes and (eventually) inflation.

• Potential Economic Impact

  • Anna: Effects not linear; potential for more significant inflation and job losses only if tariffs persist long-term [06:02].
  • Earnings calls now explicitly mention tariffs as a factor in forecasts.

• Market and Political Reaction

  • Stock market seems relatively indifferent, expecting Trump not to go all the way—“Trump put” effect [06:50].
  • Trump’s strategy parallels previous shutdown brinkmanship. Market waits for a pain point to force a retreat.
  • Felix: “He doesn’t go into details on anything. He’s just like, tariffs are awesome. … I don’t think that, like, in his heart of hearts, he wants to roll back these tariffs. I think in his heart of hearts, he wants to have more tariffs. He thinks tariffs are great.” [07:39]

• Farmer Bailouts and Political Blowback

  • Midwest farmers hurt; Trump offsets with bailouts.
  • Emily: “The great tweet today was like, why sell soybeans to China when we could just borrow from China to pay farmers to not sell soybeans to China?” [08:14]
  • Trump: “We’re gonna take $15 billion… use it to buy soy ... send it to starving children in Africa or something. It was a bit unclear, but he has it all worked out” [08:22].

• Global Strategy and Missed Opportunity

  • U.S. acting unilaterally (“Peter Navarro group”) rather than building a broad coalition (“Gary Cohn side”).
  • Jordan: “We’re losing on every single front. ... It’s such a wasted opportunity. … they are just, like, swinging a miss.” [10:24]

• China’s Response & Global Risk

  • China showing resiliency; regime and public are nationalistic and “willing to shoot themselves in the foot more times than you can” [11:31].
  • Danger: trade war could drive China to re-lever (take on more debt) and risk systemic instability—a global concern [12:47].
  • Felix: “I just don’t think, given how bad the Asian crisis was in 1998, that you could possibly imagine that a Chinese crisis would be better than that.” [13:57]

• Winners, Losers, and Supply Chain Shifts

  • U.S. farmers lose long-term trade relationships; other countries (e.g., Vietnam, Thailand) may benefit as manufacturing shifts [15:16].
  • Example: U.S. washing machine tariffs led only to higher prices, not domestic gains [15:56].

Notable Quotes

• Emily: “It’s like the opposite of everything. It’s like he’s touting how he’s raising taxes on people and doing basically communism.” [08:58]
• Felix: “The only reason that a company makes that kind of huge decision... is if they think these tariffs are really permanent.” [15:21]

Main Topic 2: Stock Market “Short-Termism”—Are Quarterly Earnings Reports a Problem?

[16:31–30:46]

A listener, Ryan, asks if the market’s obsession with quarterly reports leads to harmful short-termism.

Key Discussion Points

• The Quarterly Earnings Hysteria

  • CEOs (and investment heavyweights like Larry Fink) commonly lament “short-termism.”
  • Anna: “No.” (on whether it’s as big a problem as claimed) [18:02].
  • Examples: Companies like Amazon were allowed to grow for years without profits; investors tolerated losses for long-term vision [18:07].

• Empirical Evidence Lacking

  • Minimal evidence that short-termism leads to underinvestment in R&D or capex [18:47].
  • Market volatility around earnings often overplayed—media only reports big swings, not "business as usual" [21:53].
  • Most movements are small and rational; exceptional swings get disproportionate attention.

• Reasons for Earnings Volatility

  • Analyst models get updated; sometimes one quarter can lead to changes in future growth estimates [20:11].
  • Large moves typically occur with major surprises—undershooting or overshooting expectations.
  • Felix: "Company releases earnings and nothing happens is not news. …every quarter there are thousands of companies. Every quarter there's going to be one or two companies who really do surprise the market with their earnings and see their stock go up or down a lot as a result." [21:53]

• Why Do CEOs and Politicians Bemoan Short-Termism?

  • Calls to eliminate quarterly reporting often originate from CEOs who dislike accountability [24:03], [26:15].
  • Felix: "If you give me $1 million and say I trust you for the long term... I can do anything. … Can you just report back every quarter and tell me how you're doing with that million dollars?... No one likes accountability." [26:15]

• The Motives of the ‘Long Term’ Lobby

  • Often motivated by desire for less scrutiny and oversight rather than public or worker interest [25:39]; [25:59].

Notable Quotes

• Anna: "If short termism was actually a problem...you would be seeing the results of it, and we just simply aren't." [18:47]
• Felix: “What they mean is a lack of accountability!” (on CEO calls for “long-termism”) [26:15]
• Jordan: “These are ways of criticizing capitalism without criticizing capitalism. Right? It’s not that you want less capitalism, just longer-term capitalism.” [27:32]

Main Topic 3: Uber’s IPO—Financial Hype, Exploitation, and Gig Economy Jobs

[31:14–43:14]

Key Discussion Points

• Uber’s Record-Breaking But Controversial IPO

  • The highest profile IPO since Alibaba; company valued around $80B, despite not being profitable and with no clear path to profitability [32:09].
  • Initial investor hopes of $100B–$120B valuation didn't materialize.

• Labor Strife and Exploitation Concerns

  • Mass driver strikes accompany the IPO, with drivers protesting pay and lack of employment classification [33:39].
  • Emily: “Anyone who buys into this stock is just supporting exploitation… This is just wrong. It’s an immoral company. I’m just gonna say it.” [34:33]

• The Uber-Lyft Model—Both Damning

  • Early narratives cast Lyft as the “good” alternative due to Uber’s scandals, but both now seen as similar in labor practices [34:39].
  • Original taxi industry was exploitative; Uber arguably shifted/expanded the scale and form of that exploitation [41:44].

• Gig Economy Realities

  • Uber claims most drivers are part-timers supplementing income; data suggest many rely on it as major income [35:29].
  • Remuneration structures require drivers to work long, consecutive hours to earn decent wages; pay is "barely sustainable" [36:02].

• Consumer Pricing and Market Dynamics

  • Uber’s service is cheap (for users), subsidized by investors and driver pay [37:19].
  • Attempting to treat drivers as employees (not independent contractors) is seen as existential threat to business model [41:08].
  • Felix: “Consumers are amazingly price sensitive … The price sensitivity on car journeys is extreme. … It’s not at all clear Uber really has much scope to raise prices without losing a lot of business.” [37:52]

• Regulation and Policy Risk

  • Democratic regulatory wins could force Uber to classify drivers as employees, threatening viability [41:08].
  • Jordan: “Bernie Sanders is an existential threat to Uber.” [41:33]
  • The labor-capital split: Uber’s model mirrors exploitative taxi medallion capitalists, but at greater scale [42:19].

Notable Quotes

• Jordan (quoting Jodi Beggs): “The entire bet on Uber is that it’s going to figure out how to do driverless cars before drivers figure out what depreciation is.” [32:22]
• Emily: "If you can't run your company and treat your employees modestly well and actually call them employees, then maybe you shouldn't have your company." [41:35]

Numbers Round

[43:14–49:26]

Each host picks a number from recent news with context:

• $510 million – Disney's total write-down on its investment in Vice, exceeding the $400M invested due to tangled joint-venture holdings [44:18].
• $4,000 – On average, people whose student loans were unexpectedly forgiven (through a legal technicality) earned $4,000/year more, as per new NBER research—showing the psychological and financial unshackling effects of debt forgiveness [44:45].
• $130 – The amount charged by TurboTax to a woman in Washington for filing $376 in income, highlighted in ProPublica’s reporting on tax service "Free File" abuses [46:32].
• $50 (Australian) – 46 million Australian $50 bills printed with a typo—“responsibility” spelled incorrectly, now a collector’s item [48:17].

Notable Memorable Moments

• Emily: “The great tweet today was like, why sell soybeans to China when we could just borrow from China to pay farmers to not sell soybeans to China?” [08:14]
• Felix on CEO complaints of short-termism: “No one likes accountability.” [26:15]
• Emily on Uber: “At the end of the day, this is just wrong. It’s an immoral company.” [34:33]
• Jordan on Uber’s business model: “...it seems like the entire bet on Uber is that it's going to figure out how to do driverless cars before drivers figure out what depreciation is.” [32:22]

Episode Structure / Timestamps

• 00:14–02:09: Show opens, team reunion, birthday banter, pop culture tangents.
• 02:15–16:31: Trump’s China tariffs and trade war.
• 16:31–30:46: Short-termism: quarterly earnings, stock market behavior, accountability.
• 31:14–43:14: Uber’s IPO, labor realities, gig economy, moral dimensions.
• 43:14–49:26: Numbers Round—news nuggets and statistics.
• 49:26–51:11: Show close and host plugs.

Tone & Style

Clever, brisk, and skeptical—insights laced with punchlines and sharp analogies. The hosts combine grave economic topics with self-aware, sometimes dark humor and pop culture references, while never shying from calling out hypocrisy, bad policy, or industry malfeasance.

For First-Time Listeners

This episode showcases Slate Money’s hallmark: demystifying complex economics and finance stories, questioning conventional wisdom, and blending serious analysis with wit. Whether you’re tuning in for market insights, policy breakdowns, or animated rants about Uber or Trump, this episode delivers with energy and candor.