Slate Money: The Blackmail Episode

Date: May 15, 2021
Host: Felix Salmon (A), with Emily Peck (B), Stacey Marie Ishmael (C), Guest: Brad Stone of Bloomberg (D)

Episode Overview

This episode of Slate Money centers on blackmail and extortion as contemporary business risks, examining high-profile ransomware incidents (like the Colonial Pipeline attack) alongside the infamous National Enquirer scandal involving Jeff Bezos. The episode features extensive insights from Brad Stone, whose new book explores Amazon’s evolution, Bezos' midlife transformation, and the company’s sprawling, sometimes ruthless approach to disruption. The discussion also branches into cyber insurance, labor disruption, and how the personal quirks of powerful tech billionaires shape entire marketplaces.

Key Discussion Points and Insights

Ransomware & the Colonial Pipeline Incident

[00:58 - 10:38]

• Ransomware as a Growing Business Threat
  • The Colonial Pipeline, critical US infrastructure, was shut down by a professionalized ransomware group—highlighting “ransomware as a service.”
  • Felix Salmon: “It’s a classic example of the prisoner’s dilemma and the collective action problem…” [03:59]
• Cyber Insurance & Moral Hazard
  • Insurance payouts make paying ransoms easier, encouraging more attacks (“market for it”).
  • Emily Peck: “The insurance encourages the hacking. It creates a market for it. It’s like flood insurance in flood-prone areas… [05:40]
  • Stacey Marie Ishmael: “The most sophisticated players…have red teams…always trying to see where their own vulnerabilities are. The courthouses and police departments…are at increasing risk.” [06:25]
• Professionalization of Ransomware
  • Even ethics codes: groups like DarkSide claimed they wouldn’t attack hospitals.
  • Smaller entities increasingly vulnerable as more move operations online.
• The Bitcoin Factor
  • Cryptocurrency has enabled ransomware to flourish.
  • Felix Salmon: “Ransomware barely existed before Bitcoin made it incredibly profitable.” [09:32]
  • Bitcoin “mixers” launder ransom payments for anonymity.

The Bezos/National Enquirer Blackmail Scandal

[13:54 - 18:12]

• How Did the Scandal Unfold?
  • Jeff Bezos’ private messages were leaked to the National Enquirer through Lauren Sanchez's brother, who sold them for $200,000.
  • AMI (parent company of the Enquirer) tried to strong-arm Bezos into stopping suggestions of political motivation in their reporting—skirting close to explicit extortion.
  • Brad Stone: “The minute that he presents this list of…material…then there’s an implicit extortion attempt there.” [13:56]
• Bezos’ “Jujutsu” Countermove
  • Bezos publicly exposed AMI’s attempted extortion by publishing their emails, wrapping himself in the mantle of free press and “Democracy Dies in Darkness.”
  • Emily Peck: “He manages to distract everyone’s attention…a brilliant PR move.” [16:13]
  • The incident blurred lines between tabloid scandal, corporate PR, and national politics.
  • Investigations found no credible evidence tying the Saudis or Trump administration to the hack.

The Evolution of Jeff Bezos: From Geek to Global Celebrity

[18:12 - 21:37]

• Bezos’ Midlife Crisis and Transformation
  • Brad Stone describes Bezos’ journey from “spindly tech nerd” to “cash-splashing midlife crisis billionaire” (yachts, parties, mansions, PR calculations).
  • Brad Stone: “I think…Jamie Dimon…describes Jeff’s eyes opening up to a larger world. It’s kind of the nerd coming out of his shell.” [19:33]

Amazon’s Hollywood Ambitions & Prime’s Value Proposition

[21:37 - 27:18]

• Why Amazon Invested in Hollywood
  • The shift from two-day shipping as Prime’s prime attraction to Prime Video as the center.
  • Manufacturing their own content became necessary to compete with Netflix, Disney, etc.
  • Brad Stone: “Prime Video is really sort of now the main course in the meal of prime membership.” [23:23]
• Prime as a Product: User Experience & Complexity
  • The tangle of services under Prime, from video to game streaming, often confuses users.
  • Stacey Marie Ishmael: “I feel very similarly about Prime…these are things we think will be useful to customers…these are things we think are innovative…” [24:50]
• The Single Cow Burger Anecdote
  • A prime example of Bezos driving eccentric innovation—obsessed with a burger made from a single cow, regardless of consumer demand.
  • Brad Stone: “He asks for a single cow burger…The logic was…Bezos wants to put a little twist or some unique aspect to everything.” [27:24]

Is Amazon Really a Disruptor—Beyond Books?

[30:42 - 39:34]

• Supermarkets, Pharmacies, and the Reality of Disruption
  • Outside of books, Amazon’s entrance into sectors like grocery or pharmacy has not always translated to immediate industry upheaval as initially feared.
  • Brad Stone: “Sometimes the immediate estimation from the market is that, ‘Oh, big bad Amazon is coming to town,’ and that’s simply not the long term reality.” [33:29]
• Labor, Marketplace, and Globalization
  • Amazon’s harsh labor practices ripple across economies; their contractor-based, fissured workforce accelerates income inequality.
  • Emily Peck: “Perhaps Amazon has disrupted labor and work…That’s had ripple implications for labor across the country.” [34:35]
  • US marketplace sellers, once vocal proponents, now feel “carnage on the side of the road” due to Amazon’s globalization strategy.

The Paradox of the Ruthless, Empathy-Lacking Tech Titan

[39:34 - 44:15]

• Amazon Culture: Ruthlessness and Empathy Deficit
  • Stories of cutthroat behaviors, workplace cruelty, and favoritism for “builders” who burn out.
  • Brad Stone: “…all of these tech magnates…are operating on…a different part of the spectrum…There are some elements missing…maybe it’s that little empathy gene…” [41:31]
  • Stacey Marie Ishmael: “The tolerance for that behavior up to a certain point…but as long as the results are there…” [42:16]
• Leadership Failures
  • Cases of Bezos misjudging or trusting the wrong people—including a disastrous appointment of a country chief with a violent criminal outcome.

The Human Cost: Stories from Amazon Employees

[44:15 - 48:33]

• Impact on Workers
  • Warehouse workers’ stories highlight Amazon’s immense leverage as an employer—with better pay than competitors but significant hardships.
  • Emily Peck: “She had to ask him [manager] to go [to the bathroom], which is…for a pregnant woman, kind of a nightmare.” [46:16]
• Company Towns and Societal Influence
  • Amazon’s massive presence in local economies changes the fabric of cities—altering rents, jobs, and small business survivability.

Memorable Quotes & Moments

• “Ransomware as a service, which I love. The idea that this has become professionalized…like SaaS-based criminals.”
  —Felix Salmon [01:03]
• “It’s a classic example of the prisoner’s dilemma and the collective action problem...”
  —Felix Salmon [03:59]
• “The insurance encourages the hacking. It creates a market for it.”
  —Emily Peck [05:40]
• “All insurance is a form of moral hazard.”
  —Felix Salmon [06:06]
• “Bitcoin has made it super easy and fun to blackmail companies…Ransomware barely existed before Bitcoin.”
  —Emily Peck & Felix Salmon [09:01, 09:32]
• “There’s an implicit extortion attempt there…The jujitsu move was brilliant—Bezos…just publishing the emails.”
  —Brad Stone [13:56]
• “He manages to distract everyone…a brilliant PR move. This is why I bought the Washington Post, so I can wrap myself in the mantle of democracy.”
  —Emily Peck [16:13]
• “He’s human.…his tastes are leaving the planet earth and going into some bizarre orbit…where you have single cow burgers.”
  —Brad Stone [19:33, 28:24]
• “Amazon’s profits go to buy more Amazon…It’s just this sort of self-perpetuating machinery that Bezos has ingeniously created.”
  —Brad Stone [54:06, 54:59]
• “There’s a tolerance for that behavior up to a certain point…but as long as the results are there.”
  —Stacey Marie Ishmael [42:16]

Notable Timestamps

• [00:58] – Colonial Pipeline and the ransomware epidemic
• [05:40] – The moral hazard of insurance in cyberattacks
• [09:32] – Bitcoin’s role in criminal cyber activity
• [13:54] – Brad Stone explains the Bezos blackmail story
• [19:33] – Bezos’ transformation and “midlife crisis”
• [23:23] – Amazon Prime’s shifting value proposition
• [26:51] – The “Single Cow Burger” and quirky innovation
• [33:29] – Amazon’s ambitions vs. real-world disruption
• [34:35] – Labor and the new world of Amazon marketplace
• [44:15] – Amazon’s workplace culture and employee burnout
• [46:16] – Personal stories of warehouse worker struggles
• [48:41] – Numbers round with quirky and insightful stats

Tone and Style

• The conversation is energetic, fast-paced, occasionally cynical, and features both playful banter and sharp critique. Guest Brad Stone provides measured, well-researched perspectives while the hosts oscillate between awe and skepticism regarding Amazon and tech power.

Conclusion

This episode of Slate Money is both a forensic analysis of recent business scandals involving blackmail and a wide-ranging critique of Amazon’s economic, cultural, and human impact. The hosts and Brad Stone don’t shy away from exposing the contradictions and moral hazards of modern tech capitalism—offering memorable vignettes, data points, and uncomfortable truths for anyone interested in how money, risk, and personality drive the 21st-century business world.