Slate Money: The Dread Pirate Trump Edition – March 10, 2018

Main Theme:
This episode delves into the week's most significant business and finance news, focusing on Gary Cohn’s resignation, Trump’s tariffs and their political-economic implications, land reform tensions in South Africa, and the politics of banking deregulation in the U.S. The tone is sharp, witty, and irreverently wonky, characteristic of hosts Felix Salmon, Anna Szymansky, and Jordan Weissman.

1. Tariffs, Gary Cohn’s Departure, and the Trump Economic Team

[00:14 – 16:45]

Key Discussion Points

• Gary Cohn resigns as head of the National Economic Council, seen as the "most financially literate" member of the Trump administration, after losing the battle over steel tariffs.
  • “Donald Trump comes out in the photo op... and announced these steel tariffs. And so Gary Cohn, in a fit of high dudgeon, decides that now is the best possible time for him to pick up his toys and throw them out the plant cram and leave.” — Felix Salmon [03:51]
• Debate over Cohn’s career trajectory, Wall Street’s “revolving door,” and who benefits post-administration.
  • Anna: Cohn “came in for tax reform and infrastructure,” but “private-public partnership” infrastructure won't happen. [04:41]
  • Discussion of whether Cohn might join another bank, start a fund, or struggle due to association with Trump.
  • “There’s a lot of priority examples of senior Goldman Sachs types leaving Goldman Sachs to run other banks and not doing very well.” — Felix [06:23]
• Broader critique of Washington/Wall Street careerism:
  • “It seems that as far as Dina Powell is concerned, at least it was. And you can probably say the same thing for Hope Hicks, who I'm sure is incredibly employable right now... and quite a few of the other Trumpists.” — Felix [09:57]
  • Anna: It’s “unfortunate because it justifies this administration in a way I think it shouldn't.” [10:40]

Notable Moments & Quotes

• On Trump’s use of “globalist” as an epithet:
  • “I actually have this theory that Trump may be draining the anti Semitism from the phrase because he just doesn't understand anyway.” — Anna Szymansky [03:05]
• On Cohn’s rapport with Trump:
  • Anna: “I mean, for a hot second, Trump seemed to be considering him for Fed Chair until Cohn pissed him off by with the whole, his response to Charlottesville.” [09:09]
• The “Dread Pirate Trump” analogy:
  • Felix likens Trump’s negotiation style on tariffs to The Princess Bride, threatening Canada and Mexico with tariffs one day at a time:
  • “It seems like Donald Trump is saying that to Canada, like, every day. Like, I think, I'll leave you alive. I'll keep NAFTA alive today, but I'll probably kill it in the morning.” — Felix [13:16]

Timestamps

• [00:14] – Show begins, topic preview
• [01:46] – Gary Cohn resignation discussion starts
• [03:51] – Cohn’s loss on tariffs and resignation
• [09:52] – Pros/cons of joining Trump administration, career impacts
• [12:02] – Discussion of consequences and ongoing tariff negotiations
• [13:05] – “Dread Pirate Trump” analogy

2. White House Factions: Protectionists vs. “Globalists”

[13:50 – 16:43]

• After Cohn, protectionist voices (Peter Navarro, Wilbur Ross, Robert Lighthizer) gain influence vs. slim remains of the “globalist” camp (mainly Steven Mnuchin and “Javanka”).
• Trump’s policy direction depicted as impulsive and transactional:
  • “He’s going to go country by country and try to decide who's playing nice with us and then set the tariff based on that.” — Anna [15:25]
  • “What counts as playing nice is just like the President being nice to Donald Trump on the telephone.” — Felix [16:24]
• On unpredictability: “No one knows how any of this is going to go.” — Anna [16:21]

3. South Africa: Land Reform and Economic Symbolism

[17:04 – 29:33]

Key Discussion Points

• Western media exaggeration: South Africa is not actively expropriating land—just considering constitutional amendments allowing such action.
  • “A proposal... to expropriate land without compensation... has been adopted by the ANC. As a result, they're now creating a committee... to amend the constitution.” — Anna [17:31]
• President Cyril Ramaphosa, though technocratic and market-friendly, is compelled by politics to support radical land reform rhetorically.
• Historical context:
  • “Land was just stolen from the black farmers in South Africa. They certainly did not receive compensation... but that does not mean that land should be seized now.” — Anna [18:58]
• Economic realities:
  • Agriculture now a small % of the economy; redistribution likely to have limited impact on inequality.
  • “What you really need are... wealth transfers in terms of cash payments. You need spending on infrastructure, you need spending on education...” — Anna [20:26]
• Concerns over setting constitutional precedent, fears of Zimbabwe scenario, but skepticism it will escalate that far.
• Market risk:
  • “It doesn't change the reality that property rights are important.” — Anna [27:57]
  • Both Anna and Felix see more risk than reward; argue for wealth taxes over land seizures.

Quotes & Notable Moments

• “If you want to redistribute wealth, tax the wealth... there’s symbolic value to the land.” — Anna [28:18]
• “You are creating a mechanism that could be abused in the future.” — Anna [29:03]

Timestamps

• [17:04] – South Africa segment begins
• [18:12] – Constitutionality and process
• [20:10] – Who, how, and what gets expropriated?
• [21:26] – Zimbabwe precedent discussed
• [22:43] – Why land reform is a perennial political issue
• [29:03] – Risks of setting new constitutional precedent

4. U.S. Banking Deregulation, Community & Custody Banks, Dodd-Frank

[29:35 – 48:46]

Key Discussion Points

• Congress moving to roll back sections of Dodd-Frank, with debate on impact on small banks, regional banks ($50–250B assets), and the giants.
  • “Is there any sign that... small banks are in trouble... other than that they've been disappearing for decades because the entire industry has been consolidating?” — Jordan Weissman [31:40]
• Community banks
  • Serve local credit needs, have conservative balance sheets, but profit pressures drive consolidation.
• Jordan and Anna spar over whether compliance costs justify deregulation for small banks, and what counts as “too big to fail.”
• Custody banks (State Street, BNY Mellon, Northern Trust):
  • Debate over easing leverage requirements for custody banks due to their unique, low-risk business model.
  • Concern: Law’s language might unintentionally benefit JP Morgan and Citibank, letting them lower their overall leverage requirement.
  • Anna: “I do think lifting them [leverage rules] makes the system safer... [by] deincentivizing institutions to hold lower risk assets because they end up having a higher cost of capital...” [47:53]

Quotes & Notable Moments

• “If you have $100 billion of assets, you should totally have regulators reading down your neck making sure that you’re not discriminating.” — Felix [36:36]
• “All of those credit numbers you're just quoting are all during a period of historically low interest rates...” — Anna [39:49]
• Anna on custody banks: “Because they're not doing the normal things that a bank does. You're taking your customers deposits. The customers are always going to have some cash there... they're just parking at either the central bank or they're putting it in really liquid securities. Treasuries...” [43:47]

Timestamps

• [29:35] – Dodd-Frank and community banks
• [34:24] – Reporting requirements and discrimination
• [38:19] – SIFI threshold debate ($50B to $250B)
• [42:10] – Supplemental leverage ratio for custody banks
• [46:04–48:46] – Wrapping custody bank debate

5. Numbers Round (Labor Market, Philanthropy Lawsuit, Health Insurance Merger)

[48:46 – END]

• Prime age employment-to-population ratio up to 79.3%.
  • “It's very close to the all time high of 81.9... in the dot com boom in 2000.” — Felix [49:21]
  • Jordan: “As far as I'm concerned, this is the most important labor market indicator... just eliminates a lot of the problems with the unemployment rate...” [50:28]
  • Jordan’s mini-rant: “Just leave shit alone. That is... if you just watch. All the Fed has to do is watch that indicator...” [52:42]
• $100 million University of Chicago philanthropy lawsuit:
  • “The Pearson family... are suing the University of Chicago to get their money back... classic example of a family trying to sort of micromanage where their money goes.” — Anna and Felix [52:59–53:54]
• $52 billion: Cigna acquires Express Scripts (healthcare market consolidation).
  • Jordan: “You’re seeing the kind of entire healthcare industry turn into... huge conglomerates... I don't think it’s actually gonna help patients because nothing does.” [55:48]

Memorable Quotes Hall-of-Fame

• “I actually have this theory that Trump may be draining the anti Semitism from the phrase [globalist] because he just doesn't understand anyway.” — Anna [03:05]
• “It's like we've entered the Jurassic period of American health care or something.” — Jordan [56:53]
• “Leave all this shit alone.” — Jordan [52:44]

Segment Timestamps (Quick Reference)

• [00:14] — Start, episode theme
• [01:46] — Gary Cohn, tariffs
• [09:52] — Revolving door, careers after Trump admin
• [13:05] — “Dread Pirate Trump”/tariff negotiation
• [17:04] — South Africa land reform
• [29:35] — Dodd-Frank, community and custody bank policy
• [48:46] — Numbers round

Summary Style & Tone:
Wry, bantering, and densely packed with insight, the episode delivers astute yet accessible analysis, with occasional nerdy deep-dives — like the Princess Bride “Dread Pirate Trump” moment [13:05] and dry humor on data and inertia (“leave all this shit alone” [52:44]). The hosts balance wonky detail with sharp-edged commentary, always ready to question political and financial orthodoxy.