Slate Money — “The Economy’s ‘One Guy Problem’”
Episode Summary (April 12, 2025)

Episode Overview

This week, host Felix Salmon (Axios) and co-hosts Elizabeth Spires (New York Times) and Emily Peck (Axios) tackle an extraordinary week for global economics, politics, and markets, joined by special guest Barry Ritholtz (author and investment expert). The roundtable explores the implications of the U.S.–China tariff escalations, unprecedented volatility in bond and equity markets, and the idea that global economic fate is now alarmingly exposed to the unpredictable whims of a single individual—President Trump. The panel also digs into Ritholtz’s new book, How Not to Invest, contextualizing investment advice in an era of radical uncertainty.

Key Discussion Points & Insights

1. Tariffs, Trust, and the Breakdown of Global Relationships

• Historic Tariff Escalation:
  The U.S. and China now impose tariffs exceeding 100% on each other’s goods. Salmon summarizes:

  “US tariffs on China and China tariffs on the US are both now over 100% ... The overall blended tariff rate... is going to end up somewhere in the range of 15 to 25%, which is just almost unthinkable… historically it’s been about two.” (01:06)

• Damaged Global Trust:
  Emily Peck details how, even if tariffs are rolled back, the damage to U.S. credibility is long-lasting:

  “Trust in the United States has been weakened considerably… There's tariffs everywhere... Even if we go back to status quo, it's still status woe, I think.” (04:13)

• Increased Chinese Soft Power:
  Spires notes the irony that the tariffs make China seem like a more reliable trade partner than the U.S.:

  “It's probably increasing China's soft power... it's made China seem like they're a far more reliable trading partner than we are.” (05:50)

2. Best and Worst Case Scenarios for the U.S.

• Optimistic View (Negotiation Tactic):
  Ritholtz hopes the tariffs are merely a bargaining chip, not permanent:

  “Best case scenario is, hey, these are negotiating tactics ... we'll look back at this the way we look back at the Flash crash and some other very short [events].” (02:38)

• Pessimistic View (Collapse of 'Pax Americana'):
  The worst case is much more dire:

  “The worst case scenario is Trump has rolled the dice and it comes up snake eyes... First and foremost... all of our outside creditors stop financing us... The dollar as the world’s reserve currency… goes away… Just look at post-empire Britain…” (07:02–09:40)

• Every Asset at Risk:
  Salmon underlines how these moves jeopardize the “exorbitant privilege” of the U.S. dollar and the nation's unique ability to borrow cheaply:

  “For more than 50 years, America’s greatest export has been debt... we’ve been able to borrow money at extremely attractive rates because of that exorbitant privilege…” (10:23)

3. Explaining Trump’s Economic Instability — The ‘One Guy Problem’

• Unpredictability Redefines Markets:
  Ritholtz notes, “We've never had markets swing back and forth based on the whims of one person… He is consistent because he has been a fan of tariffs his whole adult life…” (13:42)

• Policy by Perception:
  The hosts joke about indicators for interpreting Trump’s next move:

  “What did he have for breakfast? Okay, let's figure out what happens next?” (28:22)

• Theory: Trump as ‘Entertainer in Chief’:
  Spires asserts, “My Occam’s Razor theory about this is that Trump is largely economically illiterate... when he does this... that's what entertainers do, keeping people guessing. And it's just a terrible way to run the economy.” (13:22)

4. Market Volatility: Unprecedented Swings

• The Numbers Tell the Story:
  Salmon recaps the market’s wild ride post-tariffs:

  “Thursday, April 3, was the first day after the tariffs… 5% loss... 6% drop… 8.5% up on a false headline… down 6.8%... up 9.5%… down 6.3%... This is super, super insane volatility like we only see in periods of extreme crisis.” (21:05)

• Algorithms Exacerbating Moves:
  Ritholtz: “When you see that sort of up and down craziness, it's telling you that there is some new information that the market hasn't digested yet…” (22:38)

• Contrast: Fed Communication vs. White House Chaos:
  Ritholtz again: “The way they [the White House] were implemented [tariffs] was just so heavy handed and just so amateurish and the market is showing you why.” (25:40)

5. Radical Uncertainty: When No One Knows Anything

• Risk vs. Uncertainty vs. Radical Uncertainty:
  Salmon cites Mervyn King and John Kay’s “Radical Uncertainty” to explain that not only are outcomes unknowable, but the set of possible outcomes is also unknown:

  “That world of radical uncertainty is a world where the stock market cannot do a discounted cash flow analysis on future profits… because they have no idea what the world is going to be tomorrow.” (26:28)

• The ‘One Guy’ Makes All Planning Pointless:

  “We are in a totally different environment now... that goes back to what Barry was saying about the one guy problem.” (27:47)

6. Flight to Quality… with Nowhere Safe

• Global Sell-Off:
  Salmon points out the paradoxical “flight to safety” where no assets seem safe:

  “There's a flight to safety, but there's no safety in treasury bonds, there's no safety in the dollar... Everything everywhere is going down.” (31:19)

• Long-Run Implications:
  Salmon predicts capital will flow out of the U.S. for years:

  “We are going to see years and years of capital flows out of the United States… What we are seeing in the dollar right now could just be the beginning of a very long and much, much bigger trend.” (32:05)

7. Investor Guidance in a Crisis

• No Place to Hide:
  Ritholtz: “There's nothing to buy. There are nowhere to hide, Emily.” (33:48)
  He reminds listeners that China, while a problematic trade partner, is deeply integrated into the global economy—making confrontation perilous.

• Key Takeaway from Ritholtz’s Book: Don’t Panic

  “Don’t make any kind of investment decisions in the middle of a crisis.” (35:56)
  “Your entire investment success is dependent upon you controlling your limbic system... If you fail to control your limbic system, you will die poor.” (Quoting Bill Bernstein, 36:09)

• Diversification Is Survival:

  “You need a portfolio... robust enough to survive this sort of nonsense or Brexit and Grexit or even the financial crisis. And that means being diversified, owning the world, even when the entire world feels like it's going down the crapper.” (37:16)

8. Retirement and the “Sequence of Returns” Problem

• Why Timing Matters:
  Ritholtz explains,

  “This is called the sequence of returns problem… If the first couple of years of my retirement are [bad years]... there’s a genuine chance that I’m going to outlive my money.” (41:59–44:27) “Bill Sharp has called this the thorniest problem in all of finance...” (41:59)

• You Can't Rely on the Past:
  Attributed to Paul Graham, Ritholtz reads:

  “Experts are experts in the way the world used to be... You have to be really cautious when you extrapolate that expertise forward.” (46:43)

9. Behaviour of Individual Investors Has Changed

• Buy-the-Dip Mentality:
  Salmon observes, “Individual investors, whenever stock markets plunge, they pour in and buy aggressively... No one is panicking and no one is selling.” (49:27)

• Past Performance May Not Predict the Future:
  Ritholtz: “Until people get spanked, until their muscle memory is broken and oh, this doesn't work. Hey, it's been working for 15 years. Why are we going to stop now?” (50:25)

10. Numbers Round — Lighthearted Endnotes

• Notable Figures Shared:
  • Spires: 20% rise in egg dye kits purchased this Easter—even with high egg prices—citing consumer nostalgia in turbulent times. (52:14)
  • Salmon: 18,000 chicks sold by Family, Farm & Home in Q1 2025, up from 1,700 prior year, as home egg-raising grows. (53:00)
  • Peck: 80% of Chinese box office now from domestic movies, up from 60% before 2020, reflecting decoupling and its effect on Hollywood. (53:52)
  • Ritholtz: 31% of investors who panic-sold during a crisis never return to equities, missing subsequent market rallies. (55:16)

Memorable Quotes

• Elizabeth Peck: “Even if we go back to status quo, it’s still status woe, I think.” (04:59)
• Felix Salmon: “For basically more than 50 years, America’s greatest export has been debt…”
• Barry Ritholtz: “We've never had markets swing back and forth based on the whims of one person.” (13:42)
• Elizabeth Spires: “My Occam’s Razor theory about this is that Trump is largely economically illiterate... that's what entertainers do, you know, keeping people guessing. And it's just a terrible way to run the economy.” (13:22)
• Barry Ritholtz (on panic selling): “31% of people who panic, sell into market corrections and crashes, never return back to equities. And so... when we look back at 08,09... almost one in three of those people say, ah, this equity thing isn't for me. And they then proceed to miss one of the greatest decades in stock market history.” (55:16)
• Barry Ritholtz: “Your entire investment success is dependent upon you controlling your limbic system… If you fail to control your limbic system, you will die poor.” (36:09)
• Felix Salmon: “There’s a flight to safety, but there’s no safety in treasury bonds, there’s no safety in the dollar… Everything everywhere is going down.” (31:19)

Notable Time Stamps

• Tariff escalation context — [01:06–04:59]
• Discussion: Best and worst economic scenarios — [07:02–12:05]
• Market swings and investment algorithms — [21:05–26:28]
• Radical uncertainty and the ‘one guy problem’ — [26:28–28:22]
• No place to hide for investors — [33:09–35:43]
• Ritholtz’s advice on investing during crisis — [35:43–38:57]
• Retirement math and ‘sequence of returns’ — [40:08–44:59]
• Numbers round (fun facts) — [52:10–56:49]

Conclusion

In a period of historic volatility, the hosts and guest Barry Ritholtz deliver a wide-ranging, candid discussion of how the U.S. economy and markets face threats not just from policy, but from the unpredictable personal style of one man at the helm. Markets, allies, and individual investors are left reeling not only from tangible events (tariffs, bond yield spikes, currency shocks) but from a new age of radical uncertainty—“the one guy problem.” The key lesson for listeners is humility, diversification, and resisting the temptation to make big moves when nerves are frayed and uncertainty reigns.

Full episode hosted by Felix Salmon, Elizabeth Spires, Emily Peck, with guest Barry Ritholtz.