Slate Money – The Fertile Nigerian Blockchain Edition (Feb 17, 2018): Detailed Summary

Episode Overview

This episode of Slate Money, hosted by Felix Salmon with regular Anna Szymanski and guest Erin Griffith (Wired), delivers a lively, skeptical exploration of three major business and finance topics: the wild world of cryptocurrencies (especially issues of fraud and the psychology of crypto followers), the economics of fertility and the gender wage gap, and a major corruption scandal involving oil rights in Nigeria. The tone is witty, sharp, and at times irreverent, with the hosts not afraid to call out nonsense, question dogmas, and point out both irony and deeper social implications.

1. Cryptocurrency: Pump-and-Dumps, Tether, and True Believers

Key Segment: [05:03–26:23]

Pump-and-Dump Schemes in Crypto ([05:03])

• Listener question: A university student admits to making money in “pump and dump” crypto scams—buying obscure coins, hyping them online, then selling at a profit before the price craters.
• Is it illegal?
  • "Are pump and dump schemes illegal? Yes. Are they illegal in the cryptocurrency world? Unclear... The entire world of cryptocurrencies is extremely unregulated at this point." – Erin ([08:00])
  • Enforcement is lagging far behind the activity—regulators haven't caught up.

How Pump-and-Dump Works ([06:10])

• Buy a random altcoin on a small exchange.
• Promote it intensely on Reddit, Telegram, etc.
• Price rises; latecomers buy in, then “dumpers” sell out.
• Only the last buyers (the “greater fool”) lose.
• "The only reason to buy a coin is because it goes up in price." – Felix ([06:30])

The Tether Scandal ([08:32])

• Tether: A “stablecoin” pegged to the dollar, designed to reduce crypto volatility.
• Rumors abound about whether Tether is fully backed by real dollars, mirroring the flaws of the centralized banking systems crypto users claim to distrust.
• "The irony is that almost every part of it seems to mirror everything about central banks that cryptocurrency acolytes hate." – Erin ([09:42])

Technical Challenges and Regulatory Dilemmas

• Exchanges and wallets are frequently hacked or suffer from technical failures, e.g., Coinbase’s accidental repeated overcharges.
• U.S. exchanges like Coinbase are the most reputable; outside the U.S. it’s a “free-for-all.”
• The sector’s fundamental “trustless” premise is undermined by repeated, high-profile failures (e.g., Mt. Gox collapse).

Why Crypto Survives Despite Repeated Scandals ([11:46])

• Felix questions why “the whole thing isn’t dead” after so many trust failures.
• Erin responds: It’s a combination of short memories, technological optimism, and anti-institution populism.
• Crypto’s core supporters treat it as an article of faith, not evidence-based strategy. "People just like the idea of power to the people. And this represents that a little bit." – Erin ([13:11])

The “Religious” Mindset of Crypto Acolytes ([13:18])

• Crypto belief compared to religious fundamentalism: “There’s really nothing which can make them say anything else. There’s no—it’s an article of faith.” – Felix ([14:53])
• Even big, skeptical studies (e.g., Microsoft’s) are dismissed out-of-hand.

The Problem of Lifestyle Branding and Regulation ([15:28])

• Crypto is more than a currency—it's a lifestyle and identity.
• Community is highly resistant to regulation but increasingly recognizes some oversight is necessary to weed out bad actors.

James Altucher: The Crypto “Thought Leader” ([17:28])

• Example of how self-promoters exploit the hype cycle:
  • Altucher, a self-branded “crypto genius,” peddles expensive newsletters that may influence tiny markets.
  • He’s emblematic of a space where some make money via hustle, not conviction—by selling shovels during a gold rush, not mining gold.
• “The best example of this... [on Reddit]: are you guys finally admitting there’s some value to financial regulation because it is against the religion to want to invite any kind of regulation.” – Erin ([16:18])

Inequality in Crypto: The Hobbesian Landscape ([24:22])

• The distribution of crypto wealth is extremely unequal; most coins are owned by a tiny minority.
• Felix: "…something like terrifyingly Hobbesian about the entire blockchain world..."
• Anna: The platforms claim to democratize finance but in reality, inequality is as stark or worse than in the traditional system.

Notable Quotes:

• "If you say anything skeptical about bitcoin, you will be told by a million people you don’t understand." – Felix ([21:55])
• "...the emperor has no clothes idea; people don’t want to appear stupid, so they don’t criticize it." – Erin ([22:04])

[Transition] From Crypto to Babies ([26:23])

2. Fertility, Gender, and the Danish Wage Gap ([26:23–39:06])

U.S. Fertility Trends ([26:44])

• U.S. fertility is declining, now below replacement (1.7 children per woman). Surveyed women want more kids—2.8 on average—but are not achieving it.
• Policies in Europe show state support (childcare, family leave) correlates with higher fertility.

Denmark Study: The Motherhood Penalty ([29:48])

• Massive, persistent income gap for women after children—doesn’t recover even in egalitarian Denmark.
• Explanations:
  • Some women “drop out” or shift to part-time post-baby, echoing the patterns of their own mothers.
  • “It’s entirely a function, or nearly entirely a function, of whether their mothers did the same thing.” – Felix ([32:52])
• Corporate structure may matter: e.g., more interchangeable, flexible positions reduce the wage gap (as shown among pharmacists).

Corporate and Policy Implications ([35:23])

• Egg freezing: Nice perk or tool to keep women working longer without family break interruption? The panel is skeptical about its real value to female empowerment.
• Anna: “Hopefully more change will come from the corporate level, as both men and women ask for more flexibility.” ([38:30])
• FT story: Germany's mining union pushing for hours reduction, not more pay, signals changing priorities.

Notable Quotes:

• “There are some babies that got bitcoin when they were born... now they’re sitting on huge gazillionaire babies... buying Lamborghini diapers or something.” – Felix ([26:34])
• “Egg freezing... does feel a little Orwellian...” – Erin ([36:37])

3. Corruption in Nigeria – Oil, Bribes, and Failed Reform ([39:06–49:47])

Key Segment: [39:06–49:47]

The $1.1 Billion Oil Bribery Scandal ([39:08])

• 2011: Royal Dutch Shell and Eni (Italy) paid $1.3B to the Nigerian government for oil field rights—but $1.1B was siphoned to Malibu Oil & Gas and used for bribery, kickbacks, paying off politicians (including ex-President Goodluck Jonathan) and key ex-oil minister Dan Etete.
  • “You can’t get more cliched than former Nigerian oil minister winds up at the center of a multi-gazillion dollar bribery scandal.” – Felix ([40:27])
• Companies claim plausible deniability but evidence (cash deliveries, emails) is overwhelming.

Why It Matters

• The original “owners” of the oil field got it through political connections during the military dictatorship, then essentially extorted Shell and Eni long after.
• “Part of the reason that this guy was able to extort everyone was because he had protection in the current Nigerian government...” – Anna ([47:49])
• Money lost to corruption is money not spent on public services.
• Even global banks (including those in Switzerland, the UK, Lebanon) refused to process the suspicious funds.

The Investment Consequences

• Scandals like this erode investor confidence, increase credit risk, and undermine economic development.
• Nigeria's repeated anti-corruption campaigns haven’t produced much actual reform; such campaigns themselves can be a cover for political purges (cf. Saudi Arabia, China).

Notable Quotes:

• “If someone did something corrupt back in the ’90s under the military dictatorship, you don’t just go along with that in 2011 and say... I guess that corrupt thing was done, so now we have to pay this guy...” – Felix ([46:49])

4. Numbers Round and Memorable Moments ([50:33–End])

Anna: The Jacob Zuma Charges ([50:33])

• 783: Number of corruption charges against ex-South African president Jacob Zuma.
• Despite South Africa’s advancements post-apartheid, inequality remains stark.

Erin: Cryptocurrency Heists ([52:30])

• $50 million (250 Lamborghinis!): Value stolen in a phishing scam using Google Ads for blockchain.info, particularly devastating for underbanked populations in countries like Nigeria.
• The flaw: fake sites collect credentials, then drain digital wallets—highlighting crypto’s ongoing security and trust issues.

Felix: The Overpriced “FDA Arbitrage” Drug ([56:48])

• $2,979: Cost of Duexis, a pill combining over-the-counter Advil and Pepcid, which would otherwise cost about $15. The scam is to package old drugs together and charge insurers a fortune.
• Insurance makes customers insensitive to price, incentivizing these pharmaceutical arbitrages.

Notable Quotes:

• “[On crypto ATMs] Why do—who uses Bitcoin ATMs? They always just say, ‘Well, drug dealers obviously. Obviously.’” – Erin ([56:37])
• “This is the classic FDA arbitrage that somehow if you combine these two things into one pill, you can charge thousands of dollars for stuff you can just buy over the counter.” – Felix ([58:13])

5. Timestamps for Key Segments

• Crypto Pump-and-Dump and Regulation: [05:03–14:53]
• Tether, Trust, and True Believers: [08:32–15:28]
• Altucher's Crypto Empire and Hype Cycle: [17:28–24:22]
• Inequality in Crypto: [24:22–26:23]
• Fertility, the Wage Gap, and Denmark Study: [26:23–39:06]
• Nigerian Oil Bribery Scandal: [39:06–49:47]
• Numbers Round (Zuma, Crypto Heist, Drug Profiteering): [50:33–End]

Notable Quotes & Moments

Crypto

• “Are pump and dump schemes illegal? Yes. Are they illegal in the cryptocurrency world? Unclear...” – Erin ([08:00])
• “The only reason to buy a coin is because it goes up in price.” – Felix ([06:30])
• “If you say anything skeptical about bitcoin, you will be told by a million people you don’t understand.” – Felix ([21:55])
• “Crypto is a lifestyle brand… decentralization is better… A world without institutions is better.” – Erin ([15:37])

Fertility & Gender

• “Some babies got bitcoin when they were born… they’re billionaire toddlers… buying Lamborghini diapers.” – Felix ([26:34])
• “It’s entirely a function… of whether their mothers did the same thing.” (on the Danish wage gap) – Felix ([32:52])

Nigeria & Corruption

• “You can’t get more cliched than former Nigerian oil minister winds up at the center of a multi-gazillion dollar bribery scandal.” – Felix ([40:27])
• “If someone did something corrupt back in the ’90s under the military dictatorship, you don’t just go along with that in 2011...” – Felix ([46:49])

Numbers Round

• “It’s not the biggest hack… but, you know… this is an easy way to lose your money. You have to…” – Erin ([56:21])
• “This is the classic FDA arbitrage…” – Felix ([58:13])

Closing Thoughts

The episode is packed with sharp, entertaining analysis and skepticism about much-hyped trends (crypto, workplace gender equality policies, anti-corruption drives). It’s clear-eyed about the persistence of inequality—whether in blockchain, the boardroom, or resource-rich developing countries—and critical of financial fads, regulatory avoidance, and faux-progressive corporate perks. Regular listeners and newcomers alike will leave with a hearty dose of perspective (and perhaps a few laughs at the expense of crypto “thought leaders”).