Slate Money: "The Fiscal Genie"

Date: November 7, 2020
Host: Felix Salmon (Axios)
Co-hosts: Emily Peck (HuffPost), Anna Szymanski (Breaking Views)

Episode Overview

In "The Fiscal Genie," the hosts of Slate Money digest a whirlwind week in business, finance, and politics. Recorded just after the 2020 U.S. presidential election, the episode tackles what a likely Biden presidency with a Republican Senate will mean for economic policy, takes a deep dive into the dramatic halt of what would have been the world's largest IPO from China's Ant Group, and breaks down a significant new antitrust lawsuit against Visa. The hosts maintain their signature mix of wit, skepticism, and clear-eyed analysis throughout, bringing listeners up to speed on crucial business news amid the distraction of election headlines.

Key Discussion Points & Insights

1. The U.S. Election Fallout and Economic Implications

The Gridlock Scenario

• The hosts assume, based on available results, a Biden presidency and a Republican-controlled Senate.
• Emily: Expresses concern about Biden facing a "Pyrrhic victory"—winning the presidency but being unable to get significant legislation, like stimulus bills, through due to Senate opposition. ([01:47])

  "It's going to be tough getting this recovery to really stick and getting any stimulus passed. Mitch McConnell has already signaled, you know, he's going to make life difficult for Joe Biden." — Emily ([01:47])

• Felix: Notes that, based on Senate race outcomes, "the American people voted against Biden controlling the Senate and Democrats controlling the Senate." ([02:44])

Are Americans Really Rejecting Progressive Policies?

• Emily: Cites ballot measure results (e.g., $15 minimum wage in Florida) to argue that progressive economic policies remain popular, even where Democratic candidates struggle.

  "Red states passed marijuana legalization...there's some weird disconnect between reality and propaganda." — Emily ([03:57])

• Anna: Counters, suggesting America is "not an extremely liberal electorate" and that support for issues like raising the minimum wage doesn't always transfer to federal Democratic control. ([05:24])

Is More Stimulus Coming?

• Hosts debate whether the Republican Senate will allow additional COVID-19 stimulus:
  • Anna: Suggests COVID has "let the fiscal genie out of the bottle," and that at least some further stimulus seems likely due to constituent demand and economic need. ([05:24], [09:53])
  • Felix: Skeptical. Predicts a hard pivot to deficit hawkishness as soon as Biden takes office, referencing Ted Cruz's statements as evidence. ([07:06])

    "The minute you have a Democrat in the White House...every single Republican senator gets religion on fiscal problems and deficits matter." — Felix ([07:06])

• Emily: Adds that improving jobs numbers reduce the urgency for stimulus, especially among Republicans. ([08:21])
• All agree that one of the hardest sells will be any bailout for state and local governments, with Felix arguing that without this, "no stimulus is going to be adequate." ([11:39])

The Georgia Senate Runoffs—A Slim Chance for Democrats

• Felix notes that two Georgia Senate seats still up for runoff could, in principle, tip control of the Senate.

  "It is entirely possible, not probable, but possible, that the Democrats will win both of those seats..." — Felix ([14:46])

2. Ant Group IPO Pulled—Chinese Tech Hits the Wall

The Sudden Halt

• Ant Group (formerly Ant Financial), the mammoth Chinese payments and fintech company, was about to launch a record-setting $37 billion IPO.
• Chinese regulators intervened 36 hours prior, citing new rules and concerns that Ant is effectively a bank and should be regulated as such. ([16:11])
• Anna: Suggests this signals the end of a "honeymoon" between the Chinese government and its rising tech companies. Says the move was also about "sending a message to Jack Ma and to Ant." ([16:50])

Felix’s Take—Not All of Chinese Tech Is in Peril

• Felix draws a line between Ant/Alibaba and the wider tech sector, suggesting the government’s real target was monopoly risks in finance rather than tech innovation generally.

  "I think this is very much focused on Alibaba, Ant...because they are not tech, they are a systemically important financial institution." — Felix ([18:22])

Rational Regulation or Political Punishment?

• Emily: Argues the government's action was not rational regulation, but a reaction to Jack Ma's speech criticizing Chinese regulators—likening the episode to "a little trumpy." ([21:44])
• Felix: Agrees, calling the last-minute intervention “insanity” and suggesting it was a “childish reaction.” ([22:06])
• Anna: Notes the proposed regulations could "potentially cut [Ant's] valuation in half." ([23:21])

Ant Group vs. U.S. Equivalents

• Emily: Asks if anything like Ant exists in the U.S.; consensus is no, mainly due to differences in banking access and regulatory fragmentation. ([24:44])
• Anna: U.S. banks issue loans widely, removing the need for a company to serve a similar role to Ant; payment systems and digital innovation are also far less centralized than in China. ([27:18])

3. Visa, Plaid, and Antitrust—Payments Monopoly Spotlight

The Visa-Plaid Antitrust Suit

• Visa’s attempted $5.3B acquisition of fintech startup Plaid faces a DOJ lawsuit. The lawsuit is based on evidence that Visa sought to buy Plaid as "insurance," to quell a significant future competitor in the debit payments space. ([28:58])

  "In this communication, you literally have people at Visa saying, we are buying this as an insurance policy." — Anna ([28:58])

• Plaid was planning to allow direct payments from bank accounts (pure ACH), which could undercut the lucrative Visa/MasterCard “rails.”
• Felix: Explains, with payments “geekery,” that Plaid’s model could provide the same functionality as debit cards but much cheaper and outside Visa’s ecosystem. ([30:22])

A New Era for Antitrust in Finance?

• Emily: Sees the lawsuit as evidence of a new, more proactive antitrust posture—contrasting it with past "whiffs" on tech mergers like Facebook's purchase of Instagram and WhatsApp. ([31:56])
• Anna: Suggests antitrust cases may be more straightforward in finance due to direct consumer harm; sees this as a useful precedent. ([33:29])

Interesting Comparison: Visa in the U.S. vs. Ant Group in China

• The DOJ's approach places U.S. payment monopolies under scrutiny, but, says Felix, Ant’s domination in China is even more drastic. ([32:30])

4. Numbers Round—Noteworthy Election Outcomes and Curious Markets

• Emily:
  Number: 4 – The number of states (NJ, SD, MT, AZ) legalizing recreational marijuana on Election Day, with Mississippi legalizing medical marijuana. ([34:09])

  "There was a clear winner on Tuesday, despite what you may think. And that winner was drugs." — Emily ([34:18])

• Felix:
  Number: 70,000 – Bitcoins ($1 billion worth) seized by the U.S. government related to Silk Road. Puzzled by the market reaction, as Bitcoin’s price rose despite the huge potential dump on the market. ([35:45])

  "Never try to make sense of moves in the bitcoin market because it just never makes sense." — Felix ([38:10])

• Anna:
  Number: 60% – Voters in Austin, TX, who approved a major public transportation ballot measure. Points to nationwide support for public transit funding on Election Day. ([38:17])

Notable Quotes & Moments

• Felix [07:06]:
  "The minute you have a Democrat in the White House...every single Republican senator gets religion on fiscal problems and deficits matter."

• Emily [34:18]: "There was a clear winner on Tuesday, despite what you may think. And that winner was drugs."

• Anna [28:58]:
  "In this communication, you literally have people at Visa saying, we are buying this as an insurance policy."

• Emily [21:44]: "[The halt of Ant’s IPO] makes the Chinese government look a little trumpy. Right? I mean, it doesn't seem like 100% rational."

• Felix [18:22]: "This is very much focused on Alibaba, Ant...because they are not tech, they are a systemically important financial institution."

Memorable Moments (with Timestamps)

• 08:21: Emily observes that improving jobs numbers diminish the "urgency" for more congressional stimulus.
• 14:46: Felix clings to "optimism" based on possible Democratic Senate wins in Georgia and Alaska runoffs.
• 18:22: The panel splits on whether the Ant crackdown is an anti-tech move or a targeted anti-monopoly action in finance.
• 30:08: Emily delights in Visa’s internal "underwater volcano" doodle depicting Plaid’s hidden threat—one of the most fun discoveries of the episode.
• 34:09: Numbers round: Emily’s win for "drugs," Felix’s for "Bitcoin," Anna’s for "public transportation."

Segment Timeline

• 00:10–15:47: U.S. Election results: what divided government means for fiscal policy, stimulus prospects, and the fate of state/local governments.
• 15:47–27:42: Ant Group IPO debacle: the calculus of Chinese regulators, tech vs. finance in China, and U.S.-China fintech differences.
• 27:42–34:02: DOJ's Visa/Plaid lawsuit: disruption in payments, antitrust momentum, and innovation threats.
• 34:02–38:51: Numbers Round: Post-election ballot measures, bizarre market reactions, and optimism for public transit.

Tone & Language

• Conversational, skeptical, data-driven, and laced with humor
• The hosts candidly disagree and tease each other but maintain sharp, accessible explanations—especially on complex finance topics.

For Further Exploration

• The panel teases a bonus "Slate Plus" conversation on social media companies’ handling of disinformation and election narratives—promising more insight for subscribers.

This summary delivers the episode's core themes, arguments, and candor, offering a concise but comprehensive map for those who want to grasp the conversation's depth and flavor without listening in full.