The Give People Money Edition

Summary

Slate Money Podcast

"The Give People Money" Edition

Date: July 14, 2018
Host: Felix Salmon (Slate)
Panelists: Anna Szymanski (Slate), Emily Peck (Huffington Post)
Guest: Annie Lowrey (The Atlantic), author of "Give People Money"

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Episode Overview

This episode explores Annie Lowrey’s new book “Give People Money,” focusing on the idea of Universal Basic Income (UBI), the societal choices around poverty, and the feasibility of reducing or eliminating poverty in the United States. The panel also discusses the Turkish lira crisis and the nature of "self-made" wealth, centering on Kylie Jenner and the valuation of her cosmetics business. Throughout, the conversation questions the narratives about poverty, wealth, and the myths that shape public policy and business.

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Key Discussion Points and Insights

1. Annie Lowrey’s Book – “Give People Money” ([02:14–18:12])

The central thesis:

• Explores Universal Basic Income less as a definitive solution and more as a framework for rethinking welfare and anti-poverty programs.
• Focus on making assistance simpler, more universal, and less punitive (“no pee-in-a-cup to get it type thing” – Annie Lowrey, 03:12).

Poverty as a Societal Choice:

• “Poverty is a choice that we make as a society, whereas we're often taught that it's a choice that people make themselves.” (Emily Peck, 06:54)
• The U.S. has the resources to eliminate poverty and child poverty, but policies are not directed toward this goal:
  “In a country that's as rich as the United States ... we elect to have poverty ...” (Annie Lowrey, 05:29)
• UBI is already being trialed worldwide, with programs in low-income countries showing significant results (examples: Ethiopia).

Means-testing and Universalism:

• Discussion about whether aid should be universal or targeted; Annie notes universal programs have value but don’t remove the need for progressive policies.

Political and Cultural Obstacles:

• Stigma around poverty in the U.S. is much higher than in Europe; Americans are more likely to attribute poverty to personal failings (Annie Lowrey, 11:47).
• Poor people are often ignored because they are less likely to vote and are more heavily stigmatized.
• Even left-leaning politicians (e.g., Bernie Sanders) rarely discuss eliminating poverty directly.

Notable Quote:

“The beating heart of the book is less about basic income but really about poverty and there's too much of it. And we can fix this.”
— Felix Salmon (05:00)

Women, Caregivers, and UBI:

• UBI could be particularly valuable for women and caregivers who perform trillions of dollars of uncompensated labor (15:57).

“You can think of UBI as being kind of a way of socially acknowledging that labor and providing families with more choice...”
— Annie Lowrey (16:47)

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2. U.S. Social Policy and the Politics of Poverty ([07:43–13:41])

Trump Administration’s Approach:

• Shift from unconditional support to tying welfare programs to work requirements (esp. Medicaid, housing assistance, SNAP).
• “This is basically taking all policies that exist as sort of carrots and turning them into sticks.” (Annie Lowrey, 10:06)
• Evidence suggests these measures increase poverty and exclude the most vulnerable rather than encouraging employment.

Cultural Narratives:

• The demonization of the poor is contrasted with the myth of “self-made” billionaires, shaping how Americans see both poverty and wealth (Emily Peck, 13:41).
• Racial dynamics are central: modern stigmatization of welfare is closely tied to race, even though a majority of U.S. welfare recipients are white (Anna & Annie, 14:44–14:49).

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3. Crisis of the Turkish Lira and Geopolitical Risk ([18:14–28:33])

Authoritarianism and Economic Instability:

• Discussion triggered by Turkey’s President Erdogan appointing his son-in-law as finance minister; seen as a warning sign of cronyism.
• Turkey faces large external debts denominated in dollars—a falling lira increases default risk (Anna Szymanski, 19:43–20:48).
• Reference to Asian Financial Crisis parallels: currency drops can trigger widespread contagion.

Global Implications:

• Diminished U.S. expertise and influence in managing international financial crises; expectation that IMF and Europe will have to take the lead (Annie Lowrey, 25:09).

“There’s just less experience in institutions like the NEC and Treasury than there has been…a lot of institutional knowledge is sitting on the outside.”
— Annie Lowrey (25:09)

• Erdogan unlikely to seek IMF help, in contrast to Argentina’s Macri, which heightens anxiety about a larger crisis.

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4. Kylie Jenner and the “Self-Made” Billionaire Myth ([28:33–43:45])

Forbes’ Valuation and Media Hype:

• Kylie Jenner hailed as the “youngest self-made billionaire”—the panel is humorously skeptical, noting that her estimated $900 million net worth doesn’t technically make her a billionaire (29:53).
• Valuation by Forbes is called “lazy”—mainly projecting forward her current income with little rigor (Anna Szymanski, 31:24–33:00).

“Billionaire is a meme ... it’s a label useful or useless in different contexts, but not an empirical fact-based thing.”
— Felix Salmon (30:10)

Business Model:

• Jenner is a “Shopify billionaire,” making money via direct social media-to-sales pipeline, with huge margins and highly outsourced production (Felix Salmon, 35:34).
• Success fleeting; future dependent on her personal relevance and appeal. Not all celebrity brands achieve the same (Emily Peck, 34:38–35:06).

Women in Beauty Entrepreneurship:

• Notable increase in women-founded cosmetics brands (e.g., Rihanna’s Fenty for women of color); these offer more genuine innovation and inclusivity than Kardashian/Jenner efforts.

Commodification of Makeup:

• Much of makeup is fundamentally the same—value is created through “cultishness” and branding (Annie Lowrey, 41:43).

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5. The Numbers Round ([44:08–50:50])

Four news-related stats and stories:

• Felix Salmon:
  "$4.69 billion" – Amount awarded by a Missouri jury to plaintiffs in the Johnson & Johnson talcum powder cancer case ([44:14]).

• Anna Szymanski:
  "2,000" – Women now driving for ride-hailing app Careem in Saudi Arabia since lifting the driving ban ([45:32]).

• Emily Peck:
  "500 million" – Straws used daily in the U.S.; context: Starbucks’ straw ban ([46:24]).

  “I care about the environment and I don’t want people to waste plastic or whatever, but I like straws. ... They’re nice, they’re fun.” — Emily Peck (46:35)

• Annie Lowrey:
  "3.5 billion" – Value of a new U.S. tax break for fitness/gym memberships (“the funniest tax break of all time”) ([49:12]).

  “It violates all principles. Basically, you’d be able to write off your gym membership or whatever. Why they are doing this now is a great question.” — Annie Lowrey (49:12)

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Notable Quotes & Memorable Moments

• On UBI and American Poverty:

  “We elect to have poverty, we elect to have extreme poverty, we elect to have child poverty in this country…”
  — Annie Lowrey (05:29)

• On Mean-testing and Welfare:

  “Nobody seems to me to worry about their experience of these programs … what they feel like they could use to increase their earning potential or make their families more comfortable.”
  — Annie Lowrey (13:41)

• On Kylie Jenner’s Billionaire Status:

  “Billionaire is a meme … not an actual empirical fact-based thing.”
  — Felix Salmon (30:10)

• On Makeup as a Commodity:

  “Makeup is fundamentally a commodity. … The products themselves aren’t actually that different.”
  — Annie Lowrey (41:43)

• On U.S. Political Will:

  “I think that there’s a much higher stigma around poverty in the U.S. compared to low income countries and in the U.S. compared to its rich country peers.”
  — Annie Lowrey (11:47)

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Timestamps for Key Segments

• Book Introduction & Big Ideas: [02:14–06:36]
• Welfare Policies / Trump Era Changes: [07:43–11:01]
• Political Narratives on Poverty: [11:01–15:45]
• UBI & Unpaid Care Work: [15:45–18:12]
• Turkey’s Economic Crisis: [18:14–28:33]
• Kylie Jenner, “Self-Made” Myth & Cosmetics Business: [28:33–43:45]
• Numbers Round: [44:08–50:50]

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Tone and Style

Casual, witty, skeptical, and sharp—panelists mix deep policy analysis with dry humor and cultural critique. The discussion is accessible yet intelligent, often poking fun at the media, political myths, and the “feel-good” narratives that shape headline stories.

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Useful For

Anyone seeking a lively, insightful discussion on Universal Basic Income, the politics of poverty, celebrity entrepreneurship myths, or the mechanics of financial crises, explained with skepticism and humor. Listeners also get a taste for how media narratives both inform and mislead public perception around wealth and poverty.

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Transcript

[A]

Hello and welcome to the Give People Money edition of Slate Money. You get a car and you get a car. And basically, congratulations to. For listening to Slate Money. You have won the jackpot. I'm Felix Salmon. I'm joined here in New York City by Anna Shymansky and by Emily Peck of the Huffington Post.

[B]

Hello.

[C]

Hello.

[A]

And we are also joined from the swamp of Washington, D.C. by Annie Lowery.

[D]

Hello.

[A]

Also of the Washington Post. Well, no. Of the Washington Post. Not. Also, we don't have anyone else from the Washington Post. Hello, Annie. Hey. We. We are very excited about this.

[D]

Yeah. I was about to say, I'm not from the Washington Post.

[A]

Wait, hang on a sec.

[D]

The Atlantic, Easily. I just let that go too. I was like, am I.

[A]

I'm so behind the curve on this. Let's try this on again. And we are joined from the Swamp of Washington, D.C. by Annie Lowery, who has an amazing job at the Atlantic.

[D]

Thank you.

[A]

Hi, Annie. It's not. We don't just throw this show together, you know?

[D]

Yeah, no, definitely. And also, I don't just agree with everything that Felix says.

[A]

Annie. So Annie is here to talk about lip kits and the margins. They're on. And the incredible wealth of Kylie Jenner.

[D]

Indeed. I'm very excited to talk about these things.

[A]

It's gonna be pretty awesome. Somewhere along the line, because we have to keep Anna happy, we are going to talk about the geopolitical implications of the crash of the Turkish lira.

[C]

It's the little bit of broccoli.

[A]

We will eat our greens and make it fun, because we all know how to pronounce Erdogan. But first, and kind of most excitingly, Annie, you have a book out.

[D]

I do.

[A]

What's it called?

[D]

It's called Give People Money.

[A]

And it also has some long and revolutionary subtitle.

[D]

It has a very long and quite over promising subtitle. Even I am slightly uncomfortable with the subtitle. And actually I had a discussion with the publisher where I was like, maybe we should change this from a could to a would. And they were like, no. So, yes, it's about revolutionizing things and changing and remaking the world.

[A]

So we are going to have a whole Slate plus segment devoted to your subtitle. I think this is actually the plan. I've written a piece on Slate which all of our listeners are welcome to go read, which talks about your book, and we can discuss where I went horribly off the rails. But first, why don't you just give us the. The big sort of pitch is, is this a universal Basic income book and, and what's it about?

[D]

Yeah, so there's been a number of books about ubi, which is basically the idea that the government would give everybody something like a Social Security payment. We've had a lot of trials. There's a lot of interest in it because people are concerned that robots will take everybody's jobs and what will we do in that circumstance. A lot of interest in it from lower income countries or where it seems like cash payments might be a really good way to end poverty and support development. There's a lot of interesting research and really decades of research about that at this point. And so the book, instead of sort of arguing for a ubi, uses it as a kind of more of a question than an answer to look at what we have, how we could do things better and looking at sort of the principles of a ubi. Right. So having something that is simple, having something that is universal, having something that doesn't come with a lot of requirements, work requirements, you don't have to pee in a cup to get it type thing. And so yeah, that's the, that's the book.

[A]

And you are in favor of such a thing?

[D]

I'm certainly in favor of thinking about how to make the things that we have more universal and simpler. If you read the book, I am not so concerned about robots, at least not in any kind of, you know, 10 or 20, even 50 year time span. Pretty concerned about, about poverty and the way that this could help or policies like this could help and then get into some of this part of, you know, it raises a lot of issues of which, you know, I think that you wrote about really intelligently too. You know, do we want a means test? What does universal actually mean? Is there any argument for everybody getting the same thing? There's an argument for it, but I think that it doesn't obviate the need for progressivity in government programs.

[A]

So. Yeah, it does. I mean, having read the book, I can tell everyone that like the beating heart of the book is less about basic income but really about poverty and there's too much of it. And we can fix this.

[D]

Yeah, absolutely.

[A]

Which is something we've been hearing a lot, you know, for a long time from the sort of Jeff Sachs of the world. But as far as I know, Jeff Sachs never proposed a basic income as a solution to this problem.

[D]

Right. And I think it's worth noting that in many, many, many countries, in including the United States, cash programs already. Right. It's already working. And even very low income countries now have Cash transfer programs. It's like one of the most exciting, I think, UBI type programs is in Ethiopia. And so, you know, there's this notion that giving people cash to get them out of poverty works in lots of different contexts. And in a country that's as rich as the United States, there's really. We elect to have poverty, we elect to have extreme poverty, we elect to have child poverty in this country. Um, and, yeah, I mean, that's the. That's the thing that I certainly get most worked up about. And I think that other people do, too. And we don't talk about it so much. Right. We talk a lot about concerns about wage stagnation and, you know, working people who are in poverty. And it's not to dismiss those issues, which are really important. But I would hope that in the future we would start thinking about actually trying to eliminate poverty in the US as being a clear, consistent, and really achievable goal.

[C]

I think that that's an important point, that policy matters, because if you look at what's happened in poverty among the elderly since, you know, the, you know, the 50s, it's declined pretty significantly, whereas poverty for children has increased.

[A]

And the reason is Social Security. Right, of course. Yeah.

[B]

I was curious. Annie, this is Emily. First, I love the point of the book that I never really thought about before with such clarity, which is that poverty is a choice that we make as a society, whereas we're often taught that it's a choice that people make themselves, individuals make. So I thought that was really an important lesson. And then I guess my other question is, how do you square the message of your book with what's going on in the United States right now? Like, I just read a story in the Times this morning that said Trump administration says war on poverty is over, poverty is not a big deal anymore, and there's going to be more. They're looking to do more jobs requirements, work requirements for Medicaid. Like, how do you square the feasibility of any of the solutions put forth in your book at a time like this?

[D]

Yeah, it's so fascinating. And this is something I've written about partially in the book, but also just, you know, in my more journalistic work. Right now, they are remaking the safety net in the model of TANF or welfare they are attaching.

[A]

First of all, let's explain what TANF is, because this turns out to be a big thing in the UBI world.

[D]

Yeah, absolutely. So TANF is commonly known as welfare in the United States. It is our cash dole.

[A]

It Stands for Temporary Assistance to Needy Families, something like that.

[D]

Yeah, Temporary Assistance to Needy Families. So when you say that somebody is on welfare, that's what you mean. And it is a program that has been capped at $16.5 billion in spending per year since 1996. That number has not gone up. And basically, in order to receive the cash dole, you comply with a work requirement. And the program is aimed at young mothers, very often single mothers. It's a very punitive program and it does not work very well at all to decrease poverty rates or to get people into the workforce. And nevertheless, the Trump administration and a number of red state governors and Congress has decided to take programs that have never had work requirements, so like Medicaid, and attach work requirements there and then to take programs where they have had them or that they do have them. So housing assistance and food stamps, which is known as SNAP or the Supplementary Nutritional. No, Nutritional Assistance Program. Sorry, I'm getting my Alphabet soup messed up here.

[A]

There's a lot of four letter acronyms in this world which, like remember three. But by the time it gets to four, it just becomes a problem. Eitc, tmn.

[D]

Yeah, so many of them. And so basically what this is going to do is it's not going to increase employment rates among really low income people, but it's going to boot a lot of people off of the programs and the inevitable result, like inevitable result will be an increase in poverty.

[A]

And to be clear, the alternative of not having a work requirement, and this is kind of the counterintuitive bit about cash transfers, is if you make them completely unconditional and you don't have a work requirement and you just give people money to spend on whatever they want, the chances of them finding a job wind up going up significantly.

[D]

Absolutely. We know that assistance, you know, social assistance broadly can reduce work effort. It really can. That's true. Right. Like people with Social Security stop working. However, very often when you're talking about prime age workers with kids, it actually increases their ability to work. So for instance, Medicaid providing people with Medicaid benefits actually makes them more capable of working. We have studies that show this. And so you can kind of like this is basically taking all policies that exist as sort of carrots and turning them into sticks. And so this is happening kind of quietly. I'm not even sure that people know that it's happening, but it's a really bad thing and contrary, I think, to the evidence. And even if they say it's about eliminating poverty by helping people get full time employment. It's just not going to do that.

[A]

So I have a political question, much like Emily's, which is that I look elsewhere in the Americas and I see how people like Lula in Brazil or even Amlo in Mexico, they're like, well, I'm going to represent everyone, but the people who really need me the most are the poor. And I'm going to concentrate at the margin, I'm going to concentrate as much of my efforts as I can on the poor. And that seems to be a popular message in those countries. But almost no one talks about on, on the left or the right in America, almost no one talks about the poor. It's always the middle class. Why is that? And is it just that the poor people don't vote or we don't like to think about them?

[D]

Yeah, I think that there's a much higher stigma around poverty in the US compared to low income countries and in the US compared to its rich country peers. So there's like great evidence, really good studies showing that, that people in Europe, when you ask them, you know, like, what's the issue with people who are poor? They'll say, well, they're unlucky, right? Or something happened to them in their life. In the US we're much more likely to say that they're lazy, they made bad choices, they're a drug addict, whatever else. And so I think that, yeah, poor people don't vote very often. They're kind of a marginalized class. And it's fascinating to me, I think you're right. Like Bernie Sanders, when you think about his campaign, he talked constantly about students, about working people. He didn't talk about poverty. He had no poverty elimination plan. And so even Bernie Sanders, right, Like probably the biggest, you know, person on the, I hesitate to say far left, but on the left in the U.S. the leftist of the biggest of the left people, the leftist of the big people, you know, doesn't talk about this. He really, really doesn't. And when, you know, think back to, and I don't know how much this had to do with the Bill Clinton refor, where it was all about like, you know, we're going to get single moms working again. That was the entirety of the rhetoric. And so it's, yeah, it's kind of fascinating that they're just, you know, this blind spot. Even though the thing that kind of drives me crazy a little bit is that this is millions of people. There's 40 million people who use Medicaid, about 40 million people who use Food stamps. You just ask them what they want and they need. They're never like, oh, I want to spend a lot of time with a social worker, like complying with a work requirement so that I can get a really stingy benefit. You know, like, that's the, the other thing is that nobody seems to me to, to worry about like their experience of these programs and what they feel like they could use to sort of increase their earning potential or just make their families more comfortable.

[B]

I think that the demonization of poor people is sort of the flip side of something we'll probably talk about or at least touch on a little later, which is the hero worship of rich people, where we think these rich, these rich guys and billionaires have done it on their own, pulled themselves up by their bootstraps.

[A]

So self made billionaires. We're going to talk about Kylie Jenner, the youngest self made billionaire because she did it all on her own.

[B]

All on her own. And so if the rich people do it all on their own, then the only reason the poor people are poor is because they cannot do it all on their own. It all works together to sort of set up this narrative, the so called American Dream. It's all part of this like big myth that I think we still tell ourselves.

[C]

I do think it's important to also note that this myth has changed because I think sometimes people think that this is the myth that, the Horatio, Horatio Alger myth that has always existed and to a certain extent it has. But if you look at America's ideas about welfare and poverty, when the face of poverty was white, Americans had very different opinions about it. So I think when you're talking about what we currently say about the welfare system, you have to bring in the issue of race.

[A]

But most poor people in America are white, is that right?

[D]

Yeah. And actually even most recipients of TANF are white. It's amazing how much these programs got racialized despite the fact. And you know, and I think that probably there's been an interesting stigmatization of the white people who use things like disability insurance of like Appalachian type whites. Like the book White Trash is really good on this. But I think that you're absolutely right to note that, you know, these programs got. There was an effort through the New Deal and the Great Society to exclude workers of color and families of color. And the stigmatization process has happened for a really long time. And I actually think it's important to talk about, about the way that the Trump administration's current efforts are heavily racialized. They really are it's about, you know, saying, well, these people are just lazy and they don't want to work. And so that's why, you know, we're going to. We're going to. If they get kicked off the rolls, that's not our fault. That's their fault.

[B]

Annie, could you talk a little bit about how a UBI would be especially valuable for women and other caregivers who do so much sort of invisible unpaid work in our country and other countries?

[D]

Yeah, absolutely. So we know that we actually have really great estimates of the value of uncompensated care work, which is primarily performed by women, although not. Certainly not exclusively. And it's just trillions of dollars. Right. And this is kind of like an invisible economic utility. If you don't have kids and somebody taking care of them, if you don't have somebody taking care of the elderly, of people who are sick or differently abled, the entire economy stops functioning at some level. Right. And so, you know, it's funny because we're actually having a really big conversation in the country right now about paid family leave and other policies, childcare subsidies that would take this and would kind of assign value to it. Right. It would economize it in some sense. It would make it so that women were more women and men were more able to purchase childcare labor then. You know, right now, very often there's a cliff around 13 or $15 an hour. If you make less than that, it doesn't make sense for you to pay for it. Right. Instead, you're probably going to stop working. So all of which is a roundabout way of saying that you can think of UBI as being kind of a way of socially acknowledging that labor and providing families with more choice about whether to stay at home or whether to hire somebody to help with childcare, whether, you know, in a daycare center or something. And also just that it would support people through that difficult transition, whether it's taking care of a kid or taking care of a parent or another family member who needs that assistance. And it's kind of, you know, it's sort of like a trippy, awesome way of thinking about it and sort of socially acknowledging the value of that care. And so, you know, I don't know that that's the best way to do that. I would certainly note that European countries are just so much better than we are at supporting working parents and just supporting parents in general. But it is.

[A]

I want you to listen to the Germany edition of Slate Money, because it turns out Germany's not Very good at.

[D]

Much European countries, aside from Germany.

[A]

But yeah, we. I want to go into a bit more of this question of like, what the best way to target this is at the poor. So let's do that in sleet plus.

[D]

Let's do it.

[A]

Okay, Anna.

[C]

So, okay, so speaking of economic problems. Okay, so there are, there are many signs that a country can be headed towards an economic crisis, but I feel like when a president replaces a very well regarded finance minister with his son in law, that's a really, really big red flag.

[B]

But we're not talking about the United States.

[C]

No, exactly.

[A]

So, wait, Jared Kushner is not the new Treasury Secretary?

[C]

Not that I know of.

[A]

Do you think. Here's a question for Annie, who lives in Washington and is much closer to such things. If Donald Trump nominated Jared Kushner to be Treasury Secretary, do you think he could get confirmed in the current time?

[D]

I would hope. I would hope not, but I don't.

[B]

100% think he would be confirmed.

[D]

It's so hard because I do. I just think that they've shown no willingness to stop. I mean, you have to be so egregiously awful. It's just, you know, I often think back to, like, the people who, you know, Geithner almost didn't get his job because he had messed up on his taxes. And like, there was a pretty good argument that Geithner should have known better and should have been, you know, I think it had to do with paying a nanny. Right. This was a million years ago because.

[A]

He was working for the imf and the IMF doesn't hold taxes. And it got confusing. Yeah.

[D]

I went back to the con. Oh, yeah. The confirmation hearings. But I don't know.

[A]

I'm with Emily. I think he will get confused. I think that we're entering the world of, of dynastic nepotism here. And. But Turkey is. No, but that's where it's happening.

[B]

So that's what happened in Turkey.

[C]

Yeah, so.

[B]

No, but that's what happened in Turkey.

[C]

It's related in terms of where you talk about people being frightened in the United States about authoritarian tendencies and this move toward authoritarianism. And in Turkey, we're there, like now that President Erdogan has his executive presidency, he's essentially now in charge of all branches of government and also, for all intents and purposes, controls the media. And what happened this week is really scary for a lot of investors, but it's also really scary for most people who are watching the global economy, because Turkey is a very vulnerable country. So this is similar to when I was talking about Argentina a few weeks ago, where Turkey has a few characteristics. One, they have a very large current account deficit, which means that a lot of their economy is financed by foreign investors. They also have a lot of external debt and they have a lot of debt that's denominated in dollars. So if the lira is falling in value and your revenues are in lira and all your debts in dollars, now all of a sudden you can't service your debt.

[A]

For those of us who are old, the non millennials among us, we remember 1998 in the Asian crisis and this is exactly what happened then. It's, you know, and moved from Malaysia to starting Korea and then Malaysia and then Thailand and then Indonesia. And in all of these countries it was the exact same mechanism that you had a whole bunch of dollar denominated debt. And then the local currency collapsed and then the local debtors who'd borrowed the money couldn't afford to pay back their debts. And then the economy collapsed and you needed massive IMF bailouts and there was all manner of problems. And what are the chances that Turkey is going to become the new Indonesia?

[C]

Well, one thing I think it's important to remember, part of the reason that people were so upset about the El Bayrak, the son in law, being made the finance minister is because he replaced Mehmet Simsek, who was one of the voices of reason in terms of sound monetary policy. The reason this is important is because one of the issues with Turkey is that people do not believe the central bank is independent. And that's very important.

[A]

Is the central bank independent?

[C]

Almost certainly not. So the issue is that means that the central bank is clearly controlled by the president. So they're going to be very loath to do the types of things like increasing interest rates to fight inflation and to try to kind of normalize things with the currency because they're going to prioritize short term growth.

[B]

Isn't I was. It was fun to read about Turkey because a lot of the debt, and correct me if I'm wrong, is because Erdogan just went on like an infrastructure binge like building these insane.

[A]

Oh, the airport.

[B]

It's the airport. The multi billion dollar. I mean like there's a canal. He's building a Canal, you guys.

[A]

$23 billion Canal and a huge mosque.

[C]

Yeah.

[B]

So this multiple minarets.

[A]

And if you think that the.

[B]

And no one's using. He built like a bridge that no one uses because the tolls are too high. It's Just like if you think, if.

[A]

You think the new Brandenburg Airport in Berlin is a boondoggle, just wait and look at the one they're building in Istanbul. But like it. So, so yeah.

[C]

Going back to your question though, that I don't think anyone can say whether this is going to be the next Asian crisis because literally no one knows. And if they say they know, they're lying. But it is true that even though you currently now have a lot of countries that have floating exchange rates, you have a lot of countries that now have taken on less foreign denominated debt as a total percentage of debt than they had in the past. However, one could also argue that the system is even more interconnected today, especially because of the rise of China. And so the, the problem is that what could happen with something like Turkey, especially because a lot of Turkish investors are in our US Banks and European banks. So all of a sudden if Turkey, if a lot of corporates start defaulting on their loans and then the banks all of a sudden have all of these non performing loans, they're insolvent, a lot of their debt is going to be held by the US is going to be held by Europe. This could cause a tremendous number of problems, some that we can anticipate and some that we can't because of the way market dynamics work that sometimes a crisis can start in one country or one sector and then it moves to weird sectors. Because when you're an investor, if you have a portfolio and all of a sudden one part of it's just selling off. Well, often you might have something like a margin call where you need to raise liquidity to pay for that margin call. So you're going to sell not Turkish assets. You're going to tell assets are completely unrelated.

[A]

This is known as contagion. And we, we. It is both predictable and unpredictable because you. Exactly. I have a question for Annie here.

[D]

Yeah.

[A]

Which is that like every single major international economic crisis that I can remember, you would have some version of the, you know, famous Time magazine Committee to Save the World cover with like Larry Summers and Bob Rubin sort of coming in on white horses. And you'd have hundreds of international economists at the Treasury Department trying to work out how to structure possible bailouts and they would bring in their internationalist artillery and try and save the planet. I'm going to go out on a limb here and assume that like no one in treasury right now is particularly interested in that kind of thing. We don't have that, that backstop.

[D]

Right. I mean this is, this is an issue that we've known about for quite some time, which is, it's kind of twofold. One is that the personnel has thinned considerably and there's just less experience in institutions like the NEC and Treasury than there has been. And this is not like a partisan thing. This was, you know, there's even less experience than there was during the George W. Bush administration. We've seen a lot of Bushies that were just loath to go into the Trump administration. And so I think a lot of the institutional knowledge is sitting on the outside. The second is that I don't think you can overstate how much institutions like the World bank and the IMF have stepped away from American influence and basically won't listen to American leadership on issues like this. So, you know, it sounds like we are headed on a road towards the imf, you know, kind of coming in and acting as a counterweight and demanding changes in exchange for loans and bailouts and everything else. And I think that Europe is going to be really important and the US Is not going to be important here.

[C]

Well, my guess, I think that that's a, that's a good point because when you're looking at Turkey and the way that they're actually different from Argentina is the fact that Turkey is run by an authoritarian. I actually wonder if Erdogan is going to go to a lot of these bodies like the IMF the way that Macri did. And Macri was definitely rewarded for the fact that he's been engaging in a lot of market friendly policies, whereas it seems incredibly unlikely that Erdogan is going to do that. So I really question what is going to happen because the rest of the world can't force him to go to the imf, right?

[D]

And I feel like it's this question, right? If he doesn't want to, like, what does, you know, what does that, what does that look like? Because, like, I'm assuming that it's going to be the IMF in Europe that are going to be the ones that kind of take the lead on this. But I'm curious if you think that he has other options in the event that you start to see, you know, contagion in a crisis and they need, you know, something to help them out of this pretty, pretty difficult and at some point, untenable situation that they might be heading towards.

[C]

I don't think he has a lot of options. Because if you look like a country like Venezuela, part of the reason Venezuela was able, has been able to kind of just keep going was for because they have the largest oil reserves in the world and because China would just keep pumping money in there for a while because they were just getting promised oil. Whereas you have Turkey. I mean, Turkey is a net oil importer. They, um, they import actually quite a number of commodities. So I have a hard time believing that you're gonna have a country like China that's gonna come in and be like, okay, we're just gonna start funding things.

[B]

I mean, this is really a crisis of this. If this guy's making.

[C]

Yeah, entirely.

[B]

I don't see the incentive for him to ask for help since he's doing this to his own people and he don't see an incentive.

[A]

I mean, the only, the only thing I see which, which would cause him to change track is if his, you know, popularity in the country at large just evaporated.

[B]

But the way he set up that happening, he set up the political system. Yeah, he, it doesn't matter anymore. He did it.

[C]

Yeah. And this is, and this is, this is important because, you know, you've had countries like Russia that was going through, you know, when they had both because of sanctions and because of oil price declines in 2014, 2015, where they suffered, but because the government was still at least smart enough to engage in like sound fiscal policy, they were able to get through it. That's clearly not going to happen here.

[A]

And Turkey is worse than Russia and just as authoritarian. Okay, so on which note, I think we'll just like, you know, cover our eyes and ears and pretend that it's not happening because there's nothing else I can do. And let's move on to Kylie Jenner because this is, this is really what we, what we are here for. This week she is of course on the COVID of Forbes magazine, which is devoted, as Forbes magazine normally is, to billionaires. Forbes magazine has anointed her the youngest billionaire in. The youngest self made billionaire in history. I think is something along those lines.

[C]

Um, and well done issues there already. Right.

[A]

Well done, Kylie, for becoming a self made billionaire because it couldn't have happened to a nicer person.

[B]

First, self made is obviously there's some issues. We have some problems with that. All on her own, she had no family connections and, or help. Obviously self made is completely accurate.

[C]

Entirely true. Although I would just like to point out that Rob grew up in the same family. His sock company did not make him a billionaire.

[B]

No, she's, I mean, obviously she's worked hard or something. And the second thing is, and maybe Felix can explain to me why this is totally Fine. But she's worth $900 million.

[A]

Well, that makes her a billionaire.

[B]

I mean, so I didn't take a lot of math after high school, but I know, I know that 900 million is not a billion dollars.

[C]

Yeah.

[A]

And not argue that. No, no. $220 million makes you a billionaire.

[B]

So I get it, she's on track to hit it.

[A]

But no, no, no. So billionaire does not have an empirical meaning. Billionaire is not a word which is like, well, if you, you know, run up some weird kind of balance sheet and look at the assets and subtract the liabilities and add in various other things and you can't get to some 10 digit sum. No, billionaire is, is a meme. Billionaire is, is. It's like a resonant word which people like to put on in headlines because it sells magazines and gets page views. Billionaire like you can be. We're going to talk in September about Joe Lau, the sort of fake Malaysian billionaire. We can talk about Elizabeth Holmes, the, you know, whether she was ever a billionaire.

[B]

Fake billionaire.

[A]

You know, billionaire is just a, it's, it's a label which is useful for, or useless in various different contexts. But let's not kid ourselves that it's some kind of an empirical fact based thing.

[B]

I think, I mean it should be then just say very rich, super rich. I've always loved the term super rich.

[C]

And the fact is. But just to be clear that I would also quibble with the way that Fortune did their valuation. Quibble away and quite, I would argue, fairly lazy where I think they just essentially said, oh well, we're just going to throw on a six times multiple.

[A]

No, three times multiple.

[C]

I think it was.

[A]

So what they did.

[C]

No, you're right, you're right. No, no. But then they did a discount. That's what they did.

[A]

Three times multiple. And then the 20% discount. So what they did.

[C]

And this is, this is not how you value companies.

[A]

Okay. It may or may not be how you value a company. But what they, what they did was they basically said she's made $100 million in cash. Which even by selling makeup, even assuming. Selling makeup, even assuming what we have, granted that like billionaire is a meme and not an actual imperial. I don't grant that $100 million doesn't get you there. But what they then did is say, well, let's add on all of her future income. And that's the. And because she owns this corporate entity and so they can value the corporate entity. And the corporate entity is just basically a vehicle for her future income. And so they've take, they've taken her income to date and added on some random randomly generated figure for her future income and they've come to $900 million. The whole thing is completely pulling numbers out of thin air.

[C]

I said that. But yeah, it's also.

[D]

If we, if we had just like a sense of the value of the company but even the kind of internal numbers that they suggested were kind of a little bit, bit weird to me and, and it's not so clear to me. You know, if so part of, part of the interesting thing that came out in this is that she's never taken any loans or sold any shares in this business. She owns it completely and totally. But that also means that we have no sense of like the external valuation of it. And just the numbers felt very. Yeah, there is none. And the, you know, the numbers felt very Lucy Goosey.

[C]

Yes, I very much agree with this. I will say there is a way to value a private company. Now just like any valuation, it's much more of an art than a science. But it is true that if you're looking at a company, what you would normally do is you would try to find a like 10 to 15 comps. So comparable companies that have to be similar in terms of structure revenues like market, you would do that, then you would spread all those comps and then, then you would try to generate a number of different multiples and then from there you want to get a range of values. So it is a. It is. Although yes it is still involves a lot of estimation and there's no such thing as a perfect comp. There is more of a science to it than what it appears that, I mean. So my point is that I would actually argue that you could say that the company is actually slightly undervalued because they put a very large discount on it and because of the very unique structure of the business which be actually very hard to find a comp. But regardless of that, I would also point out that if you're looking about whether this valuation will hold, I think there are a lot of, there are a lot of details to suggest that it won't specifically that their main product has the revenues declined like 35%.

[B]

I mean this is a business entirely dependent on a 20 year old woman, Kylie Jenner, who is currently extremely popular. I took a poll among some young women and they told me that the makeup's not bad and relatively inexpensive. But the important part and the reason Kylie Jenner is an alleged billionaire, I'm just gonna Say very rich now from, we don't know if a billion dollars.

[A]

She's undoubtedly extremely rich.

[B]

Extremely rich off this product is because this is the analysis. I'm synthesizing what I heard from one woman in particular.

[A]

Okay.

[B]

She's hot and young girls want to look like her. And that is the secret to her success. And obviously that is not going to last very long. Like you're not going to make a long term valuation. This isn't Netflix. It's like, it's ephemeral. Like once she stops being hot or whatever, something happens, the business vanishes.

[C]

Or once these 12 year olds now become 25 year olds and aren't like spending all their days drawing on their lips and then all of a sudden you have a new group of 12 to 16 year olds who have a new person who's young and hot. That.

[B]

Yeah, I think the real, the real valuable business is, sorry, is the Spats Laboratories, this like company run by the brother and sister out in California, in Oxnard, California, that makes makeup for like a lot of different other companies. And I think that's the business that was interesting to me reading this story.

[A]

So, so Kylie Jenner, and this really is interesting, is what I call a Shopify billionaire that basically, to a first approximation, she's made all of her money by putting a Buy now button onto Instagram. She has this incredible Instagram following, a very loyal Instagram following. And the Instagram following will click buttons and buy things very, very quickly in unbelievably large amounts. And that's absolutely right. We don't know how long that will last. But the ability to do that and the ability to bring in hundreds of millions of dollars, like revenues of more than $300 million per year with like five employees and outsourcing everything else to Spat's Laboratories and who have you, is unprecedented. And almost none of this happens really on the web in the sort of Amazon kind of way of that we think about it. People aren't like navigating their web browsers to Kylie Cosmetics.com and ordering stuff. They're on Instagram and it's all in this private network. Shopify is making lots of money off this. Facebook is, you know, owns Instagram and has basically created this unbelievable little fecund garden where things like this can grow and become surprisingly large surprisingly quickly. And that is a fascinating phenomenon.

[B]

And she, I mean, this is smart. She's done something. The strategy behind this is really smart. And not all celebrities actually, like, part of you thinks, oh, then any like, very good looking young woman could do this. But I think there's some, you know, there's strategy behind what she's doing. There's business acumen, you know, inherited probably and helped along by her mother, whatever. But yeah, this isn't. Not anyone could do this. Someone else mentioned, like, Drew Barrymore once had some makeup line called Flower, and it was kind of like, yeah, everyone.

[A]

A lot of people have tried, and Kylie Jenner is one of the few who have succeeded. But what I want to know from Annie is like, is that just stochastic? Is that, um, is that like, well, you know, you throw a million dots against the wall of a bunch of celebrities launching makeup lines and one of them is statistically going to become a hit, or do you think she actually did something like, particularly smart here?

[D]

Yeah, I mean, I think this. It's pretty amazing. Right. And leaving them, the numbers aside, she's obviously just minting money. The margins on makeup are pretty high. Right. It's a pretty easy thing to make. They note that, you know, she doesn't even do the kind of packaging and branding which is what you normal see in these kind of higher end or even just normal cosmetics. Right. It's all just branding around it and packaging and getting some slightly bigger margin. And so, yeah, you know, my, my concern is, is one that's obviously shared between us, which is like, how. How enduring is this? And I would certainly hope that she's taking this cash and like, you know, that she has a Vanguard index fund putting the money into which I trust Kris Jenner to be diversifying her out of this. But, you know, I have a feeling.

[A]

That, like, once you've made a few hundred million dollars, you're okay. You will probably. You probably don't even need a Vanguard index fund. You can just live on that few hundred million dollars for the rest of your life and you won't get through it.

[D]

Have you watched the show, Felix? They spend a lot.

[B]

They stir a lot.

[D]

Like, they really, really spend a lot. So that would be my only other question. But yeah, you know, I think that probably you would want to see her kind of going in this goopy direction or like the Jessica Alba direction of diversifying and creating an enduring brand and then perhaps at some point selling it to Unilever. Right. Like, that's the Alba. That's the goal.

[A]

Did Jessica Alba actually use her celebrity match when she was building up her company? Because I kind of feel like she. Okay, all right.

[D]

She was like the super, like the beautiful super mom who has these, like, beautiful babies who's like, I don't touch them with anything except for natural products. And it turned out that many of.

[C]

Those products didn't work.

[D]

Yeah, totally. Yeah.

[A]

That would never work.

[D]

Yeah, that would. That. That would be. My guess is that you. You don't want to bet that this is going to keep on going like this. You kind of want to make a brand and then. And then perhaps diversify it a little bit and then. And then bring in some outside investors that'll cash you out. That would. That would be my guess. I don't know if you guys know.

[C]

I think.

[A]

I think there is a quote. I mean, Forbes did the, you know, best to try and work out, like, whether anyone might be interested in buying this brand. And, you know, there's a lot of dumb money out there of people who want to, you know, be cool with the tweens who might conceivably buy this, you know, this company for a billion dollars. And if Kylie does get an offer from someone to buy the company for a billion dollars, I think we're all agreed that she should take it.

[C]

Yes.

[B]

I just want to clarify that it's not just tweens that are buying these products. I spoke to women in their 20s, and then a colleague of mine said her mother's favorite lipstick is a Kylie Jenner. I forgot what the color was. But anyway, like a brownish color. Anyway. So it's. It's women across ages, I think, probably most popular with the tweens, but a lot of other women as well.

[A]

And it does imply, you know, I mean, if Kylie Jenner is a billionaire, which she is by definition, because, you know, people are using this word around her, so therefore she is. You know, I'm going to just come out and say that Rihanna is a billionaire as well. Yes.

[C]

And can I just point out she's.

[B]

Doing a better thing with Fenty.

[C]

I agree. Because also, you know, just like, it's very nice in terms of a social thing to also say that now we have a line that is better for women of color because there's a lot more options. But also, just from a business perspective, she actually is doing something different. Yeah. The product isn't just her. She's creating a product that is different, that has added value, and she's more.

[A]

Famous and she's better looking.

[C]

Yes.

[B]

Also, it does seem interesting now that there are so many more makeup brands started and run by women, as opposed to in the past where it seemed.

[A]

Like the woman Estee Lauder.

[C]

Yeah.

[B]

Or fine, Estee Lauder, but I don't.

[C]

Know the history of makeup. Actually there are a lot of women.

[B]

In it, but fine. But it does seem like an interesting, innovative little corner of the world.

[D]

The thing that I find kind of amazing about it, and correct me if I'm wrong about this, but is that like makeup is fundamentally a commodity. You can't really actually tell the difference between different things. It was a very much true that there wasn't a lot of optionality for women of color, that it was very aimed at a certain very quite melanin deprived market, but that the products themselves aren't actually. I feel like there's just so much cultishness around. Oh, oh, this is actually really perfect. I don't. I feel like the marketing around it is kind of really hypey and crazy. Right? Like, you know, could that. That your friend's mom, could she really tell that lip kit, you know, is it actually different than something that you would buy in a cvs? So my sense is that it's all basically just kind of like vegetable oil and, you know, pigment.

[A]

My favorite makeup branding story goes back a couple of decades now for to number seven, which is exactly that, which was launched by Boots the chemist in, in the UK and was just like this kind of own brand, you know, will sell decent cheap makeup, which is the same as expensive makeup. And then somehow without really trying, just, just, you know, randomly, a bunch of like cool people discovered it and said, oh my God, this is really good. And it became super trendy and it became this like billion dollar brand. And I feel like these things can happen in makeup. It's like Grey Goose vodka. You know, like, you wake up one morning and it's worth $4 billion. You're like, how did that happen?

[C]

Yeah. And I mostly agree that most makeup is probably pretty much the same. However, I do think there are certain products that are actually significantly better than other products, especially if you have certain issues. I have very oily skin and I have one type of mascara that I can use.

[A]

So.

[D]

Yeah. And certainly I think that, you know, the whole Rihanna story of being like, oh man. Like, you know, there's millions of people who have been massively neglected and overlooked and you should sell them products because they would love to buy products, especially if those products were making Rihanna rich and happy and beautiful, which.

[A]

And frankly, there is no higher calling in life than to make Rihanna rich and happy and beautiful. I'm down with it. I'm just astonished that Beyonce hasn't launched a beauty line yet.

[D]

Oh, yeah, yeah, that's actually a good point.

[B]

Beyonce, if you're listening.

[D]

You have four buyers in the four of us.

[A]

I'm in. I will buy you my stuff.

[C]

Totally.

[A]

Let's have a numbers round. Annie, do you have a number?

[D]

I do have a number, but I forgot it. Hold on. Come back to me.

[A]

Okay, we'll come back to you. I have a number, which I just. Amazingly astonishing number. $4.69 billion is. And I don't think. You know, I'm going to do a quick quiz to see if any of you guys have even seen this story. $4.69 billion is the amount of money that a Missouri jury awarded against Johnson and Johnson for allegedly making dangerous talcum powder, which may or may not have caused cancer in 22 women. And it strikes me that, like, there are a lot of different ways that you can try and determine whether or not talcum powder causes ovarian cancer. But, like, asking a jury in Missouri is probably the worst.

[B]

Yeah, it's so hard to get a suit going against corporations these days that I say, great news.

[C]

Okay, well.

[B]

And no one is arguing with me.

[A]

So I, I, I, I'm, I, you know, I'm, I'm generally in favor of, like, sticking it to the man, but this seems, this one seems a little bit crazy.

[B]

Yeah, it's fine.

[C]

So my appeal to my number is 2,000, and that's roughly the number of women that are now driving for Careem, which is the ride hailing app in Saudi Arabia. Yeah, and I thought this was, this was. It's both a good and bad story. So on the one hand, it's really kind of cool because you hear a lot of these stories because so many of Kareem's users are female, kind of for obvious reasons, because men aren't allowed.

[A]

To hang out with women who aren't, like, related to them.

[C]

And also because women just got the ability to drive. A lot of women were using these services, and so you get these great stories of, like, women who are so excited to see there's a woman driver. And it's really great. But then it's also important to remember that you still have a number of activists, women who were activists to try to get the right to drive that are still being detained. So I think it's important that when we talk about those stories to remember that there are still a lot of really, really horrible things going on in Saudi Arabia.

[A]

Emily?

[B]

My number is 500 million. That is roughly the number of straws.

[D]

That are used every day in the United States.

[B]

And this is news because Starbucks announced that it was getting rid of straws in all its stores. I think the goal is by 2020 or something, which has me thinking about straws all week because a lot of people are now using these non plastic straw alternatives and they're so awful. And I know I care about the environment and I don't want people to waste plaster or whatever, but I like straws. I'm just gonna come out with it. I just like them. They're nice, they're fun. I just had an iced tea with a nice, bad for the environment plastic straw and it was delightful.

[C]

See, I just don't entirely understand the purpose of straws because we have many, many liquids that we drink without straws. And when you drink with a straw, you consume it so much faster. So I just don't understand.

[B]

That's what Americans do. They drink gigantic beverages through straws really fast.

[C]

You just sip it.

[B]

It's just so convenient.

[A]

Are you post straw or anti straw?

[D]

I'm. I'm so. I've started trying to carry around like a cold cup with me and it's so gross and annoying and I'm trying, I'm trying not to like to hand over a cup and a straw and, you know, you feel kind of virtuous, but it's pretty gross. And I've just gotten a lot of iced coffee all over my bag is basically the long and short of it.

[A]

So this is, this is where I'm gonna to jump in and I'm going to talk about.

[B]

We're going to talk about it, you guys.

[A]

Slate money is not sponsored this week by Zojirushi, but it should be, because I am slowly becoming a Zojirushi Stan. And when you get your iced coffee, you should just put it in your Zojirushi travel mug and it will never spill anywhere and it will stay cold for many, many hours.

[B]

Just to be clear. Coffee carrying thermos from Japan that he talks about.

[A]

I've been drinking out of all episodes.

[C]

And before we did today's episode, he essential went through an entire infomercial for this product and I was sold.

[B]

I'm sold too.

[A]

How.

[D]

How expensive are they? Is it like one of the $50.

[A]

Ones and there's like a $20 one.

[D]

Oh, okay. I will look into that.

[B]

You said it keeps the coffee hot all day long or cold.

[D]

Oh, man.

[B]

But I still think it's more fun to have an iced coffee with a straw out of one of those really bad for the world plastic cups. And us shaking her head. But it's so nice and like, it doesn't. I mean, there are so many worse things going on that's gonna destroy the environment. Like, I know it's gonna make people who go to Starbucks feel virtuous to slip out of, like, some disgusting cardboard straw that feels all funny and gross in your mouth. But, like, it's not gonna really.

[A]

Well, if it. If it means fewer people going to Starbucks and more people drinking good coffee, that. That is an advantage right there. Annie, what's your number?

[D]

The number I could not remember is 3.5 billion, which is the fitness tax break that just passed out of Ways and Means. And it is the funniest tax break of all time. It violates all principles. Basically, you'd be able to write off your gym membership or whatever. Why they are doing this now is a great question. And why these Republicans that are supposedly about a free and easy tax code with few loopholes have all decided that this is a great idea. You can go read. Richard Rubin has a really great story about it in the Wall Street Journal in which basically all tax experts are, like, just shaking their heads with their heads in their hands. But we might get a tax write off if you go to the gym or do yoga or something.

[A]

But. And of course, the chances that anyone will wind up going to the gym more as a result of this tax breaker. Exactly. Zero, right?

[D]

00,000. And it's not even that, like, $3.5 billion is not that much.

[A]

Who benefits from this tax break?

[D]

People that spend a lot of money on a gym. Right. Like, people who got a Soul Cycle.

[A]

And do they have a lobby?

[C]

The Soul Cycle lobby is strong.

[A]

I mean, like, who is pushing for this?

[D]

Yeah, but it's also like, if you're not. It's gotta be people who aren't taking the standard deduction who spend a lot of money on gyms. I bet this is a Louise Linton effort.

[A]

Talking of billionaires.

[D]

It's extremely dumb. And again, why are they doing this? Why are they doing this? We need to get to the bottom of this. We need some investigative reporting.

[A]

Yeah. Someone phone up Louise Linton and ask her how much time she spends in the gym. Okay, I think that's it for us this week. Annie. Thank you so much for coming on. It was amazing. We love you.

[D]

Thank you so much for having me, guys.

[A]

And thanks all of you wonderful people out there for listening to Slate Money and keep the emails coming. We are slatemoneylate.com Many thanks to Max Jacobs and June Thomas for growing this show together. And we will talk to you next week on Slate Money.