Slate Money: The High Stakes Negotiation Edition

Date: September 1, 2018
Host: Felix Salmon (Axios)
Guests: Jordan Weissman (Slate, host of “Working”), Emily Peck (Huffington Post), Anna Shymansky (Slate), with recurring appearances by all

Overview:

This week's episode, titled "The High Stakes Negotiation Edition," delivers an in-depth and lively dissection of three major, high-stakes business stories: the NAFTA renegotiations, the emerging and legalizing business of cannabis across North America, and contemporary battles around labor, wages, and inequality in America. The show smoothly blends explanation, witty banter, and skepticism as it unpacks how high-level negotiations—from international trade to who profits from legal weed—are shaping economies, politics, and people's lives.

Key Topics and Insights

1. NAFTA’s Messy Renegotiation (00:00–20:40)

Setting the Stage

• Background: Trump’s longtime push to “fix” NAFTA, a 25-year-old trade pact between the US, Mexico, and Canada, despite never clearly articulating what, exactly, was wrong with it.
• Recent Events: Announced “deal” with Mexico (documentation still missing), tightening deadlines due to Mexican politics, and Canada feeling sidelined.
• Notable Tone: The hosts frequently note the drama and performativity around negotiations, with Felix calling it “all a bit crazy pants” (05:21).

Major Discussion Points

• Congress’s Role:
  • Trump can’t singlehandedly withdraw from NAFTA; Congressional approval is required for any substantial change, including going bilateral with Mexico without Canada.
    • Jordan (07:09): “There was a lot of disagreement among lawyers… [but now] conventional wisdom is shifting to people realizing actually Trump can’t really just on his own end NAFTA.”
• The Mexico-Canada Balance:
  • Canada deeply values Article 19, NAFTA’s impartial arbitration system—rooted in deep-seated distrust of US courts, despite actual risk being small.
    • Jordan (12:56): “There was basically like a propaganda campaign in Canada in the 1980s that they could not trust U.S. courts.”
• Labor & Autos:
  • New rules would require 40% of car content to be made by workers earning $16/hr, but this is more symbolic—most supply chains already comply.
    • Anna (10:51): “Almost nothing is going to change… most cars already meet this.”
  • Enforcement and actual benefit to Mexican workers remain dubious.
• Labor Provisions and Enforcement:
  • More rights for Mexican labor on paper, but enforcement is questionable.
  • ISDS (Investor-State Dispute Settlement) panels—a controversial protection for multinational corporations—will likely persist, pressured by energy interests.
• IP Protections:
  • Additions mirror and in some ways exceed those in the TPP, which Trump had previously trashed.
  • Negotiations are still fundamentally conventional, despite surface drama.
• Big Picture:
  • The essential dynamic—supply chains, automation, and offshoring—has already moved jobs; new tweaks can’t reverse the loss that fueled Trump’s NAFTA rhetoric.

Noteworthy Quotes

• Felix (09:50): “[There’s a] big thing… over 65% of work on any car has to be done in a high wage country.”
• Jordan (08:42): “Even though he[Trump]’s been saying… ‘I’ve got Canada right where I want them’… it’s not really clear how much leverage he has.”
• Emily (16:21): “What Trump is doing on trade actually does make a sort of sense… trying to get rid of… rules-based trade and make his own rules so then he can give favors to the countries and industries he likes. It’s like crony capitalism.”

2. Cannabis: From Counterculture Crime to Corporate Boom (20:40–35:04)

Context

• Cannabis is legal in multiple states, recreationally in Canada by 2019, but remains federally illegal in the US.
• Problem: Businesses operate in a twilight zone—legal locally, criminal federally.

Business, Finance, and Regulation

• Banking Blockades:
  • No access to standard loans; companies rely on private equity or “rich guys… willing to give them an 18% loan.”
    • Jordan (26:38): “Banks don’t like to fund illegal activities.”
• Canadian Boom:
  • Canadian companies (fully legal) rush to list on US exchanges.
  • Canadian cannabis stocks compared to Bitcoin in their speculative frenzy.
    • Felix (25:09): “Canadian cannabis stocks are the new Bitcoin.”
• Oversupply and Over-regulation:
  • US: Dispensaries forced to grow their own; gluts and price drops.
  • Canada: Mass production with scale, global ambitions.
  • Looming: US federal legalization would open borders, pit small US boutiques against Canadian giants.

Social and Political Implications

• Equity, Ownership, and Justice:
  • Concerns about marginalized communities—those criminalized under old laws—being cut out as legalization goes corporate and rich white investors move in.
    • Emily (27:33): “There’s something to me creepy and offensive about the marijuana business going to all these… hedge funders… and John Boehner…”
• Potential for Fine-grained Regulation:
  • States like NY could restrict retail licenses to encourage local, diverse ownership (mirroring alcohol regulations).
  • Skepticism about effectiveness; profit incentives usually circumvent regulation.
• Health and Social Risks:
  • Potency is increasing; little top-quality research on abuse/addiction vs. alcohol parallels.
    • Emily (32:48): “Marijuana today versus 20 years ago is much more potent… there’s not that much good research… we’re unleashing a new drug, possibly.”
  • Heads up for future political fights: new research will fuel fresh debates.

Noteworthy Quotes

• Jordan (22:47): “At some point there is actually, I think, going to be a really big fight over weed protectionism.”
• Jordan (30:53): “I think… there will be a push to try and make this as much of a mom and pop industry as possible. And then… people will pay a lot more for their marijuana.”

3. Labor, Inequality & Symbolic Moves (35:04–47:28)

Public Benefits and Corporate Responsibility

• Bernie Sanders’s Bill:

  • Proposes a tax on companies equal to what their employees receive in SNAP/public benefits.
  • Intended to shame/shock companies like Amazon, but in reality Walmart/McDonald’s are far more implicated.
    • Felix (36:04): “It’s silly because… it would give… [companies] an incentive not to hire people who use public benefits.”

• Trump Freezes Federal Salaries:

  • Announces no pay rise for federal employees, presented as a “drain the swamp” move but largely seen as a mean-spirited, possibly retaliatory gesture.
    • Emily (37:41): “It’s a workforce of like almost 2 million people… many… have budgeted for a pay rise… in comes Trump throwing a spanner… Nasty present to give people on Labor Day.”

• Toward Better Labor Policies:

  • Microsoft requiring contractors to provide 12 weeks paid parental leave, following Facebook’s push to bring service workers in-house.
  • Pros/cons: In-house jobs preferable (less cost-cutting on benefits), but major buyers mandating standards can raise the floor.

Inequality and Corporate Structure

• Amazon as American Microcosm:
  • Hosts see Amazon as the perfect symbol for American inequality: richest CEO, lavish benefits for white-collar staff, overworked/underpaid warehouse staff and gig-economy low-wage workers.
  • Jordan (44:10): “It’s hard to think of another company that dramatizes American or… encapsulates American inequality better than Amazon.”
  • Debate on the accuracy of comparing Bezos’s net worth to line workers’ salaries, but consensus that the gap is huge and growing.

Noteworthy Quotes

• Emily (35:34): “The bill would tax employers 100% for each employee who gets public benefits… It’s silly because it would… give Amazon… an incentive not to hire people who use public benefits.”
• Anna (40:22): “If some of [the tech companies] are using [their power] to do something positive, I don't think that’s the worst thing in the world.”
• Felix (47:03): “Whatever method you use… the amount of inequality within Amazon is large, is growing and is high by historical standards.”

Numbers Round (47:28–53:32)

A buzzy, rapid-fire finish with global themes:

• Felix: 60% — Argentina’s new eye-watering central bank interest rate amid currency collapse (47:58)
• Anna: $50 billion — Argentina’s IMF bailout, whose accelerated payment marks a new phase of financial crisis (51:41)
• Jordan: 3.2% — Share of income a median-income family spends on health insurance premiums; a key political benchmark for “Medicare for All” debates (49:47)
• Emily: $10 billion — Annual cost of Marco Rubio’s proposed paid parental leave (via Social Security “advance”) scheme (52:30)

Memorable Moments & Quotes

• On NAFTA drama (Felix, 05:21): “It’s all a bit crazy pants.”
• On Canadian cannabis fever (Felix, 25:09): “Canadian cannabis stocks are the new Bitcoin.”
• On Labor Day ironies (Emily, 37:41): “It’s a workforce of like almost 2 million people… [Trump’s move] is a nasty present to give people on Labor Day.”
• On Amazon’s symbolism (Jordan, 44:10): “It’s hard to think of another company that encapsulates American inequality better than Amazon.”
• On labor bills (Felix, 36:04): “It attacks the very idea of helping the working poor by giving them jobs because you then don’t want to give them jobs.”

Timestamps for Major Segments

• 00:00 — Introductions & episode themes
• 03:19–20:40 — NAFTA renegotiations: details, Congressional politics, labor provisions, enforcement
• 20:40–35:04 — The business of cannabis: legal quagmires, Canadian boom, equity and social justice, market speculation
• 35:04–47:28 — Labor & inequality: Bernie Sanders’s bill, Trump’s pay freeze, “gig” and non-traditional work, tech-company labor policies
• 47:28–53:32 — Numbers Round: Argentina’s crisis, health insurance stats, and paid parental leave proposals

Final Thoughts

This episode blends high-level economic insight with sharp, entertaining commentary and acute skepticism, painting a picture of markets, labor, and policy at moments of profound transition—whether in “crazy pants” trade negotiations, a cannabis industry boom, or intensifying debates about fairness and inequality.