The Land of Somewhat Normal

Summary

Slate Money: "The Land of Somewhat Normal"

Date: January 16, 2021
Host: Felix Salmon (Axios)
Co-hosts: Anna Szymanski (Rakingviews), Emily Peck (HuffPost)
Guest: Cathy O’Neil (author, mathematician, data scientist)

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Episode Overview

This episode explores the rapidly shifting terrain of U.S. business, politics, and technology in the wake of the 2020 election. The panel analyzes Joe Biden’s sweeping $1.9 trillion economic stimulus proposal, the dramatic increase in political interventions by major corporations and CEOs, data insecurity from Parler and “internet of things” sex toy hacks, and the changing ideological landscape in Washington and Wall Street since 2016. Key themes are a return to “somewhat normal,” what genuinely counts as progress, anxieties over authoritarian tech power, and the hidden risks of digital life.

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Key Discussion Points

1. Biden’s $1.9 Trillion Stimulus Proposal (01:00–15:43)

• Scope & Messaging:
  Biden’s proposed package is notably vast—akin to a “liberal’s dream,” touching public health, education, families, and workers.

  • Emily Peck: “It’s a $1.9 trillion package... It’s a message. The first message is: you can’t rescue the economy if you don’t stem this awful pandemic. So there’s lots of money to do that.” (01:57)
  • Includes funding for vaccine distribution, reopening schools, paid leave, child care rescue, and a $15 minimum wage.
  • Moves to end the tipped and subminimum wage for disabled workers.

• Decoupling Spending from Tax Increases:
  Felix Salmon: “There’s no pay for in this at all... It divorces the taxing and the spending… let’s just do the spending we need to do, and then if we need to raise taxes for whatever reason… we can do that in a separate bill.” (04:07)

• Political Realities and Possibilities:

  • The Democratic Senate majority after Georgia unlocked boldness.
  • The U.S. Chamber of Commerce endorsed the plan surprisingly quickly—signaling changing business attitudes.
  • Possible moderate Republican or Democratic opposition could shrink or even expand the final bill.

• Return to “Somewhat Normal”:
  Whole panel notes the contrast to Trump’s chaotic and incoherent pandemic response.

  • Emily Peck: “Just seeing a coherent plan... was really mind blowing to me.” (08:15)
  • Felix Salmon: “This is basically the Biden administration paying off the debts of the Trump administration. They’re coming in and paying off the credit card bill, basically cleaning up the mess.” (10:06)
  • Anna Szymanski: “It’s a return to normalcy, right?... we’ve existed in this Trump world for so long that really obvious things seem somewhat like, oh wow, we actually have a real plan.” (10:20)

• Norms and Progress:
  Cathy O’Neil: Emphasizes relief at regaining “norms,” but cautions about future frustrations with moderate politics and the limits of leftward policies.

  • “It’s good because he’s within our norm group. But it’s going to be just so frustrating but not scary and chaotic and actually existentially threatening. So that’s good.” (12:08)
  • Notes Biden’s economics are much further left than Obama-era moderates, citing a leftward shift among Democratic economists.

• Concerns Over Inflation and Scale:
  Felix contrasts the modern moment to the past, dismissing Larry Summers’ worries:

  • “No government has ever done this kind of thing... If it means more inflation, I’m like, bring it. We need more inflation.” (14:08)

  • Emily Peck: “This is also kind of like a do-over for the way that they didn’t go big in the Great Recession… Don’t F this up again. Like, we don’t want to go through ten years of a sluggish recovery again. Go big.” (15:18)

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2. The New Political Power of CEOs and Corporations (15:43–27:27)

• Emergence of the “Fourth Branch”:
  Felix Salmon: Observes CEOs (notably of Twitter and Facebook) have acted faster and more decisively against Trump than Congress.

  • “It’s CEOs… having more power than Congress to censure Donald Trump… and flexing political money muscles in very explicit ways.” (15:45)

• Corporate Money vs. Democracy:
  Cathy O’Neil: Suggests business pressure—more than voter opinion—moved Mitch McConnell on impeachment and dried up GOP funding:

  • “We’re literally saying… never mind the democratic masses, we need the money.” (17:32)

  Emily Peck: Skeptical of sudden corporate courage:

  • “Congrats. You’re so brave, CEOs of America… It is really disturbing that it’s not the people who have the power to censure Trump. It’s like companies Whispering to Mitch McConnell: We won’t give you money anymore.” (19:43)

• Limits and Dangers of Corporate Activism:

  • It’s anti-democratic; decisions on banning Trump or cutting donations are made by a few unaccountable people.
  • “Companies aren’t democracies… they can be a lot more nimble.” (Anna Szymanski, 18:45)
  • Corporate shifts (e.g., suspending donations to anti-certification Republicans) may be temporary, not a lasting change.
  • Longer-term, the Republican coalition appears split: “The Republican Party can no longer really encompass both of those. It can no longer encompass the corporate donors and the Trumpists.” (Felix, 22:45)

• Uncharted Political Territory:

  • Panel wonders about the future of the “business party” as corporations find little alignment with Trumpism, but also no clear home in Democratic circles primarily focused on taxation and regulation.

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3. Parler Hack, Digital Security, and Internet of Things (28:07–37:38)

• Parler’s Collapse:

  • Cathy O’Neil: “Parler is the alternative social media platform for Nazis… a lot of the planning of the riot happened on Parler and then they got shut down.” (28:38)
  • Parler’s atrocious security allowed hackers to create admin accounts and mass-download all user data—including “deleted” content and drivers’ licenses.

• Internet of Things (IoT) Sex Toy Hack:

  • Cathy’s mom, a computer science professor, explained how bad coding in a connected male chastity belt allowed hackers to take control.
  • Hackers sent the message: “Your cock is mine now,” and demanded a bitcoin ransom. (32:40)
  • Mostly the locked devices were not in use, so the threat was more theoretical than practical.

• Common Lessons:

  • Security is often neglected by developers, and average users have no real way to judge the safety of apps, platforms, or devices.

  • Felix Salmon: “If you’re a user of social media apps or chastity belts or anything that is connected to the Internet, you do not have the ability… to work out whether what you’re using is secure or not. So there’s so much that you just wind up taking on trust.” (34:38)

  • Cathy suggests a business model for independent infosec testing, but recognizes limitations due to rapid evolution and varying threats (e.g., NSA vs. hackers).

  • Anna Szymanski: “Maybe don’t be an early adopter…” (36:49)

  • Cathy O’Neil: (On connected sex toys) “Internet of Things sex toys are worth the risk… still safer than an actual man.” (36:57)

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4. Numbers Round (37:38–44:09)

1. Cathy O’Neil — 74%

• UT Austin computer science used an algorithm to cut the time spent reviewing grad applications by 74%; the concern: it automated existing biases rather than removing them. (37:41)
  • “How much time can we save by making a computer do this biased, racist, sexist thing?” (38:16)

2. Anna Szymanski — 66%

• The average annual pre-fee return of Renaissance Technologies’ Medallion Fund, 1988–2018, highlighting the scale of private market profits that fund projects like Parler and political influence.
  • “The story of Renaissance Technologies is fascinating...” (40:04)
  • Note: outside (non-employee) investors lost money, especially in 2020.

3. Felix Salmon — $12.1 billion

• JPMorgan's Q4 2020 profit: the largest ever for a bank, with a 40% profit margin.
  • “It is more profitable than Facebook, which is meant to just be an algorithm that throws off money.” (43:01)

4. Emily Peck — $3,000/month

• Amount the Secret Service paid monthly to rent a studio apartment toilet so agents guarding Ivanka Trump and Jared Kushner could use the bathroom.
  • “They basically rented a toilet… so far spent over, I think $140,000…” (44:05)

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Notable Quotes & Memorable Moments

• Felix Salmon (on Biden’s package): “This is every liberal’s wet dream, right?” (05:18)
• Cathy O’Neil (on tech company bans): “We’re literally saying… never mind the democratic masses, we need the money.” (17:32)
• Emily Peck (on CEOs standing up to Trump): “Congrats. You’re so brave, CEOs of America.” (19:43)
• Cathy O’Neil (on IoT chastity belt hack): “That hacker… took control of people’s chastity belts, literally sent them the message, your cock is mine now.” (32:40)
• Anna Szymanski (on reopening schools): “This is kind of like a backdoor small business rescue… absolutely crucial to the function of the economy.” (01:52)
• Cathy O’Neil (on algorithms): “They just said, oh, we’ve done this so many years and it’s so time consuming. Let’s just automate this.” (38:16)

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Important Timestamps

• 01:00 – Biden’s $1.9 trillion stimulus: structure, priorities, and message
• 04:00 – Decoupling spending and taxes: economic orthodoxy shifts
• 10:06 – “Cleaning up the mess”: Biden as post-crisis janitor for Trump
• 12:21 – Norms, frustration, and the changing center
• 14:08 – Economic leftward turn and Larry Summers as a villain
• 15:43 – CEO and corporate political activism, big tech’s power
• 17:32 – Corporate money is more decisive than public will
• 28:38 – Parler hack: timeline, technical failings, aftermath
• 32:27 – Hacked chastity belt: technical explanation, comic/ridiculous details
• 34:38 – Consumer trust and the impossibility of individual security analysis
• 37:38 – Numbers round (automation in academia, hedge fund returns, record bank profits, and Secret Service bathroom rental)

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Tone & Style

The panel is conversational, witty, and at times playful—even when delving into dark or absurd corners of business and technology. There is room for both skepticism and optimism: the excitement about a rational government response is balanced with deep worries about systemic corporate power and digital vulnerabilities. The show’s mix of “normalcy” and “strange times” underscores their subtitle: welcome to the land of somewhat normal.

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Transcript

[A]

Foreign.

[B]

Hello.

[C]

Welcome to the land of Somewhat Normal edition of Slate Money, your guide to the business and finance news of the week. I'm Felix Salmon of Axios, here with Anna Shymansky of Rakingviews.

[D]

Hello.

[C]

Here with Emily Peck of HuffPost.

[A]

Hello.

[C]

And a very, very special guest. It's Cathy O'. Neill. She's back on Slate Money. There was a headline about a cock in a box being hacked and hacked in the box. There was no way that Kathy could not come back onto Slate Money. So welcome back. Kathy is going to be talking to us about hacking penises. She is going to be talking to us about.

[B]

That's going to go in my Twitter bio, Felix.

[C]

She's going to talk to us about the parlor hack. We're going to talk about how CEOs and corporations are exercising political power in unprecedented ways. And of course, we are going to talk about the $1.9 trillion stimulus proposal that Joe Biden has just come out with. We hope it will happen. All of that coming up on slate money. Emily, $1.9 trillion. I have a rule that we don't talk about vaporware on this here show. If someone does something big, then we talk about it. But if someone just talks about some vague promise of big things in the future, we wait until it actually happens. Except for $1.9 trillion is so big. We should talk about this. What am I talking about?

[D]

Yeah, we should talk about it. This is the Biden coronavirus rescue plan that he unveiled on Thursday. It's a $1.9 trillion package. And it's like at a store when everything's 99 cents, they couldn't go to 2 trillion. They just kept at 1.9. And it includes lots of goodies. It's basically, it's a message. And the first message is, you can't rescue the economy if you don't stem this awful pandemic. So there's lots of money to do that. There's money to ramp up vaccine distribution, including, like a jobs corps of people that would go out and help actually administer vaccines. There's money for schools so they can reopen if they weren't able to because they couldn't afford PPE or like distancing or ventilation. There's a lot of women stuff that makes me really super happy. There's money to rescue the ailing childcare industry, which has been really in bad shape right now. This is kind of like a backdoor small business rescue, if you look at it in one way, because these are small businesses that are Absolutely crucial to the function of the economy that let allow mostly women and parents work. There's robust paid family medical and sick leave. It's a huge. A huge mama.

[C]

Did we mention the $15 minimum wage that gets thrown in there as well?

[D]

And a $15 minimum wage recommendation? And I believe, and I was asking them about this this morning, a proposal or a pitch to get rid of the tipped minimum wage, which is like a nightmare thing we have.

[C]

Yeah, that's in that. Get rid of the tipped minimum wage. Get rid of the lower. Did you know there's a lower minimum wage for disabled people?

[D]

I think I did.

[A]

Get rid of that, yes.

[D]

Get rid of these things. They're so discriminatory. The tip minimum wage really discriminates against women, especially women of color. Right. Like in some places you make like two dollars and hour.

[A]

It's just.

[D]

It's absolutely wild. So it's a package that recognizes the people who've been really disproportionately hurt by the pandemic, and it recognizes how the pandemic and the economy are intertwined. And I'm sure you will want to talk about how it's also like a package that's like, yeah, we're going to borrow money to spend to do this. Like, the deficit doesn't matter.

[C]

There's no pay for in this at all. This is one of the most refreshing things about this package for me is that it divorces the taxing and the spending. Right. Like, fiscal policy is made up of taxes and expenditures. And in Congress for decades, there's these two have been very closely linked. And every time you come out with a spending program, you need to come out with this thing called a pay for. Like some kind of, like, how are you going to pay for it? And I have no problem with taxes going up, revenues going up, deficits coming down. I have no problem with that. But that's separate. And so I feel like it really makes sense to me to, like, let's just do the spending that we need to do, and then if we need to raise taxes for whatever reason at whatever time, we can do that in a separate bill. And you don't need to tie them together.

[A]

Yeah. Also because if you are significantly increasing taxes, that could also offset some of the spending that you're doing. So while it is perfectly reasonable to say that once the economy is on sounder footing, we can consider various spending increases, I think that that's reasonable, but I don't think it makes any sense to do those right now when the economy is still very weak.

[C]

So, Cathy, this is every liberal's wet dream, right? This is exactly what everyone wanted, or all the right thinking leftists.

[B]

Can I be honest? Like, I didn't read as much about it as what you guys just said, but it does sound pretty good. The only sort of pause I have is what you said about, like, the minimum wage for people with disabilities, which is that, like, I have a friend who has an entire company based on giving people with disabilities an opportunity to work, and they just can't be as productive as people without disabilities. Like, she specifically wants to give them jobs and that's gonna ruin her business. She won't be able to employ them. You know, it's actually a company that builds things for people with disabilities. Like, it's a really, really wonderful company that really needs that exception to stay in business. But anyway, I'm just saying, like, that's a relatively minor detail in this larger, very good story, and I hope it works. I mean, the real question, of course, and fel, you're right to point out that we shouldn't pretend to pay for everything as we go, but, like, the real question is, can this actually happen?

[C]

It's clear that the only reason he came out so big and so bold was because of the results of the Georgia election. Right now that Democrats control the Senate, he feels that he can ask for something big. And it's really interesting. The US Chamber of Commerce, which has been in the pocket of the Republican Party for as long as I can remember, came out within about five minutes and said, this is a great plan. We survive, support it. I do think there are going to be Joe mentioned, you know, fiscally conservative Democrats who don't want to spend this much money. But I also think it's entirely possible, depending on how sort of constructive and Cooperative Mitch McConnell is feeling, that there will be Republicans, you know, Lisa Murkowski, people like that, who will want to sign on to this. The centerpiece of this proposal is raising the checks to 2,000 from 600. So that's an extra $1,400. That's something that not only Donald Trump has called for, but that's something that Marco Rubio has called for. So I think it's doable. Not only doable that they might be able to get something very similar to this through, but also given the way that horse trading works in the Senate, it's actually possible that the total bill will become bigger rather than smaller in reconciliation. In order to get votes, they'll throw some money, extra money at some senator's pet project. And that's going to be what gets over the line.

[A]

It's possible that if I had, if I was betting, I'd say it's probably going to end up being slightly smaller. I mean, I think you're right that it is entirely possible that you will get Republican support. It is entirely possible that some of the more conservative Democrats will be upset. However, I think, you know, because you have things like the $2,000 checks, which we can argue if that's like the best use of funds. You know, like there are ways you could say, well, if I cut a little bit here, and then you would reiterate everything else. So I would be shocked if it was bigger.

[D]

I do want to say that just seeing a coherent plan released by the President elect was really mind blowing to me because I realized, I mean, it's no secret we don't like Trump, obviously, but I realized that, like, this pandemic has been going on for almost a year. They never put out a plan. I never got a plan from them that I was able to understand and read that had any kind of vision or any kind of recognition of the scope of crisis we're facing. So to bring it some positivity here, like, it's heartening to see some leadership and vision. And there's definitely little, like, squabbles I noticed, you know, progressives having with the plan. But just to have an acknowledgement that there's a huge crisis that's been going on and we need to address it and here are the ways and like, here's our rat rationale is like, truly seems revolutionary right now.

[C]

The whole thing is a rebuke of Trump in a not very subtle way. So it's like we're going to spend $20 billion just distributing the vaccine. There's no way that should be necessary in 2021. You know, distributing the vaccine is stuff that should have been put through legislation sometime in the summer before the vaccine even existed. They're going to spend $9 billion on extra, basically IT security stuff in the wake of that massive Russian hack to try and rebuild the information infrastructure of the US Government, which has now been just completely infested by Russian worms and Trojans and all the rest of it. And again, that's something that the Trump administration should have done months ago and hasn't done. And there's a whole bunch of stuff in this build that you're just looking at and saying, well, I'm glad it's happening, but there's no reason, there's no Good reason why the federal government shouldn't have done this a long time ago.

[D]

The money to schools, too. Like, that should have happened in the summer before schools open in September. This is basically the Biden administration paying off the debts of the Trump administration. They're coming in and paying off the credit card bill, basically cleaning up the mess. Half of it.

[A]

It's a return to normalcy. Right. I think we've existed in this Trump world for so long that really obvious things seem somewhat like, oh, wow, we actually have a real plan. We actually have, like, these very obvious things you would do, which probably even other Republicans would have done in the situation if they were in Trump's shoes, but he didn't. And I think hopefully now we will at least, you know, be back in the land of somewhat normal.

[B]

If you guys don't mind me pooping on your positive just a little bit, that's your job.

[C]

Kathy, come in here with your.

[D]

We need that.

[B]

And, you know, so be it. If that's my job. No, it's just like. And you'll excuse me, because I'm thinking. I just turned in my book, by the way, which is why I have time to be here today, and I'm so glad I have. But I just turned in my book called the Shame Machine to my editor. And, like, I'm very fixated on the concept of norms. And, like, when can we shame people? When can we not shame people? And what's happened, of course, and I'm not. I'm just restating what you guys just said, in my way of thinking about it, is like, we went from being completely unable to share norms and to even consider shaming Trump to being like, okay, well, at least Biden is speaking our language. We might not agree with him in every way, but at least he's in our norm group. And we can, like, be upset when he doesn't represent our full view. And, like, that's really good because it's a huge difference. Like, it goes from inescapably away from us to something that we feel a little bit of control over. But I'm just getting ready. I'm girding myself for the fact that it's like, it's going to be really frustrating because we're like, oh, wait, you speak my language, but you're not listening. You know what I mean? Like, we're going to go back to the same frustrations. We forgot we loved so much. We forgot we hated so much is what I mean. It's like, it's good because he's within our norm group. But it's going to be just so frustrating but not scary and chaotic and actually existentially threatening. So that's good.

[A]

Well, but I would say that like what Biden as a moderate now represents is so much more far to the left than what would have been a moderate five years ago. So I mean, I think this is.

[C]

Not a moderate poll. There's nothing in this $1.9 trillion bill that really especially not when you add in the extra 2 trillion or so that he wants to do on top of this. Once this emergency bill is down, he's got this whole build back better plan to turn the economy green and everything. Like, he is not a moderate economically speaking. He is a moderate sort of in his soul. Perhaps he's, you know, an older gentleman who doesn't, who's never been a firebrand. But economic orthodoxy and the Democratic Party have moved significantly to the left since.

[D]

Well, he's got that the economists advising him are so much to the left of what we saw with Obama. Like Summers is gone. He's got Bernstein.

[B]

Summers is gone. Can we just have a moment of silence?

[C]

I think some of them are to the left of Obama's. Top of them are the same. But the, the, the economists have moved to the left like someone like Janet Yellen. I think it is fair to say that she has moved to the left since she was Fed chair under Obama.

[B]

Well, I think it's fair to say that things have gotten a lot worse. Inequality is much worse. We're in depression. I mean, God, if there was any moment to do something real, it's now, right? So like that's just not a complete proof to me. Like we'll see. We'll see. Like I'm. Yeah, well, I'm glad you guys are happy.

[C]

The proof point is our good old friend Larry Summers, who I know you love very much, Gabby, oh my God. Who came out back when we were talking about the checks and he was saying, well, if we give $2,000 checks to people, that is going to overheat the economy.

[B]

Oh my God.

[C]

So if Larry Summers had any influence in the Biden administration and we can all be thankful that he doesn't, this kind of thing would never get off the ground. And on some level, given that we've already had trillions of dollars of stimulus in 2020, if we're going to add another 2 trillion at the of 2021 and then even more trillions later on in 2021, we are genuinely entering completely uncharted fiscal territory here. No government has ever done this kind of thing. I went back to the New Deal, to the Marshall Plan, to like, you know, this is bigger than any of that and it's way, way bigger than anything we saw after the financial crisis. So I don't know what overheat means. If it means more inflation, I'm like, bring it. We need more inflation. And I'm not worried about it. But this is clearly something that the Larry Summers of this world are worried about.

[B]

Felix, I love how you got us to agree on. At least Larry Summers hates this.

[C]

Yeah, I mean, the way you get this through the Senate is just by wheeling out Larry Summers to say that it's a bad thing and then everyone will vote for it.

[D]

This is also kind of like a do over for the way that they didn't go big in the Great Recession. Everyone, I think, kind of regrets that not enough money was spent and they capitulated to deficit hawks or whatever. So I think there's a big push from the left and the progressives to be like, don't F this up again. Like, we don't want to go through like 10 years of a sluggish recovery again. Like, get it right this time. Go big.

[C]

Moving out of the White House and the Senate and the legislature. I am particularly interested this week in the way that there's this, what I call the fourth branch of government seems to have emerged and it's CEOs. And I wrote about this in the context of basically Jack Dorsey and Mark Zuckerberg seemingly having more power than Congress to censure Donald Trump. We've also seen a huge swathe of corporations basically suspending all political donations, or certainly political donations to members of Congress who voted not to certify the election. And we've seen across the board a bunch of CEOs and corporations flexing political money muscles in very explicit ways and in very, like, explicitly anti Trump ways. And they're taking sides in the way that we don't normally see corporations taking sides. And I feel like that's new and it's something that once it has escaped, it can't go back into the tube again. What do you think about this, Kathy?

[B]

I would go further, like, and this is just a conspiracy theory that I've cooked up, but I don't think it's wrong. Which is like, you see McConnell sort of open to impeachment and stuff all of a sudden. Why? Probably because the lobbyists are like, you're not going to get money from us. You know, it's like. And of course, I'm actually all for impeachment. And I'm also, like, really happy that Trump doesn't have Twitter as a weapon against the congressmen and senators who vote to impeach. That's a major, major deal. But at some level, we're just like, okay, we don't have to worry about the base. I mean, the GOP is thinking they don't have to worry about the Trump base anymore relative to how much they have to worry about the money drying up. And so, like, even though it's working for me in a certain way, it is like a terrible precedent. Like, we're literally saying that never mind the democratic masses, we need the money. I mean, do you agree?

[C]

I totally agree. There's, like, this absolutely the wrong way. There's absolutely nothing democratic about this. Right. So the rank and file, I mean, even if you. Like, there's nothing democratic about the people in America voting for how Trump is treated, but there's nothing even democratic within these companies. You've seen large petitions in the rank and file of Facebook and Twitter for years saying, we've got to take Trump off our platform. He is causing extreme harm. And the CEOs at those companies and I guess the boards of directors saying, no, we're not going to do that. It is really a very, very tiny number of people. It's really just Jack Dorsey and Mark Zuckerberg and perhaps their boards who are making these decisions. And they have extraordinary amounts of power. They're completely unelected, and they're basically completely unaccountable. That just seems like a massive Democratic deficit, even if we agree with what they wound up doing.

[A]

Well, one, I would say that companies aren't democracies. Companies never will be democracies. That's not what companies are designed to be. I think it's perfectly reasonable to be concerned about what this says about concentration of power among a small number of companies. I mean, I think that that's totally reasonable. And part of what we're seeing is also just that, by definition, because of the way government is structured and because of the way corporations are structured, corporations can be a lot more nimble. They can do things a lot more quickly. And again, partly that is because they are not democratic, that you can have an individual say, okay, this is what we're doing. That is just simply not how government is designed to be. This doesn't mean that people shouldn't be concerned. This doesn't mean that we shouldn't think moving forward. Is there any way to somewhat counter this? But I also think, as you said, this is a change that has been made. Companies are now expected to take political positions, and if they don't, that silence is seen as taking a stand. So I don't think this is going to change.

[D]

I have a bunch of thoughts, some more coherent than others. First, with Trump getting kicked off Twitter and Facebook, like, I give no credit to Twitter and Facebook for doing that. I mean, better late than never. Absolutely. It's wonderful to not have Trump tweets in my life anymore, in our lives anymore. Great. But, like, congratulations to the businesses of America for taking their support away from a president who's outgoing. Like, yeah, they were. They were all tacitly supporting Trump for the past four years while he was in power. Now he won't be in power. So now they're taking a stand. It's like, I don't celebrate this. I think it's. It's like one step above lame, basically. Yes. Taking support away from the guy not in power. Congrats. You're so brave. CEOs of America, you know what I mean? Like, I give these people no credit. And it is like Kathy was saying, it is really disturbing that it's not the people who have the power to censure Trump. It's like companies Whispering to Mitch McConnell like, We won't give you money anymore, that actually, like, turns the page from this. It's disturbing that companies have this much power and when you see them wield it and it's on kind of like our side, there's a tendency, I think, to celebrate it, but there we should not celebrate it because one day it could be on the other side too.

[B]

I think there's two different issues here. I'd like to separate them. And one of them is like the Twitter, Facebook misinformation problem, which I think our government should and will eventually regulate. So I do think that, like Zuckerberg, Dorsey, they have too much power. Thing should be, you know, modulated or mitigated in the next few years as we figure out what the rules are. The second issue, though, is a Citizens United issue. And it's about like the finance industry as a whole saying, we're not giving you guys any money. I mean, finance doesn't pick and choose, really. I mean, as we know, finance gives a lot of money to both sides, but the point is that they give so much money so consistently that, like, those people depend on that money. So that's a different problem and it's, I think, a bigger long term problem because it's like that's the real river of money that they're worried about, that Mitch McConnell is worried about.

[C]

I don't think that river is drying up. I think that corporate America in general understands the importance of having a two party system and they will wind up trying to push back against whatever excesses they think that Democrats are playing at. And they're going to start funding Republicans pretty soon. I think this is very temporary. The people who are suspending all political donations, that's going to be temporary. And in terms of the permanent suspensions, that's just for the individual members of Congress who voted against certifying the election. And I don't. So I think Mitch McConnell doesn't have too much to worry about there. What I do worry about is what Janan Ganesh wrote this really good column in the FT this week about how the Republican Party just, it's not really a thing anymore. Right. So Trumpism is not going away. Trumpists are not going away. They do dominate the base, they do dominate the elections. They will elect the people they like and not the tools of the corporate elite. But they have now shown themselves that that wing of the Republican Party has shown itself to be completely unacceptable to the corporate donors. And the Republican Party can no longer really encompass both of those. It can no longer encompass the corporate donors and the Trumpists. Like that's what happened when the Capitol was stormed was that that broke. And it's kind of impossible to imagine how that's going to get fixed and how there's going to be a coherent Republican Party or a financed Republican Party. And this isn't a political podcast. I don't want to get too much into this, but that I think is going to be one of the huge stories of the next two to four years.

[A]

Yeah, I mean, if you look at the history of the political parties, I mean, they used to actually be much more ideologically diverse, for better or worse. I mean, some of the ideologies that was in that diversity were horrible. So I'm not necessarily saying that's always a good thing. But you know, the Republican and the Democratic Party were very, very different in the past. You obviously had the Dixiecrats who were extraordinarily conservative, very, very racist. Part of the reasons that a lot of the policies, the New Deal policies and such excluded African Americans. So it will be interesting to see if now if we end up with these parties that end up going back to something like that and having just a much wider swath. I mean, I would love if the Trumpists just went away. But as you said that is probably unlikely, but as you said, in a world where you need so much funding in order to get elected, I don't.

[B]

Know if that's possible.

[A]

That was obviously a very different world in the past.

[D]

I guess the question that Anna, you just made me think of is like, the Republican Party has always been the business party. Right. Republicans are supposed to be better for business, but now is that over?

[A]

I mean, I think you still have a obviously like large swath of the Republican Party that, you know, that, that, that is still a big focus. But there is a not insignificant part, especially in the House, that that isn't really the focus. Like the kind of Trump.

[C]

I can't think of many moderate Republicans out there. I mean, this is, this is where I was trying to define the ideology of the CEOs. Right. And basically they love tax cuts, they love corporate tax cuts. They're small C conservative, but they're also liberal. You know, they are happy to come out and say that climate change is real and we need to address it. They're happy to come out and say that systemic racism is real and we need to address it. They align themselves with the Democrats on social issues and they want tax cuts and there's basically no party for them.

[A]

Yeah, I mean, I do though say, and I think often that is correct and obviously like CEOs or corporate leaders, whoever, obviously everyone's not exactly the same. And yes, it is definitely true that you had a lot of people who were very, very much supported the Trump tax cuts, but you also had a lot of people who were like, they probably tax rates didn't need to go quite that low. They didn't need to include the individual tax cuts. So while, yes, I think in general a lot of people in the kind of, you know, corporate world would have lower taxes rather than higher taxes. I don't think it's as simple as that. Every single tax cut they will support.

[C]

I've never seen a tax cut they didn't support. But maybe, maybe you're right.

[D]

I don't think a party can just be the tax cut party. Like, there's gotta be a little bit more some fake rhetoric about rah rah business.

[B]

Yeah. And like, look.

[C]

Oh yeah.

[D]

Anti women, anti women and racism.

[A]

But like having a party that is, you know, kind of aligned with corporate interests is something that has always existed. And you know, you don't need that to be so dominant that labor doesn't have any control. But like, again, like, you need these multiple interests and to exist in our major parties.

[B]

As inequality increases and fewer and fewer people actually care if there's a, you know, if the market goes up on a given day, like, there's fewer and fewer people to vote pro corporate. So I don't want to have a party, just the entire party can sustain that pro corporate stance.

[C]

Like, no one's going to vote for the pro corporate tax cut party.

[A]

Last year, even, like, a number of people, you know, I spoke with at, you know, different banks and such were actually much more aligned with, like, we need to spend more, we need demand. We understand that, like, ultimately, like, right.

[C]

The second best form of fiscal stimulus is spending. Right. The first best form of fiscal stimulus is give me my tax cut.

[A]

No, but none of these people are calling for tax cuts. Not a single person I spoke of is like, we need more tax cuts.

[C]

They were saying, but you're absolutely spending.

[A]

We understand that these supply side solutions don't work for the problems we have right now. I'm not saying they're saying, oh, let's, let's have wealth taxes. Obviously not. But if you have part of the party where their focus is on more economic growth, you will find people that are more interested in spending.

[C]

Hence the chamber of commerce coming out in favor of Joe Biden's spending plans.

[D]

It's possible that business interests got everything they wanted and now, like, realize that that wasn't enough. So they have to switch party affiliations for a little bit to balance things out. Like, Trumpism was so wild and crazy and irrational that like, yeah, the businesses never supported Trump.

[C]

Right? Not in the primary. They. But they, you know, they wound up once he was the candidate. Kathy, I want to ask you about the other massive Trumpist cancellation of the past week. It was not just Trump who got his accounts canceled. It was also Parler. Tell me what is Parler and how much of a garbage fire is it and what happened to them?

[B]

Oh, my God. So Parler is the alternative social media platform for Nazis. And like, a lot of the planning of the riot happened on Parler and then they got shut down. You couldn't get the app on the various app stores. Eventually Amazon, like, booted them off their server. But before that happened. Can I talk about the, the hack that I read about? So exciting. I should tell you that I woke my mom up this morning in order to talk to her about computer security. She's amazing. And you'll find out why in a few seconds. So what happened was Twilio, which is a company that does backend services for companies including Parler, was in charge of their like passwords and security. And of course they just hosted it, they didn't actually control it, they weren't in charge of the settings. But when they backed out at like, you know, the night of the riots and sent out a press release, they had enough information in their press release saying we're no longer hosting their backend that hackers were able to sort of infer, you know, how to sort of start a new account in Parler. And because Parler hadn't bothered to like set the situation up like well at all, including needing email verification to set up a login, they were able to create administrative accounts, administration accounts and like they did millions of administrative accounts and then they sort of categorically downloaded all of the information from Parler that had ever been there. Included like so called deleted conversations of Parler members for posterity and including the.

[C]

Data that individual Parler users needed to submit in order to prove who they were if they wanted to be verified. If you just like verify pictures of their driver's license and stuff.

[B]

Exactly. So that's going to be helpful for the FBI, I imagine.

[C]

And so was your mom on that list?

[B]

No, no, but my mom. Okay, so this can we segue to my like the reason I'm actually on this show today and like my favorite topic which is Internet of Things Sex toys. So I found out that there was an Internet of Things Chastity belt that was hacked this week. And so I called my mom to like understand how this particular Internet of Thing hack worked.

[C]

Is she the expert on Internet of Things? Chastity Bells.

[B]

My mom's a computer science professor at UMass Boston. By the way. I should mention she's still actively teaching. She's like 79. She's writing a book about JavaScript. Right. So she's amazing. And I told her the sort of premise of my question and she was like, oh, I wrote an Internet of Things app last summer. I wasn't controlling any penises though. I was controlling a fish tank feeder which was like similar thing. She's like, every now and then remotely you could feed the fish. And I was like, okay, I can see the parallels here, mom, but can you explain it to me? And she was like, well, here's how it works. Your app talks to a service, the service talks to the cloud server, and then the cloud server talks to your device. But she said, I originally made it so that my app talked directly to the cloud server. But then I realized it wasn't secure because basically. Do you know if you're on your browser, you can look at the HTML code of the web page.

[C]

Yeah. View source. The greatest thing in the world. We love you, Source. Yes.

[B]

Well, she says it's kind of like that it's exposed when you're using an app, so people who know how to do it with a right click or something can look at the underlying HTML code or the JavaScript code that's sort of executable for any kind of app. And that will sort of. If that's directly talking to the cloud server, it will actually, because it's executable code, have to show you how it gets in, what are the passwords, everything. And so that if you see that happening, you can sort of bypass. You can just write your own sort of entrance into the cloud server and you can control the device directly. And she said that's exactly what happened for the chastity belt that somebody.

[C]

So wait, can you please talk a little bit more about this penis prison and the bitcoin ransom? Because this story is just so perfect.

[B]

Yeah.

[A]

Because when you say.

[D]

When you say chastity belt, I'm thinking women, but this is actually has to do with the male. The male parts.

[B]

Oh. And my favorite thing was, like, the person, that hacker who, like, took control of people's chastity belts, literally sent them the message, your cock is mine now.

[C]

Which is like, come on, your cock is mine now.

[B]

And they demanded a ransom in bitcoins to be paid in bitcoins, which I think is so amazing.

[C]

The one thing that the hacker couldn't do, it turns out, is work out whether the penis lock was actually on a penis at the time.

[B]

Well, that was my question, Felix, and I'm glad you brought that up, because it looked to me like a lot of people were like, oh, I didn't even know I still had that.

[C]

Yeah, exactly. So a bunch of people got this thing saying, send me $750 in Bitcoin or you'll never be able to unlock your penis. Which would be quite terrifying if it wasn't for the fact that this chastity belt was obviously lying in the drawer somewhere, nowhere near their penis. And. And basically what this bitcoin hacker did was brick their chastity belt, which obviously they don't want unbricked because it is clearly a terrible idea and no one would ever use it again even if he did unlock it.

[B]

That's a good point. Well, they did. The company that made the chastity belt now claims that they have solved this problem.

[C]

Oh, I'm so reassured. If they can unlock it for me? I'll totally start putting it.

[B]

Yeah, I think it would have been better if they had actually found someone whose dick was in the chastity belt, like at the moment and it still hasn't gone to the bathroom. You know, something like that. But no, we haven't heard that yet.

[D]

What is the takeaway from these two stories? The parlor hack and the penis hack? What are the commonalities?

[B]

The takeaway is pretty clearly that you actually need to pay attention to security. Like, you actually do infosec.

[D]

What could I have done if I was. If I was a parlor Nazi? Like, what, what was my mistake besides being a Nazi using parlor? Like, how do you pay attention to that stuff?

[B]

Oh, the people who built the parlor app just did not care. They just didn't. They didn't do the standard security.

[C]

But I think, I think this is the real lesson, right? Is that if you're a user of social media apps or chastity belts or anything that is connected to the Internet, you do not have the ability unilaterally on your own to work out whether what you're using is secure or not. So there's so much that you just wind up taking on trust. And right now, one of the big debates on Twitter is whether WhatsApp is secure. And WhatsApp is putting out all of this messaging and PR saying we're 100% end to end encrypted, we don't keep records of conversations, blah, blah, blah, blah, blah. And all of these infosec people are saying, that's crazy. Don't trust WhatsApp. Use Signal instead. And you just need to kind of work out, who do I trust? Because you as a consumer, as a user of these services, you have no ability to look at parler and say, this is not secure. To look at WhatsApp and say this is not secure. To look at signal and say, this is secure. You need to just find some kind of trusted authority who you can trust to know these things. And honestly, given the secrecy of corporate America and Kathy, your job is to do audits on companies. You know how hard it is to do this. Like, it's basically impossible to know for sure, right?

[B]

Yeah. But on the other hand, I do think that's a business model right there. Like, and Consumer Reports might have it or might have it soon. You know, rent a hacker to try to break into a bunch of different devices and then rate them publicly, you know, So I don't know the problem with that, of course. I mean, the Consumer Reports model is tough because you want to know it once and then you don't want to pay for a subscription to do it.

[C]

And it's not even third party hackers, right? Like for something like WhatsApp, the thing that people are worried about is not that some hacker is going to be able to read my messages, it's that the NSA is going to be able to read my messages. And they can do that with subpoenas and things that individual hackers just have no access to.

[B]

And that goes back to your original point about the undemocratic nature of these decisions. Like that's basically an executive decision whether to turn stuff over to the nsa.

[A]

I think one last takeaway would be maybe don't be an early adopter of some of these things. Probably better not to be.

[B]

I'm just going to push back. I mean, I feel like Internet of things sex toys are worth the risk, as I like to say. One of the original sex toy shows I came on to do with you guys is a while ago when they were like, you know, some of the sex toy robots might be killer robots. And I was like, still safer than an actual man. Like, come on. Like, the risks aren't that high.

[C]

At some point, Kathy, maybe in the, maybe in the Slate plus segment, you're going to explain to us the utility of Internet connected chastity belts for men and women.

[B]

Mostly upside, small downside risk is all I'm saying.

[C]

Let's have a numbers round. Why not? Kathy, did you bring a number this week?

[B]

I did bring a number and this is like I wanted to sneak in this story about UT Austin computer science department using an algorithm trained on their own personal data to decide who should be a graduate student in computer science at UT Austin. And I was like, I wonder if there's a number attached to that. And of course there was. And it was how much less time the professors had to spend on each folder. And the answer is 74%. So that's my number, 74%. And it's kind of emblematic to me of like the only real thing they cared about was its efficiency. Like how much time can we save by making a computer do this biased, racist, sexist thing that we don't want to do because it takes too much of our time.

[C]

Do you think the algorithm was more biased, sexist and racist than the professors left their.

[B]

No, I think it was probably pretty similar, right? It might have been noisier because it's just a toy version of the humans that used to implement their bias. But the idea Is that they just said, oh, we've done this so many years and it's so time consuming. Let's just automate this. And they really should have known better. This was back in 2013. They really should have known better. I mean, this is not the first time this exact thing has happened.

[C]

Was your book out in 2013?

[B]

No, it wasn't, but there's plenty of examples.

[C]

Oh, okay.

[B]

Yeah, I know.

[C]

It's only after your book was published that they really should have known better.

[B]

But come on, they still used it last year. So there was something about hiding their head in the sand about this that was extraordinary. I guess the answer is they were saving 74% of their time, you know, so that's why they kept using it.

[A]

Money say that they could use to pay their new football coach.

[C]

Oh, is that right?

[A]

The new football coach got a huge contract. I'm not saying it's directly related, but they have.

[C]

I'm sure it's related.

[A]

Previous football coach.

[B]

It might actually, actually be related.

[A]

I'm sure it's related to saying, have.

[C]

We reached the point yet? Do we have like Moneyball in college football where people are trying to hire football coaches on the basis of algorithms?

[A]

No. No. Yeah. The problem with college, with college sports is that because in theory, you know, these are student athletes. You can't do the like getting people for cheap and it's, it's a lot harder.

[B]

Oh, you absolutely can. And I'm sure they do. Felix is the answer is like every.

[C]

Coaches are really expensive.

[B]

But also the number of wins is directly related to alumni giving. So it's absolutely moneyballed up the butt.

[C]

All right, enough sports ball. Anna, what's your non sports related number?

[A]

My non sports related number is 66%. That is Renaissance Technology, their medallion fund. Its average annual return between 1988 and 2018 before fees. And I say this because Jim Simons, who's the founder, actually stepped down this week. This story is actually somewhat connected to Parler because obviously Robert Mercer, I think his daughter was one of the funders of Parler. And although I think the understanding is Jim Simons and Robert Mercer have very different politics. Having said that, this fund, which has been just insanely profitable, obviously is why Robert Mercer had that much money, but it really is. The story of Renaissance Technologies is fascinating. There's a really good book by Gregory Zuckerman, who's a Wall Street Journal reporter that I highly recommend about Renaissance Technology and Jim Simons.

[B]

I just, I just need to say something about this. I used to work at the de shop, I've traded in futures. We were directly competing with the medallion fund. What I thought you were going to say, and I need to say, is that like, that's closed to outside investors, but the ones that are open to outside investors have lost so much money for so long, they go down a year every year.

[C]

They had a terrible, terrible 2020.

[B]

So when I read the Jim Simons, who's like, by the way, a huge Democratic donor, you know, very, very different from Mercer. But when I read he was retiring, I was thinking like, the analogy here is like people keep investing in the outside investor funds for Rentech. Kind of like Giuliani tried to work for Trump. You know, just like somehow you feel like he will like me and he will pay me for my lawyerly work. I'm special.

[C]

The difference in returns between the funds that are open to outside investment, which all dropped between 20 and 30% in 2020, and the medallion fund, which went up, I think like 35 or 40% in 2020 after fees. And can I say, the fees on the medallion fund are not 2 and 20. The fees on the medallion fund are 5 and 36. It's the most expensive hedge fund in the world and it's still. Even after 5 and 36 fees, it still went up. Yeah. Rentek has this just astonishing money making machine, but, yeah, it's not available to you or anyone else. My number is $12.1 billion, which is the amount of profit that JP Morgan made in the fourth quarter of 2020. It is the largest profit that not only JP Morgan has ever made in a single quarter, but that any bank has ever made in a single quarter. They made $12.1 billion of profit on $30.2 billion of revenue, which, if you do the math, works out to a 40% profit margin, which is insane for a bank which basically provides a commodity product. It doesn't have any kind of monopolistic moat on anything. And it made $12 billion. Now, admittedly, 2 billion of that was loan loss reserves that they thought they might have to take. And then now they have said they probably won't have to take, but still, this institution is just ridiculously profitable. It is more profitable than Facebook, which is meant to just be an algorithm that throws off money. And I just thought I'd mention that.

[D]

Why they make so much money, Is that why they haven't gotten back to me about refinancing my mortgage?

[C]

They're too busy counting their money.

[A]

They keep sending me letters to refinance my mortgage.

[D]

I was just responding to their letter. But so we don't know why they make so much money right now or.

[C]

Well, I mean there was a lot of volatility and you know, the markets went up. Banks make money.

[D]

Volatility. Right, Volatility. Well, here, you didn't ask. But I'll tell you what my number is.

[C]

It's.

[B]

What's your number, Emily?

[D]

Thank you, Kathy, for asking. It's $3,000 a month. That is how much the Secret Service paid to rent a basement studio. So the Secret Service agency who guard Jared Kushner and Ivanka Trump could go to the bathroom.

[C]

They basically rented a toilet.

[D]

They rented a toilet.

[C]

They had to rent the whole studio.

[D]

In a studio, a ladies studio apartment.

[B]

I hope they also took naps in that basement apartment.

[D]

There's a great story, it's very entertaining in the Washington Post, basically detailing the toilet woes of the Secret Service that were tasked with watching Ivanka and Jared's house in Washington D.C. which has 6.5 bathrooms by the way. But they didn't want the Secret Service to use any of the 6.5 bathrooms and I guess they didn't have an accessible one like in a garage or something which is I guess standard for the Secret Service. So at first they were using the toilet over at the Obama's house.

[C]

They would like run down the street to the Obamas and say hi, can I use your bathroom?

[D]

And the Obama's like the Secret Service there had like a command post so they were using that. But then the post says one of the Ivanka Trump Secret Service people made a big mess in the Obama bathroom and then banned.

[B]

Well, we need a follow up story about that particularly.

[D]

There were no details provided on the.

[C]

Mess.

[D]

But now they worked it out and have so far spent like over I think $140,000 on, over the years, months, whatever on this basement studio toilet. So there you go, some toilet news from me.

[B]

I'm glad we heard that story now because I feel like there's going to be a flood of such stories later that we'll get like overwhelmed by. But I will always remember this one.

[D]

Yes, so will I. I will cherish it.

[C]

On which note, I think that's it for Slate money this week. Thank you Kathy for coming on.

[B]

It's my pleasure to be here.

[C]

Amazing to have you back. Thanks to everyone who's been writing in to slatemoneylate.com and thanks to Jessamine Molly for producing this here show. We aren't going anywhere. We'll be back next week with more slate money.