Slate Money: The Munchkin Edition

Date: December 3, 2016
Host & Guests: Felix Salmon (host), Cathy O’Neill, Jordan Weissmann

Overview

This episode of Slate Money, dubbed the "Munchkin Edition," revolves around the introduction of Donald Trump’s key economic appointees, notably Treasury Secretary nominee Steven Mnuchin ("Munchkin"), Commerce Secretary pick Wilbur Ross, and the political spectacle of Trump’s deal with Carrier to “save jobs” in Indiana. The discussion probes the apparent irony of Trump’s populist campaign rhetoric versus the reality of his Wall Street-centric appointments, the future direction of U.S. economic policy, and the economic substance (or lack thereof) behind these headline announcements.

Key Topics & Insights

1. Steven Mnuchin: Wall Street Insider as Treasury Secretary

[00:35–13:57]

• Pronunciation Fiasco:
  The co-hosts comically discuss the media’s widespread mispronunciation of Mnuchin’s name as “Munchkin,” cementing the episode’s title (01:12–02:14).

  “Once you hear the Munchkin thing, you can't go back. It's really hard to unhear…” – Felix Salmon [01:43]

• Background & Experience:
  Mnuchin portrayed as “Wall Street to the core.” A Yale grad, former Goldman Sachs partner (as was his father), later a hedge fund manager and investor in failed mortgage bank IndyMac—acquired, rebranded as OneWest, and notorious for mass foreclosures (02:18–03:53).
  Connections run deep: George Soros, John Paulson, work for Stanley Druckenmiller.

• Contradiction with Trump’s Rhetoric:
  The pick seems to betray Trump’s anti-elitist, anti-Wall Street campaign message:

  "Then he goes and hires the ultimate Soros and Blankfein person as his Treasury Secretary. It's kind of hilarious." – Felix Salmon [03:53]

• Expectations for Mnuchin:
  The hosts anticipate a classic Goldman technocratic approach: hiring talent, maintaining low public profile, making the “trains run on time” (05:31–07:57).

  "He’s going to let Trump keep all of the limelight... Trump is going to be making the headlines... and he's going to be making the trains run on time in the background." – Felix Salmon [07:36]

• Mnuchin’s Role in Trump Campaign:
  Chosen due to personal/business ties and his role as Trump’s chief fundraiser—a promise apparently dangled to Wall Street donors well before the election ([07:57–08:46]).

• Good or Bad Appointment?
  Mnuchin offers technical competence about bond markets and serves as a stabilizing figure versus possible ‘bomb thrower’ options such as John Allison (08:46–13:57).

  “Honestly, the alternative here was that we'd get some crazy bomb thrower who wants to default on the national debt…” – Felix Salmon [12:48]

• Regulatory Outlook:
  Mnuchin’s history with foreclosures signals a likely rollback of Wall Street regulations—a “light regulatory touch” expected ([09:13–11:50]).

2. Trump and the “Carrier Deal”: Symbol over Substance

[14:01–19:55]

• Carrier's Deal Details:
  Trump “saves” 800 jobs in Indiana by offering Carrier tax incentives, but the company still ships 1,200 jobs to Mexico ([14:01–14:39]).

  “...he made it very, very bad deal with Carrier company with lots of tax breaks to keep them from moving 800 jobs to Mexico. They're still moving like 1200 jobs to Mexico though, I believe.” – Jordan Weissman [14:03]

• Economic Irrelevance of Small-scale Deals:
  The U.S. manufacturing sector loses/creates millions of jobs a month; focusing on 800 jobs is a political spectacle with negligible economic impact ([14:39–15:32]).

  "The economy creates more than 2 million jobs a month and destroys more than 2 million jobs a month." – Felix Salmon [14:40]

• The Complexity of Modern Manufacturing:
  Trump’s “simple” model of where jobs and factories are misses the reality of intricate, North American-wide supply chains enabled by NAFTA ([15:32–16:47]).

  “...the supply chain, especially in North America, will be incredibly complex. And you can't just point to one place and say, that is where the air conditioner's come from.” – Felix Salmon [16:26]

• Carrier as Realpolitik and PR:
  Trump’s intervention seen as about optics—“what can I have a press conference about or a rally around?” ([17:05]).
  In a "post-truth" context, a steady stream of jobs-related headlines may placate voters even as policy reality diverges from promises ([17:22–18:18]).

• Perverse Incentives and Deals:
  Carrier and other companies now have incentives to threaten offshoring to extract taxpayer-funded incentives. Such state-level “race to the bottom” tax breaks predate Trump but may be turbocharged by his direct involvement ([19:07–19:55]).

3. Manufacturing, Trade, and Tariffs: Myths vs. Reality

[19:55–22:29]

• State of U.S. Manufacturing:
  U.S. makes more than ever (by value) but employs fewer due to automation, not trade ([19:55–20:50]).

  “...the manufacturing industry of the United States is bigger and stronger now than it has ever been... What is true is there are fewer manufacturing jobs just because manufacturing is so much more efficient now than it used to be.” – Felix Salmon [19:57]

• Jobs, Offshoring, and Purchasing Power:
  Tariffs may retain jobs but at enormous cost to consumer purchasing power—i.e., high inflation and especially regressive impacts on the poor ([21:26–22:07]).

  “The people at the bottom 10th would actually lose 63% of their purchasing power.” – Jordan Weissmann [22:01]

• Trump’s Actual Economic Direction:
  Despite protectionist rhetoric, appointees appear more focused on lowering taxes/regulation than starting trade wars ([22:29]).

4. Wilbur Ross as Commerce Secretary: The Billionaire Cabinet Expands

[22:50–30:46]

• Who is Wilbur Ross?
  Private equity billionaire, famous for “reviving” dying industries by cutting costs and sometimes offshoring, but with more nuance about globalization and trade than a simple protectionist ([23:28–25:23]).

  “He did it in textiles, denim plants, things like that. And in the process, he would sometimes offshore jobs, but while also keeping an American plant running.” – Cathy O’Neill [24:11]

• Commerce Department’s Real Power:
  Often overlooked, the Commerce Secretary has real influence over trade enforcement, particularly on tariffs; in this administration, may be unusually important ([25:33–26:30]).
  Peter Navarro (co-designer of “Trumponomics”) and Ross are the top economic surrogates.

• Motivations and Concerns:
  Speculation that immense personal wealth drives a power-seeking turn—transitioning from “one who has everything money can buy” to seeking influence ([27:02–28:08]).

  “Once you have everything that money can buy, all that's left is power that you want.” – Felix Salmon [28:05]

• Ross: Plutocrat, Not Protectionist:
  While he may use tariffs as negotiating tools, he's described as a "market guy," not a straight-up trade warrior. His economic thinking, however, is criticized as unsophisticated ([29:13–30:46]).

  “His economic think is just not that sophisticated... back-of-the-envelope calculations.” – Cathy O’Neill [30:25]

5. Big Picture: What Kind of Administration?

[31:06–31:28]

• Plutocrats, Not Politicians:
  The hosts characterize Trump’s economics team as “market guys" and plutocrats, more than party ideologues, with little government experience and few actual economists ([31:16–31:28]).

  “They're even Republicans. They really are plutocrats. That's the thing.” – Cathy O’Neill [31:16]

• Policy Direction:
  Expect tax cuts, deregulation, and headline-grabbing deals, with little substantive benefit for average Americans.

Notable Quotes

• "Once you hear the Munchkin thing, you can't go back. It's really hard to unhear..."
  – Felix Salmon [01:43]

• "Then he goes and hires the ultimate Soros and Blankfein person as his Treasury Secretary. It's kind of hilarious."
  – Felix Salmon [03:53]

• "If you look at the long history of treasury secretaries... there hasn't really been a sort of Democratic mold and a Republican mold. This hasn't been a very political job."
  – Felix Salmon [10:05]

• "He is going to be exactly the kind of high technocratic, Wall Street-friendly Treasury Secretary which both Democrats and Republicans have had all along."
  – Felix Salmon [10:36]

• "Trump’s model is... what can I have a press conference about or a rally around?"
  – Cathy O’Neill [17:05]

• "This idea that there's no manufacturing done in the United States is completely false... What is true is there are fewer manufacturing jobs just because manufacturing is so much more efficient now than it used to be."
  – Felix Salmon [19:57]

• "Once you have everything that money can buy, all that's left is power that you want."
  – Felix Salmon [28:05]

Important Timestamps

• [00:35] Main Topic Intro: Trump's economic team announcement
• [01:30–02:14] The “Munchkin” pronunciation debacle
• [02:18–03:53] Mnuchin’s Wall Street credentials and controversial IndyMac takeover
• [05:17–07:57] Technocratic management at Treasury, Goldman Sachs tradition
• [07:57–08:46] Mnuchin’s role as Trump’s campaign fundraiser
• [09:13–11:50] Regulatory outlook under Mnuchin
• [14:01–15:32] Carrier deal: numbers and symbolic value
• [16:26–17:22] Complexities of 21st-century manufacturing
• [18:18–19:55] The new “incentive” structure for companies considering offshoring
• [19:55–20:50] U.S. manufacturing reality: more output, fewer jobs
• [21:26–22:07] Tariffs and purchasing power impact on the poor
• [23:28–24:53] Wilbur Ross background/approach
• [25:37–26:30] What does the Commerce Department do?
• [26:59–28:08] Personal wealth, power, and new ambition in the Trump cabinet
• [29:13–30:25] Critique of Ross’s economic “think”
• [31:06–31:28] Defining the administration: plutocrats, not economists

Numbers Round Highlights

[31:49–35:17]

• $720: Cost of Nike’s self-tying sneakers (Jordan Weissman [31:51])
• 1,856,000: Number of Americans unemployed for 27+ weeks, down from a 2010 peak of 6.8 million (Felix Salmon [32:33])
• 1.2 million: Barrels of oil per day OPEC has pledged to cut output by January (Cathy O’Neill [34:13])

Tone & Style

The conversation is lively, irreverent, and sharply analytical, peppered with inside jokes (the “Munchkin” gaffe), pithy critiques, and a healthy dose of cynicism about both the economic acumen and political motives of Trump's appointees. The hosts’ banter underscores their skepticism toward post-truth politics, media spectacle, and the “billionaireization” of government.

Conclusion

This episode provides a brisk and skeptical briefing on what Trump’s economic appointments—and actions like the Carrier deal—signal for the future: a government run by “market guys” and plutocrats who favor lower taxes, deregulation, and business-friendly policies, under a president more interested in headlines than structural reform. The hosts urge listeners to look past the PR and focus on the substance—or lack thereof—behind the new administration’s actions.

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