Slate Money: "The Occupy French Starbucks Edition"

Date: March 2, 2019
Host: Felix Salmon (Axios)
Co-hosts: Anna Szymanski, Emily Peck (Huffington Post)
Guest: Rob Cox (Breakingviews, current Paris resident)

Overview

This episode of Slate Money explores the week's key stories in business, finance, and politics, with a particular focus on Tesla’s pivot toward cost-cutting, the ongoing “Yellow Vest” protests in France, the challenges at Facebook regarding content moderation, and corporate restructuring at Gap. Notably, guest Rob Cox brings an insider’s perspective from Paris, directly discussing French societal unrest.

Key Segments and Insights

1. Tesla’s $35,000 Model 3, Cost-Cutting, and Growth vs. Profit Debate

(00:42–16:00)

Main Points

• Tesla announces actual availability of the $35,000 Model 3 — until now more of a promise than reality. (00:47)

  “He kept on saying he was going to do it. And it never did. It was always much, much more expensive...” —Felix (01:08)

• All sales shifting online: Tesla is closing its physical stores to further reduce costs. (03:18)
• Cash crisis context: Musk had to pay $920M to settle a bond; debates arise over whether raising equity is wise.

  “On Friday, he spent $920 million to pay off a five year bond ... now he’s got this kind of cash problem.” —Felix (04:04)

• Pivot from hypergrowth to cost discipline: Comparing Tesla’s approach to 3G’s/Kraft Heinz’s notorious zero-based budgeting and its consequences.
  • 3G slashed costs, underinvested in brands like Kraft, and ultimately stalled innovation and sales.

  “If I'm going to be able to sell a car for $35,000 and make money on it, I need to cut costs absolutely everywhere. And haven't we just learned from Kraft Heinz that this is not a move that works?” —Felix (06:40)

• Differences highlighted:
  • Tesla is still reinvesting savings vs. 3G's focus on dividends/shareholder payouts.
• Debate over whether Tesla is becoming too reliant on its brand and not investing enough in sales/outreach:

  “He basically has so much name recognition and so much brand value at this point that he doesn't need the stores in shopping malls anymore… The cars will sell themselves.” —Felix (10:30)

Memorable Quotes

• “I love that we’re living in the future and that’s actually like an optional extra on a $35,000 car.” —Felix (02:49)
• “There’s nothing wrong with cutting costs. Like you should make your company as efficiently as possible. It’s what you do with what...falls to the bottom line.” —Rob (07:45)

Notable Timestamps

• Tesla section begins: 00:47
• Comparison to Kraft Heinz/3G: 06:40
• Discussion of Musk's compensation and growth incentives: 12:37

2. Street Protests in France: The Gilets Jaunes (Yellow Vests)

(16:00–25:45)

Main Points

• Rob Cox on moving to Paris: Offers personal impressions and context for the Yellow Vests’ emergence.
• Origins: Sparked by diesel/gas taxes, symbolic yellow vests required in French cars (18:44), the protests have since “metastasized into this general, let’s bring on the Sixth Republic, revolutionary sense.” —Rob (19:01)
• Complexity & Diversity: Movement now encompasses anti-elite sentiments, labor market conservatism, and resistance to change.

  “It’s not really clear what you [the protesters] want … it’s completely metastasized into this general, let’s bring on the Sixth Republic revolutionary sense.” —Rob (19:01)

• Parallels to Italy and broader populism across Europe:
  • The Gilets Jaunes move echoes Italian populism (Five Star/League), mixing anti-immigrant and pro-welfare state positions.

  “In many respects what’s happened in Italy...looks like the Gilets Jaunes in power.” —Rob (21:06)

• Macron’s challenge: He’s caught between calls for reform and deep resistance to changes in the French social contract.

  “It seems like a deeply, deeply conservative movement… about not wanting to liberalize the labor market...not wanting competition to come in.” —Anna (19:22)

Notable Quotes

• “When they occupied a Starbucks, for instance, and they all looked really jolly there and I think a lot of them were ordering, you know, their four euro lattes.” —Rob (20:06)

Notable Timestamps

• France/Yellow Vests segment begins: 16:00
• Complexity and demands: 18:44
• Parallels to Italy: 21:06

3. Facebook and the Human Toll of Content Moderation

(25:45–35:00)

Main Points

• Casey Newton’s expose on Facebook moderators: Contractors at Cognizant deal with constant exposure to gruesome content under stressful, poorly paid conditions.

  “They must look at just really awful content all day long… and they’re really messed up.” —Emily (25:57)

• Workplace conditions: High stress, under-compensated relative to regular Facebook employees ($28K vs. $240K average).
• Facebook’s larger problem: Struggles to define and enforce global standards for content moderation; difficult edge cases.
• Comparison to past outsourced labor abuses (Nike sweatshops): Unexpected to find similar treatment in tech.

  “It strikes me it’s the—20 years ago we had this conversation about Nike… perhaps you just don’t expect this as part of the Facebook social network information economy, that there’s also these really crummy, terrible, and kind of dangerous, at least to mental health…” —Rob (29:35)

• Moderation by machine as the end goal: The ongoing revolving-door workforce is, in part, used to train Facebook’s AI.

  “They really just want this to be done by machines.” —Emily (35:41)

Memorable Quotes

• “If you want the car to come find you in a parking lot… if you want it to be like KITT, in, like, drive away, ‘car, come rescue me,’ then that costs extra.” —Felix, on Tesla’s auto features (02:44)
• “Facebook is regulating the speech of 2.3 billion people across multiple countries. And it’s, you know, it’s really, really hard… I would call it a shitstorm.” —Emily (28:24)
• “Facebook has not worked out how to do this key part of its job at a high level. It has not worked out how to do this key part of its job at a low level…” —Felix (31:18)

Notable Timestamps

• Facebook moderator expose: 25:57
• Working conditions/outsourcing critique: 29:35
• Automation of moderation: 35:41

4. Quick Hit: Gap Splits Up, and The Fate of the Middle

(36:09–37:39)

Main Points

• The Gap splits into two companies: Old Navy (now a massive budget-brand juggernaut) and “Newco” (the rest, including Gap, Banana Republic).

  “Old Navy is becoming its own thing… will raise the number of female CEOs in the Fortune 500 to a whopping 28.” —Emily (36:25)

• Mid-market retail is dying: Old Navy is thriving on affordability, while mid-priced brands struggle.

  “Everything in the middle, the middle is dying.” —Emily (37:31)

Notable Timestamps

• Gap’s division discussed: 36:09

5. Numbers Round: Michael Jackson’s Neverland, Oprah’s WW Windfall, and Ethiopian PM’s Pricey Dinners

(37:39–42:50)

Highlights

• Neverland Ranch: Now asking $31M, slashed from $100M after years unsold. (37:40)
• Oprah and WW (Weight Watchers): Oprah has cashed out $143M from her investment, still holds $100M stake.

  “I couldn’t believe it had gone up 15 fold since the time she first invested.” —Rob (39:29)

• Ethiopian PM’s dinners: $175,000 for a seat — symbolic of efforts not to rely only on foreign state funding (i.e., China). (40:44)

Memorable Moments & Quotes

• “The cars will sell themselves. SG&A get cut. And I feel that that move—my brand is amazing and it sells itself—is exactly the same move that 3G made with Kraft.” —Felix (11:14)
• “If you want to have dinner with the Ethiopian prime minister, it will cost you $175,000.” —Anna (40:44)
• “One of the things that [Facebook] said… is that they really just want this to be done by machines.” —Emily (35:41)

Final Thoughts & Themes

• Brand value isn’t an infinite moat: Tesla risks learning the same hard lessons as Kraft Heinz; cost-cutting must be balanced against innovation and maintaining customer connections.
• Populism is heterogeneous: Both France’s Yellow Vests and Italy’s creative populist coalitions mix anti-elite fervor with traditional conservatism and leftist economics.
• Modern tech labor abuses: The gig and contract economy of Silicon Valley echoes—and sometimes rivals—physical industrial abuses of the past.
• Corporate restructuring: The demise of “the middle” (in retail, labor, and more) is a recurring motif.

For Listeners

If you missed the episode, this summary paints the episode’s landscape: an energetic, at times irreverent, but deeply informed roundtable on capitalism’s current dilemmas, from futuristic electric cars to retro street protests, to the continuing labor and ethical headaches of the digital age.

Not discussed here: Ads, promos, intro/outro, and non-content chatter.