The Pink Collar Edition

Summary

Slate Money: The Pink Collar Edition

Date: January 7, 2017
Host: Felix Salmon
Panelists: Kathy O’Neill, Jordan Weissmann

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Episode Overview

This episode explores three main topics:

1. The gendering of virtual assistants and the broader implications for “pink collar” jobs and societal expectations towards women and caretaking roles.
2. The potential conflicts of interest surrounding President-elect Donald Trump’s debts, their securitization, and the implications for governance.
3. The decline of public companies in the U.S., what’s driving it, and the ramifications for investment and innovation.

The panelists bring a mix of policy wonkery, economic analysis, and social critique, creating a lively and insight-packed discussion.

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1. The Gender of Virtual Assistants and “Pink Collar” Job Trends

Timestamps: [03:00] – [14:26]

Introduction (03:00)

• Kathy O’Neill kicks off discussing a Twitter thread that points out how most voice assistants (Siri, Alexa, etc.) default to female voices, tying this to cultural norms around women being helpful, caregiving, and passive.

“The answer is they’re all female, or essentially female...It’s a part of a general theme where in our society, women are expected to be helpful, to be caregiving, and to be relatively passive.”
— Kathy O’Neill [03:27]

• Felix Salmon raises the question of whether making helpful AI “female” further entrenches gender roles or will eventually “de-gender” these qualities.

“The question I have is, if we wind up in a world where a bunch of women have passive and helpful female Assistants, does that basically create a world where passive and helpful becomes a robot thing? Or does that make passive and helpful even more gendered?”
— Felix Salmon [05:04]

Transition to Job Market Trends (06:02)

• The discussion moves to U.S. labor trends:
  • Loss of manufacturing jobs since 2000 (about 5 million lost), primarily male-dominated and not requiring college education.
  • The BLS projects the fastest-growing jobs over the next decade will be women-dominated: health and caretaking, “pink-collar” fields.

“What we’re seeing in the next 10 years...we’re seeing tons—millions, in fact—of jobs in women-dominated fields.”
— Kathy O’Neill [06:53]

Why Aren’t Displaced Men Transitioning? (07:20)

• Wage pride: Service jobs pay less ($11–$12/hour) than old manufacturing jobs ($18–$20/hour), and there’s a perception/reluctance due to gender norms.
• Jordan Weissmann notes many men simply don’t have the temperament or inclination for health/care roles due to cultural identity and personal disposition.

“When they say, ‘I don’t fit this line of work. I’m not suited for it.’ They’re not bullshitting.”
— Jordan Weissmann [09:51]

• Felix points out that when men do enter these fields, they often see faster pay and promotion, and over time these jobs become less gendered.

“The more men that enter a certain profession...the less gendered that profession becomes.”
— Felix Salmon [10:24]

Race, Identity, and Jobs (11:25)

• Black men are already overrepresented in the fastest-growing care jobs, highlighting racial divides.

• The transition isn’t easy; Kathy O’Neill relates personally, acknowledging she’d struggle in caregiving roles.

• The panel challenges the economist’s narrative that workers should easily “flip” to new sectors, highlighting how tied identity is to work, especially in working-class jobs:

“We have trained ourselves...to think about jobs as commodified objects...Like historically people were in the family business...the expectation that economists have that people can just switch up very quickly is just not true.”
— Kathy O’Neill [12:57]

“Actually no, their identity is very, very much, maybe even more so to some extent...tied up with the job they do.”
— Jordan Weissmann [13:51]

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2. Trump’s Debts and Presidential Conflicts of Interest

Timestamps: [14:26] – [22:29]

Introduction and Context (14:26)

• Following a Wall Street Journal report, Felix explores why Trump’s debts could be a greater conflict of interest than his assets.

“Because we live in a financialized world, Donald Trump’s debts have been securitized...Vanguard alone owns more than $200 million worth of Donald Trump’s debts...It’s a really interesting potential conflict.”
— Felix Salmon [15:01]

What Makes Trump’s Case Unique? (16:41)

• Trump (and most mega-borrowers) have engaged in “liability management”—renegotiating and sometimes defaulting on debts.
• Trump’s debts are widely held (via securitization) and traded, unlike typical personal loans. This opens the door for anyone—including foreign governments or bad actors—to accumulate Trump’s debt and potentially curry favor through favorable restructuring.

“What you have is an auction among every single person and sovereign wealth fund and country and businessman and corrupt drug lord...can start competing to buy this distressed debt...Everyone is going to be wanting to own that debt so...they can do him a favor.”
— Felix Salmon [18:09]

Is This Precedented? (21:57)

• Comparisons to wealthy presidents of the past (Kennedys, Roosevelts) fall short; they never had securitized, tradable personal/business debt in the marketplace.

“I think this is unprecedented.”
— Felix Salmon [22:26]
“Unprecedented. That can be cut. Wait, keep that.”
— Jordan Weissmann [22:29]

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3. The Disappearance of Public Companies

Timestamps: [22:41] – [34:15]

Background: The Numbers (22:41)

• The number of U.S. public companies peaked at 7,507 (1997) and has fallen to 3,766.
• Causes: Mergers, privatizations, and a dearth of IPOs (“birth-death model”).

“We’ve just seen this die off since the late 90s...We’ve just seen this massive consolidation of industry for just this variety of factors.”
— Jordan Weissmann [23:46]

• Fewer new IPOs: Public companies aren’t being “born” as fast as they’re “dying.”

Why the Decline? (24:33)

• Felix: The “money is elsewhere.” It’s easier to get large sums from wealthy individuals, PE funds, or venture capitalists than from many small investors in public markets.
• Regulatory and managerial aversion to public reporting and scrutiny.
• Private equity and VC backers can be more involved and helpful than anonymous public shareholders.

“There are lots of advantages to managers and to CEOs, in particular, of not going public. Going public sucks. It gives you a whole bunch of public scrutiny which no one likes.”
— Felix Salmon [26:09]

The Shareholder Value Revolution (27:10)

• Shift towards prioritizing returns to shareholders—often at the expense of reinvestment and innovation.
• Kathy O’Neill: The rise of “shareholder value” wasn’t organic; it was engineered by financial theorists like Milton Friedman and business school professors.
• Now, large public firms increasingly act like monopolies/oligopolies, returning cash via buybacks and dividends instead of investing for growth.

“They basically don’t invest as much as they used to...They are returning capital to investors and hoarding cash, rather than raising funds to invest more.”
— Jordan Weissmann [24:42]

Societal/Investor Implications (30:16)

• Less access to high-growth investments for ordinary investors—private company deals are the preserve of the ultra-wealthy.
• Most of the population invests via retirement funds, which are largely in the “rump” of boring public companies.

“If this goes to an extreme where all the exciting companies are owned by VCs and all the boring companies are publicly traded, that’s a problem.”
— Kathy O’Neill [32:31]

• Felix offers optimism, arguing there are still plenty of opportunities in global public markets: “I don’t think we should...feel to ourselves that we’re missing out on something great just because we can’t invest in Uber.” [32:05]

Policy Notes

• Short-termism and declining innovation are acknowledged problems but, as they point out, policies to address them (such as those tentatively offered by Hillary Clinton’s campaign) are hard to design or implement.

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4. Numbers Round & Notable Moments

Timestamps: [34:15] – end

• Kathy O’Neill: “33,000”—Opioid deaths in the U.S. in 2015, close to the worst year of HIV deaths and more than gun fatalities. Recommends “Dreamland” by Sam Quinones. [34:24]
• Jordan Weissmann: “2”—The number of days between a Bear Stearns economist’s “don’t worry about the credit crisis” op-ed and the start of the 2007 credit crunch. The economist, David Malpass, was later tapped for a key Treasury post by Trump. Panel expresses skepticism about his judgment. [35:41]
• Felix Salmon: “1.00928”—The most recent 3-month dollar LIBOR rate, crossing 1% for the first time since May 2009. “We have interest rates now, people...a little bit of normalization.” [38:27]

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Notable Quotes

• “I am not a caring person. I don’t feel like I am the right person for that job. I feel like I want like six hours a day of being by myself.”
  — Kathy O’Neill [12:05]

• “When Donald Trump has hundreds of millions of dollars of debts and he’s trying to manage those debts...how do creditors respond? Because they’re...dealing with the President of the United States.”
  — Felix Salmon [15:01]

• “There are companies all over the world which you can invest in and which really have a lot of growth ahead of them and are perfectly innovative and successful...I don’t think that we should feel...that we’re missing out on something great just because we can’t invest in Uber.”
  — Felix Salmon [32:05]

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Episode Tone & Style

The panel maintains a conversational, irreverent tone, mixing policy wonkery with humor, personal anecdotes, and sharp critique of prevailing narratives around gender, economics, and business.

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Key Takeaways

• The feminization of artificial assistants and the rise of “pink collar” jobs reflect—and may reinforce—societal expectations about gender, caregiving, and labor.
• The economic transformation away from manufacturing has left deep cultural and psychological impacts, especially on non-college-educated men, for whom switching careers is more than an economic decision—it’s an identity crisis.
• Donald Trump’s securitized debts pose unique, under-discussed conflicts of interest that have little historical precedent in the presidency.
• The decline of public companies and the “shareholder value” focus may limit investment access for ordinary Americans and stifle innovation—both a reflection and a cause of broader economic inequality and concentration.
• The panelists give voice to skepticism, caution, and some cautious optimism on these changes, with plenty of room for robust debate.

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For links and further reading, see the episode show notes on Slate.com.

Transcript

[Jordan Weissmann]

The following podcast contains explicit language.

[Felix Salmon]

Hello. Happy New Year to all you lovely, lovely Slate Money listeners. Thank you for listening to Slate Money. Welcome to 2017. 2017 is going to be the best year of Slate Money ever. Because this is going to be a year full of policy wonkery and things actually happening. And we're going to start it off with all manner of Policy 1, Korea, and we haven't even got to the inauguration yet. So trust me, this is going to be the year. You want to subscribe to Slate Money and tell all of your friends to Slate to subscribe to Slate Money and basically just orient your entire lives around Slate Money, because I don't think that's.

[Kathy O'Neill]

That's too hard to sell.

[Jordan Weissmann]

Yeah, I think you may have. You may have gone a little farther.

[Kathy O'Neill]

Let me jump the shark here.

[Felix Salmon]

Yeah, it was. It was worth a try.

[Jordan Weissmann]

Although the cult of Slate Money is sort. There is something.

[Felix Salmon]

If anyone wants to start a religion, you know, centered on Slate Money, Felix.

[Jordan Weissmann]

Would love nothing more than a cult of personality. A religion surrounding.

[Felix Salmon]

I'm like the Duke of Edinburgh. You know, he was worshipped as a God in some South Pacific island.

[Jordan Weissmann]

Hashtag lifegoals.

[Kathy O'Neill]

Nothing.

[Felix Salmon]

Yeah, many, many ways. I'm like that random Greek racist. But anyway, we will not talk about the Duke of Edinburgh because we want to talk about Donald Trump. Instead, we are going to talk a little bit about Don Trump and specifically, not so much his assets as his liabilities. And those are going to cause very interesting implications for conflicts of interest and the like. We are going to talk about public companies. Where did they go? They've kind of disappeared and. Oh, basically. I should introduce us, shouldn't I?

[Kathy O'Neill]

Oh, yeah.

[Felix Salmon]

For those of us who don't know who we are, I'm Felix Hamlin. Infusion. Kathy, who are you?

[Kathy O'Neill]

I'm Kathy o'. Neill. I blog. I'm a data scientist. I wrote a book called Weapons of Mass Destruction.

[Felix Salmon]

Read the book, people. And Jordan, who are you?

[Jordan Weissmann]

I'm the Moneybox columnist for Slate.

[Felix Salmon]

Like, basically, we couldn't afford a third regular panelist, so we just dragged Jordan in from his. From his desk every week.

[Kathy O'Neill]

We love Jordan.

[Felix Salmon]

Jordan's the best. Jordan's very cool.

[Jordan Weissmann]

I'm the. I'm the cheap help.

[Felix Salmon]

Jordan has been free labor talking about mortgage interest deductions on Twitter and we want to know. You should email us on slatemoneylate.com that's slatemoneylate.com should we have a segment on the mortgage interest deduction or should we have an entire episode on mortgage Interest, deduction.

[Jordan Weissmann]

It's one of the other guys.

[Kathy O'Neill]

Great idea. Or the best idea.

[Jordan Weissmann]

We're either going big or bigger. It's one or the other.

[Felix Salmon]

Cathy. Yeah. Let's talk about pink collared jobs, because this is a really kind of fascinating subject.

[Kathy O'Neill]

Yeah, it is. And I'm gonna start with a little theme that our good friend Shane Farrow as a conversation on Twitter.

[Felix Salmon]

Oh, and by the way, hi, Mom. Terry Farrow is the best listener.

[Kathy O'Neill]

Oh, I know, I know. She's the best. I'm going to have a beer with her tonight. Here's my question for you. What do Siri and Alexa and all other chatbots have in common?

[Jordan Weissmann]

I don't know, Kat.

[Felix Salmon]

Artificial intelligence and voice recognition.

[Kathy O'Neill]

Yes. They're all chatbots. Yes. But that wasn't what I was going for. The answer is they're all female.

[Felix Salmon]

Right.

[Kathy O'Neill]

Or essentially female. I mean, some of them, you can adjust their voice to be male.

[Felix Salmon]

So when Ciri first came out, there was a version of Ciri who understood American accents and a version of Ciri who understood British accents. And so obviously I had the British Siri, who everyone called boy Siri because the British Siri had a man's voice rather than a woman's voice. I didn't even know, but then I don't know what happened. And now Siri is just a girl again.

[Kathy O'Neill]

Okay, Well, I mean, and by the way, there was this really interesting New Yorker piece that Shane actually brought me to over Twitter that explained that if you ask Siri, who are you? The answer is, who I am isn't important. If you ask Alexa, if you tell Alexa that she's dumb, she'll say, sorry, thanks for telling me. If you tell Alexa that you're smart, she'll say, you really think so? Thank you. And the reason I'm giving these. The reason I'm giving these examples is because it's a part of a general theme where in our society, women are expected to be helpful, to be caregiving, and to be relatively passive. And we. And. And that expectation set is what we want to talk about with this respect to jobs. Now, the.

[Felix Salmon]

Wait, hang on a second. Before we disappear to jobs, I just want to stay on Siri and Alexa.

[Kathy O'Neill]

Yeah.

[Felix Salmon]

For one minute. I can see how if you want a smart assistant to be passive and helpful.

[Kathy O'Neill]

Yeah.

[Felix Salmon]

Then because passive and helpful are sort of gendered, you kind of naturally gravitate to making that assistant female. The question I have is, is if we wind up in a world where a bunch of women have passive and helpful female Assistants. Does that basically create a world where passive and helpful becomes a robot thing? Or does that make passive and helpful even more gendered?

[Kathy O'Neill]

I mean, good question. I think the answer is it makes it even more gendered. And I mean, the way I look at it, of course I have a very specific perspective because I am a woman who is actually a bitch. And so when people expect me to be passive and helpful, I'm like, you can fuck yourself. I mean, like this actually, I don't.

[Felix Salmon]

Know which is if, if, if Alexa were a Cathy girl rather than sort of passive and helpful girl, it'd be Alexa, can you remind me to wake up at nine o' clock in the morning? I'll go fuck yourself.

[Kathy O'Neill]

A very successful chatbot. I would say my chatbot like existence would be relatively short, I'm pretty sure. I mean, I'm someone who like. I actually left academia in part because I was expected to be passive and helpful in the math department and the, the men in the same position that I was in were not expected to be like that. So it's very raw to me. But I want to bring that, I want to talk about the Bureau of Labor Statistics now because what's going on right now is that we've lost tons of job. We've lost 5 million manufacturing jobs since 2000. Tons of male dominated jobs. And what we're seeing in the next 10 years, which is what the Bureau of Labor Statistics came out with sort of projections for jobs in the next 10 years, we're seeing tons, millions in fact, of jobs in women dominated fields.

[Felix Salmon]

So this is what we used to call the man session, sort of.

[Jordan Weissmann]

Yeah, sort of. I mean this is a longer term trend even than the man session. It's, it's what, it's the, it's a further shift into service industries. And so it's. Whereas, you know, hard manufacturing industries used to be male dominated, now we're shifting to health and caretaking things along those lines where they've traditionally been female. So the man session was something specific to what happened during the Great Recession. This is, this is a 30 year trend that is going further and further and further.

[Kathy O'Neill]

Yeah, that's right. And it's, it's a trend that affects mostly people that don't have college educations. I should add, like the, the manufacturing jobs were specific to men that didn't have college educations but finished high school and said, I can get a good job in support my family. And those jobs are disappearing, as we all know. And the point that the New York Times UPSHOT article this week talked about was that these very men who have lost their jobs are not essentially not willing to retrain and take the jobs that are actually growing.

[Felix Salmon]

Because then. And there are two reasons for this. One is that the service industry jobs pay less than they used to be earning in manufacturing industry. Even though like the first derivative is, is good, you know, the, the amount of pay that is going up rather than down, the absolute level is bad. They're like, I'm not going to take a job which pays $12 an hour. I used to work, I earn $20 now. And so there's a kind of pride thing there. And then the second reason is just that the jobs are gendered and they're like, I don't want to be a nurse because that's a woman's job.

[Kathy O'Neill]

That's right. And it's not. You know, I just want to reiterate what you just said. Like, these jobs do pay less. They're typically like $11 an hour instead of 18, which is what they remember getting. But right now they get $0 an hour. Moreover, these jobs, I mean, because they're growing, have much more job stability. And they come with, often they come with benefits, not as good benefits as they are used to, but it's a kind of like repositioning of expectations that these, a lot of men have trouble dealing with.

[Jordan Weissmann]

You know, zero dollars an hour might be a little bit of an exaggeration. That's one thing conservatives will bring up is that some of these men have gone on disability, for instance, things along those lines, ways to kind of patch together a living and maintain living standards. If they're younger, they go back with their parents, things like that, even if they're, they're not working. So they're, you know, going back to work in a lower paying job isn't necessarily going to increase their welfare as far as they're concerned, let's put it that way. And I, you know, there is this kind of frustration because you say, okay, we have these growing industries and men won't take these jobs. And on top of it, you see male labor, you see what they call prime age, male labor force participation declining. You guys who are in their prime years are just less likely to work than they used to be. So how do we fix it? You know, how do we get these guys to train to be nurses or whatever. And to that I kind of say is like, have you ever met a construction worker? Have you ever like spent time with like a former factory guy? Is like when they say, I'm I don't, you know, I don't fit this line of work. I'm not suited for it. They're not, they're not bullshitting.

[Felix Salmon]

Like, I mean, okay, I would.

[Jordan Weissmann]

They're really not. Like, I mean, you talk to, you spend time with them like, this is, you know, some people aren't. Don't have the temperament and the patience to go and work in a hospital all day. It takes a certain kind of person, okay?

[Felix Salmon]

But there are a lot of jobs in hospitals, nursing jobs particularly, which require a lot of, like, lifting human beings. And actually, it's very helpful to be a, you know, big, burly, strong man. There are two things which give me hope here. One is that as the number of manufacturing jobs declines from what has been a relatively low base for quite some time, the number of men who have manufacturing industry jobs or who had manufacturing industry jobs is also going to decline. And so it's going to be less and less of an issue that I used to have this manufacturing job and now I don't want to become a nurse because I never had the manufacturing job in the first place. And then the second thing is that when you look at what happens to men when they enter these professions, they generally get paid more and they get promoted faster than their female counterparts. And the more men that enter a certain profession, whether it's, I don't know, like dental technicians or something like that, the less gendered that profession becomes. And so, inevitably, I think, as manufacturing dries up, men who have never been in the manufacturing industry are going to wind up taking these jobs, which are steady jobs with good benefits and all the rest of it. And as they do so, those jobs are going to be less and less generous.

[Kathy O'Neill]

So I want to jump in and mention that, in fact, there is already a racial divide in this. Black men are much more likely to take these jobs already, including home health aides, personal care aides, and registered nurses, which are the three job categories that are supposed to grow the most. But I also want to mention that I don't think this is necessarily a gender thing. Right. I personally would have a lot of adjustment to make myself to take one of these jobs. Right. It's like, I think we have to ask ourselves, you know, like, how much of it is like, oh, those people should just find their. A way to fit themselves into this new job category and how much it is, like, really a lot to ask of anyone.

[Felix Salmon]

You're not a caring person, Kathy.

[Jordan Weissmann]

Yeah, exactly.

[Kathy O'Neill]

I am not a caring person. I don't feel like I am the right person for that job. I feel like I want like six hours a day of being by myself.

[Jordan Weissmann]

So also about, about your optimism, Felix. I think there, there's something to that. However, this, this trend we're seeing, men staying out of the workforce, it's, we see it with younger guys too, people who grew up after the manu, who have been growing up after the manufacturing bust. And so I think there is this strong gendered component about what kind of job is appropriate for man. Even if that those jobs never existed for these people. Even if these people never had an opportunity to get a manufacturing job, that is still their idea or, you know, you know, construction is their ideal and they can't find that for whatever reason now because the housing market in their community went bust. So, you know, it's, I don't think time is necessarily alone going to heal these wounds in the economy. We need to actually find a way to reorient the way men think about.

[Kathy O'Neill]

I agree. I don't think machismo as a general fad has, has decreased. And this is very related to that question of like what kind. Who am I as a person and how do I fit myself into this? I would just want to say one last thing about this, which is like, I think we have trained ourselves, you know, in the last 40 years to think about jobs as sort of commodified objects that we can just flip from one job to the next. And the only question we're going to ask ourselves is like, how much does it pay? Do I have to accept a pay cut or a pay raise? Like historically people were this, you know, in the family business, they had the same kind of job for, for decades. You know, they were farmers for decades and decades. For generations upon generations. Like the expectation that economists have that people can just switch up very quickly is just not true. I just think it's a, it's a mistake to believe that.

[Jordan Weissmann]

Yeah, it's weird because we don't have that expectation necessarily for higher, like for, you know, upper middle class professionals. We have this idea that your job is your identity, but somehow we lose track of that when we talk about people in working class jobs. You think, oh, well, it's just a paycheck. But actually, no, their identity is very, very much, maybe even more so to some extent top tied up with the job they do.

[Felix Salmon]

Yeah, it's not easy for a doctor to become a lawyer or vice versa.

[Kathy O'Neill]

Well, those are both white collar profession professions. I, Anyway, I, I don't share your optimism. I think that I Agree with Jordan. I don't, I don't see how this is going to play out. Well.

[Felix Salmon]

Donald Trump has a lot of money.

[Kathy O'Neill]

Yes, I've heard that, like, that's what he says.

[Felix Salmon]

Many rich people, he has a lot of debt. And there's been a fascinating article in the Wall Street Journal this week about the debt, rather than people have been concentrating on the assets and they're like, you own this hotel, you own this building, you own this property in this foreign country, and how is that going to be a conflict of interest given your role as president? So the Wall Street Journal did the flip side of that, and they said, well, what about the debts?

[Kathy O'Neill]

And that's more important, really.

[Felix Salmon]

And in many ways, it's more important. You're absolutely right. And so they started looking around. And of course, because we live in a financialized world, Donald Trump's debts have been securitized. And so they're everywhere. There are hundreds of millions of dollars of these things, and they're owned. I mean, just to give one example, Vanguard alone owns more than $200 million worth of Donald Trump's debts. And this is, this is really fascinating to me because it's a really interesting potential conflict because Donald Trump has a long history of either defaulting on or renegotiating or his debts. And in fact, every rich billionaire or corporation who has debts is constantly doing this thing called liability management, which is a perfectly legitimate and normal thing for all people with debts to do. If they're debt, big debts, if they're not, credit card debts, or even credit card debts for that matter, when you move your credit card debt from a high interest card to a low interest card, that's liability management and it's perfectly legal and not defaulting. So the question is, when Donald Trump has hundreds of millions of dollars of debts and he's trying to manage those debts and at the extreme case, possibly even default on those debts, how do the creditors respond? Because they're not just trying to maximize their return on how much they paid for the debt. They're also saying, well, this is a way that we're dealing with the President of the United States. And the different ways that that might happen, different ways that that might play out, I think are really fascinating to me.

[Kathy O'Neill]

Well, can we just back up a little bit? I mean, because I feel like Trump, we have some history of this before he was president, obviously, but like he did, he kind of almost defaulted on debt before.

[Felix Salmon]

He defaulted on that four times.

[Kathy O'Neill]

Okay, well, but, but there were, I think, isn't it Deutsche bank that responded by just extending his debt, or was that Wells Fargo?

[Jordan Weissmann]

Deutsche bank was one of the few large banks that would extend his company's large lines of credit. These securitized debts, which people didn't know about until this Wall Street Journal investigation, essentially are mostly to companies and entities he has a 30% stake in. And that's why we didn't know about them, because he didn't actually put them on his federal elections.

[Felix Salmon]

But let's go back to Kathy's point. If I'm a creditor and if you're Donald Trump and I'm a lender to you and I've lent you a bunch of money, I basically have two choices. When you run into money, run into trouble, either I can extend the line of credit so that you don't officially default, and then I hope that eventually you'll repay me the kind of extend and pretend or delay and pray or whatever you want to call it. Or you say, okay, buster, enough, I'm foreclosing, which is also a completely legitimate move. But then you wind up owning a casino in Atlantic City, and who they are wants to own a casino in Atlantic City, and you wind up losing money. So a lot of bank. It can be an entirely rational. Not. It's not just because he's Donald Trump.

[Kathy O'Neill]

No.

[Felix Salmon]

But a lot of these banks also have made this calculation, which is one of the reasons why they made the loan in the first place. The buildings with the Trump name on them are somehow that much more valuable just for having the Trump name on them. And so they want to keep the Trump name on them. They want to keep Trump involved in some way. And those kind of calculations become much, much more top of mind when Trump is the president. And what has fascinated me in particular is this idea that because loans and bonds are tradable, that what you wind up with is actually you don't have Trump simply negotiating with his creditors. What you have is an auction among every single person in sovereign wealth fund and country and businessman and corrupt drug lord, and you name it in the world, can start competing to buy this distressed debt. If the debt looks like it's going to be renegotiated in any way, even if it's not distressed, even if he just wants to renegotiate the interest rates or something like that, everyone is going to be wanting to own that debt so that they can be the people sitting across the table from him and doing him a favor and saying, hey, guess what? We'll give you a concessional rate because you're the president.

[Kathy O'Neill]

Oh, my God. So you're saying that they're going to pay more for that debt because they think they'll have something on him?

[Felix Salmon]

Because they get to negotiate with the President of the United States and they get to do him a favor. And having him like you because you did a favor for him is something which everyone's going to want, or at.

[Jordan Weissmann]

Least you get to negotiate with, I guess, Donald Trump Jr. And go through that intermediary. I guess. My question is the fact that this debt has been securitized. What you're bringing up now is one huge issue with that, the fact that it's tradable and so some drug lord in Mexico can try to buy the debt. Are there other ways that changes the dynamic of him owing money all around town, as opposed to just having bonds or having debt to a regular bank? Is there anything other. Any other consideration?

[Kathy O'Neill]

I think it makes it more easy to do what Felix is saying, which is sell it. Right. Because it's securitized, which means it's like just a piece of a contract that's easy to trade.

[Felix Salmon]

Yes. Trading loans is difficult. Trading bonds is easy.

[Jordan Weissmann]

So having the President of the United States with a ton of outstanding debt floating around the markets, bonded debt. Bonded debt floating around the markets that anybody in the world can get a piece of and thus get a piece of Trump and get access to his company is. Is the situation we now find ourselves in. And we didn't know about it because of federal election rules not requiring him to reveal it on his original disclosures because of the way he owns these entities. I mean.

[Felix Salmon]

Well, one way of looking at this is to say that one of the conflicts which we didn't have with Donald Trump was that he didn't own any public corporations. There was no one saying, yeah, I can bake, I can buy shares in Donald Trump Inc. And then if he becomes elected, the shares will go up and I can be a major shareholder. And if I'm a major shareholder, that gives influence over Donald Trump. And that if it had been the case, would have been a major conflict, which would have been really difficult to disentangle, and we'd have probably forced him to sell all of his shares or something like that. But what we do have is securities in Donald Trump Inc. They might not be equity securities, they might be debt securities, but they're still securities and they still have a claim on his assets. And so really, it's the same thing.

[Jordan Weissmann]

Yeah, well, I think Trump actually backed some of these also personally, too. That's what makes some of it scary.

[Felix Salmon]

Some of them are guaranteed by Donald Trump personally, which is.

[Jordan Weissmann]

That's the. That that makes us even scarier because it's not even like he's got limited liability of some kind or something like that.

[Kathy O'Neill]

Unbelievable.

[Felix Salmon]

So welcome. Welcome to Conflict of Interest. This stun. It's going to be fascinating to see this one play out.

[Kathy O'Neill]

Just one question, like, do other presidents have this kind of. I mean, obviously they don't have the extent of debt. We would have heard about that. But, like, how does this compare to, like, other presidents?

[Felix Salmon]

So I think you have to go back to what, the Kennedys and the Roosevelts to find any kind of presidents who are remotely this rich. And I don't think the Kennedys and the Roosevelts had debts like that. Certainly not traded debt.

[Jordan Weissmann]

Yeah, I was gonna say they weren't securitizing the Roosevelt family fortune at that point.

[Kathy O'Neill]

So he's found a new way.

[Felix Salmon]

I think this is unprecedented.

[Jordan Weissmann]

Unprecedented. That can be cut. I. Wait, keep that.

[Felix Salmon]

Jordan. Yeah, we have one more segment.

[Jordan Weissmann]

We do have one more segment.

[Felix Salmon]

So come up with something. We don't just throw this show together.

[Jordan Weissmann]

You know, let me, Let me put in my.

[Felix Salmon]

Jordan has literally opened up his laptop and is typing away desperately to try and come up with a segment here.

[Jordan Weissmann]

I've got. I've got a word doc with a bunch of numbers in it. I'm gonna. It's gonna be exciting, I promise. Okay, so public companies, they're kind of dying. They're disappearing. They're becoming dinosaurs. Right? There was a paper that came out not too long ago that was just like asking, like, what the hell is happening to the public corporation America, which is like, supposed to be like the gold standard of American business for so long. Right? Like the company buy stock in. And so here are a few numbers I just want to share. In 1975, there were 4,819 public corporations in America. By 1997, they had reached a peak of 7,507. And now they fall into about 3,766, which is about. About.

[Felix Salmon]

Yes, about roughly 3,766. About four significant figures roughly.

[Jordan Weissmann]

So we've seen this just die off since the late 90s where we've just seen this massive consolidation of industry for just this variety of factors.

[Felix Salmon]

And there's three or four different ways that this happens, just to be clear. One is that you have mergers, that two public companies merge and they become one. One is that you have companies going private, so you have private equity coming in and buying a public company. One is that the company just goes bust. There's a bunch of ways this can happen. These things have always happened, by the way. These mergers and takeovers and bankruptcies have always happened. But we have a birth death model. Right. And those are the ways the companies die. And then the way that public companies are born. There's really only one way for a public company to be born, and that's this thing called the IPO.

[Jordan Weissmann]

Yeah. And right now, deaths are outnumbering births.

[Felix Salmon]

IPOs have been very, very low for years now, in fact, for basically a decade.

[Jordan Weissmann]

Yeah. And so, you know, what's more than two decades? What's more than that? It's not just about the sheer number of companies, but it's about what's happened to them, what they actually do do. And what this paper looked at is like, well, these companies have kind of gotten. They're fatter and lazier, and they basically don't invest as much as they used to in either R and D or in. When you combine R and D and capital investments, things like machinery, and they just return a lot of money to shareholders. And so there's this. This quote at the end of it that's been getting a lot of play says, as a whole, public firms appear to lack ambition, proper incentives or opportunities. They are returning capital to investors and hoarding cash rather than raising funds to invest more. And so there's this question is just like, have we come to a phase where, you know, taking companies public, it's just not really useful anymore. It's just not a great. It's not a great management model.

[Felix Salmon]

I think the reason why companies went public was that that's where the money was, that there were hundreds of millions of Americans, a large proportion of whom had the ability and inclination to invest in the stock market. And if you wanted to tap that enormous pool of capital, the way you did that was by going and getting money from, you know, Mrs. Jones in Nebraska, who had a bit of money in her stock market account. And as inequality has increased, Mrs. Jones in Nebraska no longer has so much money in her stock market account that you're particularly interested in Mrs. Jones. And the people who do have money are, you know, sovereign wealth funds and billionaires who have lots of ability to invest in private companies. And so private companies can raise billions and billions of dollars. They don't need to go public anymore. And there are lots of advantages to managers and to CEOs, in particular, of not going public. Going public sucks. It gives you a whole bunch of public scrutiny which no one likes. And so they have the choice, and given the choice, they make the rational choice to stay private.

[Kathy O'Neill]

So let me say something.

[Jordan Weissmann]

Yeah.

[Kathy O'Neill]

So I'm going to just reframe it because I'm not disagreeing with anything you guys have said, but it sounds like we used to. Companies used to be forced by necessity to crowdsource. And now they just find that one billionaire or a few billionaires who just can give them the money they want.

[Felix Salmon]

Called Kleiner Perkins or whatever.

[Kathy O'Neill]

And so they know what those. They only have to deal with three people instead of 30,000 people.

[Felix Salmon]

And what's more, those three people can be extremely helpful to them in growing their business in the way that anonymous shareholders can't be.

[Kathy O'Neill]

So the other aspect which I think we should bring in is this shareholder value revolution, which is kind of the bad news about going IPO that probably people are avoiding. Right. Which is that once you do go IPO and you have all these shareholders, you're expected to care about them and them only. And you're not expected to care about, in fact, your business very much anymore, just about pleasing those guys. And that is a lot of. There's a lot of problems.

[Felix Salmon]

So the reason why people bought shares, historically there was really only one reason to buy shares, and that's because you wanted the share price to go up. And if the share price went up, you were happy. And if the share price didn't go up, you were unhappy. And because the shareholders are the residual claimants on the cash flow of the company. And people kind of equated that with ownership. And because the shareholders get to elect the board of directors, everyone was like, well, it's the job of a company to maximize returns to shareholders. And Justin Fox had a very interesting column about this where he was like, well, there's a revolution here. And the name of the revolution is kind of Trumpism in some ways. So Donald Trump is looking at companies, he owns a private company which has never had the same kind of we need to maximize the share price imperative. And he looks at companies in, in a way that they have a bunch of different roles. And one of the main roles they have is to make America great again and to make things in America and to create jobs and to pay well and all of these other things which are kind of, you know, old fashionedly paternalistic and have no real place in this kind of shareholder value world of the 1980s and 90s.

[Kathy O'Neill]

I do want to disagree with one thing that Felix has said. It's not that Shareholders spontaneously came up with this idea that of shareholder value. I think it was orchestrated by a few people. I don't know the exact history of it, but I've read about it.

[Felix Salmon]

I know that Milton Friedman was in there somewhere.

[Jordan Weissmann]

Yeah, some of the guys.

[Kathy O'Neill]

So it was a real thing that happened. And it happened around the time of the peak of the number of companies.

[Jordan Weissmann]

Yeah, in the 70s and 80s, you got a lot basically business professors or some people, like finance professors, were the guys who kind of came up with this idea. And you know, the idea behind Share, that the concept behind shareholder value was sort of sound at the time, which was that if you, you paid more attention to the need to return cash to your shareholders, you would be driven more to make a profit and to watch the bottom line and be a hungry, you know, hungry, agile company, et cetera, et cetera. And, you know, I think that worked for a long time, but now you get this combination of this idea of shareholder value with concentration in industry, when in some ways a lot of these companies are just facing less competition. And so they can just kind of sit on what we call rents. They can just kind of take in all this money because they don't necessarily have a monopoly, but they have close to it. And so the money just flows in. And so as far as they see it, the easy thing to do, rather than be an agile hungry company trying to innovate or whatever and invest, is just give money to your shareholders, because that's your job anyway. So you sit there, you wait for the cash to roll in, and then you do a stock buyback. And so it's kind of come full circle where shareholder value has brought us back to where the problems of corporate America that existed 30, 40 years ago that it was supposed to combat.

[Felix Salmon]

So the big question here is, is this bad for us, whereby us, I mean, the shareholding public, or what used to be the shareholding public, is there a case to be made that all of the really interesting and valuable investments out there these days are in private companies rather than public companies, that those investments are only accessible to the ultra wealthy, and that the broad democracy of shareholders, that was the dream of Ronald Reagan and Margaret Thatcher has gone by the wayside because normal people are left with just a kind of rump group of public companies which are really boring and don't have the sort of golden future that the private companies do?

[Kathy O'Neill]

I think the answer is yes to that very long question. And I feel like most people in this country invest in the market through their retirement funds and those Retirement funds are investing in these boring companies that don't have much of a vision and are doing their best to just give back money to shareholders, which sounds good in the short term, but in the long term that's not a very innovative use.

[Felix Salmon]

My answer to the question, by the way, is no, and I've changed my mind on this one. At one point I thought the answer was yes and I actually wrote a New York Times op ed saying that the answer was yes. And now I've changed my mind and I was wrong when I wrote that New York Times law back. I think the answer is no. The private companies are a place for billionaire whimsy people to burn their stupid cash, which they don't need. And that there is ample opportunity in the stock market to really invest in the global economy as a whole. That the public markets, for all that there are fewer companies, are bigger than they've ever been. And, but especially in this globalized world, if you're buying sort of global indices, there are companies all over the world which you can invest in and which really have a lot of growth ahead of them and are perfectly innovative and successful. And I don't think that we should have this kind of fomo. I don't think that we should feel to ourselves that we're missing out on something great just because we can't invest in Uber.

[Kathy O'Neill]

I would say that I am not a proponent of pushing everyone to invest. But I do say that if this goes to an extreme where all the exciting companies are owned by VCs and all the boring companies are publicly traded, that's a problem.

[Jordan Weissmann]

Yeah, I would say I'm less concerned about this as a problem for shareholders given that in the end you can just invest in the s and P500 and these big market cap companies are returning a ton of cash to you, so you're not doing so bad or mom and pop shareholders. I think the bigger issue a lot of people are concerned about, at least in econ, is the macro effects of this. Right. What is, what does it do to our economy long term if the, you know, what used to be the major, the major corporate form in this country or the most important corporate form in this country isn't performing anymore. One thing that's interesting also, and probably my last point, is that Hillary Clinton tried to kind of bring this up during her campaign. This was actually an early theme of hers as corporate short termism and combating it and looking for ways to combat it. And it was really ill formed and her ideas weren't very Good. It was like toying with the capital gains rate in ways that might make them invest more long term. But it seems as if she was at least onto a real issue. There was like a real. She wasn't.

[Felix Salmon]

Wait, was she saying that public companies are good or public companies are bad?

[Jordan Weissmann]

She was saying that they needed to think less in terms of short termism. They needed to think more in terms of. They needed to do more in terms of investment in R and D. And that does seem to be one of the results of this laziness among public companies, is that. But we are getting less investment.

[Kathy O'Neill]

If we want to encourage that, we would have to break up these monopolies.

[Jordan Weissmann]

Well, exactly.

[Kathy O'Neill]

These near monopolies.

[Jordan Weissmann]

I don't think.

[Kathy O'Neill]

It's not something you just tell a company to start wanting to do.

[Jordan Weissmann]

Clinton. Exactly. I'm not saying Clinton's. I think it was interesting that there was some. This actually almost became a political issue and then kind of fell by the wayside.

[Felix Salmon]

All right, let's have a numbers round here because God knows Jordan will turn everything political if you give him half a chance.

[Jordan Weissmann]

Yeah, that's my day job.

[Kathy O'Neill]

Everything is political.

[Jordan Weissmann]

That's my day job, man.

[Kathy O'Neill]

Okay, so I have a number. It's a sad number. 33,000. That's how many people have died in the United States from the opioid epidemic just last year, sorry, 2015. I want you to compare that. That's more than the number of people that were killed by guns. Almost as many as the number of people that were killed in car accidents. And in the worst year of HIV deaths, we had 50,000. The worst year, HIV deaths. We now have 33,000 deaths in opioids and there is no end in sight. It's a really huge thing I want to recommend because this is what I did over Christmas because I like to be depressed. I read this amazing book by Sam Canones called Dreamland that really goes in. A wonderful investigative journalism piece about the prescription drugs industry contribution to the current opioid epidemic as well as the Mexican heroin industry.

[Felix Salmon]

Jordan.

[Jordan Weissmann]

Okay, I'm going to go political one more time. My number is two. I'm going to break form a little bit and give a story before I get to the number, which is In August of 2007, the Chief Economist of Bear Stearns wrote an op ed in the Wall Street Journal about how you shouldn't worry about the credit market, you shouldn't worry about the credit crisis. That's the headline. This is August of 2007. Everything was fine. He said that the Bush boom was probably going to continue and that.

[Kathy O'Neill]

But he still called it the, he called it the crisis.

[Jordan Weissmann]

Yeah, I think he's like, don't worry about the credit crisis. He said the problems in the problems, or at least the headline did. But the, the, you know, problems in the market are just a correction and things are going to be swell. And in fact, if home prices fall, don't worry, that's also just a correction. We have long term prosperity ahead. Two days later. Two days later. BNP Paribas had to then freeze three of its hedge funds, thus starting the beginning, the true beginning of the credit crunch that then metastasized into the financial crisis of 2008. Eventually, David Malprous eventually became a advisor to Donald Trump's campaign, is now being assigned to the Treasury Department as Under Secretary of International Affairs. One of his jobs is going to be spotting problems in international finance and making sure that the world doesn't burn. So we have that eagle eyed scout now at Treasury.

[Felix Salmon]

So yeah, it's very easy to make fun of David Malpass. Honestly, it's a fascinating job and I've written at some length about Tim Geithner's old job. Well, it's Larry Summers old job, it's Lael Brainard's old job. There's a, virtually everyone, Tim Adams, virtually everyone, Randy Quarles, all these people who you may not have heard of but are super smart, sort of technocrats have had this job. It's a fascinating job which is normally done by sort of serious people who take it seriously. John Taylor and I have a little bit of hope that David Malpass is going to fit into that tradition of like technocratically trying to keep the wheels of international finance oiled. You know, it's not a job where you need to stare into a crystal ball and guess what the future is. That's really not what the job is. It's a job of being able to sort of schmooze other finance secretaries and sort of understand how international finance is working and not working and trying to make it work a bit better. I think he can do it. I don't think he's like, you know, a great economist, but I think he can do this job.

[Jordan Weissmann]

I think part of it is that when the world's on fire, you're in that job, expect to be part of the fire department, you're supposed to show up at the bottom.

[Felix Salmon]

That is true.

[Jordan Weissmann]

And you know, if you look, it's not just that he blew the call on the financial crisis, it's that in the years afterwards he was sitting around talking about how we needed higher interest rates and we needed to have a stronger dollar in the US and that was what was going to fix everything. And so the idea of him being the one we're expecting to come and help save the day if for some reason China explodes or Europe explodes is a little frightening.

[Kathy O'Neill]

He's not a wise man.

[Jordan Weissmann]

He's not someone whose judgment I want on. If the world again is kind of up Schitt's Creek and we need a paddle.

[Felix Salmon]

My number is 1.00928. Why not?

[Kathy O'Neill]

I wonder what that is.

[Felix Salmon]

This actually comes from Twitter. This comes from lovely chap called Andrew Loveseth on Twitter who said can we talk about this? So hi Andrew, we're going to talk about this. This is that's the most recent number I could find for 3 month dollar libor. And of course all listeners to Slate Money know what three month dollar LIBOR is. It is the first time that three month dollar LIBOR has been higher than 1%. It's a percentage, by the way, 1.00928%. It's the first time we have been above 1% since May 2009. It's been a very long time. We have interest rates now, people. It's kind of unprecedented. I mean we've got lift off. We actually have single digit interest rates. Congratulations. 3 month dollar libel is kind of the single most important interest rate out there in commerce. It's the rate that most floating rate debt is linked to. And of course most debt is floating rate debt, so or swapped into floating rates. So it's a hugely important benchmark. And the fact that it's over 1% means that it's good for investors, it's bad for borrowers, but it also just means a little bit of normalization, I think. But anyway, that is it. That is it for us this week. Thank you for listening to Slate Money. Next week we may or may not talk about mortgage interest deductions because is there ever too much talk about mortgage interest deductions? Subscribe to us. Write to us. The email address is sleeping [e-mail] thank Zach Dynestein, the producer and the executive producers to Steve Lichti and Andy Bowers. Find all the Panoply [e-mail] Panoply and we will talk to you next week on Slate. To let you kneel. It's barely enough to scrape by.

[Jordan Weissmann]

The night before last when supper wasn't.

[Felix Salmon]

There My wife left the table to cry.