The Riches of This Land

Summary

Slate Money — “The Riches of This Land”

Date: August 8, 2020
Host: Felix Salmon (Axios)
Panelists: Anna Szymanski (Breakingviews), Jim Tankersley (New York Times, Guest)
Theme: The rise and fall of the American middle class, systemic discrimination, the future of the labor market, U.S.-China economic tensions, virtual economies, and structural shifts amid the pandemic.

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Episode Overview

This episode features a conversation with Jim Tankersley, New York Times reporter and author of “The Riches of This Land,” a book about the history and struggles of the American middle class. The hosts and Tankersley discuss the evolution of the middle class, the role of diversity in driving economic prosperity, contemporary challenges like labor market stagnation and offshoring, the implications of government and corporate policy, the accelerating shift to a virtual economy, and the impact of geopolitical tensions with China. The discussion highlights underlying optimism about growth through inclusion and recognizes sobering realities about persistent racial and class disparities.

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Key Discussion Points & Insights

1. Defining the American Middle Class and Its Evolution

• Origin of the Modern Middle Class

  • The idea that America always had a vibrant middle class is a myth; real growth started post-WWII (01:55).
  • The postwar period featured increasing economic security, widespread home ownership, education, and retirement security (01:55–02:52).
  • The period of strong growth ended in the late 70s/early 80s, with subsequent decades, especially the 21st century, seeing stagnation and decline.

• Middle Class Stagnation

  • Growing debate about whether the middle class is shrinking or just stagnating (02:52).
  • Since the Clinton-era 1990s, middle class income and job growth have been deeply disappointing (03:55).

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2. Diversity, Inclusion, and the Real History of Middle Class Prosperity

• Expanding Opportunity Was Key to Growth

  • Myth-Busting: The iconic "Leave it to Beaver" white, male-centric narrative is historically inaccurate.

  • The real postwar middle-class boom was powered by opening up skilled jobs to women and people of color due to civil rights advances and the necessities of war (04:15–05:22).

    “The reason the middle class grew and thrived...was that we opened up the American labor market...to nonwhite guys, to women of all races, to men of color who had been held back by overt discrimination.”
    — Jim Tankersley (04:15)

• Echoes in Global Development

  • Felix draws a parallel to microfinance: bringing women into the workforce in poorer nations has transformative effects, just like the U.S. postwar inclusion boom (05:22–06:06).

• Current Barriers and Latent Potential

  • Policies and structural barriers still limit women and minorities (06:06).
  • Further inclusion represents economic “low-hanging fruit” for productivity gains.

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3. Economic Ideologies: Right, Left, and the Size of the Pie

• Debates Across the Spectrum

  • Both populist right ("immigrants take jobs") and populist left ("redistribute wealth from billionaires") get the story partly wrong (07:00–08:35).

  • Real economic growth comes from both better allocation and growth of the economic pie via maximizing diverse talent.

    “If we better allocate the resources in the pie, the pie will grow faster.”
    — Jim Tankersley (07:34)

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4. Productivity, Offshoring, Labor Markets, and New Opportunities

• The Global Labor Challenge

  • The offshoring of jobs is a structural shift, not easily reversed—political promises to restore them haven't panned out (10:10–11:44).

  • Future good jobs will likely emerge in new industries (healthcare, carbon mitigation) but precisely where and how is unclear.

    “I don't think there's a very good chance that most of the jobs that have been outsourced are coming back....what hasn't happened now is those better jobs...haven't appeared.”
    — Jim Tankersley (10:10)

• Role of Government Investment

  • Postwar prosperity was aided by substantial public investment in science, which seeded private sector dynamism (11:44–12:34).
  • Today, lack of public investment is a bottleneck for productivity and job creation.

• Profit-Sharing and Worker Bargaining

  • Exploding corporate profits haven’t translated into wage gains; companies reward shareholders over labor (12:34–14:37).

  • Strong labor markets and worker bargaining power are crucial for this to change.

    “When the labor market has been so loose for so much of the last 20 years, companies could view workers as eminently replaceable and disposable.”
    — Jim Tankersley (14:37)

  • True wage growth and investment in workers may require both tight labor markets and government intervention to spur broader distribution of gains (14:37–15:42).

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5. The Pandemic, Virtualization, and the Changing Economy

• Acceleration of Digital Transformation

  • The pandemic drastically sped up the shift to digital business models—669,000 new digital NYT subscribers in a single quarter shows the wider pattern (24:42–25:57).
  • Brick-and-mortar businesses, especially those lacking scale or agility, are struggling, while “kitchen-only” restaurants and e-commerce explodes.

• Will It Last?

  • Panelists debate whether shopping and business habits will snap back post-pandemic (25:57–28:07).

  • Extended crisis may make behavioral shifts permanent, especially for new delivery and remote retail models.

    “I think the longer this goes on...the more it’s going to result in some type of permanent behavioral changes.”
    — Anna Szymanski (28:07)

• Winners and Losers

  • Commercial real estate & small businesses are major losers; big box and digital-first retailers dominate (29:00–30:18).
  • Equity markets reflect a “winner-takes-all” effect, raising worries about more concentrated corporate power (30:18–31:56).

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6. US-China Tensions and Global Business Risks

• Escalating Conflict

  • Trump administration’s “China villain” strategy (e.g., TikTok ban) is largely political posturing, intended to shift COVID-19 blame (18:34–19:55).

    “They think making a villain out of China is helpful for them in this election...it is a way to try to...deflect coronavirus blame.”
    — Jim Tankersley (18:34)

  • Real consequences for American and global businesses, as the uncertainty threatens market plans (21:55–23:53).

  • Even a Biden administration is unlikely to fully reverse the chilling of US-China relations.

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7. Notable Quotes & Exchanges

• On Structural Racism & Economic Mobility (37:49–40:22)
  • Tankersley references a study highlighting the persistent penalty for Black Americans since 1870:

    “Since 1870, the penalty for being Black in America in terms of economic mobility has not changed. It is just as hard today for Black men to get ahead as it was during Reconstruction.”
    — Jim Tankersley (37:54)

  • Felix Salmon notes that, in sectors like Wall Street, things may even be getting worse for Black professionals (39:39).

    “There are definitely significant parts of the economy where things are getting worse.”
    — Felix Salmon (39:39)

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Segment Timestamps

• [00:10] Introduction and episode overview
• [01:55] The rise and fall of the middle class
• [04:15] The role of inclusion in prosperity
• [07:00] Ideological divides over economic solutions
• [10:10] The reality of offshoring and future employment
• [11:44] Government investment and postwar productivity
• [12:34] Corporate profits, labor, and wage stagnation
• [17:40] U.S.-China tensions: TikTok, WeChat, and business fallout
• [24:18] NYT’s digital milestone and the virtual economy
• [27:04] Will post-pandemic behaviors last?
• [29:00] Commercial real estate and small business under threat
• [30:18] The “winner-takes-all” economy
• [37:49] Enduring barriers to Black economic mobility

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Memorable Moments

• On Tiktok and Geopolitics:

  “I can't imagine a scarier, more horrifying thing than a LinkedIn TikTok scenario.”
  — Jim Tankersley (33:24)

• On pandemic consumer shifts:

  “I never want to go back into an electronics store again...It's just easier to order a new...whatever online and have it show up at my door two days later.”
  — Jim Tankersley (27:04)

• On myth versus reality:

  “It is this great myth that Americans, so many white Americans have sold to the rest of the country is this idea that we have this Leave it to Beaver middle class...”
  — Jim Tankersley (04:15)

• On executive compensation:

  “The market seems to have no problem with increased compensation for executives...it's not necessarily paying people that the market doesn't like. It's paying your typical worker.”
  — Jim Tankersley (16:26)

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Conclusion

The episode delivers a nuanced, historically informed, and at times sobering look at the American middle class, reminding listeners that its true strength came from inclusion and opportunity. But deep structural barriers—especially around race—remain as strong as ever, and recent crises threaten to entrench economic power at the top. Yet, amid the pessimism, there’s optimism: unleashing untapped talent and making strategic investments could still foster a new era of broadly shared prosperity.

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For listeners seeking a sharp, candid conversation on the roots of economic opportunity and the forces shaping our post-pandemic economy, this episode offers expert insight, grounded analysis, and a balanced dose of realism and hope.

Transcript

[A]

Foreign.

[B]

Hello and welcome to the Riches of this Land edition of SLEEPD Money, your guide to the business and finance news of the week. I'm Felix Salmon of Axios. I'm here with Anna Shymansky of breakingviews.

[A]

Hello.

[B]

And we are also here with Jim Tankersley from the New York Times. Who are you and what is your book?

[A]

JIM tankersley, I cover tax and economic policy for the New York Times. My book is called the Riches of this the Untold True Story of the American Middle Class.

[B]

We have a great episode this week. We are going to talk to Jim about his book, of course. We're going to learn all about the middle class and how it got to where it is. We are going to talk about China and whether TikTok is going to be banned or whether TikTok is going to wind up being merged into LinkedIn, which would be quite a thing. We are going to talk about the digitization, the virtualization of the American economy, whether that's going to last. And we are also in Slate plus going to talk about Donald Trump and what kind of credit he can claim or blame we can lay at his feet for the state of the economy. All of that coming up on Sleep Money. So, Jim, you've written a whole book about the American middle classes and it's a book full of people. And a lot of the people in your book, as with a lot of Americans had generally positive experiences up until a certain date and then since that date, they have had generally not so positive experiences. So what is the middle class and when did things start going sideways?

[A]

Great question. The American middle class is actually sort of a relatively new phenomenon. It's this thing that Americans have in our minds that, oh, we've always had this vibrant middle class, but really wasn't true for decent part of the nation's history. And really the big rise of the middle class, the boom was after World War II, starts with the war effort and continues in the decades that end somewhere in the late 70s, early 80s when millions of Americans get pulled into what we think of perhaps somewhat arrogantly as the American dream, which is really, I think, about economic security, being able to own a home, being able to own a car, being able to send your kids to school and have a retirement and just some sort of assurance that even if things get bad for a little while, you have enough of a cushion that you're going to make it. And that period after World War II and those decades that followed was was the time in America when there really was a growing, vibrant middle Class. And since then it has not been like that at all.

[B]

Has it been shrinking? Is it growing? But just more slowly than it was previously?

[A]

So there is this amazing debate in Washington and around the sort of wonk community about how to measure this. There are people who will tell you that the middle class has been completely obliterated since 1980. There are people who tell you that oh no, it's been doing fine by the numbers that I see. It's actually been going backwards in the 21st century. People have been falling out of the middle class, millions of people. And it has along those lines, not been performing anywhere close to the expectations people have. Which I think is the non controversial way to say this. There is no question that the middle class grew and thrived much, much more after World War II than it has since really the Reagan era. And in particular the 21st century has been brutal. The last great stretch for the American middle class was the Clinton late 90s growth. And since then we've had really disappointing income growth, really disappointing job gains, and very little of what we would think of as tight labor markets that help workers.

[C]

One of the things I found really interesting about your book was that you didn't just focus on white working class workers and especially white male working class workers. You certainly talked about them. But I think one of the really interesting things that you bring up is the idea that these, the middle class has always involved people of color and women.

[A]

Yeah, it is this great myth that Americans, so many white Americans have sold to the rest of the country is this idea that we have this leave it to be for middle class. And it was certainly something that political reporters and I include myself in this criticism and talk about it a lot in the book. Really overemphasized in 2016, which was the role of white working class Americans. The truth is actually what economic research shows us is that the reason the middle class grew and thrived in those decades after World War II was that we opened up the American labor market and the highest skilled, highest talent, highest paid jobs in the country to non white guys, to women of all races, to men of color who had been held back by overt discrimination, by actual laws, from doing those jobs and in the struggle for civil rights and starting with the necessity of the war effort, women and men of color gained the entry to those occupations. They didn't get full equality. They still do not have equality of opportunity. But that simple progress of opportunity unleashed what economists call a productivity boom.

[B]

This reminds me very much of one of my favorite economics papers by Joe Stiglitz, where he looked at the effects of microfinance. And insofar as microfinance has really had a positive effect in poor countries, it seems to be entirely a function of its ability to bring women into the workforce. And to no one's great surprise, if you bring millions of women into the workforce, then that creates economic activity. And microfinance, their ability to sort of employ themselves in a highly discriminatory environment where people weren't giving them jobs, made a big difference even without creating equality. And this seems to be like a. A very similar story that you're telling about America.

[A]

Absolutely. And it's just sort of so intuitive when you think about it. If you were like an alien coming to Earth and given nothing but sort of statistics about the economy, saying, here is the types of skills that are demanded in the modern economy and the types of people who hold those skills, you would assume the vast majority of the top Americans in top jobs are women. They're more educated. They have dramatically improved their skill attainment over the last few decades, particularly compared to men who have stagnated. And that's not the case. Right. So that's. To me, I see that as a huge amount of opportunity. We have policies that hold women back, whether it's childcare policies or, again, the overt discriminations in boardrooms. But, yeah, empowering women has this opportunity to put more talented people in jobs they should be in where they can contribute more to the economy. And that lifts everybody up.

[C]

And I think this is really interesting because it kind of cuts a little bit across the right and left divide, because I think on the, you know, kind of populist. Right, right now you have this idea of, you know, immigrants taking jobs, that kind of thing. And then on the left, you sometimes also have this idea that it's. It's almost like a limited pie. The economy is a limited pie. And while we do need better reallocation of wealth, we all know that it's. It's also about growing the pie. It's the idea of getting more people and also using people's skills in the most productive way possible.

[A]

Yeah, no, and I think, again, it's both the lesson of history, but also I just think it's a really intuitive and optimistic way of looking at the economy. Now, if we better allocate the resources in the pie, the pie will grow faster. And what we know is that a faster growing pie at a time of low unemployment is the recipe for big income gains. And so I think that the most sustainable version of that is these prices, productivity gains. And yeah, you're right, the first excerpt of this book got a lot of blowback from both of the populist left and the populist right. The populist right wanted to tell me that, no, immigrants don't actually lift the economy, which I argue in the book that they clearly do. And the populist left wanted to tell me that, no, this is all just about taking money from billionaires and giving it to workers. And that'll make everything fine. But I really think there's something in here, no matter how you view the economy, that you could pursue. There's a path for market oriented policies, there's a path for government oriented policies to try to correct these productivity failures we have right now.

[B]

So I have a question about productivity and looking at it more from maybe the capital side of the equation or the employer side of the equation, rather than the labor side of the equation, which is that during the boom that you were talking to, which ended around 1980, employers would want to employ people who are becoming more productive. And as those people became more productive and as they had bargaining power thanks to unions, they could reap the fruits of that productivity. And what I'm seeing now for a lot of Americans, but especially for ones without college degrees, is that when employers look at them and say, like, how much money can we make from these people? Maybe they can make a bunch of money, but on the other hand, there's no real need a lot of the time to pay them more because they can make even more money if they pay someone in Mexico instead. We're in a very global world now. And so I guess my question for you about how to bring living wages back into the middle classes, or I guess that would be a tautology, how to bring living wages back into the people who should by rights be part of the middle classes, is how did those people compete with Mexico, Vietnam, China and the rest of the world?

[A]

This may be a frustrating answer. It's certainly been a frustrating answer for some of the people I've talked to about it. But I actually, I don't think there's a very good chance that most of the jobs that have been outsourced are coming back. I've covered this long enough. I've seen enough politicians, promises. Donald Trump promised to repatriate all these jobs from, and he's actually tried a bunch of different levers of trade and tax policy and they haven't worked. So when I talk to CEOs, there's a very, very low chance they are actually bringing their supply chains back. So I think we've seen this in America before, entire, like, groups of jobs that just dry up and never come back. And usually what happens is they're replaced with something that makes better use of those workers. Over time, when farming technology made enormous amounts of the agricultural workforce redundant, a lot of those workers moved on to factories where they were more productive. But what hasn't happened now is those better jobs, better uses of those people haven't appeared. So my argument is sort of really, again, frustrating because I'm not going to. I can't tell you where it's going to come from, But I really believe if you are empower the people who actually have a view towards solving human problems with capital and want to invest in that, in healthcare, in carbon mitigation, in a bunch of other industries where there are new frontiers of ways that putting people to work can be helpful and productive, I think those will be good jobs. And so I don't know where they'll be exactly or where they'll be located, but I believe they'll be the sorts of things that could put even the workers. You're talking about workers without college degrees to use in ways that pay more and more and make better use of their skills, which are essentially not in demand right now in our economy.

[C]

Well, one of the things I think is really interesting about the kind of golden age of the American middle class that we think of Post World War II was that you had a significant amount of government investment in basic science. And it was across the country at universities across the nation. And as a result of that, you then had the private sector kind of jump on that investment from the public sector and create these incredibly dynamic productive industries that could afford to pay people a lot because they were so productive. Whereas now the government invests very, very little in basic science. And frankly, the private sector is never going to invest in basic science because it doesn't make any sense, but they will jump off of it. So it seems to me that part of this could also be where the government is choosing to invest to kind of stir this productivity.

[B]

Also. The other question is, even if you can afford to pay people a lot, what's your incentive as an employer to pay people a lot? Because what we've seen is this massive explosion in corporate profits that the balance between capital and labor has really favored capital for the past few decades. And when companies make more money, they go, that's great, and we'll dividend it out to shareholders who will spend it on share, buybacks rather than paying it out out in terms of wage hikes. So what's the incentive? How is profitability going to turn into increased wages? How does that happen?

[A]

I think it has to be a mindset shift. There's this sort of, I think false choice between sort of profits and labor. I actually think profits would be higher longer term if companies were investing more in their workers. I think that it's sort of a sustainable resource you invest in kind of an argument. And I don't think that that's how a lot of companies, but I do think there are some companies that do that and who have reaped the benefits. I think, and we've seen it particularly for highest skilled, the most in demand, highest skilled workers. Clearly they are, you know, Google invests a lot of money in its very high skilled engineers. I think that we can get to a point where that is true of a lot of companies with a lot of very highly skilled workers. But we just live in a time right now, particularly when the, when the labor market has been so loose for so much of the last 20 years, where companies could view workers as eminently replaceable and disposable. And so they didn't. Why invest in them? Because there's always going to be somebody else who needs a job who can work for less. So that's why I think keeping the labor market tight is so important because it does generate that sort of bargaining power that allows workers to demand, hey, you need to invest in me. And we're seeing some of that right now, by the way, in the pandemic. Some companies that really want to keep their work from home workers happy are trying to take some steps to keep them engaged and to keep them from jumping ship even at a time when, when obviously there's enormous unemployment. So I think it's possible, it's just not right now, very widespread.

[C]

I agree with that. I think that like on the one hand, when you have really productive industries, they pay their workers more for the simple fact that if they didn't, they wouldn't be able to find those workers like and they also, because they are productive and very profitable, they were able to do that. But, but Felix, I do also think you're right that there's also a side of this that probably is going to have to revolve around government policy or labor mobilization in some way so that you can start to get more of the gains of the economy to be more widely dispersed. And I think I agree with both of you that by doing that you probably would actually end up generating larger growth. Because part of the reason that you have a lot of companies not investing, even though you have low tax rates, capital is essentially free, but you don't invest because there's no demand. So why are you going to build a factory? Why are you going to invest in training if there's not significant demand? If you can generate that demand by having the people who actually spend money, which are the lower income deciles having more, then you could actually stimulate that demand which could perhaps create more of a virtuous cycle.

[B]

Right? Well, if you look at the stock market, people are desperate to find money losing companies to invest in. Like it's never been a better time to be a money losing company, especially if you are based in California. But what's fascinating to me is that the one type of losing money that the market doesn't like is like, well, we're losing money because we're hiring a bunch of people and that's going to increase our market share and our growth over the long term. The increase in full time salaried employees is exactly the kind of investment that the market really is disincentivizing. Virtually any other form of losing money, even if it's just spending money on marketing, is better, Right?

[A]

Although, yeah. And the market seems to have no problem with increased compensation for executives. So I mean, there is again, it's not necessarily paying people that the market doesn't like. It's paying your typical worker. There's a real market bias toward paying your quote, highest skilled, end quote workers in your company. And so again, I don't like to always argue, well, it's easy to say, well, the market is just clearly wrong. There's clearly incentives that the market is responding to here. And I think one of them is this shift away from the corporate allegiance that is basically complete now. I don't know anybody who thinks they're going to spend their entire career with one company like a lot of people thought they did, maybe in the 50s or 60s. But on the flip side, I think that that fraying of that relationship, the sort of mercenary transactionalism between companies and their workers does rob everyone of a chance to build the kind of trust over time where you really do feel like you're taken care of and then you really do feel like you go the extra mile for your company. Right now companies can demand that you go the extra mile because if not, they'll kick you out and replace you. But again, if the labor market's tight enough, that's not something they can get Away with.

[B]

Let's talk about the big news of the week, which is the ever worsening relationship between the United States and China. I don't know what the hell is going on here. We're banning TikTok, we're banning WeChat. We're sanctioning Carrie Lam, the chief executive of Hong Kong. This is, you know, I thought things were bad like a week ago and suddenly things have seemed to get hell of a lot worse.

[C]

Yeah. At this stage, it seems like the Trump administration is simply throwing anything at the wall that they possibly can, I think most likely as an election maneuver more than anything else.

[B]

So, Jim, you're the political savant here. Can you explain to me? Because I have to say I am. I find this oblivious. How does banning TikTok help anyone politically?

[A]

I mean, I would say two things. One, that the president has a core group of advisors who are true, like actual true believer China hawks. You know, Peter Navarro absolutely has been pushing like from day one for the President to take much more aggressive measures against all sorts of Chinese companies. And I think this is a sort of a natural extension of that. But it is also true if you look at their political messaging, that they think making a villain out of China is helpful for them in this election. And I'm going to go on a limb here and wager that it is in part because they really see it as a way for them to deflect coronavirus blame. The more that you can message this as China unleashed this virus on us. China has these Trojan horse companies that are spying on us. China is the true enemy. It is a way to try to. And then saying Joe Biden is soft on China. I mean, that is a way to. I don't think anybody's going to vote on like, oh, I'm excited you took away TikTok. That doesn't seem like. Although I do think a lot of teenagers might complain to their parents about it. But I think that there is a political narrative that they are helping to build here on top of true actual desires of the President's advisers to crack down on all sorts of the Chinese economy.

[C]

I 100% agree. I really think this is far more about that narrative, that kind of COVID narrative than it is actual economics. And that isn't to say there aren't legitimate concerns about China, that there aren't legitimate concerns about Carrie Lam. But I don't think that this is a well reasoned policy to deal with those. I do think this is more just posturing. However, I do think it will probably have consequences far after. Hopefully Trump gets out of office. I think that what has been done in the last few years, and especially now, what has been done in the last six months, I don't think that is something you quickly fix. Even if Biden comes into office.

[B]

Definitely not. If TikTok disappears. It doesn't like spring back on January 21, if Biden comes into office. But it's even bigger than that. I wrote a little bit in my newsletter this week about hsbc, which has, you know, it's the sixth biggest bank in the world and it has just imploded because it's. I mean, the. It's in the name Hong Kong and Shanghai Banking Corporation and they're a UK bank. They do most of their business in Hong Kong and China. And the tension there between, like, do you support democracy? Do you support the people of Hong Kong? Or do you support the. The Chinese Communist Party is irreconcilable and it is tearing that bank apart and has destroyed that bank's profits. And the greater the geopolitical tensions between the US and China, the less money HSBC makes. And I think HSBC is a little bit of a canary here. Like when it was Huawei, we didn't care because they were like this Chinese company and who cares, right? HSBC is a big UK company. Maybe we don't care about big UK companies, but I'm thinking about Apple. China's basically Apple's second biggest market. Apple is probably the most successful American company in China entirely, thanks to the fact that a lot of Chinese people like and use iPhones. If Apple can't keep WeChat in its app store, then no one in China is going to use an iPhone. It's as simple as that. A mobile phone is WeChat in China. So without WeChat, there's no Apple in China. And I feel like, I mean, it's obvious to me that no one in the administration has thought this through. If you take one look at the executive orders that Trump put out, they are incoherent. It is absolutely impossible to understand what they're saying. But there is going to be a huge number of unintended consequences, many of which are going to fall on American companies.

[A]

Yeah, absolutely. And I think that the grand hope that American companies have had for more than a decade now of the Chinese market being their next. The true great growth frontier, that's something they have to be thinking about and reassessing right now, how tenable that's going to be. Just given all this.

[C]

One of the Things I think is interesting, too, that I've heard for much of the past six months or even a year, is that the Chinese government, in a lot of ways, despite all of this kind of nonsense, would much rather have Trump in office than Biden, because what Trump is doing is unfocused and it's unilateral. Whereas when you get a Biden administration in, they're much more likely to work with the rest of the world and they're much more likely to be able thus to get real change out of China. And the model that we've had in the relationship between China, the way that China's been able to grow, some of the things that China's been able to do that's probably done, that stage of globalization is probably done regardless of who was elected this fall. And if anything, if you do get a more reasonable administration, that does not mean that all of a sudden we go back to having this nice relationship.

[B]

Jim, can I talk to you about the New York Times for a minute, please? You just had a digital milestone. You now are making more money from selling electrons than you are from selling print circulation and ads. This is the dephysicalization of the New York Times. I mean, when was the last time you went into the actual office?

[A]

I haven't been in in more than five months. I think it's been 148 days since I was in the office.

[B]

So, like, offices are disappearing. Print newspapers are disappearing, print revenue is disappearing. New York Times is doing great. Meanwhile. So my question for you is, is this, I don't know, some kind of synecdoche for the economy as a whole? Is this what is happening across the economy?

[A]

Well, all economics is local, right? So I'm going to just wildly extrapolate from my unemployer, but I do think that it is. I think that There's. We had 669,000 new digital subscribers last quarter. We are like, well on our way to this goal of 10 million digital subscribers. And I think, you know, was not that long ago that people were criticizing the New York Times strategy of digital subscriptions and saying, you couldn't do it. You couldn't make that work on the Internet. And, and I, I feel like maybe in the pandemic, we have accelerated that shift, clearly, for the Times. I think, you know, other newspapers and large media outlets are going to be there with us, the Post and the Journal and others. And on the flip side, I don't think it's just a media story. I really don't. I think, you know, Brick and mortar retail is really struggling right now. And the way that, you know, just in my neighborhood, the way that so many restaurants have just kind of reinvented themselves away from their physical spaces to basically just kitchens where you pick things up, you know, they deliver to you, or you pick things up right outside. I think we are seeing a dramatic shift to a virtual economy that we all knew was coming slowly but has really picked up. And I'm not sure we're. We're fully anticipating or understanding just. Just how many business models have been totally reshuffled under our eyes here.

[B]

So is this permanent or temporary? Because this is the big question, which I've been struggling with for the past couple of months, is like, obviously people change their behaviors during quarantine, when there's a lockdown, when they can't go into the office, that kind of thing. Obviously, at some point, the pandemic will end. When the pandemic ends, do we snap back to the status quo ante or. Or something similar to it because we just hated this horrible pandemic period and we want nothing to do with it, or do we suddenly realize that we kind of prefer this new life in some ways? And especially on retail? I think I'm more in the snapback camp when it comes to shopping. People like that more as a physical activity. And sure, they might do the actual transaction online after having walked around all of the stores and it's all omnichannel and the stores are ads for the E storefront or whatever. But ultimately, especially when it comes to clothes, you know, people want to be able to walk through stores, touch them, look around. I think that bit is maybe more temporary.

[A]

Maybe. I don't know. I would have agreed with you two months ago. I'm not sure that I agree with you now. Part of it is like, I don't know, I never want to go back into an electronic store again. I just. It's just easier to, you know, order a new, you know, computer speaker online now and have it show up at my door two days later. I don't want to have to, like, get up and fight traffic at the mall or whatever. And I can think of, you know, the stores I really like going to. I definitely will return to it. I really hope REI does not go all virtual, but I even think about things like that are beyond retail. I think we will see a lot more virtual innovation in the home buying space, like the way that realtors have innovated with being able to stage a home virtually now so you can put really Cool furniture in that doesn't actually exist, but it's just there on the tour. I think we will see a lot more of that now. I don't think that's going to mean there's nobody goes to an open house anymore, but it may dramatically change the way people buy homes. And I wouldn't expect that fully snaps back.

[C]

I agree. I think that number one, the longer this goes on, obviously the more it's going to result in some type of permanent behavioral changes. But I also think what we'll probably go back to will be a different model. One of the things I found really interesting is, I mean I've been someone who for a long time has been like the New Yorker with the doorman building that has everything delivered. That was my reality long before the pandemic. And it was interesting for me then to see my relatives who were not used to ordering groceries or these kind of things all of a sudden start doing it and being like, this is great. Why would I want to go back to the way things were done before? So I think as some of these models were moved beyond just kind of the urban centers, I have a hard time believing we're just going to go back to pre Covid world.

[B]

So who are the losers here? Presumably it's commercial real estate.

[C]

Yes.

[A]

Yeah, it really feels like it.

[C]

Talk to people commercial real estate and they'll give you these spiels about oh no, people are going to need more space because of social distancing. You're like, no, commercial real estate is going to struggle.

[A]

I think short term, that's right. And I think there's also just like a bunch of big incumbent brick and mortars that are, that we're seeing, you know, have filed bankruptcy or look you close to it, and they were not doing great before this started. But I'll tell you the other losers here are the smaller business brick and mortars who have not been able to adapt, who don't have the instant ability to go more virtual of like a Target or a Walmart. And I think that they anecdotally, that is one thing I'm also hearing from a lot of places is like, oh, we had a decent size for us neighborhood market share from our hardware store, but we had to close for a few weeks and we haven't been able to figure out this sort of low contact curbside pickup model and Home Depot is blowing us away. So I worry about that because I think that a more dynamic, more competitive market with more local businesses is better. But I think there's a real chance we'll lose a lot of those permanently.

[B]

One thing we've definitely seen in the stock market is not just the S&P 500 outperforming the market as a whole, the broad market, but really just a handful of big digital companies dominating the rally and hitting new highs while the rest of the market is lagging behind them. And I do definitely worry that this is the winner takes all recession. And at the end of this recession, anyone who isn't enormous is going to be dead and we are going to wind up in a world of monopolies.

[C]

I think that's certainly possible. I hope that is not the case. But yes, I think there is definitely a possibility of that. I would say I think that even though while the economy is really, really, really struggling, you may not have quite the interest in antitrust, despite what we saw with all the Congressional hearings, I think that once the economy starts recovering now that you are almost certainly going to have more government involvement in the economy moving forward. I think that that is just a reality. I do wonder if you're going to have more pushback on some of those companies that are experiencing essentially windfalls right now. If you look historically, it wouldn't be surprising if we end up getting more government pushback and we end up having changes. And I don't know if it results in a bunch of smaller, really, really small companies thriving. Obviously I have no way to say whether that's going to happen or not, but I don't necessarily think this means that it's just going to be Google, Facebook, Microsoft and Amazon and nothing else.

[B]

Not even if Microsoft buys TikTok.

[A]

Maybe Microsoft buys TikTok, then all bets are off. That seems like a world owning conglomerate right there.

[B]

I have to mention my theory here, which is that Microsoft has really become the dominant enterprise computing company in the world. It's astonishing to me how Microsoft Office in particular retains like 90% market share when Google Docs are so much better, but they just haven't really made it into Excel. I'm sorry, Excel is.

[C]

Excel is so much better.

[B]

It's not even Excel I use every day word I loathe with a hate of a thousand sons. But yeah, but Microsoft also has a bunch of random consumer facing products which everyone kind of ignores, at least when it comes to the stock market. But they're really big things. Minecraft is a huge thing. Xbox is a huge thing. And my idea is that the reason they want to buy TikTok is because if you have something as big as TikTok and then you combine it with Minecraft and Xbox and maybe LinkedIn, I'm not sure about that. But a few of these more consumer facing things and then spin that all out into a consumer facing company, then you create a bunch of value that way. Even though they probably couldn't do that kind of a spin out unless there was a big anchor in the form of something like TikTok. This is not going to happen, by the way. This is my fantasy, but this is my mental model of Microsoft.

[A]

I can't imagine a scarier, more horrifying thing than a LinkedIn TikTok scenario. Right.

[B]

I mean, it's just, I mean, LinkedIn. I just like to screw roll through LinkedIn, watching thirsty teens. This is the best of both worlds.

[A]

Yeah.

[B]

Wow.

[A]

Dystopia. That's great.

[B]

Talking of dystopia, my number this week is 68.2%, which is the latest home ownership rate from the Census Bureau. It has absolutely skyrocketed in the past couple of months and there's lots of talk about why that might be. There's obviously very low mortgage rates. People when they aren't able to go to the office or go shopping and stuff like that, they really value personal home space much more. And so there's been this big sort of sucking sound as people have been buying up property in the suburbs. Suburbs have much higher homeownership rates than cities do. So every time you buy in the suburbs that increases the homeownership rate and all of these other similar things. But honestly, I also suspect that we have some very noisy data here and the Census Bureau isn't able to count as well during a pandemic as it was before. They actually had a note in the release about that and that maybe that number might get revised down a bit because I still believe in my heart of hearts that homeownership is on the long term secular decline.

[A]

I think that's, I think that's really possible. I also think, I mean, we have seen this surge of home buying, but I also, I wonder what, how that all interplays with this sort of like potential wave of evictions that we could see and whether those turn into landlords then trying to sell properties and it feeds on itself and there's higher.

[B]

Yeah, I think, I think rental properties mostly remain rental properties, but if you are evicted from your Brooklyn apartment and then you wind up going back to Nebraska and buying somewhere, that increases the home ownership rate at the margin. True.

[C]

Although I don't know if you're being evicted if you're probably then going to go immediately and buy a place, I'm not sure if the overlapping population there is exactly the same thing.

[B]

You could probably buy a place in Nebraska for the price of 6 months rent in Brooklyn.

[C]

Depends on where you live. But yeah. So my number is sadder. My number is 2,750 tons.

[B]

Oh, is that the ammonium?

[C]

Yes, the ammonium nitrate. It really is just unbelievable when you start to dig into what actually happened in Beirut and the fact that through complete incompetence and really criminal incompetence of the Lebanese government, they have killed over 100 people, injured thousands of people. I think there were 300,000 people who were homeless. And I mean the size of this was like 20 times larger than the largest non nuclear bomb. And I heard like the shockwave was something like 20 or 30% of Hiroshima's shockwave. I mean, just unbelievable. And just through incompetence, I mean, I feel like not only should the Lebanese just be infuriated, I feel like the entire world should just be like, this is horrible.

[B]

This is like it was not only foreseeable, it was foreseen. There was a steady of letters from the ports, people saying like, we are sitting on a bomb and it's going to explode unless we get this stuff out of here. And the government was like, yeah, yeah, we should probably do something about that. And never did and it shouldn't.

[C]

And in a sense it's almost not surprising because you had, this is the same government that couldn't pick up the trash on the street for how long? So you had trash piling up that has completely destroyed their economy because they turns out you can't run a Ponzi scheme for that long before it breaks down. It's just the more I read about it, the more I'm just like, this is the worst thing I've ever seen.

[B]

So in terms of foreseen disasters, the other big one that I'm really worried about right now is the Three Gorges Dam, which the Chinese government is coming out and saying the Three Gorges Dam is perfectly safe, which is the least reassuring thing you can possibly hear. But yeah, that would make the Beirut blast look like a walk in the park if that collapsed. Jim, what's your number?

[A]

All right, my number is a gratuitous.

[B]

Book promo, but it's also, we love gratuitous book promos. We're all into all this.

[A]

It's also an attempt to be just as depressing as you guys. So My number is 1870 which is a year. And it happens to be the year that some researchers, including Marianne Wanamacher of the University of Texas, Tennessee, who was on President Trump's Council of Economic Advisers, it's the year they looked back to in a big longitudinal study of economic mobility for black men. And they were looking at to see how had it changed over time. And is it easier, has it ever become easier for black men to get ahead of where they're sort of where they were born, do better than their fathers, than white men? And the depressing answer is that since 1870, the penalty for being black in America in terms of economic mobility has not changed. It is just as hard today for black men to get ahead as it was during Reconstruction. And that, I think, is one of the more sobering and depressing statements on our economy right now, in the midst of this summer of protests and calls for equality, that it is just still incredibly difficult and there is this deep, deep penalty just for blackness in our country.

[B]

I want to jump in and say, like, the businessweek had a really good cover package on this, I think it was last week. And there's this general feeling among sort of my circle at least, that, you know, there's a lot of systemic racism and there's a lot of room for improvement and that things are getting better far too slowly for black Americans. But I think what's not being realized is there are definitely significant parts of the economy where things are getting worse.

[A]

Yes.

[B]

And Wall street is one of those. And it does really seem as though Wall street was more welcoming to black Americans 20 years ago. And there were more black Americans in senior positions of Wall Street 20 years ago than there are now. And that there has been this backwards movement. And I'm sure Wall street is not alone in that. But, like, there is this kind of complacency that, well, at least we're not getting worse. I think we are getting worse in significant parts of the economy.

[A]

Yeah, it's sobering. But again, I mean, the hopeful thing is that means there's opportunity if we could get better, dramatically better. There's just all that talent to be unleashed on the economy. And I think that would be great for Wall street, frankly, and it would be great for the rest of the.

[B]

Country, which I think brings this episode of Slate money to a close. Jim Tankersley of the New York Times, thank you so much for joining us. It's been great to have you here.

[A]

It's been really fun.

[B]

It has been fun. Thanks to Jessamine Molly for producing, and thanks to all of you guys for keeping the emails coming on slatemoneylate.com we will talk to you next week on Slate Money.