Slate Money: The Shared Values Edition (August 5, 2017)

Episode Overview

In “The Shared Values Edition,” host Felix Salmon and co-hosts Anna Szymanski and Jordan Weissmann explore the latest in business and finance, focusing on surging stock markets under the Trump presidency, the shifting role and governance of stock indices, and the challenges facing public benefit corporations like Etsy. The episode weaves together economic analysis, corporate governance debates, and the perennial tension between profit and values-driven business.

Key Discussion Points

1. Stock Market Highs and What They Actually Mean (00:57–13:37)

• Market Check-In: The hosts rarely discuss the stock market, but with all major indices hitting record highs, they ask: does this signal genuine economic strength or something else?

  • Felix Salmon: “We are now six months into the Trump presidency. We are hitting all time highs on virtually every index.” (02:04)

• Trump and the Markets: Trump touts the highs as his achievement, despite once calling the market a “bubble.” The group discusses how political narratives interact with market reality.

  • Anna Szymanski: “Trump…is taking great credit for this, which I feel is unbelievably stupid, because when it falls, he’s gonna have to own it.” (02:10)

• Drivers of Stock Prices: The conversation covers low interest rates, robust corporate earnings, currency weakness, and their impacts on multinational companies.

  • Anna Szymanski: “Interest rates continue to be low... earnings have been robust... companies that make a lot of revenues overseas are doing disproportionately well.” (03:30)
  • Jordan Weissmann draws parallels to Britain after Brexit: “The fascinating thing to me…is like, shit’s actually really, really bad politically, and yet the country’s kind of soldiering on.” (06:37)

• The Role of the Dollar: They discuss the weakening dollar and its impact.

  • Felix: “The dollar’s at a 15 month low…people expected a lot of spending…that didn’t really happen…now people are saying, oh shit, Donald Trump can’t pass jack through Congress.” (04:29)

• Low Interest Rates—A Blessing or Risk: The hosts debate whether persistent low rates are a sign of economic health or masked fragility.

  • Anna: “We can’t seem to hit our inflation target. No matter what, we are undershooting inflation. That speaks to some sort of weakness somewhere…” (09:23)

2. Index Funds and Corporate Governance Shake-Ups (13:37–20:27)

• The Passive Investing Debate: The group revisits the rise of index funds and why passive investing may not be all it's cracked up to be.

  • Anna: “I do not actually believe that passive investment is all that it’s cracked up to be and could potentially be a problem for the overall market…” (13:37)

• S&P, Russell, and Dual-Class Shares: Major index providers announce they will exclude companies with multiple share classes (like Snap, which offered shares with no voting rights).

  • Felix: “If you come to market…with multiple share classes where a handful of insiders control the company…we are not going to include you in the index.” (14:09)
  • Anna: “The fact that investors went along with that shows you how degraded investment standards have become.” (15:03)

• Why Does Index Inclusion Matter?: Inclusion (or exclusion) from indices such as the S&P 500 has deep implications for investor behavior and company strategy.

  • Anna: “People think an index is the market and an index is almost never the market.” (16:46)

3. Can Public Companies Have “Shared Values”? The Etsy/B Corp Case (20:27–35:25)

• Exploring B Corps: This segment unpacks the concept of Benefit Corporations, using Etsy as a test case for whether companies can serve shareholders and broader stakeholders.

  • Felix: “A Benefit Corp is one which doesn’t only answer to its shareholders…accountable to its employees, its customers, the planet.” (22:04)

• Etsy’s Bumpy Ride: Etsy failed to convert to legal public benefit corporation status upon going public, leading to tension between its values and market pressures.

  • Felix on Etsy’s transition: “All of the crunchiness of Etsy has pretty much gone out the window.” (25:56)
  • Anna: “They’ve brushed away most of the granola.” (26:04)

• Profit vs. Principles: Can a publicly traded company sustain values-driven goals in the face of shareholder pressure?

  • Anna: “I really don’t think the B Corp model is ever going to work for publicly traded companies…if you’re talking about a publicly traded company, you’re going to be less profitable almost certainly by doing this.” (28:24)
  • Felix, pushing back: “If I take money from the public while explicitly saying that I am not going to be trying to maximize profits at every available expense…and they give me money on those terms with their eyes open, then that’s a transaction between consenting adults.” (30:52)

• Activist Investors and Growth Obsession: The group discusses the inevitability of market forces—like activist investors—turning any “soft” public company toward profit maximization.

  • Jordan: “I wonder if just eventually some Carl Icahn is going to come along essentially and turn you…turn you evil.” (33:27)
  • Felix: “There is this obsession in the public stock markets with growth…private companies can last so long and do very well…precisely that they don’t feel the need to grow the whole time.” (32:17)

4. Numbers Round: Notable Facts & Figures (35:31–39:41)

Each host shares a surprising or telling number from the business world.

• $100,000: Columbia Journalism School’s new master’s program in data journalism will cost nearly $100,000 in tuition, a figure the hosts roundly criticize as “unconscionable.” (35:33)
• $81 Million: The discount on a New York penthouse (Pierre Hotel Penthouse), sold for $44 million after originally being listed at $125 million, illustrating softness in ultra-luxury real estate. (37:32)
• 12%: In India, sanitary napkins face a 12% goods and services tax, sparking debate about economic policy and gender. Anna discusses the complexity behind apparent “feminist” stories in taxation. (38:15)

Notable Quotes

• “We’re in this Goldilocks moment where we’re growing fast enough that earnings are doing well, but we’re not growing so, so fast that rates are going to increase at an increased pace.” — Anna Szymanski (05:25)
• “If you come to market…with multiple share classes where a handful of insiders control the company…we are not going to include you in the index.” — Felix Salmon (14:09)
• “The fact that investors went along with that shows you how degraded investment standards have become.” — Anna Szymanski (15:03)
• “All of the crunchiness of Etsy has pretty much gone out the window.” — Felix Salmon (25:56)
• “I really don’t think the B Corp model is ever going to work for publicly traded companies.” — Anna Szymanski (28:24)
• “If I take money from the public while explicitly saying that I am not going to be trying to maximize profits at every available expense…and they give me money on those terms with their eyes open, then that’s a transaction between consenting adults.” — Felix Salmon (30:52)
• “There is this obsession in the public stock markets with growth…private companies can last so long and do very well…precisely that they don’t feel the need to grow the whole time.” — Felix Salmon (32:17)
• “Columbia Journalism School is starting a data journalism degree…tuition is going to be $100,000. That’s fucking unconscionable.” — Jordan Weissmann (35:34)

Memorable Moments

• The hosts’ mockery of the Dow Jones Industrial Average and the practice of daily market “number recitations” on other finance shows. (01:17–01:43)
• Felix’s ardent defense of being able to raise public capital for a company with an explicitly non-maximal-profit agenda. (30:52)
• The playful banter about the “crunchiness” of Etsy and how “they’ve brushed away most of the granola.” (26:02–26:04)
• The light-hearted endorsement of cotton socks from a Turkish seller on Etsy, used to illustrate the company’s global, quirky appeal. (21:46)

Timestamps for Key Segments

• Stock Market Analysis: 00:57–13:37
• Index Funds & Corporate Governance: 13:37–20:27
• Etsy & B Corporations: 20:27–35:25
• Numbers Round: 35:31–39:41

Tone & Conclusion

The conversation is lively, sharp, and slightly irreverent—reflecting the hosts’ deep expertise and skepticism toward easy narratives in business news. They blend economics with skepticism about both markets and social good claims, but also show personal investment (and exasperation) in the subjects at hand.

For listeners seeking an episode that blends market savvy, skepticism about finance orthodoxy, and reflections on whether public companies can “do good,” this edition of Slate Money delivers memorable arguments and insights.