Slate Money – The Soft Power Edition

Date: March 11, 2017
Host: Felix Salmon (B)
Co-hosts: Jordan Weissman (A), Laurel Touby (C; Guest)

Episode Overview

This "Soft Power Edition" of Slate Money dives into the mechanics of global economic influence, exploring the role of corporate power, government sanctions, and symbolic gestures in shaping international politics and business. The central theme is "soft power"—how entities from eccentric billionaires to the U.S. government leverage money, policy, and culture to influence global behavior. Notable highlights include an in-depth look at Japanese conglomerate SoftBank and its ambitions, the U.S. wielding its financial clout via sanctions and the SWIFT system, and State Street Global Advisors’ public campaign for gender diversity on corporate boards featuring the now-iconic Wall Street girl statue.

Key Discussion Points & Insights

1. SoftBank and Masayoshi Son: The Global Tech Dealmaker

[02:14 – 10:13]

• Who is SoftBank?
  A giant Japanese conglomerate, founded in the 1980s, known for ambitious investments and unusual scale in tech and telecommunications.
• Masayoshi Son:
  “This is a man who has been a household name in Japan and China for a very long time and now... he wants to be big here [in the U.S.] too.” — Felix Salmon [02:44]
  • Owner of Sprint, significant stakes in Alibaba, ARM, Yahoo Japan, and a massive $100B investment fund (bolstered by $50B from Saudi Arabia).
• Notable traits:
  • Son is described as an “eccentric billionaire” with a “300-year business plan,” ambitions toward telepathy technology, and an appetite for debt.
  • “He wants to own your thoughts.” — Jordan Weissman [02:59]
  • Highly leveraged ($160B in debt) and almost lost it all in the dot-com bust.
• SoftBank’s ambition:
  • Compares himself to Warren Buffett, but with a focus on 21st-century telecoms and tech.
  • “He’s a good old-fashioned... telecoms mogul is probably a good description…” — Felix [05:13]
  • Willingness to shake hands with governments, and speculated maneuvers to get U.S. regulatory favor for a Sprint/T-Mobile merger with Trump.
• Mixed feelings on soft-power concentration:
  • “Is it good to have that much money sloshing around? Should one man have all that power?” — Jordan [07:57]
  • Laurel admires billionaire ambition in jest, “All billionaires are good billionaires. Except for maybe Vladimir Putin.” [10:21]

2. U.S. Financial Sanctions & Global ‘Soft Power’

[11:13 – 20:27]

• Case studies:
  • ZTE (China): Fined $892M for selling U.S.-technologized smartphones to Iran, a violation of U.S. law.
    • “If a Chinese company wants to deal with an Iranian company, it’s not obvious why the Americans should be able to control that, but they can and they do.” — Felix [13:34]
    • Fine closely matched to an earlier Chinese penalty on Qualcomm, suggesting tit-for-tat geopolitics.
  • SWIFT system: A Belgian-based global payments network, cut off North Korean banks following American pressure.
    • “They are the arteries of the global financial system. If you are cut off from SWIFT, you cannot function…” — Jordan [13:49]
    • Cutting Iran from SWIFT was described as “dropping the nuke financially” [13:49], leading to economic isolation.
• The centrality of the U.S. dollar and U.S. policy:
  • “America is pretty much the only country in the world which has this power... because every single international financial institution needs to have some presence in New York.” — Felix [15:58]
• Debate: Will U.S. retain its soft power?
  • Laurel is skeptical if the U.S. turns isolationist: “If we step back... we’re not going to be able to exercise soft power in any way, shape or form.” [16:58]
  • Jordan argues dollar dominance and entrenched systems protect U.S. “soft” (and hard) power for the foreseeable future. [17:32 – 18:28]
• Critique of sanctions:
  • Laurel questions the efficacy and morality of targeting consumer goods in sanctions: “Why would they stop like phone parts from being exported? Isn’t that just hitting the people?” [19:31]
  • Jordan acknowledges the roundabout but effective nature of economic isolation.

3. State Street’s Gender Diversity Push and the Wall Street Girl

[20:47 – 30:45]

• State Street Global Advisors:
  The world’s third-largest asset manager, accused by Felix of “doing almost nothing” on board diversity.
  • “If these companies with no female board members... can’t persuade State Street they’ve made moves... then they will vote against the chairman... Come on.” — Felix [24:03]
• The “Fearless Girl” statue and gender diversity ETF:
  • Public stunt for International Women’s Day, aimed at starting conversations about gender equity on boards.
  • “It’s a brass sculpture of a little girl staring down the Wall Street bull...” — Jordan [22:48]
  • Laurel defends the symbolic moves: “At least they’re doing something, right?” [24:44]
• Evidence and skepticism:
  • Jordan disputes the empirical argument that women on boards boost performance: “Once actual academics have looked into it, it doesn’t hold up... There’s no causal relationship.” [25:47]
  • Real change comes with 30%+ female board membership, not just “one token woman.” [26:16]
  • “I think all companies should do that. And I think investors should make noises about that. And I don’t think that a stupid publicity stunt with a girl on Wall Street makes any difference.” — Felix [27:43]
  • Artistic critique: “Why couldn’t it be a woman instead of a child?” — Laurel [30:11]
  • Jordan opines the symbolism is “sub-Banksy.” [30:46]
• Takeaway:
  State Street’s efforts are largely about marketing rather than substantive corporate change, but the panel agrees that moving the conversation forward has some value.

4. Numbers Round: Memorable Figures and Quirks

[30:57 – 35:21]

• Laurel: “250 petabytes”
  • The theoretical data that can be fit in a gram of DNA. “Isn’t that cool?” [30:57]
• Felix: “650,000”
  • Pounds paid to George Osborne by BlackRock for one day a week of work, a symbol of political/corporate crossover (and sinecures). [32:03]
  • “He was this kind of joke of a finance minister... Well done George, for your like 800k sinecure.” [33:09]
• Jordan: “520”
  • The number of “beachhead staff” placed by the Trump administration into federal agencies—cast as ideological ‘preppers’ (highlighting John Perdue, a bow inventor and self-styled guerrilla warfare expert). [33:15 – 34:53]
  • “I feel like the one thing that Treasury has always lacked has been preppers...” — Felix [34:52]

Notable Quotes & Memorable Moments

• On Masayoshi Son:
  “He wants to own your thoughts. Like literally wants to own your thoughts.” — Jordan Weissman [02:59]
• On Soft Power via SWIFT:
  “If you are cut off from SWIFT, you cannot function in the financial system.” — Jordan Weissman [13:49]
• On State Street’s Girl Statue:
  “It’s a brass sculpture of a little girl staring down the Wall Street bull, staring down the aggressive macho visage of American capitalism with nary a care in the world.” — Jordan Weissman [22:48]
• On Board Diversity Initiatives:
  “At least they’re doing something, right?” — Laurel Touby [24:44] “I don’t think that a stupid publicity stunt with a girl on Wall Street makes any difference.” — Felix Salmon [27:43]
• On Sanctions and Soft/Hard Power:
  “We’re not literally launching a Scud missile at you, but we are going to reduce your economy to a non-functional, pre-modern finance state.” — Jordan Weissman [15:41]

Timestamps for Important Segments

• Intro & Guest Introduction: [00:08 – 02:12]
• SoftBank & Masayoshi Son: [02:14 – 10:13]
• U.S. Sanctions, ZTE, SWIFT & Soft Power Mechanics: [11:13 – 20:27]
• State Street, Gender Diversity, “Fearless Girl” Statue: [20:47 – 30:45]
• Numbers Round (DNA Data, BlackRock, Government “Preppers”): [30:57 – 35:21]

Tone and Style

The hosts maintain a witty, skeptical, and conversational tone, often poking fun at one another and satirizing both business figures and policy trends. Laurel’s humor and perspective as a self-professed “international woman of mystery” adds levity, while Felix and Jordan frequently reference their journalistic and analytical backgrounds. The conversation oscillates between insightful economic analysis and irreverent banter.

Summary Takeaway

This episode artfully weaves together stories of economic power, technological ambition, political leverage, gender equity, and the sometimes-absurd intersection of policy and symbolism. Whether discussing Masayoshi Son’s world-domination strategies, the mechanics of financial sanctions, or the merits of public art as corporate activism, the panel challenges listeners to think critically about who truly holds power in the global economy—and how that power is wielded, for better or worse.