Slate Money – "The Weirdo Camp"

Date: June 12, 2021
Host: Felix Salmon with Emily Peck and Stacey Marie Ishmael

Episode Overview

This episode of Slate Money dives into the bombshell ProPublica report on billionaire taxes, explores the shifting economics of Uber and gig work post-pandemic, assesses the real-world prospects of bitcoin as legal tender in El Salvador, and questions society’s priorities for funding (MRNA vaccines versus convenience apps). The team critically debates structural inequalities in the US financial system and the aftermath of a decade of lifestyle subsidies for millennials.

Main Topics & Key Discussion Points

1. ProPublica’s Billionaire Tax Report

[00:39 – 15:12]

Key Insights:

• ProPublica obtained tax returns of 25 of the richest Americans (e.g., Bezos, Musk, Buffet, Zuckerberg, Murdoch) and found they pay minimal taxes relative to their wealth.
• Public Reaction Split:
  • One camp: Outraged, calling for tax reform.
  • The other: Unimpressed, pointing out nothing new about untaxed unrealized gains.
• Felix, labeled a "weirdo," underlines that it is standard not to tax unrealized gains—whether it’s houses, stocks, or companies.
  • “[...] owning something that goes up in value is not income. So that kind of shock finding that the ProPublica led with seemed to be not very shocking and not very finding, at least to me.” — Felix, [03:42]
• Mechanics of Billionaire Wealth:
  • Ultra-wealthy often borrow instead of selling stock, using shares as collateral for low-interest loans, thus avoiding taxable events.
    • “The way these guys get money is instead of selling stock...they borrow money, like, relatively low interest rates...That’s how they sort of buy lots of fun stuff and have money.” — Emily, [05:23]
• Structural Inequality:
  • The system inherently favors those with wealth—making it harder for the less-wealthy to get good credit and pushing up interest rates for minorities even at the same income.
  • “It’s how it’s structured from the tax level on down to ensure that the wealthier you are, the easier it is for you to generate and accrue more of that capital.” — Stacey, [07:05]

Memorable Quotes:

• “Clearly something needs to be done. Not only is it not fair that so much wealth has accumulated amongst so few guys, but we don’t want a lot of... high wealth inequality in the United States.” — Emily, [08:59]
• Re: Jeff Bezos’ $4,000 child tax credit:
  • “If you’re gonna pay $973 million in taxes over five years...fine, take your $4,000 tax credit.” — Felix, [11:02]

Tax Policy Suggestions:

• Step-up basis on death as a major loophole enabling generational wealth transfer without taxing appreciation.
  • “No one ever pays the tax on that massive gain from zero to $1,000. So that whole amount of wealth...never, ever gets taxed as income by anyone, ever. And that’s crazy. [...] So he’s made all of this money when he dies and then you pay tax on it. That’s how it should work.” — Felix, [12:11]
• Audit rich people more.
  • “Just giving the IRS more money to audit rich people...is just like the easiest low-hanging fruit.” — Felix, [14:01]
• Current situation: IRS audits the poor more due to lack of resources ([15:00]).

2. Uber, Gig Economy, and the End of Millennial Subsidies

[15:22 – 32:27]

Key Insights:

• Uber Prices Are Up:
  • Demand rebounded post-pandemic, but supply of drivers is way down due to health concerns and better labor market options.
    • “Supply of drivers has gone down. Demand for drivers is back up...” — Felix, [16:56]
• Opaque, Algorithmic Pricing:
  • Upfront fares can swing wildly; increases haven’t consistently reached drivers, despite recent Uber PR suggesting otherwise ([34:05] update).
• Gig Jobs Less Attractive:
  • Uber/Lyft used to subsidize both riders and drivers to gain market share; now, with less subsidization and better job prospects elsewhere, it’s harder to find drivers.
    • “These gig jobs, there are always bad jobs and they worked because the economy was bad for workers. [...] Now we're in this whole new hopefully world where workers at the bottom of the income scale have leverage and can get paid more.” — Emily, [20:32]
• Public Transportation & Privatization:
  • Cities mis-invested, expecting ride-hails to fill service gaps; now both are crumbling.
    • “Now you have the worst of all possible worlds where not only is it significantly more expensive...there are fewer and fewer alternatives than would have been possible had cities and states not bought into the idea that this was a form of public transportation.” — Stacey, [23:05]
• Millennial Lifestyle Subsidy is Ending:
  • Venture-cap-funded services for transport, chores, and food are receding; the “mom replacement” era is fading.
    • “The mom subsidies for the millennials are going away and...there’s no societal loss. Except for...underinvestment in public transportation.” — Emily, [26:10]

Notable Moment:

• Felix boasts about his gold Citibike founder badge—debate over whether service improved or got worse with Lyft ownership ([23:57]).

3. MRNA Vaccine Innovation vs. VC Incentives

[27:31 – 32:27]

Key Insights:

• Funding “Real” Innovation:
  • In contrast to app-based ventures, Katlin Karikó (MRNA vaccine pioneer) struggled for decades to receive grant funding.
    • “She has been working on this MRNA technology...since the 80s and has been absolutely obsessed with it and had no luck getting any funding.” — Emily, [27:31]
• Systemic Issue:
  • Public health research is hampered by laborious grant-writing and lack of funding—far harder than raising easy money for consumer convenience startups.
  • “It’s not that we don’t have the money. It’s that we’re having difficulty making sure that money is going to where it can be best used...” — Felix, [29:18]
• Charity Inefficiency:
  • Well-funded single-disease charities don’t correlate with cure rates; coordinated public effort is more effective.

4. Bitcoin Becomes Legal Tender in El Salvador

[34:34 – 43:23]

Key Insights:

• Historic Decision:
  • El Salvador will accept bitcoin as legal tender, requiring businesses to accept it and exempting bitcoin income from taxes.
• Motivation:
  • Seen as a bid to attract crypto capital and companies, with the government itself transitioning into a major dollar-to-bitcoin exchange.
• Risks & Criticism:
  • Capital flight, money laundering, and association with existing crime and violence.
    • “This really worries me that El Salvador is just going to become overnight basically the global hub for criminal money laundering.” — Felix, [36:20]
• Currency vs. Store of Value:
  • Skepticism that bitcoin will actually circulate as money; most view it (especially in the US) as a speculative asset (“store of value”).
    • “The reason that people hold bitcoin is because they hope and expect that it’s going to go up in value.” — Felix, [38:36]
• Crypto in 401(k)s:
  • Now possible—but highly risky and niche.
    • “Your 401k is supposed to be the place that you can reliably be like, it's set, forget, move on, it’s going to cover my retirement. [...] But it does seem to be another step in that normalization of something or treating it as if it’s something that's like a normal asset when it has none of the underlying characteristics of normal assets.” — Stacey, [39:20]
  • Felix: If you must speculate, a 401(k) may actually be tax-smart (for the truly risk-tolerant).

5. Numbers Round

[43:25 – 49:07]

• Stacey: $71,403 — The median "reservation wage" (minimum acceptable for a new job), up from $61,737 in March 2020 ([43:33]).
• Felix: $11.75 million — Price paid for a “CryptoPunk” NFT (by “Silly Tuna” at Sotheby’s), then immediately spent $1.4 million on the first ever NFT ([45:46]).
• Emily: 438 — The number of days an apple sat untouched in a desk, yet emerged unspoiled; quirky Atlantic essay ([47:10]).

Notable Quotes & Memorable Moments

• “The system is working as designed... And then a bunch of people are like, yeah, burn the system down. I am sometimes in that camp occasionally.” — Stacey, [08:28]
• “I would love someone to do the math on how much money Masa Son has personally given every American, but in a very sort of non evenly distributed way.” — Felix, [26:55]
• “The millennial lifestyle subsidy is going away, and single people living in San Francisco can’t get their laundry done for really cheap anymore or get a scooter.” — Emily, [26:00]
• “No one ever pays the tax on that massive gain from zero to $1,000...and that’s crazy.” — Felix, [12:11]
• “If you're glad to pay $973 million in taxes over five years, just federal income taxes, then... fine, take your $4,000 tax credit.” — Felix, [11:02]

Timestamps for Major Segments

• ProPublica billionaire tax story: [00:39 – 15:12]
• Gig economy & Uber economics: [15:22 – 32:27]
  • Uber pricing specifics [16:56], impact on drivers [19:48]
• MRNA vaccine funding, VC priorities: [27:31 – 32:27]
• Bitcoin in El Salvador, 401(k) exposure: [34:34 – 43:23]
• Numbers round: [43:25 – 49:07]

Takeaways

Slate Money paints a portrait of a capitalist system where the rules are optimized for capital, not fairness—be it in tax, transportation, investment, or innovation. The “weirdo camp” of skepticism grounds the debate, pushing back on easy outrage with nuance. As market and social conditions shift (from gig work scarcity to bitcoin adoption), they ask the tough question: what does progress really look like for workers, for consumers, and for society at large?