The World-Changing Edition

Summary

Slate Money: The World-Changing Edition (December 5, 2015)

Episode Overview

In this edition of Slate Money, host Felix Salmon is joined by regulars Kathy O’Neill and Jordan Weissman and special guest Adam Davidson (co-founder of NPR’s Planet Money and co-host of "Surprisingly Awesome") for a lively, in-depth roundtable. The episode’s main theme is: “What does it take to create media that truly explains world-changing economic events – and do the people at the center of these events change the world for good or ill?” Major topics include the film adaptation of “The Big Short,” moral ambiguity around financial crisis “heroes,” Mark Zuckerberg’s $45 billion charitable initiative, and a listener-fueled reexamination of McDonald’s place in modern society.

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Key Discussion Points & Insights

1. The Big Short: From Book to Film

Segment: [01:49–23:39]

• Felix introduces Adam Davidson as a guest, and they discuss his role in the making of "The Big Short," a movie adaptation of Michael Lewis’s book about the 2008 financial crisis.

• Adam describes the challenge of turning a dense, technical financial book into dramatic cinema, especially when the central action is “pouring through prospectuses of mortgage-backed securities.”

• Intent of the Book vs. Film:

  • The book follows a group of financial outsiders ("four groups of men") who bet against the housing market.
  • Adam: “I see the movie as different from the book in a few key areas. I think the book has more moral complexity, moral ambiguity…” [06:31]
  • The film attempts to show these key figures as “complex figures who are confused about their own personal benefit, what their responsibility is.” [11:59]

• Moral Ambiguity of the Crisis “Heroes”:

  • Felix and Jordan press Adam on whether the short sellers in "The Big Short" were really heroic or whether, in fact, they contributed to the disaster through synthetic financial products.
  • Adam: "If we had more shorts, if we had more of a conversation about the decrepitude of these financial products, that would have been good.” [09:51]
  • Felix counters: "The act of creating these synthetic CDOs … just added fuel to the fire and made the whole thing worse." [10:16]

• Behind the Scenes: Technical Accuracy in the Film

  • Adam details his consulting role with screenwriter Adam McKay, working to ensure financial jargon and props were period-accurate.
  • “Every scene where there’s like a prospectus or research from a bank, that’s actual research that would have been on that person’s desk in that month of that scene.” [17:44]
  • Notable moment: "I had to like, sit with Brad Pitt, … Ryan Gosling, Steve Carell, Christian Bale, and be like, here’s what your character is doing, here’s what he’s saying." [17:49]
  • Ryan Gosling and Brad Pitt were described as particularly engaged in mastering the material.

• Media Explaining the Crisis: What Works?

  • Felix and Adam discuss whether books, movies, podcasts, or blogs do the best job of making complex economic events comprehensible.
  • Adam: “The key lesson… is not so much a specific technical understanding of what a synthetic CDO is …but to communicate that these are human creations, created by people with recognizable human emotions…” [21:12]
  • Kathy draws a parallel to the Occupy movement: “[Occupy] made clear… you don’t actually have to understand all the details to know it doesn’t work right.” [23:13]

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2. Mark Zuckerberg’s $45 Billion “Charitable” Pledge

Segment: [24:52–39:06]

• The hosts analyze the structure and implications of Mark Zuckerberg’s widely-publicized pledge to transfer 99% of his Facebook shares ($45 billion) to the Chan Zuckerberg Initiative.

• Adam lays out the facts: “He shifted the ownership of his Facebook stocks to a taxable limited liability company … which can, if it so chooses, give that money to charities, [but] it also can not give that money to charities.” [25:21]

• Is it a Tax Dodge?

  • Felix: “It clearly isn’t a tax dodge because there’s nothing tax exempt about this LLC.” [27:03]
  • Kathy (counterpoint): “He’s basically saying, instead of giving money to the government through taxes, I’m going to get to decide what to do with this money. And as rich billionaires do that… they have much more and more power.” [29:49]

• Judgment vs. Systemic Critique:

  • Jordan: “The question isn’t so much, is he going to avoid some taxes… It’s what is he going to do with the money?” [31:46]
  • The panel debates the merits (and failures) of Zuckerberg’s past efforts, notably his $100 million Newark school donation: “It was just blind. He didn’t—he literally had never been to Newark… A lot of the money just got spent on consultants rather than actually helping students.” [31:46]

• On Philanthropy’s New Science:

  • Adam puts it in broader context: “How do you effectively spend charitable money or philanthropic money … We started truly systematically studying how money impacts the people you want to help them maybe in like 2005, 2003… We need... a venture capital model where we’re willing to make huge mistakes, but not arbitrarily.” [33:43]

• Philanthropy vs. Government:

  • Felix: “The idea that just because you’re rich, you can actually have an effect on anything is not exactly supported by the empirical evidence.” [37:43]

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3. The McDonald’s Debate, Redux

Segment: [40:37–50:02]

• The panel follows up on a lively listener response to last week’s debate: "Is McDonald’s a force for good in the world?"

• Jordan: “We got more emails on this than any subject we’ve ever gotten… pro-McDonald’s 38, anti-McDonald’s 18 and neutral was 10.” [41:21]

• Thankfulness: Individual vs. Cultural

  • Kathy: “They were individually thankful for what McDonald’s had to offer them… That doesn’t mean that we are thankful as a culture.” [43:35]

• McDonald’s and Modernity:

  • Adam submits a broader historical defense: “The very fact that we can have this conversation…is a byproduct of companies like McDonald’s.” [44:59]
  • Felix counters: “What McDonald’s did do was create millions of deaths from heart disease and obesity. They engineered their food to… maximize various sort of atavistic pleasure receptors…” [45:11]

• International Perspective:

  • Jordan reads from listener Igor Pak (Moscow): “[McDonald’s] was unbelievably clean compared to other places we had at the time… The food smelled like food…” [48:24]
  • Adam: “We’ve grown past McDonald’s because of McDonald’s… There’s no alternate universe in which there was no McDonald’s or McDonald-like company.” [49:24]

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4. The Numbers Round

Segment: [51:32–56:13]

• Jordan’s Number: 31%

  • The required menu price increase for NYC’s Eleven Madison Park and other restaurants dropping tipping. [51:32]

• Kathy’s Number: 5,000

  • The number of guns found in a South Carolina hoarder’s house. “This has completely changed our definition of an assload of guns.” – Sheriff J. Brooks [52:21]

• Felix’s Number: $62.5 billion

  • Uber’s latest post-money valuation after another huge funding round; now worth more than GM. “Uber can get away with [raising money constantly]… which is absolutely fascinating to me.” [52:57]

• Adam’s Number: Less than 20

  • The years of service required in the US military for a pension; Ash Carter’s proposed reform for more portable, fair pensions. [54:09–56:13]

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Notable Quotes (with Timestamps & Speaker Attribution)

• On the Difference Between Book and Movie:
  Adam Davidson: “I see the movie as different from the book in a few key areas. I think the book has more moral complexity, moral ambiguity... I think the movie shades that a bit more.” [06:31]

• On Short Sellers’ Role in the Crisis:
  Felix Salmon: “The act of creating these synthetic CDOs, far from bringing down prices, actually just added fuel to the fire and made the whole thing worse.” [10:16]

• On Making Financial Details Cinematic:
  Adam Davidson: “I will say I’m fully biased, but …this is an amazing dramatization of doing things like reading bond prospectuses, reading the loan level data...” [05:25]

• On Storytelling About Financial Catastrophe:
  Adam Davidson: “[We try] to communicate that these are human creations, created by people with recognizable human emotions, including obviously greed and self interest…” [21:12]

• On Philanthropy vs. Taxes:
  Felix Salmon: "I think that it is really silly to start criticizing gifts to charity on the grounds of there's a charitable tax deduction. That’s two different things." [29:32]

• On the Limits of Billionaire Philanthropy:
  Felix Salmon: "It’s a lot easier to turn power into money than it is to turn money into power. The idea that just because you’re rich, you can actually have an effect on anything is not exactly supported by the empirical evidence." [37:43]

• On McDonald’s Global Role:
  Adam Davidson: “We've grown past McDonald's because of McDonald's. So to me, there's no alternate universe in which there was no McDonald's or McDonald-like company.” [49:24]

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Memorable Moments

• Adam describes teaching financial concepts to Brad Pitt, Ryan Gosling, Steve Carell, and Christian Bale. [17:49]
• The trio’s vigorous disagreement about whether short-sellers in “The Big Short” were heroes or villains. [10:16, 11:10]
• Kathy’s evocative one-liner: “People in this country are processed corn. This is a problem. And McDonald's is contributing to that problem.” [45:53]
• Reader Igor Pak’s nostalgia for the first McDonald’s in Moscow, and the discussion of global food chains as "engines of modernity." [48:24]
• Sheriff J. Brooks’ immortal quote on gun hoarding: “This has completely changed our definition of an assload of guns.” [52:21]

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Section Timestamps

• The Big Short and Crisis Media: [01:49–23:39]
• Zuckerberg’s Charitable LLC: [24:52–39:06]
• McDonald’s, Thankfulness and Modernity: [40:37–50:02]
• Numbers Round: [51:32–56:13]

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This episode of Slate Money offers a deep and entertaining exploration of how popular culture, billionaire philanthropy, and corporate legacies all intersect with our economic lives – and how truly explaining world-changing events is always a challenge, regardless of the medium.

Transcript

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[Jordan Weissman]

I'm Gretchen Rubin.

[Kathy O'Neill]

And I'm Elizabeth Craft, her sister and Happiness guinea pig.

[Jordan Weissman]

Every week on our podcast we talk about a Try this at home tip for making your life happier, which Try this at home tip do you think listeners have most responded to, without question.

[Kathy O'Neill]

The one minute rule.

[Jordan Weissman]

Oh, the rule that anything that you can do in less than a minute, you do without delay?

[Kathy O'Neill]

Yes.

[Adam Davidson]

Put a dish in a dishwasher, hang.

[Felix Salmon]

Up a coat, whatever.

[Kathy O'Neill]

I have to. This has improved my marriage because my.

[Felix Salmon]

Husband is neat and I'm not.

[Jordan Weissman]

And this is a good example that happiness can feel very transcendent and abstract. But sometimes it's the little practical things that give us the biggest happiness boost. Search for happier wherever you find your podcast. The following podcast contains explicit language.

[Felix Salmon]

Hello and welcome to the World Changing edition of Slate Money, your guide to the business and finance news of the week. I'm Felix Salmon of Fusion. I'm joined as ever by Kathy O', Neill, the data scientist and [e-mail] hello everyone. I am joined as always by Jordan Weissman, the Money Box columnist at Slate.

[Jordan Weissman]

Happy to be here, Felix.

[Felix Salmon]

But most excitingly, awesomely and fabulously, we are all joined for one week only by the one and only Adam Davidson, who needs no introduction really. But Adam, how? How would you like to be introduced?

[Adam Davidson]

Well, right now I am the co host of surprisingly Awesome, a brand new podcast from Gimlet Media with my good friend who we will talk about Adam.

[Felix Salmon]

McKay, you have a whole podcast, just you and Adam McKay looking at things which look like they're boring, but you reckon that you can make them interesting anyway.

[Adam Davidson]

That is the goal, yes. I'm also co founder of NPR's Planet Money, which is relevant to your podcast.

[Felix Salmon]

And we have Adam on the show today, not only because he's just the best radio financial journalist in the world, but specifically because he was intimately involved in the making of a movie with Brad Pitt and Ryan Gosling and Selena Gomez and a million other awesome people, which is coming out on December 23rd.

[Adam Davidson]

It opens in New York and LA December 11th.

[Felix Salmon]

It's coming out any minute now, people.

[Adam Davidson]

Yeah.

[Felix Salmon]

And what is the name of the movie?

[Adam Davidson]

The Big Short, based on the book by Michael Lewis?

[Felix Salmon]

We are gonna talk about the Big Short. We're gonna talk about a whole bunch of crisis related stuff because it is Michael Lewis crisis book. Everyone needs a crisis book except for me. I never wrote a crisis book. But we are gonna talk about crisis media. We are going to talk about Mark Zuckerberg who announced he's going to try and spend $45 billion on do gooding. And by popular demand, we are going to resuscitate the McDonald's discussion from last week and try and bring a little bit more light and maybe a little bit less heat to the whole thing. But first, Adam Davidson. I really loved the book the Big Short and I polish it off in no time. It's a rollicking read. I have to admit that when I was reading it, it never occurred to me that this was gonna become a Brad Pitt movie, right?

[Adam Davidson]

And Michael Lewis himself, who wrote the book, said, you know, and who has had books like Moneyball and the Blind side turned into movies, said, well, the one thing I never have to worry about is who will play anyone in this movie. Because there's no way this book will become a movie. I mean, the basic story is four groups of men, they all were men who early on saw that there was a bubble in housing, that there were these dangerous financial products that could bring down the whole economy and they bet against them.

[Kathy O'Neill]

So I remember reading this book and it was a while ago. This book's like what, five years old or something? Four years. And what I remember the main characters doing, and this might just be because I'm a nerd and I identify with fellow nerds, but I remember the main characters pouring through prospectuses of mortgage backed securities and like finding the deep, like reading through the details and finding out that they, they were flawed.

[Felix Salmon]

There's a lot of Bond prospectuses in.

[Kathy O'Neill]

This is Brad Pyatt reading through prospectuses.

[Jordan Weissman]

Strikingly well dramatized.

[Adam Davidson]

Yeah, yeah, I would say that.

[Kathy O'Neill]

How could that be good cinema?

[Adam Davidson]

So I will say I'm fully biased, but I really do believe, and you guys are objective, that this is a amazing dramatization of doing things like reading bong prospectuses, reading the loan level data. I'm the guy who actually when Christian Bale.

[Felix Salmon]

Let me pull just a little bit before we get into the nitty gritty of the movie. The big short as a book was Michael Lewis way attempt to write a book about the financial crisis and to explain what happened in the financial crisis to a broad audience. Michael Lewis is. His technique when he tries to explain anything is to find a person or a group of people and to follow that group of people and to try and tell a bigger story by telling one person's story or a couple people's story. And he did that in the book or he tried to do that in the book. Is that also the intent of the movie, to try and let people understand what on earth happened in the financial crisis? Or is the movie different from the book in that respect?

[Adam Davidson]

I'd say there are the plot of the movie, the characters in the movie are extremely faithful to the book. And I've talked to almost all the real people involved and for the most part they feel it's a very accurate portrayal. And I'm just speaking for myself. I see the movie as different from the book in a few key areas. I think the book has more moral complexity, moral ambiguity. You know, like every financial journalist, I worship Michael Lewis. I like him very much as a person. I think his writing is amazing. I'd say one thing he does that I tend not to do is he finds sort of good guys and bad guys. And that's not how I see the world. That's not my experience. For the most part, there are bad guys, but I don't see it in as black and white as he does. And I think the movie shades that a bit more. I mean, there are good guys and bad guys, but it's not quite as clean.

[Felix Salmon]

Because what happened after the book came out is that Michael Lewis did revise his position a little bit when the book first came out. I think the people doing the shorting and making lots of money were a little bit more heroic. And then in sort of the year or so after the book came out, Michael Lewis did come out with a few columns basically saying on further consideration, these guys were probably more part of the problem than they were heroes.

[Adam Davidson]

You know, I saw Michael last week and we talked about this. I mean, I think I would agree with him that the people featured in the book did more good than harm that they were. They're good for America. If we had more of them, the crisis would have probably happened sooner but would have been less violent. Or at least there's a chance that's the case.

[Felix Salmon]

I completely disagree with that.

[Adam Davidson]

Yeah, but that's a separate issue though. I think as a general rule, in my experience, people on Wall street talk their book and talk their book is just a way of saying people have a trade they're making. And questioning whether or not this is good or bad is not a. It's just not part of the conversation in any substantive way.

[Jordan Weissman]

I was gonna say one of the, I guess, moral ambiguities here is that Michael Burry, one of the characters who, you know, is featured as kind of an oddball hero in the book, is also the guy responsible for essentially creating or asking for credit default swaps to be created. And so those added ended up adding a lot of fuel to the fire. And they were a big part of the problem with aig. I'm curious how. Yeah, how do you kind of balance that and the fact that he did ask. He.

[Felix Salmon]

Well, yeah, I want to go further than that and say it's easy to see how these guys made things worse because they created all of the synthetic CEOs, they created all of the bets on bets on bets which made the size of the crisis so much bigger. When you say that they did more good than harm, I mean the harm is easy to see. What good did they do?

[Kathy O'Neill]

Can I jump in here for a second and like, I'll say what they did. I'll defend these so called heroes and I'll also say why I don't think they're heroes. In defense, we want there to be a counterfactual to any sort of, any kind of bubble that's being written in Wall Street. And we had this huge pro housing bubble situation and these guys were countervailing force. They were saying, hey, not so fast, this isn't such a great idea. That's a good thing in general for finance. But if we're going to talk about ethics and they figured out that this stuff was dirty and it was rotten, what did they decide to do about that? They decided to make just a shit ton of money. They could have done something else. They could have alerted.

[Adam Davidson]

Well, actually some of them did work very, very hard. And I was one of the Reporters, they came to trying to alert the media, trying to alert the sec. Not all of them did that, but particularly Jamie and Charlie did do that. Jamie Mae, Charlie Ledley really did try and alert the world. And. But what I'm just going to say is, broadly speaking, I think if we had more shorts, if we had more of a conversation about the decrepitude of these financial products, that would have been good.

[Felix Salmon]

This is where I disagree in the first place. So I think it's very easy to extrapolate here from a world which finance nerds like us understand quite well, which is shorting stocks, where if you think a short is overvalued and there's a bubble and that the stock is going to go down, you borrow the stock, you sell it, that helps to stop the price of that stock from going up. And in fact, it can help the price of that stock go down and it can help prevent bubbles. And short sellers have a very positive role to play in price discovery and that kind of thing in the stock market. And I think that that does not analogize to the mortgage market and that the act of creating these synthetic CDOs, far from bringing down prices, actually just added fuel to the fire and made the whole thing worse.

[Jordan Weissman]

I will say though, that they're kind of almost separate from whether or not these guys are heroes. And kind of, in a way, it's like a really loaded word, obviously. But this does bring up the issue of there need to be some incentives for people to call bullshit on a giant bubble like that. Otherwise it's going to, you know, the point of the bubble was that people were being given these mortgages that were eventually going to crush them financially. And if there is no incentive for anyone to say, to call bullshit and say something has to stop this, we have a problem because those bubbles are going to keep forming. Maybe in the end, they may not have. In the end, unfortunately, the way they called bullshit happened to add fuel to the fire. And so that speaks to a systemic problem. But I do understand the urge to see the guys who spoke truth to, I guess, to financial folly, financial power, see them in some sort of heroic life.

[Felix Salmon]

They were definitely correct. Yeah, no one is denying that they were correct. They just weren't.

[Adam Davidson]

But I. So I feel like when I read the book, these are heroes fighting for good. When I see the movie, I feel like these are complex figures who are confused about their own personal benefit, what their responsibility is. The movie does feel to me, and you guys saw it. I've been involved with the movie for a very long time. I have no distance on it, but that's my feeling at the very end.

[Jordan Weissman]

There's a scene specifically about this. I don't want to give anything away.

[Felix Salmon]

But we all went through it.

[Jordan Weissman]

No, no, no. I mean, for the listeners, though, like, there's a scene specifically that addresses this issue that we're talking about right now. So I guess viewers who see it will. Listeners who see the movie are going to be able to judge whether or not the movie dealt with this sufficiently. I do want to change subjects a little bit here, because we haven't actually asked you, how were you involved in the movie? What were you up to with it?

[Adam Davidson]

Yeah, yeah, I'd be thrilled to. This is, like, so much fun. And it's hard not to sound like I'm just showing off.

[Kathy O'Neill]

We asked you to show off.

[Adam Davidson]

Okay.

[Jordan Weissman]

Yeah, we want to hear about this. You're living the.

[Adam Davidson]

Yes, this was a financial nerd dream. So my brother, Eben Davidson is a senior vice president at Paramount Pictures, and through him, I've become friends with Mark Evans, who's the president of Paramount Pictures. And so Adam McKay is this director. He's mainly known for comedies. He was the head writer of Saturday Night Live, wrote the Anchorman movies, Talladega Nights. And if you do see those movies, knowing what I'm about to say, you can see it, but it's not the first thing that leaps to your mind. He's an extremely passionate, progressive lefty who is also, you know, arguably America's leading purveyor of sort of broad, goofy comedies. But. But now that I know him, when I see his movies, I'm like, oh, wow. They're basically like a lecture, you know, like Bernie Sanders supporting lecture, but. But secretly tucked in anyway. So Adam McKay read the book, loved the book, Wanted, and was like, I still feel pissed off about the financial crisis. I don't really understand what that was. What. What was that? And the closest I got to understanding it was reading Michael Lewis's books. I'd like to make that into a movie. He called around. He found out that Brad Pitt's production company, Plan B, had optioned it, and there was a script. But people, all of these issues, there was a real fear on the part of big studios. Who's going to root for a bunch of people who made money off the crisis? Are they really heroes? I mean, all of these issues were central to why this movie had not previously been made. So Adam McKay decides, I'm going to make the movie. And Paramount and Plan B are going to produce it. And he's talking to the president of Paramount Pictures and it's like, I'm going to make the movie. I don't actually know that much about these financial products about Wall Street. And so the president said, oh, my friend's brother, he knows that stuff. Why don't you talk to Adam Davidson? And so a couple years ago I get a phone call, we have this, we talk on the phone. Pretty soon I fly out to Hollywood and I end up, I mean McKay and I are now like, I think I can say like very close friends as. But at first I was just his financial nerd that he's hiring to help him understand these products. But it just became so much fun just sitting with him for hours and hours and hours talking through the products and really like. And you guys know this and I don't know how much we want to get into it on the show, but understanding what a mortgage backed security, what a plain vanilla agency backed mortgage backed security is understanding how that's a very different thing from a private label mortgage backed security. Understanding how that's a very different thing from a cdo. Understanding how that's a different thing from a synthetic cdo. These were just. Knowing all of that were central to under writing the movie. And then understanding how each of the characters in the movie were making slightly different bets that had different moral and emotional dimensions was very important.

[Felix Salmon]

So I, so I need to come in here and say if you think that the movie really explains this kind of stuff, you're wrong. I do think that the. And I'm saying that just as someone who's seen the movie, I mean the. I do think that the movie does a good job of making people think that they understand what's going on in real time because it has that nice little narrative drive and it moves forward. But. And you know, there's this famous scene of Margot Robbie in the bathtub trying to explain something. But 24 hours later, what you remember about that scene is Margot Robbie in the bathtub. And you don't remember a word of what she was saying.

[Adam Davidson]

Well, let me just finish the whole process. Cause I think it'll help get to what you're talking about. So for a year, for Most of last 2014, I worked very closely with McKay writing. I mean he wrote the movie, but I would say I had a very big impact. I think he has said that, you know, helping not just. I mean, part of it is he'd write like financial gobbledygook goes here. And I'd type in financial.

[Kathy O'Neill]

It's like the Star Trek techno ballad, right?

[Adam Davidson]

Make it accurate. I know a guy who works for Silicon Valley, the TV show, and they just bring him in. They're like, we need something on this board that geeks will know is actual geek. And so he just writes something on the board. No one knows what it is, but it. So if anything, the most fun part of the movie is I was working very closely on set with what they call the department head. So there's like a set designer, a set decorator, a costume designer, a props department. And I'm working very closely with them on Just because they know nothing. They've seen Bonfire of the Vanities. I think they're hoping it's going to be guys screaming. So I'm bringing all those people to actual trading floors. I'm getting, like, one thing I'm proud of but nobody else would ever notice, is every scene where there's like a prospectus or research from a bank that's actual research that would have been on that person's desk in that month of that scene. You know, I worked hard to have a verisimilitude.

[Felix Salmon]

If there's any sort of financial verisimilitude in this movie, it's your fault.

[Adam Davidson]

I mean, I think McKay would give me credit for that. And then the most awesome part is I had to work with the actors and, like, explain, you know, so I had to, like, sit with Brad Pitts. It was Ryan Gosling, Steve Carell, Christian Bayel, and be like, here's what your character is doing, here's what he's saying. It was interesting to me how each of them had a different level of interest, a different way of processing the information.

[Jordan Weissman]

Was there one actor who appeared to get it better than the others, or are you even allowed to?

[Felix Salmon]

I'm going to assume that if Brad Pitt optioned the book and really wanted to make it into a movie, that's maybe because he understood what was going on.

[Adam Davidson]

Yeah, I mean, I will say, I mean, all of them were awesome. And everyone in this process, literally everybody, I had zero experience of, like, Hollywood diva ism. Everyone was cool, everyone was nice, everyone was respectful, very professional. I'd say Ryan Gosling was a guy who really engaged the material, asked very deep questions, asked very thoughtful questions.

[Felix Salmon]

Now he's playing Greg Lippman, who is the guy who kind of orchestrated this entire thing and made a mere $50 million, which is so much less than everyone else. Poor guy. Doesn't your heart just bleed?

[Adam Davidson]

And he says that I Mean, Greg Lippman does feel like, why did I only make $50 million? Yeah. So. But, yeah, but I would say of the actors, Ryan and then Brad Pitt would be the other one who. And then a couple of the secondary actors were very, very interested and very. I will tell you that I've discovered there is the world we live in of finance. There's a slightly larger appetite for stories about Brad Pitt and Ryan Gosling. That is something I have found.

[Felix Salmon]

But let me ask you. Let me just pull away from the big short for a minute. The Big Short. The book was one of the big crisis books. Too Big to Fail was another one, which was also turned into an HBO movie with Paul Giamatti and various other William Herpes. We had Bethany maclean on. She's our favorite guest on the show. We love her dearly. She wrote all the Devils Are Here With Joan and Serra, which is also another good book. There was a bunch of crisis books, and then there was the universally acclaimed crisis podcast on this American Life called the Giant Pool of Money, which someone in this room was intimately involved in.

[Adam Davidson]

Yes.

[Felix Salmon]

That was your big sort of crisis explainer, and everyone loved that.

[Adam Davidson]

And, Felix, I think you were a crucial part of that period. I mean, it wasn't in one jump, but it was. I mean, I think, yeah, I had a blog in the world of economic explainers, particularly at that time through my.

[Felix Salmon]

My thing was always that the unit of, you know, when you're writing a blog, the thing that you're writing is the blog. It's not the blog post. And, you know, in my blog as a whole, I think was explaining the crisis. Although there was never, like, just one thing you could point to. But I think that's what I wanted to ask you is just looking back on the gazillion different attempts to sort of try and explain what on earth just happened to the global economy and to the housing market, into the American economy, to the banks and to the way everything was interrelated. Now that you've been involved in books, in movies, in podcasts, in blogs, what's your view of, like, which, if any of them is the medium which can do this, or do you think it's even possible?

[Adam Davidson]

I think that when I look back at the giant pool of money, or I think about this movie, I think the key lesson that I think people get out of it is not so much a specific technical understanding of what a synthetic CDO is. I mean, I have spent literally years studying synthetic CDOs, and I feel like every time I Think about them. I have to re. Remember what they are and kind of what they're very complicated. I think we did something, something on a different plane. What I think we did in Giant Pool Money. And it wasn't something we thought about, it's just something I think, looking back and I think the movie the Big Short does that too. Which is to say that fundamentally this is a story that is a human story. I think when the Crisis hit in 2008, my sense was that a lot of people who didn't work on Wall street, and frankly a lot of people did, suddenly felt like, oh, there's this alien force that's bigger and smarter and has power over everything about my life. And that alien. I don't even know how to think about it. I don't know how to engage it. And I think communicating that these are human creations created by people with recognizable human emotions, including obviously greed and self interest and stupidity or all too clever intelligence. That this crisis existed in a. In a continuum with your own life and the world that you already know you live in, I think is valuable. I would hope that that helps empower people and makes them at least feel like, okay, this is something I can have something of opinion about. I can begin to think about at a time when I think people weren't even able to know how to think about it. I'm assuming millions of people at this point have listened to Giant Pool Money. Hopefully many millions of people will see the movie. Are we talking about 1,000 people, 2,000 people, 10,000 people who actually their life has changed in some way? I don't know. I don't know what's realistic to expect, but that's the level where I think I've made a contribution, or I like to think I have.

[Kathy O'Neill]

That resonates with me, but also reminds me of what I think Occupy accomplished. Occupy was. People complained about it because people didn't know exactly what was happening in finance. But. But the one thing that Occupy made clear is that you don't actually have to understand all the details to note it doesn't work right. And people started finding their voice because of this kind of thing, which I think is really important.

[Felix Salmon]

And certainly Adam McKay, the director, would love it if we all became politicized and angry as a result of watching this film. Not that that's going to happen. That is really all we have time for on this subject. But it's an awesome, wonderful subject and we're going to revisit it at some point. Slate money is sponsored this week by Braintree Braintree is this company which will let you get money from people they want to pay you, but you don't want them to find it difficult, you want them to find it easy. So if you have a website, if you have an app, Uber uses Braintree, Airbnb uses Brain. Braintree people can pay you with anything they like, whether it's Apple pay or Venmo or Bitcoins or credit cards or anything they like. It's super easy. It's a very simple integration as continuous support. So check it out for yourself@braintree payments.com SlateMoney Braintree's full stack payment solution is all yours at braintreepayments.com SlateMoney so, Adam, what did Mark Zuckerberg do this week?

[Adam Davidson]

Well, I thought he did one thing like three days ago. And now through the work of you and Jesse Eisinger and others, I have a more complicated view of what he did. But the press release version is he promised to give 99% of his shares.

[Felix Salmon]

In Facebook to what people were calling charities.

[Adam Davidson]

What people were calling charities. What we now know is that he created a corporate, a for profit corporate entity to contain a taxable, a taxable.

[Felix Salmon]

I think for profit is putting it wrong. I don't think that the aim of this entity is to make a profit, but it is taxable.

[Adam Davidson]

It is taxable. Right. So what he did not do is say, I'm going to give this much money to this person, I'm going to give this much money to this organization. On this time frame, what he did do is he shifted the ownership of his Facebook stocks to a taxable limited liability company called Chan Zuckerberg Initiative, which can, if it so chooses, give that money. Just as any entity can, if it so chooses, give that money to charities, it also can not give that money to charities. It can lobby Congress or other politicians. It can just become a fully for profit enterprise. I mean, he has not. There's no, what the game theorists would call. There's no binding constraint on what he did other than reputational. I mean, he has made the statement. So if we find out next year that he's using all the money to buy a giant yacht, we can call him on it. And then, very thrillingly, in the world of finance, Twitter, you and my good friend Jesse Eisinger exchanged remarkably thoughtful but still barbed comments at each other.

[Felix Salmon]

I believe I called him churlish.

[Adam Davidson]

Churlish, Yes. I know you both reasonably well. I think you're more churlish than him. I'm just going to Come out and say that as on average. But I would love for you to explain because that was exciting for me. It was sort of a thrilling finance week. There's this big news story which I'm not really following because I'm busy on something else, and. Oh, Zuckerberg, he's given all his money to charity. That's interesting. And then Jesse comes out. Well, actually inspired by Jesse Drucker, a Bloomberg writer comes out with this thing saying, no, this is a bunch of bs. He's just hiding taxes. This is not anything to do with charity. This is all about.

[Felix Salmon]

John Cassidy thought it was some kind of a tax dodge, and it clearly isn't a tax dodge because there's nothing tax exempt about this llc.

[Jordan Weissman]

I don't underwriter. I. Felix, I think I'm gonna let you talk, but I feel like I probably agree with you, like, 98% on it, so please go ahead.

[Kathy O'Neill]

I disagree 100%.

[Jordan Weissman]

Yeah. So, Felix, do you want to. Do you want to go?

[Felix Salmon]

So let's start with Kathy, because it's a lot easier for me to say why Kathy is wrong than it is if we know what Kathy.

[Kathy O'Neill]

Thanks for setting me up like that, Felix.

[Adam Davidson]

Was that churlish? I think that was churlish.

[Jordan Weissman]

That's not even half as churlish as we get on this show. Did you hear the McDonald's episode last week?

[Kathy O'Neill]

Well, I mean, basically, I feel like that's my money. He's giving away my money now. You're right. He hasn't given it away yet, and he's going to give it away in some future time. And right now, it's sitting in something that's taxable. But if and when he turns his Facebook shares into a charity donation. Right, that's him deciding. Let's just take it for example. He has a million dollars in Facebook shares. He decides to give it to charity. What would have happened if he didn't decide to give it to charity? Well, he would have had to. When he sold his Facebook shares, he would have had to.

[Felix Salmon]

Why would he sell his Facebook shares?

[Kathy O'Neill]

I'm saying that's my assumption. He's either gonna give it to charity or he's gonna do something else with it.

[Felix Salmon]

And I'm going to completely push back right there that it is obvious to me that the only other thing that Mark Zuckerberg would ever do with his Facebook stake is sit on it and do nothing. The only other thing that he would do with his Facebook stake is what Warren Buffett has done with his Berkshire Hathaway. Stake, which is just get richer as it grows in value. He has no need to sell it. It's not like he can spend all of those billions of dollars on shoes, you know, so there's two things you can do. You can either just sit on it and do nothing with it, which generates zero taxes, or you can give it to charity. There's like, there's no third option. I will also mention that Mark Zuckerberg, before He even turned 30, paid 2 or 3 billion dollars in taxes. This guy has paid more taxes than virtually anyone else on the planet. I'm pretty sure that he's actually paid more taxes right now at age 31 than Warren Buffett has in his entire life. Despite the fact that Warren Buffett is richer than Mark Zuckerberg. It's not like Mark Zuckerberg is out there as some kind of icon of tax evasion. And I think that, yes, I agree that the charitable tax deduction is a bad thing. I would love to get rid of the charitable tax deduction. And that's, I think, an entirely separate issue. I think that it is really silly to start criticizing gifts to charity on the grounds of there's a charitable tax deduction. That's two different things.

[Kathy O'Neill]

No, well, my basic point was, though, that when he decides what to do with it, it's a power play, right? He's basically saying, instead of giving money to the government through taxes, I'm going to get to decide what to do with this money. And as rich billionaires do that, the rich billionaires have much more and more power.

[Felix Salmon]

So this is where I get really frustrated, because every rich billionaire does this. Every single billionaire in the world has lots of power and decides what to do with their money and minimizes their tax on a more or less aggressive basis, depending on their nationality and their personality type. Rupert Murdoch is not paying a lot of taxes. So why, of all the billionaires in the world, do we single out for this particular tax based criticism, the one who's actually trying to do good with.

[Jordan Weissman]

His money, I would add. I think the legitimate thing to bring up here is to ask about his judgment, how he spends it. I wrote something short about this, but, you know, Zuckerberg's first big charitable move was basically dropping $100 million on the Newark school system and saying remake, like saying to Cory Booker and Chris Christie, go reform your system and make it, you know, make it the best in the world. And it was just blind. He didn't. He literally had never been to Newark by the time he met Cory Booker. And basically decided to give this gift. He knew nothing about urban school reform. And a lot of people. There was a long Yerker article about it, and there was a book have kind of described it as a disaster. A lot of the money just got spent on consultants rather than actually helping students. There's still some arguments about how Newark school reform has worked out. So the question isn't so much to me, is he going to avoid some taxes? Because that is, like Felix is saying, a separate policy discussion. It's what is he going to do with the money? And is he going to use it in a not even, like, you know, optimal way? Because who can really say what the absolute optimal way to spend your money is? He going to try to do it in a smart, systematic way. And it seems like by creating this, you know, taxable entity, the Chan Zuckerberg Initiative, at least he's going about it in a very systematized approach, which I think is.

[Felix Salmon]

And I will.

[Kathy O'Neill]

I'll rephrase that.

[Jordan Weissman]

Okay.

[Kathy O'Neill]

He has already thrown away $100 million on consultants in Newark and has nothing to show for it.

[Adam Davidson]

Wait, Kathy. But I'm gonna.

[Kathy O'Neill]

And now we think that it's so great that he's now gonna be deciding other stuff with way more money. And I'm not singling out him as a billionaire, obviously, given that. Given that there's, you know, he's a good guy. We hope. We think that's great. I'm talking about the system that we're presenting to billionaires. I mean, I'm not saying this guy is a bad. He's. He's not. He doesn't. He has good intentions. Right. I just don't have more faith in what he's choosing to do, given his record, than what the government could do with that money.

[Felix Salmon]

So. Okay, so this is.

[Adam Davidson]

Can I just jump in real quick? So, just a couple things. I just want to second what Felix is saying, which is there is a deep conversation to have about how we tax the super wealthy in this country. And I'm going to take a wild guess and say the four of us would agree we're not doing it optimally. And I think we might end up at a different place if we actually wrote a solution. But it would definitely be, I think, more taxes coming from the wealthy and less ability to hide their money. It's very hard to do. Very tricky. But that's one big bucket. A second bucket, which I think the Newark school example is crucial, is how do you effectively spend charitable money or philanthropic money or whatever we want to call it. And this, to me, we are in such an interesting moment in the very idea of like trying to transform other people's lives through money as sort of a, a big concept. It's very new. I mean, it's, it's, you know, you know, there's been, you know, rich kings and stuff throwing money here and there, but a kind of systematic system of foundations and governments trying to intercede. It's maybe 100 years old, maybe 50 years old. You could argue over whether the Marshall Plan is the first real example. We started truly systematically studying how money impacts the people. You want to help them maybe in like 2005, 2003. It's very new, serious, sober minded, peer reviewed studies where we actually can begin to know stuff about how money impacts people in positive and not perverse ways. And we're so new in it that what we do need now, I believe, lots of people believe, is here come the RCTs. RCTs is we need something like the venture capital model where we're willing to, to make huge mistakes, but not arbitrarily. I don't think Newark is a good example.

[Felix Salmon]

I think Newark is actually a good example. I mean, not the best example because.

[Jordan Weissman]

That one was controlled.

[Felix Salmon]

No, no, I'm not saying it was a controlled experiment. And I have a big problem with randomized controlled trials in general. And we're going to have.

[Adam Davidson]

And I'm just going to say that's one tool. I'm not saying that's the only tool.

[Felix Salmon]

But we are going to have a whole podcast in January with Bill Easterly on this subject. So that's going to be a fantastic one. But the fact is, the New York donation was cynically timed to coincide with the release of the Social Network. And it was meant to be like a positive thing waiting for Superman and no, it's a social network waiting for Superman. In any case, the point is that Mark Zuckerberg was willing to, what you call, do a sort of risk capital thing here. The government can't throw $100 million at something which probably won't work. Very few people have that ability. If what you were talking about, Jordan, is like a systematized way of trying to work out the best way. That's actually not what Mark Zuckerberg is. That is what his co founder Dustin Moskowitz is doing. And that is what people like GiveWell are doing. And I think there's a very strong case to be made for the people who want to maximize the effect of their philanthropic money to do That I think what's fascinating about what Mark Zuckerberg is doing is that he's willing and able to do crazy things with a low probability of success and quite possibly a low level of public support and say, I'm the only person who can do this.

[Jordan Weissman]

I want to do.

[Kathy O'Neill]

Why do we trust him? Why do we trust him?

[Felix Salmon]

We don't try to trust him. That's the whole point. So $45 billion is half of the annual budget of New York City. It's 1% of the annual budget of the federal government. It's not like this money would make a big difference in government. Instead.

[Jordan Weissman]

Yeah, I think if you add up all the billionaire. I see Kathy's point in the sense that if you add up all the billionaires doing this over time, over the next 60 years, while it collectively.

[Kathy O'Neill]

Yes.

[Jordan Weissman]

While lobbying for lower taxes, it does collectively add up. But at the same time, it's hard for me to. Again, you have to kind of split it between what this one guy's doing and the problems with the system. On the whole, I don't think. I think you can legitimately criticize a system that you agree, feel should probably be reformed. At the same time, acknowledging that Mark Zuckerberg right now probably is not personally culpable in any way.

[Felix Salmon]

It's not.

[Jordan Weissman]

Yeah, exactly.

[Felix Salmon]

It's not really his fault. He's a billionaire. I totally agree. He can't put all of the sins of billionaires.

[Jordan Weissman]

No, no. Yes, Mark Zuckerberg. Yeah, exactly.

[Kathy O'Neill]

I would say, though, that the Newark public school system is in a bad place partly because of poverty and inequality and lack of opportunities for the Newark residents. And I just think it's kind of ironic that a billionaire says, we're going to. I'm going to use my money to solve this problem, which was created in part because we don't invest public goods.

[Adam Davidson]

But he could change that. But the thing that he. The one piece I'm with you that looking forward at Mark Zuckerberg, I would love to see big swings, risky bets, lots of failure, if there's learning and if there's amassing some way of iterating and improving.

[Felix Salmon]

And you're absolutely right that this is a new science and this is something which he's very interested in developing. And one of my slogans, which I'm sure I've said on this podcast before, is that it's a lot easier to turn power into money than it is to turn money into power. The idea that just because you're rich, you can actually have an effect on anything is not exactly supported by the empirical evidence. And a lot of these philanthropies are trying very hard to try and work out what is the best way to take a lump of cash and turn it into a meaningful, positive change in the world. Mark Zuckerberg is doing that. Of course, it would be great if he didn't need to do it and everyone in Newark was out of poverty and happy. But John Arnold, who's another billionaire who's been looking at Newark quite closely, is saying you can look at where he started. It's not quite as bad as the prize. The book and various other people have painted it. And if you start doing something a little bit more holistic and you start tackling poverty on a regional basis rather than just concentrating on schools, if you have $45 billion, there are things you can do. And I think the idea that we can have some hope that individual actions by rich people can have a positive effect, we know they can. Going back to John Rockefeller Sr. Billionaires.

[Adam Davidson]

Can be Sheldon Adelson Just kidding.

[Felix Salmon]

Anyway, we will leave these billionaires because Zach Dynast is making Wrap this thing up, Felix. We don't want the podcast to be three hours long. Figures at me. Slate Money is also sponsored this week by Credit Karma, which is the free way to get your credit score. There are lots of expensive ways to get your credit score. There are lots of services who will ask you to subscribe to them so that you can find out your credit score. Do not use those services. Just download the Credit Karma app on your phone by texting money to 89800 and it will tell you your credit score for free. This is a useful thing to know, so find out. Text MONEY to 89800 to find out what your credit score is and maybe get lots of other useful information as well, like which old credit cards might be hurting your credit. Just remember, you don't need to pay for this. It's completely free. They will not ask you a credit card number. They will not charge you any money. Ignorance is not bliss in this respect. Get your free credit report today by texting MONEY to 89800 to download the free Credit Karma app right now. Jordan, are you feeling weirdly gratified or vindicated in any way this week?

[Jordan Weissman]

I would say a little bit more so than usual.

[Felix Salmon]

So this is the situation. Those of you who were listening last week will know that we had a little bit of what we English people call Argy Bargy.

[Jordan Weissman]

Was there a donnybrook?

[Felix Salmon]

We had a Donnybrook Jordan, in his inimitable idiocy, decided to say one of the most stupid things that anyone has ever said on Slate Money, which is that McDonald's is some kind of force of good in the world and we should all be thankful for it.

[Jordan Weissman]

Careful, careful. You're talking about our listeners now.

[Kathy O'Neill]

I'm gonna interrupt right now, Felix, because I have figured out a way where we can all be right and I'll be happy.

[Jordan Weissman]

Well, first I want to, just before we segue into. You're kind of conciliatory, you wanna be.

[Kathy O'Neill]

Smug for just another minute.

[Jordan Weissman]

Oh, smug, one more minute.

[Kathy O'Neill]

Go ahead.

[Jordan Weissman]

I don't get to be often on the show, so at the end I put out a call to our listeners saying, you know, please vote, tell us what you think about McDonald's, you know, and is it a, is it something to be thankful for? And we got, I think we got more emails on this than any subject we've ever gotten. In the end, the tally was pro McDonald's 38, anti McDonald's 18 and neutral was 10.

[Felix Salmon]

I think all of those numbers have gone up a bit since the rally, but it's been like, generally it's about 2 to 1. Yeah, pro McDonald's.

[Jordan Weissman]

And I just want to, I want to just reiterate for those who might not have been listening last week what my argument was, which was that even though we have some bad associations with McDonald's now, you have to remember that back in the 1950s, it was the company most responsible for or really did almost single handedly come up with the modern franchise model which gave us or allowed the American fast food chain to flourish and as a result kind of give us a base level of food quality and I would argue some, probably food safety in a lot of places around the country.

[Felix Salmon]

The main theme that I found in the pro McDonald's emails was not so much food quality or food safety, but clean toilets.

[Jordan Weissman]

That wasn't. There were some clean toilets.

[Kathy O'Neill]

And that goes directly to my point, which is that I think we were running on different definitions of thankfulness because almost to a man, the people that wrote in saying I agree with Jordan said they were individually thankful for what McDonald's had to offer them. Clean toilets, consistent quality, cleanliness. It was easy for my friends and me to agree on a place because we all know McDonald's is at the individual level. They're thankful. And I want to say that as, as an individual, I'm also thankful for McDonald's. I lived in Budapest for a year and McDonald's was literally the only place you can go for to use the bathroom without sitting down for a two hour meal. So there's definitely things to be individually thankful for. That doesn't mean that we are thankful as a culture. We think that McDonald's has had a positive effect on our culture, which I think.

[Adam Davidson]

Well, I do want to say I'm going to go make a weak defense of Jordan in the following sense because I hate McDonald's. I never eat there. I hope I never eat there again. I'm dreading my son, who's 4, just last week for the very first time, said dada, what's that M Flag? And I was like, oh man, it starts. But that being said, I would say, broadly speaking, the 20th century is the transformation in parts of the world from a world where starvation is the number one human challenge to a world where obesity is the primary challenge. And I think that the machinery that allowed that to happen, the industrialization, Walmart, McDonald's gets a lot of credit for that, I think. So much so that we are now wealthy enough that we can actually, for the first time in human history, have a broad class of people who actually think about what they want to eat and not just think, oh, there's food, I'm going to eat it and actually begin to think about consuming health rather, rather than just consuming food. And I don't know that it had to be McDonald's. I don't know that it, you know, I don't know enough about McDonald's to know if they didn't make some pretty crappy choices along the way. I certainly hate industrialized food. I can't stand the idea of eating pig slime. But I'd say broadly, the very fact that we can have this conversation and think about this conversation, think about food as a thing where there is choice and levels of quality and.

[Jordan Weissman]

And an.

[Adam Davidson]

Opportunity to reject entire classes of food as uninteresting or beneath us is a byproduct of companies like McDonald's.

[Kathy O'Neill]

I think you're giving McDonald's too much credit for that.

[Felix Salmon]

And I think that the, you know, I think that what McDonald's did do was create millions of deaths from heart disease and obesity. They engineered their food to put, you know, to maximize various sort of atavistic pleasure receptors around salt and fat.

[Kathy O'Neill]

Yeah, the food engineering of McDonald's is out of control.

[Felix Salmon]

Jordan was talking about eating McGriddles, which I had never heard of a McGriddle before last week and now I've, I looked it up on the Internet. And it's basically a sandwich where they inject maple syrup into the bun.

[Adam Davidson]

You know, I kind of want one.

[Jordan Weissman]

Yeah, it's a pan. Yeah, Felix, that's called a pancake made with some maple syrup.

[Kathy O'Neill]

I mean, this week the cbc, like, proudly announced that the number of new diabetes cases is finally going down. The yearly diabetes cases is down to 1.4 million instead of 1.7 million. And, you know, it just makes me think because I'm pretty diabetic myself. My father's diabetic. These kinds of McDonald's. McDonald's puts corn syrup into everything. And I'm going to go one step further because I've had a week to think about it. When Felix said that cows are processed corn, I just want to say that people in this country are processed corn. This is a problem. And McDonald's is contributing to that problem. That's my real thing about McDonald's. It's not that I don't like the taste of the food. I like the fries. When I was pregnant, I had a huge urge for McDonald's fries. But I don't think it's a good choice to make if you're pre diabetic.

[Adam Davidson]

But what is the. I mean, I would want to put some constraint on this. What is the alternative? In the 1950s, if it wasn't McDonald's, it wasn't going to be like, there's.

[Felix Salmon]

So we had a bunch of emails about it.

[Adam Davidson]

No, but that was not going to happen. There's no realistic. We don't live in a world where there was going to be a national chain of beans and rice restaurants in the United States.

[Felix Salmon]

No, but you didn't need a national chain. And where we were going without McDonald's.

[Adam Davidson]

Was, I think if we didn't develop the ability to produce food at scale through better industrial processing and better logistics, then we would not now be rich enough to want to voluntarily spend extra money to consume better quality food.

[Jordan Weissman]

I would say this, though, and I.

[Adam Davidson]

Don'T see if McDonald's doesn't get credit for that. Who does?

[Jordan Weissman]

What Felix is gesturing at here is that if true fast food had not emerged in the 1950s, and McDonald's and, you know, Burger Chef and Burger King, even by the 60s, you would have had more things like Howard Johnson's on the side of the road, where it's.

[Felix Salmon]

Basically Lions Corner houses in England, which my family used to own, which basically.

[Jordan Weissman]

It'S like, you know, as far as health concerns go, how healthy is Denny's? Like, that's what we're Talking about, like, that's the level of food. I mean, Howard Johnson's was not a health food restaurant. You know, I don't think it would have been great for the American diet either.

[Adam Davidson]

I also don't buy it. I think there was. When you have a national highway system, when you have national. The development of national based logistics and supply, you're gonna have a national food chain and it's probably gonna be a lot like McDonald's. So it's probably gonna sell low end burgers and fries.

[Felix Salmon]

Emails, we need to talk about these emails. So Jordan, do you have any particular email that you want to read?

[Jordan Weissman]

Also, there's also the global element of McDonald's. A lot of this was another theme. People from around the world. And so there was one we got that I thought was interesting, which was from Igor Pak or Igor Pak, P A K. He writes, I can't vouch for the US in the 1950s, but in 1990 I recall how the chain opened its first restaurant in Tverskaya, the poshest street in Moscow. I went there a few days later and waited for an hour to get in. The line stretched from around the corner. It was unbelievably clean compared to other places we had at the time. Don't even think about the toilets in those places. People were nice, smiley and efficient. The food smelled like food and had actual fat in it. This was all hard to imagine for all us Russians back then. And you do see with American chains in general going to a lot of developing nations. You know, this happened early in China. You see it now in Africa where they are essentially the healthiest, cleanest option for a lot of these communities when they first emerge there and then over time again, as is happening in China we've discussed on this podcast. Eventually they move on to something else. Other stuff.

[Adam Davidson]

And that is what I would say you guys have done that. It's not that you're bourgeois snobs. I'm a bourgeois snob. When I had dinner at your house, we spent about 40 minutes discussing the wine I brought. It's that we are bourgeois snobs, not because our parents were kings, but because we are middle class Americans or Brits who are allowed to become bourgeois knobs because of the developments of the 20th century for which McDonald's is a key component. We've grown past McDonald's because of McDonald's. So to me, there's no alternate universe in which there was no McDonald's or McDonald like company. That got us to this point where we're sitting In a room on a podcast talking about McDonald's.

[Felix Salmon]

Okay, so Adam Davidson has adjudicated this debate. We are going to leave it there. We are going to thank our sponsors who are amazing. Bolland Branch make excellent sheets. They're organic, they come from India, they're unbelievably comfortable. They just get softer and more comfortable the more that you wash them. They're pretty much the best sheets you've ever had. I'm not even going to start talking about thread counts and things like that. All I'm going to say is that you can get 20% off your entire order, whether it's sheets, towels, blankets, duvet covers, the whole thing, plus free shipping. If you go to bolandbranch.com today and because this is the Internet, you get a risk free trial for 30 days. Don't just throw them on your bed. This is the one thing I would say. Make sure you wash them first. Then try them out for a couple weeks and if you're not completely delighted, just send them back. And it's no harm, no foul. But you will love these things. Bollandbranch.com b o l l and branch.com and use the promo code money. That's important. If you don't use the promo code money you won't get 20% off. So bollenbranch.com b o l l and branch.com promo code money. And we are going to wrap up with the numbers round. Jordan, you're looking at me like you have an amazing number.

[Jordan Weissman]

That amazing. It's a good number. It's a follow up number. So My number is 31% 11 Madison Park. It is actually. I think it's the, it's one of the more famous high end restaurants in America. I think on the top 50 list it's number five right now. Recently announced that they are getting rid of tipping. We've again discussed the demise or restaurants kind of moving away from tipping before and 31% is how much they're going to have to raise the price of their tasting menu. It's interesting because that's not too different than the price hike that Danny Meyer, who's also moving away from tipping his restaurants is talking about. So it's starting to seem like that, I don't know, that could be something like a magic number that the restaurant industry is settling on something. If you get rid of tips, it's going to cost about 30% more for food to make the numbers work out.

[Kathy O'Neill]

I have a fun number. Oh, I, I thought it was amusing anyway. It's sad though. 5,000. It's the number of guns found in a gun hoarder's house in South Carolina. They now suspect that he was part of the so called iron pipeline of illegal firearms that flow from the from the south to New York and New Jersey illegally. But my favorite part was the quote from the sheriff, the county sheriff J. Brooks in the article. Quote, this has completely changed our definition of an assload of guns. Guns.

[Felix Salmon]

5,000 guns. Yeah, there you go.

[Jordan Weissman]

Is there a metric assload?

[Felix Salmon]

I used to think an ass load of guns was like 40 guns. Now my number is $62.5 billion, which is the latest post money valuation of Uber in the wake of its latest $2.1 billion capital round. Uber seems to be this company which is never not raising a new round of money of equity. And Uber's now worth more than General Motors. It's this crazy massive company and people concentrate on the valuation. But more interestingly I think, is this idea that it is raising more money in the equity markets than I can think of any public company ever doing. It seems to be easier to raise money when you're private than when you're public. Public companies can't just keep on coming out doing secondary offerings every six in the way that Uber does. The shareholders wouldn't stand for that kind of dilution. But Uber can get away with it, which is absolutely fascinating to me.

[Adam Davidson]

And the founder's commitment to spending 99% of his proceeds on strippers and cocaine is really heartening.

[Jordan Weissman]

Company once known as Boober.

[Adam Davidson]

My number is less than 20.

[Felix Salmon]

So is it 10?

[Adam Davidson]

No, it's just less than 20. It's 20 and less. So I am writing a column about this now, so it's very much on my mind. The Secretary of Defense is trying very hard to stop one of the most perverse elements of the US military, which is that you basically until you get 20 years of service, you don't get a pension. And then you get a really, really, really generous pension. And having spent some time with officers in the US Military with non commissioned officers, I've learned that what that means is if you get to 38 or 41 or 42, you get to retire and make half your salary, which can be high. If you're a lieutenant colonel, it could be 50 grand every year for the rest of your life. But if you get drummed out a year or two earlier, you get nothing. And it creates, and there's a lot of literature on this, a culture of toadyism where your boss, your commanding officer has enormous power over you because they have this, like, giant, beautiful carrot that they can take away from you at any point. It's seen as one of the primary problems in creating a learning organization where skeptics or people with smart ideas can actually let senior leadership know. And so Secretary of Defense Ash Carter, through a massive overhaul of the army personnel system, is trying to create portable pension systems for people with much less service. So that means it's first of all just fair. I mean, if you've served 10 or 12 or 15 years in the military, you should get some pension. And then also, I think it will lead to a healthier military. The problem is it has to pass Congress, and Congress is probably not in the mood to pass any major overhaul of defense in this election season, even if it's a smart one that would help protect us. But I hope it passes.

[Jordan Weissman]

Question Would that cost more money or less money than the current system, or is it neutral? Because I feel like that is going to have some impact on whether we have any hope of it actually happening.

[Adam Davidson]

So this is part of a huge series of reforms, and it's one of those things where, if you believe the story, which I basically do, that it's long term cost beneficial, but short term, it probably would cost some money. And that's part of why it'll never pass.

[Felix Salmon]

Okay, that is it for us this week. Thank you, Adam Davidson. You are a prince among podcasters. And the big short is out. If you live in Los Angeles or New York any minute now. Otherwise you might need to wait until Christmas. Ish. In any case, go see it if you want to go see Margot Robbie in a bathtub. If you liked the show, subscribe to Slate Money. Also subscribe to Awesomely Boring or what's the name?

[Adam Davidson]

Surprisingly awesome.

[Felix Salmon]

Surprisingly awesome, which is. Which is on itunes and exactly the same app that you use to listen to this one. It's awesomely boring. No, surprisingly awesome. Write to us. Continue to write. Thank you for all of your McDonald's related emails. Don't listen to us with two headphones on when you're on your bicycle. Terry Farrow, who emailed us saying that you listened to us on your bicycle. Just make sure you only have one earbud in because we want to make sure you hear the cars and you stay safe.

[Jordan Weissman]

We want as many listeners to survive as possible because it's basically because it's good for our numbers, not for your health, for ours.

[Felix Salmon]

Many thanks to Zach Dynastein, who was trying desperately to keep us from going massively over it this week and failing miserably. It was not his fault. It was entirely mine. Many thanks. The executive producer, Andy Bowers. The Slate Money is part of the Panoply network [e-mail] panoply and we will talk to you next week on Slate Money. Sam.