Slate Money – "The Yanis Varoufakis Is Not on Slate Money Edition" (April 30, 2016)

Episode Overview

The episode was set to feature Yanis Varoufakis, the former Greek finance minister and author of And the Weak Suffer What They Must?, but Varoufakis canceled last-minute. Instead, hosts Felix Salmon (Fusion), Kathy O'Neill (mathbabe.org), and Jordan Weissman (Slate Moneybox columnist) conduct a lively conversation as planned, channeling Varoufakis’s ideas and examining three major economic crises: Greece, Puerto Rico, and Brexit. Kathy O'Neill stands in as an “honorary Varoufakis” to provide insight into his book and ideas.

Main Discussion Topics

1. Where is Yanis Varoufakis? (01:10–03:21)

• No-show confusion: Yanis reportedly arrived at the remote studio but canceled the interview, leaving the hosts to improvise.
• Lighthearted banter: They joke about Kathy impersonating Yanis, including references to his wife’s rumored inspiration for the song “Common People” by Pulp.

"[Yanis] arrived at the studio on time, but then decided that he was canceling the interview." — Felix Salmon [02:13]

2. Greece: The Eurozone, Monetary Policy, and 'Fiscal Waterboarding' (04:23–15:04)

Varoufakis’s Book & Key Ideas (04:23–06:56)

• Book summary: Varoufakis argues European monetary policy's roots lie in a failed quest to make money "apolitical"—beginning with the 1971 Nixon shock and culminating in the euro.
• Quote:

  “It was all a doomed effort to make money apolitical.” — Kathy O'Neill [04:23]

• Monetary union without political union: The flaws of the euro mean nations like Greece cannot control their own destiny during crises.

Greece’s Current Crisis & 'Fiscal Waterboarding' (05:45–08:48)

• Fiscal waterboarding: Varoufakis’s metaphor for the treatment of Greece by its creditors — repeated financial tortures without real relief.
• Power imbalance: Creditors (Germany et al.) wield all control; debtor nations like Greece remain powerless.
• Euro design flaw: The euro inherently creates repeat crises since countries lack monetary sovereignty.

Comparative International Responses (08:48–10:33)

• Americans vs. Europeans: Americans tend to end broken systems (e.g., Nixon shock); Europeans prolong crises by "kicking the can down the road."

  "...with the Europeans just absolutely go into this denial mode and just push the can down the road every single time they can." — Kathy O'Neill [09:34]

Solution? Political Union & Democratic Deficit (10:33–14:41)

• Political union needed: Varoufakis advocates for true political/economic union in Europe, not just a monetary one—something the hosts argue is more remote than ever.
• Democratic deficit: Decisions are driven by technocrats/bureaucrats, not the people. Central banks are powerful yet unelected.

  “Not a single democracy that I know of elects its monetary authorities. These are deeply technocratic and fundamentally anti democratic positions.” — Felix Salmon [13:26]

• Result: Germany dominates, others suffer.

3. Puerto Rico: "America’s Greece" (17:07–25:44)

• Crisis parallels: Like Greece, Puerto Rico accrued enormous debt due to easy borrowing; it's now defaulting on repayments.

  “Puerto Rico has been enjoying like easy borrowing for just tons of time... built up just enormous amounts of debt.” — Kathy O'Neill [17:07]

• Factors exacerbating crisis:
  • Shrinking population → higher per capita debt and declining revenue.
  • Labor mobility (people leaving for U.S. mainland, draining economic base).
• Congressional intervention: U.S. Congress considers a financial control board (like for Washington, D.C.) to stabilize Puerto Rico — but deep recovery is not guaranteed.
• Structural disadvantages: Laws (e.g., Jones Act) make imports costlier; federal policies both help and hinder Puerto Rico.

  • “Even with no debt service repayments whatsoever, it's really hard to see how Puerto Rico can thrive as a government." — Felix Salmon [22:02]

• Comparison to Greece: Unlike Greece, Puerto Rico receives some U.S. welfare aid (e.g., Medicaid, food stamps), but lacks full state benefits and monetary sovereignty.
• Minimum wage complication: The U.S. federal minimum wage is too high for Puerto Rico’s economy, inhibiting competitiveness and creating underground labor markets.

4. Brexit: The Coming UK EU Referendum (27:37–34:39)

• David Cameron's mistake: UK Prime Minister Cameron is criticized for calling referendums (on Scottish independence; on EU membership) he didn’t want to lose.

  • “He is, in my opinion, the worst prime minister, quite possibly of all time in Britain because he has made exactly the same mistake twice.” — Felix Salmon [28:12]

• Economic fears: Leaving EU could reduce British GDP, harm banking sector access, and most importantly — fracture Europe’s integration.
• Political/cultural value of EU: Beyond economics, EU membership means peace, prosperity, and international cooperation.

  • “There’s no doubt that Britain has benefited, not just economically, but culturally from being part of Europe.” — Felix Salmon [29:48]

• Populist/racist undercurrents: Xenophobia, spurred by issues like Syrian refugees and fears over Turkish immigration, drives much Leave-campaign sentiment.

  • “I think the migrant crisis is the proximate cause for the popularity of the Leave campaign...” — Felix Salmon [31:52]

• Democracy dilemma: Hosts reflect on how populist pressures and racism can "break democracy" by turning majority rule into a tool for exclusion.

Notable Quotes & Memorable Moments

• On central banks & democracy:

  “Not a single democracy that I know of elects its monetary authorities. These are deeply technocratic and fundamentally anti democratic positions.” — Felix Salmon [13:26]

• On Greece’s treatment:

  “[Varoufakis] has a term for it... 'fiscal waterboarding.'” — Kathy O'Neill [05:45]

• On Brexit referendums:

  “If you have something you don’t want to happen, you don’t allow the country to vote for it.” — Felix Salmon [28:24]

• On racism, democracy, and the EU:

  “The minute that democracy becomes the tyranny of the racists, that's when I start breaking with democracy.” — Felix Salmon [34:13]

Important Timestamps

• 01:10 – Introduction, Varoufakis’s cancellation and banter
• 04:23 – Kathy introduces/recaps Varoufakis’s book
• 05:45 – "Fiscal waterboarding" term explained
• 10:33 – Union without politics: the European flaw
• 13:26 – Democratic deficit in monetary policy
• 17:07 – Puerto Rico’s crisis explained and U.S. parallels
• 24:19 – Puerto Rico & federal minimum wage issue
• 27:37 – Brexit discussion begins: Cameron, referendums
• 31:52 – Migration and xenophobia’s political power

Numbers Round (36:39–40:54)

• Amazon’s Q1 net income: $513 million — largest ever (Kathy)
• Facebook’s Q1 net income: $1.5–$2 billion (Felix, Kathy)
  • Amazon’s Jeff Bezos gained ~$6 billion in a day post-announcement
• Zero Hedge blog “exposed”: 3 people behind “Tyler Durden” persona; profit via fear-mongering (Jordan)
• Facebook voting shares: Felix notes the coming introduction of a non-voting share class — soon, the majority of Facebook shares will have no voting rights, cementing Zuckerberg’s control.

Tone & Style

The podcast is informal, witty, and sharp-edged, with hosts joking through disappointments (Varoufakis's absence) and treating complex macroeconomic subjects with a blend of accessibility and analytic rigor. Regular moments of levity ("fiscal waterboarding;" Kathy's 'Varoufakis impression') keep the mood energetic even through serious discussions of economic crises.

Closing Note

Despite Yanis Varoufakis’s absence, the Slate Money team delivers an insightful, entertaining tour through Europe’s (and America’s) current monetary and political quagmires, using Varoufakis’s ideas as a springboard for debate. For listeners seeking clarity on Greece, Puerto Rico, and Brexit — and the repercussions of technocratic, unaccountable economic governance — this episode is a lively must-hear.