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- [00:11]
A
Hello and welcome to the Toby for Prime Minister edition of Sleep Money, your guide to the business and finance news of the week. I'm Felix Hammond of Axios. I'm joined by Emily Peck of the Huffington Post.
- [00:26]
B
Hello.
- [00:26]
A
I'm joined by Anna Shymansky. Hello. And I'm also joined by. How would you describe Toby?
- [00:32]
C
Cute? Tiny.
- [00:34]
B
He's a poodle mix of some kind. Right.
- [00:36]
A
I think he's got some, like, Jack Russell in him. Anyway, I am joined by Toby the dog, who is very friendly and very cute and he is going to make a cameo appearance in this show because obviously, because, you know, he is literally here in the studio with us. We are going to talk about Facebook and the $5 billion fine they have now agreed to pay to the FTC. We are going to talk about safety deposit boxes and whether they are actually safe. And of course, we're going to talk about. I can't believe I'm actually saying this, the new Prime Minister of the United Kingdom of Great Britain and Northern Ireland, Mr. Boris Johnson. And whether he is better or worse at that job than Toby would be. All of that coming up on Slate Money. So this was the week of the big Facebook fine. Da da. How big was it, Emily?
- [01:31]
C
$5 billion.
- [01:33]
A
You are going. I can already tell how this is going to go. You're going to say they're so small compared to, and then name some big number compared to Facebook. And Anna's going to say, no, it's actually big if you compare to some other number. And is that, have I got more or less that right?
- [01:47]
C
I mean, I was thinking about this and yes, of course it's not that much money because Facebook makes so much money. But it's a fine. And fines, I decided are fine. They're fine.
- [01:57]
A
They're not meant to be.
- [01:59]
C
I think it's actually a business killer.
- [02:01]
A
It's a fine and it's, it's a tougher fine than I think most people expected before the FTC came out. And it's also just in terms of size, maybe not in terms of how much it constrains what Facebook does going forward. And it's certainly by far the biggest fine that the FTC has ever levied on anyone for anything on a tech company.
- [02:21]
C
There have been bigger fines on other kinds of companies.
- [02:24]
A
Okay.
- [02:24]
C
Yeah. But the last tech company be fined by the FTC was Google and it was in the millions.
- [02:29]
B
Right, right. And related to net income, it's significant. And the, And Emily, what you were saying is true is that it's a Fine. The point of a fine is not to make the company unprofitable. The point of a fine is to be biting and to try to alter its behavior. It's supposed to.
- [02:44]
C
It's like a speeding ticket, right?
- [02:45]
B
Exactly. You don't want it to be so small that it doesn't do anything.
- [02:48]
A
But it's also, you know, it's more money than Facebook spent, like buying Instagram. You, you know, it's a lot. But the weird thing is this is we. We didn't talk about this back when all of the details of the fine came out because we didn't really know what to make of it. Now we have a lot of color because, number one, it's more public and number two, because Tony Rom at the Washington Post had a whole bunch of background about the deliberations. And what was fascinating about that article was that Facebook was really quite aggressive in terms of pushing back on any attempt to hold Mark Zuckerberg personally responsible for anything, even though he personally responsible for the whole company. He's the controlling shareholder and he can do what he wants. They did wind up trying to create this weird sort of independent committee which he doesn't entirely control, which is in charge of privacy. But it's not at all clear, at least to me, what that achieves. Do you have?
- [03:44]
B
Well, it's kind of like an audit committee. I mean, it's basically what they're trying to do with these privacy regulations is somewhat similar to what they've tried to do with the regulation of financial institutions in terms of auditing rules, especially like if you're related to, like Sarbanes Oxley. This is somewhat similar to that. It's trying to establish an independent committee that is connected with the company but not controlled by the CEO that is going to make sure that certain regulations are met. They're clearly mirroring it on that.
- [04:13]
C
It's kind of weak sauce. I mean, I don't think anything. Any of the new kind of rules the FTC imposed on Facebook are really going to do much. The committee will monitor what Facebook is doing, but Facebook isn't obligated really to do much differently than it has been doing.
- [04:29]
A
And one of the interesting things about the Tony Rom article was that Facebook basically had a case which they were in theory prepared to argue in court that they didn't violate nearly as many FTC consent decrees or anything like that, that the FTC was alleging. And if the FTC went too far and they didn't just agree to this fine, then they would let a judge decide and they would fire millions of dollars of extremely expensive legal, you know, resources at the judge. And there was. And the ftc, it seems, was a little bit worried that they might get egg on their face and lose that case.
- [05:13]
C
Right. And it should be noted, I guess, that the. The FTC was split on what to. And it was three Republicans who went. Who wanted to do it this way. And the two Democrats on the panel were against this deal and thought it was too weak and didn't really go far enough and they wanted to go to court.
- [05:30]
A
So, Anna, is this another case of what we just generally assume is normally the case that the Republicans are more corporation friendly and the Democrats are more like anti big business?
- [05:41]
B
I mean, there's probably some truth to that. I mean, when it comes to tech, it gets a little bit interesting because of course, you do actually have a lot of Republicans who are upset with tech companies because they say they think that they're squelching conservative voices and that they're. They tend to be more. That's true. That's true. I'm just saying that when you're looking at the oversight of tech in general, the politics are a little bit different. But having said that, yes, I think in this particular case that is basically like the split was pretty expected. I just want to bring up one other thing that I don't think we have mentioned is that similar to like with an auditing committee where the CEO has to sign off, that's actually part of this too, that Zuckerberg now actually does have to sign off on what this like, privacy committee says. So then he in the future could be held responsible. And the reason I think this is important is because going back to whether they should have pushed for tougher regulations or a tougher fine is that currently the laws related to tech just aren't great. That's part of the problem.
- [06:46]
A
It's a new industry. It's hard to actually point at the regulation Facebook violated because there aren't that many regulations or that many laws.
- [06:55]
C
I mean, businesses aren't allowed to do deceptive practices. And what Facebook did in this case, one of the things it did was take people's phone numbers that they were using for two factor authentication and then selling them to advertisers to do targeted ads without consent of the user. That seems to me a deceptive practice. And it's pretty clear cut to my mind.
- [07:15]
B
I mean, like, this is the problem. I mean, this is the problem when it comes to tech. It's a very new industry in terms of what people have signed off on what they haven't signed off on. It's still very great. And I mean, I agree with you that when you hear that on its face, it's like, yeah, that sounds pretty bad. But, yeah, part of the problem. And that's why I think what they're trying to do now, and I'm not saying it's perfect, I'm not even saying it's necessarily enough, but it is trying to say, okay, let's actually set up a standard and saying, okay, now, Mark Zuckerberg, moving forward, if there are future instances of this type of behavior, we do have the ability to hold you liable in the way we may not have in the past.
- [07:46]
A
One of the fascinating tidbits in the ROM article was the. That the FTC wanted to basically recite in this agreement all of the statements that Mark Zuckerberg had made about privacy in the past, which is just a factual statement of what he had said in the past. And the Facebook lawyers were completely opposed to that and would not sign any agreement which just simply recited, like, you know, quoted him from the bust. That one, I think, was super interesting to me. And it speaks to what you're talking about, which is that it's one thing saying something in public and there's another thing like having it written down in black and white as part of an FTC agreement.
- [08:27]
B
Right, exactly.
- [08:28]
A
The big problem facing Facebook now, of course, is not the ftc, it's the doj. Because while the FTC is much more constrained in terms of what it can Fine. And what it can regulate, the Department of Justice has a much broader remit. And now they have announced that they are going to be looking at Facebook and Google and Amazon and it's not clear who else, maybe, maybe not Apple. That I think, Anna, to your point, is much more the sort of elected Republicans who are saying we don't like big tech and we're going to jump onto the anti big tech bandwagon now. Emily, do you think this is all just for show?
- [09:07]
C
Yes, I do.
- [09:08]
A
And what makes you think. What makes you think that?
- [09:11]
C
I just haven't seen DOJ or even congressional Republicans, really. It's all bark and no bite. I just don't think, at the end of the day much is going to come out of this. I think it's a lot of bluster, but I just don't think we have a federal government that has the appetite to actually rein in companies much at all. At the end of it all, I.
- [09:37]
A
Don'T think my question for you guys is if we were going to have a little bit more teeth in terms of antitrust in the US like coming up to maybe where Europe is, or even possibly further than that, would that most likely come from the DOJ opening up an investigation and really getting tough about it, or would that ultimately have to come from Congress passing new laws about antitrust, basically new antitrust laws for the age of big tech, which are more than just what we now understand to be a relatively narrow set of anti competitive concerns that antitrust judges need to rule on?
- [10:17]
C
I think so. I mean, I think Josh Barrow had a piece in New York magazine, maybe just talking about we just need legislation. Like it's, it's not hard, actually. I mean, it's hard because we have an ineffective legislature. Yeah.
- [10:28]
A
When was the last time we had effective legislation?
- [10:30]
C
Right. But that's what is needed. Like the FTC is not going to do it. The DOJ is not going to do it.
- [10:35]
A
And that's Matt Levine's point. When he wrote about the FTC fine, he was like, ultimately, what the lawmakers are asking, when the lawmakers are standing up and berating the FTC for not be, for not coming down harder on Facebook, he's like, dude, your lawmakers, if you wanted to make something illegal, you can just make it illegal.
- [10:55]
B
Kind of your job. Yeah. I mean, no, and I completely agree with you. I know, but I think, now look there, I think, Emily, ultimately I agree with you that I think that this particular administration, despite what they say, is so pro business that I find it hard to believe that they're going to want to do anything to hurt these companies, especially because these companies represent such a large part of the stock market, which obviously we know Donald Trump cares about. Having said that, I do think that the concern about the power and the size of tech is becoming one of those few issues that there is a little bit of bipartisan support for a.
- [11:31]
A
Lot of bipartisan support. And these are very blue state companies. If there's any presidential candidate who's the friendly to big tech candidate, it's probably Pete Buttigieg more than anyone else. And even he is saying, no, no, I'm not that friendly. I'd love to regulate them more. So they're in a tough spot and they are really getting it from both sides. The question is, in this era of extreme division in Washington, even when both sides can agree on something, can they actually agree on it enough to pass legislation? And I think to Emily's point, there's very little evidence of that happening.
- [12:09]
B
No, certainly like The Republicans, I mean, the Democrats aren't going to do anything that appears to give Donald Trump a win. I mean, I mean, just to be perfectly honest. And I, you know, I kind of understand that, but I. They probably wouldn't. Right? And then I think my concern is that if we get a Democrat in, it's gonna be the exact same thing. The Republicans aren't gonna wanna do anything that gives whatever that Democratic candidate is a win, even if they would agree with it.
- [12:29]
C
One thing I wanted to say is to the point about bipartisan support. I read one poll, 60% of Americans trust Facebook. Not at all. That's astounding. I think 60% compared to 37% Google and 28% Amazon. So Facebook is really on the edge of you need people to trust that company, otherwise the whole thing falls apart.
- [12:50]
B
Right. Although I kind of. I wonder about that, though, because. Yeah, that's true. But then how many of those people are not using Facebook? And is it also.
- [12:57]
A
This is the answer. Like, this is the thing which people don't understand is that even if you don't have the app, even if you have not signed up for an account in your life, even if, like, you are still using Facebook, Facebook is still targeting ads at you. Facebook knows what your phone number is. Facebook knows lot about you and is monetizing you. It's absolutely amazing the degree to which Facebook monetizes people who have never even signed up for it. Plus, add on to that all the people who have Instagram or WhatsApp and don't realize that it's.
- [13:30]
B
So you're correct that, yes, it is true that Facebook can affect you regardless of whether you are actively on it or not. Having said that, a lot, a lot, a lot of people are on Facebook. The same people who, if you ask them, will say, I don't trust it, I wouldn't pay for it. Yet they are still on it.
- [13:43]
A
And that I think is entirely legit. I was, you know, this is one of the conversations which I have a lot with the tech folk at Axios, like the tech reporters. You know, there are a lot of them basically saying, like, you know, every cell phone should come with a warning, that it's a tracking device and tracks everything you do. And like, you know, Facebook should come with a warning saying, like, you know, if you use this, this is bad. On one level, I kind of understand that, you know, people often don't understand just how much these companies know about us and how much they monetizing us. But on the other hand, this is not in any way a problem that either can or should be addressed by individual actions. So people not using Facebook or deleting Facebook, if you say, you know, I don't trust Facebook and yet you still use Facebook, I don't think that's hypocritical.
- [14:31]
C
Right. You really just need lawmakers to come in and say, Facebook, you can do this, you can't do that. And really put some parameters on privacy because it's all private and people don't really know what is going on. So we need a lot of sunshine. But at the end of the day, that's gonna really shrink Facebook because Facebook's whole thing is we know everything so we can do the best ads of anyone. And it's sucked up all this advertising opportunity, killing our beloved media companies.
- [15:01]
A
Meanwhile, the White House, nevermind the Congress, but the White House, if it hates any of the big tech companies, seems to be on the warpath, particularly against Amazon, probably because Jeff Bezos sends the Washington Post and Donald Trump doesn't like the Washington Post. I mean, it really is that petty. Yeah. Steve Mnuchin was on CNBC this week complaining about how Amazon had decimated the retail landscape. And it was like really, really, really.
- [15:27]
B
Steve Mnuchin.
- [15:30]
C
Small business Steve.
- [15:32]
A
So talking about people decimating the landscape, let's talk about Boris Johnson. I'm not quite sure what to say about Boris Johnson, to be honest.
- [15:42]
C
He is terrible. I mean, people are comparing him to Trump, but I don't think that's quite the right way to go.
- [15:47]
A
I mean, they have a huge number of similarities, but only their hair. I mean, obviously the hair and the just general like blundering into things without any clue of what you're doing or why you're doing it or how you're gonna get out of it. That's similar between them. The bottomless well of self confidence, which is based on absolutely nothing, is similar to both of them. And I think most profoundly the desire to be in charge. Not because you actually want to make any particular difference, but just because you want to be in charge.
- [16:19]
B
And this is why I.
- [16:21]
C
Did we say who Boris Johnson is?
- [16:22]
A
Yeah. Who is Boris Johnson?
- [16:23]
B
Boris Johnson is now the Prime Minister of the uk.
- [16:28]
A
I can't believe you actually said that.
- [16:31]
B
It's, it's very interesting.
- [16:33]
C
I mean, he got a start as a journalist, sort of. I mean, you could be the next President. I mean, I'm not a natural born citizen. Right. That's true. Maybe me then.
- [16:43]
A
Interesting fact about Boris Johnson, he was born in New York City.
- [16:46]
C
Oh my God. Really?
- [16:47]
A
Yeah.
- [16:48]
C
I didn't know that.
- [16:49]
A
He was born in New York City and people back when he first started making noises about wanting to become prime minister, it turned out that he had an American passport and he said he was happy to give up his American citizenship. But parts of the problem was that he hadn't filed any American tax returns in like his entire life. And the Americans wanted a whole bunch of like back taxes or tax returns and stuff. It took forever to clear that up. I think he is now officially, he has renounced his American citizenship, but he, he, he is weirdly a natural born American, just like Donald Trump.
- [17:21]
B
You know what's interesting? So I think I actually did remember that fact and it was because of this interview years ago that he did with Freakonomics. And the reason I bring this up is because at that point when he was the mayor of London, he was kind of like, at least in the US he was seen as this somewhat socially liberal figure. I mean, he was kind of bumbling, but he wasn't the person that I.
- [17:44]
A
Think, I mean, given how many children he has and by how many women, I think you'd expect him to be.
- [17:50]
B
Somewhat socially liberal every article.
- [17:53]
A
He's definitely not like a Bible basher. Right, But I mean, you don't get those in England.
- [17:57]
B
Right, but you didn't necessarily have quite the amount of xenophobia and racism that has been associated with the Brexit movement that we now see. And some of the things. And the reason I bring that up.
- [18:06]
A
Is because you do get the racism. I mean, this is the guy who would write columns about like pickaninnies with watermelon.
- [18:13]
B
Okay, fair enough, fair enough.
- [18:16]
A
It's not that he's not racist, but he, you know, he did represent an incredibly multicultural city and get many votes from a lot of people with lots of different skin colors. That's definitely true.
- [18:29]
B
And also at that, during the time when he was mayor and including during the financial crisis, he was very supportive of business and the financial community. And then now you have him saying like f business. And the reason I bring these things up is because he does seem to be this figure basically without principle. And that can obviously be a very bad thing. But then I also wonder if there's some way that maybe it could actually allow him to actually get some type of deal through. I don't know. I've just been wondering this because he's not going to care about going back on his word because that's all he ever does.
- [19:02]
A
I mean, he does have a certain knack at sort of wordsmithing. He famously once, when asked if he had any conviction, said, I think one for speeding. But no, he's open about the fact that he doesn't have an ideology. He's open about the fact that literally 24 hours before he came out for Brexit, he wrote two columns for the Daily Telegraph, one that was for Brexit and one that was Pro Remain. And he kind of like stayed up all night having a long dark night of whatever rubber sole he has, and woke up in the morning, said, yeah, you know what? I think I'm going to go leave. And he didn't particularly believe it so much as that. He just decided that was politically advantageous and it would be an outrageous thing for him to say. And he always likes being outrageous. If it wasn't for that decision, Brexit would not have won. He really made the difference between a Remain victory and a Leave victory. And now he has been charged with actually delivering this Brexit that he campaigned for and that 52% of Britain voted for. And he has said very clearly that he wants to go out of the European Union on October 31, which, of course is Halloween. You know, Deal or no Deal, he's looked no deal in the whites of its eyes, and he is not afraid. And that's honestly terrifying. You know, there's. There's just a million businesses in the United Kingdom. We had Faisal Islam on, you know, a few months ago, talking about Brexit. He had a great little thread on Twitter about cheddar. A 500 pound, like 500 pounds sterling, not 500 pounds weight. 500 pound sterling block of cheddar that currently gets exported to the EU without any tariffs. The minute you leave with no deal becomes £1,200. And you can imagine what that would do to your cheddar. Cheddar exports. And that's just like one block of cheddar. Imagine multiplying that across the entire economy when Britain is a small island nation which does most of its international trade with Europe. Yeah.
- [21:03]
B
And just the UK isn't.
- [21:05]
C
It'll be fine.
- [21:07]
B
Well, I mean, I guess I think one of the ideas is that it would be so bad for them to leave without any. Any deal whatsoever, that I think on the uk, at least, on the kind of Johnson side, there's this idea that, well, the EU would come to the table. Like, they don't want to see this UK completely fall apart. Or on the other side, you could say, if everything falls apart because they fall out, then the population in the UK could be like, wait a second, like, we need to actually do something. And that. That would spur action.
- [21:35]
A
The population, I think it's. There's been a lot of opinion polls for, you know, every week pretty much for the past three years. And the population, it does seem to be pretty solidly set now. Roughly 50 to 48 pro remain. It's kind of flipped from the referendum result, but the number of politicians who want to revoke Article 50 and just remain remain is nowhere near a majority. Most politicians want some form of Brexit, but there's no form of Brexit which is acceptable to most of Parliament. If Boris Johnson tries to leave without a deal, then Parliament will vote against that. It's not clear whether that's enough to stop. No deal. But push comes to shove, they might wind up with a vote of no confidence in Boris, because there's definitely enough Conservative MPs who want to remain who would vote against Boris Johnson in a vote of no confidence that would trigger a new election. If a new election was triggered, that might actually force Boris Johnson to ask for an extension pending the result of the election. And it's probably the case that the Europeans would grant that, but no one knows.
- [22:44]
B
Right.
- [22:44]
C
I mean, this is truly unpredictable.
- [22:47]
A
Yeah. We have literally less vision into the future of Brexit and where we're going now, like, three years after the referendum than we did three hours after the referendum.
- [22:58]
B
Yeah. And the problem is that even if eventually there is some type of resolution that isn't catastrophic, you will still have had such a hit to the economy for all of these years of lack of investment, lack of consumption that you just can't easily make up.
- [23:12]
A
Yeah.
- [23:12]
C
How could you talk more about the hit to the economy?
- [23:14]
A
It's already been enormous and it will be even bigger.
- [23:17]
C
And when you say it's been enormous, what. What happened? What's happened?
- [23:20]
A
Basically, the positive actions, which is a bunch of banks moving out of London, or, you know, James Dyson, who famously, like, you know, is the great entrepreneur, billionaire, Vacuum guy. Vacuum guy who voted, who campaigned for Brexit, decided to move his company to Singapore.
- [23:37]
C
The Vacuum guy?
- [23:38]
A
Yeah.
- [23:38]
C
I didn't know he was. I'm sorry, we can cut this later, but I love my Dyson. But now, I didn't know the Dyson guy was pro Brexit.
- [23:47]
A
He's a Brexiteer who, the minute that Brexit happened, decided he was gonna move his entire company to Singapore.
- [23:53]
C
He Brexited.
- [23:54]
A
He Brexited, he exited. And then. Yeah, he just bought a $50 million apartment in Singapore.
- [24:00]
C
Email me your recommendations for different vacuums, please.
- [24:03]
A
And don't buy that ridiculous hair dryer.
- [24:05]
C
Yeah, no, obviously I agree that's ridiculous.
- [24:08]
A
But yeah, there's a lot of them. You know, Nigel Lawson, the former Chancellor of the Exchequer, was also like a pro Brexit guy who the minute that Brexit actually went through, he was like, oh, I think I've just. Guess what? I've applied for French residency. Unreal, you know.
- [24:23]
B
Okay.
- [24:24]
C
And what about the global economy?
- [24:25]
A
And so that's one thing is that, you know, just the people and companies leaving the country, and then the. And then the other thing is, is the inbound investment that isn't happening. That hasn't happened. Everyone who even thought vaguely about investing in the UK over the past three years has said, well, there's no way I'm doing it now. I'll wait and see what happens with Brexit and then I'll make a decision. Obviously, if there's no deal, I can't see why anyone would. But even if there is a deal, it will be highly contingent on what form that deal takes.
- [24:56]
B
Right.
- [24:57]
A
And so there's been just a massive lack of inward investment into the UK for obvious reasons. And so put those two together, you get a big hit. What you haven't yet had is the massive regulatory and tariff hit. What you haven't yet had is all of the MRI machines in the UK going dark because you can't import radioactive.
- [25:18]
B
And planes not being able to fly.
- [25:20]
A
And that kind of thing.
- [25:21]
C
Right? So right now we have Boris Johnson and we have Donald Trump really screwing up these great economies. We have shot ourselves in the foot in two places for no reason, essentially.
- [25:34]
A
Am I correct?
- [25:35]
B
They're definitely self assumption.
- [25:36]
C
I'm not sure where I'm going with this, but, I mean, it doesn't seem very smart.
- [25:40]
A
But it's not like this is. You know, they're unique in this. You know, you can look at anyone from Erdogan to Bolsonaro to Duterte, even to Putin for that matter. There are a lot of popular leaders or populist leaders. I mean, Bolsonaro is not popular anymore. His approval ratings have gone through the toilet.
- [26:00]
B
He's never really that popular, even when he was elected.
- [26:03]
A
Popular enough to get elected.
- [26:04]
C
But Felix, these are democracies.
- [26:07]
A
So, I mean, this is the thing that really everyone was up in arms about is that in the uk, this the oldest democracy in the world, you know, the Prime Minister was elected by a vote of 160,000 Conservative Party members. It was, you know, less than 1% of the population. It was a tiny, tiny vote. And the idea that this, this incredibly rabidly pro Brexit constituency, which is tiny, gets to choose the prime minister and gets to basically therefore determine the entire approach that the country is going to take to Brexit does seem a little bit anti democratic.
- [26:46]
B
Yeah. Although we have the opposite in the US where we're probably may not need to go into this, but we're like, our primary system is so democratic that essentially like almost anyone can run for president and get the election, which did not used to be the case.
- [27:00]
A
We saw how that turns out. Right.
- [27:01]
B
So it's like there are, there are pluses and minuses to both.
- [27:04]
C
That's what Anna was talking about the other week when she was in favor of smoke filled rooms.
- [27:07]
B
I just, I read a book. She wrote a book on it. That's all.
- [27:09]
C
The primary system in the United States.
- [27:11]
B
It kind of used to be better.
- [27:12]
A
Fun fact, you know, I'm a Hamiltonian democrat. I believe in a certain level of democracy, but also a certain level of, you know, as Anna says, smoke filled rooms. But honestly, both systems have kind of broken down at this point.
- [27:27]
C
Need a balance.
- [27:27]
A
What we're seeing is the EU still has smoke filled rooms. That's how we got the new EC president and the new ECB head and that kind of thing. It was just like a bunch of grandees getting into a room and deciding among themselves. And that seems increasingly untenable as well. I don't know how long that can last. And even though it might work in theory and even work in practice, if and when it does happen, I think going forwards, it's just going to be completely untenable. That populism has become too powerful.
- [28:01]
C
My last question is, if Boris Johnson gets the no confidence vote and someone else comes in, is there someone waiting in the wings? I do feel that Boris Johnson got this job because no one really wanted to do it.
- [28:13]
B
We have a dog in the studio, just like FYI.
- [28:16]
C
Is he waiting in the wings?
- [28:17]
A
Yeah. So I'm telling you that the best prime minister that I can think of right now would be Toby. The dog who's in is in the studio with us. Yes. Toby, you would make a great. You would make a much better prime minister than Boris Johnson. Better hair, well done. So, yeah, Toby would make a great dog. But even if we got a general election, so Toby would make a great prime minister. But if, even if we had a general election, there's no one who would be obviously a good Prime Minister who has a chance of being elected, because obviously the leader of the opposition is this guy Jeremy Corbyn, who's equally bad.
- [28:56]
C
Great.
- [28:57]
A
Let's talk about safety deposit boxes.
- [28:59]
C
Not safe. Bottom line, not safe.
- [29:01]
A
All right, thanks. That's the shortest, shortest episode.
- [29:04]
C
And we're done.
- [29:04]
A
And we're done. Everything you need to know about safety deposit boxes, which I was genuinely shocked about. You know, if you want to keep your money safe, you go to a bank and it's federally guaranteed and your money is completely safe. And the whole point about banks is that they present themselves as being trustworthy places which keep your wealth safe. And then they have these huge, massive safes with 4 inch thick doors. And I actually had a safety deposit box at what is now the Lower east side People's Federal Credit Union, but was previously Manufacturer's Hanover. And the safe there was amazing. And you would go to all of these doors and there were all of these incredibly elaborate procedures you had to go through with various matching keys. And you would leave your valuables and important documents in the box and you're like, now it's safe. I don't need to worry about anyone stealing it. And it turns out that banks, to use the technical term, fuck this up all the time. They will drill these safes, they will remove the contents, the contents just evaporate. And then if and when that happens, you basically have no recourse.
- [30:13]
C
That's right. We're talking about a New York Times story, we should say on, on this very topic and we'll put a link to it on our show page.
- [30:19]
B
Well, although I would say, like, if you Google safety deposit boxes, it will tell you like every article that comes up tells you, like, the contents are not covered in the same way that your, you know, your cash in the bank is covered. It's not FDIC insured.
- [30:33]
A
If you have, in fact, it's not.
- [30:34]
B
Insured, it's not insured at all. So if you have very, very valuable things in there, you need to insure them on your own. It's, you know, it says that. And I think that was one of my issues I had with this article, was that look, yes, it definitely sounds bad when you have a bunch of things in a safety deposit box. In this particular article sky a bunch of watches and some of them went missing. And so, yes, that sounds really bad. Agreed.
- [30:57]
A
Well, it is really bad.
- [30:58]
B
It is really bad. However, a, I find it very hard to believe that that dude did not have those insured. It was like $5 million worth of watches. Also, I have a hard time feeling bad for a guy that has $5 million worth of watches. But I guess the question then is, well, what is the remedy for this?
- [31:12]
C
Well, it sounds like banks are getting out of the safe deposit box business. Like new banks that are being built without them at all, and banks are shrinking them. And I guess the reason this guy lost all his watches, actually, I don't understand the reason he lost all those watches. It had to do with two boxes. It was the same number. They emptied out the wrong.
- [31:29]
A
What it was, was a classic. I think it was a classic case of bank merger fuck up. What happened was that there was one of the 80 gazillion bank mergers which happen every day. Two branches merged and each branch had its own safety deposit boxes. And what happened was that the person in the other branch who had safety deposit box number 105 in the other branch wound up going delinquent on their safety deposit box payments. And so they wound up drilling safety deposit box number 105 and removing all the contents and. Except they draw the wrong box number 105. I mean, you can kind of see how these mistakes happen. But also one of the reasons that these mistakes happen is the banks just don't take this part of their jobs seriously anymore. It's not very profitable for them. And the competent people do not want to be in charge of safety deposit box. It's kind of a dead end in terms of any banking career.
- [32:24]
C
We should also add that the bank that screwed this up and emptied the wrong box is of course, of course Wells Fargo. I mean, needs to be said, friend.
- [32:33]
B
Of the podcast, Wells Fargo.
- [32:35]
C
I'm still available to run it anytime. I won't mess up the safety deposit box.
- [32:41]
A
Yeah, I mean, I guess I would.
- [32:42]
B
Just say to me, when I was reading it, I think, like, okay, like one of the issues when they were talking to people was that when people would say like, well, you know, you lost all this stuff, and they would sue and want to get the value of that back from the bank. The banks would say, well, but you signed a contract that said we only owe you something, like $10, you know, like, yeah, like basically like two years worth of what you would pay for the safety deposit box. And on the one hand, yes, that sounds bad, but on the other hand, like, they did sign a contract.
- [33:06]
A
Well, yeah, but no one really says that.
- [33:07]
C
Well, so this is actually.
- [33:07]
A
And then the other thing they noticed is that a lot of the time, even if you didn't sign that contract. But you held the box for many years, and they implemented a new contract long after whatever, you know, like, you know, even just, like six months ago, somehow you were bound by the new contract, which you never had signed.
- [33:23]
B
Yeah, that I agree with. And I agree with you. Like, that's bad. And I think if you're trying to figure out, like, look, this is a dying part of the industry, so it's not. We need to have, like, an enormous amount of new regulations, because if you did, they would just eliminate other safety deposit boxes. But I do think it would be reasonable to say you need to make these contracts clearer so people actually understand what they're signing onto and, like, potentially eliminate that ability to just move people into new contracts where they have no idea what they've now essentially agreed to.
- [33:47]
A
So my big question is, if this is dying and banks don't want to do it, and it's not as safe as people think. If I do have valuables, what am I supposed to do with them?
- [33:56]
B
Well, there are private vault companies.
- [33:58]
A
Ooh, okay, tell us more.
- [34:00]
B
Yeah, there are private vault companies that are. I mean, they're going to be a little bit more expensive, but they do offer more protections. Having said that, I'm pretty sure I am not an expert in private vault companies, but you would still obviously ensure if you have millions of dollars or, you know, hundreds of thousands of dollars worth of items, you would still insure them somewhere else. But they are almost certainly going to be safer there than they actually would be in a safety deposit.
- [34:24]
C
So the bottom line is, don't use safe deposits.
- [34:26]
B
Pretty much. Yeah. They really just probably shouldn't have them anymore.
- [34:29]
C
It seems like a bad idea.
- [34:30]
A
I remember that once when I got my safety deposit box, it did feel like I was walking back in time. It felt incredibly anachronistic, even at the time. And I was like, this is awesome. I get to go through these big steel safes. And it felt like, very theatrical.
- [34:45]
C
It seems really cool. And they take the long box out. It takes a while to even come out.
- [34:50]
A
It's so much longer than you think it would be.
- [34:52]
C
Yeah, I would buy one, but just keep fake things in it just for fun.
- [34:57]
B
That's an excellent idea. Just for the fun of it.
- [35:00]
C
And then just keep my regular jewelry, like, at home laying down.
- [35:03]
A
But if safety deposit boxes went away, imagine what it would do to movies. The harm. Exactly. To Hollywood.
- [35:08]
B
It's true. It's true.
- [35:10]
A
Even Spike Lee has made a safety deposit box movie. Everyone has.
- [35:14]
C
But the data was like, of all the bank robberies. I wrote it down, but now I can't.
- [35:19]
A
Yeah, people want cash. Yeah.
- [35:21]
C
Oh, I see. 19,000 bank robberies, but only 44 times were safe deposit boxes broken into over four years.
- [35:28]
A
Right. The danger with safety deposit boxes is not criminals getting your stuff, it's the bank.
- [35:34]
C
Yeah, pretty much.
- [35:35]
A
Okay, let's have a numbers round. Anna, what's your number?
- [35:38]
B
My number is 4.57 million. So that's the amount of money that Justin's son paid to have a lunch with Warren Buffett, the famous. Yes. Okay, so this is the guy who created this Tron cryptocurrency.
- [35:53]
A
He's a crypto gazillionaire.
- [35:55]
B
Yeah. Bought BitTorrent. He's now the CEO of BitTorrent. Okay, so there's been, like, this weird story where he kind of out of nowhere canceled the lunch, saying he had kidney stones. But then there was all of this discussion about how actually the Chinese government maybe wasn't going to let him leave the country. So then he showed a video of himself in San Francisco, but then it comes out that apparently the, like, the government was investigating the company and investigating him and other executives related to, like, money laundering and other issues. And so essentially, nobody knows what's really going on. But it all initially involved a lunch with Warren Buffett.
- [36:29]
C
But he doesn't get his money back for the lunch.
- [36:31]
A
He does not get his money. Well, he said that he was just rescheduling it, but, yeah, everyone was like, ooh.
- [36:36]
B
He was also very relatable that he.
- [36:38]
C
Canceled the lunch because I cancel things a lot.
- [36:40]
A
Do you cancel lunches?
- [36:41]
C
Oh, I cancel everything.
- [36:43]
B
Is the Chinese government usually involved?
- [36:45]
C
No, but I related to, like, I bought this lunch with this person, but now I have too much social anxiety to go to the lunch. That's what I thought was going on initially, but. But that was apparently incorrect.
- [36:55]
A
My number is $125, which is how much money I am getting from Equifax, which I am quite excited about. I went to the website, and they said, do you have credit monitoring services? If you do, then you get $125. And I said, yes, I do, which is actually true because I use a credit monitoring service which advertises on slate money, and there are a million of them, and they are free. So do not feel like you have any obligation to spend money for this. Just say, yes, I have a credit monitoring service. So I would like $125, please. You give them your name and address, and they will send you a check, which I think is awesome. And everyone I know who has gone to this website to find out if they were in the Equifax breach has been in the Equifax.
- [37:41]
B
Yeah, yeah, yeah.
- [37:42]
C
I'm hoping for my check very soon. We should put the link on the show page.
- [37:45]
A
We'll put the link on the show page. And if you. If you went to Equifax and put in your name and address and you were told you were not part of the breach, then let us know because we haven't found anyone like that yet. There's gonna. It's great. It's a nice little stimulus program for America. Everyone gets $125. Yay.
- [38:02]
C
We should all get money from Facebook too, somehow.
- [38:04]
A
Wouldn't that be nice?
- [38:05]
C
Yes, it would, actually.
- [38:07]
A
Emily, what's your number?
- [38:08]
C
My number is $185,000. That is the amount of money that this woman, a former partner at Ernst and Young, is paying to bring her sexual harassment case to arbitrators because she. She was a partner at ey. She said she was sexually harassed and discriminated against and retaliated and fired, and she wanted to sue them, but she can't sue them because she signed a force. She was forced to sign an arbitration agreement. And ey, unlike a lot of other employers, requires employees to share the costs of the arbitration. So she has so far paid $185,000, which is a lot of money even to a former partner at EY to have her case heard by three judges, three arbitrators. And, you know, now they're asking. They went to the Southern District this week, and they're asking to get out of the arbitration agreement, arguing that money is ridiculous and renders the whole thing moot.
- [39:02]
A
So I thought the whole point about arbitration was it was meant to be cheaper than a lawsuit.
- [39:06]
C
Companies love to say that arbitration is cheaper than a lawsuit, but this kind of belies that argument.
- [39:14]
B
So even if it is cheaper than a lawsuit, that doesn't mean it's not still incredibly expensive.
- [39:17]
C
It's still expensive. And I mean, and for the labor, I mean, maybe it's cheaper, but the amount that you could win is much less. Also, I think maybe in business, to business arbitration, there's a better argument for cheaper, but when it's actual people, consumers or workers, it's not a good argument.
- [39:37]
A
So basically, this thing has been dragging on, presumably for some time. She spent, yeah, 180 grand so far.
- [39:44]
C
So far.
- [39:44]
A
And she's now saying, this is ridiculous. I just want to get out of arbitration altogether. And her argument for getting out of arbitration is just look at how much money I've spent so far.
- [39:53]
C
Yes. And I called Ernst and Young about it and they said, well, the arbitrators decided that she had to pay the money, not mentioning that they argued in favor of that in front of the arbitrators, which is adding up for her as part of the thousands of dollars she spent so far was to argue that she doesn't have to spend the thousands of dollars so far.
- [40:12]
A
This is, this is so circular and depressing.
- [40:15]
C
You could, we could put a link to my story on the show page.
- [40:17]
A
Let's. We'll have. There are going to be so many links to so many stories. It's going to be a link, a link fest.
- [40:22]
C
Yay.
- [40:24]
A
So keep on reading. Now that you're done listening to Slate Money, do keep on reading all of these wonderful stories that we've linked to. Thank you very much for sending in all of your questions. So we're going to get to those in a couple of weeks. But for anything else, just keep on writing. To us, it's slatemoneylate.com and with that, we will move on to, I think we'll talk about the ECB on Slate Plus. I want to say something about the European Central bank on Slate plus. If you are a Slate plus member, we'll talk about that. If you're not. Thanks for listening to Slate Money. Thanks to Jessamine Molly for producing. And we will talk to you next week on Sleep Money.