Slate Money Podcast Summary

Episode: Why Are Republicans Being So Mean?
Date: April 25, 2020
Host: Felix Salmon (Axios)
Co-hosts: Emily Peck (HuffPost), Anna Shymanski (Breaking Views)

Episode Overview

This episode explores the political, economic, and social dynamics emerging from the U.S. government's response to the COVID-19 crisis, particularly focusing on stimulus measures, the controversial approach of the Republican Party (notably Mitch McConnell), flaws in relief programs, and the unprecedented situation in the oil market. The hosts dissect legislative shortcomings, policy logic (or lack thereof), and offer vibrant, witty analysis of the week's business news.

Key Discussion Points & Insights

1. PPP (Paycheck Protection Program) 3.5: Flawed Relief and Small Business Struggles

• Recap of Federal Relief Rounds:

  • The initial $2.2 trillion CARES Act included $350 billion for PPP, now supplemented by $322 billion ("PPP 3.5"), totaling around $672 billion.
  • Still, it is widely agreed this won’t meet demand, with funds running out rapidly.
  • Quote (Emily): “It’s not going to be enough, Felix. … Some are predicting…will run out even faster.” [03:25]

• Challenges with Fund Distribution:

  • Banks can process faster now; applications are stacked, creating a "Ticketmaster debacle" situation. [03:55]
  • Small banks get a carve-out ($60 billion), aiming to reach smaller and minority-owned businesses, but the implementation is limited.
    • Quote (Anna): “I think that the Democrats were pushing to try to get carve outs for, you know, minority owned businesses, female owned businesses and such. And I do think that this was kind of the way that they were able to get that somewhat. Not exactly.” [05:35]

• Public Companies Controversy:

  • Larger public companies (e.g., Ruth’s Chris Steakhouse) drew criticism for taking PPP; public shaming is viewed as the main deterrent, not legal restrictions.
  • Treasury’s “toothless” guidance suggests loans for these firms may not be forgiven, but the law allows them to apply.
    • Quote (Felix): “In the law, you can apply for these things, but then…treasury can just decide…not going to agree to forgive the loan.” [08:00]

• Structural Flaws:

  • The PPP is structured as loans distributed through private banks, leading to biases toward well-connected or bigger clients.
  • Requirements to maintain payroll lead struggling businesses (especially restaurants) to avoid the program altogether.
    • Quote (Felix): “If you look at the industries that got the most loans, construction did better than the restaurant industry. … really, really dire straight companies aren’t doing this because of the requirements which have not changed.” [11:38]

2. Stimulus Checks, Unemployment Funding, and Gaps in Support

• Stimulus Running Out:
  • $1,200 direct checks and enhanced $600/week unemployment seem underfunded and risk expiring with continued need.
    • Quote (Felix): “So much of this stuff can just run out of money and no one knows what happens if it does.” [15:54]
  • Political negotiation is slowing, and repeatedly piecemeal bills are expected due to political posturing.

3. Why Are Republicans (and McConnell) So Mean?

• Reluctance to Fund States:

  • Despite state and municipal financial collapse, Mitch McConnell suggested bankruptcy for states rather than immediate relief.
  • Notable quote (Felix): “Mitch McConnell, I swear to God, he says, well, why don’t they just declare bankruptcy?” [17:01]

• Interpreting the Political Strategy:

  • Theory that Republicans—especially Trump—are positioning to blame states (many “blue”) for economic fallout, resisting federal aid.
  • Anna: “That’s their strategy. And I think this is part of that…idiotic for about 18 different reasons.” [18:24]
  • State bankruptcy isn’t legally possible (no chapter in the code), and such talk is viewed as political maneuvering.

• Counterproductivity:

  • Cutting state budgets undermines overall stimulus, leading to contraction, not growth.
    • Quote (Anna): “If you force the states to have to cut all their budgets…you’re going to have fiscal contraction.” [19:01]

4. Unemployment, Incentives, and the $600 Debate

• Attacks on Enhanced Unemployment:
  • Republican talking points claim $600/week unemployment “discourages work,” a rationale dismantled by the hosts.
  • Emily on reporting bias: “There’s this whole sub genre…where journalists go to, like, owners of small cafes…these owners say things like, ‘I was forced to fire all my workers because none would work because they wanted the better paying unemployment insurance.’…And the stories never…talk to the employees.” [23:35]
  • Evidence from UBI pilots suggests a regular safety net actually increases people’s willingness and capacity to reenter work.

5. Stimulus Check Efficacy and Flaws

• Listener Stats:
  • Anna: 53% of surveyed Slate Money listeners received their $1200 checks.
  • Many non-recipients either made too much or were non-citizens.
• Program Gaps:
  • Excludes undocumented households and penalizes single parents compared to dual-parent households.
    • Quote (Emily): “If there's someone undocumented in your household, no one gets a check, which is obviously cruel.” [30:13]
  • Argument: Checks should be ongoing, not one-off, perhaps triggered automatically by economic distress (“automatic stabilizers”).

6. The Oil Price Meltdown: Negative Prices Explained

• Historic Market Dislocation:

  • WTI futures for May 2020 sank to -$37.63/barrel upon expiry, a previously unthinkable negative price.
    • Quote (Felix): “The May futures contract for West Texas Intermediate oil…closed finally at minus $37.63…pretty much inconceivable.” [34:16]
  • Cause: Collapsing demand, full storage facilities, and contract holders incapable of physical delivery.
  • Anna’s “musical chairs” analogy: Not enough storage = desperate selling = negative prices.
    • Quote (Felix): “There are seven people running around in a circle and there are six chairs. … Who has nowhere to store the oil? That’s who’s willing to pay others to take it.” [39:06]

• Futures vs. Physical Market:

  • Much speculation in futures; most traders never intend to physically accept oil. Physical delivery requirements for WTI (but not Brent), drive market weirdness.
  • Anna: “Brent…is cash settled…WTI is settled physically. So, like, if you had that contract and it expired, you, my friend, own a barrel of oil.” [41:10]

7. Numbers Round and Final Thoughts

• $8 Trillion:
  • Global fiscal response to COVID-19 has already topped $8 trillion in six weeks—a staggering and unprecedented scale.
    • Quote (Felix): “We’re already at $8 trillion six weeks into this thing. I have no idea where we’re going to end up. But it’s going to be a lot higher than that.” [45:23]
• Three Hours:
  • Average increase in workday length for remote workers during the pandemic.
• 66 Billion:
  • Argentina’s foreign law debt subject to restructuring—a tale as old as time.
    • Quote (Anna): “With everything that’s going on…Argentina is still defaulting on their debt. Like some things never change.” [48:00]

Notable Quotes & Memorable Moments

• On political strategy:
  • Anna (to McConnell): “This is idiotic for about 18 different reasons.” [18:24]
• On UBI and incentives:
  • Felix: “It’s a talking point that refuses to die.” [26:25]
• On life under quarantine:
  • Anna: “All I do is work. Like, I work and then I run with an enormous face mask on. … That’s essentially it. And baking cookies.” [46:56]
  • Felix (teasing): “The kind of woman who wakes up at 5 AM to run a half marathon with a mask on, even when there’s no one else running.” [47:29]

Timed Segment Highlights

• PPP Funding Flaws: [02:55 – 13:46]
• Treasury and Public Companies Debate: [06:16 — 10:18]
• Stimulus/Unemployment Funding Limits: [14:59 – 15:54]
• Republican Response & State Aid Fight: [16:31 – 22:16]
• Unemployment Disincentive Myth: [22:16 – 27:24]
• Stimulus Checks: Listener Poll: [27:43 – 29:52]
• Automatic Stabilizers & Oil Price Collapse: [33:31 – 43:30]
• Oil Market “Musical Chairs” Explained: [39:06 – 42:12]
• Numbers Round (Global Fiscal Response, Work): [44:16 – 47:21]
• Argentina Debt Default: [47:48 – End]

Tone & Style

The episode is lively, irreverent, and analytical, blending clear-eyed economic critique with biting wit and occasional exasperation—particularly when discussing policy missteps and political brinkmanship. The hosts are conversational, frequently riffing with each other, and quick to ground complicated topics in relatable analogies.

Summary Takeaway

The hosts of Slate Money deliver a sobering, often scathing portrait of U.S. pandemic economics, honing in on why relief efforts are insufficient and how political gamesmanship endangers recovery. They expose the technical and philosophical weaknesses of stimulus plans, unpack the historic oil crash with humor and clarity, and call out both media and policymakers for failing to rise to the moment. The discussion ends with a reality check that, despite all the chaos, some things—like Argentina defaulting—never quite change.