Audio Length: 00:51:36

 

Slate Money talks Facebook’s move to Meta, taxing billionaires, and the new Hertz-Tesla deal.

Transcript:

S1: Welcome to the Backdoor to monarchy episode of Sleep Money, your guide to the business and finance news of the week, I’m Felix Salmon Jeff Axios. I’m here with Stacy-Marie Ishmael of Bloomberg.

S2: Hello.

S1: We’re also here with Emily Peck of fundraise.

S3: Hello. Hi.

S1: Hello. And we are going to talk about rich men this week because apparently on a money show, this is inevitable on a regular basis. We are going to talk about all of the billionaires who have managed to avoid the billionaire tax and why that might be. We are going to talk about Mark Zuckerberg, who’s extremely rich and who has pivoted his company. We are going to talk about Elon Musk and Tesla and how his new deal with Hertz might change things around. We’re going to talk about in Slate, plus, we’re going to talk about Edward Rogers, who is attempting a very successions style coup up in Canada. It’s all manner of fun and games, all coming up on sleep money. Mark Zuckerberg, thank you very much for rebranding your company and forcing us to talk about what I guess we should now be calling Metta rather than Facebook, although I suspect that people are still going to call Facebook Facebook much like they still talk about National Airport. Stacy. Give me a quick picture of what did Mark Zuckerberg announce? And does it matter?

S2: What Mark Zuckerberg announced this week is that Facebook, as he has alluded to several times in the past, is really betting its present and future on the idea of what’s called the Metaverse. This immersive, experiential virtual reality video game feeling situation in which all of our quote unquote real life interactions will happen in environments that seem to come more from science fiction than they do the real world.

S1: So he’s investing a bunch of money into Oculus, which is the sort of headset company that he bought. He’s investing a bunch of money into a which is augmented reality, and he’s saying that this is the the new way that we are going to sort of interact with the world. This is this is going to replace the internet and apps on our phones. And that’s his big bet. What does that mean for Facebook and Instagram and WhatsApp and all of these apps that he’s made all of his billions of dollars from? Like, Are they just going to keep on going as they already did? Are we going to see any changes to them?

S2: I think one of the most interesting questions for me and this is where my deep skepticism of the idea that any of this is actually going to be interoperable comes from is one. Will most people adopt this at the rate that Facebook wants them to or meter wants them to, right? Like the Oculus headset has been out for a long time. It is a good seller, but you canvassed 10 normal looking people not wearing fleeces on the streets and you ask them, Hey, have you ever used a VR headset? And they’re not going to be like, Yeah, totally. So the they’re going to put themselves in this interesting product cycle where they have to keep doing the thing they’re doing now that’s, you know, super profitable for them and also aggressively try to drive adoption of entirely different kinds of both hardware and software experiences that most folks have frankly been really skeptical of.

S3: Facebook’s problem is the problem of so many tech companies over so long, which is that young people don’t use Facebook anymore in the brand name is kind of tarnished and trying to pivot to do another thing that’s kind of cool and they hope will catch on with young people is a huge gamble that historically doesn’t really pay off. Like Microsoft is a good example of a company that, like pivoted to not caring about young people at all in adoption and is doing more, you know, like B2B business and has been enterprise and has been successful at it. It’s sort of like grew up alongside

S1: they did buy Minecraft. True.

S3: But I feel

S2: like that’s a play on parents.

S3: OK, I just like Facebook, has lost the young and I don’t it doesn’t seem like they’re going to get them back, even if they do something that young people might want to adopt and understand because there are other brands already doing this ahead of Facebook, right? Stacy, like I Roblox, we mentioned

S2: every video game company pretty much is is trying to solve this. And I also think folks like, you know, Apple has been very early on really investing in what Felix alluded to, you know, are augmented reality. The idea that you like, look through your phone and it gives you another layer in the reality you’re already in, as opposed to being in something that’s completely immersive and virtual. I mean, the other thing too is, you know, Emily, you’re having intimate problems. Like one of the fun things about VR is it’s incredibly bandwidth intensive, right? Anything where you’re like fully experiential. I’m looking around and I’m surrounded by a tropical island, but I’m actually still in my living room. You are not going to get that experience on 4G. My man, just that’s not a thing that’s going to happen. So how they’re going to solve that ongoing problem of hundreds of millions of people around the world barely even having any kind of internet access, I think is also kind of scary when when I think about the techniques they’ve used in the past.

S1: Yeah, I think a lot of this is really contingent on widespread availability of 5G. And I have to say I’m a 5G skeptic. I’m I’m not convinced that that is going to exist in the world wherever you walk and where if you want to be. What I do think is going on here. Is that we’re seeing something incredibly consistent with what Facebook has been from the very beginning, which is a company absolutely obsessed with growth. Growth forecasts, growth is the only thing that matters. Famously, in the early days of Facebook, there was this growth team which basically ran the company and whatever the growth team wanted, the growth team got. And if it wasn’t what the glitzy wanted, it never happened and it worked. Facebook grew incredibly fast, and when the Facebook app growth looked like it might slow down like, you know, once you had like 100 percent penetration in the United States and that kind of stuff, they decided they were going to grow another way by buying Instagram, and then they grew by buying WhatsApp. And the one thing that Facebook has always wanted and Mark Zuckerberg has always wanted and Sheryl Sandberg has always wanted is where is the astonishing future growth going to come from? And this, to me, is entirely in line with that. They know that there’s no more major acquisitions that they would be allowed to do. You know, both the US and the European antitrust authorities were just squashed that in a heartbeat. They tried to do this Libra e-commerce cryptocurrency thing that fell flat on its face, and they realized they weren’t going to get any massive growth from that. And so now they’ve decided they’re going to build something else. And the great thing about building something rather than buying something is that the antitrust authorities can’t stop you from building something they’ve already bought Oculus. That’s in the past. No one’s going to unwind that Oculus acquisition. And so they’re like, our future growth is going to come from the Metaverse now. I don’t believe the growth story about the future. I don’t think I think with Stacy, I’m I’m with you on this one. I’m skeptical that they’re going to see the kind of growth from the Metaverse that Mark Zuckerberg claims to be basing his company on. But I also think he has no choice. I think that if he really wants growth at all costs, despite the fact that he’s already a massive and, you know, globe spanning company and he still wants to get bigger, then it’s this or nothing. So he chose this.

S3: Yeah, I think that’s right. They’re not allowed to buy their way or acquire their way out of the situation there, and they had to create something. They have no real track record of creating anything besides Facebook. Initially, they haven’t really.

S1: You remember the Facebook phone? Yeah, they tried. They’ve tried, you know? But I think the the weird thing to me here is that this is exactly what you what you don’t need to do if you’re Mark Zuckerberg and you have control of your company. And we will talk a little bit about what that means in Slate Plus with with what’s going on with Rogers Communications in Canada. But he has complete control of the board. He has complete control of the company and he is not beholden to outside shareholders who are saying you need to keep on growing or I’ll, you know, sell my stock or whatever he can do what he likes. Why does he feel like he needs to grow? Is he not big enough already? Why can’t he, you know, concentrate on the incredible problems that we have learned so much about within his company that have emerged over the past few weeks, first from the Wall Street Journal and then from everyone else on the planet? And why can’t he really try and fix everything that’s broken with Facebook rather than spending a huge amount of bandwidth and executive time pivoting to some pipe dream?

S2: One thing I’ve always found fascinating about engineering cultures is nobody likes to fix bugs, but everybody likes to build new things right? And it is really boring, frankly. And this is like an intensely wide, widespread perception in lots of types of corporate cultures and talk that I’ve interacted with to be told that no, no, no, you have to slow down because this one thing over here isn’t working properly. And I do think that the reaction to the most recent set of, you know, whistleblower documents is revealing in that sense, because this is not the first document up by any means. We’ve had various other things come out about, you know, genocide in Myanmar, what’s happening with Indian elections, the the complete lack of scalability in terms of being able to moderate various kinds of local languages. So it’s not that Facebook was kind of coming into this unaware internally externally that they had a bunch of things they could be working on to sort out. It’s just that it’s. Very hard to reconcile. Like do the fundamental infrastructure stuff to kind of keep people safe, even if it’s much less glamorous and the press is still going to be mad at you, even if you think you’re trying really hard vs. we’re going to do a big, shiny, incredible rebrand and we’re going to get wall to wall coverage from every single media company in the entire world, and we’re going to make them think about the future for a second versus that thing that everybody’s been doing, which is reminding us that we made mistakes before.

S3: I don’t think it’s even only tech culture. I’m now I’m thinking about politics and like the impetus to build the new bridge instead of fixing all the old bridges that are crumbling. It’s very it feels very similar.

S2: Shiny is shiny.

S1: Yeah, and it’s, you know, the same thing that you see it. Art museums, they’re much more likely to do a massive capital campaign to build a sexy new wing designed by Steven Hall than they are to invest in conservation efforts for their permanent collection.

S2: Sometimes the future is really just pretending that the past didn’t happen.

S1: So enough about Mark Zuckerberg. Let’s talk about Mark Zuckerberg. He has actually paid a decent amount of tax when Facebook went public. He paid like a billion dollar tax bill. But he has made much, much more than that. And he has paid no tax on most of the money that he’s made in his life. If you think of the money that he’s made in his life as being the value of his stock in Facebook. And this is true for, like most of the big name billionaires that come to mind these days, whether it’s Bill Gates or Jeff Bezos or Elon Musk. The money they make is generally untaxed. Even Warren Buffett is the same way. And so the question then arises if the government wants to pay for big social infrastructure and spending bills rather than just borrow the money, doesn’t it make sense to tax the very rich? And if it does make sense to tax the very rich that would like, reduce inequality, redistribute a bunch of wealth and pay for a bunch of programs that the government wants to do? You know Win-Win-Win? We should tax the wealthy rather than just the people with high incomes. And so this week, Senator Ron Widen came out with a plan that would do that. Basically ask the likes of Mark Zuckerberg to pay capital gains tax on their capital gains, whether they’d sold their stock or not. And this lasted. I think about six hours before Senator Joe Manchin decided he didn’t want to do it until it died. My theory is that a wealth tax is basically a step too far, and this wasn’t technically a wealth tax. It was just a capital gains tax. But it’s a step too far, and for we’re sort of cultural reasons, it’s going to be really, really hard to get any kind of thing looking that looks like that through America’s Congress, because this is America it.

S3: I thought it was more like and jump in if I have this wrong. But basically the concept of taxing gains in your stock that you haven’t sold yet is like too hard for people to to to do like. That’s would seem like the stumbling block was just like, it’s just too hard. It’s ridiculous. We can’t do it because it’s hard and work instead of

S1: just regular

S3: millionaires.

S1: If if you look at the proposal that widen came the white and club published and it was a very detailed 107 page bill and there was like this big, long, 17 page explanation of how it worked like. It’s really quite easy. Anyone, any of us can do it to look at. Like, what are the unrealized capital gains on your stock market portfolio? Like, if you have a stock market portfolio, there’s a very good chance that you can just log on to your brokerage account and it will tell you to the nearest dollar what the unrealized capital gains are. And then you just take that number and you multiply it by twenty three point eight percent. And boom, that’s how much you owe in taxes. If you are a billionaire or if you have more than $100 million of income now, there might be ways to hide, you know, to avoid some of those taxes or, you know, in a legal way. But in theory, at least for those liquid assets that you needed to pay tax on that year, I don’t think it’s that hard to do.

S2: I mean, whenever somebody is like, it’s too hard, so I’ll spend my money going to Mars instead, I’m like, Let’s talk about the relative complexity of having an army of lawyers and accountants to figure this out versus like literally trying to fly to another planet, right? It’s up there with the rhetoric that, yes, yes, I will pay more taxes if the money were better spent. Like, sure, would you? Well, what is what is this ideal, perfect allocation of resources with which you approve? You know that you want the government to act like a donor advised fund that you are going to specifically sign off on the individual bridges that they want to spend their taxes on. It’s just the sums involved here are so wild. You know, I saw some data that came out either yesterday or today, today, Friday about like there were more than 100 new billionaires added during the past 18 months, when so many people were losing jobs and so many people were trying to figure out just how to survive. And so this this idea that doing something that would take an amount of money away that is not spendable by anybody anyway in any realistic way, even if we did fly to Mars is, you know, like a moral outrage is is a position I as a person cannot understand.

S1: It might not be a moral outrage. I think the more Jim. Main argument against it is that it’s a constitutional outrage, and we’ve talked about this on the pub with an instrument ski who was a great, great fan of this constitutional arguments against the well tax, which is actually a real argument, a wealth tax. On its face would be unconstitutional, the wealth tax of the type the Elizabeth Warren had proposed would probably be unconstitutional.

S3: I don’t understand how it would be unconstitutional, like I pay my property tax. Could you explain more how it’s unconstitutional because I do not understand how it’s unconstitutional?

S1: OK, I will explain how it’s unconstitutional. Property taxes are state taxes. They’re they’re not federal taxes. States can do what they like basically in terms of taxation, but the federal government can’t. The federal government is constrained by Article one, section nine of the Constitution, which bans any capitation or other direct tax. Basically, unless you are taxing the number of people in the state, which makes no sense at all, and that includes income tax, it’s also unconstitutional, which is why the Congress implemented the 16th Amendment that allowed an income tax like an income tax would not be constitutional unless it was that the were it not for the fact that the 16th Amendment came along and said, you can do income taxes. And the 16th Amendment basically allows income taxes, but it doesn’t allow wealth taxes. That’s the general consensus on this one. So you can get wealth taxes at the state level, you can’t get them at the federal level. Now, the good news about the widened version of this is that it wasn’t actually a wealth tax, it was an income tax. It was a tax on capital gains, which counts as income. Whether that argument would pass muster with the current Supreme Court, we don’t know, but certainly not all billionaires would pay this tax, right? If you own Revlon, say, and you’ve lost billions of dollars over the past few years but you’re still a billionaire, then you have no capital gains and you and you owe no tax. It’s not a tax on the wealth that you have. It’s just a tax on the capital gains. And we would have been like a massive, massive tax. You know, it would be effectively twenty three point eight percent of the net worth of all of the big entrepreneurial billionaires like Elon Musk. One off big tax, which they’d pay over five years. And then every year after that, they’d pay 23 percent of their annual capital gains. That’s way bigger than what Elizabeth Warren was proposing, which was just like two percent per year.

S3: Well, now I feel like I do understand then how it’s unconstitutional. I don’t understand how billionaires are ever going to pay more taxes in the United States, and I’m feeling like I agree with Stacey that this is incredibly frustrating and upsetting, that we have these essentially a super class of 700 billionaires, mostly men who don’t have to that who pay less tax than I do like it’s it’s incredibly frustrating. And what the Biden administration has done is basically say they’re going to raise taxes on on the working rich. I guess that’s what we call now. These are the millionaires who people who make a lot of money, the working

S1: struggling by 110 million. Yes. Yeah.

S3: Yeah. And and just the billionaires just get a pass. It’s just it’s crazy. And judging by my Twitter feed, people think this was a solution because I said, Oh, the billionaires aren’t going to be taxed. And people told me I was a gaslighting liar because no, don’t worry, people with incomes over I think 10 million will be taxed. But actually, actually, no. The billionaires still get away kind of scot free here.

S1: Yeah, because because the billionaires don’t have incomes of over time. Yeah, a lot of them have incomes of like zero or $1 or something. And they if they need spending money, they just borrow against their stock. It’s this loophole. The one thing I will say is that the United States is hardly unique in this respect. There are few, if any, countries in the world where billionaires pay a lot of tax. Billionaires, by their nature, are good at locating themselves in places where they don’t have to pay tax. And really, America is the only country which is even has a chance of being able to tax billionaires because it taxes people on their global income. But billionaires are politically powerful, and they have expensive lawyers, and they’re good at making sure that they don’t pay taxes on their wealth. And you know, you get people like Peter Thiel creating, you know, $5 billion IRAs and all of that, all of this kind of thing. In an ideal world, I think, yes, the billionaires would pay a lot of tax. I just don’t think that we have ever lived in that ideal world. I don’t think that that exists in any country, anywhere. And while it was lovely for a brief shining five seconds on like Wednesday of this week to think that Ron Widen might have come up with like a vision for that world, yeah, I’m, you know, I don’t think anyone is entirely surprised that it didn’t come to pass.

S3: Isn’t that a recipe for people to take out the guillotines, like if you if these people are? Actually untouchable.

S1: Well, I believe, but but that’s exactly what they did, right? It was called the election of Donald Trump that, you know, you can you can draw a straight line from the 2008 financial crisis to the 2016 election. And unlike the anger that you saw in 2016 and the continued popularity of Donald Trump, I think is definitely related to, you know, it’s it’s definitely guillotine adjacent.

S2: Yeah, it’s just not a direction that people who likes to think of themselves as progressive would approve of. But I I know I completely agree with Felix, right? I think that the the degree of societal unrest in the United States, it’s a highly commented upon, but it’s an under examined secular trend that some politicians are better at writing than others.

S3: And I’m Felix. You had another kind of theory in your in your newsletter this week that this is just the reason the billionaire tax didn’t work is because we, the U.S., just isn’t into the socialism of it all. Which is sort of a separate so

S1: yeah, it’s a separate thing, but it’s a real thing that it’s like on some deep level, un-American. The person who wrote famously from each, according to his abilities to each according to his needs, was Karl Marx, right? The idea that you tax people according to their ability to pay is, on some level, a pretty Marxist idea. Right? It’s not just the, you know, the the right wing, certainly in America, has always loved this idea of a flat tax. You remember, like, was it Herman Cain with his 9-9-9 plan or whatever like the idea being that everyone should be treated equally, no matter how much money they have and the idea that, no, we should treat the very rich differently and get more money out of them because they are the very rich and they have more ability to pay is a Marxist idea. And we are not in America a Marxist society. And although the opinion polls are showing more and more people, especially younger people self-identifying as socialists, that’s certainly not true of the United States Senate. That’s certainly not true of people like Joe Manchin. And what Joe Manchin said when he killed this idea was, I don’t want to single out the billionaires for higher taxes like that just feels unfair. And that on some level, I think that’s that’s exactly what we’re seeing here is that the broad, massive like Middle America, centrist America is non-progressive. America just feels that there is something unfair about taxing billionaires. And I don’t. But I’m not really that American. I’ve only been an American for, you know, a few years.

S2: So then it feels like

S3: we’ve basically created a Backdoor to monarchy. We’re not supposed to have kings or queens and such. But I mean, if we have 700 people that are above tax policy, then yeah, we do.

S2: But that’s exactly what I mean about under analyzed, right? Which is that one of the strangest things for me about moving to the U.S., given the the ideals and principles upon which it was founded, it was like, on the one hand, the adulation of, you know, a class of politicians that were basically royalty for, especially if you read Vanity Fair, as well as this idea that there’s a class of people who just because they were good at making money should be allowed to infinitely make money and questioning that is wild and somehow suggesting that, you know. Cool. Also, it would be good if because of the ways in which you benefited in order to be able to build up money like from tax subsidies on your HQ in New York or Seattle or Austin, or using the social safety nets because you are not offering paid leave of any kind, that that’s something that you put back into a functioning capitalist system is is a bridge too far and in kind of a lot of the rhetoric here, like I have always just like as a person who didn’t experience that and other places have been baffled by it.

S1: To be clear, in the case of the richest person in the world, Elon Musk, he didn’t just benefit from the basic societal affordances that America gives entrepreneurs. He actually got hundreds of millions of dollars in direct federal loans and grants to to build Tesla and and solar city, and not to mention the fact that Space X, his other company where he has, you know, $40 billion worth of stock is, you know, it basically has one client, which is the American government. OK, let’s keep talking about Elon Musk, since he’s not only rich, but he is selling 100000 Teslas to Hertz. This is great for Tesla. Obviously, he’s selling them basically at full price. It is so good for Tesla, in fact, that it managed to push up the market capitalization of Tesla in one day by 2x the market capitalization of Ford pushing Tesla into the trillion dollar club. Well done, Elon. It’s also good for Hertz, which is going to be 20 percent electric pretty soon. Yeah, and it is also weirdly good for Uber. This is something that only came out a day or two later that half of these cars, you’re not going to be able to rent just by turning up to your local Hertz store and renting a car. Half of these cars are going to be reserved for Uber drivers because in a bunch of jurisdictions, Uber is being forced to go all electric. And in fact, Uber has said, I think nationwide in the United States is going to be entirely electric by 2030. And so that’s a problem for Uber, because most Uber drivers don’t necessarily have the means to be able to buy an electric car themselves. And so what they’re saying is, well, if you can’t buy a car, then you can just rent it from Hertz. So here we have in one great vat of a, you know, one week news cycle. We have Tesla and Hertz and Uber all getting intermingled in this one news story. Yeah.

S2: Oh, shout out to the also his reporters. Good luck. This is a bit of a wild week feel. It’s a really interesting story.

S3: I mean, I think it really signifies that electronic cars are going to be a it’s it’s a mainstream thing now and Tesla is going to be the brand, as we already kind of knew that Tesla was going to be the brand for electric electric cars. But this is

S1: the moment I don’t think this is a foregone conclusion right leg. I if you look at the latest version, if the build back better bill, there’s an extra four and a half thousand dollars of tax breaks, basically for people who are buying electric Fords or other electric cars made in the US by unionized labor, which obviously wouldn’t include Tesla, which does not have unionized labor. And people are really excited about the Rivian truck. They’re excited about the Ford F-150 Lightning. They’re excited about the Ford Mach E. The number of Porsche Taycan’s sold has already exceeded the number of Porsche 911 sold this year. And you know, while it is definitely true that Tesla has a head start, it is not entirely obvious to me how much that how valuable that first mover advantage is, especially when the Tesla charging network becomes interoperable with all of the other charges. And at that point, I think there is a slightly more level playing field than you might think. And Tesla certainly the number one player in the market today and will be for some years to come. But I don’t think we can just sort of tie it up in a bow and say, well, Tesla’s one and everyone else is lost.

S3: I mean, I would push back a little bit on that. I don’t think Tesla has created a brand name for itself that is extremely powerful, sexy. I mean, it has incredible brand recognition. There’s no other new auto manufacturer I can I can think of that has been able to pull off the same since maybe like Kia or maybe Hyundai, I don’t know. I live in a pretty affluent area and I see Tesla’s all the time. When I when I talk to people, people are excited about Tesla. When I talk to people about this deal, they were like, Well, I’ll definitely go to Hertz and I want to try it. I want to try one of these cars like, I just think it has a real lead on the marketing brand piece, and that’s not to be discounted.

S2: I wouldn’t discount it, but what I would say is I want to jump on a word. The use, which is like affluent right, which is electric cars, will succeed. When you don’t have to be willing to spend above average money for brand and above average money relative to the quality that you’re actually getting, like my friends who are very into cars and there are a lot of them all around me, you know, there are some Tesla drivers within there, but one of the things that they’re talking about all the time is that like from if you are a real car aficionado and even if you’re a real electric car aficionado, there’s a lot about like Tesla’s quality, like the finish. Some of the features that appeal to you if you’re if you are a gadget person, but that are insufficiently interesting if you are a real car person. And even if you are coming at this from an electric car perspective and Felix, this point about the Chargers is really, really key, right? Like when I lived in Silicon Valley and it was like every person around me was literally buying a Tesla or a Porsche, depending on their bonus that year. One of the big things that was appealing was so many of these tech companies would offer you free or aggressively subsidized charging so that you would park your car when you got to work and you would charge your car for free and then you would drive it home. Because the rate of adoption of electric cars in certain communities far outstrips the mass availability of places to charge it even if you have a garage at home.

S1: I think you’re absolutely right, Stacy. The panel gaps and the basically the whole value proposition of the Tesla is like, this is a really sexy computer on wheels. And then we’ve built like this kind of cheap and shoddily constructed box around the computer. But hey, look at the amazing screen, which does a million things, and what you care about is the amazing screen and the great acceleration and the electric bill. And and like car people kind of care about the books and often really dislike the screen. I have driven an electric car with like acres of screen in front of me, and I hated it. And I don’t want to be like hunting around on the screen to work out what button I want to impress. And I think there is a lot of opportunity space out there for other manufacturers to make other cars and possibly cheaper cars, as you say. Like, we need to have broad adoption here that don’t feel quite as gadgetry. And we and you know, I definitely agree with Emily that the Tesla has done an amazing job in terms of marketing and and desirability, and a lot of people want still want to buy a Tesla. The. The electric her future is going to be a diverse and vibrant future with lots of players, and the only question is really like what is the market share of Tesla going to be? It’s not going to be 100, you know, it’s going to be less than 100. And who knows how, how big or whose house? We’re still in very, very early days. We just don’t know.

S3: Tesla could be Mercedes or Porsche, or a Tesla could be like Ford or something,

S2: but I don’t think Tesla’s going to be for it, right? Because Ford is trying to be Ford, right? Like the Ford F-150 Lightning like has blown people’s minds in terms of appealing to the aesthetic of people who like Ford trucks, but delivering on electric performance. And you know, the Tesla s, I think is very specific and it is it is not for everybody, particularly with some of the quality control issues that they have. Which is not to say Ford has not had its own quality control issues. But I don’t think that the way we move forward with mass adoption of electric is by like optimizing for people who exclusively like the shiniest gadgets version of a thing. I think the way we move forward with electric, and that’s what’s so interesting about this credit is by making it available at every price point to people who want to get from point A to point B,

S1: but back to the Hertz and Rubin Nate. The thing that interests me is like, what does this mean for Uber? If the Uber like we, I think we’ve all more or less agreed that the Uber Tesla dream of self-driving cars is not going to be here for the foreseeable future. You’re going to have to get human beings leasing these cars from Uber, from Tony Romm, Hertz and sitting behind the wheel and driving around. And I just can’t get the math. Straight in my head, like I understand that the amount they spend on refueling is going to be lower because it costs less to recharge than it does to fill up with gas. But these, you know, if you’re if you’re paying like hundreds of dollars a week just to rent your car, that changes the economics of driving for Uber really substantially, and I suspect that people aren’t going to want to do that.

S2: Well, the so one of the things that I’ve been looking at in like the left in the Uber app is they’re really trying to push what they’re calling green rides. So, you know, like you can, you can choose whatever they’re calling it now, like the X in the Uber contract and the XL. And then there’s one called comfort. And then there’s green and Uber, as it has done in the past. It looks like it’s subsidizing the cost of the green relative to some of the other options. But according to a Wall Street Journal story that I was reading, they’re paying a dollar more for every two average driver of an electric car per ride. So there’s some they are. They’re trying to address those mechanics, but like $1. I don’t know how that works out to your point in terms of the maths involved here.

S3: The clear winner here seems to be maybe Hertz that just came out of bankruptcy and got a lot of press that it wouldn’t have in any other universe for doing this right. I mean, and has differentiated itself as a rental car company in a world where rental cars are not really that big of a thing anymore are really struggling, especially since the pandemic to stay relevant.

S1: Yeah, they’re going public soon on the Nasdaq again again. So well, well done Hertz for your IPO number two. All right. I think it’s time for a numbers round. Stacy, do you have a number this week?

S2: Yes, my number. My number is 24 percent, which is how the amount that a Canadian material science firm, the trades under the ticker and maps but is called metamaterials, rallied on Friday because people are like o meter. That must be a Facebook thing somehow. So it was like one of the most actively traded stocks on on Friday, and I think the volume was like more than a million shares traded hands before people were like, Oh, wait, never mind metals. Yeah.

S1: Did you see the volume on matter, which is an ETF? Because ETF the price didn’t go up, the volume went up like a gazillion percent. It was crazy people. The new ticker is not matter. The new ticker is MVR s, which I don’t even know what people are going to call it.

S2: Movers Metaverse

S1: Emily. What’s your number?

S3: My number is cheerful. It’s $10000. That is the amount of money that Spanx CEO Sara Blakely gave each of her employees, along with two first class tickets to anywhere in the world. They want to go this week, and there’s a great little Instagram video that that you can go and look at just the pure joy. It’s mostly that Spanx workforce, it’s mostly women, and it’s just a delightful, a delightful thing. And I’m struggling to have to feel a downside to this because they the news. The news here is that Spanx got a lot of money from Blackstone sold themselves to Blackstone. And yeah, you should go watch the video.

S2: Ten thousand dollars seems great. Anyone who wants to give me two

S1: tickets to anywhere in the world is just such a wonderful, like, ultra luxe,

S2: brilliant idea. Delta Airlines, I think also. So it’s not like Southwest has to be on Delta.

S3: Yeah, but first class. Because if someone gave me to not first class plane tickets, I’d be like

S1: Delta One or whatever it’s called. Yeah, that first class is nice.

S3: Plus, and then you got the cash to spend too. You know, it’s like it’s it’s a good gift. She knows what she’s doing.

S2: Is it taxable?

S1: Yeah, that’s the question I want to know. Like if I if I take $10000 worth of first class airfare, do I now need to pay income tax on that?

S3: Oh, you’re probably going to. I bet you don’t get the whole $10000 in cash.

S2: I’m going to I’m going to ask any accountants who are listening to this how they may have structure this. Is this a gross up situation? What’s happening

S1: is is there going to be a tax gross up Spanx when the important questions the

S2: audience know?

S1: I have a question for Stacey in the form of a number, but I guess the number first, then the number for the number is one hundred and twenty four thousand four hundred fifty seven point zero seven,

S2: which is specific number,

S1: which is the number. Of. If that punk nine nine, nine eight sold for oh oh, and this is this is all to do with something called a flash loan, there wasn’t a real sale from one person to another sale. Does this wonderful thing you can do in the crypto world once you scored a flash loan where you basically borrow money for like an hour and a half and you can do what you like with it because according to the smart contract, the person who lent the money is guaranteed to get it back, so they’re not really taking any credit risk. And so what this guy did is he borrowed basically 532 million dollars, took his CryptoPunks, sold it to himself, transferred it back himself and then paid the $530 million back just to be able to get on top of something like leaderboard and say, Hey, I have a five hundred thirty two million dollar crypto bank. On some level, it’s silly. On some level it’s funny. On some level, it’s like a weird flex. But the question I have for Stacey is how much did it cost? I want to know about these flash loans because we know that there was like $800 in gas fees, but presumably there was an actual cost to borrowing the money. On top of that, that was a lot more than $800 or no.

S2: That’s actually one of the things that we’re trying to reports out at the moment. The the invisibility of that flash loan fee is something that I find really interesting for two reasons. One is I have had a hunch and I am not alone in this, that these sorts of trades happen fairly frequently, usually not at the five hundred million dollar level, and that people are using it to inflate the prices of NFTs. And then the second person who buys it, they’re like, Well, it’s sold for 400000 before 500000 seems like it seems like a bargain. And two, I I confess to, not 100 percent understanding what the upside is to providing flash loans. If there isn’t some kind of margin that is attractive, you know, it’s like, OK, it’s going to be lower than if you had to, you know, actually take on credit risk. But I still want to know like what that percentage is that folks are making.

S1: Yeah, I mean, no one no one loans out $500 million for free if even if it’s only for an hour and a half like people are going to want to get paid for that, right?

S2: Yeah, exactly. I’m like, What makes that worthwhile?

S1: OK, so as the managing editor for crypto at Bloomberg News. Your your assignment this week is to come back next week and tell us what is the interest rate on the flash loan? I’m genuinely interested, and I know you have

S2: multiple people giving me homework. Yes, I will. I will come back next week with some more insights on the brilliant.

S1: So I think that’s it. Unless you’re a slate plus listener, I hope you’re a slate plus listener because we’re going to talk about six Heilweil. We’re not really going to talk about succession. We’re going to talk about something succession adjacent, which is the Rogers family in Canada. When we had Italy on the show talking about all of the media families, the succession was based on, I can tell you that the name Rogers was not a name that appeared. But now, oh boy, it turns out to be like the most succession esque family in the world. We’re going to talk about what’s going on with them in Slate Plus. But other than that, thank you so much for listening, and thank you so much to Shane Roth for producing. This show was a bear of a show to produce for various boring technical reasons. She is a superstar. Send your emails in to sleep money at Slate.com until she know how wonderful she is. And we will be back on Monday with more slate money succession with Matt Haber and then the following Saturday with more sleet money. Emily, as my co-host on Slate Money Succession on a scale of one to succession, where would you rate? Where would you rate the Rogers family of Canada?

S3: This is like this is like at least one and a half successions. I mean, this is

S2: the real deal.

S1: 18 out of 10.

S3: Yeah, there’s a sister tweeting insults at a brother on the internet, and that feels super successfully to me, even more than the mother and son feuding, the sister coming out and just shading her brother and being like, Don’t pay attention to my brother. I mean, my God, it’s right out of the the pages of HBO to some mangled.

S1: So to back up a little bit, what we have is the largest telecommunications company in Canada. Rogers Communications is a publicly listed company, but like all of these TMT places, it has a dual class share structure and is controlled by the Rogers family. The Rogers family have all of their shares in one trust. They don’t vote their own shares individually. Have a trust which you know, holds those shares in trust for each of the various members of the royal family. But the trust votes all of its shares together, which means that whoever controls the trust controls the company. And the chairman of the Board of the Trust is Edward Rogers, who wants to fire the CEO and his, if tried to effect, effectuate this coup and all of him and his sister and his mother and all these other family members are saying, How dare you? You can’t do that. And it’s all going to court in British Columbia. And the mayor of Toronto is spending like a day a week trying to mediate, even though he’s the mayor of Toronto. And like the whole story, is absolutely glorious and the cherry on the top. Stacey, did you come across the spit? Was the butt dial?

S2: No. Tell me about your style.

S3: It’s in the it’s in the Bloomberg piece that was really good on this whole thing. Basically, the Edward Butt dialed the person he was trying to overthrow and just about. Oh yeah, but still,

S2: the CEO, the

S1: CEO found out that he was that there was this coup attempt by getting this dial and he picks up the phone and he overhears these people saying, We’re going to fire the CEO. He’s like, You guys, I’m the CFO

S3: on the line here.

S2: Wow.

S3: And an aside from being very juicy, I feel like Felix managed to to find the good like finance angle out of all this, which is like you can control all the stock, but you can still be in a weak position somehow if you go too far.

S1: Is that it reminded me? Yeah, it reminded me of Travis Kalanick and Adam Neumann, both of whom controlled their companies and both of whom got pushed out anyway.

S3: Yes. Yes. There are limits to what you can do, even when you have all the stock and all the other.

S2: If you are Adam Neumann, you continue to make money no matter what you do.

S1: So, Adam Neumann, Adam Neumann this is the other thing, which is the very succession on the day that we went public was that this week I can’t even I’ve lost track of time at this point. But I think it was this week or maybe last week that we went public via a SPAC. And so at nine o’clock in the morning, Adam Neumann was to be found at the Standard Hotel in the West Village in Manhattan with tequila shots at him.

S2: Oh God. The bad decisions there never has any day that started or ended with tequila shots been a good day. Like, it’s just sort. Not a real thing. I mean, it’s been

S3: a good day for him, right?

S2: Well, I worry about all the people around him. That’s all I’m saying.

S3: I mean, this guy, Edward Rogers, is in a better position. I will say than Logan Roy, who is the head

S1: of the because Logan actually control like this is the as we know of season two. He has a large number of votes, but he doesn’t have a controlling number of votes. And yet it’s there’s there’s a proxy war going on, which we will talk about

S2: in the next late Monday succession. I hope you will also mention Brian Cox’s new book in which he just trashes everyone.

S1: I’m I’m so here for I really am.

S3: I’m all for the trashing the tweeting the the family being torn apart, the billionaire at least. Look, the billionaires might have. They might be royalty and have all the power. But I guess, you know, they still have, they still have their difficulties. And they’re, you know,

S2: it’s interesting that we just spent an episode of. Talking about like, why is it that people are so enamored of billionaires that they’re willing to let them not pay taxes? I’m like, Oh no. Maybe because we have a bunch of really entertaining, slickly produced shows about them and everybody’s like, I see myself in these people somehow. That, too, could be me.

S1: So I’m just I’m just going to say that Martha Rogers, if if you are a Slate Money Plus subscriber and you’re listening to this segment, please send us an email on Slate Money at Slate.com and we will invite you on to Slate Monthly 100 percent. Well, you are welcome on Slate Money Succession anytime. I know that Twitter is good, but let me assure you that slate money is even better.

S3: Wait, Felix, you got to. You got a deem her right after that. We we hang up this this riverside chat. You have to tweet at this woman because her tweets, I mean, she she could use some more amplification, and I will keep my

S1: promise b the promise to retweet her if she comes on slate on this.

S2: This is the one the one service Felix can provide to the billionaire social media capital. Fantastic.

S1: Brilliant.

S3: Well done. Well, we figured it all out.

S1: So tequila shots all around.

S3: Well, I definitely need wine after this.