Elon Backs Off
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Hello, welcome to Slate Money, your guide to the business and finance news of the week. I'm Felix Salmon of Axios. I'm here with Emily Peck of Axios. Hello. I'm here with Elizabeth Spires of New York Times and places like that. Hello. And we are going to talk about taxes and the budget and...

bond vigilantes and deficits and all of those new sexy things. We have a whole segment with Julian Sanchez of the Watch Cats podcast on the legacy of Elon Musk at Doge. We are going to talk about the fraught experience of going out to eat in a restaurant when your dining companions are all on Ozempic.

We have a Slate Plus segment on slop, and I'm not going to give it away, but we come up with the perfect verdict on what slop is. You'll have to be a subscriber to find that one out. But it's all coming up on Slate Money.

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This message is brought to you by Apple Card. You earn up to 3% daily cash back on every purchase without limits. Visit apple.co slash card calculator to see how much you can earn. Subject to credit approval. Apple Card issued by Goldman Sachs Bank USA, Salt Lake City branch. Terms and more at applecard.com. Okay, so let's start with this budget bill, which, Emily, you've been

looking at it that all of the various taxes and spending cuts and whatnot they actually do correct me if i'm wrong here for the first time in living memory they do seem to be serious about cutting government spending they're actually cutting spending in this bill they're just cutting it by a tiny fraction of the degree to which they're cutting taxes and so it blows out the budget any

Yeah, I think that's right. The cuts to Medicaid are unprecedented. What are they, like $800 billion, I think, in the House bill? And then there's cuts also to SNAP, the food stamp program. Those are the major ones, and they are very large, very unprecedented, and will likely – I don't want to sound alarmist, but –

Probably people will die from this. Medicaid has been shown to prolong people's lives. So losing it, I don't know, you could make that conclusion anyways. They're doing those cuts and they seem very serious about it. And there's this whole contingency that, well, I think it's four lawmakers in the House that wanted deeper ones.

But at the same time, they're extending the 2017 tax cuts and on top of that, doing more tax cuts that are very expensive, especially the state and local tax deduction SALT, which, you know, like a handful of blue state lawmakers push for because, you know, in the Northeast, SALT is beloved or was beloved until it was capped.

the last time. So yeah, they're doing big cuts, but they're doing big spending. And the big spending is outweighing the big cuts. I will make the case and I have a whole big money talks podcast with Barry Lamb coming up about this.

I will make the case that the tax cuts are huge if you use current law as a baseline. If you use current taxes as a baseline, like the taxes you pay this year versus the taxes you pay next year, the cuts are not that big. The reason they look really big in CBO scoring is just because of the way that the TCGA cuts expire.

Yes and no, because some of the additional cuts, like the salt cap being lifted for some pretty rich people and rich or middle class, depending on how you define them now, and we can talk about your piece, Felix. But if you're a couple making $400,000 a year, you're going to see a big cut. And if

you're paying, especially if you live in California or Massachusetts or somewhere like that. Yeah. Yeah. And like the estate tax deduction or tax break, I don't know what you would call it is bigger. Like there are some people who are going to see meaningful quote unquote relief from this. That was the thing that really jumped out at me. Like if you're trying to pretend that this is some kind of relief for the middle classes, but then

At the same time, what you do is you're like, the amount of money you can leave to your heirs without paying taxes, it used to be $15 million, but that's not big enough. We're going to double that to $30 million. So like, there you go. Like people with $30 million. Out of Medicaid. And it's just like...

In what world is someone with a net worth of $30 million ever going to be considered middle class? But apparently we live in that world. If you're Elon or Trump, it's all relative, Felix. I'll just say, because the White House tells me this all the time, which is that these Medicaid cuts are really just taking Medicaid away from the people who don't deserve it or need it, which is able-bodied working people, they say, and immigrants.

That's their line. They're like, we're not actually cutting Medicaid. We're just focusing Medicaid.

on the people it was meant for. And also, if you go back to the baseline conversation, it's a big cut. Again, it's a big cut year on year in terms of Medicaid. I'm not sure how big of a cut it is compared to where we were like pre-Obama. Like Obama did a massive Medicaid expansion. Yes. Basically, this is like a, this budget that the House passed is like a backdoor Obamacare repeal because they're like pushing back on this particular part, the Medicaid expansion, which

expanded Medicaid to precisely the population that they're now targeting for cuts, which is like the working poor without kids. Also, a lot of those red states had voted against Medicaid expansions for their own constituents. And so there was already a problem with rural hospital closures and things like that. And now, you know, part of the rhetoric, at least, is that the states are going to fund some of this. But you're looking at the states that are most affected, and they're the least capable of coming up with that extra money. Well,

And also, as you point out, the least willing. If they wanted to look after those constituents, then they would have taken the federal money to do so. And for political reasons, they didn't want to. But Felix, I thought you wanted to talk about this because we're going to talk about like

the deficit and how bond yields are rising because people are afraid that our deficit's too big now, blah, blah, blah. I really do. And I think this is, you know, slate money. So we should concentrate a little bit on like the market implications where we seem to be entering a,

new era of higher risk-free interest rates than most of us can remember for a very, very long time. And this is, again, it's a little bit like the inflation conversation. This is not just an American story. This is an international story. If anything, it's probably happening even more in Japan than it is in the US. But what we're seeing is

Rates going up globally, and by far the biggest and most important interest rate market in the world is the U.S. Treasury market. And U.S. Treasuries are now going up. And now the new normal for U.S. Treasury seems to be like 4.5% on the 10-year and 5% on the 30-year. And that is just really...

high for those of us who kind of got used to the zero interest rate regime that has been in effect pretty much for most of the years since 2008, if not earlier. So that's just a really big change. And what we've seen over the past week or so is a lot of talk of the bond vigilantes kind of saying, if you are going to increase the deficit this much,

we are going to have to find a lot of money that would otherwise have gone somewhere else to fund that deficit. And the opportunity cost of that is significant. That money, which would otherwise have gone somewhere else, would probably have got a higher return somewhere else. And okay, maybe there's a little bit less risk if we wind up using that money to buy treasuries, but we're still going to force you to pay higher interest in order to fund your deficit. So

The entire rate environment in the United States, the benchmark baseline interest rate that everyone borrows money off of, which is basically the 10-year treasury bond, that's how you invest money, that goes up. And of course, the US government's borrowing costs go up because the CBO projections for budgets assume that the US is paying like 3.6% on its debt. If it's paying 4.5% on its debt, then suddenly,

the deficit is even bigger and the debt is even bigger because the cost of servicing interest goes up. You know, this was the week everyone started talking about deficits and how higher deficits mean higher borrowing costs. What you just said, Felix. But like two weeks before that, everyone was talking about the U.S. has higher borrowing costs because we have a president that

does tariffs than doesn't do tariffs. Because we have massive policy uncertainty in the US now and people can't expect stability from us, which makes us a less safe and secure investment than in the past. So what I'm having trouble with is, is what's happening now in the bond market one or the other? Is it an interplay between the two? I mean, the fact that it's happening globally...

The answer to that, to oversimplify a little bit, is that one is domestic and the other one is international.

old narrative of there's a big sell the US trade because international investors don't really know what the hell is going on in America and they don't trust America and this is the end of US exceptionalism and we've been overweight America for a long time and now we're going to start possibly even going underweight America and that will create massive capital outflows from the US and that's going to bring rates up and it's going to bring stocks down and it's going to weaken the dollar and all of that kind of stuff.

is a big global portfolio flows kind of story.

Whereas the higher deficits cause higher interest rates narrative, you don't need any international investors at all to explain that. That you can do just with US investors alone. My other question is then I'll ask, because I was reading a, I don't know how I got down this rabbit hole, but I was reading a Wall Street Journal editorial and the guy was trying to argue like bond yields are only going up because of taxing.

of trade war and it's not about this budget. This budget is great. Like it's going to be super pro growth. Like, you know, everyone's freaking out now, but you'll see long-term it's pro growth. And I was talking to a kind of conservative lawyer yesterday about the

the budget and he was like yeah it is pro-growth and I was like wait what it is Liz Truss editorial yes yes oh my god it was astonishing you you both read it too like of all people how did I get there

We should totally trust Liz Truss on fiscal policy because she is so trustworthy. It was just some nameless guy for the editorial page. There was, though, a pro-growth editorial. And I think maybe it wasn't the Wall Street Journal. It was in the Washington Post that made the same argument. Okay.

Which is by Liz Truss. Yes. Just citing, oh my God. The lettuce. But this is exactly right. Liz Truss is proof that no one really believes this. But this is exactly the argument that Scott Besson is rolling out quite a lot. He's saying,

Yeah, yeah, yeah. The CBO is saying that this budget blows out deficits, but it doesn't really because this budget is so pro-growth. You know, suddenly we're going to see like 4% growth. You think he believes that though? He's not a, you know. Well, he knows what he has to say, right? The thing that the Treasury Secretary has to say when he goes on TV is,

If he wants to keep his job when his boss is Donald Trump is always to just talk about how wonderful and smart and genius Donald Trump is. So like whatever he believes is kind of neither here nor there, like a key important part of his job. And he learned this from Steve Mnuchin is, um,

have no shame when it comes to saying things on TV and just say whatever Trump wants to hear. But I was slightly convinced by this lawyer because he was like, well, it's not pro-growth to cut Medicaid a lot, and it's not pro-growth to raise the SAL cap, but if we didn't extend the corporate tax cuts in the 2017 bill, that would be bad for growth. Do you think that's true? I don't think that corporate taxes are

significant drag on growth. And one of the ways that you can see that is in the tax on stock buybacks.

which was introduced a few years ago. And there's this like 1% tax on stock buybacks. And if companies want to return money to shareholders without paying that tax, they can 100% do it. They can just pay a dividend, right? And so like there is a very easy way for them to avoid that tax. And yet in the face of this tax, the rate of stock buybacks didn't seem to go down at all. And so if the main thing that companies are doing is trying to avoid taxes,

You know, that was like, you know, a hypothesis that had a certain amount of, you know, well, could be true, could be not. But then we saw like a very easy way of avoiding taxes and companies just didn't do it. You don't think the original TCJA, because a lot of its supporters say it was really good for growth. It was good for,

Stock market, good for the economy. So there was one part of it which was kind of wild, which was the 100% depreciation on capital investment, which kind of got phased in and then phased out. And there was like one year when it was like 100%. And that definitely...

sort of brought forward a bunch of investment that companies were going to planning to do anyway. They were like, well, let's do all of our investment in that one year when we get to write it all off on year one. That doesn't increase the total amount of investment that companies make in the economy over the long term, but it certainly provides like a short term, like sugar high, because you get like this massive wave of investment in that one year.

But yeah, I think that isn't a long-term thing. That's just moving money from one year to another year. Also, I feel like it wasn't that long ago when everyone was saying deficits were totally fine and Stephanie Kelton is right and we should spend a lot of money and it's fine. Don't worry about it. Is that era over now? Stephanie Kelton has always said that deficits are only fine in an environment where inflation is running below target.

Okay. We're pretty close now. We're still above target. We're still significantly above 2%, and I don't know anyone who's saying that we're going to go below it anytime soon, especially with tariffs coming in and the inflationary effect of tariffs yet really to be felt in a real way. So the whole sort of MMT-Kelton view of deficits don't matter is, well, they do matter, but you need much more willingness by Congress to be...

fiscally tight in periods exactly like right now, where you have this combination of relatively strong growth and high inflation. At that point, you need much less fiscal stimulus. And in fact, you need Congress to start putting the fiscal brakes on. And you don't do that with a huge tax cut. So what we have really learned is that, you know, a Republican Congress will always be happy to cut taxes much more than it cares about fiscal anything, really.

Who cares about the deficit? There are, I'm going to say, probably a dozen members of Congress who care about the deficit. There are some. There are some genuine fiscal hawks. And I think Scott Besson genuinely cares about the deficit. I just don't know what he can do about it. I mean, they should be... No one will do this...

the United States is never going to raise taxes on people, but that's what they should do. They should raise taxes a little bit. And they have the perfect opportunity to do it now because they could just be like, well, this thing expired. So your taxes are going up a little. Like it's actually could be like a good opportunity to be fiscally responsible. Instead, they're like, let's give away more tax breaks to people and spend more money that way. It's like bizarre. My favorite reporting on this was when Donald Trump

was reportedly open to the idea of a tax hike on the rich but his idea of a tax hike on the rich people like okay so how about we hike taxes on people earning more than a million dollars a year and he was like a million dollars a year that's not rich why don't we make taxes higher on two and a half million dollars a year that's where you start being rich and i'm like

I think Trump just doesn't understand numbers sometimes. No, I think that he probably does think that. In his tweet announcing the tariffs, like a 50% tariffs on the EU, he was like, the EU is terrible. They have a trade deficit of $250 million. I'm like, yeah, you're off by like three orders of magnitude, man. Yeah.

Thank you.

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Okay, guys, so I'm going to start this segment off with an apology, mostly to Emily, that we are going to be talking about Elon again. We promised we wouldn't, but we have to. But...

One of the reasons we're talking about Elon again is because Julian Sanchez has parachuted in to slate money. By the way, I love your parachute, Julian. I didn't realize people were still using like silk parachutes, but it's very natty. Well, thank you. I try. It goes with my pocket square. It does. And coming in on a parachute in a three-piece suit with a pocket square is very James Bond. But when you're not emulating James Bond, who are you and why are you so into talking about Elon Musk? Yeah.

I am, I don't know how to say it, into it, but it is a professional necessity. I am the co-host with Noah Kunin of Watch Cats, which is a regular podcast that is focused on Doge and how it is transforming and or breaking aspects of the federal government. And so we thought this would be the best time to check in on that because...

This is pretty much officially the point at which Elon is peacing out from the White House, going back to his day job running Tesla. Tesla shareholders seem to be overjoyed about this. I think quite a few of Emily's sources seem to be quite happy about it as well. But I think there are two big questions here.

And the first one I would like to ask is, what is Doge sans Elon? Is it even a thing or is this not just the end of Elon, but also kind of the end of Doge? No, I think Doge is still a thing. It will formally continue for a while longer. And to some extent, I think at this point we could say Doge is...

kind of a deep state, or at least what someone like Donald Trump might call a deep state, in that a lot of the people who are brought on as Doge staff are now formal employees, sometimes quite senior employees, throughout the federal bureaucracy, and in many cases, wearing multiple hats, quite unusually, with titles across different agencies. So the folks who are brought in as part of Doge are now

installed within the federal bureaucracy of the authority. And of course, Doge itself was formerly all along, in theory at least, led by someone other than Elon Musk, Amy Gleeson. We know, I think, that Musk was the de facto leader and that a lot of its real power was

not from obviously any real formal or statutory authority, but from Musk's access to Trump and ability to say, well,

When a command comes from me, it comes with the authority effectively of the president. So without Musk, maybe that will be diminished somewhat. But I think the long-term effects of Doge and the team as it's installed throughout the federal bureaucracy is going to be felt long after he's gone. And while it may be diminished in influence somewhat, I think also the fact that Elon is not there to drive headlines and press attention may enable them to

to operate with less scrutiny as well. Yeah, I was just writing about Fannie and Freddie and like apparently some 20-something-year-old SpaceX engineer has now joined the board of one of them. There is a lot of weird stuff happening. But Emily...

You are deep in the weeds of all of the chaos that Doge has caused, mainly on the sort of hiring and firing front. And it seems that we're still very much in chaos mode right now. Yeah. I mean, no one really knows where this is all going to shake out. I don't know. I mean, I had some thoughts and questions for Julian about that. It seems like Elon Musk and Doge do

accelerated what the Trump administration probably would have done regardless, especially around hiring and firing, like the large scale reductions in force. I mean, they came out swinging and tried to fire all these, the temporary, the probationary employees that was kind of overturned by the courts. Then they went down this other road of

doing more reductions in force and making that happen in a more orderly way. It seems like he just came in and did this initial bout of disruption, but longer term, I sort of wonder, and maybe this goes back and resolves to what Julian was saying, but longer term, he sent the bowling ball down the lane and the pins are falling and they will continue to fall. It won't happen as quickly and chaotically as at first, but it's still...

will happen. That said, to answer your question part two, it does seem like there is pullback on some of the reductions in force. I'm thinking specifically today of the Social Security Administration. They basically forced out like 3,000 people and they said they wanted to fire 12,000 people. But now when I'm

hearing and from what I understand, the new guy has come in and said, maybe we shouldn't fire those other 9,000 people. We don't even have enough people now. Things are already falling apart. This needs to kind of stop. So there is a little bit of pushback. Yeah. I mean, there was that famous meeting in the White House where a whole bunch of different cabinet secretaries started shouting at Elon and being like, you can't just destroy entire parts of my department like that.

that's you know i'm the cabinet secretary i run this organization so if it's going to happen that should be up to me and that seemed to be like the beginning of the end of elon's sort of unchecked power and the co-presidency that people were talking about in the very early days but i think

In Elon's mind, what he did achieve, and I think in my mind too, what he did achieve was just massively blowing open the Overton window of what it is even possible for government to do. And so now we just have government by...

complete chaos, which probably we would have had anyway, where, you know, Trump wakes up one morning and declares 50% tariffs on Europe, or Kristi Noem wakes up one morning and says they can't be any more foreign students at Harvard, all of these things which would have been like completely unthinkable are now thinkable. In a little way, I think we can give Elon some credit for that, because quite aside from Doge, he had this idea of coming into the government, doing a bit of unthinkable stuff, doing a bunch of unthinkable stuff,

And then some percentage of it works, some percentage of it sticks, right? Most of USAID is still gone, you know, and so long as that percentage is more than like 10 or 15%, we're just in a whole different world. I don't think any of that was strategic though. You know, he, part of his weakness is that he fundamentally doesn't understand what half the stuff he's cutting is for. I think in his mind, that's his strength. Yeah.

Like, there's this wonderful line in the Atlantic article about like, if you don't need to hire people back, then you haven't fired enough people. Right? He's like, we will go ahead and make a bunch of mistakes and cause a bunch of chaos. And yeah, we're not being tactical about we're not trying to like improve efficiency. We're just burning a bunch of stuff down. It's a stupid line, though. It's and people have pointed this out, you know, when these agencies do have to go back and rehire people.

That is doing the opposite of what Doge is supposed to be doing, which is creating more efficiencies. It's in contrast to the first term where Trump's approach to this was to just not staff the government.

You know, instead of coming in with swashbuckling wrecking ball. Wait, I just want to interject. We are talking about this because The Atlantic had a piece earlier this week called The Decline and Fall of Elon Musk, which outlines a lot of the stuff in which Felix was referring to before. And to be clear, I am not saying for a minute that Elon's

trying in any kind of a clinical way to create efficiency here. I'm saying precisely, I'm agreeing with you that he is trying to create, you know, chaos and destruction because, you know, reasons, but Julian, you're the guy who like has been looking at this much more closely than we have. Do you think that the efficiency bit of the E in Doge is,

Was always like a cover for just going in with a wrecking ball and killing things or were there some people who actually believed that that stated aim was a real aim? I mean, I'm probably, I'm not a mind reader. Probably some people within that team imagined that that was what they were trying to do. I, I,

tend not to think that was really the primary goal. And one thing I will say is, it looks to me like, and then this is something we talked with Ryan Mack and Kate Conger about New York Times reporters who came on Watch Guys to talk about their book about about Elon Musk at Twitter character limit, because they noted he really ran the same playbook.

he did at Twitter on the federal bureaucracy. And I'll say at least it is a playbook that is less inviolable in a private sector firm on the scale of, let's say, a social media platform. You can decide, look, we're going to go and sort of strip this down to the minimum viable product

And then we'll figure out if we cut too close to the bone and we can probably get those things back. And if the site is suboptimal for a few days, you know, in the long run, that's a blip and we'll have made some savings. I don't know if that's working out fantastically at Twitter, but it is less catastrophic at an entity of that scale of the federal government.

I mean, I will say in terms of sort of the goal, it is very hard for me and for most budget policy experts to imagine them approaching this the way they have, even assuming generous helpings of incompetence, if the sincere intention was to cut the budget deficit and meaningfully reduce federal spending. It's just nothing they've done is what

A person who is serious about that goal would do what they've done is, you know, essentially look for fast headlines and, you know, a lot of kind of MAGA red meat, right? Not stuff that is a meaningful thing.

source of federal expenditure, but stuff that the Trump base can cheerlead about hearing getting cut. So USAID. Can I run a theory by you, which is that

Really what this is about on some kind of deep level is this unitary executive idea of we just need to consolidate a huge amount of power in the White House and specifically bring it away from Congress. Congress had appropriated this many billions of dollars to USAID. They have the power of the purse. It is up to them how much money USAID gets.

And then Elon comes in and within like a week, he's like, well, nevermind. You know, we don't care what Congress has mandated. We don't care what the law is. They're just not getting the money. We can dismantle that agency without even really, you know, Marco Rubio having a look in. And that degree of power in the White House, as opposed to in Congress, seems to be unprecedented. And also there seems to have been a pretty successful way of doing that.

Well, I mean, it was the explicit aim of Trump in the campaign to overturn what's called the Impoundment Act, which was a law explicitly created because Nixon tried some of these shenanigans back when he was president, you know, not spending the money that Congress appropriated. And Congress was like, no, no, no.

You must do what we, you must spend the money we allocate, blah, blah, blah, and pass this law. That was back when Congress had a spine. Right. And Trump, during his campaign, explicitly said, we want to get rid of the Impoundment Act. And then instead of even trying to do that at Congress and overturn the law in a...

like a traditional way, even though he has all of Congress is Republican. He has it all. Instead, he just, you know, did exactly what you're saying. He came in and he said, we're going to act like the impoundment act doesn't exist and catch up to us if you can later. And, you know, and now you see like the courts are like slowly trying to reverse some of what Elon Musk started. And in some cases, I don't think that's going to be possible. Like with USA,

AID. I don't think you can put Humpty Dumpty back together, but maybe there'll be more luck at other agencies where firings were prevented more quickly. But I don't know. I mean, of course, part of the point, I think, of moving so quickly is that you can then present Congress with this as a fait accompli and say, well, hey, too late. Sorry. You know, those people are gone now. They've found other jobs. The former headquarters is Starbucks now. So no use crying over spilled milk. Wait, is that right? No, I mean, that detail I made up. Hang on.

I will say in terms of what are the actual goals of Doge, I think if you infer their aims from what they've actually done, hypothesize at least a handful of things. One is, right, so spending cut theater, a budget ram through that's going to add, what, $2.5 trillion to the federal debt over the next decade. The savings from Doge, you know, maybe $1.

I mean, they're claiming 170 billion. I would say half that would be optimistic as the real number. The goal was 2 trillion. Right. I mean, obviously nowhere near that. And almost certainly nowhere near. Per year, which is like 20 trillion over there. Yeah. I mean, I think the more realistic number might be 15 or 20 billion a year. So just.

Obviously, on Net here, they're increasing spending and debt by a huge amount, but they've got all these very headline-friendly things. So it might feel, if you're a sort of not super attentive voter, like, well, I'm hearing about all these cuts. What do you mean increasing the debt? They're cutting spending, you might think. Another is...

as Felix was saying, really centralizing control here. Doge's effort to control the Bureau of the Fiscal Service's payment system, I think is huge to the extent that that is more directly under the control of the White House. You make oversight more difficult and you make intervention by courts more difficult because

Essentially, you've got a small number of people with their hands on the keyboard who can say, oh, Marco Rubio, you wanted to spend and this actually happened. You want to restart some of those USAID grants? Sorry, nope. You know, big balls in his in his hoodie has decided that that funding is not going to go through, even though you wanted it to. So that's a second important thing. A third is really remaking the character of.

the federal bureaucracy effectively turning a traditionally nonpartisan civil service into a kind of patronage system for

Trump loyalists, which also, again, reduces the risk of whistleblowing or people deciding to obey a court order rather than a directive from the president or otherwise having qualms about following dubious or unlawful orders. And then finally, a big one, I think, is the consolidation of databases. A lot of what the efficiencies Doge is finding are ultimately about

unifying and creating data flows across federal databases that were by law segregated and siloed deliberately for privacy reasons and in a sense to prevent misuse of that information. Wait, to prevent like tax information from being used to deport people?

For example, right. I mean, one of the ways you encourage people to provide veridical information to the government is by ensuring them that, yeah, if you accurately report your income, barring extraordinary circumstances, this is not going to be used for immigration enforcement. It's not going to be used to punish you because you make charitable contributions to the wrong organization. Right.

Well, what we're seeing now is Social Security and IRS data being accessed or attempting to be accessed for immigration purposes to try and ferret out voter fraud, or at least to ferret out something that they can claim as evidence of voter fraud. So I think that is sort of the bucket of things they're actually accomplishing. In terms of what's happening in the markets, it's kind of interesting if you look at the PayPal mafia, the evil twins of Elon Musk and Peter Thiel,

When Elon leaves the government and goes back to Tesla, Tesla stock goes through the roof and Tesla shareholders are overjoyed about this. Meanwhile, the big beneficiary in the markets of all of this, exactly what you're talking about, like unifying of databases, is Palantir. It's Peter Thiel's company, which is also going through the roof. Right.

Right. I guess the fifth motive is self-dealing. Just make everyone rich. I'm sure somewhere Elon has a stake in pound here, but those people all have weird frenemy relationships. I have no idea what the relationship is like between Elon and Peter. It just occurred to me that Doge, even if you take like the good faith assessment, like they wanted to come in and like cut costs and improve efficiency. It's kind of like the equivalent of like Suze Orman, like

wagging her finger at people and saying, don't buy coffee and don't buy avocado toast, and that will fix your budget problems. It's literally the same thing. Even if they really figured it out how to cut the cost they have been attacking, it's like, what, 1% to 2% of the overall budget? It's not going to move the needle, friends. It's not even 1%, yeah. Look, I like to try and assume good faith when possible, but it is, again,

I think very hard to look at this and say, yeah, this is something any reasonable person who has even talked to a budget expert could think is a sensible strategy if really your goal is to meaningfully reduce waste as opposed to generate a lot of headlines that make it sound like you're reducing waste. A lot of the folks we talked to who had either resigned because they saw they were about to lose their jobs or were fired by Doge told very similar stories.

along the lines of, well, I had been getting, you know, so glowing stellar, you know, five out of five, whatever performance reviews. And then a month into the new administration, I hear I'm being laid off for poor performance, but there's no metric by which they possibly could have come to that conclusion because all the data to date, at least was saying my performance was fine. You know, if you cared about cutting waste, you know,

and, you know, actually wanted to make cuts that were cost effective, you would take a little time first and figure out what you were cutting and whether it was wasteful. You know, you wouldn't be rushing to have a wall of receipts and a list of cuts and

three weeks in. Elon and Trump, one of the reasons they love each other is precisely that their fire shoot aim, they never think things through before doing it. They do it first and then if it doesn't work, they backtrack. Yeah, that's also just as kind of inherent part of tech culture in tech companies where the idea is that, you know, if we run into a wall or there's a problem, we'll fix it in post and you can't really do that here. So one of my questions is how much of what they've wrecked is just broken now?

I mean, you know, nothing is in the long run irreversible. But I think, you know, the point you made there is when you either, you know, fire people or create circumstances in which employment in a particular sector seems so precarious that no one with other options, you know, considers that an attractive career path, you make things very difficult, right? You can, as with the example of USAID, you can say, all right, all these people are fired overnight.

overnight, essentially, if you like. And maybe those people ultimately get rehired. But those people have to pay rent and buy groceries in the meantime. So not 100% of those people are going to sit around waiting to get their old jobs back. So you may find key components of your staff have gone. I think DHS is in very much the same boat. If you fire an entire workforce, it is

not nearly as easy a month or two or a couple of years later to say, oh, now we need to reassemble it, right? That takes a long time to staff something up from zero. One of my theories about why Tony Blinken was such a disappointing Secretary of State was that he inherited a

a state department that had been completely eviscerated in the first Trump administration. And that without the kind of institutional knowledge that state has always historically had, it was really difficult for him to build that back up and create a department that could actually do its job. I mean, I don't think that's the whole story by any means, but I think it's indicative that once you break something, it takes a really long time.

to build it back up. A lot of the inefficiencies in the federal government come from some of this already. Like I've talked to people who work on the tech side,

Right.

lifelong civil servants there doing the work and now we've set this precedent of like upheaval every four years that's going to be bad overall for efficiency in the long term we won't have a more efficient government we will have uh more you know hot take government there'll be plenty to talk about so julian i'm sure your podcast will continue indefinitely or at least for the next few years thank you very much for coming on yeah of course my pleasure

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Emily, can I ask you a personal question? Yes, but I may choose not to answer it. Go ahead. Are you on GLP-1s? Are you on Ozympic? Because I read in the New York Times that everyone is on Ozympic. I am not.

I am not on Ozempic, Felix, but I'm so flattered you thought I was. You know, you're declining my offer of drinks and I'm like, what? So I am. I'm microdosing it though. So what? You're microdosing Ozempic? Ask me anything. First question, how do you do that? It's just a lower dose. It's usually like half the recommended dose. And so it just mitigates, you know, the side effects mostly. And because I'm a small person, I'm like 5'1". You're so tiny. Yeah.

I don't need, I think, as big a dose for it to be effective for me. But you still inject it? Yeah. What are the side effects that you were worried about? Mostly nausea, because I'm highly sensitive to that. And have you found yourself spending less money in restaurants as a result of this? A little bit. You know, I do notice being less hungry and, you know, craving things like carbs less. So I think I'm more likely to order a salad and that's it. And do you worry that this is bad for the restaurant economy?

It doesn't keep me up at night, no. I still spend so much money in restaurants compared to most Americans that I feel like I'm doing my part here. Well, we're talking about this because the New York Times had a nice piece the other week that we wanted to talk about last week, but we didn't anyway. It's called Group Dining on Ozempic. It

It's complicated. And it starts off with a nice anecdote about a fellow who is 6'2 and weighs 210 pounds and likes to eat. But then he goes out to dinner with his friends. They're all on Ozempic and no one's eating anything. And he's just like sitting there chowing down and he looks up at everyone else and they're kind of just pushing the food around the plate. And he's loving it because he's managed to crack the system. And I love this, which is like he

winds up making sure they always do this thing that everyone does these days, which is, we'll just get a bunch of small plates to share. And then he eats all of the small plates to share. And then everyone else has the same restaurant experience of being able to taste all of the good food and having the conviviality in the restaurant and the senior and all the rest of it. And then like, he provides the very useful service of not just sending all of those small plates back untouched and offending the chef. So he's like,

Everyone needs one stomach at the table who can just eat all of the food. And he does that. I think it works out great. I don't know. It seems like it upends like the social contract of going out to eat if like no one is eating, but you're the one, I guess I identified with this guy. You don't want to be like the one person who's just like going for it with the food. And then you look around and no one else is eating. It's very uncomfortable. And I don't know exactly what to make of it, but like,

Why go out to eat if you're not going to eat? Oh, there are a million reasons to go out to eat if you're not going to eat. But I think you've put your finger on it. And this is also in the story is, you know, you kind of need to get over the uncomfort that is associated with eating when other people aren't.

And you're right that it can feel uncomfortable. But I think one of the reasons that it feels uncomfortable is because, you know, gluttony is one of the seven deadly sins and eating is in like,

The crazy, like fattest mindset is considered to be like a bad thing and people should eat less and not eating is a sign of great self-control and is virtuous. And therefore, like you feel like you're surrounded by virtuous people and then you're the sinful glutton. And so that's bad.

But yeah, I think we just need to flip that on its head and be like, no, I am the guy who's rising to the occasion of like being able to justify us all going out to eat and not offend the chef and, you know, keep this restaurant afloat. And I am going to do this service of eating the food. And you guys should all thank me for eating the food. Is that you, Felix? I volunteer. I volunteer as tribute. Okay.

But to go back to what the piece was about, you know, how you split the check when a lot of people are on an Zympic. To me, this just parallels this sort of ongoing conversation around how you split the check when people are increasingly sober.

and alcohol is a big piece of the check. I mean, and to be fair to the piece, it was like, it was much, there was relatively little on check splitting, but obviously, yeah, you just split the check equally. Like it's all shared plates. Everyone gets to eat as much as they want. And as the ozempic person, you, you know, the people doing the eating are kind of doing you a favor. It's like the idea of, um,

you know, I consumed less salad, therefore I should pay less money. Like one, it's unworkable on a practical level, but two, it kind of misses the whole point of having a group meal in the first place. Because you're saying, Felix, going out to eat isn't about eating. Correct.

I can't go all the way there with you. It is also about eating. What I do think is that restaurants are going to, or they already said this in the piece, like some high-end restaurants are like adjusting their menus. They're doing shrinkflation basically, selling half portions, small plates. I don't think we need to worry about the restaurants because they're going to figure out how to still make you pay

for less food now, right? - I think that's right. I think that when people go out to eat, you know, certain restaurants are kind of mentally at certain price points in terms of like, if we go to this restaurant, we'll pay $50 a head, we go to that restaurant, we'll pay $100 a head.

And like the restaurant will just set the prices for the dishes. So that's roughly where the check is going to wind up and people will pay how much they expect to pay. And that will probably mean nominal dish price inflation or as you say, shrink inflation. Now the dishes will get smaller, but still cost as much.

Which I guess for those of us who aren't on a Zen pic is going to make meals more expensive. But we're just going to have to make sure that we always include some Zen picites in our dinner parties. Always invite Elizabeth. Yeah, I'm pro small plates generally because I'm like a small person. I don't eat that much categorically. And so every time I go to a restaurant with big portions, I never finish whatever I'm eating. And then invariably, if it's a nice restaurant, the chef comes out and says, oh, I'm sorry, did you not enjoy your meal?

your meal. And this happens every time. And so I always want to have like a, it's like sometimes I see them coming and I'm like, uh, it was great. I'm just not that hungry. And this is a recurring thing. So,

I'm pro small portions or charging for half portions. Do you now say, it was great, I'm on Ozempic, like that one woman in the piece where she just tells the chefs, I'm on Ozempic, I really love it, but I can only eat so much. Maybe I should start doing that because this has been a lifelong problem, way before Ozempic. But yeah, now you have some language which defeats it. Wow, I literally have never not finished Ozempic.

a plate of food. My grandmother used to applaud it. So that positive reinforcement has carried me through the next few decades. Yeah. Now anyone with like a Jewish grandmother, you know, you not only finish your plate, but you get another plate and you finish that one. And then you get a third plate and you finish that one. And the more you eat, the happier they are. Yes. Such a good eater.

Thank you. So yeah, you and I, Emily, we will continue to wave the flag for eating. I'll still feel uncomfortable though. That's the difference. Will you feel any kind of guilt about like freeloading on your GLP-1 co-eaters? It's just not comfortable. You just want to be, when you go out to eat with a bunch of people or one other person, you kind of want to be like in the same-ish place, you know? You want to be in the same speed. I'm never at the same speed. The salmons eat so fast though, you know? Yeah.

Even when everyone finishes their plate, I finish my plate like 10 minutes before everyone else. I've had dinner with Felix. This is true. This message is brought to you by Apple Card. Picture this.

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We should have a numbers round. Emily, do you have a number? Okay, my number is 233. That is the number of years that the US has been minting pennies. Ah!

And we learned this week that we will stop minting pennies. You can still use them if you have them. But the U.S. is walking away from pennies. And as Felix explains in a story that I recommend, this may all be folly. The intention is to save money. But if we walk away from the penny, it pushes more people to the nickel. And that costs even more money to make pennies.

We lose even more money on nickel production than we do on penny production. We lose like nine cents a nickel for every nickel that we make. And if we wind up using more nickels as a result of debauching the penny, it's a false economy, Mr. Trump. Very Trumpian math. Yes.

Elizabeth, do you have a number? My number is 2 million and that's euros. And that's how much Nestle has been fined for labeling Perrier as natural water when in fact at some of the production plants, they do filter it. By filtering something that makes it unnatural? In France, it does. Wow, that's some RFK logic right there. But my favorite detail in this story is that there's a specific Perrier plant in France where they hid the

filtering mechanism behind a movable armoire so that when the inspectors came in it was just you know it's like a secret door movable armoire it's the shawshank perrier so crazy my number is 5.5 trillion

We like a nice large number. 5.5 trillion is a number that came out in an FTC trial this week and is apparently the number of call minutes per year that are hosted on WhatsApp. That when people call each other on WhatsApp, if you add up all of those calls per year, it comes to 5.5 trillion minutes a year. And to put that in perspective, if you look at all of the calls

phone calls made on US cell phones every year across every single cell phone network in America, it comes to $2.4 trillion. Do you ever think about all the money you spend on long-distance calls in the before times? I sometimes do. So crazy. And it's fine. It's kind of wild how WhatsApp phone calls are just the standard way that people talk to each other in most of the planet.

And yet like America is this one sort of holdout. People like FaceTime in America. Yeah. Well, only the elite with Apple phones. Right. And soon to be more elite if these 25% tariffs happen. No, but this is the point. Like everyone else in the world is just like, we use WhatsApp for video phone calls.

And WhatsApp video phone calls are fine, and they work very well for people on iPhones calling people on Androids. Only in America does this become a problem because they don't use WhatsApp for these things, and they use FaceTime instead. Now they're like, oh, you have the wrong kind of phone. I can't FaceTime you. Just use WhatsApp like everyone else on the planet. But I think that's it for us this week.

Thank you for listening. Thank you to Julian for coming on to talk about Elon Musk. Thank you to the gentleman Molly for producing and thank

Emily, you'll be back on Tuesday with a television money talks. Yes, it's a must listen with Slate editor-in-chief, Hilary Fry. We were talking about the Apple TV Plus show, Your Friends and Neighbors, and it's a really super fun episode. Even if you haven't watched Your Friends and Neighbors, if you're like a Jon Hamm type fan, a Don Draper kind of person, you should listen. All right. I have never watched it, but I will tune in. And

And then after that, we'll be back yet again the following Saturday with even more Slate Money.

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I'm Leon Nafok, and I'm the host of Slow Burn, Watergate. Before I started working on this show, everything I knew about Watergate came from the movie All the President's Men. Do you remember how it ends? Woodward and Bernstein are sitting with their typewriters, clacking away. And then there's this rapid montage of newspaper stories about campaign aides and White House officials getting convicted of crimes, about audio tapes coming out that prove Nixon's involvement in the cover-up. The last story we see is Nixon resigns. It takes a little over a minute in the movie.

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