Oligarchy in the USA
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Hello and welcome to Slate Money, your guide to the business and finance news of last week, which was a week in which TikTok existed. I am Felix Salmon of Axios. I'm here with Emily Peck of Axios. Hello, hello. I'm here with Elizabeth Spires, who writes for The New York Times and does all manner of other stuff. Hello. Hello.

We are not going to talk about TikTok this week because we have no idea what's happening on Sunday. This show, as you know, is coming out on Saturday, but probably next week we will. So instead, we're going to talk about this idea of Joe Biden's, as articulated in his farewell address, that America is becoming an oligarchy. We're going to ask whether it's becoming an oligarchy, whether it's been an oligarchy for decades. We're going to talk about the right to repair and

and whether anyone ever repairs anything anymore. We are going to talk about short selling and whether that's a thing anymore. Everything's going away, people. We have a Slate Plus segment on even demand for Harvard MBAs seems to be going away. It is a wistful thing as the Biden administration disappears into the rearview mirror. Everything else is going away as well. But we will talk about it all coming up on Slate.

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Okay, so I want to do a quick straw poll just so I know where we are.

as of this new era that we have just begun. Emily Peck, do you think that the United States of America is an oligarchy today? Yes, I do. Elizabeth Spires, do you believe that the United States of America is an oligarchy today? Yes. Wow. Should I switch to no to make this more interesting? No, I'm going to take the no side of this. I'm going to say that just...

Because you have a lot of wealth inequality. It is not ipso facto make you an oligarchy that oligarchy requires oligarchs. And I don't think that if you look at America over the past, however many decades or years, that it's very easy to point to people and say, Oh, that is an oligarch. And we are beginning to see the emergence of the first possible oligarch in Elon Musk. But like,

That's new, and it doesn't mean that that is where America has been for some time. But according to the definition I read in our research, one of the top oligarchy researchers defines oligarchy as a small number of people empowered politically by massive wealth. I think we have had that in the United States all along.

I think for a while, you know, after the Great Depression, during the New Deal, and maybe a few decades after that, their power was like depressed a little bit because unions were strong. And because coming out of the Great Depression, people were mad and wanted more power. And there was more of a sharing of the wealth. And those oligarchs had less power in that period. But for the most part, we've always had oligarchs.

I would argue that we've never not been an oligarchy. I mean, the founding fathers were rich guys who didn't want to pay their taxes. And it's just a matter of the extent to which wealthy have had power at different points in our history.

So I feel like this is maybe a definitional thing. I will take Elizabeth's thesis that we've never not been an oligarchy as kind of, I'll reverse back into that as an idea of how she's defining oligarchy. You know, if we were an oligarchy during the Carter administration, then in that sense,

okay, fine. If we were an oligarchy then, then we're an oligarchy now. But I think the fact that American politics has always favored the rich is, at least in my mind,

separate from there is a small group of people who have turned financial wealth into political power. And my general shorthand for many years now has been that it's much easier to turn power into money than it is to turn money into power. And if you look at the very rich people in America, the vast majority of them are not actually politically very powerful at all.

I would disagree with that. I think there's, you know, just because we have campaign finance laws that allow money to participate in power in a way that I think most of the public is just not really aware of. You know, when something really big and on the nose happens, like Elon Musk donating $250 million to the Trump campaign, that's certainly a little bit of an outlier. But if you look at how campaigns are funded and who can run for office, you

All of that's controlled by money. It's very expensive to run for office, and it's a full-time job. So part of the reason why we have a gerontocracy in Congress isn't just not wanting new people. It's that those people can afford the campaigns, and younger people generally can't. Can I just make a distinction here, Elizabeth? Because I think this is the key distinction in my mind. I totally agree with you.

The U.S. politics is incredibly skewed to the interests of the rich. And friend of the pod, Mithu Gulati, has shown quite impressively that this is true even at the Supreme Court level and on the judicial branch as much as it is in the legislative branch or in presidential elections. Poor don't vote as much as the rich. And broadly speaking, the upper middle classes and the rich have...

political power way beyond their numbers. We don't live in a sort of one person, one vote democracy where every single American has equal political power. We're not even close to that. So on that front, I would completely agree. I just want to sort of take it one step further and

and say, well, beyond just rich people have power and politics requires money and therefore people with money have political power, which is totally true. Who are the oligarchs? An oligarchy requires individuals who have political power, significant political power. And that doesn't mean, that basically means more than just a low level of corruption of I donated a bunch of money to your campaign so you should vote in this way. Correct.

Corruption is not a prerequisite for oligarchy, although I think it's very often a side effect. It's really just a description of structural advantage that wealthy people have in a political system and how much access to power they can buy. If that's all you're defining it as, is there's a structural advantage for the wealthy, then okay, I will say that we're oligarchy. Yeah.

It's more than that. First, I would say you mentioned Me Too's paper on the Supreme Court and how it mostly rules in favor of businesses and the wealthy. I think the Supreme Court, if you look at the past 10, 20 years, is completely captured by the wealthy. I mean...

And in very explicit and corrupt ways where, you know, justices are taking private plane trips and lavish vacations and getting their homes purchased by billionaires to just like the everyday rulings that they're handing down that almost always favor companies and the wealthy. Yeah.

And one of the things that Me Too really finds is that this is just as much a function of the people who we think of as the left wing of the Supreme Court, you know, someone like Sotomayor as it is of someone like Roberts. Right. And then I would say there's also, I think, explicit examples of oligarchy in practice. And maybe you'll push back on this, but

So as we're recording, the Supreme Court just upheld the TikTok ban. But right now, no one really thinks it's going to happen. Trump used to support the TikTok ban. He doesn't anymore. And one reason, which has been reported, though Trump didn't say this is correct, is that

There's a Republican mega donor billionaire called Jeff Yass, who he talks to Trump and maybe changed his mind on the TikTok ban. This is something Congress, you know, they all voted in favor of it, right? They voted for this law. Now all of them are, not all of them, many of them are backtracking. They don't want this ban. Trump doesn't want this ban.

Schumer doesn't seem to want the van. Why not? Why did Schumer change his mind? Why are people changing their mind? Why? I don't know. Oligarchy? Maybe. Let me just get this straight so we're clear about what you're saying. Is that if there are some very rich individuals are unhappy with the

TikTok ban and who want it to be reversed and who by power of their political connections, which they built up with many political donations over the years can bend the ear of people like Trump or Schumer or whoever, or Biden, because Biden has now said he wants, he seems to be moving towards not, not implementing the ban as well. Then that kind of direct influence over what the government does is,

Is ipso facto an oligarchy? Yeah, I mean, I took that definition seriously that I mentioned before. Small number of people empowered politically by massive wealth. There's just no question that in the United States, there are a small number of billionaires, rich people who have a lot of power and sway with political leaders and lawmakers by virtue of their money, the money that they use to donate to politics.

I think there's a feature of American culture that prevents people from calling it that. And I think it's that the American dream myth is so prevalent and embedded in everything, you know, that we sort of want to believe that any story of, you know, somebody who becomes very wealthy by starting a business is a dream.

is just fulfilling a narrative arc that we generally appreciate in American society. And so I think when we use the word oligarch, I think the average person thinks of like Russia. The corruption aspect of it is a prerequisite, but it has to be very overt corruption. There's not really much discussion about whether money in politics is inherently corrupting in a way that's legal or

that might not be ethical. I think the big change now, because I sort of agree with Elizabeth that we've always kind of been an oligarchy, but like extreme and less extreme versions, depending on the economic climate. But the difference now is just, it's just in your face. Elon Musk is in your face. They're all in our faces all the time on social media.

And it's kind of just become shameless, whereas before it was more behind the scenes. Well, also Trump's cabinet picks, too. It's even during the last administration, you know, when he's plucking rich friends. You know, we've always had an oligarchical system in terms of appointments for ambassadors. You know, those have always been kind of handed out to people who are big donors.

But when you look at the entire cabinet lineup and you have the sort of wealthiest cabinet in maybe American history, and a lot of these people are just wildly unqualified, I think that makes it a little bit more front and center. Yeah, they used to be wealthy and qualified. I mean, yeah. Or, you know, in the case of the Biden administration, they were not particularly wealthy and qualified. But to your point, even...

Even when the cabinet isn't wealthy, they're still in some way or another controlled by the people who are. To various degrees and extremes. I think it varies a lot. Obviously, Trump administration appears to be more captured by the wealthy donor class. And maybe it's to be fair, maybe it's just like because those are the people Donald Trump likes. That's who he knows. That's who he respects and likes, you know? Yeah, there is definitely a kind of billionaire affinity thing there.

billionaires for various reasons really like to hang out with each other. I totally get that. I get it too. Like there are billionaire problems that non-billionaires have no sympathy for and like the billionaires can kind of like understand. One of the things I wrote a week or two ago was looking at the number of billionaires on the Facebook board.

And when Mark Zuckerberg appointed Dana White to the board, people didn't really notice he also appointed two other new billionaires to the board. I think there are now seven billionaires on the Facebook board, which is a wild number of billionaires to have on a corporate board. One of the new ones that he appointed was John Elkann, who made his money the old-fashioned way. Wow.

by inheriting it. He's the grandson of Gianni Agnelli and now runs the Agnelli family office, basically. We're talking about oligarchy because President Biden, soon to be former President Biden, said the U.S. was at risk of becoming an oligarchy in a speech he gave this week. When Scott Besson, the incoming Treasury Secretary, at his confirmation hearing this week, Bernie Sanders brought it up and he was like, do you think we are an oligarchy? He's like,

You know, and then Sanders is, oh, the richest three people have more wealth than the bottom. And Besson was like, wow, I mean, look at the richest three people. They're self-made. You know, he started to go into the whole, like, they're self-made, therefore it's okay. Which I don't really understand that argument, but it really goes back to what you were saying, Elizabeth. Like, we don't think we're an oligarchy because, you know, Zuckerberg created Facebook. He's a college dropout, Emily. It's the American dream. Right. No, but here's my question for both of you.

which is that it is just empirically true that what we're calling like the billionaire donor class is a small subset. It's a minority of the billionaire class.

But if I'm understanding you correctly, not all billionaires are oligarchs, but the ones who donate a lot of money to politicians are. Is that what you're saying? The ones who have access to political power by virtue of their wealth. So it's not just donations, it's other stuff too, particularly with somebody like Trump, who is really genuinely chuffed to be in the room with a bunch of other billionaires because he wouldn't have had that access during his pre-presidential life. So it doesn't even necessarily need to be about direct donations.

you know, contributions to a campaign. It can just be what sort of access do you have solely based on the fact that you are extremely wealthy. Part and parcel of being an oligarch is the idea that you are sort of building this flywheel of turning money into power and power into money, right? And that you are using your political influence to change the

The law in ways that makes you more money and then you take that money and you put it back into more political influence and so on and so forth. Right. And that is something that is happening sort of entrepreneurial types understand. Right. They have spent their whole life trying to make money and they've been good at it. A huge chunk of the billionaire class.

is not particularly entrepreneurial and does not have particularly much interest in making money. So not all billionaires. Felix is saying not all billionaires. So no, I'm just trying to understand when you're talking about the oligarchs, are you talking about all billionaires or are you talking about just the ones who are trying to turn their money into power? On some level, if we are an oligarchy, we need to be able to draw the line between the oligarchs on one hand and the

the non-oligarch billionaires on the other. Because otherwise, it's a distinction without a difference. If every billionaire is an oligarch, then we're not really an oligarchy. So we need to create top 100 oligarchs? I don't understand why that would be important. It's because the disadvantages of an oligarchy are that you have political power concentrated in

in a very small number of people who are not, they haven't gained that power because they're qualified or they're smarter or they've bought into the civic system more. It's just because they have wealth. And that's, I think, what makes it an oligarchy, not whether they do it in a certain way or whether all of them are doing it. It's like, is the system set up to give

wealthy people disproportionate access to the civic process. And it is, it just is.

And it's become more set up that way the past 20 years, definitely since Citizens United. So again, you will get zero argument from me on the sort of weak definition of oligarchy, which is that wealthy people have more political power than non-wealthy people. That has always been the case. I think that's true everywhere. And if it's true everywhere, then it's not.

that useful of a thing to say. Well, but it's not structurally enabled the way that it is here. You know, campaign finance reform efforts have gone backwards, particularly after Emily mentioned Citizens United. And when you have somebody like Trump, who is particularly corrupt by himself, he will...

take those structural advantages and exploit them as much as possible. And that's where, you know, you see the real damage done. Yeah, because in the past in the United States, I wrote down a few things. I already talked about the captured Supreme Court. We mentioned Citizens United, but then there's also there's a diminishing counterweight

to the power of the oligarchs, like the decline of unions, which was enabled by the captured Supreme Court, et cetera, et cetera. So there's no counter force there. And then tax policy, since Reagan basically has given more and more power to the wealthy, it's not redistributive. Something we read pointed out that the income tax was first enacted only for the wealthy and

in the New Deal, can you imagine if we didn't have an income tax now in our current political system? It would be impossible. No way. No way could we have an income tax now. There's just no way. There's so many things we couldn't do right now. We couldn't put- That's because of the oligarchs. Fluoride in the water. We couldn't put iodine in salt. There's a lot of really sensible things that we couldn't do right now. And I think just to sort of argue against myself for a second here, it is probably the case that

that the economic interests of billionaires are broadly aligned and that therefore if I'm a non-political billionaire sitting on a beach somewhere ordering room service from the Four Seasons, then I can kind of free ride on the billionaires who do put the work in in terms of trying to influence politicians. That doesn't make me an oligarch, but it definitely makes me the beneficiary of an oligarchy.

In contradistinction to something like the Russian oligarchy, where if you were a billionaire who wasn't an oligarch, then you are going to be screwed by the

Actually, could we unpack for a second the Russian oligarchs? Because it's my understanding that Putin empowers anyone who has power in Russia. It's all at his behest. So it seems different than what we're talking about in the United States, where it's kind of like the wealthy billionaire using their money to have power.

power themselves. Whereas in Russia, it's like Putin is conferring that power onto rich people. Right. So when I talk about oligarchs, when people talk about oligarchs in Russia, we're really talking about that brief sort of Yeltsin era, pre-Putin, where there was the loans for shares swap thing and like a whole bunch of very politically connected

men wound up amassing a huge amount of both wealth and political power and effectively installed Putin as president in the expectation that they would be able to control him.

And that turned out to be a very bad bet. Something to think about. Because it turned out that they couldn't control him and he wound up like having way more power than them. And there's actually today effectively zero oligarchs in Russia who have any real power over Putin.

So, yeah, Russia was an oligarchy in the 90s, but I don't think it is anymore. Yeah, because that's the danger, right? Oligarchs don't have a military at their behest. Right. And yeah, like Putin can and will throw oligarchs in jail.

So, yeah, the classic example of an oligarchy, of a country that was run by a small handful of billionaires, was sort of Yeltsin's Russia. That started with all the nationalized companies in Russia were privatized, right? And all those oligarchs, it was like a little mad dash to get their company, their piece of the pie. And it kind of makes me think about Fannie and Freddie and how people are talking about privatizing them now and how much those companies are worth.

under the supervision of the US government. And now there's sort of like a scramble, an attempt to get a hold of these companies. It's kind of like, I don't know, there's parallels there. So going back to what Biden was talking about in his speech, saying like, we are at risk of becoming an oligarchy. And I think I'm closer to Biden on this than I am to you two. Like, I don't think we have been an oligarchy for the past however many decades, but I think that there is a risk of that happening.

And I look around not only at Musk, who's like this very sweet, generous kind of individual, but I do look at someone like Bill Ackman who spend a lot of time sucking up to Trump on Twitter and who has a massive stake in Fannie and Freddie and who wants to clearly make billions of dollars out of that stake. And that is a very clear motivation.

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Felix, are you going to repair something this weekend? No, I'm not going to repair anything this weekend. Emily, are you going to repair anything this weekend? No, I can't fix a darn thing. Everything has to be, I have to have a guy come out or send it somewhere or just buy a new thing.

So the news here is that the FTC has filed a lawsuit, has sued John Deere, the tractor company, basically saying people should be allowed to fix their own tractors and you make it very difficult for people to fix their own tractors.

And that's illegal. And it's all connected to this idea of right to repair, which is also connected to this idea of intellectual property, which is basically that increasingly as we enter this world of everything as a computer, including tractors are these days, very, very expensive computers on wheels. What you're buying when you're buying a tractor is a bit like what you're buying when you're buying an iPhone, which is like a bunch of very expensive,

expensive, sophisticated software. And so the companies are saying, well, this is software. We control the software. We're not going to let you go in and fiddle around with the software because this is our trade secret and this is our intellectual property and we're holding onto it. So you can't really go in and repair anything. If you need to fix anything, you need to take it to us. And it's kind of the softwareification of everything.

And the FTC is like, never mind if it's software or not. There's no actual particular evidence that if you allow people to repair things and that's going to cause huge damage to your IP. So just allow people to repair things. The other argument that the companies are making is that if you allow people to particularly fix things that have software components, that that's maybe a security risk. But if that's the argument, arguably the kind of people who are capable of doing that are

and would be inclined to do it for criminal purposes are already going to do it. Right to repair really doesn't affect any of that. My big general vibe around all of this is that this is a sort of losing battle, that it feels very noble to stand up for the right of repair, but that ultimately we are moving from a world where labor is cheap and goods are expensive to a world where labor is expensive and goods are cheap. And

The cost of repairing stuff is just going to become more expensive than the cost of replacing stuff in more and more parts of our daily lives. Companies are making it expensive to replace stuff and to fix stuff, is my experience as a homeowner. It's just, labor is not only expensive, it's hard to find. I think there are fewer people now that can fix things than there used to be. And at the same time, companies have made it harder to fix their things. I recently had

a Samsung refrigerator, the ice machine broke. My Liebherr refrigerator's ice machine broke. And I have no idea how much it's going to cost me to fix it, but it's an insane amount of money. This is like the most middle-class problem ever. My ice machine broke, but I called, you know, like six different repair places. They're like, we don't do Samsung. And I'm like, oh, it must be really hard to fix a Samsung fridge. You know, then I had to go through Samsung, which was like, the journey was insane. I could only text with them like a

bot. And then at some point a real person came on and I was like, are you a bot? And he was like, no. And I'm like, how do I know if that, and, and then it was like, we'll send you a form and you have to fill out the form. And if you fill out the form, right, then we will send a person, but we won't tell you what day the person is coming. Like they said in five business days, we will let you know what day the person is coming and you have to pay $180 for us to come, but we don't, we're not saying we can fix it, but these are the terms.

And there's no one else that would fix the Samsung refrigerator. And reading the prep for this right to repair, I couldn't help but think like, does Samsung make it so? You know, is that why I couldn't get anyone else to fix the Samsung thing? Then finally, I jumped through all the hoops. You know, it was a real challenge. I have jobs. And finally, the Samsung person came, left.

literally five minutes. He came in, he was like, oh, your blanga flanga is broken. I have a new one in the truck. He goes out to the truck, takes the old flanga out, puts the new flanga in. And I'm like, is that it? How do you know it's fixed? It's been five minutes. And he was like, no, it's fine. It's fixed. Just give it an hour. The ice will ice up or whatever. And I promise it's fixed. And he was gone, literally like a 10 minute repair. And that's it.

And it worked? Oh, yeah. Now it's back to normal. It's totally fine. It costs like $350, something crazy like that. It must be that I think, and please call or email me and let me know, like, is Samsung preventing people from fixing the refrigerators? Because the repair seems so simple. You couldn't help but wonder if they had made it hard for an outside company to do it. Yeah, but it was probably a Samsung flunger and it's not easy to find the Samsung flunger. No, we just had...

No one knows how to install a Flunga.

It's not hard. Here are two bright spots, though. We have established some right to repair rights for cars. You can now take your broken car to pretty much any place that's capable of fixing it. And they now have some access to diagnostic tools, even if your car is super computerized.

So that's at least one area where there's a little bit of a model for doing it. That's interesting, too, because I read Massachusetts passed a right to repair law that forced the car makers to share that stuff with auto mechanics. And then the Massachusetts law was adapted nationwide. Is that right? Is that why we have better rules for cars?

Well, it made sense for the companies to do it because they didn't want to have two systems, one for Massachusetts and any other state that might adopt it. It made more sense to just kind of adopt a national standard because it's cheaper in certain ways or cheaper long-term. But I do understand that software, I mean, used to be if you bought like an appliance or something,

It didn't have software in it, you know? It was just a toaster. It just was a refrigerator. Oh my God, old toasters were amazing. Have you, like, disappeared down the vintage toaster rabbit hole? If you have a toaster from, like, the 1920s, it's just the most perfect and amazing thing, and it works perfectly, and no modern toaster can...

compare. When I was a kid, my mom used to, I don't care how broken a thing we had, would go find like the specialist or the person who could fix all the things. So I feel like once a week we'd have an errand where you'd go to like the vacuum cleaner guy who also fixed the mixing stand and the toaster and maybe your car. And now there's just kind of not that. I've lost track of how many bios of like tech entrepreneurs begin with like

And then when he was 11 years old, he started a business repairing televisions in his parents' garage. And all of the local neighbors would come along and get their radios and TVs prepared by him. And they thought he was a genius. And like, that just doesn't happen anymore. But the few people who can repair stuff, they're the future. AI is going to take all the MBAs jobs, as I think we're going to talk about in the plus section.

But the AIs, they can't take, you know, when my washing machine broke, I need to call a guy, right? And like those guys, there's fewer of them and they're in demand still. But like TV repair person is a job that no longer exists. Right. That's true. But now we have the Genius Bar and other computer repair shops. I was talking earlier about how like umbrella repair person is a thing that no longer exists.

Even more broadly, the whole concept of a tailor, someone who will take your clothes and repair them or let them out or take them in or anything like that, is a thing that used to be ubiquitous and is now increasingly difficult to find.

cobblers as well. All of these jobs where the idea is that the value of the object is high enough, that it's worth putting a significant amount of hours of labor into keeping it good, that mathematics doesn't work so well in a world where the labor becomes more expensive and the object is

made in China. Yeah. There's a lot of consumer support for right to repair, partly because I think people have this intuitive sense that if the reason why you can't is either planned obsolescence or just wanting to upcharge for aftermarket services. And people get very frustrated with the idea that, you know, particularly for expensive things, like I paid for this thing. I should not have to continue paying for it forever simply because the company won't let me

repair it myself if I know how to do that. I was thinking about that and it's like the idea of owning a thing is changing and it's becoming a weaker bond. Everything is rented in one way or another. It started with music. Like you used to own your albums, your tapes, your CDs, whatever. Now we've all sort of come around to

not owning any of that. And now with phones too, it's like I own my iPhone, but my ownership of it is contingent upon Apple software updates and things like that. Like it's not fully mine the way whatever was in the past. This rental mindset has changed

become so embedded that I recently had a conversation with a book author who told me that she was kind of resentful of anyone who checked her book out of the library and that she felt that like those people should be paying her like a dollar each time because she has that like rental mindset she's like you're getting value out of my IP and so I should be getting some money from that oh no

I don't know any authors who feel that way, but I understand the point. I can tell you there's at least one. But I do think that one of the interesting twists to this framing of right to repair, I think 90% of people are all in favor of right to repair, probably much higher than that. It's such a great framing and it's so easy to agree with that you're like, who in their right mind could disagree with a right to repair? And as far as the right is concerned, it's like,

We all have the right. But even if we all have the right, that isn't going to significantly slow down the long secular trend of us repairing less and less stuff in reality. The right doesn't help you if you don't actually take advantage of it.

Although someone said in our prep call, they're like, you just go on YouTube and you watch the video and then you can learn how to do the repair. And I'm like, no, nope. Like my husband definitely can, but I could watch the video 30 times and still be like, huh?

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the playing field. And when I say left the playing field, I do not mean Andrew left who left the playing field a few months ago. He had a short selling company called Citron Research, and that is basically no longer. The latest one is Nate Anderson, who had a short selling company called Hindenburg Research. He has basically said he's shutting up

I will mention that short sellers in general have really fun names for their companies. Like Citron was named because he looks into lemons and Hindenburg was named because he thinks all of the companies are going to go the way of the Hindenburg. Jim Chanos has also closed up shop and is no longer short selling. Bill Ackman came out and said many times that he's not going to be doing any activist shorts anymore after he lost his shirt on.

Herbalife. And we did talk briefly about Hunterbrook in previous episodes, so we won't revisit that. But it does seem as though the number of people who are sticking their neck out there and publishing research on fraudulent companies and overvalued companies and saying, these are bad companies, I'm short this company, it should go down in price.

Those people are getting fewer and further between. They don't seem to very much exist anymore. In the Trump and meme stock era, no one wants to sort of like hate on any companies. Like short selling is just...

and shorting, it's all out of fashion. Starting with GameStop back in 2021 when everyone hated the shorts, I feel like that's the current vibe in the market. The shorts on GameStop were, they became this moustache twirling villain, right? And we did a Slate Money Goes to the Movies on the movie about GameStop, which...

also very much played into that. It was like the normal folks on Reddit and just buying stuff from their Robinhood accounts. And then there were the billionaires who were shorting the stock and getting their comeuppance. And I think a large part of that meme stock spring of 2021 was just

If there's a large short interest in a stock, then you can engineer a short squeeze and make money. And isn't it fun to make money off billionaires rather than short selling is inherently bad. But you're right that it's been a while since Jim Chanos and Bethany McLean were like bringing down Enron and being celebrated for it.

Also, I think part of what short sellers rely on is the idea that, you know, if they're putting out reports that are true and can be verified, part of what they do is intrinsic to making the market work well. And I think going into a Trump administration where, you know, any sort of pushback on corruption happens.

or hurting companies, hurting the private sector, I think is going to be sort of undermined by whatever the administration chooses to do. So I wouldn't want to be a short seller going into another Trump term. And I don't know if the timing is coincidental, but I think that might be part of it. There are two sides to that coin, right? Which is that one of the things you find in a corrupt system

is a lot of overvalued and fraudulent companies. So there's a lot more low-hanging fruit if you are a short seller, if the system is as corrupt as you're implying it's going to become. You're right that there's also more political opposition to what you're doing and more blowback. And one of the things that Nate Anderson said in his sort of exit interview was like,

This is just really hard, painful work and you're constantly being attacked and sued. And I've basically made enough money that I can support my family now. I don't need to do this to live anymore. And I'd rather have a nice life than it's, it's not, it's not easy being assured. So I used to be a equity analyst for an activist investor. And what that involved in practice was I did a lot of due diligence work.

And, you know, you would go in and talk to a C-level officer or CFO usually. And it was always a kind of hostile situation. You know, it's not because the guy was an activist investor. He was looking for opportunities where the companies were heading toward distressed territory and he thought management needed to make changes. Right.

Was he like most activists are activists on the long side, right? They buy companies that they think if they make a bunch of changes, they buy up the stock and they're like, make a bunch of changes and the stock will go up. That's what he was doing. But you still get a lot of blowback when you do that. Yeah, yeah, exactly. But being activists on the short side is even more painful than that. Yes, I would agree with that. Something we read the quote was the market has a structural deficit of skepticism. Like people in the market, they want it to go up.

Correct. Like everything's fine. Like it takes a lot to sort of jar the market into reality sometimes. Well, there's a sense that the market going up benefits everybody, which isn't strictly true. But also, I think one of the things that we saw in 2021 was like there was this clearly overvalued stock in GameStop and a whole bunch of hedge funds.

were relatively quietly, but in large volume of money, short that stock because they were like, this stock is worth a lot less than it's trading at, so I'm just going to short it. And over the long term, it should converge to its natural value, which is lower than it is, right? And that kind of shorting activity, I don't think has gone away.

I think that the number of hedge funds out there who are looking for short ideas and who are shorting stocks that they think are overvalued and doing like relative value plays where they short one thing and go along another thing. And they're saying like, you know, this should be worth more and that should be worth less. That is still happening, but they're just not going public with their theses. And they're not doing the second bit, which is trying to actively cause the stock to go down rather than just take a short position and wait for the stock to go down. Right.

I think that's a real loss. Reading about, I can't believe I missed this back in 2019, but Care.com was the subject of a short seller's activism. Apparently the site was just terrible and the short seller created a profile that said he was Harvey Weinstein. Yeah.

And he was like remoted on care.com to be like a superstar babysitter or something. But that's like a public service, right? The short seller draws attention to something that's really problematic and bad for public safety. You're doing a service and short selling on Enron too. I mean, this is like an important function in society.

There was a statement from Nate Anderson about his decision to step down, but he noted that the company had been responsible for like 65 enforcement actions by the SEC. And in the last year, 27 different CEOs have stepped down as a result of short seller reports. Yeah, no, there is definitely a lot of societal benefit to short selling. And one of the things that I have been reading for the past 25 years

in the US press. And this is just this constant drumbeat. It's this idea that there's something un-American about short sellers and that people just don't like short sellers. And maybe because America is a nation of stock owners in one way or another, people think that short sellers want us all to become poorer and they want our stocks to go down. And that's just like bad for all of us.

And I've read it so often that I'm beginning to wonder whether it's true or whether it's just this kind of piece of received wisdom that everyone just parrots out without bothering to check. Because I don't actually personally know anyone who thinks that short sellers are bad.

That's the oligarchs influencing the narrative. Well, that's what I was going to say. I think it goes back to what we were talking about during the oligarchy segment, which is that Americans are superstitious about criticizing wealth, especially if they think it's coming off the back of building a business, because that's so intrinsic to the idea of the American dream. So I think it's more like a gut feeling that if you're doing something that harms a big company, that you're somehow acting against some unwritten piece of the social contract.

The slate.com sentence that has stuck in my mind more than any other sentence that has ever been published on slate.com was a piece by Michael Kinsley many years ago.

where he said that basically when people talk about small business owners, they're talking about people who empirically speaking are quite rich, that it's big business owners is normal people. Those of us who just have S&P 500 index funds with our own 500 massive stocks in the S&P 500, we're the big business owners. Small business owners tend to be like

much richer than big business owners. And this is this kind of sort of paradox of American capitalism. But it does help explain on some level why everyday people, because we normal everyday people are big business owners, that we would react badly to people who are trying to cause those big public businesses to fall in value.

It is true. Calling them small business owners is a real win for small business owners, right? Because you always think they're the underdog. It's such a sort of Frank Luntz win, right? Yeah. It makes them sound like the little guy. It's great branding. Instead, it's just like some guy who owns like 15 gas stations or something. What's that statistic about how like in more than half of congressional districts, the richest person is the guy who owns the local car dealership? Yeah. Those car dealership owners...

a small business in it. That was Kid Rock's dad. That's how he became so rich. And who was that? Do you remember Daryl Iser and his car alarms? Oh my God, we're going so off topic here. Anyway, I'm

Thank you.

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Let's have a numbers round. Elizabeth, do you have a number? My number is one third, and that's a third of retirement age people own at least 100 books. They're the people most likely to own physical books. And one in 10 own over 500. So this was from a piece about super readers. Unsurprisingly, they skew a little bit toward people with high incomes and higher degrees of education, but

Another factor was whether or not you tend to read using e-books or not. The people who use e-books tend to read more. And intuitively, it doesn't really go into the explanations for why that might be. But as somebody who impulse buys books way more on my Kindle than I do in bookstores, I think that's part of it. E-book readers read a huge amount, and they over-index massively to romance as well. Romance publishing has been supercharged by this.

the ebook revolution much more than most other bits of reading. I think that's because the supply is much higher. My number is five, which is the number of private high schools in Connecticut that pay their head of school more than a million dollars a year. Wow. I have the list here. Loomis Chaffee is at the top, pays its...

Principal Sheila Culbert, $1.73 million in the last year for which we have data. Also Greenwich Academy, Miss Porter, Suffield Academy, and Brunswick. So yeah, that's a place that you can earn a nice seven-figure income, which maybe you didn't know, is being the head of school at a private high school in Connecticut. I bet it's much higher for New York. They should start paying all the principals and teachers a million dollars. That would be amazing. It'd be so good for our...

intellectual capacity as a nation. We underpay our teachers. Emily, what's going to happen? I feel like Felix is going to get mad at me about this number because it might be a rerun. I might be doing a rerun. I don't know. Do people still use the word rerun? My number is three. That is the number of women on the board of directors of Meta. And that compares to 10 men because this is the week we couldn't stop talking or I couldn't stop thinking about Mark Zuckerberg's comments that

companies have been culturally neutered and require more masculine energy. And everyone thinks masculine energy when Mark Zuckerberg comes up. Do you remember that whole period when he was going to have a cage fight with Elon Musk?

That was masculine energy. Right. His whole thing has been this turnaround to the masculine energy, I guess. And there was a blind quote in a New York Times story this week where he said he promised Stephen Miller, even the incoming Trump administration, he was going to change the energy of his company and get rid of all his diversity initiatives and things, blaming it all on the female energy, I

I guess, of Sheryl Sandberg just throwing her under the bus, blaming all of this on her. And she left the board in 2020. So she was on the board. And that's when the board went down from four women to three women. Yeah. And then apropos what I was saying earlier about how he likes to surround himself

by billionaires just like trump does all seven of the billionaires on facebook's board are men of course there's they're bringing the masculine energy when sherwood was on the board she was a billionaire but she left and now it's like there are three women and not only are they massively outnumbered by the 10 men but also none of them have that billionaire energy that zuckerberg

Not only values in terms of we can see that he does because these are the people that he's appointing to his board, but he said when he went on Joe Rogan, he's like, yeah, I really want to appoint people to my board who have made a lot of money. Like that is important to me. Yeah, because they had the entrepreneurial spirit and I guess the masculine stuff.

It's ironic because nothing demonstrates more that gender is performative than Zuckerberg trying to make himself over as this kind of alpha male caveman who kills his own food and fights with his hands and whatever. I went back and I was Googling. I was like, I must have written about their board or something at some point. And I found an article that I wrote and a lot of people wrote back in, I think it was 2015, when he took paternity leave. And every feminist writer, every woman writer,

writer who covered that stuff was like, this is amazing. What he's doing for women by taking paternity leave. It's just like head spinning the transformation here. You're going to end up with five oligarchs in a room, all of them, you know, killing their own food and punching each other.

And they'll wonder why no women talk to them. And that's what the apocalypse is going to look like. Five guys in a room at the end of it. I am fascinated by the Zuckerberg-Musk relationship and what's going to happen to that now. Like, I feel like part of what Zuckerberg is doing with this big sort of MAGA move is trying to sort of get some makeup a little bit with this man Elon Musk used to be his great enemy. Yeah.

But we will be talking about this much more in the past next four years. I'm sorry. I apologize in advance. In the past next four years. In the past next four years. Wishful thinking. Thank you for listening to Slate Money. Thank you for emailing us, slatemoney at slate.com. Thank you to Merit Jacob and Shana Roth and Jessamyn Molly for producing. And we will be back next week with even more Slate Money.

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