Davos is So Back

0:10Emily Peck: Hello and welcome to Slate Money, your guide to the business and finance news of the week. I'm Felix Salmon of Bloomberg with Elizabeth Spiers of New York Times. Hello. And Emily Peck of Axios.

0:24Felix Salmon: Hello.

0:24Emily Peck: And we are coming to you live from the Alpine town of Davos, Switzerland. No, we're not. We're coming to you from New York City. But we are going to talk about the Alpine town of Davos, Switzerland, which has become, like it becomes every year, an Alpine Gab Fest. We're going to talk about why it suddenly seems to be super relevant again. We are going to talk about the affordability crisis and whether it's a thing that exists. We are going to talk about AIs and whether they should be determining who gets jobs or not. We have a Slate Plus segment on celebrities interviewing celebrities and who the best interviewers are and why.

1:02Emily Peck: It's a good one this week, so stay tuned. It's all coming up on Slate Money.

1:20Emily Peck: So back in the day, I used to record Slate Money from Davos. I used to book out a Eurovision studio. It's not just a song contest, you know, from the media center and do a special show from Davos and be all like, let me tell you what's going on in Davos and what Davos is. And everyone would be like, Felix, no one even knows what Davos is. It's not important. No one cares. And then over the years, Davos really did become less important And no one really cared. It was just this increasingly irrelevant Alpine gab fest. And then 2026 happened. And Emily, would you agree with me that this is the most important Davos since 2008, if not ever?

2:06Felix Salmon: Yes, I would agree with you. This is the most important Davos that I've ever seen in my time. I don't really remember 2008 very well, but I remember being at HuffPost and Ariana would go to Davos and we would all have to scramble to like write up all the Davos conversations. And then we would look at the traffic numbers because it was HuffPost and there would be like 100 people. Like no one cared.

2:29Emily Peck: Yeah. I think once actually we had Ariana on to Slate Money because she was like floating around Davos with nothing to do. So I was like, come on, Ariana, we'll do this thing. And she was like, Felix, I have a plan. We are going to move it to the island of Lesbos. it was some Greek island she was like Davos the Swiss have too much money they don't need it the Greeks need the money so we're just going to move it to Greece but so the big news Davos as we know is run by this thing called the World Economic Forum the World Economic Forum as we know used to be run by this guy called Klaus Schwab Klaus got ousted in a bunch of scandals that we don't need to talk about Klaus did he got Klaus did exactly and this is my sort of theory a along with Trumpy things, but mainly my theory A for why Davos is so relevant again is that it used to be Klaus was very important and he tried to persuade all of his important CEO and head of state friends to come to Davos every year to convene.

3:25Emily Peck: And he did a very good job of that. And he was probably as good, if not better than anyone else at doing that. But there was only one of him and he was getting old and crotchety and people had done it every time and people were getting a bit bored of it. He leaves and the board of Davos, which is filled with the great and the good and all of the CEOs and the most well-connected men in the world, and I think even possibly a woman or two, they kind of stepped in and they're like, we need to rescue this. And so for the first time ever, the board started inviting people, including Larry Fink, who's the chairman of the board.

3:56Emily Peck: And when Larry Fink comes up to you and is like, I want you to come to my conference,

4:00Elizabeth Spiers: you say yes.

4:02Emily Peck: And it's not just Larry, it's all of the other people on the board as well. And they're all pressuring all of the CEOs and especially Donald Trump to come. And there was question marks over whether Trump would come. The minute that Trump says that he's going to not only come, but also give like a really important speech and everyone was expecting like some earth shattering speech on Wednesday. At that point, everyone else kind of gets sucked into the sort of power nexus. I remember reading that the Swedish foreign minister was like very high minded and it's like, I'm not going to Davos. And then at some point he's like, I have to go to Davos because that's where everyone is.

4:36Emily Peck: And I think this is the first time that's happened. We had Elon Musk for the first time. We had Jensen Wang for the first time. Suddenly, all these people who are like, that's not important to me, they're friends on the board telling them, come on, come along. You'll go skiing. You'll meet everyone. It'll be great. And they're coming. And so it's become this thing again.

4:54Elizabeth Spiers: How much of this is just people kind of wanting to be there because they're trying to figure out how to deal with Trump globally and they feel like that's...

5:02Emily Peck: Oh, like a lot. And the point is, it's collective, right? So one of the reasons why this was such a good divorce was because important shit happened. There was that meeting between the leader of NATO and Trump, where Trump backs down on his threats to impose tariffs. And Trump meets him and is like, oh, never mind about the Greenland tariffs. You know, I'll work something out. Even more importantly than that, I think, was this incredibly, I've never seen a speech go viral in the way that Mark Carney's speech went viral. Mark Carney's speech was fantastic, and I really urge everyone to read it.

5:37Emily Peck: We'll put it in the show notes. And he was like, basically, you know, he was talking about how the rules-based order in the world, talking about it is silly. And you just make alliances where you can and try to have, if you're like a middle power, as he calls Canada and presumably most of Europe, you kind of need to be very honest about what you're doing and who you're up against and make the alliances where you can. Zelensky gave a very similar speech. He's like, listen, you Europeans, collectively, you're very strong, but individually, you're not. He called Europe a salad, which I liked. He's like, you shouldn't be a salad.

6:12Emily Peck: If you come together, you can be much more than a salad. You can be much stronger than Putin. And the Americans have managed to arrest Maduro. Whether that's a good idea or not, we can debate. But it's obvious that no one's going in to arrest Putin.

6:25Elizabeth Spiers: There are Russian ships off the coast of Greenland.

6:28Emily Peck: Well, we know how to blow up Russian ships.

6:30Felix Salmon: It's like, hey, we Ukrainians can help you in Greenland if you want.

6:34Emily Peck: So there was a bunch of like very important speeches from the likes of Carney and Zelensky. And then, of course, you know, Trump comes out on stage, gives his much anticipated speech, which turns out I'm going to say to have been a little bit of a damp squib, but everyone's there. People are fighting to get into it, literally fighting to get into the speech. And the thing that I remembered the most was the difference between this and 2011, because 2011 was the Arab Spring and everyone was kind of saying, oh, yes, democracy. see, oh, yes, you know, what are we going to do about this? But it didn't seem relevant.

7:07Emily Peck: Whereas I think the sort of upending of the world order that Trump has done is so relevant to all of the people in Davos. They actually want to use this convening to do something about it.

7:20Felix Salmon: For a long time, like I was reading about 2020 Davos and this we're going to change the world kind of vibe that the conference like to have for so many years. So many talks about climate, about this and that. But that was all coming from a place of...

7:36Emily Peck: Noblesse oblige.

7:37Felix Salmon: Well, relative global stability. Power was established. And then the most powerful, if they felt like it could come and say they were devoted to whatever social causes because...

7:48Emily Peck: Committed to improving the state of the world. That's the slogan of the WEF. And the idea is that we are rich and powerful and we will do for you.

7:56Felix Salmon: We will do for you. But now...

7:58Emily Peck: Now it's all self-interest.

7:59Felix Salmon: It's self-interest because who gets to be rich and powerful is a little bit more up for debate right now. And sort of all the power balances have been disrupted by the American president. And these guys are, they're afraid, I think. And that all sort of comes to a bubbling stew at this conference where they all go because they're all feeling FOMO and they all need to get in front of, you know, the president.

8:25Emily Peck: They need to get in front of the president and they also need to get together to work out how can we counter the president. So my ex-boss Nareel Rubini talked about the Fafo Talo Tacos sequence. It's like first you sort of fuck around and find out. Then Trump always lashes out. And then Trump always chickens out. And we had that circle in the space of 48 hours in Davos where Trump lashes out, says that he's going to impose tariffs, and then it's like, actually, never mind. But what you need to be able to do is project some kind of unified front. You need the markets to plunge. You need the banks all to say, no, fuck you.

9:09Emily Peck: We're not going to reduce all of our credit card interest rates to 10%. You need the Republicans in Congress to be like, yeah, no, that's stupid. And trying to put those coalitions together is exactly where Davos excels because everyone is in the same place at the same time. Yes.

9:24Felix Salmon: And someone also pointed out, just to wrap up my previous point, is Davos is always basically a business meeting. But for a really long time, the guy who ran it and the people who attended tried to pretend it was something else. They were trying to make the world great or solve climate change or whatever. But now, in the face of the challenges of 2026, it's returned to its central purpose, which is a business meeting.

9:49Emily Peck: And the Trump threat is just so much more immediate and so much more counterable than the climate. You know, you can talk about the climate threat and you can put together like, you know, G fans or something and you can have panel discussions about how important it is to get to net zero, yada, yada, yada for the next however many decades. but it just sounds like so much hot air and nothing you know and it's impossible to see whether it makes any difference when there's things that can happen within the space of just the meeting you know as we saw this week where trump did that u-turn like in between giving his speech and coming out with a truth which was like two hours three hours something like that like the world changed and people were like oh okay this is important but it's interesting

10:37Felix Salmon: everyone gleefully tweeting about taco or truthing about it or blue sky, whatever people do. I don't know. But talking about taco, Trump doesn't always chicken out. It's only about very specific policies that are threatening to the stock or bond markets. Bro is not chickening out. We don't have to talk about immigration, but he's not chickening out in Minneapolis, as far as I could tell, or, you know, in Minnesota, or, you know, in so many other spheres, there is this little check, I guess, maybe on the president, which is the stock market, and maybe Europe when it can all come together and protest tariffs or whatever.

11:17Felix Salmon: But it's not a principle that applies across the board.

11:21Emily Peck: I don't think that Trump's U-turn on Greenland tariffs was a function of the stock market. I don't know what it was a function of. I don't know what happened in that meeting between Trump but the stock market is basically at an all-time high right now you know it was down what two percent or something ahead of the meeting then it went up three percent or something these are normal moves in the stock market i don't think trump was like freaked like the thing that freaked him out in april was the stock market being down 30 percent you know 20 30 percent not two percent i think

11:55Elizabeth Spiers: part of it too is that trump tends to back down a little bit when he has to meet the principles in person. He's very bombastic on social and behind a camera. But even people that he's disparaged historically, once he has a sit down meeting with them, he usually comes off a little bit softer. And I think it's because he's, you know, more sheepish in person. And I think that's part of what happened with the Greenland situation when he actually has to directly confront the principals, the people he's been insulting the whole time. He softens.

12:25Emily Peck: This is absolutely true. I remember people telling me, oh, my God, Trump is going to come out in a speech on Wednesday and just lash out at and attack all of the people in the audience. I'm like, no, he's not. He's never done that. He never attacks people to their face. He's very good at attacking people on truth or in press conferences or something. But then he meets with them and exhibit A being Sauron Ramdhani, you know, and suddenly he's all like smiles and grins. The only real antagonism to the face that I can remember was that first meeting in the White House with Zelensky. And that antagonism came from Vance.

13:02Emily Peck: It didn't come from Trump.

13:03Felix Salmon: Yeah. I mean, he wasn't very nice about Europe in his speech. It's not like he... Yeah, but he will attack abstractions.

13:10Elizabeth Spiers: No, no.

13:11Emily Peck: Yeah. He was rude about Mark Carney. He made a joke about Emmanuel Macron's sunglasses. That's not flashing out.

13:18Elizabeth Spiers: Fair enough. He did insult Europe as, you know, just an idea in various countries and a few people walked out. But I think he does tend to back down whenever he's talking about actual human beings.

13:31Emily Peck: And we saw this with Lutnik as well, right? With his proxies, the Vances and Lutniks and that lot, they haven't quite got the memo. So they are happy to be rude to people's faces. And then you got that shouting match between Lutnik and Al Gore or whatever. And like, everyone's like, oh my God, that guy's such a dick, you know?

13:47Felix Salmon: With Al Gore, it's kind of surprising because for a long time, people thought he was a dick, if you will remember. I do remember. He won the Nobel Prize, right? Did he win the Nobel Prize? Do I have that right?

13:58Emily Peck: I don't remember that.

13:59Felix Salmon: I'm probably wrong. Yeah, no, he won it. I'm right.

14:02Emily Peck: Well done.

14:02Felix Salmon: It was awarded in 2007 jointly to the Intergovernmental Panel on Climate Change and Albert Gore.

14:09Emily Peck: Wow. Well done, Al Gore. You have a Nobel Peace Prize. Look at that.

14:12Felix Salmon: No wonder President Trump wants one. If Gore has one, Obama has one.

14:16Emily Peck: Yeah, it's only the Dems who get the piece of this.

14:18Elizabeth Spiers: Well, technically he has one because the last recipient gave him. Because Machado gave him hers.

14:24Emily Peck: Framed, no less.

14:25Felix Salmon: I don't think that, no one counts that.

14:27Emily Peck: Or he does. As long as he counts it, that's the thing I think that matters. I don't think he really counts it.

14:30Elizabeth Spiers: The whole event seems to have been sanitized specifically not to raise Trump's ire. So none of these topics, you know, are just completely eliminated from the panels. But also the theme for the whole thing was a spirit of discourse, which is just that means nothing elizabeth the theme for the whole thing always think means

14:50Emily Peck: nothing like that is 100 in line with the themes for the past 40 years that is the same but yeah the sanitization there was like one report in politico i think or maybe it was the fd saying like that the wef had done had carefully scrubbed all of the panels of dei wokeness so that trump would come, which I feel like maybe the White House asked for that, but also they were kind of pushing it an open door. You know, in this post-Schwab world, as you say, like what they really care about is business rather than high-mindedness, you know, like we are going to do for the world because everyone kind of doesn't believe that anyway.

15:29Emily Peck: And so they were like, honestly, you know, we've had however many decades of panels about climate change, which has achieved a bunch of ridicule, basically. Why not just go back to basics, go back to a whole bunch of important people meeting with each other and convening and, you know, being important. And it seems to have kind of worked. Like, I don't think many people in Davos really missed the panel with the king of Eswatini talking about the importance of the oceans.

15:59Elizabeth Spiers: I mean, it's important for... Yeah, climate and sustainability are real issues. They are real issues.

16:06Emily Peck: And they are for business. They are 100 % they're important issues. I just, I'm far from convinced that they're important issues where the World Economic Forum in particular can play a useful role in making them more tractable.

16:21Felix Salmon: It sets a tone and it sets purpose, I think. As much as it was a lot of window dressing and a lot of noblesse oblige, as we've already just talked about, priorities were set. goals were established among some of the biggest companies in the world to address climate or whatever, sustainability, and those did matter. And since we have this new regime now in the US, companies are like pushing towards more fossil fuels in a way that's like actively damaging, because the tone has changed and the fear of punishment has been laid out. So I think it was

16:57Emily Peck: No, I would agree with you on the fact that the tone has changed and the company is careless and they're moving back in the other direction and this is bad. And I would agree with all of that. I would only disagree with the idea that the collective goals being set and the feeling that the corporate world was doing something about that was something that was coming out of Davos so much as COP. I think COP was more important, was always more important than Davos was.

17:25Felix Salmon: It's like a thermometer taking the corporate temperature over there in the cold air. And the corporate temperature has gotten really weird. Yes, I agree.

17:35Emily Peck: Weird and cold and polar vortex.

17:37Elizabeth Spiers: There would not be a refugee run at this version of Davos. Felix, I feel like you have to explain what that is.

17:43Emily Peck: Oh, God. Yeah, no, that was the height of the woke Davos, basically. It went on for a few years. some group, and I can't even remember which group it was, created like a mini refugee camp where you would give up your phone and get thrown into the refugee camp and understand what it was like to live in the conditions of a refugee for 15 minutes. And then you'd come out the other side and they'd give you your phone back.

18:07Elizabeth Spiers: They would blindfold you and you would go through a dark passage and there would be simulated gunfire.

18:12Emily Peck: And every single year it was there. People would like laugh about, oh my god there's a refugee run and i spent many years there and i don't think i ever met a single person who did it but everyone laughed about it it reached the point of davos self-parody basically and now whatever else you can say about it it's not a self-parody anymore why do the cnbc anchors

18:34Felix Salmon: like why do they wear those coats and things when they're hosting their shows such a good question i can answer that question really well yes because i've been on that set oh the answer is

18:45Emily Peck: that it is hugely expensive to move an entire TV operation, a live TV operation, to the top of a mountain in Switzerland. They are making all of this investment and the views are spectacular. The sky is always blue. The mountains are gorgeous. What they say is it is really dumb for us to come all this way and just build the same set that we have in Englewood Cliffs, New Jersey. So they put the set on the roof of the conference center so it's easy to get to but also it's outdoors and it's up at the top of an alp so it's fucking cold and like even with the tv lights which are all now leds anyway so they don't even warm you that much it's fucking cold and the guests come on for five minutes so they are often just wearing like a suit jacket to look good because you can cope with the cold for five minutes the anchors are out there for two hours they need their coats on wow they

19:39Felix Salmon: We should get hazard pay. That's like covering the Super Bowl or something.

19:42Emily Peck: But the answer to the question of why are they wearing coats is exactly the same as the answer to the question, like why are the hurricane reporters always outside when they're reporting on the hurricane?

19:51Felix Salmon: Because it makes good TV?

19:53Emily Peck: Exactly.

19:54Felix Salmon: To put Andrew Ross Sorkin in a coat.

20:10Emily Peck: We should talk about kind of the dog that didn't bark, which was the massive emphasis in the Trump speech on affordability, which, for one thing, I never quite believed because Davos speeches are always international and people never use a Davos speech to prosecute a domestic agenda. No one cares. And the affordability crisis, in so far as it exists, is a domestic issue. It's not an international issue. in any case trump kind of flicked at it for five minutes and then started rambling about something else but is it over i want to say i want please god let it be over i want it to be over so bad like the 10 credit card thing kind of feels this trial balloon that went like the deadline came and went nothing happened and he's banning black rock or black stone or something from buying houses and which is going to make no difference to anything like the only thing he said in his speech was something rude about renters.

21:06Emily Peck: He's like, we're not a nation of renters, we're a nation of homeowners, which is unlike, you know, come on, like renters make for a vibrant economy, they're good for an economy.

21:14Elizabeth Spiers: I have a theory about this. Okay, when Zorn Mamdani won, there was a lot of discussion in democratic circles about how he had been able to run on affordability. And, you know, explain the economic issues better than, frankly, national Dems have done. And of course, Trump and Republicans picked up on this and his approval ratings keep going down, the more people are sort of suffering economically. But he had that call with Mamdani and came away kind of charmed by him. And he's referenced Mamdani when he's talked about some of these policies. So the 10 % credit card thing, he was in an interview and he said something like, that sounds like something the mayor of New York would do, but I'm all for it too.

21:51And so he just saw Mamdani's popularity

21:54Elizabeth Spiers: and he wants that for himself. So he thinks that if he just rattles off some rhetoric about affordability.

21:59Emily Peck: The big difference between Trump and Mamdani in terms of the rhetoric around affordability is that Mamdani is four square behind renters. Like really, like he is running on the rent is too damn high. And Trump is anti-renter. He's like, we are not a nation of renters. I want everyone to be able to become a homeowner. I want to bring mortgage rates down. I want to stop individuals having to compete against Wall Street to buy homes. Like he is pro-homeowner. Mamdani is pro-renter.

22:28Elizabeth Spiers: That's because he's obsessed with mortgage rates though. I don't think it's that he has any sort of underlying philosophy about homeownership versus really. I think he does. I think he does.

22:36Felix Salmon: There's so many things I want to say in response to what you two have just said, but try to keep it simple. First, Felix, things are expensive now. People are upset about it, and that's not going away. Sorry.

22:47Emily Peck: Sigh.

22:48Felix Salmon: Second, I think Trump, it was only a small part of his speech in Davos, but his comments around housing were very revealing. He spent a little portion, maybe a minute in his speech talking about the price of homes. And he said something bombastic like, I could destroy the housing market and make it more affordable in a second, but we don't want anyone's home values to go down, is what he said. And that's like such a classic Yimby, American, suburban way of looking at the housing market, which is like any disruption could potentially lower our home values. And no one wants that because like Felix was saying, we're a nation of homeowners.

23:26Felix Salmon: Our wealth is in our homes, which Trump also said. He said so many people are wealthy now because the value of their home went up and I don't want to mess with that. So his affordability agenda on housing is damned before it even starts because not messing with that to the mind of a lot of NIMBYs is don't build more houses. They think if you do, then the value of your home goes down. And I think there's a lot of evidence that points in another direction when it comes to that stuff. And then all his sort of housing affordability ideas, such as they are, a lot of them probably going nowhere, including banning institutional investors, they don't really address housing affordability.

24:06Felix Salmon: It's just it's all pretty marginal. And where it does address affordability with rates, best case is mortgage rates get lower and that just increases demand for buying a house and then home prices go up. So it's not it's not really an affordability agenda as far as I could tell.

24:22Emily Peck: I think what Trump wants is what we saw for a while there during the sort of pandemic, which is this combination of rates coming down and prices going up, the prices like monthly payments coming down. And so houses becoming more affordable, even though the prices were going up. The prices were going up, which made the homeowners happy. The monthly payments were coming down, which made the first time homebuyers happy and everyone was happy. But that's not sustainable, right? That is not something that you can do for more than a year or two max. And even then, you kind of need a pandemic to do it.

25:00Felix Salmon: Yeah, that's the problem, like, with rates right now. So mortgage rates are tied to 10-year treasuries. And yields on 10-year treasuries really haven't come down very much, even though the Federal Reserve has been cutting rates, because there's only so much, I think, that they can do to control.

25:14Emily Peck: Yeah, the Fed does not control long rates.

25:17Felix Salmon: The Fed does not control the rate on 10-year treasuries. that's set by the market, and the market is pricing in risks. Some of the risks posed by our own presidents.

25:25Emily Peck: Well, the market is pricing in inflation, is what they're pricing in. Yeah.

25:30Felix Salmon: And is also sensitive to tariff threats and things like that, as we saw earlier this week. Yes, which is inflation. Fine.

25:38Elizabeth Spiers: Geopolitical risk in general is priced in.

25:40Felix Salmon: First order, the tariffs, I think, and geopolitical risk. Yes. So anyways, There's not much he can even do on that piece of it either. That said, I think things are very expensive. People are having trouble affording things, basic necessities such as food. You see it in a lot of the data. You see consumer spending among low-income Americans is basically flat, and more and more of the spending that holds up our entire economy is being done by rich people. Everyone else is kind of really struggling. Food prices have risen over the past year and over the past five years. It's crazy. Anyone who shops for food will tell you that.

26:17Felix Salmon: I don't think policy can – well, there are things policy can do to help with the affordability crisis or chronic situation.

26:24Emily Peck: Eggs are cheap now.

26:26Felix Salmon: Eggs are cheap, but beef is expensive, but coffee is expensive. I mean, you can't make things cheaper probably. Correct. Maybe you could at the margin.

26:34Emily Peck: Well, haven't you heard Trump, Emily? He says that drug prices are down by 800%.

26:38Felix Salmon: Right. But you can make a few things cheaper at the margins. You can make things not become more expensive like health insurance. But what you need to do is make wages go up, I think. I think instead of making things cheaper, you make people have more money.

26:52Emily Peck: I need to just jump in very quickly and say, like, this is the thing that doesn't work. This is the thing that we have learned over the past five years doesn't work. If things are more expensive and people are unhappy about it, increasing wages does not make people happy about it. because what they look at is the prices and how expensive things are rather than, oh, I can afford this now because I got a pay rise.

27:17Felix Salmon: Yeah, we have said that. But I think long term, you have to make wages go up. They have to be in wages have to rise faster than inflation. Like that is actually quite important. And eventually people will stop being so upset about higher prices.

27:30Elizabeth Spiers: I think this is simpler. I think Trump is aware that his approval rating is in the toilet. that he's been complaining about polls for the last couple of days and saying they're all fake. So that's front of mind. And he's kind of a human A-B test. He will try things, throw out things rhetorically and just see what the reaction is. And I think he's sort of testing the idea that if he runs on a rhetoric of affordability, even if there's not much to back it up, you know, whether it helps his ratings or not.

27:58Felix Salmon: I don't mean to defend President Trump, but I think it's a really hard situation for a president to deal with, this notion that things are not affordable and prices are too high?

28:08Elizabeth Spiers: This is a problem of his own making in a lot of cases.

28:11Emily Peck: This is exactly the same problem that Biden faced. And if anything, Biden was more responsible for it than Trump was. Like Trump has only been in power for a year. The affordability crisis, insofar as there is a crisis, which I continue to believe there isn't, you know, goes back much further than Trump's term. This one anyway.

28:27Elizabeth Spiers: Yeah, but, you know, inflation was ticking down toward the end of the Biden era. And then Trump did a lot of things that are just making things more expensive for people generally. And I do think, you know, you are right that, you know, this affordability, and I do think it's a crisis when you get to the point where people can't afford health care. But it's, there are policy choices that Trump has made that do affect the overall experience of being able to afford the basics or not. And, you know, we do live in a vibes economy now. And I think that affects the way that people view Trump's presidency.

28:58Elizabeth Spiers: And he's aware of that.

28:59Emily Peck: I think when it comes to the basics, yeah, we were talking about eggs a lot for a while. And the minute they come down in price, no one talks about eggs anymore. But more broadly, like Emily, you've been talking for a long time about food. And we talk about food prices quite a lot on this show too. In the grand scheme of things, if you look at food expenditure as a percentage of household income, it has never been lower. Food prices are going up, but it's not nearly as important as it was 40 or 50 years ago. And Elizabeth is absolutely right that the more salient and more important thing is if you get kicked off Medicaid and you need to start paying a lot of money for insurance.

29:37Emily Peck: Like my health insurance went up 50 percent on January 1st. And I'm like, that is expensive. That is unpleasant. And that I'm sure was related in some way or another to the big, beautiful act. Health insurance is a highly political and politicized issue. And I'm very happy to come out and say that the Republicans are on the wrong side of that issue. And yes, one of the problems with health insurance is that if it becomes more expensive, then you have less money to spend on everything else. Another problem that we should mention, which is, to be fair to Trump, when people are looking at affordability, what they generally look at is real wages.

30:17Emily Peck: You say, like, how much are you earning after adjusting for inflation? And this is what you were saying, Emily. You were saying like what we need is for wages to rise faster than inflation. And real wages are doing fine after adjusting for inflation. If you look at the lot, again, like a long-term chart of real wages, we're basically near all-time highs right now. But the thing that is not included in inflation, the thing that you don't discount those real wages by is credit card interest. The amount that you have to pay back the credit card debt that you've run up over the years because you've spent more than you've earned.

30:53Emily Peck: And as credit card interest has become a bigger and bigger proportion of household budgets, that is something that doesn't show up in the real wage statistics. And I think the impetus behind people like Trump and Bernie Sanders and Elizabeth Warren all saying we should have credit card interest rates at 10 % is precisely this idea of this will help with the real wages rather than the real wages you see when you plot them on shred.

31:20Felix Salmon: I actually think 10 % is pretty extreme cap. So there should be a debate about the cap itself. Like maybe it should be 18 % or something. If you look at credit card interest rates on a chart over the past few years, they keep going up and up and up. And even when the Federal Reserve started cutting rates like a year or so ago, they haven't really come down very much. In other words, they're probably a lot higher than they should be.

31:43Emily Peck: Agreed.

31:57We should talk about this idea that companies have to hire people.

32:03Emily Peck: And we are in an AI-dominated discourse right now. And hiring people is labor-intensive and expensive. And so why not just get an AI to do it? Makes sense, right?

32:14Felix Salmon: Well, what's interesting is there's this lawsuit that has been filed against a company that screens job applications with AI. And the plaintiffs, refugees from the Consumer Financial Protection Bureau among them and from the EEOC also are suing. And they're saying we should know what goes into the algorithm that screens candidates with AI because job applicants were reporting they were getting rejected for jobs like at 2 a.m. because they allege that obviously an AI was screening candidates, and we need to know what the requirements are, because there are legal and illegal things you can do when you're screening out job applicants.

32:56Felix Salmon: You can't say, oh, that person's too old, or oh, that person's the wrong color, whatever.

33:01Emily Peck: This is so CFPB-coded, right? It's just like disparate impact rules in lending and this kind of thing. They're like, we need to audit your algorithm. We need to get in Kathy O 'Neill to make sure that your algorithm isn't discriminating against people. And the whole point about the current iteration of AIs, which is all like, you know, large language models and shit, is that you can't pick them apart and see there's no like algorithm. It's just a bunch of weird, predictive, random, unpredictable stuff. And so in principle, I am very sympathetic to the plaintiffs in this case saying like there might be disparate impact here.

33:38Emily Peck: We want to make sure that what you're doing isn't illegal. In practice, I just don't think it's possible because there is no algorithm. It's just an AI.

33:47Felix Salmon: We'll get a lot of email about this and I'm braced for it. But humans created AI. Humans control AI. And to be like, oh, we created a monster and we can't control it. No, too bad. Figure it out. If you're using this technology to hire people, if police are now using it, if the FBI is now using it, You damn well better figure out what standards AI is using to make these big decisions, of course.

34:13Elizabeth Spiers: The crux of the lawsuit is that these tools should be subject to the Fair Credit Reporting Act. Because another concern here is that, you know, if these tools are being used to screen, are they misusing data that job applicants expect to be private? But it's not just the issue of what the models are doing. It's also about data privacy, or at least that's the through line of the lawsuits.

34:37Emily Peck: Yeah. And basically, where we're at right now is if you want to do loan underwriting, if you're a bank and Elizabeth Spires comes up to you and says, I want to borrow$10 ,000, then the bank has a very written down algorithm and a very clear set of rules about what information about Elizabeth Spires they're allowed to use. and what information about Elizabeth's bias they are not allowed to use in deciding whether or not to give her the loan and how much to charge for the loan. And the banks, because of this very strict set of rules and all of the regulatory compliance stuff that they are subject to, are not using AI to underwrite loans because it would be illegal, because you need to have everything written down.

35:20Emily Peck: And the lawsuit is basically saying, we should apply those standards to hiring, which basically means you are not allowed to use AIs to make these decisions because an AI by its nature cannot be audited in that manner. And I would be okay with that.

35:36Felix Salmon: I really like that.

35:37Emily Peck: I would be okay if we created a rule saying you cannot use AIs to hire people because you cannot audit them, you cannot be sure that they're not using, you know, information they shouldn't be using. I am 100 % fine with that. What I am very skeptical about is the idea that you can come out and say, By all means, use AIs, but just make sure they're not using information they're not allowed to use. I just don't think that's feasible.

36:03Felix Salmon: You could at least audit them to see what the results of their AI hiring process lead to, right? Can't you do that?

36:10Emily Peck: Yes.

36:11Felix Salmon: It's always been an issue with hiring as technology has improved and enabled employers to screen resumes and LinkedIn profiles and whatnot with technology. Besides AI, that's always been an issue. I remember many years ago now, Amazon got in trouble because of the way it screened resumes for education. It was screening out like women because they were looking at who's succeeded at Amazon before and where they went to school. And it screened out like all whatever it was, women-only schools and stuff like that. It's always been an issue. So I feel like this is just the next level in an ongoing problem, which is when you take a human out of the equation and and you use technology to evaluate people, you run into all these biases.

36:52Felix Salmon: But then when you zoom out from that, you say like, where do the biases come from? They come from humans. Even when humans were the only ones screening resumes, shit was quite discriminatory before. I mean - Humans are biased too.

37:04Emily Peck: But if we're going to replace biased humans, let's not replace them with biased AIs. Let's try and make things better rather than worse. I totally agree on that. And I totally agree that it is possible to look at outcomes, look at the people the AIs have approved for interviews, look at the people the AIs have said, we recommend this person should get the job, take a large set of those people, find the exact information that they should not be able to use to make that determination, things like race and age and other protected classes, and then do the comparison, try and work out whether there was this thing called disparate impact, try and work out whether the AIs, you know, with perfect knowledge of what the race and age and all of the rest of it of these candidates was, like, do the AIs turn out to have been biased?

37:56Emily Peck: Yes, we should absolutely do that study. But the we there is a really interesting we. Like, I do think the EEOC is the obvious agency to do that study.

38:08Felix Salmon: Well, guess what? The EEOC doesn't care about disparate impact anymore. In fact, the Trump administration has gotten rid of those regulations.

38:16Emily Peck: But I also think that it's not only difficult, but possibly even illegal for companies themselves to do that study. They would need to use all of the information they're not allowed to use in order to be able to tell whether there was a disparate impact.

38:45Emily Peck: Anyway, we should have a numbers round. I feel like ending on a sigh is always a good place to end. Emily, do you have a number?

38:52Felix Salmon: Yes. Do you want to know what it is?

38:55Emily Peck: I would love to know what it is.

38:57Felix Salmon: Okay. It's 10. Good number, right? 10.

39:00Emily Peck: It's round.

39:01Felix Salmon: It's round. It's a good one. 10. That's the number of non-English films that have been, had been nominated for Best Picture since 2020. 10.

39:11Emily Peck: You mean English language?

39:13Felix Salmon: Non-English language films that have been nominated for Best Picture at the Oscars since just 2020.

39:19Emily Peck: Okay.

39:20Felix Salmon: Prior to that, only 11 non-English films had been nominated ever for Best Picture, going back to 1928 or something. So like basically a century.

39:31Emily Peck: So the world is becoming increasingly global, as we like to say.

39:34Felix Salmon: But it's not just this just happened. I was just like getting really into this. So I'm talking about it because we just had the Oscar. nominations a few days ago.

39:44Emily Peck: And how many, there were two films that got nominated that weren't in English?

39:47Felix Salmon: Yes. There were two movies nominated for Best Picture that weren't in English, The Secret Agent from Brazil and Sentimental Value from Norway. So that's two more, bringing our total to 10, which was my number. And it's incredible, 10 in just the span of six years versus, what is it I say, 11 in almost 100 years. Wow, the Oscars are so global now. But this didn't just happen. What happened was back in, I believe, 2015 or 2016, you'll remember hashtag Oscars so white.

40:14Emily Peck: I remember. Remember? Yeah.

40:16Felix Salmon: And people got upset. And the Academy actually did something. They expanded the number of members in the Academy to include more women, people of color, and significantly more international members. is now lo and behold. And then we had the breakthrough of 2020 when Best Picture was Parasite. And, you know, that was not an English film. It was the first time that had ever happened. A non-English film won Best Picture. And now it's 2026. And, you know, the Oscars are not so white anymore. And they're so, they're very global.

40:46Emily Peck: Slightly more global.

40:48Felix Salmon: I just think a really good example of like wokeness, as is now derided, coming from a platform that no longer exists, which is Twitter, changing the algorithm, the human algorithm of a very important, established, you know, prestigious institution and leading to these results. And what's funny to me is like, no one really talks about how we got to that place. You know what I mean? They're just like, it's so global now.

41:15Emily Peck: I think it's partly that. And I think it's partly just something we've talked about as well on this show, which is the decline of Hollywood. Hollywood is just not the global hegemon. I mean, it still is a global hegemon, but there's not as much of a global hegemon as it was, that there are very strong filmmaking industries, not only in Korea and India, but around the world. And the cost of making a movie has, you know, of making a small movie, at least, like Sentimental Value, has come down. So like, you know, at a time when Hollywood itself makes very few of those small movies. So if you want to find a good small movie, it's more likely to come from abroad than it ever used to be.

41:54Emily Peck: I think there are a bunch of different aspects here. But yeah, probably Twister Circuit 2020 was part of it. I've been looking a little bit at the prediction markets. And it's interesting that in most of the categories, there is one overwhelming favorite. And yes, Stellan Skarsgård for sentimental values is like the overwhelming favorite for best supporting actor.

42:15Felix Salmon: Is that because of Andor, Loki? Like everyone knows him from that and it just spills over to this, which fewer people have probably seen.

42:21Elizabeth Spiers: I think it's the Skarsgårds as a family unit are super popular right now.

42:26Felix Salmon: Yes.

42:27Emily Peck: We should mention in terms of the prediction markets and whether you should trust them. Back in November, the overwhelming favorite to win Best Supporting Actress was Ariana Grande. And she wasn't even nominated.

42:40Elizabeth Spiers: Locked out.

42:41Emily Peck: Elizabeth, what is your number? it?

42:42Elizabeth Spiers: My number is 10 ,000 and that's milligrams of caffeine that it would take to kill you. I needed to answer the question this morning, how much coffee is too much coffee in light of coffee prices and my own caffeine consumption. So the recommended amount of caffeine that's considered safe for people is more like 400 milligrams a day. And that's equivalent of four eight ounce cups of coffee or six espresso shots. But in order to kill yourself with caffeine, you'd have to drink between 50 and 100 cups of coffee, depending on strength. So now you know.

43:17Emily Peck: That's reassuring.

43:18Felix Salmon: So you're not in danger of that. No, I'm fine.

43:21Elizabeth Spiers: That's your upper limit.

43:22Emily Peck: I feel like that would be difficult, even for Swedes who famously drink a lot of coffee. My number is two, which is the number of liters of liquid that you can carry on to a plane into your carry-on bag at Heathrow. now that they have sexy new scanners, none of this, you can't bring liquids onto the plane anymore. You are allowed up to two liters of liquid because apparently we don't need to worry about liquids on planes anymore.

43:54Elizabeth Spiers: Are you going to start bringing your 64-ounce bottle of shampoo with you?

43:58Emily Peck: Hell yes. And when you say shampoo, you mean champagne, right? I'm just going to be sitting there popping over the open champagne in the back row of economy, having my own little party.

44:08Felix Salmon: Two liters is 67 ounces. I just needed to say that. If anyone out there is like me and is like, is that a lot? I don't know.

44:17Emily Peck: Yes, it's a lot.

44:18Felix Salmon: But that's only in the UK. So if I'm flying domestically in the US, I still can't do anything, right?

44:23Emily Peck: Which is why you should just, you know, fly out of Heathrow whenever you fly anywhere. Where Heathrow goes, the rest of the world will surely follow, right? That would be great. I think that's it for us this week. We have a Slate Plus segment on celebrities interviewing celebrities. We have all manner of wonderful money talks, plans in the works for things in the future on Tuesdays.

44:46Elizabeth Spiers: But for the time being, this is it for our Saturday show.

44:49Emily Peck: Many thanks for listening. Many thanks for emailing us on slatemoneyatslate.com. Many thanks to Shana Roth and Jessamyn Molly for producing. And we will be back next week with more Slate Money.

45:06We'll be right back.