Explosive You-Know-What

0:06Hello and welcome to Slate Money, your guide to the business and finance news of the week. My name is Felix Salmon. I work at Bloomberg. I am joined as ever by Emily Peck of Axios.

0:20Felix Salmon: Hello, hello. By Elizabeth Spiers of the New York Times. Hello. And we are going to talk about cyclospora this week and the other term with which it is commonly associated. We are going to talk about the latest round of Trump tariffs, which are kind of batshit, but that's half the course. We are going to talk about Sinai Takeichi's sleep habits. We have a Slate Plus segment on Coke and Mulberry. It's a fun one this week, so stay tuned. It's all coming up on Slate Money.

0:58Slate Money is sponsored this week by Your Next Dollar, a podcast from NerdWallet Wealth Partners. Your Next Dollar is built specifically for high earners like you. It covers the financial complexity that comes with a higher income. If you have equity compensation, RSUs, tax planning, housing decisions, figuring out when it's actually okay to enjoy your money, it turns out that the more you earn, the more complicated the questions get. And yet, somehow, there's even less content built for you until now. Your Next Dollar covers both sides of the equation, building wealth and spending on what actually matters to you.

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2:17Felix Salmon: Slate Money is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. But what policy changes should investors be watching? Listen to Washington Wise, an original podcast for investors from Charles Schwab, to hear the stories making news in Washington right now. Host Mike Townsend, Charles Schwab's Managing Director for Legislative and Regulatory Affairs, takes a nonpartisan look at the stories that matter most to investors, including policy initiatives for retirement savings, taxes and trade, inflation concerns, the Federal Reserve, and how regulatory developments can affect companies, sectors, and even the entire market.

2:58Felix Salmon: Mike and his guests offer their perspective on how policy changes could affect what you do with your portfolio. Download the latest episode and follow at schwab.com slash Washington Wise or wherever you listen. Okay, so I want to start this week by talking about branding we have like spoiler alert we have a segment three on branding which is all about coca-cola and marlborough but segment one i think is also about branding isn't that the plus i'm so sorry to interrupt your flow which was fabulous wait segment three is not coca-cola in Marlborough?

3:37Elizabeth Spiers: Segment three was the Japanese PM. Yeah. Well, goddammit! Weird sleeping habits. Okay, so guys, if you want to learn a lot about branding, you have to become Slate Plus members upon which you can learn all about the weird similarity of the Coca-Cola font to the Marlborough font and whether that was deliberate or not. We are not going to talk about this in segment one, but we are going to talk about a different type of branding, which is taking a relatively recondite parasite named Cyclospora and rebranding it as explosive diarrhea.

4:08Felix Salmon: I really thought we weren't going to say explosive. I don't know. I thought we were classier. I'm sad to tell you that we have no class here on Slate Money. The fact that those two words captured the public imagination in a way that no public health emergency has been able to do with the possible exception of like Ebola. Someone just used those two words and they went sort of mentally viral everyone started talking about it and suddenly we have this food poisoning thing which is making headlines across the country and i'm quite convinced that 80 plus percent of those headlines and news stories we would not be reading were it not for this rebranding of cyclospora as something you know so viscerally disgusting well as a journalist

4:59Elizabeth Spiers: How many times in your career do you get to put the phrase explosive diarrhea into a story? I mean, once in a lifetime opportunity. I mean, I write about sovereign debt restructuring. So obviously all the time.

5:10Felix Salmon: I mean, we all wish we could have put such an adjective into one of our stories and had it be well read. I've never managed it. It's redundant, I think. You could just say severe. There's so many other words that could have been chosen. It's so salacious. Every time you see a TV newscaster say it, they get a twinkle in their eye. They're like excited to say it.

5:33Elizabeth Spiers: There's a great quote from a Times piece about this where there's a woman named Barbara Kowalczyk, who's the director of the Institute for Food Safety and Nutrition Security at George Washington University. And her only quote in the piece is she said that she was avoiding high-risk foods. And her quote is, quite honestly, I don't have time in my life for explosive diarrhea.

5:54Felix Salmon: You are all of us, Barbara. It's fast if it's explosive. So you do have time, Barbara, actually. I'm just saying. It's quick. So what happened was that there's a food poisoning outbreak, and it winds up getting associated with this phrase, which is just, as we have all agreed, catnip to journalists, which then creates a whole bunch of news coverage about the outbreak. And then because we are living on a 2026 timeline, obviously it's about 10 seconds before there's a trump angle and so like the the cyclospora gets traced back to a farm in mexico the farm in mexico is owned by a company in california the company in california is kind of trumpy and has been donating to the trump administration and is kind of slow walking its response in contradistinction to taco bell and one of the interesting things about all of these weird sort of foodborne public health things is that there's a standard playbook in America, which is the recall.

6:58And who was it? I can't remember. Was it Hershey who like did a big recall back in like the 80s or something and set this playbook. And everyone was like, oh my God, you know, even though 99.9 % of the product was uncontaminated, they recalled everything.

7:14Felix Salmon: Oh, that's the Tylenol story, the famous Tylenol story. There you go. Yeah, it was Tylenol. Because someone put cyanide, I think, in a Tylenol. Someone died. And then Tylenol, I mean, it's this famous Harvard case study that's still told about it. There's like multiple podcasts about it. Legend in the marketing biz that Tylenol knew that if they didn't take -

7:37Elizabeth Spiers: Yes.

7:38Felix Salmon: They knew if they didn't do something super fast and drastic and clear that their Tylenol would be forever tainted. Had they only known that decades later, the president would like say on live whatever. But famously, they recalled it all and regained the public's trust pretty quickly. And that has now become the sort of not just go to playbook for all brands up to and including Taco Bell, but the generally accepted just every single member of the public expects every single corporation to do this with every single case of anything, you know, even when it isn't cyanide. And some brands have been slightly less enthusiastic about doing it than others.

8:21I remember when, And, you know, like when Peloton recalled its treadmill, they were kind of like, well, if you really want to send it back, you can. But this is one of the first cases I can remember where it's so obvious that the brand was like, well, yeah, we'll do a recall. But they didn't really have their heart in it. And they put out this sort of incomprehensible press release that no one could understand, partly because there's a couple of reasons. One is that the overwhelming majority of the lettuce was within wholesale channels. So like a public press release thing wouldn't make any difference because it's not like the public are picking up packed lettuce from the shelves, although they are in Walmart.

9:02And so like one of them is like, were there like Walmart packages that were affected? But the other reason is that there's this massive time delay on Cyclospora. It takes like weeks before you actually wind up with all of the explosive diarrhea and whatnot. So the fact was that everyone was reasonably sure that all of the lettuce that was on the shelves and in the Taco Bells at the time of the recall was fine.

9:28Elizabeth Spiers: That's one theory. There are plenty of indications that Taylor Farms also kind of went out of their way to obfuscate what was happening. 100%, yes. And we're already sort of dealing with cuts to the programs that actually do foodborne illness surveillance. But one of the things that came up a lot in these stories is that the sort of rapid testing that they did is usually not the way that you would track something definitively that has that long incubation period. Yeah, because it's actually more or less impossible to track definitively, as we discovered when the FDA did test a bunch of lettuce and said, oh, we found cyclospora.

10:04And then they had to backpedal and say, actually, no, it was a false positive.

10:07Elizabeth Spiers: But they use epidemiology to figure out where these things are coming from. And they did not say that Taylor Farms wasn't responsible or that it wasn't happening through all these Taco Bells in the Midwest. Taylor Farms kind of took one false positive for a specific product that they had and then kind of made up this whole story about how the FDA had apologized to them. Yeah, no, there was. Taylor Farms did a lot of dumb stuff that no marketing professor would ever recommend, including putting out this tweet saying the FDA has apologized to us when the FDA had not apologized to them. But I guess my point here is that it is interesting to me that Taylor Farms would have chosen to take this route of being sort of aggressively like anti-Tylenol.

10:52I take the opposite road to Tylenol. That that's even an option these days.

10:57Felix Salmon: It reminded me of just as a journalist, you know, you hate to correct a story and there's like good and bad ways to do it. like some corrections you could be very persnickety about and not really like come clean and be like this was wrong this was why we are sorry like that's like ideal correction you can be like well I'm just making a clarification due to an editing error due to an editing error like there are ways and then typically when something like that happens you get screwed because you put it through and then someone else writes you and it's like it's still not right you've got to do it again you got to do it again and that's what happened to taylor farms and to the fda you know as they're sort of like bumbling their response to it the first response from the fda didn't even they named taco bell but not taylor farms i mean it's just been like this rolling mess because taylor farms is so trumpy everyone is conspiracy theorizing that the reason they didn't name taylor farms was because there's this like white house connection i mean there is reporting from they took a direct line there's reporting from bloomberg that the white house fda they all talked to Taylor Farms before the FDA put out its first notice.

12:04Felix Salmon: Oh, I'm not saying the conspiracy is false. It is entirely possible that the conspiracy is true. Like, this is the Trump administration. There are a lot of conspiracies here. Yeah, and the Trump administration, there is a trend where they're talking a lot, they're saying a lot, but they're not putting out any real information. You can see this across multiple lanes, right? They don't want to do quarterly reports in the SEC. They stopped putting out hunger statistics for the USDA. like they don't want to name the company involved in the recall. Like it all kind of fits together of this opacity that we're seeing.

12:36Felix Salmon: It's like very of our time and it just makes people panic. It causes more stories and now no one's buying lettuce anymore. No one's getting their salad.

12:45Elizabeth Spiers: I was sort of trying to decide if this is incredibly cynical on Taylor Farms' part or just incredibly naive because on the naive side, everyone who lives in the current media environment knows that if you do stuff like this, it has a kind of, you know, Streisand effect. I didn't know who Taylor Farms was two weeks ago. And now I think anybody who's following the cyclosporid story does. And the fact that they have to keep going back and, you know, making new announcements probably wouldn't have happened if they had on day one just kind of done the recall, did everything that, you know, Tyler at all did, and then they'd just be done with it.

13:18This is why, you know, I'm sure there's a marketing communications PR CMO type at Taylor Farms who's like pulling her hair out going, no. But like the CEO, like this is a family owned company, right? This is not a public company.

13:31Elizabeth Spiers: That's a good point. This is a family owned company. It's owned by Mr. Taylor, who's kind of Trumpy and it's friendly with the president. And like his first reaction was basically the first reaction of every company pre-Tylenol, which was, you know, we'll just do the minimum we need to keep every piece of lettuce on the shelves that we know is perfectly safe. you know and he clearly hasn't been to whatever bit of business school tells you about the importance of marketing and comms probably hasn't been to business school as well he's just inherited

14:02Felix Salmon: it from his dad they've had bad e coli lettuce outbreaks before and i don't think any of them rose to the level of 2026 explosion so like if you've been through this before and kind of tough it out maybe they just used the e coli playbook from 2019 or whenever that last e coli thing was And then they're like, well, you know, it worked then. And then suddenly everyone started talking about explosive diarrhea and then it got out of hand.

14:28Elizabeth Spiers: We also just acknowledge that when they were talking about the origin of the explosive diarrhea, the administration and Taylor Farms both went out of their way to say that this was produced by the Taylor Farms de Mexico. They sort of like use the Spanish name of the subsidiary to make it seem like it was a Mexico problem, not a Taylor Farms problem? Well, I mean, I kind of like the idea of sort of like communicating that this is contained, that there's like one farm in Guadalajara that produces this iceberg lettuce that was problematic. This does not mean that all Taylor Farms produce anywhere in the country that you see with the Taylor Farms branding is problematic.

15:10I totally do see the logic there.

15:12Felix Salmon: Can we talk about some fun facts I learned? Yeah, oh, please. Okay. First of all, lettuce is the second most consumed vegetable in the United States after, any guesses? Anyone? Anyone? Tomatoes. No, Elizabeth? Most consumed vegetable? You know what it is. Potatoes. Potatoes. So lettuce is number two. Oh, French fries. If you could fry lettuce, it would be number one. But you can't fry lettuce, therefore it's number two. Exactly. You can grill romaine lettuce for a Caesar, which I think is the only way to eat lettuce right now. I love doing lettuce. Yes. Yes. Oh, and fruits and vegetables are responsible for about half of the foodborne illnesses in the U.S.

15:49Felix Salmon: Second pun fact. Third is lettuce. Bagged lettuce is prone to these kinds of outbreaks because, well, as we all learned about the crags in the lettuce. The crags? You can't get the parasites out of it. It's hard to get the oomstia out of the crags. The crags. Also because we don't cook it except for the romaine. And because the bags. There's crags in leeks. Cleaning leeks is terrible, but no one eats leeks. So it's just much less of a big deal. And you don't buy a bag of leeks mixed with other things. So like if one lettuce is contaminated, then they chop it up and they put it in a bag with other lettuce.

16:21Felix Salmon: Then you're spreading more disease all around. Bagged lettuce is the vegetable equivalent of ground beef. Yes. Yes. So I don't know. Now I'm very turned off. I know it's only like a few thousand cases nationwide and no one's died. Not to sound like, you know, right wing arguments. No one's died. Who cares? But no one did die. And I still don't want to eat bagged lettuce. That's all.

16:45Elizabeth Spiers: Is it part of it too? Iceberg lettuce is kind of like the most popular lettuce, even though it's like mostly water. And that makes it more vulnerable if you put it in a bag. Again, like just go back to the great American food, which is a burger and fries. Number one popular most vegetable is the fries. And then what do you put on the burger? Is iceberg. No one's going around putting kale on their burgers.

17:08Felix Salmon: Ugh, no. I like iceberg. I mean, I'm never eating lettuce again. Oh, and I did have one other point to make if no one else feels like speaking about lettuce anymore, but I was like reading about this for, I feel like hours. People always talk about we need less regulation and the US bureaucracy is too much and we pay too high taxes. But like food safety is a really important kind of regulation. And I think everyone knows that actually. and not having good regulation, having all these big layoffs at the FDA, cutting back these rules. They delayed a food tracing rule that they've been trying to enact for like 15 years since the Obama administration.

17:48Felix Salmon: It's been delayed again until 2028 or something by this White House. This is core function. And they specifically took, like RFK specifically took cyclospora off the list of things that he was tracking. Yes, yes. These are core functions of government. It's not good to cut them. As an immigrant, as a foreigner, I will say that the first time I moved to the United States, I lived in California in 1984. One of the things that really impressed me was the not just the quality, but just the whole, you know, professionalization of the food chain and how incredibly like organized and clean and healthy everything felt.

18:25And Americans do, I think, take that for granted. And I think one of the reasons why bagged lettuce is so popular in America is because people just assume that it is safe. And so, yeah, I think it is definitely the case that as the government shrinks and starts taking less and less responsibility for these things, maybe people will start having a different attitude to things like bagged lettuce.

18:48Elizabeth Spiers: Yeah, I think part of it, too, is just that, you know, when things are working in the government, people are not necessarily cognizant of them. It's not totally transparent to them. And, you know, foodways and food chains are not transparent to most people anyway. So if you have, you know, a whole group of companies like Taylor Farms, who on the one hand are lobbying for less regulation and throwing money at politicians, and then voters aren't really saying anything about it because they don't perceive it as a problem. That's how these, you know, food safety implementations end up not happening.

19:18Elizabeth Spiers: That's why Congress decides not to enforce this law from 2011. It's not even that voters don't perceive it as a problem. I think voters do care. It's just like, this is not going to be in the top five issues of any voter. it. You know, like people care about this, but they care about other things a lot more. And so it just never really rises to the level of, although like, you know, it is the case that the food safety law that was passed in the Obama administration passed with a massive bipartisan majority, like the legislators were fine with it. And then the industry pushed back and was like, oh, this is really tough.

19:52No, suck their teeth and managed to, you know, it's all the lobbyists. It's not like voter apathy, it's lobbyists.

19:58Felix Salmon: They divorce the reality from, like they'll talk about regulations and bureaucracy and big government and taxes. They won't talk about making sure lettuce is not going to give you explosive diarrhea. And it's all very like Michael Lewis, I think we all read or some of us read The Fifth Risk. Like there are all these functions that the government has sort of been doing in the background, not really talking much about that like makes it safe to go out to eat and buy bags of lettuce. And then when that all falls apart, people aren't quite connecting the dots. They're like, oh, Taco Bell causes diarrhea.

20:31Felix Salmon: And it's like, no, Taco Bell actually followed the Tylenol playbook here. And also no one goes to Taco Bell for lettuce. It's fine. Like things are falling apart. It just feels like that.

20:42Elizabeth Spiers: If no Democrat creates an ad that says, would you prefer explosive diarrhea or RFK Jr. to stay? You know, and there's just a missed opportunity there. Yes. In the annals of marketing, though, I think Taco Bell did this one pretty well. This is not going to be my number. It belongs in this segment. But the number that I'm not going to use this number is one, which is$1, which is the price of the Taco Bell Enchirito, which they're bringing people back into Taco Bell by offering the Enchirito for$1. The Enchirito is the most gloriously American thing in the world because it's like a mix between an enchilada and a burrito.

21:21and it has like beef. It's like a tortilla, which you roll up with beef and onions and cover it in sauce. But most importantly, it doesn't have any lettuce.

21:30Elizabeth Spiers: Does it have any spicy Doritos or Takis in it? I feel like that's the Taco Bell kind of signature now. They should just sprinkle spicy Doritos on top. Yeah, exactly. I like this idea that Taco Bell is like, not only are we going to do this massive recall, but also we're going to offer you$1 and Doritos. And who could resist such a thing?

21:49Felix Salmon: I'm going to head there right now. I'll eat it live. Send you a voice note.

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25:51Emily, can you wait until the end of the show and then go get your entry dough? Because I want to ask you about tariffs. You're the tariff queen.

25:58Felix Salmon: I am not, but okay. Ask me anything. Okay, so to catch people up, you know, previously on Tariff Watch, we all remember that the Supreme Court struck down the broad-based tariffs that Trump had imposed on countries just for being a country. He's like, the trade deficit is large. Therefore, I'm putting a tariff on you. And the Supreme Court finally made its way to the Supreme Court. And the Supreme Court dragged its heels on this for a long time, but eventually struck it down and said, you know, you can't do that. And Trump immediately said, that's fine. I respect the rule of law. I'll just take away.

26:36No, of course he didn't. What Trump did was he immediately got rid of those tariffs, but replaced them with almost identical tariffs under some like weird emergency thing that he would only last for 150 days because he still loves the tariffs. He's like, I can't do the tariff while calling it X. I'll do the tariff while calling it Y. Problem was, these were emergency tariffs and they only lasted for 150 days. And 150 days is yesterday, Friday. So what happens on yesterday, Friday? He comes up with even more new tariffs. He can't do tariff X because that was found illegal. He can't do tariff Y because that expired under emergency tariffs.

27:14And now he's doing tariff Z, which is something something about forced labor supply chains or something.

27:20Felix Salmon: The U.S. trade representative, Jameson Greer, they're using Section 301 of the 1974 Trade Act to raise tariffs on like 60 countries. They're accusing 80 countries. Is that right? Yeah. All of the countries, including like Canada and the U.K. Well, okay.

27:38Elizabeth Spiers: 95 % of our imports.

27:41Felix Salmon: 12.5%, I guess, because they supposedly allegedly use forced labor in their supply chains. And it's basically, it's retaining the status quo. I mean, the Supreme Court knocked down the tariffs that he tried to do under the IEPA law and said, you can't use the IEPA law, but maybe you could use a different law. I don't know. And so they went around looking under, you know, the cabinet covers and under the bed in the Lincoln bedroom or wherever the fuck. And they came up with this one. It even dusted off Smoot-Hawley, the notorious Smoot-Hawley Act of 1934 that caused the Great Depression. Wait, no, 1929, whenever it was.

28:201930. 1930, that caused the Great Depression.

28:23Felix Salmon: It didn't cause the Great Depression. The Great Depression was already underway when Smoot-Hawley passed, but it may have exacerbated the Great Depression. It exacerbated the Great Depression. I spoke to someone at the Hoover Library this week because I was so tickled by the Smoot. Don't be asking the Hooverites. They're the last people to ask. No, but I mean, he was historically accurate that the Great Depression was underway. You know who you should ask is Ben Stein's professor in Paris Bueller's Day Off. Anyone? He was asking about Smoot-Hawley tariffs in there. Yeah, they brought back Smoot-Hawley, a provision of Smoot-Hawley.

28:58Felix Salmon: That's going to definitely get challenged in the courts because— But as we discovered with the original Liberation Day tariffs, to challenge these things in the courts takes months, if not years. and if you win he just invents some other random fucking thing that he found in the back of the cupboard somewhere so like everyone who was celebrating when the supreme court finally stood up for the rule of law and said you can't do these illegal tariffs like i feel at this point

29:24Elizabeth Spiers: we're just like well it's it's there you know we have to keep playing whack-a-mole because trump is so dead set on using tariffs you know it's like he has a hammer and everything's a nail he can only think of tariffs as his primary, you know, foreign policy tool. But Republicans don't even like it. It's bad for business. It's true. But like the question is, like when you have this executive branch, which is hellbent on imposing tariffs, you have a Supreme Court that is hellbent on empowering the executive branch as much as possible to do as much as it possibly can.

29:57Felix Salmon: When it's President Trump, when it was President Biden, they were hellbent on empowering him to do nothing. Just worth pointing out. As you say, quite correctly, Emily, like the Supreme Court ruling, like number one took a long time and number two basically said, look, just find another excuse to do this. Do it classier. Basically, we have reached the point at which the judicial branch is clearly not going to be able to work as an effective check on the executive branch. So like, is it worth still trying?

30:24Elizabeth Spiers: Yes. Can we talk about the Canadian tariffs that he's proposing? Because I think that's a example of something so egregious and insane that there's no way that you could just sort of say, oh, well, you know. Are these wildfire tariffs? Because he kept on moaning about the wildfires. He's like, I'm going to tariff them in punishment for having fires.

30:44Felix Salmon: The administration says they're not the wildfire tariffs, but they did announce them like a day or two after he said he was going to do the wildfire tariffs.

30:53Elizabeth Spiers: Well, he has a tariff and he's looking for a rationale. And the wildfire thing is just so, you know, unhinged that I think people are like, well, how would they stop the wildfires? It's not like they're having them voluntarily. Since the stated rationale for the tariffs is like almost non-existent, something about, you know, labor supply chains or something. And since the wildfire reason is mildly bonkers, even by Trump administration standards, do we know why they're suddenly imposing massive tariffs on Canada? Yes. Do you know about the cheese thing?

31:21Felix Salmon: Oh, is it cheese? He said it was basically retaliation for their tariffs that they did in retaliation to us. Like, they stopped buying American alcohol. Well, that's not a tariff. That's just like a consumer boycott. So we mad. We big mad about that.

31:35Elizabeth Spiers: So he thinks that it's like unfair competition on some level. And this is why there's something about cheese, where because Canadians prefer European cheese to U.S. cheese, that he's arguing that that's like an unfair market or something. I mean, objectively, European cheese is better than American cheese. What?

31:56Felix Salmon: That's stereotyping. There are so many different kinds of American cheese. You can't possibly be serious. No, there's a handful of great cheeses I've had that are American. There's some amazing cheese in Vermont and this kind of thing. No, cheddar comes from cheddar in Somerset. Yes, I know cheddar comes from cheddar, but in the U.S. we make a good cheddar. No, you don't. You make a bad cheddar. Have you ever had a real cheddar? That's not the point, Felix.

32:19Elizabeth Spiers: The point is, do you know about our Velveeta and our craft?

32:23Felix Salmon: American cheese my hot take is that American cheese is amazing stuff I know it's not technically cheese but no better cheese for a burger than American cheese or a grilled cheese sandwich yeah and this takes us back to the main theme of the podcast which is it all comes back to burgers and a cheese is really just something you put between the top layer of your bun and your burger it's not something in and of itself but anyway I guess Trump is mad about cheese so he tear up the hockey sticks that are made in China.

32:54Elizabeth Spiers: It is entertaining to see him stereotype Canada in the most hilarious ways. He's like, what can I tariff? Maple syrup and hockey sticks. And this one could be bad. We don't know. It's like the Smoot-Hawley tariffs aren't coming into effect until August, and that gives him a million days to change his mind three times. But most of the big tariffs that he's announced on Canada, the 50 % tariffs that he's announced over the course of the second Trump administration have actually been much less of a big deal than they look on their face because they carve out USMCA, which is the rebranded NAFTA, which is nearly all of the trade between the US and Canada.

33:40But this one doesn't. So if this goes through, which I kind of suspect it probably won't, something something Turco, then that could be, you know, a new historic low in relations with our friendly northern neighbors.

33:56Felix Salmon: One last question for the group. Does the U.S. now depend on tariffs for fiscal revenue? I, before we hopped on the call, I was looking at a note from the bank Standard Chartered, another note. And now it looks like about 1 % of GDP is coming through fiscal tariff revenue. And I've seen now two arguments, one in this note from Standard Chartered and one in the pages of Elizabeth's New York Times, arguing that the U.S. now needs, I'm doing air quotes, needs tariff revenue because we're in such a fiscal pickle. And I just don't believe that. So it is definitely the case that, you know, the one big beautiful act, when it was costed out by the CBO, assumed a bunch of tariff revenue.

34:55And there was a bunch of sort of wailing and gnashing of teeth when the Supreme Court decision came down saying like, well, this is going to throw all of our finances out of right because we've now assumed that we're going to get all of this tariff revenue that we're not. The tariff revenue is at this point non-negligible. It's not, you know, income tax, but it's a meaningful part of the fiscal mix. And if you got rid of it, as we good neoliberal shills would surely love, you would have to find some other tax hike to replace it. Hello, but, and Courtney Brown at Axios pointed this out in a meeting this morning, if the ostensible purpose of the tariffs is to make imports more expensive and drive more manufacturing to the home country where we make our own products that people would buy that wouldn't be tariffed, then that seems like a bad plan.

35:46Felix Salmon: Because if the plan is ultimately not to get tariff revenue, it's more like to shift production to these other untariffed goods. So it doesn't make sense to me as a revenue raiser. The math doesn't math at the macro level.

35:59Elizabeth Spiers: It's like if you just look at the tariffs in isolation and you look at the percentage of GDP that they occupy now versus before Trump, it looks like a significant change. But you also have to look at where the administration has created new tax breaks and things that have lowered revenue generation in other areas. That was my point about the One Big Beautiful Act, right? There was a big tax cut which they basically paid for with tariffs.

36:22Felix Salmon: Yeah. And so if you abolish the tariffs, you have to go back to that tax cut, and you need to sort of rewind, reverse some of that tax cut. And yes, Emily, you're right on the ostensible argument that what they want to do is for imports to plunge and all of the manufacturing to happen in America. If that happened, then tariff revenue would go down. But we know that's not going to happen. So that tariff revenue is here to stay unless we get rid of the tariffs. Which I think actually the tariffs are just here to stay. And even if Trump leaves office, which I'll say if, even if Trump leaves office, I think he's kind of changed the way the global economy works.

37:08Felix Salmon: Other countries are doing tariffs now also. Like we're in a new higher tariff era. We have seen this movie before, right, with Biden. Biden inherited a bunch of China tariffs that Janet Yellen said were really terrible that Biden himself opposed. And then the first thing he did when he comes into office is abolish. No, actually, he didn't. He kept them in place for the entire Biden administration. So these broad based, you know, I'm just going to impose 10 percent tariffs on the entire planet because I woke up one morning with a pain in my buttock. You know, that kind of tariff, maybe some of those will get reduced.

37:47And I do think that there are ways of dealing with the fiscal effects of reducing those tariffs. But you're absolutely right that the effective 0 % tariff rate on imports that we had pre-Trump 1, and it's now up to sort of 7-ish. you know it will come down but it will probably come down to like i don't know two or three which is still a huge increase compared to the status quo anti

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40:54I want to talk to the moms on this show, which thankfully is both of you. You have experience of sleeplessness. Is it good? Is it bad? How bad is it?

41:07Elizabeth Spiers: It is terrible. They tell mothers, especially if you're breastfeeding, you have to feed your child every two hours. And then you only sleep when the child sleeps. So basically, you're just chronic sleep deprivation for at least two months. And I can't even deal with, you know, less than six hours of sleep normally without being completely discombobulated. But this is considered standard medical advice for new moms. Are you serious?

41:32Felix Salmon: Every two hours? Yeah. Get out of town. Yeah, I would highly recommend not doing that. Don't do that. That sounds real bad. Ignore the doctors. That's what Slate Money says. This is medical advice.

41:43Elizabeth Spiers: If I did it again, I would ignore the doctors instead of making myself insane. I need a lot of sleep. I need like eight, nine hours of sleep. I just more sleep, more better for me. And sleep is good for you. And a lack of sleep is bad for you. And boasting about how little sleep you get is the most fucked up thing in the world. But who is doing it? Elizabeth? The prime minister of Japan. And she is saying that she gets zero to three hours of sleep.

42:10Felix Salmon: Am I going to say her name correctly? Takaiichi, Sunei Takaiichi. She said she apparently Monday, last Monday was something called Sea Day in Japan is a holiday. And Miss, I'm just reading the New York Times. Miss Takaiichi spent her holiday weekend doing work and she took to Twitter to boast about it, about all the documents she was reading and editing, like very detailed oriented policy work. and she also mentioned that she had a chance to catch up on her ironing and that she and this is from the translation okay so if someone speaks japanese and i'm getting this wrong from the translation please let me know but she ironed her undergarments and her handkerchiefs it's 2026 just ps but she did this and it was a good thing because she was running out of undergarments implication being like if her undergarments aren't ironed she won't wear them which i i find baffling Anyway, she also says she typically gets from zero to three hours of sleep a night.

43:13Felix Salmon: Obviously, that's not enough sleep to get a night. This isn't her first time talking about this. She's talked about it before. Famously, when she first took office, she called her cabinet ministers to her house for a meeting at 3 a.m. Why? Because a fax machine wasn't working. Again, it's 2026. What are we doing? Okay, handkerchiefs, ironed underpants, and fax machines.

43:39Elizabeth Spiers: There's good work ethic, and then there's just psychotic behavior. She's on the line. I'll say for the record, I think she's lying. I don't think anybody could survive on zero to three hours of sleep. I don't think she gets zero to three. I do think she probably gets three to four. Some people, and it's a tiny, tiny minority of people, but some people don't need more than three or four hours of sleep a night. Margaret Thatcher was famously one of those people.

44:05Felix Salmon: Bill Clinton. And I think a lot of them don't realize that everyone else needs a lot more sleep than they do. And they kind of, they look at the rest of the world and just go, you guys are all lazy. Come on, they don't realize? Like she's reading detailed policy papers. She understands about bonds probably. She doesn't know that people need more than zero to three hours of sleep. Of course she knows. She has been told this, but I'm saying she doesn't understand it on a sort of gut intuitive level.

44:33Elizabeth Spiers: I guess. Her head understands it, but her heart does not. I think it's performative. Because she ran, this was her election campaign, right? It was like, work, work, work, work. All I'm going to do is work. I'm not going to have any family life. I'm not going to have any private life. I'm not going to go hiking. I'm not going to go traveling. I'm just going to work 24 hours a day. And that was what got her elected. And she's doubling down on it. She's going to work and have completely wrinkle-free underwear. That was her promise. It might not be underwear. It might be blouses.

44:58Felix Salmon: Yeah, maybe it's blouses. That was my only, maybe to be fair, she's talking about like what she wears under her suit jacket or something, which I could understand you don't want to be wrinkled. But people were saying this is like a gender performance because she's a woman. She's a woman prime minister in Japan. So she needs to show like, I'm still a girl. I still iron stuff. So it's sort of like this gender performance kind of walking the line. Also, you know, because Japan is still a very sexist society, you know, she needs to do that thing of like, well, because I'm a woman, I need to work twice as hard and do that very visibly.

45:32Felix Salmon: Right. But Japan is changing. And this caused quite a stir, according to the English-American reporting I read about what happened in Japan. Like, they have a word for working yourself to death, kuroshi. And it's been something that they've been in sort of a panic worry over for for like a decade. There's often these reports of like businessmen who, you know, work 24 hours, They never get up from their desk, but then they eventually die by suicide. And then there's like a law passed. You can't do more than, I don't know, what is it, like 40 hours of overtime a week or something. And I guess there is some cultural shift here where people are like, maybe working that much is bad.

46:12Felix Salmon: Like there's a changed understanding or something. Friend of the pod, Libu Kite. Yeah, and yes, there is a sovereign debt aspect to this. Because there's a sovereign debt aspect to everything. Very important. Leiboukite has written at some length about sleep deprivation as a tactic in the sovereign debt negotiations, especially in the Paris Club, where you negotiate with a bunch of bilateral creditors. And he would talk about how the French Treasury would deliberately keep you up all night in order to just literally tire you out to agree to anything that they propose. Also, I think you pay for it on the other side.

46:51Felix Salmon: I've read in places that people who sleep less in their lifetimes, they die sooner. So like it catches you.

46:57Elizabeth Spiers: A few months ago, I read this book that's actually really good. It's called Why We Sleep by Matthew Walker, who's a sleep scientist. And when I was reading the story about the Japanese PM, it reminded me of an antidote that he has about there's a rare genetic disorder that only appears in midlife where you start having this chronic insomnia and eventually your ability sleep goes down until it's zero. And whatever this disorder does, it doesn't respond to sleep medication. So basically, if you have it within like 12 to 18 months, you just die because you can't sleep. And so I was looking at the zero to three hours and thinking, how old is the Japanese PM?

47:32Elizabeth Spiers: Oh my gosh, the clock is ticking.

47:45All right, numbers round. Emily, do you have a number?

47:48Felix Salmon: I do. My number is 53%. That is maybe the U.S. home ownership rate. It's a new calculation that I wrote about this week. The census reports the home ownership. I thought it was 65, yeah. Yes, the census reports 65%, but how they measure it is, and feel free to cut this if it's too nerdy, but how they measure it. No, I love this. This is amazing. No such thing. They look at all the houses, all the homes in the U.S., and they say what share are occupied by their owner, and then that's the home ownership rate. But that leaves out a lot of people. It leaves out adults who are living in owner-occupied homes but don't themselves own the home.

48:26Felix Salmon: So like parents whose adult kids can't afford a house and still live at home don't get counted. Cousins, relatives who are living with people who own a house don't get counted. So the Federal Reserve Bank of Minneapolis economists there went out. They looked at the population and they just simply counted up the share of the population of adults who own their own home. And it turns out to be a much lower number because it gets rid of all those other people, those adults who live in owner-occupied housing but don't themselves own homes. But they're not renters. You can't subtract that number from 100 and get the proportion of the population that rents.

49:02We used to have a thing where there were like two categories, you're either own or rent. And now there are three categories. So like there's own and there's rent And then there's other.

49:09Felix Salmon: Yeah, basically. Yes. Which I guess would include like federal prisoners and stuff like that. They actually, they did include the prison population and the nursing home. They included people living in institutions. And you might say that's not fair to include them. I kind of think it is because the U.S. policy is very homeowner focused, as we've talked about so many times on this podcast. You know, tax policy very centered on the homeowner. And the argument in favor of that is always, well. most Americans are homeowners 65 65 well no most adults it's about half barely half are homeowners actually so like maybe give that policy another look-see my number is 30 ,000 which comes from a wonderful column by my Bloomberg colleague Giroid Rady about Japanese weddings and the way that japanese weddings work is that they're quite expensive and they're basically paid for with wedding presents in a roundabout way that a standard wedding gift in japan is a very beautiful envelope with three very very beautiful 10 000 yen notes in it so you basically give the happy couple 30 000 yen if you're one wedding guest if you're coming as a couple you give them 50 000 yen you give them five wedding notes it's an odd number of notes because if it was an even number that would have implied that they should just like take half each but it's an odd number so it's like you're given collectively and so basically what happens is that the happy couple can kind of count on getting 50 000 yen per couple or 30 000 yen per person which they can then used basically to defray the costs of the wedding this has been more or less stuck in stone forever and now japan for the first time ever has got inflation and so the cost of weddings is up like 50 from pre-pandemic times partly because of the whole tourism boom as well like hotels and all that everything's becoming more expensive but the wedding gift is just three banknotes oh no and so the amount that the people getting married receive has been going down in real terms quite dramatically compared to the cost of the wedding, which has been going up.

51:32And so now there's this disconnect, but no one knows what to do because it's cash. And you know, and you can't give four notes because that would be rude. If you give five, that's like a 60 % increase. And you know, prices are up a lot, but like, you know, the move from 30 to 50 is a big move and it's not clear how and when people would make that massive jump switch to dollars

51:53Felix Salmon: so a 30 000 yen is about 180 yeah so give 300 does that work out the yen is at a historic low to the dollar right now it's a great time to go to go to japan things in general are cheap in japan the one exception to that as i say it's hotels which are expensive because there's so much demand from people wanting to go to japan because the yen is so cheap elizabeth bring us home here give Give us a good number.

52:20Elizabeth Spiers: My number is 9 ,000, and that's a dollar. And that's how much you would pay for a Terran Tactical Innovations pit viper pistol, which are apparently very popular in LA right now because they were in the John Wick movies. Wait, wait. This is an actual gun that you use to shoot people or vipers? Yes, people. It's called a pit viper because, you know, these companies need them to sound menacing and cool. Wait, it's$9 ,000? Through a gun? Yes. Is that expensive or cheap? I have no idea how much. I think it's a lot. It's expensive for a pistol. So this was from a time story about this Shishi gun club called The Range in L.A.

52:54Elizabeth Spiers: Now they're making sort of like Equinox but gun range sort of places where it's sort of high-end club. It's expensive. They have good like product in the showers. Do people take a shower after shooting guns? I have no idea. I don't know. They have fancy coffee bars. And the membership is between$3 ,700 and$5 ,400 a year. So that's not cheap. A little bit cheaper than about the same as Equinox. Yeah. Yeah, they have events catered by Erewhon, because of course they do. And they sell$9 ,000 pistols, so you need to buy that somewhere else. You can use them to shoot at the range or you can bring your own gun.

53:30Oh, so they'll lend you a pistol if you don't have your own gun.

53:33Elizabeth Spiers: They have like a collection of like 40 different kinds of guns, so you can try them out. But one of the guns they have is a pit viper. Yes, that's the trendy one, and it's pricey. But John Wick came out years, like why now? Well, it's a whole franchise. You know, they did a movie last year that was called Ballerina that was kind of like in the, and I think just the John Wick. Did she use a pit viper? No, I saw that movie. She used a flamethrower. I watched it on the plane.

53:58Felix Salmon: The John Wick movies are actually really good. I've seen them all. Wow. All right. So for our final number, Emily, I'm going to give you two this week. Out of one, two, three, four, which of the John Wicks is the best John Wick? Oh, wow. You know, I have them all jumbled in my head. I think it was the last one where he falls down this like really long flight of stairs that may have been my favorite scene I think it was for um because he keeps falling gets up it's like a whole thing and you're like no normal human would make it down those stairs and let alone back up again yeah I mean and I also like the first I mean the first one's kind of the best one because it was it's so cute you know the dog you know yeah the rest of the movie's dogs appear but they're not nearly as cute.

54:44Felix Salmon: They can't compete with the first dog. Okay, we have to move on to a Slate Plus segment about Coca-Cola. So we are going to tie up this episode right now for all of you, except you lovely Slate Plus listeners. For the rest of you, thank you for listening. Thank you for emailing us on slatemoneyatslate.com. Thank you to Jessamyn Molly for producing. And we will be back next week with yet more Slate Money.

55:16slate money is sponsored this week by your next dollar a podcast from nerd wallet wealth partners your next dollar is built specifically for high earners like you it covers the financial complexity that comes with a higher income if you have equity compensation rsus tax planning housing decisions figuring out when it's actually okay to enjoy your money it turns out that the more you earn, the more complicated the questions get. And yet, somehow, there's even less content built for you until now. Your next dollar covers both sides of the equation, building wealth and spending on what actually matters to you.

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