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0:06Jeff Horwitz: Hello, and welcome to Slate Money, your guide to the business and finance news of the week. I'm Felix Salmon of Bloomberg. I'm here with Emily Peck of Axios.

0:16Felix Salmon: Hello, hello.

0:16Jeff Horwitz: I'm here with Elizabeth Spiers of the New York Times. Hello. And most excitingly, I am here with Jeff Horwitz of Reuters. Who are you, Jeff? Introduce yourself.

0:27Emily Peck: Yeah, hello. I'm Jeff Horwitz. I'm a technology reporter at Reuters. I cover Meta, a good deal.

0:34Jeff Horwitz: And you have a fabulous scoop this week about scams on the platform, especially on Facebook. So we're going to talk about that. We are going to talk about the crazy amount of money that MBS in Saudi Arabia has spent on this folly called Neom. Of course, we're going to talk about tariffs and the big Supreme Court case. That's coming up right now. We have a Slate Plus segment about Christmas shopping. It's an exciting one this week, so stay tuned on Slate Money.

1:12Jeff Horwitz: Okay, Emily, I want to talk to you, if I may, about the Trump tariff case that went up in the Supreme Court this week. And the kind of fun, interesting, weird thing was the way in which the Solicitor General was backpedaling wildly on the whole question of whether these tariffs raise revenue and whether that revenue is important or meaningful. Yes.

1:41Felix Salmon: So this is the case. I think we've talked about it before. The Trump administration famously invoked the IEPA Act, the International Emergency Economic Powers Act, to impose tariffs on literally the whole world, including penguins, in April. and no big businesses filed lawsuits, even though they were upset about it. Some small businesses filed lawsuits and the Trump administration lost the two courts below the Supreme Court, which really honed in on the idea that there wasn't really an emergency here. The Trump administration was saying the trade deficit is the emergency, but we've had these trade deficits for a very long time.

2:22Felix Salmon: It's not really an emergency.

2:24Jeff Horwitz: Not to mention the fact that we're imposing tariffs even on countries with which we don't have a trade deficit.

2:30Felix Salmon: Right. Yes, good point. And so at the Supreme Court, though, they also honed in on a very relevant thing, which is that in the Constitution, Congress is the one who does the taxing and the revenue raising, not the president. And the president, Trump is his name, he has been bragging about the revenue raised by the tariffs for months and months and months. I think in one post he says they're bringing in trillions of dollars, which is not accurate. But still.

2:59Jeff Horwitz: Scott Besant has been coming out saying like, we can raise$500 billion a year in tariffs. And like, he has suddenly been like, wait, was I not meant to say that?

3:06Felix Salmon: Yeah. And they've even said like, we can lower income taxes because we're making so much money from the tariffs, et cetera.

3:12Jeff Horwitz: Do you remember during the big, beautiful bill act, they got really upset that the CBO wasn't including tariff revenue? They're like, you have to include the tariff revenue.

3:20Felix Salmon: You have to include the tariff revenue. But at the Supreme Court, John Sauer, the solicitor general, argued tariffs really aren't about money. They're not about raising revenue. They're not a revenue raising mechanism at all. They're about regulation. And that was the argument they put forward. So they sort of have their rhetoric going into this case has really not. It's been sort of a self-own in many ways.

3:42Elizabeth Spiers: It's sort of like Sauer's entire argument is he's defending a serial killer and saying my client didn't do it. but the serial killer is posting on social media every day. I did it. I did it. Here's where the body is.

3:54Jeff Horwitz: But it's okay because that's, you know, that's not like evidence in front of the Supreme. I mean, I always wonder the degree to which the Supreme Court cares about, like, what people say and what people do and the degree to which they just kind of sit there looking at the Constitution and scratching their chin and going, I wonder what the Constitution is.

4:12Felix Salmon: Well, we know in the past they haven't cared about President Trump's rhetoric, right? in the Muslim ban, the so-called Muslim ban case in 2018, when Trump was going around saying, we need a Muslim ban. And they said, it doesn't matter what he's saying. Like, we're just going to look at the policy. So in the past, they have ignored things he said. Well, here though, it's a little bit more, I think, relevant because they are looking at

4:34Elizabeth Spiers: the question of intent. And so when he articulates what his intent is, it's more directly relevant than it would have been in the Muslim ban.

4:42Jeff Horwitz: Yeah, we don't know. We don't know whether that they're looking at the question of intent, but it would be perfectly rational for them to look at the question of intent.

4:48Elizabeth Spiers: Well, we do, because they've literally articulated that. Some of the justices.

4:53Jeff Horwitz: Yeah, no, exactly. Gorsuch seems to be the one who's, like, focused the most on this sort of question, because he's like, you know, if you look at the original ruling from the International Trade Court in New York, it was very long and very detailed and very persuasive. And it basically said, these tariffs were illegal on a whole bunch of different levels and therefore, you know, we're overturning them. But the one thing it didn't do was go into the nitty gritty of are they constitutional? They didn't really talk much about the separation of powers and like only Congress can impose taxes and that kind of like high minded stuff.

5:31Jeff Horwitz: And that seems to be what the Supreme Court seems to be focusing on, which is kind of interesting because like, as per the lower courts, they don't need to like that these tariffs are pretty clearly illegal, you know, high-minded constitutional questions notwithstanding.

5:46Felix Salmon: Yeah, they could pick their poison in terms of arguments, I think. There's also this major questions doctrine that basically holds the executive branch can't really do anything if it raises major questions. So they used it to knock down a bunch of Biden things that they said were like a really big deal and Congress needs to weigh in when there's so much money at stake. But the Biden things that they were weighing in on, like the student loan forgiveness, we're talking like billions of dollars. In this case, it's trillions. So you would think if there was any consistency to this doctrine that they came up with, they could also use that to knock back the tariffs.

6:25Felix Salmon: I do think the more, maybe more interesting question longer term is like, the White House is probably just going to do tariffs some other way, because there are lots of legal ways the president can impose tariffs without Congress.

6:38Jeff Horwitz: Yeah, these tariffs that fall under this court case are roughly half. I think someone was estimating that like we're getting about$190 billion of tariff revenue right now. And that would go down to like$100 billion if all of the ones that are about to be made illegal are made illegal. But that still leaves the other half. And then what you can do is like expand the other half. I think it would be much, much harder to just say, oh, yeah, Brazil, 50 % tariffs because I don't like your politics, or Switzerland, 39 % tariffs because reasons. You know, like, I think those kind of very sweeping, non-targeted tariffs, which are just based on countries rather than national security or anything like that, would be harder.

7:23Jeff Horwitz: But, you know, you're absolutely right that it's not like the Trump tariffs in entirety would suddenly disappear in the path of smoke.

7:31Elizabeth Spiers: In one of the stories we read in the prep, it was a journal story. You know, Trump's complaining that if this happens, it will, quote, literally destroy the United States of America. And then the journal very dryly says, that doesn't seem likely. No?

7:45Jeff Horwitz: Jeff, you are hanging out in California in the world of, like, blockchain and prediction markets. Right now, the prediction markets are saying that there's, like, a 70 % chance that the Supreme Court will uphold the lower courts and the tariffs will be found to be illegal. How's the vibe of where you are?

8:06Emily Peck: It was fascinating watching the real-time odds change as justices continued to speak and ask questions. There were spikes, which is, I guess, the entertainment value prediction markets, really. We maybe haven't fully

8:21Jeff Horwitz: I love this idea that people have been trying to get television cameras into the Supreme Court for a long time and failing. And so it's been kind of boring as a spectator sport. But now that you can put money on it and bet it in real time, then suddenly people are going to start caring about SCOTUS.

8:39Emily Peck: Yeah, no, it's prediction markets have managed to do that. It'll be the same for, you know, peewee soccer games and peewee baseball pretty soon. You know, we can bet on the children. It'll be great.

8:48Felix Salmon: It will be interesting to see if the prediction, if it's correct that the Supreme Court is going to overturn these tariffs because the prediction markets have been really great in predicting things so far, right? But this is the first one I remember involving Supreme Court argument. So that's kind of fun.

9:06Jeff Horwitz: Emily, what's your feeling? Do you think the prediction markets are right that we've finally reached the point at which this conservative Supreme Court is going to go against President Trump's wishes for pretty much the first time?

9:19Felix Salmon: I mean, I'm not in the prediction game, so I'm not going to make a prediction. That said, I would say this court has ruled in the president's favor a lot. And I feel like if it doesn't this time, it'll find a very narrow way through to leave him lots of room to do lots of other things.

9:38Jeff Horwitz: In the appeals court, which heard this case like on bank, the entire suite of appeals judges weighed in. I was quite shocked at how incoherent the dissent was. Like it wasn't a unanimous decision. There was a dissent. There were like three judges who managed to come up with a reason why the tariffs were legal. And I read that dissent like three times and I could not make the head or tail of it. It just didn't make any sense.

10:05Felix Salmon: Yeah, I tried to read that too. It was hard.

10:07Jeff Horwitz: But it looks like the judgment will come down probably next month. We're hoping like before the end of the year. And then comes the interesting question, which is if the tariffs are ruled to be illegal, is the obvious remedy going to be put in place, which is that everyone who paid any of these tariffs can like put in for a refund with the IRS?

10:29Emily Peck: I'm owed at least$15, I think. There are major questions at stake.

10:36Jeff Horwitz: i hate to break this to you jeff but you did not pay the tariffs you just paid like a higher price for something that was tariff the entity that paid the tariff was the was the importer no i did have

10:46Emily Peck: to pay ups so i oh okay problem here i am a victim that's all i'm saying yeah i think i had to pay

10:53Jeff Horwitz: some tariffs on like a chair once but yeah broadly speaking it's the imports or the importers i should say. And that's every major company in America pretty much is importing things. And so, yeah, like Elizabeth, you think they are all going to be like, that was illegal. I want my money back. And the Treasury is just going to have to start giving out massive refunds.

11:14Elizabeth Spiers: I think some of them are going to say that was illegal. I want my money back. I'm not optimistic that they will end up with refunds, though.

11:20Jeff Horwitz: Why not?

11:21Elizabeth Spiers: I feel like the Trump administration will find a way around it. Their MO so far is to say, just declare things unilaterally that they want to do and then wait for somebody to stop them, either the courts or Congress. And we've had limited success in doing that.

11:36Felix Salmon: Their math is interesting. I've been covering the SNAP case, the case over supplemental nutrition benefits that's sort of ping-ponging in the court right now. And the Trump White House put out this formula for states to calculate reduced food stamp benefits. And it's been interesting watching the math happen. They did one formula and then they had to take it back because it had an error in it. And then they put out another formula. Meanwhile, nothing's happening. It sort of reminds me of when the tariffs rolled out and they had that formula that they pulled from ChatGPT.

12:10Jeff Horwitz: That insane formula for what the tariffs should be that made no sense at all.

12:14Felix Salmon: Yeah. So you wonder if they have to issue refunds, how they're going to math that. It'll be really interesting to cover. I'll say that.

12:30Jeff Horwitz: so Jeff you have this big new piece at Reuters it's long it's detailed I'm sure it went through a million levels of lawyering but the TLDR at least for me is that if I'm a scammer if I want to be scamming people then not only is the internet generally the best place to do scams these days, but specifically, Facebook is the best place to do scams these days. And my chances of being slapped down by the platform, if I'm scamming on Facebook are much lower than if I'm trying to scam somewhere else. And so Facebook is like the place to scam.

13:06Emily Peck: That was Facebook employees conclusion, both on their own and also in sort of investigations of scammer forums, because the scammers actually are pretty good. There's a community there. I was kind of surprised to figure that out along the way. There is a great deal of honor and community among these said thieves. Yeah, so the company has a, shall we say, reasonably lenient set of guardrails for when they take you down for scamming. As an advertiser, this is all probabilistic, but as an advertiser, if you're sub 95 % scammer, you are unlikely to be actually stopped from buying ads on an ongoing basis.

13:50Jeff Horwitz: This is well. So basically, if Facebook sets its like algorithms on you and says, you are 90 % probable to be a scam, then they'll be like, we're not sure. So we'll let you stay and we'll let you keep on scamming. But also, and this is my absolutely favorite bit, they'll be like, but we'll charge you more.

14:07Emily Peck: Yeah. So there are penalty bids, right? So digital ads are very frequently sold in auctions. That's how almost all the advertising on Facebook and Meta's products are sold. And because of sort of very tight revenue constraints that Meta has placed on its own safety staff in terms of taking down scammers, they kind of went for a more revenue efficient way of doing this. And that is that if you think someone is, say, 90 % likely to be a scammer, you're going to charge them a penalty on their bid in the advertising market. So if like Scammy Felix bids, you know, 120 and you've got a 25 cent penalty bid, then, you know, like Honest Jeff here could come along, bid a buck and still win.

14:54Emily Peck: But the way that this would work out in practice is that if Scammy Felix is up to pay$1.30 and I bet my buck, you're still going to win. You're just going to pay an extra$0.25, basically.

15:07Jeff Horwitz: So basically, for the few scammers that do get kicked off the platform because they're more than 95 % likely to be scams, Facebook loses some revenue there because it's no longer getting money from those people. But on the other hand, it's making money from all of the penalty bids that it's imposing on all of the other scammers. So really, scamming is now a profit center for them.

15:27Elizabeth Spiers: Also, if you're a successful scammer, that would seem to imply they're going to sort of service you better. One of the most amazing stats in your story was just that small advertisers have to get reported at least eight times before they get taken down. Also, the stats about user reports being either rejected or ignored 96 % of the time are just mind boggling.

15:48Emily Peck: They actually did. They considered the 96 % failure rate in handling user reports of fraudulent messages to be a problem. And so they did set a higher standard for themselves going forward. And that higher standard was dismissing at most 75 % of all valid user reports of scams, which, to be fair, is a big improvement over dismissing 96 % of valid user reports. Now they're just going to do 25%. So, you know, they're going to get one in four right. That's the bar that they set for themselves to clear.

16:19Jeff Horwitz: Running a platform that is scam infested does not seem to be the most obviously user friendly way of being a company. Is this just another piece of inshittification? Is this what happens when the revenue function just completely squashes the product function?

16:40Emily Peck: Look, I think for a number of years, social media has been perhaps less interesting to Mark Zuckerberg than other new technology, right?

16:53Jeff Horwitz: He did change his name to Meta because the metaverse was going to be so big.

16:57Emily Peck: The company was all in on the metaverse and that didn't work out. And previously it was kind of all in on crypto and for a bit, you know, with Libra. And now it's all in on AI. And I mean, there is this just massive cash cow that, you know, continues to grow day by day that they've been using to pay for investments that have not worked out great.

17:21Jeff Horwitz: So basically what you're saying is that if Mark Zuckerberg is wandering around Silicon Valley offering$100 million pay packages to AI scientists, which he is doing, and if that's what he cares about the most, which it is because he said so, then at that point, the social media stuff is just basically the way to pay for his investments in AI. And so the main job of social media is not to bring people together and let people talk about their aunt. It's to create a cash flow that can pay for AI. And so he's maximizing for cash flow. He's optimizing for cash flow.

17:59Emily Peck: Look, I have not seen a document where they are talking about how they're going to buy more NVIDIA chips by running more scams. It's not like that's a one-to-one thing. that said yeah mark has been very clear that he views one of meta's big advantages in the ai race so to speak as that it has the cash flow from its business to invest like this right i mean other companies in ai they charge people for their products meta is uh giving away this stuff for free and that's you know been a tried and true tactic for them in the past yeah and and to be

18:38Jeff Horwitz: clear the big thing that everyone is all talking about when it comes to open ai which is still arguably the market leader in the ai space is how the fuck are they going to be able to pay for all of these chips and their cfo zera fryer was coming out and saying you know yeah we're going to have to start doing profit share with pharma companies and you know whatever because they are desperate for cash to fund all of the massive capital investments that they need to buy chips and data centers and all the rest of it. And it's true that if you are meta and you have just this raging torrential river of cash running through your headquarters every day, you don't have that problem.

19:22Jeff Horwitz: And that does give you a significant advantage.

19:25Emily Peck: It is. I mean, it's weird to see this stuff in internal documents play out with like the level of stinginess that it seems like they've shown in some instances, right? Like, so a team that was devoted to trying to basically create a bit of extra fiction and extra vetting for high-risk clients, high-risk advertising clients. They were given a cumulative total of revenue harm they could do to the company, and that included both benign and violating. So in other words, like scams and not scams. That cumulative total was 0.15 % of Meta's revenue for the first half of this year, Yes, it's north of$100 million, but I mean.

20:09Jeff Horwitz: But if scammers are providing billions and billions of dollars of revenue to Meta, and the anti-scammer team is being told, you can only cut no more than$100 million or$130 million or whatever.

20:23Emily Peck: $150 or so, yeah.

20:24Jeff Horwitz: Then by definition, the overwhelming majority of scammers are just going to keep on staying on the platform.

20:30Emily Peck: Yeah, and this is one of the reasons why the penalty bids were, I think, popular. internally is that if you wanted to reduce scams, but kind of to minimize the revenue impact, you didn't ever say no to anyone. You can't buy ads. I mean, you did for the people who were truly 100 % nailed. But you mostly would just sort of raise the price and make buying scams less economic. And it does work. Internally, there were some ethical concerns raised about this, because, as you know, you're like, you are charging scammers more because they are scammers, which is a weird thing to sort of bake into your calculations.

21:11Jeff Horwitz: It reminds me very much of the famous story, I think I've told this story on the show before, about the primary school that was getting really upset about parents who would turn up late to pick up their kids at the school gates. And so they decided to implement fines. And they're like, if you turn up more than five minutes late, we're going to fine you 20 bucks. And what happened is that the number of parents who turned up late at the school gates went up substantially because they were like, oh, now I've been permission. Now it's just something I can pay for. You know, if I want to turn up late, I can just hand them 20 bucks and that's okay.

21:48Jeff Horwitz: And it does kind of legitimize this whole, like, if you have a Pigovian tax, which is what this is, you you tax things you want less of, then that is an alternative to some kind of regulatory ban, right? You're saying we are explicitly going to allow this and we're going to tax it rather than disallowing it. And it does seem like this is Facebook very explicitly deciding we are going to allow scams on our platform.

22:13Emily Peck: I mean, yeah, they and there are other elements of the documents that do support a similar conclusion, we'll say. So, for example, internally, they noted that they we're doing three and a half billion dollars every six months in what they referred to as higher legal risk scam revenue. So that would be stuff where it's like pretty obvious something is wrong. Like that marketplace advertisement, the goods never arrived.

22:39Elizabeth Spiers: Like, would you like some heroin?

22:40Emily Peck: Yeah, well, that was actually an interesting thing is that it turns out a lot of the legal drug advertising internally is actually fake. That's scam ads too. So they're scamming people out of buying drugs on Facebook.

22:52Jeff Horwitz: Who's going to complain about, I didn't get my cocaine?

22:55Emily Peck: But yeah, it's hard to, yeah.

22:58Elizabeth Spiers: Isn't this all in keeping with Facebook's general orientation toward everything that might be unethical, which is, we'll fix it if we're about to be regulated, but if we're not, we're going to just punt on the problem.

23:11Emily Peck: That has been a historical approach, that until something is either a very high-end PR fire or there is regulatory threats. The company has in the past sometimes been pretty tolerant of things. And I think that's with the scam revenue issue. You know, one of the documents I've seen states they're doing$3.5 billion every six months in high risk, higher legal risk scam revenue, and that the outer limit of potential fines is likely less than that by a margin. And that then turns into a fairly basic math problem and one in which cutting down too hard might have negative revenue effects.

23:56Felix Salmon: Can we talk more about the kinds of scams that we're talking about here? Because one thing I thought was really interesting in your piece, Jeff, was that Meta is more apt to crack down on scams if they involve a big name brand company or if they involve a big name brand person, which I think is just so telling of who they consider their actual customers to be. You don't want to piss off your big advertisers. It's not your users who are there for free, but it's your advertisers who pay you money and then famous people also. That's what it seems like anyway. So I was wondering if you could maybe give us a few examples of the kinds of scams we're talking about.

24:32Emily Peck: Yeah, I mean, look, if you use social media and you have managed to avoid seeing an Elon Musk wants to give you money post, I salute you. So I think internally, yes, in terms of what the company was worried about, guidance from management was that, you know, the two biggest concerns were things that would piss off advertisers and things that would piss off really high profile public figures. And that was due to both revenue and, you know, PR fire risk. Does anyone outside the company use the phrase PR fire? Is that or have I just kind of internalized that over the last years?

25:12Felix Salmon: PR fire. I mean, I get it.

25:15Emily Peck: I think of like, oh, man, that's a PR fire. And that's like largely based on reading my documents.

25:21Jeff Horwitz: Jeff, you are. You are a walking PR fire for Facebook. But on that subject, just remind me about the chronology here. When Trump was elected, Zuckerberg went on Rogan. He talked about being more masculine. Sometime before then, I think, Cheryl left the board. Do you think that what we're seeing here in terms of like this, you can almost call it libertarian laissez-faire, let the people be scammed and it's on them if they get scammed. Is that sort of of a piece with Zuckerberg's move to the right or does it predate that?

25:56Emily Peck: I would say it mostly predates that. I think that the move to the right was kind of billed as, you know, sort of some abrupt shift for Mark. I think there's long been a sense that Mark is focused on what's good for the company and on winning. And, you know, he never liked content moderation because content moderation is expensive, burdensome, and, you know, not something that can be scaled as easily as, you know, a machine learning based recommendation system. And so I think there maybe is a little more permission at this point to be open about these things. And certainly, as you noted, there was a bit of positioning toward the masculine energy, I think was the phrase he used.

26:41Emily Peck: But this is not new. I mean, in 2023 and 2024, the company was, if anything, I think even less concerned about scam activity on its platforms. It really was the arrival of regulators both around the world and sort of getting more and more upset about these things that did lead to the company starting to think about how it might want to maybe put scam revenue on a glide path.

27:09Jeff Horwitz: Thank you, Keir Starmer. He's actually achieved something. Good for him.

27:13Felix Salmon: Do you have a sense for which of Meta's platforms has the most, like, which is the most popular with scammers? Is it Facebook, Instagram, WhatsApp?

27:21Emily Peck: Facebook is still where most of the money comes from. And yeah, I mean, it's, look, I understand that among coastal media types, the idea of spending an hour on Facebook reels is pretty daunting. but it is not that way in much of the world. And that's where most of the money is coming from.

27:40Felix Salmon: And do you have a sense for like how much people wind up spending on these scams year to year?

27:45Emily Peck: So in terms of losses, I mean, there's the very obvious math of running a scam is a business. You know, you value your own time or value the time of like your, and this is nightmarish, your like human trafficked employees on the Cambodian-Myanmar border in a scam compound. You have to buy the ads. You have to figure out how to launder some money. These are all cost things. So you would assume that if Meta is doing$3.5 billion of just higher legal risk scam ads, that the losses would have to be a multiple of that for users. And so the victims range from people who gave$19.95 to an entity that was saying it was McCormick for a spice rack.

28:32Felix Salmon: That one looked tempting, I'll be honest. I saw it in the story.

28:35Emily Peck: Yeah, I mean, your spice rack will never arrive, but your credit card will be shared widely once that happens. So it ranges from like kind of little e-com scam stuff to ads for investments in which people have lost their whole damn life savings. There are plenty of investment ads where it looks like a investment firm based in New York or London, and they get you to deposit money and they show that you're making amazing profits real fast. And, you know, then you deposit more money and soon you're hundreds of thousands of dollars in.

29:11Jeff Horwitz: Is this pig butchering?

29:13Emily Peck: Pig butchering, I think, almost has that romance scam connotation sometimes. But the whole concept of it is that you're fattening up the pig, right? As in building trust. And then at some point, you butcher them. So yeah, this is a variation on that. And I mean, it's obviously something that you don't have to have it work out that much if when it does work out, you are making six figures in profit. So the losses here can be pretty devastating.

29:42Jeff Horwitz: And just the losses, I mean, obviously, most of Facebook's user base is not in the US or even North America, but this is where the money is. Are the losses disproportionately American?

29:55Emily Peck: It's disproportionately, I would say, affluent country. I referenced the scam compounds in Southeast Asia. This is sort of the confluence of crypto, which makes money laundering much easier and makes it much harder to recover funds once you realize you've been had. plus the rise of organized crime that is really focused on like these sorts of scams, plus Gen AI making it much easier to, you know, take someone who was trafficked from Kenya and is now like in Cambodia and to have them talk to someone who lives in Texas and pretend to be someone who's in New York.

30:40Felix Salmon: Can these people file lawsuits against Meta? Why isn't there no class action or anything, you know, or maybe there is.

30:48Emily Peck: There are a few class actions. There is some litigation here. That said, it's been very hard. Section 230, which we've all talked about at various points, which gives platforms legal defenses against allegations that they failed to moderate content. That does apply to some degree here. I think for a lot of folks, they're like, wait a second, if you're taking money to let someone advertise, there's a higher standard of responsibility. That just feels right to a lot of people, I think. How that's going to hold up in court is an interesting question. But there's both the class actions you mentioned.

31:27Emily Peck: And then there's also instances in which extremely pissed off billionaires who dislike that people are being regularly defrauded in their name and having their likeness, you know, like sort of used by the scammers, they have sued Metta as well. There's both a case in Japan. And then I think the one that has gotten furthest in the US court system came from Dr. Andrew Forrest, who is an Australian mining magnate slash philanthropist, and who I think just got extremely upset on a personal level that thousands upon thousands of scam ads were being run in his name. And at this point is sort of going at this thing in a rather aggressive and personal fashion.

32:17Jeff Horwitz: Andrew Forrest is to Mark Zuckerberg as Peter Thiel is to Nick Denton.

32:30Jeff Horwitz: But I do want to stick on this subject of massive losses and billionaires, because we do need to cover the FT story about Neon, which was just amazing and delicious. And if you think that losing hundreds of thousands of dollars on like some Facebook scam is bad, just imagine what it would feel like to lose$50 billion on building a hole in the ground in the middle of the desert.

32:56Felix Salmon: I had no idea. I mean, can we talk about the FT story is amazing, but it's all in meters. and, you know, my pedestrian American brain. I'm like, what?

33:07Jeff Horwitz: So 500 meters just is what, like 1 ,600 feet, something like that?

33:11Felix Salmon: I looked it up. It's like it's about as high as the Empire State Building, this structure, Neom, and then as long as 100-ish miles long. So it's like a just, I mean.

33:23Jeff Horwitz: It's long enough, and this is in the FT article, it's long enough to reach from London all the way to France.

33:28Felix Salmon: To be clear, it doesn't exist.

33:30Jeff Horwitz: It doesn't exist, but this is the thing that MBS wanted to build in the middle of the desert. It was basically a solid wall, 100 miles long, more than 100 miles long, I think, which was 1 ,600 feet high, taller than the Empire State Building, would have inverted dangly skyscrapers as part of it. I love that bit where they were talking like we had hundreds of meetings about birds because the birds were just constantly – it was in the middle of like a major migration line. and the birds would just be crashing into the sides of this wall and they couldn't go around it because it's hundreds of miles long.

34:04Jeff Horwitz: And they can't go over it because it's 1 ,600 feet high.

34:06Emily Peck: It was going to be mirrored. Birds were going to run into it because it was going to be mirrored. It was going to be worse than a window. And it needed to be mirrored because otherwise the Saudi Arabian desert heat would cook everything inside immediately.

34:21Jeff Horwitz: For fire safety, they couldn't have what you have in every other building, which is if there's a fire, evacuate the building because you'd just be evacuated into the middle of a desert where it's 140 degrees outside. So all they can do is say, well, evacuate next door and hope the fire doesn't follow you.

34:37Elizabeth Spiers: What's remarkable about this to me is it's sort of like it's so sci-fi-ish, but not grounded in reality in such an extreme way. It's like if you asked a 14-year-old who is a sci-fi fan to imagine a city of the future who had no understanding of structural engineering, no concept of scale, and just came up with all the craziest shit they could think of, this is what you would end up with.

34:59Jeff Horwitz: There's so much crazy that they are still, I mean, the Winter Olympics is going to be in the middle of the desert in 2029. They're still building like a winter ski slope.

35:08Elizabeth Spiers: Well, there was also this detail about, you know, they had to, the government basically razed a nearby small town and there were people who protested and most of them ended up in prison and three of them ended up executed.

35:23Jeff Horwitz: Yeah.

35:23Elizabeth Spiers: So against the backdrop of that, which 9 million people in any part of the world would find it attractive to move there and live in this crazy, you know, possibly structurally unsound city?

35:37Jeff Horwitz: But the crazy thing is that like for all like there was this wonderful video that the FD people found where the people in charge of it were saying, yeah, it's not so much about engineering and it's more about poetry. Like we need more poets. and you're like no you you really need more engine here if i'm going into an upside down

35:56Elizabeth Spiers: building that's dangling from you know a bridge i i care more about the engineering than the poetry

36:02Jeff Horwitz: oh that was so great that wonderful bit where they were like well the problem is that all of the toilets when you flush like all of that waste goes down it doesn't go up so what's going to happen to all of the waste and they're like oh we have it all worked out we're going to have like these shuttles running 24 7 that are shuttling like it was absolutely batshit but the amazing thing about it is that even though it's absolutely batshit they still spent 50 billion dollars on it and they're the largest piles in the world just massive pieces of concrete sitting in the desert being follies that cost billions and billions of dollars they actually started building this thing

36:43Emily Peck: I actually have a minor personal connection to this, which is a friend worked for a public planning firm. And I mean, this thing was such a bonanza for consultants. You know, just like a large portion of the money we're talking about for the planning stages of this just went to a whole bunch of white collar people who were being told by their bosses that they needed to tell the Saudis what the Saudis wanted to hear. And so I'd hear occasional updates from my buddy, and he'd be like, yep, well, they just didn't really put in transit, so they're just going to have everyone fly around via drones.

37:20Emily Peck: But they're also going to use the drones so that they will hold up some extra moons, just because they thought it'd be pretty cool to have two moons flying over. And there's going to be an electronic sea monster in one of the harbors. What?

37:37Elizabeth Spiers: Again, this is like a child comes up with.

37:40Emily Peck: Everyone knew this was not going to happen. And again, Elizabeth, you have children. This is like, you're like, oh, isn't that nice, honey? And sometimes you say, and it was basically that level. And my buddy is a smart person, did not expect this was going to happen, but was just kind of like, yeah, this is weirdly what we are being hired to do. And so I think the fascinating thing is even as the FT and the Neom is kind of done And Elliot Brown, shout out to Elliot Brown, my colleague, former colleague of Wall Street Journal, who wrote a lot about this stuff and failures previous to this as well.

38:17Like, even as that's happening, they're also talking about building a World Cup stadium on top of a skyscraper.

38:25Emily Peck: Like, that's like the new version of it, which is like another version of you're like, wow, that's a terrible idea.

38:32Jeff Horwitz: Let's get 100 ,000 people into a stadium 1 ,600 feet above ground. They all need to go up and down in elevators because reasons.

38:40Emily Peck: I'm not an engineer, and evidently neither was anyone involved in this project.

38:45Felix Salmon: Well, it's so amazing because my hot take is just like, you know, there's all this talk now about the abundance agenda, and there should be less barriers in place to building, and that's America's whole problem. And we have this president now who's just like, oh, I don't need to ask for permission. I'm just going to knock down a building and build whatever I feel like, and everyone seems okay with it or whatever. And then you have MBS out there in Saudi Arabia, and he's like, we want to build this crazy structure, and who cares about the birds, and there's toilets, whatever. And the FT story has meetings where he would come in with an entourage of 50 people.

39:22Felix Salmon: He'd walk around, total silence, and he'd say something, point to something he liked, and they'd all go, love it, love it. Like, there is a reason you can't just, like, fully, you need some kind of someone saying no sometimes. Like, that does actually make sense a little bit. And one of the things, like, at the top of the piece is that officially this is still on.

39:45Jeff Horwitz: Like, he has, like, no one has really worked out how to let MBS down gently on this one and be like, you know.

39:52Elizabeth Spiers: Well, if he takes it badly, we know what the consequences are.

39:55Jeff Horwitz: The initial plan went from like, we're going to build 20 of these sections to seven to four to three to like maybe one. But it doesn't work if there's only one for a whole bunch of like logistical reasons. And so obviously nothing's going to wind up getting built. Partly because the amount of just the amount of steel you would need is like the entire annual production of steel. And there's no way of physically getting it into the middle of the desert. There's just like one tiny little port somewhere that just doesn't have that capacity. None of this makes any sense.

40:25Felix Salmon: Well, I thought about that too. And I know I just had a whole thing about you can't just have one guy have a crazy dream and then everyone, yes, surrounded by yes men and it happens. But like, how do great buildings get built? Like, this is maybe my dumbest hot take ever, but like, this is how innovation happens. The pyramids happen. Like, you know, sometimes crazy things happen because someone has a dream.

40:46Jeff Horwitz: What I will say is that we should all go back because we have a bunch of archives here at Slate Money. And we should all go back and listen to the great Slate Money Goes to the Movies episode with Michael Beirut about the fountainhead. Because that is very apropos. And that is an awesome movie. For all that it was written by Anne Rand and according to her contract, they weren't allowed to change a single word. And so there's this crazy long monologue at the end that goes on forever. But that movie is Gary Cooper, right? And it's just such a great movie. And that's how buildings get built. That's a documentary, Emily.

41:19Felix Salmon: Yeah, that's what I mean. You got to have a vision. One guy with a dream who seems crazy and, you know, takes it to extremes. But then in the end, everyone celebrates the beautiful.

41:28Elizabeth Spiers: It sounds a little bit more, it reminds me of, there's a bit in Thank You for Smoking, where some Hollywood guy comes up with an idea for a movie and he wants people smoking in space. And somebody points out that you don't want to do that in a high oxygen environment or everything will explode. And the agent says, oh, well, we always have a solution for that. You know, whenever you have some unrealistic, unworkable idea, you just say, oh, well, thank God we invented the machine that prevents these things from exploding. And then people just will the machine into reality. And that sounds like that's what's happening here.

42:01Elizabeth Spiers: You know, they discover a blindingly obvious problem and then engineers have to scramble or designers have to scramble and just come up with some equally preposterous solution to it. and then that just gets built into the plan.

42:14Jeff Horwitz: Yeah, I mean, it's almost literally, there's this joke in architecture circles that if you don't know how to support something, you just put in a skyhook. You just dangle it from the sky. And then you kind of use the skyhook as the design solution until such point as you work out what the actual real solution is going to be. But this entire city was basically suspended from skyhooks. It was all just this flight of fancy and it was all just the creature of this one you know millennial prince who has more money and power than like probably anyone else on the planet and he likes to dismember his critics too

42:55Emily Peck: i was gonna say felix would you say that if you were in riad right now i don't think you would

43:00Felix Salmon: felix you'd say love it love it if i was commissioned to do a comedy show in riad

43:06Jeff Horwitz: that would be like a bit that i might choose not to say

43:22Jeff Horwitz: let's do the numbers round elizabeth you have a number i do it's 10 and that's dollars and that

43:28Elizabeth Spiers: is the amount of money that a caller into a radio show called uh manny and lauren's morning show said that she was going to charge all of her thanksgiving dinner participants in order to subsidize the cost of Thanksgiving dinner. And this generated a huge debate about whether this was reasonable, but it sort of also got put into a Yahoo news story about the cheapest things people did to save money. And then I just went down the rabbit hole of crazy things people did to save money. And they included somebody's roommate who counted sheets of paper towels to make sure that none of the other roommates were using too many.

44:02Elizabeth Spiers: Someone who reused Q-tips and a guy who would go on vacation, buy a canoe, use the canoe, and then return it on the way back.

44:10Jeff Horwitz: Oh, I see. You buy the canoe and then you get a refund on your canoe. I like that. I'm pro that. My number, because you guys watch television and I don't, but I love this story. My number is 32 million, which is the lower end of the number of dollars that was being made per year by a guy called Rob Durdick. Rob Durdick is the host of a show on mtv called ridiculousness which was apparently responsible for like the majority of the linear programming on mtv for the past few years it has more than 1 700 episodes it's one of the longest running series in mtv history it ran for 14 years and they were paying the host 32 million dollars a year plus plus that's a lot of money yeah and it's just like a clip show of people falling over i don't know man anyway they've canceled it now um but they have an archive of 1700 like previous shows and i don't think there's anything new in any of them so they can just keep on running reruns in perpetuity should they so desire yeah i feel like it's in

45:19Elizabeth Spiers: the jackass genre of tv shows which do well with a certain demographic yeah it's definitely in the

45:24Jeff Horwitz: jackass genre. Emily, what's your number?

45:26Felix Salmon: My number is 2.6 million. That is the number of people who will get no money in SNAP benefits in November under this new calculation the White House put out this week. I've been following this very closely, and you'll forgive me if I just explain it a little, even though maybe it's a bummer.

45:46Jeff Horwitz: Yeah, Debbie Downer.

45:47Felix Salmon: Sorry. The government is shut down. It's the longest shutdown ever. And because of this, the White House said it can't pay these food stamp benefits. Even though in other shutdowns they've been paid, it's no problem. Even though in the appropriations that sets up SNAP, there is a contingency fund there specifically for the purpose of in case something goes wrong, there's more money to send out. There is money there. Trump administration said, no, we can't do it. Cities, states, nonprofits, they all sued. They said, there's money there. Like, just give out the money. And the White House said, we can't.

46:19Felix Salmon: We are law abiding and we can't. So they went to the court. Two different courts were like, there's money there. Pay the money. You can do it. And they were like, oh, well, there is a little money. We'll pay partial benefits. So instead of just like sending out the money as they normally do, they're like, each state needs to calculate these partial benefits. So they made up this calculation. And this wonderful policy analyst at the Center for Budget and Policy Priorities looked at it, did the math, was like, they're not even spending the amount they said they would spend. And the USDA was like, oh, we made a mistake.

46:52Felix Salmon: We made an error. And they told the court, like, we have a better calculation. So even under the better calculation that the USDA came up with, there are still 2.6 million individuals who under this new calculation get absolutely nothing because of the way they're mathing the math. So that is my story. Oh, and so, but now we are recording on November 7th. So no new benefits have gone out now for seven days. There's lines at food banks and food pantries around the country. The Times had a good piece on Friday where they talked to a bunch of people who get snapped. Some of them are like dumpster diving.

47:24Felix Salmon: Other people are, you know, asking their friends for food or like stretching out their food and their meals. A court again said, by Friday, please like send out the money. And the White House was like, no, they have appealed that order. So that's what's happening. I just thought people would be interested in that.

47:42Elizabeth Spiers: But we have a$350 million ballroom, Emily. Yes.

47:46Felix Salmon: Oh, and I should say, to be fair, the White House, their response to this is that if Democrats would end the shutdown, that they could send out the money for the food.

47:56Jeff Horwitz: Politics. Jeff, tell me your number isn't political.

47:59Felix Salmon: Sorry.

47:59Emily Peck: I'll just stick with meta numbers. I'm going to go with a percentile, and that's 70%. And that is the percentage of advertisers in their first week on the platform that are violating Meta's rules. The reason that number is so high is because advertisers who get kicked off can just come right back on under a new account. And so therefore, like most Facebook advertising in its first week is like illegitimate, which I thought is just kind of a fascinating statistic.

48:33Jeff Horwitz: Yeah, I mean, but here we are in 2025. Like, if you're an advertiser who has never advertised on Facebook, you're a weird company just to begin with.

48:40Emily Peck: Or you are an entity that was kicked off last week and will be kicked off again this week and will join the platform again next week.

48:49Jeff Horwitz: I like the idea that there are sort of scam probability percentage consultants who are like, this is how you tweak your ad So it's only 94 % likely to be a scam rather than 96 % likely to be a scam. And that way, it'll stay up.

49:06Emily Peck: I mean, it's not that precise. These accounts are, you can throw them away pretty quickly. It's more like, ah, we've got like 300 to 400 accounts. Like, let's see what works. You know, because everyone's doing A-B testing, right? Meta's doing A-B testing and the scammers are doing A-B testing. So like, does this get us kicked off? If not, keep doing it.

49:26Jeff Horwitz: on which note I think that's it for us this week thank you to Jessamyn Molly and Shana Roth for producing thank you to Micah Phillips for making sure that we can all be on the YouTubes which is very exciting thank you everyone for writing in slate money at slate.com but thank you mostly to Jeff Horowitz who got up at the crack of a sparrow's fart to be on this show all the way out there in California thank you Jeff for being on it's been great having you it's been a pleasure we will be back next week with even more sleep money the crack of the are we just gonna let that

50:03Emily Peck: go the sparrow's heart thing it was weird i i didn't i didn't let it go you know what just yeah yeah yeah you guys haven't heard that