GameStop, Economic Democratization, and the Power of Oversight

GameStop, Economic Democratization, and the Power of Oversight.png

Topics Discussed

  • Covid-19 Relief Proposals, Bipartisanship, and Unity

  • Stock Market Definitions and Explanations

  • GameStop & Robinhood

  • Moment of Hope: Black Women Entrepreneurs

  • Economics, Democratization, Populism, and Oversight

  • Outside of Politics

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Episode Resources

Transcript

Sarah: This is Sarah

Beth: And Beth, 

Sarah: You're listening to Pantsuit Politics.

Beth: The home of grace-filled political conversations.

Beth: [00:00:00] Hello everyone. Thank you for joining us for this episode of Pantsuit Politics. We're going to focus quite a bit on money today, since we are living in the game stock era last couple of weeks. We're gonna talk a little bit about that and how it has us thinking about corporate responsibility and the stock market and how we interact with all of that as consumers and citizens.

Before we do, if you're not getting our newsletter, I feel like you're missing really wonderful connections with other Pantsuit Politics listeners. Every Friday and only on Friday, we send out an email, the most important part of which shares feedback from our community. And there are always such lovely insights and such personal messages shared.

And so I really want all of you to be able to be part of that. You can sign up on our website, {PantsuitPoliticsShow.com. You just scroll down that homepage to a big purple box, enter your email address. And really the only time we send out messages are on those Fridays or very, very special occasions.

Sarah: [00:00:50] So before we dive into the economy and the games stop controversy, fervor, instability, I don't know what word we're using, but before we dive into that, we do want to [00:01:00] talk about the COVID relief package. As most of you know, president Joe Biden and his administration proposed a $1.9 trillion package. That includes money for vaccine distribution money for schools, money for state and local governments.

It also includes a raise to the federal minimum wage, up to $15 and some other policy proposals. Now we have a group of 10 senators led by Senator Susan Collins from Maine proposing another COVID relief bill, much smaller, about $600 billion. And as we're recording on Monday, they are heading to the white house to discuss this bill with president Joe Biden.

We wanted to talk about it with full knowledge that this could be out of date by the time they have this opinion in this episode comes out on Tuesday, but we still felt like it was really important to talk about this proposal. And it's accompanying depending on who you are, either call or response to discussions of unity.

Beth: [00:01:57] Perhaps that's the place to start since that's where the story is [00:02:00] living, because the story is much less about a counterproposal to a COVID package and much more about the vaguely threatening way that this letter is being talked about, because what you have here are 10 Republican senators. For the most part.

I think this represents the group most likely to work across the aisle throughout the Biden years. Although commentators fairly point out that there is no reason to believe that this group will consistently or ever work across the aisle when it matters based on the past four years. But this is the group most likely, if that is to happen, going to president Biden with an attitude of, you said you wanted to do things on a bipartisan basis and so you need to listen to us on this and walk in our direction, instead of passing through most of your envisioned relief using a reconciliation process that takes a simple majority in the Senate versus 60 votes. Is that a fair summary, Sarah? 

Sarah: [00:02:50] I think that's pretty fair. Yeah, it is half, as I said before of Joe Biden's proposal and I think what really bugs me about it is it is, it's like using this call [00:03:00] for unity as a weapon. And look, Joe Biden did spend a great deal of his inaugural dress calling on Americans, all Americans to end our quote unquote uncivil war and calling on his own history of bipartisanship and his belief that it is essential to a good and functioning DC, if not democracy, but then he did not spend the next week coming out every day with complex plans to establish unity. 

His message has always been, we established unity by dealing with the crisis before us. It's like unity to me is a value. It's not the end all goal of the administration. It is a value of administration and I value the fact that he's having them to the white house to discuss. This package and this proposal, but the idea that the only goal of the administration is unity.

And if it's not, if, if, if whatever they're doing doesn't achieve unity, it doesn't have some sort of bipartisanship, then it doesn't matter. Well, that's not the goal. You know, Jen Saki said, he goes to bed every night, thinking about COVID and he wakes up every morning thinking about COVID and how to deal with this crisis and get the most Americans well and safe, and our [00:04:00] economy back on track kids back in school.

And you know, this package under the administrations understanding and rubric and legislative priorities achieves that. And so if you want to meet that, the smarter thing would have been is we want what you want. We want what you want. Here's why we think this is a better way to do it instead of what we want, what you want, but you're spending too much money and you said you wanted it to be bi-partisan. I just bugs me.  

Beth: [00:04:22] I would take this letter much more seriously if it were framed with more questions. Now that's a terribly naive thing to say about Washington DC, right? No one operates in good faith. Everything is used as a weapon. And I'm saying all of that because that's the way we read it.

I don't think that's always what's going on, but that's the way the storyline is always presented. So just like all of the executive order tweets Biden has done 40 executive orders. Now we're taking 40 executive actions, Tik, Tik, TOK. So many of those, how can we continue to go on this way? It's unsustainable.

Well, if he weren't doing that, then what you would say is Biden promised all these things, where are they? He hasn't delivered on any of them. I mean, there's always going to be some kind of weapon in the process. So I don't care so much about that part of the storyline here. I would like to see everyone treating this crisis as the [00:05:00] crisis it is, and trying to make this the best package possible.

And I think to that end, there are some points that this group has. I'm interested in any of the money from the first relief packages that hasn't been spent yet. I want to know why that money hasn't been spent and how we can make those programs better and how we can administer those programs. More equitably that's certainly in line with the articulated priorities of the Biden administration.

It's not a good thing that PPP money was sent out in the manner that it was where lots of businesses that really needed it, didn't get it. And lots of businesses that really didn't need it did. That's a problem. And I think talking about that is important. I think we've gotten really hung up on some symbolism around one-time relief payments, which I support.

I am not against any aspect of this bill because I think it's too much money, but I also think if we're arguing about whether a household in the $200,000 a year plus range, recognizing that that is not a ton of money, depending on where you live in the country, but a household in that range getting $1,600 direct relief payments versus what all of that money pooled together [00:06:00] could do for childcare programs, could do to get kids back in school, could do, to get vaccines in arms.

You know, I think the allocation of the dollars matters a lot and I wouldn't die on the Hill of what exactly is the relief check amount for something that's one time versus something that's programmatic. There's policy stuff to argue about here. The Biden administration anticipated that. I'm sure these senators anticipate that.

And that's why they're low-balling from the very beginning. If this ultimately makes a better bill, I'm excited about that. I don't think that process has helped by Rob Portman sitting on Fox news saying, well, if he really meant unity, You know, he would sign off on our proposal. 

Sarah: [00:06:33] Over the weekend I listened to as our client interview, Paul Krugman, the Economist on his new podcast that's very good. And I thought what was really helpful was the framework of this particular crisis as closer to a natural disaster than a traditional recession. Um, he was talking about, you know, the truth is one household who makes over $200,000 a year won't get [00:07:00] a blip, like won't feel that $1,600 and another household that makes over $200,000 a year in the tourist industry will feel it tremendously.

Right. And it's just really hard when we come out and we say, well, you know, the average salaries are fine or people are saving on average. And his point was like, well, yeah, on average, but that's not really applicable in this particular type of crisis because it is hitting the people it's hitting extraordinarily hard.

And he's like, you know, I, I hate all discussions of average. If Jeff Bezos walks into the bar, everybody's average wealth goes up, but you don't feel the impact of that. You know, your actual wealth doesn't go up. And so the idea that like, well, we're worried about people getting money, they don't need. And I, I just think often there's this like, Technocratic obsession, usually on the left, not the right with making sure we're doing it perfectly when there is more to be gained by doing it quickly.

And I think this is a case where we need to do it quickly, you know, and it might not be perfect and then people might get money. They don't actually need, but I think it's more important to not be obsessed with it, you know, not to mention like that. There's an [00:08:00] entire economic argument about whether we should be obsessed with the overall total cost at all.

But I mean, that's a bigger fish to fry right now. But I just think that the obsession with a cost in the middle of a crisis of this magnitude, and then having no other argument beyond the cost, except for it, you said you wanted to be bi-partisan is, it's just, it's hard to swallow. And again, I'm not, I'm glad he's having with the white house. I think shutting them out would be. The wrong approach. I don't anticipate a lot of movement, but 

Beth: [00:08:28] We'll see. I don't disagree with any of that. And ultimately I'm a pragmatist about this. I would rather the checks just be cut with the risk that people get the money who don't need it because sometimes it's cheaper to cut the check to everybody then to figure out who really needs it and who doesn't. And that slows things way down. And every economist who I trust has said the risk here is under spending not overspending in terms of what is needed. 

And so it's not that I'm in agreement here. I do think it's fair to ask questions like that. Does it makes more sense to allocate direct spending here versus shoring up [00:09:00] programmatic spending there? And I think that everyone in Congress has just screwed this up 11 times over by allowing the debate to go on for so long instead of getting something done quickly, we would not still be talking about 1600 versus 2000 if this had passed in June, when we needed it.

But all those positions have kind of hardened because this thing has dragged on for so long. And so however, the Biden administration gets this done is fine with me. I think these Republicans are acting like they have a lot more leverage than they do here because a fair counterpoint to, well, you should listen to us cause you said you wanted unity is, well, if you can't even vote with us on COVID relief, then we're just going to get rid of the filibuster and pass our whole agenda. Cause you're clearly not serious either. And, and that's a really nihilistic place to be, but that's how they're all talking about it right now.

And so just putting on a banner of like bipartisanship and unity, pulling some lines from the president's inaugural address to me does not show that you are actually ready to partner in good faith. I hope they have a great meeting today and that by the time y'all hear this, we're all going to be so blown away and pleasantly surprised by what has [00:10:00] unfolded. My level of optimism is not high, but I wish to be wrong. 

Sarah: [00:10:03] From your lips to God's ears. Okay. So moving on from the COVID relief negotiation, we wanted to spend some time with the economy. I mean, it's like a small subject. I think we should be able to move through it pretty quickly. Don't you think that? 

Beth: [00:10:18] I put in our notes for this segment why do we have a stock market? Sarah was like, good bet. That's a great, that's a good narrow niche starting.

Sarah: [00:10:25] No, I said, okay, we're going to do the whole history of the stock market. 

Beth: [00:10:28] I just think it's good to kind of think about what we're actually talking about because in my mind, the stock market is like so many things. This relatively simple concept that has layers and layers of jargon and practice and gatekeeping to make sure that most people don't really understand it. And that bugs me. And I just want to make sure that we all really understand from a 50,000 foot view what we're talking about. 

Sarah: [00:10:50] So Beth, why do we have a stock market?

Beth: [00:10:51] Because businesses need money to do things. And sometimes they need that money before they can generate it in another form. And so the stock market is just the idea that investors are bringing money [00:11:00] in and exchange for sharing future profits. Public trading says anybody can be one of those investors and take a piece.

And the idea has been that the stock market is supposed to efficiently allocate lots and lots of capital to businesses and lots and lots of future profits to investors. But ultimately when you buy a stock, you're just placing a bet. I think this company will do well. So I'm going to put some cash in assuming that I will eventually get to take more cash out.

And that, that period of time between my cash going in and some cash coming back to me is one that's acceptable to me. Right? So there are a range of risk categories that you take in positions relative to stocks based on your tolerance for how long that process is going to take. 

Sarah: [00:11:37] So let's talk about two other words that get thrown around a lot sometimes without any basic definitions being attached to them.

So we hear a lot about mutual funds. That is just professionally managed investments in the stock market. So you give your money to the mutual fund and they are going to say, we're going to invest in the stock market, but we're going to get you a little bit better return than if you were just placing those [00:12:00] bets on your own when you're placing them on your own.

That's where you get retail investors. That's where that term comes from, that you hear thrown around a lot, particularly in the last week or so, who are out there just trading on their own without any professional guidance or help, as you would find with a mutual fund. 

Beth: [00:12:13] So you're walking into the casino as an individual retail investor and just picking games to play and seeing what happens.

If you're part of a mutual fund, you're walking in with a group of people who are all going to play games, and they're going to have an expert telling them, you all play this one and you will play this one. And this is how we improve the odds that this whole group goes home with some money. 

Sarah: [00:12:33] And you've also probably heard, particularly with regards to GameStop about hedge funds.

Nd they're also a group, but it's a very limited partnership and investors, and they're going to use really high risk methods to try to beat the casino. They're going to take really large bets, really risky bets. A lot of these are what is called again. Another term you probably heard pretty recently, short-selling 

Beth: [00:12:52] Short selling is not new. It's been around since at least the early 18 hundreds and short selling just means I am going to invest in a way that [00:13:00] allows me to profit. If this asset performs poorly, if a stock loses money, I make something when I am in a short position, there are a bunch of ways to do this and a lot of terminology around it.

And. Investors have been using things like shorts and derivatives and hedges and swaps for a long time, just to try to make sure I never lose too much money, that I can put lots of money into the stock market and ultimately come out pretty well. Even if I take some very risky position. 

Sarah: [00:13:26] And because there's so much risk involved for the most part this has been a game in which most Americans were not betting. Lots of people have their retirement savings in mutual funds, but as far as retail investors, it wasn't a lot of people until 2020. When an estimated 10 million new accounts opened up, 6 million of which were with the app Robinhood, which promises a very easy technological solution to retail investors, just get on the app, decide what, what shares you want to buy.

It sort of promise this sort of instantaneous delivery on retail investing and eliminating all [00:14:00] that gatekeeping, all the, the professional fees. This is a zero fee trade, all these things. And so it was opening the doors to the casino wide open for lots of people to come in. 

Beth: [00:14:09] And everything that happens in the stock market, much like the casino is about confidence and optimism.

If investors think the economy is growing, they buy more stock and that makes the stock price go higher, which leads to more people investing, which helps more people make money. And sometimes that increase in wealth leads to an increase in consumer spending, which means businesses can make more and sell more and profit more. And it's just a cycle of hoping for more, more, more based on confidence that more, more, more is coming. 

Sarah: [00:14:32] The other thing important though, is not only is a lot of this based on confidence, but a lot of it is based on credit. So, and here's where we're going to get into the game. Stop controversy. Now I have visited a Game Stop.

Stop, Beth, have you ever visited a Game Stop?

Beth: [00:14:42] Oh yeah. I've frequently visited a game stop. There is still one close to my house that my husband occasionally picks up Nintendo switch games from. 

Sarah: [00:14:49] Yep. Agreed. We also have a game stop in our town in Paducah. We do that. We, the, the trades and the buys and the used and the things for all the Nintendo switch games and DS games.

So. It's a retail [00:15:00] establishment, most of which are found in malls. And so you're starting 2021. And if you are perhaps a hedge fund, that's looking to make a lot of money on short sales. You're going to pick stocks that you think aren't going to go do so well in 2021 in the middle of a pandemic, like for example, a retail based gaming store like GameStop.

Beth: [00:15:18] And you're looking at GameStop and saying, not only is it retail, but it's kind of old and everybody's getting their games online now. And we know that lots of people are playing games, but we also know that not lots of people play lots of games. Right. We have lots of players, but players tend to be pretty focused on a couple of games instead of playing so many that they would need to constantly go to a place like GameStop to buy new games.

So there are lots of reasons to go short on GameStop countervailing considerations are that lots of people are playing games who've never played games before, cause there's not much else to do. And we have this huge interest in the nineties, culturally. So even within the gaming community, people are getting more excited about Mario and Atari games than they ever had before.

We've got wonder woman set in the nineties. Like we just got all kinds of eighties, nineties [00:16:00] nostalgia pervading the cultural zeitgeist in the middle of this pandemic.

Sarah: [00:16:04] So have a flood of new retail investors. Now these retail investors decided, or the, the, the group coalesced, because it's probably a better description of what happened around this Game Stop stock, and particularly the idea that it was being shorted by these massive hedge funds. Now, were they feeling nostalgia? Were they feeling funny? Where they bored and home from the pandemic, did they just want to stick it to the hedge fund managers and to the wall street firms? I don't know millions of people are involved here. So it's probably a little bit of all of that. 

Beth: [00:16:34] And it's also, I think millions of people wanting a piece of what they see going on in the stock market as the rest of the economy suffers because it's been incredibly bizarre to see the stock market just doing bananas well while so many people are losing jobs and we have a kind of constant refrain as we talk about the economy of saying, well, the stock market isn't the whole economy. 

And certainly it doesn't represent everything. It's just one indicator. And yet we've had a president for four years who's very focused on the stock [00:17:00] market as the most important indicator of the economy. And I think the best understanding that I've come across of what happened last year is that COVID causes the stock market to bottom out until people think we'll, we will see our way through it.

And once people decide, we will eventually see our way through it we get that confidence back. And so people are placing these bets in the stock market that eventually things are going to be reopened and people are going to be really excited about them. And we're going to have tons and tons of consumer spending because people are really excited about goods and services because we were deprived of them for a little bit. And so the stock market has just done amazing. And I think a lot of these retail investors said, well, I want a piece of that too.

Sarah: [00:17:35] And a lot of these retail investors talk to each other, particularly on forums like Reddit. And there became a drive to buy Game Stop stock. How to say that slowly, cause it's kind of a tongue twister.

As they begin to purchase Game Stop stock it rises in value because the market is responding to this demand. And it's saying this must be valuable because so many people went to buy it and the price of GameStop goes up now, as it goes up, the hedge [00:18:00] fund managers who put shorts on game stock are in a very tricky position.

Because they are going to have to buy the stock back eventually. That's what happens in a short sale you're gambling, but part of the gamble is I will buy this back eventually. And so they're trying to decide as this continues to rise, when do we buy back? What are we going to do? Are they done buying it? Is this as high as GameStop is going to get or will it get higher? 

And so this leads to GameStop being the, like at one point, like being the most traded stock in the world, its value increases like 10 times. And everyone everywhere is talking about it, which leads to a lot of volatility, a lot of instability, and ultimately the decision of Robinhood, the trading at the brokerage firm to halt trades to say, you cannot trade GameStop and some other sort of meet what they're calling meme stocks at that time.

 This leads to a lot of even bipartisan outrage with people feeling like they are putting their hands on the scales. And Robinhood is sticking up for the hedge fund managers and the people who are getting hurt in this sale. When I think that the reality [00:19:00] is a little more complicated and it gets back to what we talked about before that this is a game of confidence, but it's also a game of credit.

Beth: [00:19:06] So Robinhood said, we're not trying to put our hands on the scale. We love our retail investors. We care about our retail investors. The problem is we are pretty much issuing IOUs throughout this entire process. Without getting into a whole lot of detail, when you make a trade on Robinhood, it isn't  actually settled the instant that you push the buttons. 

Robinhood and other brokerages are providing all kinds of collateral to third parties to cover your transactions. And because of all this volatility, Robinhood needed a lot more cash to post that collateral so those transactions could go on. And some of that is like regulatory requirements.

We want people to put up money showing they're good for all these transactions that they're putting out into the system. So it shut down by orders in order to tap, a lot of credit. Robinhood raised a billion dollars overnight in order to get back up and running processing these particular transactions. And this happened to other brokerages, not just Robinhood. And so 

Sarah: [00:19:58] I think there's lots of questions [00:20:00] to ask about the instability, about the influence of retail investors, about the actions that Robinhood took, and we're going to get into that in our next segment. 

Beth: [00:20:09] Before we do, we always include a little moment of hope. And since we're talking about money today, I thought, why not have a moment of hope around an entrepreneur? I read this delightful article that we'll link for you in the show notes in Entrepreneur.com about Sheletta Brundidge. She is a very experienced media personality who started a podcasting company to elevate Black voices in February, 2020, which was a tough time to start a new business, given that COVID hit in March in a big way.

 And she has written in entrepreneur.com about how she survived the pandemic, not because of programs like PPP or because of other government assistance, but because of other Black women entrepreneurs and the way that Black women entrepreneurs constantly lift one another up and help each other through business referrals and through offering gifts of goods and services with this sort of pay it forward mentality.

 And her article draws on the wisdom of Madam CJ Walker, who was the daughter of enslaved people. And she was born a [00:21:00] year after the emancipation proclamation and became the nation's first female self-made millionaire. It's just such a great read. And I love this paragraph about what the podcast hosts in Brundidge's network are doing.

She says after George Floyd was murdered, we created a podcast that was the first and only town hall with Black community leaders and police officers. When the city's grocery stores were burned down during the riots, our host collected and passed out food. When school shuttered because of COVID, we held virtual workshops to help parents who have kids with special needs locate resources, and therapy.

We held online listening sessions for teens battling mental health issues and offered a free counseling session for those who couldn't afford a therapist. It's just such an uplifting read. I so appreciate the way that she explains the dynamic among Black women entrepreneurs and uplifts that in the context of history, so highly recommend.

[00:22:00] Sarah: [00:22:20] Story has definitely been billed as this sort of David and Goliath situation, which I do think it absolutely has degrees of, I guess, but I read an article in the New York times, editorial that was basically like, well, here's our chance to democratize corporate America and to make them more responsible and to hold their feet to the fire.

And it felt like so reminiscent of you know, the fact that corporate America has more trust in institutions that it's corporate America's decisions that were really pushing us forward in many ways during the pandemic that, you know, we're all waiting for the CEOs to say the insurrection was a bad thing.

Not to mention, we have, you know, Facebook's oversight board that's basically like a corporate Supreme court. And it just, it sort of sent me down the spiral of like, [00:23:00] I don't understand how in the midst of some of the strongest and most passionate critiques of capitalism that I have read or experienced in my lifetime, we are doubling down on the economy, the stock market, corporate America is the only place in which we can get results. 

Like I am, I am deeply bothered by this thread. Which seems to be running through so much of these stories. And again, like the way we're all waiting for corporate America to lead us out of the dark ages, or we're waiting on retail investors to lead us out and to show us the way, like, I don't know. I don't know. It makes me really uncomfortable. 

Beth: [00:23:37] Similar to a point that I really appreciated from this newsletter I love called Margins. Andrew Granada was writing for Margins and said, I want better than this. Even if you accept the most romanticized version of this story, that is truly a bunch of, let's say average wealth.

I mean, you have to have disposable income if you're day trading. Right. But a bunch of average wealth, little guy investors stick it to a big hedge fund [00:24:00] on an app called Robinhood. How poetic is all of this? Right. And send shockwaves through the financial system. Which is both true and incomplete because certainly well into this thing, there were hedge funds on both sides. Venture capital firms are in the owner strip strip structure of GameStop. So it is not like only little guys won and big guys lost. 

Sarah: [00:24:18] Yeah. Well, and not to mention that the, the retail investors are not the client for Robinhood. The data those retail investors create is the product that Robinhood sales. And to me, like that sort of gets lost in all of this to, yes. They open up retail investing to lots of people and it's, and it's benefiting them. They were downloaded like more times than ever over the weekend. But what they're doing is they're taking that information and they're giving some people a glimpse of the macro picture of what the retail investors are doing within the app. They're not making money off the retail investors.

Beth: [00:24:44] If you ignore all of the realities that cut away at the idea that this is like an internet version of occupy wall street, and you just take that narrative, we really got them here. What Andrew Granada was saying, I think is like, that's not good enough for me. That's a [00:25:00] really a bismal way to look at societal change. And that connects me to your point of like, if the best we can do on speech is to have an organization like Facebook create its own super court for adjudicating international human rights norms around speech, that's not good enough for me. Yeah.

Sarah: [00:25:19] That's how I feel. I am happy when the CEOs of Apple or Walmart or. Nike or they're the head of the NBA come out and make a principled stand, but it can not end there. That's not good enough. It's important. And I'm happy that we're seeing more corporate responsibility, but the bigger they get and the more powerful they get, it becomes a stand-in.

It becomes, well, this is good enough because they're so powerful, but it's not. We also, you sent me this fantastic article about how. The big chains have really been the albatrosses down, slowing down vaccine distribution and how we have this idea that the bigger is [00:26:00] better and that scalable makes it more efficient.

But that the reason you're seeing vaccine distribution going so well in places like West Virginia is because there aren't a lot of CVS and Walgreens and these big chains that are supposed to be doing vaccine distribution. It's a ton of independent pharmacies and the independent pharmacy. Can act quicker can adapt more efficiently because they're not going through many, many levels of corporate bureaucracy in order to make a decision or to change things.

And this article that gets in real deep, too, like how CVS owns one of the clearing houses or, or organizations that basically sell the pharmaceuticals to hospitals. I didn't even know these organizations existed in the same way that I didn't know about the in-between purchase that I have made on Robin hood in the past.

I've used Robin hood. And the stock company or the company I'm buying stock in that there's these individual layers. Right. And I think that's the complexity of our economy that is easy to ignore because it is really complex and confusing. It's also where a lot of the money and the credit and the corporate power reside.

And so I think that's the other thing it's like when we [00:27:00] pay attention to the emotional stories to the justice, which I don't, I don't think this is justice that's. My other big problem is like this game stop stock. Soaring is not any sort of justice in any real in long-term way with regards to income inequality, but let's just say you do call it justice.

Like when we look over there and we say, well, you know, corporate responsibility or corporations stepping up and doing the right thing, or even forcing corporations to step up and do the right thing through the power of retail investors. That's what we want. Then we miss the opportunity to prevent real harm and to actually improve the outcome being in the healthcare space or in the financial space or in the tech space, by bringing the strength of the federal government, to those, those murky in-between spaces to those, those financial infrastructures that exist in almost every industry that are just completely shaded from the rest of us, right. 

That the rest of us don't have the expertise or the time to even, you know, an [00:28:00] army of day traders to really get at and understand. And even if you take them out here or there without regulation, you're just going to be constantly playing whack-a-mole right. Like there's no long-term impact of that. And there might be short term emotional payoff which feels good, but I want long-term impact, not just a story that makes me feel good. 

Beth: [00:28:17] Great article by Matt Corbett, that we'll also link in the show notes about how the best rule for social media would just be to say, companies that provide social media platforms are in many ways, like hosts at a party you're invited to the party until I don't want you at the party anymore than I can throw you out because basically there's too much content on social media to meaningfully moderate that content. And so you shouldn't try. It's okay to act in an arbitrary way. It's okay to make ad hoc decisions because that's all you can reasonably do.

 And I bring that up in connection with your point about pharmacies and business and Robinhood, because I think a huge problem [00:29:00] that we're confronting and it shows up in almost every topic we discuss is that we have access to the world at a scale that is mindblowing. And when you have access to the world at that mindblowing scale, everything starts to look arbitrary. And when you think about the United States government, even coming in to try to bring some transparency and order to that trading infrastructure, as one example, it's hard to have confidence that the United States government will do that because we have access to information about the government at a mindblowing scale.

And we realize that the government has an enormous purview that naturally leads to lots of things being decided in ways that are arbitrary or that look pretty bad when you look at them in isolation or are pretty bad when you look at them with all kinds of context and are pretty great, it's a mixed bag and we struggle psychologically with mixed bags. 

And I feel like we're living in this era where the challenge of being a human being is to teach your brain that most things are mixed bags. That is a hard lesson to take in. So who makes the rules if everything's a mixed bag? And I think [00:30:00] the conversation about Robinhood shutting these traders down, and somebody needs to do something about this sort of ignores that.

What I think a lot of society is doing is saying, well, I can't totally process that everything's a mixed bag. So I'm going to gravitate towards some personalities that feel right to me or towards some causes that feel right to me and everything else. I'm going to be pretty nihilistic and amoral about because it looks like that's how everybody else is operating too.

And so nobody really has authority. And when you layer onto nobody really speaking with moral authority, the idea that corporations are going to build their own arbitration rules, the corporations are going to build their own courts to enforce those rules. That could become a really dark path, unless we find a way to more clearly say to people, these are the principles that we are trying to enforce. We will not get it right a hundred percent of the time or even close, but we're trying to do these things. 

Sarah: [00:30:50] Yeah. I mean, I think it's the bigness that really. Freaks me out. I mean that Matt Stoller article, you sent about the pharmacies. I mean, he writes about monopolies and I think the idea [00:31:00] that so many of these companies, whether we're talking about the tech space, whether we're talking about healthcare are getting to a level of size that it just, it feel, I mean, I don't want to be hyperbolic or emotional myself, but it does feel like we're like creeping ever so closely to the point of no return.

Where, if we don't start to regulate in the gut, I understand that other people live in fear of the size of the government, and that's why we both belong at the table to have this conversation. But to me, I'm always more interested when I'm looking at a mixed bag of picking the players that are at least philosophically supposed to be motivated by things besides profit.

 To me, profit as a motivation is how we ended up in a nihilistic space and it's how everything becomes a transaction and then how we can justify being amoral, because that's the value is based on currency, not anything else. And so, even though I know that in the government space, you know, pretending that that is like a really values oriented, perfectly executed, uh, situation is ludicrous.

Like I get that at least I feel like there's like some [00:32:00] language and there is some philosophy and some bigger call to be. To be achieving something besides profits. And so that's why, you know, even though I get it's a mixed bag, that's why that, that mixed bag makes me much more comfortable. And I need something that's on that same level of big, but motivated by something else besides profit to tackle this problem.

And while as you know, as much as I love to stick it to hedge fund managers too, I'm still mad about Toys R Us. Like, that's just, it's not gonna, it's not gonna get it done. It's just not going to get it done. That's my beef. And when we detach, you know, I feel like the stock market is detached enough from actual value because it is a gamble.

And because it's so much about confidence and something like this, where no one is arguing that GameStop, should we all be possessed by level of nineties nostalgia on the level of QA. And it'd be just becomes a mass 99 as delusion is ever going to be worth. The price that it reached, like it's not based on actual valuation.

And so if that's the case and we're just going to allow the stock market to further continue on this path and that, you know, into [00:33:00] come to the reckoning that many other industries have been forced to come to, which is you got a mob of people that feel like the game is rigged and you're gonna have to address them sooner or later. And I think that's important too, but I don't think in an effort to address that we detach from all reality evaluation. 

Beth: [00:33:14] Uh, a problem with that argument, I think is that. If we're really acting like democratization is the goal everywhere. What is the difference from a mob of people who are willing to vote with their dollars saying, no, I want game stock to really thrive here.

Now I don't think what's just happened is going to cause GameStop to thrive. I think GameStop would be better off if all those people went and bought games instead of buying stock. But. If you have a mob of people when he's mob like that's so pejorative, you have a group of people who decide. I want GameStop to do really well at least at stock prices, I'm willing to put my money behind it. How is that different from our government deciding I want the auto industry to survive. The made in America car industry to survive. I want the financial system to survive. [00:34:00] I don't agree with a lot of this article from Matt Tabby. He is called Suck It Wall street, but this quote really stuck out to me.

He said, America's banks just had maybe their best year ever raking in $125 billion in underwriting fees at a time when the rest of the country is dealing with record unemployment. Thanks entirely to a massive federal reserve intervention that turned a crash into a boom. Who thinks the fundamental value of most stocks would be this high absent the feds Atlas like support in the last year?

And I resist that. Like, I feel myself instinctively resisting that. Right. And kind of defending some of that monetary policy decision making. But I don't want to be scared of looking at it and saying, you know what, like there's a point here because if everything is democratized right, a lot more people have voted in favor of increasing the game stock price than in theory, voted in favor of tarp.

You know what I mean? It's. It's hard to keep valuing representative democracy when it sometimes yields results that feel totally unrepresentative. And it's hard to value a system that is supposed to be about something besides [00:35:00] profit when injecting like true believer ism into that system looks pretty bad.

I mean, if you look at some of the people who just got elected to Congress, I would almost rather than be motivated by profit than what I think they're 

Sarah: [00:35:10] motivated by.

 I don't look at the federal reserve and think that they are the representation of what I'm talking about because they're motivated by growth, not democracy. And so, and even peer doc democratization is not what I'm talking about. What I'm talking about is an institution that's big enough and has the resources to say, is this doing what we want it to do? Is this meeting the things that our populous values. And to me, like the corporate answer is always the stock price is always the stockholders.

Right. But yeah, it's harder to that question is harder to answer with the populace, but it's not because we're pulling everybody constantly insane. What do you want? It's because we are taking the resources of the group and in theory, empowering experts to figure out how best this works and that didn't work out well either.

I think there's a real trick of technocrats and how we get so focused on like, [00:36:00] he was even talking to the top of the show of doing things like according to the data and as opposed to what does this mean for people? But if it works well, if we're paying attention to a populace and the entire populace, how does this impact people then?

You know, the government placing its hands on the scales has improved the lives of millions of Americans. For hundreds of years, the government putting its hands on the scale is how we got a vaccine. It was a private public partnership that is to be praised because you know, sometimes the, the research and development and the innovation needs a big player.

That's not motivated by profit to say, go see it. Maybe it won't work, but we'll see, go try it. And that's the government a lot of the time. And so to me, it's like, yeah, it's a mixed bag, but I'm still more comfortable. I'm still more comfortable holding that bag at the end of the day and saying, this is where the solution lies, or this is where at least the path to a solution lies.

Not because I want mass democratization or populism at every turn. Although I do have a populous streak from time to time as most of us do, I don't think there were many Americans who heard a bunch of Reddit guys stuck it to the hedge fund managers and went, Oh, poor hedge fund managers. Nobody thought that, [00:37:00] and that's fine.

That's that's also a signal we should listen to. That's also valuable information about how we feel about the market and the players within it. But, you know, I still think that the bigger issue for me is that things are getting too big. Corporations are getting too powerful and I don't just mean corporate power. I mean, something creeping up on the edges of governmental power and that makes me really uncomfortable. 

Beth: [00:37:21] No question. This Facebook oversight board just sends me to a really dark place the more I learned about it. 

Sarah: [00:37:27] But then you read the people on it and this is why like the technocratic training and my brain is so powerful because you look at the people on that board and you're like, well, yeah, heck if somebody was like, you want to put them in charge of global free speech and human rights standards, I'd be like, heck yeah. These people seem really well qualified. You know, that's, what's so tough about 

Beth: [00:37:41] it. It is a really impressive group of people. If I think about the motivations in me being a much less impressive person than that group of people. If somebody came to me and said, you want this job, the parts of me that would want to say yes to that are the parts that are not my finest qualities, because this is a [00:38:00] horrible job.

It is a horrible job. It is so complex. You have to have, and I'm not accusing any of these people individually of this, but you have to have a certain level of arrogance to be able to say yes to a job like this, and believe that you can do it. And I think that's true about running for office or being a leader or having a podcast or anything, right?

Like you've done a certain level of arrogance to be, to put yourself out there and say, I want to lead anything again. That is not a bad quality, 

Sarah: [00:38:21] but that's different because it's such a big group. It's not like anybody's taking this on themselves individually. It's like this oversight group is like 20 people, 25 people, 

Beth: [00:38:27] IT'll be 40 if it's fully staffed. They started with 11. It'll be 40 if it's fully staffed and they may adjust from time to time, they say based on the needs of the body, that does not seem like a big group of people in relation to damn near every person on the planet with a Facebook account. Yeah. And the kinds of issues that are going to make their way to that body, they got 150,000 applications between October, 2020 and when they issue their first decisions. Their first decisions came in six cases. One of which they ultimately couldn't decide because it was kind of moot.

 I think that is a massive undertaking and it makes my stomach hurt to think about it again, knowing that they will probably do some good. [00:39:00] They probably will do some good and they will probably do a lot of harm too. And again, I think it all comes back to like, how do we hold the mixed bag? I read this piece over the weekend, but somebody I think is mad at Blasius had tweeted it. And I mean, the comments were just like people were giving such grief about having even tweeted this piece.

But the piece was a critique of Dr. Fauci and it was a thoughtful summary of how you don't get to just be a technocrat. There is always a political element, even when you are an expert, if you are operating in the public realm, You must do politics. And they quoted, somebody is saying, everybody understands, Dr. Fauci is and has to be more game of Thrones than Mr. Rogers, that feels right to me. He's kind of affirmed that in lots of public statements, right, where he has said, look, I'm ratcheting this number up over time as I think the public can tolerate it. And I'm not mad at him about that. And I'm not throwing no way everything he has said.

And I still feel more comfortable that he's leading this effort than I would, if he weren't. We really struggle. People were mad at the person who tweeted this article, who did not author,  just shared it. For sharing it because we don't [00:40:00] trust each other to hold the mixed bag. And I think that's kind of the game stop thing too. We just don't trust each other to hold the mixed bag. 

Sarah: [00:40:07] I think that's right. What happens if you take technocrats is you get accused of being anti-science and anti expertise and saying no, sometimes the only important thing is not the data. And I say this as a Democrat, like I think we went too far down this road.

And not only to the detriment of the outcomes, but certainly to the detriment, to our politics. And I mean, like the successful politics of the democratic party, sometimes it might be the best policy, but if you can't sell it or if it doesn't impact people's lives in ways they can see, or if it takes too long to get to the perfect answer, then it doesn't matter.

And I think that's hard. And I think that that's, you know, you see that a lot in big democratic cities. Not just, you know, I'm not trying to double down on the bullshit, excuse my French narratives coming out of right wing media about democratic cities, but they are also not a paradise, a perfect policy.

The truth is somewhere in between. And I think that because of what we talked about last week, that none of us can recalibrate or don't want to, or [00:41:00] maybe it's not the right thing to do. It's like you say, like, how am I going to stand up here and say, well, the answer isn't always with the technocrats, we also need to trust government and politicians, when we're talking about Marjorie Taylor Green, every 15 minutes, like I get it, I get that's a hard sell, but sometimes it's like, I don't know. We have to talk about what we want instead of what we have right in front of us. And I don't want corporate governance and I don't want Reddit governance either with love.

I want actual governance. And I think that, you know, a good and true functioning federal government isn't just run by technocrats. It is also run by politicians and that's important. And, you know, like you said, it's a mixed bag and the truth is somewhere in between and nobody wants to hear that and that's not easy to sell and it's certainly not easy to bite onto it.

Beth: [00:41:41] And it kind of takes us full circle to COVID relief. I think, because if you accept the mixed bag, okay. You just like lean into full embrace of what feels like a horribly unsatisfying conclusion and you accept it in a bunch of different ways, right? You accept that the American economy. Is a mixed bag of socialism and [00:42:00] capitalism already.

It has been for most of our country's history. It always will be. And what we're arguing about is the proportion of each in the mixed bag. And when we talk about regulation by governmental authorities versus corporate self-regulation versus the regulation that consumers imposed by voting with our dollars, what we're really arguing about is not all one thing or another, it's the proportion and relative strength of each.

If you accept all of that, what my hope is is that we can get to real discussions about that stuff instead of the spin of it all. If there's a real at the white house today about substantive ways to improve the disaster relief delivered by the United States government to its citizens. I am thrilled. If what's going on at the white house today is some ridiculous test of how Biden is delivering on his unity promise, I am disgusted. Because there is something very real happening on the ground in terms of need and for it to be batted around like that in Washington, DC around a pandemic [00:43:00] is the worst of where we could be headed as a society. 

Sarah: [00:43:03] Well, and maybe the real solution is just to continue this metaphor until it is totally dead. Just to look in the bag, you know, it's a mixed bag and sometimes it's more intimidating because we don't actually open it. I didn't love going, you know, 30 tweets deep on a thread about what is actually happening between the retail investors on Robin hood and the actual. Stocks. It was confusing. I still don't think I understand it all.

I definitely don't understand everything laid out in that article about what happens between the pharmaceutical companies and the hospitals and how CVS. Oh, it's one of the companies that actually makes those transactions. It left me feeling powerless and overwhelmed and a little bit stupid and that sucks.

And nobody likes that. But at the end of the day, because we do live in this massive. Global environment and because it does affect us. And sometimes it's, you know, looking in the bag, sometimes it's asking for help. Sometimes it's just not following the emotional reaction because there's this little piece of you that says, maybe this is a little more complicated than this.

And let's hope that people like Susan Collins are also following that instinct from time to time and saying like, you know, [00:44:00] just because it's a mixed bag, doesn't mean we just throw our hands up in the air and say, well, forget it. And, and follow that nihilistic impulse too. Turn and walk in the other direction. So I guess that's my plea to, to dig in the mixed bag. I like to think that's what we do at Pantsuit Politics, digging into the  mixed bags 

Beth: [00:44:13] This was a business oriented show today. So we're going to end with what's on our minds outside of politics, by turning this over to two people who are very important to our business. You're next going to hear from Alise Napp and Megan Hart about what they do with Pantsuit Politics and some exciting developments around that.

Thank you, Alise and Megan. Thank you to all of you for joining us and for supporting what we do here in a variety of ways. We are really looking forward to your thoughts about this discussion, which is in many ways, an umbrella of all the discussions that we have here. So let us know, and we will see you back here on Friday, have the best week available to you.

[00:45:00] Megan Hart: [00:45:17] Well good morning Alise! Congratulations on your first day starting full-time with Pantsuit Politics, that is so exciting.

Alise Napp: [00:45:24] Good morning, Megan, and congratulations to you for starting part-time. It's a big day here at the show. For those of you who are a little bit like, who are these people? Why am I hearing them? We thought maybe we would just tell you who we are first.

So my name is Alise Napp. You've probably heard my name in the credits of the show for a while now. I'm the managing director of the show. I live in North Carolina with my husband, Kevin, who, if you follow me on Twitter, you get a lot of good Kevin quotes up. Until today, literally today I have spent my full-time career in higher [00:46:00] education.

I've been on the faculty side, the staff side, and most recently working for a consulting firm, but on the side for the last three years, I have been helping Sarah and Beth and being involved with the show. So I started as a volunteer in February, 2018. I've been a listener since January of 2017, but I'm super, super excited to finally be coming on full time starting today. Megan, what about you? 

Megan Hart: [00:46:28] Uh, yeah, so I, um, my name is Megan Hart. I am the, I live in Missouri with my husband, Ben. I am an engineer. Biomedical engineer have been in the healthcare industry. Um, a few years now. I am a soon to be lawyer. I'm graduating uh, the plan at least is this may, uh, 2021. I have been at let's start with the show for four years now.

I actually started the day, the first podcast episode after the 2016 election. I very vividly remember starting Pantsuit Politics then. I [00:47:00] started the book club as a volunteer in 2017. It was a tweet by Beth or someone said, who's anyone interested in a book club? And I just kind of took it and ran with it. 

Uh, joined the team on a volunteer basis last year in 2020, just start, um, and be the book club coordinator. And I'm excited to start my role as community engagement manager on a part-time basis with the team today. 

Alise Napp: [00:47:23] Yay. So exciting. So maybe the next thing we should do is just tell people a little bit about what in the world those titles mean. So, Megan, do you want to talk a little bit about what you're going to be doing with us part-time? 

Megan Hart: [00:47:34] Absolutely. So Pantsuit Politics community. Um, if, you know, for many of our listeners who listened to multiple podcasts maybe, or who understand Pantsuit Politics media is a really really unique aspect to this podcast.

It's not just a podcast. It's a community that we engage with in so many different ways. So as the community engagement manager, I want to bring all of those community together and help us to [00:48:00] really make that experience for our community members the best that it can be. So we couldn't be what our listeners call the best little corner of the internet without all of our listeners, all of the people who want to support us, provide us feedback and then actually be a part of community. 

They want to get to know and involved in each other's lives, which is just wonderful. So my, my role is to help bring all of that together and make it the best, make it the best that we can be. Uh, with the extra credit book club, I will continue to help with that.

And we want that to continue to be something special. And then we want to integrate it into the other parts of our community and really bring that content altogether. So that will be the community engagement manager as a part-time member of the team. How would you at least what are you will be doing full-time now? 

Alise Napp: [00:48:44] Well, I just have to affirm to what you said about our community being the best and that we couldn't do this without them, but yes, my full-time managing director ship. If that's what we're going to call it. Um, so I have been [00:49:00] managing director of the show for probably a year and a half now, but really coming on full-time is taking all of that and multiplying it by five or six or however.

Maybe five or 600. Um, so as managing director, it kind of is a little bit of a catch all position, kind of a COO for the show and for our work, I touch pretty much everything that happens behind the scenes with Beth and Sarah. I keep all the trains running a little bit of everything, everything from big picture conversations about content and what we're talking about on the show from week to week to, you know, bigger picture strategy and long-term vision for the show and the community, everything from small details, like putting together the show notes for each episode, to keeping the team organized, to working with all of our amazing partners that help us make the show real.

 So our Studio D team, the Acast team that helps us with advertising and being a part of their network, uh, Ruth Brown, who does some designing for us on the side, just [00:50:00] kind of a little bit of everyone who helps the show in some form or fashion, keeping that all organized and running and post pandemic, when we can, again, I'll be helping think about live tours, which will be very, very exciting when we can get back out on the road and see all of you again. 

So I guess the next big question that some of you might be wondering is what does this mean for the show? And the answer to that is nothing sort of. Your listener experience won't change. It'll still just be Sarah and Beth hosting the show. We're not going to jump in as like new co-hosts or anything. Maybe we might fill in every once in a while when someone is on vacation, but it will be Sarah and Beth. It'll be what you have come to know and love from them. They'll be giving you the content here on the podcast and the vast amount of bonus content.

 Megan and I will just show up every once in a while like this. The biggest thing that we're hoping by expanding the team is just to see quality improvement. Honestly, in a [00:51:00] lot of ways, we have been a little engine that could team for a long time. You know, if you listened to something like the daily from the New York Times, at the end, you hear Michael Barbaro list like 17,000 people's names, the end of the show in their credits.

And they have a lot more people working on their show than we do. Another show is different than ours, of course. But, um, we're really excited that having more commitment from a full-time and part-time team will enable us to do more, more community support, more structure around the work, more long-term planning and dreaming.

Um, so more, but also just making everything better. So continually improving the quality of what you're getting here at Pantsuit Politics. Just having more dedicated team members to make that possible.

Megan Hart: [00:51:44] Absolutely. And I think, uh, The reason that we can do all of this and have this conversation this morning and talk to you about this growing team is the amazing listener support.

We talked about the amazing community. We could not do what we do, and we could not expand this team and hope to bring you [00:52:00] more content, better content, better quality content without all of you. So thank you to our listener support. Um, It really makes the biggest difference. And we're really excited for what it means for 2021 moving forward.

Alise Napp: [00:52:14] Yeah, it would seriously. Thank you. If you are just a regular listener of the show here in your podcast feed, if you're a patron, especially our executive producers who have been amazing. If you're someone who buys from the sponsors, when you hear the ads on the show, if you tell other people about the show, if you follow us on social media or anywhere online, You are part of this community and we absolutely could not be doing this and growing the show and making the show better without your support and your being a part of, of our world.

So thank you. It feels so inadequate, but it is so absolutely true. And we are just incredibly grateful. So Megan, I guess we should get off to work this morning. That's great.

[00:53:00] Yes, we will.

Beth: Pantsuit Politics is produced by Studio D Podcast Production.  

Sarah: Alise Napp is our managing director. Dante Lima is the composer and performer of our theme music. 

Beth: Our show is listener supported. Special thanks to our executive producers. 

Sarah: David McWilliams. Ali Edwards, Martha Bronitsky, Amy Whited, 

Janice Elliot, Sarah Ralph, Barry Kaufman, Jeremy Sequoia, Laurie LaDow, Emily Neesley,  

Allison Luzader. Tracey Puthoff,  Danny Ozment, Molly Kohrs, Julie Hallar, 

Jared Minson, Marnie Johansson. The Kriebs! 

Beth: Shari Blem, Tiffany Hassler, Morgan McCue, Nicole Berkless, Linda Daniel, Joshua Allen, and Tim Miller. 

Sarah: To support Pantsuit Politics, and receive lots of bonus features, visit patreon.com/pantsuit politics. 

Beth: You can connect with us on our website, PantsuitPoliticsShow.com. Sign up for our weekly emails and follow us on Instagram.

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