Make Me Smart July 22, 2022 transcript

Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it.

Andy Uhler: Is it hot out there?

Kai Ryssdal: It’s like you know 90-ish, not so bad.

Andy Uhler: But you all complain about it?

Kai Ryssdal: Well, we complain about it because this is Southern California. Supposed to be paradise. It’s not damn Texas, which is – I don’t even know what. That’s a whole different thing. Whole different things. But we’re going to start because the music started. Thank you, Drew Jostad. I’m Kai Ryssdal. Welcome back to Make Me Smart. Making today make sense is what we do on this pod.

Andy Uhler: Hey, everybody, I’m trying to, try to bring everything… yeah, I know, I’m trying to bring everything up right now.

Kai Ryssdal: All right. Well, that’s Andy Uhler, in for Kimberly. And as soon as he finds his script and his camera we’re going to be going. Here, just super quick, just for the regulars among you. Kimberly is going to be out, for like a week or something. She had a death in the family, one of her uncle David is past. So she’s taking some time to be with family. And in the meanwhile, we got Uhler today and an all star lineup coming through next week. So that’s what’s up with that. But anyway, it’s Friday, where I’m having a beer. I don’t know what Uhler’s having. Uhler, what are you having?

Andy Uhler: I am having an Arnold Palmer, not a John Daly.

Kai Ryssdal: Are you? Are you?  An Arnold Palmer. Very interesting, very interesting.

Andy Uhler: It’s nice. It’s actually an interesting sparkling Arnold Palmer I’d never had one before. Cousin of mine brought it to my house. So it’s delightful.

Kai Ryssdal: Very refreshing. Before we go to the comments for what people are drinking, I should explain my face. So I’m a trail runner. And I was out running on Monday morning after our 6:15 meeting. And I was having a great run, zipping right along and I was not paying attention, because that’s why you run, is to not pay attention to anything and just have a good old time inside your head.  And I tripped. And I went down so hard and so fast that I didn’t have time to get my hands up. My hands are scar free basically. And I landed on a bunch of rocks on my face. And so there’s this and then this and then there was this thing up here too. And let me just say, I look really good now compared to the way I looked on Monday morning.

Andy Uhler: Is that right?

Kai Ryssdal: That’s what happened. I might have broken my toe. I don’t know, we’re waiting on the X rays. The dogs are here by the way. Anyway, that’s what happened on my face. So that’s what’s what. You’re having an Arnold Palmer, I’m having a – what, go ahead.

Andy Uhler: Yep, I’m with you.  No, no, no, I was gonna ask you, was it – I mean, was it go to the hospital? Was it bad news? Like I had an injury years ago. And so I, you know, maybe we can talk about that?

Kai Ryssdal: Well, so it’s interesting you mentioned that. So I was two miles from home. So I had to run home, right, because I was up in the mountains, and what was I going to do, not go home? So I had to run home. I am reasonably sure I was lightly concussed because I landed too hard on my face. That Monday day was just shot, I really was good for nothing. Number one, it hurt a lot, but number two, I was a little spaced out. I’ve gotten X rays on my toes, we’re waiting on that and then we go from there. Then we go from there. Crazy. Anyway, Arnold Palmer for you, sparkling, and I’m having Bunny With A Chainsaw from Paperback around here in town, I believe, it’s quite tasty. A recommendation by the way, of one Deborah Clark, the former EP at marketplace. Anyway, so that’s where we are. Let us do some news. Mr. Ehler you get to go first.

Andy Uhler: Well, that’s what I was gonna tell you, is that it’s a nice little dovetail, right? We had some earnings reports from some folks who are producing beverages, and apparently, from what I’m reading, from what I’m seeing, there’s a headline in the Wall Street Journal that says Hard Seltzer Fad Fizzles as Light Beer Makes a Comeback. I mean, it sort of sticks on one after the other for you though. You know, light bear is not much better.

Kai Ryssdal: Exactly right.

Andy Uhler: And so I’m curious about – I wanted to hear your take honestly, because you’re not a hard seltzer person. But I guess on some really hot summer day, I don’t know, is a light beer tolerable? I guess it depends on…

Kai Ryssdal: I’m never gonna have a light beer, but I will have like, a really, you know, smooth cold lager or Pilsner like after a run or something.

Andy Uhler: Or something like that. Yeah, yeah.

Kai Ryssdal: Yeah. Some something like that. Right. The whole hard seltzer thing I never really understood, and was baffled by the White Claws and all the rest of them. What’s really interesting, are the companies that made a huge bet, lead among them Sam Adams, who in earnings –

Andy Uhler: Who you talked to.

Kai Ryssdal: I have. Yeah, I can’t even remember his name. But anyway, yes. And they got whacked in earnings because they had to write down a whole bunch of hard seltzer. You know, and look, I mean, okay, so I’m a snob on a couple of things. Number one, coffee. Number two, beer. I’m a beer snob. But there are people out there who really like Bud Light and Coors Light and all that jazz, and more power to them. I will make fun of the beer itself, but drink what you want beeps, just drink what you want.

Andy Uhler: Well. And the other thing too, I think what we’re seeing too was that substitution effect of – you know what, I’m going to have a hard seltzer, that not happening anymore. If I’m not going to have a hard Seltzer, I’m going to get a Bud Light, right? I’m gonna get a light beer. And so that sort of shift, it seems like is what’s happening. It’s funny, because I have a buddy, and I talk about him all the time, a buddy here in Austin who runs a brewery. He has a brewer. And I asked him all the time about hard seltzers, right. Like, Hey, man, there’s a market, what are you doing? And he’s like, that’s just not on brand for us. And so I think maybe there’s some of that fallout happening, right?

Kai Ryssdal: Yep yep. Totally. Totally, totally. what’s your other one? I saw these pictures.

Andy Uhler: Oh, yeah. No, that was –

Kai Ryssdal: It’s a not-great story.

Andy Uhler: It really isn’t. And what’s interesting. There’s a really, really great sort of time lapse picture in the New York Times about what has happened to the water levels in Lake Mead – Lake Mead, sort of famously being, you know, our largest reservoir. And so it’s funny, I was thinking about this in the context of – I’ve been reading a bunch this week about drought in western states, droughts here in Texas, certainly affecting farmers. But also something you and I and everybody else here talks about all the time, is those farmers, it’s going to be more expensive, it’s going to be more difficult to get water for their crops. Those crops are going to have low yields. Those low yields are going to mean stuff is gonna be even more expensive. And so I was sort of thinking about that in the context of everything that I’m hearing, all the emails that I’m getting from my sources, who are out here trying to farm, trying to produce pecans in Bastrop and places like that, who are saying, Look, dude, we don’t have any water. And we’re trying to figure this out, and so our yields are going to be bad, and you’re going to be paying for it. It sucks.

Kai Ryssdal: Yeah, that’s the great wrestling match here in California and water use, right? It’s the Central Valley, where all the agriculture is, from which come a huge percentage of this country’s vegetables and fruit. And residential, right? And God, look at Los Angeles, right, I mean, lawns and that whole deal. It’s, you know, anyway. Yeah, but check out that. We’ll put it on the show page. Those pictures are really, really distressing. They are, they’re incredible. What are you talking about today? Okay, so I got two and a half things. The first one is a Bloomberg article, which points out in the beginning of it – and this isn’t actually the news I have, but it’s worth mentioning that there has been finally a green deal struck between Ukraine, Russia, and Turkey, to let Ukrainian grain out into the market through the Black Sea, and the Bosphorus and all of that. And that’s a big deal, just because this war has had such a huge impact on food prices. Russia and Ukraine together accounting for something like 25% of the world’s grain exports and sunflower oil and all of that good stuff. So that’s great news. What I really wanted to point out, though, was that the Pentagon – actually, it’s John Kirby, who’s now the National Security Council spokesperson – said today that the Pentagon is looking into supplying fighter jets to the Ukrainians, which if you remember like 45 or 60 days ago, was verboten. They wouldn’t even talk about it. And I think it’s an interesting indicator of the shift now in support moving from just money and weaponry to actual forward-facing offensive-possibly armaments. And that can be a little challenging, and it’s going to be interesting to see how that plays out. And the Biden administration is going to have to walk a really fine line here. I don’t know how that’s, I don’t know how it’s gonna go. I don’t know how it’s gonna go.

Andy Uhler: The grain stuff is so interesting, too, because you’re getting at its supply chain stuff. I mean, there was grain in ships sitting in ports forever, or just going to waste. And so this was, this was basically a concession of “you know what, let’s just let this stuff get to where it needs to go”, right?

Kai Ryssdal: Right. Right, totally. Let me just scroll quickly through the YouTube chat here. Matthew Carroll: A-10 but not A-15s or A-16s, right? Yeah, that’s true. So they’re doing A-10s which are older. The tank killers, they’re cool-as-hell-looking ground attack aircraft. They will not necessarily be used offensively, that is a fair point. But they will absolutely wreak hell on Russian tanks and armor and columns on the ground in Ukraine. So that’s a really good point. Here’s the other thing I want to, we’re just gonna put this on the show page. And warning here. This is a Kai opinion piece coming up, and I’m going to do 30 seconds of my opinion. So there’s a piece in The New York Times yesterday, I guess, an op-ed signed by six or eight retired four-star admirals and generals, one of whom, for simply what it’s worth I – well, I didn’t work with him, I worked for him, because he was a captain and I was a lieutenant junior grade, when I was on the USS Theodore Roosevelt. Anyway, they have written an op-ed in the New York Times, saying that Donald Trump’s actions on January 6 were a dereliction of duty. I completely agree with that, they were. But I really think it’s time for retired military brass – and by brass, I mean, like two three four stars, to just shut the hell up. It does not contribute to the civic dialogue and in fact damages the military-civilian divide in this country, for retired general officers or flag officers to opine politically. Yes, they’ve got first amendment rights, but I think it contributes to the hagiography of the military in this country, which does nothing for civil society. I’m happy to elaborate perhaps on a later pod, but I just want to get that out.

Andy Uhler: Well, what I was gonna ask you too, is this sort of consequences for those two and three star generals – are there any? I mean, that’s my question is. Can you just say this? Can this op-ed… go ahead.

Kai Ryssdal: These guys were all retired, right? So saying this while on active duty is completely remote, you can’t do that, and if you did, you would be cashiered and your career would be over. But these guys were retired. And look, they have first amendment rights, and they got experience and I totally understand that they’ve got valid … Anyway, these guys have opinions and they’ve got experiences that are valuable. I don’t believe, though, that they shouldn’t be opining publicly in a forum as widespread as the New York Times on political matters. I don’t think it does us any good. And, you know, there’s a whole long thing to be had about this. But anyway, I just want to get that out there because it’s my podcasts where I can say what I want.

Andy Uhler: You want to play the game?

Kai Ryssdal: Unless, unless and until somebody in St. Paul says No, okay, shut up. But that’s a whole different thing. Okay. So let us move on, shall we, Drew? Save me from myself? Oh, my goodness. All right. So first of all, let me just, I want to go back to the comments here. Lynn’s boo PDX who is somebody in Portland, Oregon, says: Tell that to Michael Flynn, i.e. it goes both ways. Yes, it absolutely does. It absolutely does go both ways. Let’s remember that Michael Flynn spoke at the convention that nominated Donald Trump and led the chants of “lock her up”. It absolutely goes both ways. Sorry. Yep. I’m done with my soapbox. So half full half empty is the game, Drew Jostad’s in charge. Drew, hit.

Drew Jostad: Okay. An installation art company called Meta.is has filed a lawsuit for trademark infringement against Meta, formerly Facebook. Are you half full or half empty?

Kai Ryssdal: Why don’t you go first?

Andy Uhler: No, I was gonna say, I’m absolutely half full. That’s fine. Like.

Kai Ryssdal: Yeah, yeah, we were here first. Goddamnit. Right.

Andy Uhler: That’s exactly right. I mean, that’s the attitude, and it should be the attitude. And say, Look, this is our – theoretically our IP, I guess. I mean, that’s a word not an idea. But good on them. I’m half full man.

Kai Ryssdal: What Uhler said. Totally agree. I’m half full. Totally.

Drew Jostad: Okay. Are you half full or half empty on Major League Baseball’s settlement with the minor league players?

Andy Uhler: Were you listening – were y’all listening to the morning program?

Kai Ryssdal: I did listen to the morning program.

Andy Uhler: You didn’t listen to my story on the morning program?

Kai Ryssdal: Oh my god, I listened to three freaking feeds of that show. Give me a break. I literally set my alarm for 4:43 in the morning so I can deck and then I can hear MMR. Shut up.

Andy Uhler: I’m kidding. There’s a delightful two minutes and two seconds on exactly this. So I am actually half empty on this one. So what happened was – Kai, I’ll break it down: $185 million was allocated in a settlement to Minor League Baseball players over the course of 13 years. I think it dates back to 2009. A collection of 23,000 players in a class-action lawsuit said that they were treated unfairly in terms of their wages. And in the document and the case and what came out in court was, a lot of these players are making right at the poverty line or less, and taking on second jobs. Actually, The Uncertain Hour did a whole episode about exactly this.

Kai Ryssdal: Quick shout out here to Peter Balonon-Rosen. He did a great piece, actually, which I think in a word or two about minor league baseball, it was really good. Yeah.

Andy Uhler: So what ended up happening was Major League Baseball saw this as an opportunity to, I guess, come out and say, Okay, we got to do this. So we’re going to allocate a bunch of money. What ends up happening is if you have 23,000 people as part of a class in a class-action, it’s going to be $5,000 a person, maybe? And so the effects, hopefully, what a lot of sort of positive, optimistic people are saying is, this is an admission that Major League Baseball admits that it treated players poorly, that it treated employees unjustly. And so hopefully, this changes the way that they pay people in the minor leagues. The thing is, the Major League Baseball Players Association only represents the 40 people on the active roster, right. And so those minor leaguers who are in whatever class, class A in whatever small town in New York State, they don’t have any representation. So the players union doesn’t matter to them, so. There’s a lot of talk about whether or not that should be expanded, which is interesting. I’m half empty.

Kai Ryssdal: I’m with you. Let me just say also, by the way, that triple A baseball – super fun, super super fun.

Andy Uhler: Oh absolutely.

Kai Ryssdal: Drew, continue.

Drew Jostad: Okay. China is reducing its holdings of US Treasuries. Are you half full or half empty?

Andy Uhler: This is wheelhouse Kai, you go.

Kai Ryssdal: Yes. So for the first time in a decade plus, China has less than a trillion dollars’ worth of US government debt, which is, of course, treasury bonds, bills and notes. They had been the biggest buyer for a very long time. They are now number two, behind Japan. Look, they’re conceivably rebalancing their portfolio. They are trying to move away from the dollar, which is fine. That’s great. It’s interesting, I don’t think it’s seismic. I think – look, eventually the dollar is not going to be the reserve currency. But it’s not going to happen anytime soon. Alright, look. So this would piss off Nancy Cassidy, who was the most recently departed Director of the Marketplace newsroom. I’m neutral on this. It is a fact, it is a thing that happened. I have no other point of view. That’s where I am.

Andy Uhler: Yeah, I mean, I guess, I’m sort of with you on that, too. It’s like, this doesn’t feel half full or half empty. It’s just a thing that is happening. I think for me, a lot of my friends asked me about sort of exactly those questions, about what if China comes and asks for the tab? That’s a really, really long answer.

Kai Ryssdal: Well, so look. So no, actually, I have thoughts on this. And since we’re going with, as the comments say, hot take Kai, I’m going to pile on, on a Friday afternoon after a beer and a half, or half a beer. Anyway. So look, here’s the deal. There was a point where China had $1.3 trillion of US Securities in the Bank of China, right, buried under Tiananmen Square or wherever they keep their money. And the thought was, oh, my god, China could wreck the American economy by just going on to the market and dumping all of these things.

Andy Uhler: Exactly.

Kai Ryssdal: That was not going to happen. Because if China did that, then the Chinese economy would crater as well. This is an intricately balanced global economy. And I used to call this – earlier in my career at Marketplace, which has now gone on for far too long. I used to call this Newto – that’s a whole different podcast. I used to call this Newtonian economics, right? For every reaction, there’s an equal and opposite reaction. If China went out and dumped $1.3 trillion of US debt onto the market, the Chinese economy will suffer as well. So there was no way they were going to do that. It’s an economic form of Mutually Assured Destruction, if you want to go back to Cold War dynamics, right. So they were never going to do that. An orderly drawdown of China’s holdings is not necessarily a big deal. Nor is an orderly build up of anybody’s holdings, right? The entire deal with the global economy is an orderly transition between one situation of stasis and other. If things go to hell in a handbasket in a hurry, then that’s bad. But as long as there’s relatively little motion on either side, then we’re fine.

Andy Uhler: There it is. What’s the last one?

Drew Jostad: Okay, I got: Amazon has a deal to acquire a membership-based healthcare company called One Medical. Are you half full or half empty?

Kai Ryssdal: Alright, so let me pause here for a second. No, no, I know nothing of this story, because I looked at it, I was like, oh my God, shut up. So I really have to now say, Bridget Bodnar, what are you thinking putting this in there? Seriously. Bridget? We have to figure out a way for Bridget to get on this cast as well, I’m just saying. So look, Amazon is expanding. It’s not their first venture into real life medical care. Jeff Bezos, as we know, wants to take over the world. Here’s the deal. I am not informed enough to have an opinion. That’s where I am.

Andy Uhler: Okay. I think I’m sort of with you, except that I’m sort of half full in the sense of, look, Walmart’s getting in there, and has been for a minute. Amazon sure jump in there, and if it makes it any more, if you have access to, you know, greater access may be cheaper? I don’t know. I’m sort of like, you know what, these corporations have so much power and they have so much going on? Sure. That’s a lazy half full but.

Kai Ryssdal: I love that, lazy half full. I’m gonna go with that actually. We’re gonna have a lazy half full and a lazy half empty. That’s exactly right. That’s exactly right. Drew, do we have any more or is that it?

Drew Jostad: We got one more. The US Attorneys for the Southern District of New York have indicted a former Coinbase employee for insider trading. Seems like based on possibly a story that was broken on crypto Twitter by a user named Toby. Are you half full or half empty on the FBI reading your tweets?

Kai Ryssdal: Woah, that’s a different, that’s a whole different story!

Andy Uhler: Kai was ready. He was ready to pounce, and that’s a different question.

Kai Ryssdal: Oh, man. Anyway, Uhler, go ahead.

Andy Uhler: I mean, I’m half empty on the – well, it feels like I’m half empty on the idea of the FBI reading my tweets. But I know the FBI is doing it. Or can. I mean, I’m tweeting out stuff about, you know, goofy energy policy and also sports, so they can have whatever they want on my Twitter feed? I don’t know. What do you think?

Kai Ryssdal: Yeah, I don’t think it’s about the FBI reading your Twitter feed, it’s about crypto and this – Alright, so I’m gonna get in trouble here, but what the hell? It’s about crypto and the scam and the pyramid scheme that it presently is. And before you pile on to me on the comments, or on Discord or on Twitter, hear me out. It’s not money yet. It’s not a store of value. It’s not a means of account, right? It’s not any of those things yet. Right now, it’s a way for already mostly rich people to get richer because of the greater fool theory, okay? There will always be a greater fool who’s going to come in and buy my Bitcoin later. It’s interesting to me that it has taken this long, right? Bitcoin’s been around since 2009. It’s taken this long for there to be an insider trading scam on crypto, which is by definition anonymous and all of those different things, that make it sort of ripe for this kind of, shall we say, event? So I’m not surprised. I’m gonna name it the Uhler lazy half full.

Andy Uhler: What I was gonna ask you too is – just this one.

Kai Ryssdal: No, keep going. No, you are in charge.

Andy Uhler: Is there – I’ve been thinking about it when you just said that – is there legitimacy that comes with insider trading, right? I’ve been thinking about like, Okay, now we talk about this in a different context than just these, these tokens and commodities.

Kai Ryssdal: I think that’s totally fair, right. One of the – All right, look, I’m gonna go out on a limb here. Shocking. I know, on this podcast today. There is a certain legitimacy that is imparted by using all the old devices of fiat currency and traditional asset management, right? That’s exactly, I think that’s exactly what you’re saying. And maybe. But right now? it’s just, it’s interesting to me that this has just happened. Alright, Drew, hit that thing one more time. There we go. There we go. All right. We’re back on Monday. My thanks, as you can hear, to Andy Uhler jumping in today with Kimberly being out. Tuesday we’re going to do a deep dive on all kinds of different things, mostly about inflation, what The White House or Congress might be able to do about it. And we will have, as I said, an all-star lineup of Marketplace’s greatest to help while Kimberly’s gone.

Andy Uhler: Without a doubt. In the meantime, keep sending your thoughts and questions. Email us at makemesmart@marketplace.org. You can leave us a voice message too, which are kind of cool. 508-827-6278, that’s 508-U-B-SMART. Man, it’s already over? Come on!

Kai Ryssdal: It is already over, right? It’s quick, but look, this one went, honestly this one went 24 minutes, which is kind of a really long time.

Andy Uhler: All right. Make Me Smart is produced by Marissa Cabrera. Today’s episode was engineered by Drew Jostad. The Senior Producer is the aforementioned Bridget Bodnar.

Kai Ryssdal: Steven Byeon leads the team behind our Friday game – what you call them? Oh sorry, nevermind – Mel Rosenberg and Emily Macune help out. Theme music was written by Drew Jostad. The Director of On Demand is Donna Tam. Yes I know I’m butchering the credits but honestly?

Andy Uhler: We didn’t even have time for my Pick-n-Pull. I mean, maybe that’s a whole another…

Kai Ryssdal: Oh my god, quickly. Come on! Let’s extend it like 30 seconds. Go. Pick-n-Pull.

Andy Uhler: So I have a 95 OJ Ford Bronco, right? I got into – of course I do. All of this reporting on EVs and energy policy, and I have this basically a gas guzzler – what happened was I ran into somebody who was in charge of putting boots on cars when they parked wrong, stopped in front of me and yeah, it was bad news. Got into a wreck. This is years ago. And so I’ve been searching for two fenders and a hood for the Bronco.

Kai Ryssdal: Oh my God.

Andy Uhler: Found them today. And my buddy Gomez and I went out and we were out in a pickup yard for about four hours.

Kai Ryssdal: Wait, so when you say Pick-n-Pull, I had like this image of of like picking your own pork and pulling it and putting it into a sandwich, or like in an orchard and picking your own, you know, I don’t know, like apples or whatever the hell they have…

Andy Uhler: So this is a Pick-n-Pull in a junk yard. That’s exactly right.

Kai Ryssdal: Oh my god.

Andy Uhler: Yeah. Yeah. So you go out and you – they sort of point you, Hey, where are your old style body, old body style, OBS boards. And they pointed me to a Ford F250 and…

Kai Ryssdal: So the first car I ever owned was a 1972 Cutlass Convertible 442, red with a white top. It was blue when I bought it, blue and with a black raggedy convertible top. I painted it red, had a white top, and it had headers on it, and it was louder than shit. And the headers – one of the headers leaked, and it was just a pain in the ass to fix it all the time. So I had to go to a junkyard and I found the original exhaust manifolds, for a 1972 Cutlass 442 convertible. And I want to put him on. Yeah, so. So junkyard, I mean junkyards are wild places. They are crazy places.

Andy Uhler: Well, and also it’s such an interesting exercise in patience, right? It’s… Okay, I have this old car. It’s gonna sit around, you know, adjacent to my house, who cares? Like if I find what I need when I find it? Okay.

Kai Ryssdal: Exactly. Exactly.

Andy Uhler: This is fun, dude.

Kai Ryssdal: All right. And with that, the special bonus post show episode of Andy Uhler on Make Me Smart is done. Oh my god. We’re back on Monday. Bye, everybody.

Andy Uhler: Thanks y’all. Take care.