20 Episode results for "nadia lewis"

What The %!&$# Is The Repo Market?

The Indicator from Planet Money

07:55 min | 1 year ago

What The %!&$# Is The Repo Market?

"N. P. R. This is indicated for planet money. I'm Patty Hirsch now usually I edit the indicator but every nine again I'd like to get a little bit more involved and this is L. Knight Foundation helping NPR advanced journalistic excellence in the Digital Age Mary childs the Repo Market a professor at at Yale who is the big repo person and repub excuse me and he said he likened it to function at an arcade where if you're at the arcade support for this podcast comes from the John S and James What exactly is the repo market can you help us understand sure so it's basically a place where banks and other financial institutions can go where there's just repo is why we should care whether we should worry about it going forward absolutely hi I'm here to help try to help more Mary after the break time on like ten years ago during the financial crisis I tried to explain it then I was trying to explain it now and I realized that there was some big gaps in my knowledge and when big gaps in my knowledge and I need to explain things I call a friend and that friend today is Mary Childs Mary welcome thank you that was touching so lovely functionally do that too just like to finance the positions that they have on their books so it's like I've got the securities and I I've got a million dollars worth of securities of treasure have you here so lovely to be here my listeners will of course be familiar with Mary's voice because she has been with us before on numerous occasions for our Finance Fridays with Mary I love that Pronuncia made in you have a dollar you can't shove the dollar in the arcade machine quarters so suddenly the value of quarters becomes very important if you don't have your dollars useless you can sit there with your dollar it's not GonNa get you anywhere so if you want to convert that into quarters and there's some function that isn't working to convert your dollar into quarters you might be willing to be like listen I'll just take three quarters for my dollar Shen Nan Finance I think it's a much more kind of so much more has a much more upmarket feel to it and financial feel up market right so the repo market this is something that rebounds I want a million dollars in cash so I can run my operations so what I do is I go to this counterparty this other bank and I say hey listen I'm going to sell you these millions the business pages and in fact not just business pages but news organizations generally have been obsessed with for the last couple of weeks so everybody to talk about at what it is that's going on with repo thanks that use the repo market they all have treasury bonds they've they've got these securities but they want cash banks after fund their positions every day so they go into the repo market treasures like arrived which means to new treasures treasuries on that one side less cash more treasuries who everybody's trying to do that trae they wanna switch those like I don't care just give me the quarters I need those to function and that's basically what happened like that's very blunt but that's kind of what happened in September in mid-september all of a sudden there were all these so that's like a lot of cash that just got out of the system out of money market funds and then on the flip side you have seventy billion or something treasuries that settled that day which means all these certainly understandable when you see mechanical problems in the repo market it's very destabilizing sort of emotionally like it could be destabilizing actually in the market but it's the constant churn between treasuries cash and if you have one but you want the other like a magic pool that you can dip it in and it just transforms into the other thing so most of these institutions these and it makes it more difficult for banks to run their operations yeah just get gummed up in can't function so this point the Federal Reserve gets involved right could you give me some idea but wide ah reaper that's the correct pension the grim reaper so a lot of people talk about repo by the Repo market and they this is a number of analogies that people come up with they were caught a bit off sides this go but functionally stepped in and just provided that cash so they basically stepped in to act as lender of cash and accept treasuries and like auto there are a lot of reasons some short term in some long term so you had these kind of immediate things like it was corporate tax day all of a sudden every institution had to pay their tax bill mentally a different problem there so much has changed since then and so much you know there's this instinct to say oh the banks are being reckless but what's happened is more than what's happening now is more just like Oh my God the Fed hasn't done this in a decade the last time they did this it was a true panic I need to get out so there's just this like very strong override but it's their balance sheet so that combination of liquidity requirements functionally has hurt both sides of that ledger and then on the other side there's also the US government issuing a ton as Lee decided to get involved and and what happened so essentially the Fed knew that this was going to happen eventually that at some point this imbalance would manifest and it's arguable that so you have both at banks in the in the kind of post crisis regulatory environment not only are they hold you know they're doing less lending and they're also doing less holding of stuff on the securities you're GonNa give me a million dollars worth if in in money and I'm going to write this agreement it's a repurchase agreement says I'm GonNa Repurchase these the next day for functionally just facilitate that repo and just keep it going a lot of people have said that they're a little bit worried about the Fed's involvement here and this this whole concerned about Oh is this moral hazard again those times because we've had a lot of questions about something that's been happening recently in the markets very specifically about something called the Repo market which is something that I've spent a lot of injuries and no one had the cash and it just like the cost of money spiked I see so the cut the basically money dried up in the system that's right was there a reason why the money for a million dollars plus a little bit of extra which is the interest is that right now sounds right to me so it is repurchase so I think Steve Smith said it should be the repo market right during PTSD from the financial crisis but the the issue then was that the collateral was bad the the the the security that they were giving up where these dodgy home loans treasuries that just means you have vastly more treasuries just in existence which again weighs more heavily on one side of the ledger so my understanding is that if there's not enough of that cash in the system shirow NPR or by the way the indicated will not be airing on Monday like most of the rest of the country we'll be taking a holiday so we'll see on Tuesday concern because it does feel reminiscent of two thousand seven there was a big repo freak out and oh seven and that sort of prestige the crisis and that Muslim memory is strong that's is the Fed by stepping in and doing things that shouldn't do and in actual fact banks should be able to just manage the whole thing on their own how do you feel about that I feel sympathetic. This episode of the indicator was produced by Nadia Lewis and Darius Raffia was edited by Stacy Smith and Cardiff Garcia is there was a confluence of weird events and also banks have pulled back on both sides of this in part because they're being less reckless yes so the market is really kind of suffering from I guess post Traumatic Stress Disorder on securities attached to that but today the the collateral is much better because it's treasury securities right there's actually not so much concerned that US treasuries are not going to be money good like that's not treasury from for for real money in this none of that real money around exactly that's the short term in the long term you have kind of a bunch of different things kind of weighing on that the problem today today we're just more concerned about this just an imbalance it's just you have a mismatch Mary Charles Thank you so much for helping me understand thank you it's a pleasure having you take any right they'll it's it's the lifeblood of the markets like a beating heart and the blood or they say it's like plumbing is what's the best analogy. Oh

Repo Market Mary childs Patty Hirsch N. P. Mary Charles US NPR professor Nadia Lewis Yale Stacy Smith L. Knight Foundation Cardiff Garcia Darius Raffia million dollars three quarters ten years
Brexit: It's Complicated

The Indicator from Planet Money

09:58 min | 1 year ago

Brexit: It's Complicated

"N. p. r. brexit great britain's exit from the european union brits voted to do this back in two thousand sixteen and since then brexit has been nadia lewis our editor is paddy hirsch the indicator is a production of n._p._r. which had been set for halloween prime minister boris johnson was not happy about the delay he's been pledging to get brexit done brexit of course has enormous economic implications the european union essentially functioned as one country with one set of immigration laws trade deals and rules for business brexit changes all that it will probably won't different things that are hard line brexit is who would just be delighted to have the most catastrophic visit zoom online to set up your free account today meet happy with zoom support also comes from american express say yes from zoom zoom is used by millions to connect face to face through a single app for videoconferencing phone calls group chat webinars and conference rooms payment flexibility and card choices including ones with no annual fee don't do business without it rates fees apply learn more at american express dot com calms of brexit the UK parliament has already rejected a number of brexit plans and tomorrow they'll vote on the latest put forward by prime minister boris johnson the vote issue oskoui cautionary tales in economist oh yeah that well it's relevant to our purposes and so indefinitely complicated dan show what's going on what's at stake and what is the economic impact of all the delays tom slash no annual fee my name is tim harford i am a columnist at the financial times and the presenter of a new keeping up to be very tight and brexit could end up back at square one this is the indicator from planet money i'm stacey manic smith brexit start let's start with i mean it seemed like this might be there've been lots and lots and lots of delays and it seemed like this vote i mean boris johnson's hole exit there was a big vote and what happened yeah well yeah we still asking ourselves that question i mean where do you want and disruptive exit possible although they don't seem to think it would be catastrophic and disruptive but it it clearly obviously would there were people who the UK has to negotiate hundreds of trade deals and international business deals and immigration rules probably because the UK and the you still have to agree to the he said i was dead body he said he would rather die in a ditch than send a letter to the european commission asking for a delay he has sent a letter to the european commission asking for thing the prime minister boris johnson's whole saying was no more delays we're going to do this thing rip the band aid off brexit's going to happen i think he's over his dead body would there be another delay yes and no border checks for goods and the single market is more about and common standards for services like banking media insurance and support for this podcast and the following message tips in place with with countries and allow maybe some of the businesses that are kind of operating across countries to continue absolutely i mean yeah northern ireland is part of the united kingdom but there are communities in northern ireland who would rather it was part of the irish republic and up until recently i mean people were people killed quite a long and not just the border but and and and free movement of people and so there were proposals to stay in the european customs union their proposals to stay in the european single market ice oh i mean that's the first time the prime minister said something that turned out not to be true i mean just a lot of different people their proposals to stay in both proposals to leave both just to complicate all of this it also interact with the situation in in northern ireland would like have very very soft brexit because that would respect the will of the people would not be economically damaging there are people who are some of the trade relations who moving parts to that there's a customs union as the single market they sound like the same thing but the customs union is is more about fiction list trade in goods in union and the republic of island is in the european union a now that that nice convenient situation that's going away and so these negotiations between the UK and the european union have been heavily influenced by the question of what's going to happen on the border between ordinary citizens and businesses you do at some stage wants to know what is likely to happen so delaying is that if you don't like what's been agreed you might be able to get something that you prefer so a lot of this strategic but purely from the point of view of well well very much depends on your point of view i think clearly the the advantage but recently there's been a a piece in the piece has been based on the fact that well look the UK's in the cons of the extensions like what are the pros of continuing to kind of extend that to continue to delay bombs in though bonds in london that would i there was a bomb threat mild oxford college when i was there bombs in manchester bombs in birmingham people got killed okay you're thinking oh i want to make some decision i want to make some investments maybe build a factory and as i contemplate my decision if an island in the republic of ireland that that's where we are why do you think the delays keep happening it's been like three years it's been a long time move to the next stage of the negotiations we agree the legal basis for leaving the u. but then we have to negotiate the future trade relationship so there's all this it's pounded the timetable was never terribly realistic i mean even even if we agree deal now it's not that anything's going to be done we all kinds of decisions that people make from booking holidays to studying for degree to building factory and the trouble with the the brexit v note we originally voted in june twenty sixteen and of course there was uncertainty about what the vote would be then once we had the vote there was uncertainty about can emotional thing for you well i'm trying not to be emotional because people are very very emotional about this it's very polarized basically evolved into the longest slowest most confusing break-up in history over the weekend parliament voted to request to delay the brexit deadline again it certainly does slow down economic activity it does depress investment and if you look for example at investment in the british economy relative to investment the the bitterness and the distrust the whole argument has brought yeah well tim thank you so much for would happen next there was uncertainty about who was going to be the next prime minister and it just goes on and on and on meanwhile lots of people who could spend in the american economy in the german economy and it's it's not a pretty picture no one's investing everyone is just waiting waiting waiting this i mean my wife is a portrait photographer and she has a new project of trying to get people who disagree with each other to hog on camera i think to myself you know it would be better to wait why would i commit not decision when i'm going to no more in due course and that's true for all decisions while they wait to find out more do spending decisions while they wait to find out more so so that's the theory of it but there's lots of good empirical evidence as well so far she has not managed to get any levers and remains to hug each other at all it's got really personal and that's and that is it's very worrying because in the end i think this deal is is great for the country but what is more damaging than any particular deal is he's never gonna stop so so yeah that's been slightly frustrating attempts yeah what are the economic like i would love to look at the pros and brexit i appreciate it it's it's delight and you know i'll i'll be back tomorrow is she liked to explain what's happened next because it's it's a fast moving story you any good in the opposing

britain editor paddy hirsch boris johnson n. p. r. brexit european union nadia lewis prime minister three years
What's The Story? Narratives And The Economy

The Indicator from Planet Money

09:41 min | 8 months ago

What's The Story? Narratives And The Economy

"N. p. r. everyone welcome to the indicator from planet. Money garcia and. I'm patty hirsch on the editor of the indicator. Now you may remember at the beginning of the pandemic. We had this incredible run on certain items at the grocery store. Paper goods like paper towels and toilet paper gone cleaning. Products like bleach wipes wipe tight and the reason is that people worried. There would be a shortage of those goods because of the pandemic but the truth is there was not a shortage. Supply chains manufacturing facilities. Had not really been significantly disrupted but the very story that there might be a shortage ended up spreading really fast and that story is what ended up creating a shortage at least for a while as people rushed to the store and just bought everything up. See we will tell each other and tell ourselves stories about what's happening in the world and our place in it and those stories can influence our economy in surprising ways that how do we identify the effects of stories on our economic behavior. And how does some stories go viral and end up affecting the whole economy and others. Don't that is the subject of a book by economist. Robert schiller called narrative economics. And we talk with chiller while back about this but we wanted to share that interview with you again. Because it sheds light some of the more bizarre economic phenomena that we've seen play out not just during the pandemic but over the last couple of decades so after the break. Our conversation with bob schiller about narrative economics. This message comes from. Npr sponsor the capital one venture card. Right now you can earn one hundred thousand bonus miles. You can actually use when you spend twenty thousand dollars in your first year. What's in your wallet. Limited time offer terms apply see capital one dot com for details. This message comes from. Npr sponsor evola providing cloud based sales tax solutions for businesses of all sizes valera automatically integrates with more than seven hundred erp and ecommerce systems learn more at avalon dot com slash indicator. Bob welcome to the podcast pleasure cardiff so bob. I almost don't know where to start. So what gives a definition narrative economics. What is it actually tried to measure. Well i define narrative okay. It's sometime taken as synonymous with story. A story could just be a chronology Now narrative is telling of a story that abuse it with emotions with morals With views of the world how it works. It's a story that we willingly communicate because we think that it's useful or enlightening or pleasurable or just just dramatic. People love dramatic story. Yeah that's true and in terms of narrative echo. What is that narrative part. Add to economics. That wasn't there before what is new about this. What's new about it is increasingly. we are starting to study. How people change their thinking and so If we're going to describe how people make decisions especially for forecasting economic events like recessions. We have to know how they're changing their thinking. And unfortunately that's not doesn't sound glamorous because we're talking about often naive theories that are just half-baked. They sound. maybe wrong to us. But if people think that way they're basing their decisions on it. Yeah it does sound unromantic in a way. I mean we tell ourselves these dramatic stories In part because that's what it is to be human but when you start bringing in quantitative methods to measure it it sounds unromantic. But you're saying it's still very important. I think it's important. The reason why most economists didn't forecast the great recession ten years ago was that they weren't listening to what people were saying just before they were saying a couple years before That they were thrilled by stories of people who flip houses and they were fascinated with the stock market. The stories are about people who got rich quick and then of course. The story changed and that impart. It seems like what you're saying contributed to the severity of the downturn. The narrative had changed now. There was a new narrative. How did that work. Well i wear a new narratives. Come from they come. I think from creative minds or from people who are looking around further away and remembering things that happened before but the phrase housing bubble came in new just before the financial crisis I'd say around two thousand five when it started to take off so these narratives spread like epidemics. They become contagious and given the mysterious nature of it. How do you seek to measure the influence that a story is actually having especially in real time. Where it's it's really hard to pinpoint well at this point. I'm still relying somewhat human judgment. I like to do counts on digitized. Text and i'd like to not just stop with a something like housing bubble and see when that came in. Nobody said that Almost nobody said that before. This recent crisis. Yeah go back to the and magazines that i'm searching and read the articles Also you you. You can find. Article a rare inter sprinkling of articles. That might have said housing bubble in past decades but never took off. Someone tried it and it didn't work and they can try to reflect on why it didn't work then maybe maybe you'll have dim idea of an answer But i think we can back up that judgment with with some science that reveals something we can do word costs and we can do readings. We can get people to classify readings by some dimension that they understand And that is a bit of science. But you know the human spirit is is likely to stay in In affable for according to what. I'm what inscrutable. Yeah you say that. Economists should still try to predict the future. I think one narrative that's there is that economists are not very good at forecasting and that understanding narrative economics can help that. This is actually a moral issue. A can you explain that. I have to defend my fellow economists. They can go out further than the whether people can talk well. They're both weather. Forecasters are pretty sharp people but the weather just doesn't seem to be forecast beyond a week or so. That's what i'm an economist can go out six months. It's pretty good But on the other hand it would seem that it should be forecast the well the next recession. You should see it coming. The problem is that it has to do with people changing their minds and looking at each other and seeing what other people are talking in thinking about One other question about forecasting in particular. And if you end up incorporating this idea of narrative econ into the forecast and you're to do so successfully so that the ability of american economists to forecast improves to not just six months. But let's say one to five years into the future. Then you have the issue of the forecast itself becoming a narrative and then you're just chasing it all over again right. That's right well. This also brings up the self fulfilling prophecies story. And i think that it's it's happening right now. Maybe not maybe with the next recession People have heard so much talk lately about the next recession That it. It sounds like we're talking our way into a recession and my thought on that is absolutely right. But i'm not sure that it's convict contagious enough. So this is not deterministic economic. This it has a random component but there's definitely elements of that happening and i think that's happened in all prior recessions in the one thousand nine hundred eighty nine just before the great depression. There was already sort of gloomy. Talk about high unemployment and about Machines replacing jobs and some with after the crash. Nineteen twenty nine. Those just immediately charged into the foreground those those narratives. Yeah i mean. I guess if one person says i think the economy is not going to do well i'm going to hold off on buying something That person might look like a crank. But if sixty or seventy percent rather than people do that you don't just have a forecast for a recession a consensus forecast. You probably also have the research. Recessions developed over years often. And they're not that easy to see is because there's a lot narratives that sound like they might be a reason to withhold expenditure but maybe they're not salient enough for the not. Brilliant enough not emotionally charged. Enough bob schiller. Thanks so much. My pleasure absurdity indicator was produced by lena sons gary fact check by nadia lewis. Our editors patty hirsch. An indicator is a production of npr.

patty hirsch Robert schiller bob schiller twenty thousand dollars garcia Npr Npr cardiff Bob ten years six months five years seventy percent nadia lewis lena gary npr
The Work Week, Episode 3: Gender Segregation In The Workplace

The Indicator from Planet Money

09:32 min | 1 year ago

The Work Week, Episode 3: Gender Segregation In The Workplace

"N P R.. Hey everyone it's stacey as we continue our week long series on the labor market. We turn to a very hot topic in the news right now. Gender Segregation in the workplace. This episode originally ran as our jobs Friday episode in March. Hey everybody it is stacey and Cardiff and this is jobs. Friday happy Friday. Everybody in today's jobs report showed that the economy created only twenty thousand jobs in February should have been like a wall walk super low because usually like a hundred thousand couple hundred thousand. Let's hope it could be just a blip Because more than three hundred thousand jobs created in January so too early to say if this is something to worry about because this report does fluctuate a lot from month to month. Which is why here on the indicator from planet money? We as always prefer looking at the longer term so for this episode. We're going to cover a topic. That is kind of hard to talk about sometimes times. This topic is gender segregation in the workplace. And what we mean by. This is that there are some occupations where women hold a very high share of the jobs and other occupations shins where men hold a very high share of the jobs for example women hold a big majority of jobs in teaching and healthcare and men hold most of the jobs in manufacturing and computer engineering so today on the show the big and sometimes underestimated effects of gender segregation in the workplace effects for both men and women and why hi it's a big deal for the US economy as a whole support for NPR and the following message. Come from capital one where you can open a savings account in about five minutes and earn five times times the national average. This is banking reimagined. What's in your Wallet Capital One in a member. FDIC Martha Jimbo is the Economic Research Director. At the indeed hiring lab in a regular on the show one of our favorites and gender segregation in the workplace is a topic. She's been focused on for a while. Now people tend to avoid talking about it a little bit. I think like the fact that women are more likely to be in primary care. Teachers and men are more likely to be. CEO's IT can end up sounding like you're either blaming women or saying it doesn't matter like it's it's hard to talk about but Martha's says we should talk about it because occupational gender segregation Asian matters for everyone for women for men for families for the economy in a bunch of ways for example it explains a big part of the wealth gap that remains between men and women and the reason is that overall most jobs that pay the most are held by men which include jobs like being a doctor or a dentist or an engineer and most of the lower paying jobs jobs are held by women like childcare workers. Cashiers personal care. Aides in the breakdown is really stark. When you look at senior executives of big companies here's a really staggering statistic of the five hundred? CEO's of the companies that made up the fortune five hundred last year only twenty. Four were women. That's not very many. No I five percent not a lot. Are you GONNA do. Women earn about twenty percent less than men do throughout the economy. That's the gender wage gap gap now discrimination and other variables account for a lot of it but in a recent paper. Economists Francine Blau and Lawrence con estimated that roughly half of the gender wage gap is because men and women work in different industries and occupations. So one conclusion is that if the labor market were less segregated in other words if men and women held roughly the same share of jobs in every occupation then women would likely be paid closer to what men are paid overall. The wage gap would be smaller now. Of course one response to the fact that men and and women work in different jobs could just be that women are choosing different jobs than men are that they're just doing the work they want to do that. It's no big deal. It's just free choice. But Martha's the issue is way more complicated than that. She says we should also consider some of the reasons that women might choose to work certain jobs and not working other jobs if they don't have role models if if people assume that women can't do that kind of work if people who are already in that profession ten talk about women in a derogatory way that's going to cause hawes women to think maybe this occupation isn't for me and there is research showing that women who do go to work in male dominated occupations. Find it more pleasant in the working. Environment is more hostile to them in those male dominated fields and that of course can discourage women from trying for those higher paying jobs in the first place and more also so sites fascinating sociology paper about another barrier to women entering these higher paying jobs. Stereotypes there was a paper that came out recently. Showing knowing that when employers were reviewing resumes they preferred to call in high achieving men for interviews but only moderately achieving women and the researchers went. Wait why is this. And they followed up with the employers and the employer said We think that the moderately achieving women will be more sociable and friendly the high achieving women. You know they seem like they're going to cause social problems in the office. These are people they hadn't even met and you could see that. kind of factor being a bigger occur problem in male dominated occupations where there aren't already high achieving women in the office but Martin is quick to point out the gender segregation is also an important issue for men especially when considering where the economy is heading over the next decade. Most of the jobs that will grow the fastest our jobs that have historically been dominated by women. It's things like nurses nurses nurse practitioners We're going to need a lot more. Healthcare workers because of the aging population. Exactly on the other hand occupations that are dominated by men are predicted to grow much more slowly and in fact occupations that are predominantly women are projected to grow about twice. What occupations that are dominated needed by men are so if the men in these heavily male dominated occupations to keep participating in the labor market. A lot of them will probably have to shift into jobs that have traditionally additionally been held by women. There's another point here which is at a lot of the high paying jobs that require long hours and have very little flexibility jobs like lawyers or bankers or senior executives at big companies still tend to be held by men. One likely explanation for that. Is that the responsibilities of parenting and child care. Have disproportionately been carried carried by women. In the past and inflexibility in the workplace is actually a problem for everybody. Martha says it's a problem for women because it means fewer of them can take these jobs jobs. which would also help? Close the wage gap. But it's a problem for men because men also want flexibility at work maybe more than a lot of people realize one. Recent paper for example concluded clued. Men and women just aren't very different when it comes to reporting conflict between work and family finally says Martha Gender Segregation can also hold back overall economic growth. Both because it means that a lot of jobs aren't being taken by the people who are best matched to those jobs and that slows down. The economy produces a lot of the gains that we've seen in our economy over the last thirty forty years or because of women entering the workforce. I would argue that. We aren't aren't yet fully using women's potential. Because they may not they minis shut out of the occupations that where they may be most productive that they would like to be in and so if we are getting the most out of every worker that we possibly can that's great for everyone and so- ending adding gender segregation and occupations or at least the bias and discrimination that keep women out of certain occupations is good for women It's good for men not to be stuck in occupations that may grow more slowly and it's good for our economy. Progress in reducing gender segregation has been slow and some economists find that has actually been getting slower in the last few decades but there have been some signs that more progress is at least possible. For example the sheriff nursing jobs done by men has been steadily going up since the sixties and as the labor market has strengthened in recent years. Women have also been getting hired into more traditionally male dominated jobs things like construction mining and manufacturing. I do think. The tightening labor market has helped here. One thing that we've seen you know from two thousand sixteen to two thousand eighteen in this period of a really hot labor market is is that women's employment in male dominated. Industries has grown almost twice as fast as their employment in non male dominated industries. Now it's still small but it's growing much faster a quick note of gratitude. The idea for this episode was partly sparked by an excellent article about it in the economist. We also relied on some great work on this topic published by economist at the Center for equitable growth and on the paper by cloudy. Golden and work from other economists and scholars. We'll post links to all these articles and papers in the show notes at NPR dot org slash money. This episode was originally produced by Constanza Gherardo and Darius Rafi on the update was produced. Used Lena Sons. Gerry are intern. Is Nadia Lewis. Our editor is Paddy Hirsch and the indicator is a production of N._p._R..

Martha Jimbo NPR stacey Wallet Capital One FDIC CEO US Cardiff Francine Blau Paddy Hirsch Lena Sons Nadia Lewis hawes Gerry Economic Research Director Martin Constanza Gherardo editor
What To Watch In 2020

The Indicator from Planet Money

09:37 min | 1 year ago

What To Watch In 2020

"N. P. R. Everyone is indicator for planet money. I'm Cardiff Garcia. Stacey Panic Smith is on a break so I'm joined today by Dr. Es Rafi on producer and quite frequent fill-in conversationalist high cardiff. Thanks for having me in the studio again. Yeah it's a very long title I just gave you. I hope. You'll put that on Your Business Card Commissioner conversationalist exactly Bromide Tinder by So here's what we're doing today. I am sure that at some point in time you've heard the old cliche. The predictions are hard especially about the future. Yeah isn't it With a Yogi Berra said allegedly. Yes well in economics predictions are mostly waste of time. So I had an idea for today and instead of making predictions. We'll just pick a few things to watch. Okay Okay and and I chose some trends. That were happening last year and trends that we are not going to predict. We're not going to predict now. We're going to predict what they're GONNA do. But I think they're all meaningful wants to watching watching the New Year educated hypothetical non predictions. Yeah that's that's what we do here on the indicator because we're rigorous and because we care about accuracy So I have broken down these trends into three categories. All right all right. One trend last year was very bad. And so we'll talk about whether it might turn around undiscovered here one trend that was kind of mixed last year and so the question is will break in a favorable or negative direction and then finally one trend. That was really a good last year and so the question is will it continue and those three trends are coming up right after the break excellent support for NPR in the following message. Come from mail chimp. So you're ready to make that side-hustle your remain hustle. Now what start with the all in one marketing platform from male champ. That's what it has all the tools you need to give your new business. The strongest wrong is start with the right marketing at male champ dot com support for this podcast and the following message come from salesforce a customer relationship management solution dilution committed to helping you deliver the personalized experiences that customers want salesforce bringing companies and customers together visit salesforce dot com slash learn more. Okay Dr is. Are you ready for the three trends. Yeah right so are we going bad. I I think we're going to go with a trend. That was really bad in two thousand nine hundred ninety nine and we'll talk about whether or not it might turn around in twenty twenty and it's this business. Investment K Yeah so business investment vestment by the way is the money that company spent on things like buildings plants equipment research stuff like that and last year. The amount of that money that company spent on these things stopped growing and in fact growth in business investment turned negative so that it shrank. Yeah did it shrink by a lot no not by it ton but the fact that it was shrinking is notable because the economy overall was growing and people were spending money and so. There's this kind of interesting question. It just why that was and there are a few different theories here. The main one is the trade war has been causing a lot of uncertainty in the global economy. And that has made eight companies kind of hesitant to invest. Because they just don't have much clarity on what the future's going to look like so there are a little bit nervous about spending the money now but also it's possible that some some of that sluggishness in business investment was a one off trend in the energy sector or in the aviation sector and so it might rebound in the coming year so the question Now is will business investment in fact make a big comeback in twenty twenty and I would point to one thing as possibly hopeful sign at the end end of last year. The confidence of CEO's had started to go up after it had reached a really low point in the middle of the year and so that suggests that maybe CEO's or becoming a little bit more confident about the economy the direction it's going in the trade war maybe they'll start investing again. How right so yet? To yet to be scene if twenty twenty will will be will continue the trend if this bad trend will turn around or if it will continue right. That's one thing we're going to be watching number to to write a trend that was Kinda Meh last year can mixed and so the question for this one is will go in the right direction or will it turn in the wrong long direction and here it is. Wage growth was stagnant last year. Right here we hear a lot about this. This is this is why a lot of average people aren't necessarily feeling Ling the impacts of a good economy. Yeah I mean there's a few things going on here but the really baffling things. The labor market overall last year was pretty strong right. We were still creating a a lot of jobs but overall for some reason wage growth did not accelerate the way people expected it to okay. So here's something interesting. That happened last last year. Okay of the people who month to month go from being not employed to then getting a job almost three out of four for those people were not even looking for a job the month before and tryst and with a lot of people coming back into the labor force exactly and that's a big deal because it suggests that the economy still needs to create a bunch more jobs before workers have the kind of bargaining power that would lead to accelerating wage growth so this is a huge deal. I mean when you're talking about wages you're talking about something really tangible. I know how much is in my paycheck. I know what that affords me right. The chance to provide for my family the chance. Sometimes too. You know indulge in something. Nice whatever I have a sense of it and that's what wage growth is all about. That's why it matters so much healthy reminder that economics isn't just a game affects people's lives absolutely it. Bears reminding you to lose sight of that. I think we we should remind people and also if it leads people to recommend a certain podcast. I it's quite good at explaining these trends. Then why not liking subscribe wherever you find your pockets exactly Okay so the last trend. This was something that was really good in two thousand nineteen gene. And we're all hoping we'll continue in twenty twenty two good stuff. The good is dollar on me. It is simply consumer spending. Will people keep keep increasing the amount of money that they spend in the economy which is of course what drives the US economy and also to some extent a chunk of the world economy enemy because of course US imports a lot of goods from other parts of the world. And so the question is will Americans keep spending money keep increasing the amount of which we spent a lot of this past year a healthy amount I would say so roughly last year the US increased. How much money spent by about two and a half percent after you just for inflation? That is roughly in the range of what it has been for the last three years when the labor market has stayed strong and when the economy's continued growing and to the question is will the US consumer keep spending it roughly the pace of increase it has been spending at for the last few ears. Some pretty hopeful signs here. The Federal Reserve has suggested that it won't try to slow down the economy anytime soon that it is is comfortable with where the economy's ad so that's one thing another thing. The housing market and the stock market did quite well in the second half of last last year and that can have in fact on the amount of money people are comfortable spending. But here's the thing. Consumer spending is also something that can get hit quite suddenly quite hard. There's a big economic surprise and who knows what we're going to get going into next year right. Will the trade war sort itself out what's going to happen in the political realm with the impeachment and the election coming up. That's something I'm going to be watching all year and at the end of the day. Humans are not perfectly rational all of at the time and so you may be hard to predict exactly how people feel about spending money. It's not quantifiable thing. This is something that economists are studying. Stunning increasingly and again. That's hard to predict what will the narratives be in twenty twenty that become contagious. In that end up having a big influence on how we behave so let me make sure got this all all right. The three things that we are watching but not predicting is correct. Businesses weren't spending enough. Maybe they'll spend more wages. Were flatter than we'd like maybe they'll grow faster consumers. Were spending a good amount. Let's hope they keep spending. Yeah that's exactly right all right. So there's your Educated hypothetical non predictions for twenty twenty. If you lose all your money in the stock market on us that's right and by the way we'll we'll post charts and links to describe some of these trends over at NPR dot org slash money. Dr Is always a conversational pleasure. Thanks for having me. This episode of the indicator was produced by Lena Sons. Gary our editors Paddy Hirsch. Our fact checker is Nadia Lewis Indicator. Peter is a production of N._P._R..

US twenty twenty salesforce NPR Yogi Berra Cardiff Garcia CEO Commissioner Stacey Panic Smith N. P. cardiff Dr. Es Rafi Federal Reserve producer Lena Sons Nadia Lewis
Of Diet Coke And Nobel Prizes

The Indicator from Planet Money

08:54 min | 1 year ago

Of Diet Coke And Nobel Prizes

"N. P. R. Before we get started you mind if I get your name the way you'd like it and your title the way like it Micheal Creamer So non dairy creamer Yeah Zoom so economics as a field it can have the reputation of being kind of abstract cerebral yes that's true support for this podcast and the following message come from Zoom Zoom is used by millions to connect face to face through a single if matty lots of CIGNA's you know complicated financial instruments ivory tower stuff Michael Creamer our newly minted Nobel laureate says he APP for videoconferencing phone calls group Chat Webinars and conference rooms visit zoom online to set up your free account today meet happy with all these different things in those developing countries Michael got started in this kind of economics when he was visiting a friend who was teaching in Kenya his friend was working for a nonprofit and had been mixed focuses on improving conditions in developing countries so Michael's research is looked at different ways to improve health care education agriculture social conditions put in charge of a bunch of local schools and they were trying to figure out how to best run these schools and where to invest their very limited resources we weren't sure much the peak because when someone wins the Nobel Prize the whole world is going to acknowledge them as having contributed significantly to their field and in this case to humanity coke drinker Micheal creamer about development economics what it is how it has helped change the way we think about economics and how it's even changed the world here's this from people all the time people have a view of economic says only about the stock market suggested that perhaps they could try some approaches in some schools and other approaches and other schools and they did that systematically they could learn proved our ability to fight poverty in practice visit indicated from planet money I'm Garcia and I'm Stacey Vanek Smith Today on the show we talk with Nobel laureate and regular uh what the best approach was they had several different ideas that they were interested in China and as we were talking I element economics along with his colleagues esther flow an advocate Banerjee the Royal Swedish Academy of Sciences said that the work of the three economists had quote dramatically it diet coke to irregular nothing so mind now Micheal Creamer just won the Nobel prize for his work in what's known is trials are used in many of the sciences but applying them in economics was groundbreaking in some of the most noted work of Michael Kramer and his colleagues they looked at where to best allocate resources impoverished schools in Kenya so for example would students benefit more from free textbooks or from free meals it turned out neither of those things actually made a huge impact for the students what did make a huge impact for the students another study uncovered a pretty unexpected answer to that the students for years all the way through school and into the workforce and they found that free access to de worming medication just kept paying off this was a while ago mixed figured that out the solution was not obvious it emerged after a series of rigorous experiments that were systematically trying different approaches until they found the most active efficient solution Michael and his colleagues presented that information to the Kenyan government you want to help kids and keep them in school put your money here in I got this doctor from a Nobel Prize winner and the response he might give to somebody who asks him for stomach that look development economics is something different branches investing in De worming medication as it turned out had a much bigger impact on the educations professional lives of kids than textbooks or school meals and economic onto secondary school so huge impact relative to the really tiny costs lose medicines cost really pennies per does best in de worming medication and it will affect major change it will move the needle they were excited about it and they decided they wanted to launch an take the medication to treat worms was quite cheap but it did still cost some money and there were a lot of parents who are still not getting it for their kids what made a huge difference what was what was working best and evaluate the impact of what they're doing much isn't Medical trial much as in a medical trial real world Michael Creamer in his fellow laureates this year has changed the lives of hundreds of millions of people around the world and Michael Says he's very glad to see that a more hands on he is incredibly excited to see economics being used this way and of course peace excited about winning the Nobel yeah maybe we'll even figure out how to celebrate it properly kind of economics is being acknowledged invalidated in such an important way we're trying to do work that is very rigorous that is using the there will be more progress as economics is applied to different problems in the developing world he thinks he can help find simple practical solutions that can actually make a big difference. Michael says a pain for itself through increased tax revenue because people did become more productive when they were healthier is that is that right that's exactly right I think you definitely have to put that on there I should think so he'll pry I mean you know that to Converse Ah Tours of of economics but that is also engaged with practical problems it's easy to quitting school absence from school what by one quarter reflect when they had access to the medicine Michael and his colleagues followed awesome upgrade to the Diet Coke Survive and that ladies and gentlemen is how you celebrate winning a Nobel Prize you upgrade for was when kids were given free access to de worming medication Michael says the impact it had on their education was extraordinary we found that topic for much more like national program and then Indians state governments heard heard about it and then the national government of India introduced a similar program so now and my titles actually gates professor of develop into site is in the Department of Economics at Harvard and Nobel laureate this episode of the indicator was produced by Lena. San's Gary edited by Paddy Hirsch Our intern is Nadia Lewis indicator is a production of NPR. Aw Th Indian program is reaching more than one hundred million children every year and I think I remember reading that The program actually did see the problems of global poverty and to think that there are intractable that we can't make a difference but actually there's been huge progress Alga young adults we see that they're actually earning more and consuming more and the girls are more likely to yeah there you go there now we're talking we're talking hyphen free access to de worming medication. Hookworm whipper roundworm worms that actually used to be in the southern United States. Ah The free just do the calculations turns out of the extra tax revenue alone would have been more than enough to pay the cost of the program. It's estimated that the work of congratulations thank you so much and I think you should upgrade to regular coke for at least a week paid lip balm recent follow up work we've looked at the economic impact of us now that students at the time of original de worming are now in the labor force and see the people are earning more meaningful way. It's hard to think of how you even celebrate that actually found out our reporting at was diet coke talks next. That's the question that you get when you sit makes people on airplanes there like is the stock market GonNa go up hopefully classic questions going to the I I also much place on that one now is a Nobel prize so you really want to know if he thinks.

Nobel Prize Michael Department of Economics Converse Ah Tours N. P. R. NPR United States Harvard professor India San Paddy Hirsch Nadia Lewis intern Gary one quarter
WeWork And The Future Of Co-Working

The Indicator from Planet Money

09:55 min | 1 year ago

WeWork And The Future Of Co-Working

"N. P. R. in the office it's boring it's Beige. It is full of drones in suits who are just counting down the days until retirement and then it can help you diversify revenue and reduce costs through human center design and Agile software development learn more at V. I. G. E. DOT COM slash and music and neon lights and lounge couches and open kitchen areas where people could congregate and drink free cold brew coffee and draft beer it was young and we are we work conjures up these images of young entrepreneurs on laptops in beanbag chairs wearing noise cancelling headphones London earlier this year the company was estimated to be worth forty seven billion dollars and a lot of competitors cropped up but we work was the five hundred pound life and we workers are already seeing some changes there's notices about of course certain staff being unavailable in their re vamping up itself this message a billion dollars to eight billion dollars that's like eighty percent of the company's net worth that just went up in smoke Softbank which has bankrolled a lot of we works growth took control of the spiralling company and no surprise we work CEO got pushed out surprise he got more than one and a half billion dollars on his way out and I rila its name was synonymous with co working and then people took a closer look at we works books the company had a staggering amount of dead on Sept took off we were rented out office space in cities all over the world and even became the big ten in New York Washington DC and designing and building groundbreaking digital products whether you're running a startup with a disruptive idea or launching an innovation initiative inside a large corporation vision and the management was making all these weird decisions and investments like sinking tens of millions of dollars of works money into a medical marijuana company a we work school a superfood company that makes mushroom coffee and to Merick CREAMER YEP and investors freaked out the companies estimated value was slashed from forty seven league deals and then you know put down their laptop to join the five PM Tequila tasting and resume building workshop yeah it's like hip new and over according social and full of freelancers entrepreneurs in tiny startups that were you know going to change the world and personally my biggest nightmare but it is true that the yeah and I'm Stacey Vanik Smith Today on the show we work goes down a look at what happened and also what we were struggles will mean for the whole business of co working comes from NPR sponsor visit thanks to innovative startups and brave enterprises software is still eating the world for two decades vigorous has led the way in branding soltys we work mostly creates these big hip spaces that fill up with freelancers and small businesses no tell pretty much only works with big companies yeah you can get it yeah other executives have also been ousted thousands of employees are being laid off the company is now fighting for it's the future of our office and I would hope that we're able to continue working here I think I've noticed less fruit and the water recently dizzy indicator from planet money I'm part of course form it's in the general category of office basically not does compete with we work yeah though Amal does say that they have different special it'll rent office space to them and then set up the office according to what that particular big company wants no tell by the way is currently valued at more than a billion dollars and to a mall. Sarda so explain this to me because I think workings over and I don't even think it had happened yet we will remember the days of co working but we will remember them as yeah I don't see how they could not make changes but riding at how long as you can I'm deeply concerned about we'll probably benefit from we works implosion though Amal says probably not from the freelancers and small startups part of that business in fact he thinks that part is on its way I think from the past Amal is the CEO of a company called Motel which he would like to stress is not in the co working business were a flexible workspace plant. Oh Gee I think it's just going to dissipate with with the story of that company because Amb all says most people are not entrepreneurs or freelancers or working for Hiney startups most of us just worked for big boring companies a number that has been increasing for decades because of technology globalization the biggest companies are getting bigger and so apt the kings of co working are done and the mythology of co working that work is a party that everybody's freelancer that nobody works at companies like that home or stable tenants and also they have more money and that more money part is especially important says a mall because the amount of money you need to spin up an office space is actually often facebook around a third of we were tenants are big companies but the lion share of its tenants are still individuals and small businesses and we work itself admitted its own financial documents that these tenants were likely to be quote disproportionately affected by adverse economic conditions the big companies on the other hand tend to make more a crazy when you take a perfectly good office and you slice it into a million little boxes that is so much more expensive than anyone could possibly imagine like you have to be a little business about big companies we work though focused primarily on freelancers in startups in the last couple years we were did start to target bigger companies like Mike it was crazy costs we work spent nearly two and a half billion dollars last year on leases renovations and other expenses and it had expected to spend four billion a real estate person to understand to build a building in New York costs like between five hundred and a thousand dollars per square foot wow take a normal building and turn it into a we were says you sort of feel that there is this bubbling economy of small enterprises they believe they're get bigger go away and so most people working big companies which means the office businesses goals it's it's three hundred dollars per scroll awfully expensive that is colossally expensive so we work has these crazy costs and it's expanding like crazy which compounds freelancers and tiny startups is gonNA sting a lot of those workers are extremely price sensitive and they have much cheaper options like they could work from starbucks or they're living room really and if those customers react to we works higher prices by choosing one of those alternative options we were could end up struggling even more there's this year had expected. Softbank is reportedly hitting the pause button on a lot of work spending laying off staff and there's just a lot of speculation that will and with it the whole premise of the work economy of this whole new idea the new dream of what working meant the co working people they wanted you to believe that office it turns out work it's not cool and people probably are not gonna get excited about Mondays. I mean we get excited about Mondays here sure yet tempting though it is the company still estimated to be worth about eight billion dollars it has hundreds of thousands of tents lots of income and some of the people we talked to have you been drinking the mushroom coffee again cardiac indicator cool latest book we can't count out we work just Asia and the indicator is a production of NPR by the way if you WANNA learn more about Softbank the company that now owns we work you should check out a planet money hundred dollars a month and that is just for access to the lounge common room area if you want an actual office it's more like a thousand dollars a month this could be where we worked focus on start closing locations do you think like co working will get more expensive yeah yeah co working we'll get more expensive there are a lot of places that they were giving free everything hundred so the aired a couple of weeks ago called the Unicorn cowboy it explains that whole relationship and it's a totally fascinating piece came we work we work was not boring or beige it was this whole new way to see work and to see the office this were cool had art books in India the office anymore that office was a party that works like a delight thank God it's Monday that was one of their other tagline is I mean that's very that's adorable the the side of a we work here in New York really do seem to like it I love it it looks cool cool people mixing around with the networking communicates a calm lifestyle aesthetic. Today's episode of the indicator was produced by Darius Rafi on our intern is Nadia Lewis our editor is Patty hearst costs another three hundred dollars per square foot it's as if you're building a building again when you convert an office into a real so if you're like leasing a space to fill it out with all the stuff the chairs and the deaths in the cubicle head off kind of discounts all that go away I mean they have to increase price they need to make money to survive they have to make money and that involves raising price we workspace here in New York cost around five Thomas of we work with Supervi- be like they're all these like really hits totally want it to be true love that to be true I love that the benefits aren't really great they have like free events is a free keg Tab which is great you know free beer it feels like you're part of something other than a steel office based.

New York Softbank N. P. R. Amal NPR Sarda Asia facebook CEO starbucks Darius Rafi Hiney India Patty hearst Nadia Lewis intern Supervi Mike editor
Finance Fridays With Mary, Volume 5: Why Fees Matter

The Indicator from Planet Money

09:57 min | 2 years ago

Finance Fridays With Mary, Volume 5: Why Fees Matter

"N. P. R. Everyone Welcome to the indicator from planet money. I'm Cardiff Garcia and I'm joined today by my friend. Mary Child to finance report over Baron's for the next installment of Finance Finance Fridays with Mary. Mary how are you I'm great. How are you good. I hope you enjoyed your brief hiatus from Finance Fridays with Mary because you've come back with some pretty big news actually actually for our listeners nortel do everybody. I'm joining planet money. Yes you're now going to be my colleague. I can't even believe it. Yeah you're joining our sibling. PODCAST CAST says those beautiful long form narrative podcasts about business and economics. It's GonNa be awesome and today we're going to be fielding a listener question in about the fees that are charged by hedge funds and private equity firms okay and I think a lot of people going to hear from you like why would I care about. That sounds like a thing for rich people to worry about Telhami Homework. That's not the case so actually you should care. It turns out that of the four point two trillion dollars invested in private equity some some forty four percent of that is actually from pension funds pension von. That's right those are the funds that are supposed to help people in retirement actually afford their retirement so you put in a dollar today and in twenty five thirty five whatever years it comes back to you in a nice fixed income stream and you get to live happily ever after and in hedge funds which is like three point six trillion dollars. That's forty two percent of that comes from pension funds so it's substantial these are real normal people that are trying to live out their lives. Asia's want to relax relax retirement. They earned it and we're depending on hedge funds and private equity for them to do that. So it matters that hedge funds and private equity firms do well and also by the way eight means that it matters if the fees that they charge those pension funds and other types of institutional investors like bees like endowments and universities cities. It's a big deal if they're overcharging them but is that the case that is the question we're going to be exploring right after the break support support for this podcast and the following message come from Google Domains Google domains helps make your business a reality with the tools and partners for building your website like a pro and N. premium security features and included for three make it happen at domains dot gov slash. NPR support also comes from fund rise innovating the way the people can invest in Real Estate Fund rise makes it simple to build a portfolio of high quality real estate affordably visit fund rise dot com slash built and get your first six months of advisory Fees Waived Okay Mary. Today's listener question is about the fees that are charged by hedge funds and private equity firms real. Oh quick explainer first about what hedge funds and private equity firms actually are a hedge fund takes money from pension funds and universities and other big investors and then invest that money money using all kinds of sophisticated strategies including a lot that I don't really understand private equity firms do something a little different they take that money and they invested by buying out whole companies and then running those companies for a period of time like seven to ten years and then hopefully selling that company again for a Prophet so with that out of the way here's the question from Listener Stephen Murdoch hello. This is Stephen Murdoch calling from Kent in the United Kingdom. My question is what do people tolerate tolerate. The exorbitant fees that hedge funds and private equity firms charge for a long time. These groups have charged a two percent management fee every year and a twenty percent performance fee if they're successful after the two thousand eight crash many people said that the two and twenty feet structure would change but I'm not sure it has has it changed okay first off Mary though I need to explain to our listeners what that too and twenty structure actually represent so if I'm pension fund and I give my money to a hedge fund then right off the bat the Hedge Fund will keep two percent of all that money as a fee. That's the management fee but then wants to hedge funds start investing the money it will also so take twenty percent of the profits that it earns through the investment that also is a fee. That's the performance fee so two and twenty and steven is wondering Wyatt is that hedge funds and private equity firms are still charging two and twenty fees so the question is are they stevens instincts are actually sort of correct correct here. They are not really charging to in twenty anymore. Private equity is charging on average. One point eight in management fee and seventeen ish for performance armaments and hedge funds one point five percent and nineteen percent for performance. That's according to pray. Quin okay so in other words. They're charging less but is that a lot less. How should we think about that for sure emotionally. It's a lot less emotionally. They're having a hard time with it. They heated the one point five. They say is actually particularly painful. Especially for a startup hedge fund a new hedge fund. It's harder harder and harder to to actually be able to function business with lower management fees because you may go through a dry spell where you're making no prophets. Don't get that nineteen percent and that's where the real money is but you I really believe in your investments and you may not make it to that day. If your management fees are too low to survive okay so obviously they're not gonna like it the fact that they are having to charge less S. yeah right so here's a question that I think a lot of people are going to have Mary which is to in twenty or slightly less than two in twenty. It sounds like a lot of money that hedge funds and private equity firms are charging for their services. Do they actually justify those high fees so for a private equity over a historic period. Yes they have outperformed public equities. According to Cambridge associated better than the stock mark that's right. There's sort of an asterix tricks to that though because the outlook for that is less sunny right so people are concerned that now with the stock market so high private equity companies are having to pay a a ton of money when they want to buy a company ticket private which means that it's even harder to make that company worth more money in the future because it already is so expensive exactly okay so the bottom line is for private equity. They've done well in the past but they might actually not do as well in the future. What about hedge funds so it's been a bit spotty the done really well some in years and other years not so well in the years since the crisis on aggregate. They've kind of not crushed it. It's been it's been here's my question there other things that people people can put their money in right like there was mutual funds. There's exchange traded funds. These vehicles that just invest in the stock market basically where the fees are a lot lower. You're right how do private equity fees and Hedge Fund fees compare to the fees charged by say a mutual fund. The average for mutual funds and exchange traded funds is zero zero point four eight percent. That's a lot less than two so much less okay so mary if these other vehicles charge so much less and it's not clear that hedge funds private equity firms in the future are going to always be able to justify the higher fees that they charge. Why would pension funds or anybody the L.'s put their money into hedge funds and private equity firms in the first place. It's mostly for diversification so if you think that the stock market is really expensive expensive right now and the bond market is really expensive right now and you're kind of anxious and you think that maybe things are going to go down. It's really good to have something that's different from just two long mutual fund that is betting on the stock market and betting on the bond market with how much water goes down. You want something that can bet using other things that aren't accessible to those regular alert vehicles so for a hedge fund that means they can short things they can bet against things for private equity that means they buy a company and put it in a cabinet tinker with it and make it better and then like seven seven years they'll trot the company back out and it's better and more expensive but you're not going to experience the fluctuations of the market which might just be like down thirty percent like you don't have to deal with that. You'll just bypass. I pass that entirely I gotta say it's interesting to me that there was a standardized to in twenty feet structure in the first place because I would just assume that if a hedge fund and has really talented managers and does a great job of investing money on behalf of its investors that hedge fund would be able to charge more than two in twenty. Wani and hedge funds at aren't as good or less experience would have to charge less wiser more variety in the fee structures. There's actually you hit on something interesting. The two and twenty legend kind of came to be in the dark ages of hedge funds. What are now considered the grandfathers of the industry were pioneering it and generating crazy returns doing really really well along the right like the seventies eighties right around there exactly so since then you know with any market when it becomes very popular a lot of people enter it? Maybe some of those people or less talented the performance deteriorates so as a result of these kind of other people joining that are less talented. They can't charge as much. They're not as good so today there or is this great dispersion between fee structure. If your past performance is stellar you can still charge two and twenty in fact. You can charge a lot lot more because investors are more than willing to pay it. They want that performance and they want your specific talents to generate it and then there are other hedge funds that just aren't the same amount of talented and they just can't charge as much to twenty then it's fair to think of it as more of an average right is representative of any Hedge Fund that you put your money into. It's a colloquialism that functionally it represents the industry but but it's not actually true thanks thank you this episode of the indicator was produced by Rachel Cohn special shout out to Rachel by the way she's been with us for the last couple of months and will soon be starting new rule reply all this amazing podcasts that we all love She's been a total rockstar forest. Thanks for everything Rachel this. This episode was also fact checked by Nadia Lewis and edited by Paddy. Hirsch indicator is a production of N._P._R.

Hedge Fund Mary Child Cardiff Garcia N. P. Google Rachel Cohn Baron Asia United Kingdom Stephen Murdoch Cambridge Quin NPR Hirsch representative Nadia Lewis
The Work Week, Episode 4: Is The Unemployment Rate Broken?

The Indicator from Planet Money

09:58 min | 1 year ago

The Work Week, Episode 4: Is The Unemployment Rate Broken?

"Cardiff Garcia they. Do you hear this. Yeah I know. It's the holiday music for the holiday season. It's time to ask for money. I mean it's the giving season. That's that's the giving season is what I meant. We are asking you to donate to your local. NPR member station because they bring so much wonderful programming to you. That's right and by going to donate dot. NPR DOT ORG slash indicator. Make sure you include the slash indicator because then then they'll know we sent you that's right and we will deliver that love right back to you so please make sure to donate before the end of the year. And thanks again and P. R.. Everyone everyone is Cardiff in Stacey and today we are concluding the work week. Our series on the labor market with the discussion we had with economist. Jared Bernstein about the unemployment rate earlier earlier this week. We've talked about the strike the change the US labor market asked why so many workers remain outside the American labor force and confronted a major problem for the Labor Economy Gender Segregation segregating. Today's episode originally aired in October. And we'll be back on Monday with new episodes of the indicator everyone it stacey and Cardiff and this is the indicator from planet. Money Today on the show are we there yet and by their we mean is the US economy at full employment yet or candle labor market. Get even stronger than it already is. Now this seems kind of obvious but it. It is actually a much trickier question than you might think. Because the definition of full employment is kind of unclear that's right the Federal Reserve for example says that the US economy Konami maximum employment. That's another phrase for full employment when all Americans that want to work are gainfully employed but another definition. That economists honest sometimes use is whether all workers are employed in jobs that make the best use of their skills so that the quality of the jobs matters to and not just whether there there are enough jobs and finally a lot of economists say the labor market is a full employment. Only when it can't get any better without inflation taking off the idea. Is that if enough forcus have jobs. Then companies have to pay higher salaries to attract new workers and the companies then offset the cost of paying those higher salaries by raising the prices of what they sell prices going up. That is inflation. So you've got these different definitions and plus it's hard to measure just how strong. The labor market is in real time. In the first first place so the best we can do is to look at a bunch of economic indicators to get an overall picture and then make an educated guess as to whether the economy is at full employment so historically to get an idea of what full employment is people would look at the unemployment rate so right now the unemployment rate is super low just three point five percent that what is the lowest in more than fifty years. So does that mean we're at full employment well to help answer that question. We are going to be joined today by an old towel. This show L. Economists Jared Bernstein. He is brought three indicators for us that he thinks offer better signals as to whether the economy is at full employment. That is coming up right after the break support for this. NPR podcast and the following message. Come from the. Ymca a nonprofit but that helps fill the gaps and bridge the divides in ten thousand communities. Nationwide learn more about the impact of your donation at Ymca Dot net slash giving the why for a better US shared Bernstein. Welcome back to the PODCAST. Thanks so much for inviting me. So Jared Before anything cards on the table here you do not think. The economy enemy is at full employment right despite the unemployment rate being so low correct. I don't think we're at full employment yet. We're closing in on it but we're not there. That seems crazy because when I was growing up the unemployment rate was always five percent so when five percent of the population was unemployed than that meant it was at full employment and now we're at three three point five percent unemployment and you still think like no we could. We could push it further well first of all. I applaud the fact that when you were growing up you knew what the unemployment rate was so. That was a very sophisticated shut. It makes sense that you ended where you did. That's probably true. I think the challenge with the unemployment rate is that for decade upon decade economists. Honest thought we knew the lowest unemployment rate consistent with stable inflation and we thought that number was six and then we thought it was five and then we thought it was four. And now if we're being being honest we have to recognize that we don't really know what that number is so we have to turn to other indicators to evaluate whether we're truly at full employment or not okay okay. I'm definitely willing to hear you. You always have very interesting smart points to make so you have three indicators about whether or not we're at full employment what is your first indicator gainer. My first indicator is inflation and the inflation gauge. The Federal Reserve watches most closely was recently seen growing at one point. Eight percent year over year a year now listeners to our show probably know that The Fed target say two percent inflation rate so inflation is below two percent That would argue that. We're not quite at full employment generating the sort of pressures that Cardiff mentioned earlier. And it's not just last month that we had this in fact inflation has been below. Hello it's target for about ten years so I would say the most common reason economists would argue that. We're not quite a full employment yet. Is this persistently below target inflation rate. But that but one point eight percent is barely below two percent or am I looking at this wrong because it seems like we're basically to. That's why I cited this long term result. Sure if you if you spend a month below two percent that doesn't tell you anything if you spend ten years below the two percent target that tells you a lot okay. So that's indicator here number. One inflation jared what is indicator number two well indicator number two is a pretty intuitive one and that's wage growth now. Wages have grown more quickly as the unemployment rate comes down and that makes a ton of sense because workers have a bit more bargaining power in tight labor markets. I mean anytime you can tell your employer no thanks or take this job and shove or some variation between those two poles of the gay day. That's that's a day when you expect to see some wage pressure because at very low unemployment employers have to bid up their wage increases to get and keep the workers they need but with unemployment rate at a fifty year low. Oh you might expect to see more wage pressure than we're seeing One frequently cited series was last seen growing at three point two percent year over year. Now that's better than the two percent Kind of growth. We saw a while ago and by the way this relates to my indicator one slow inflation wages that are growing a little bit north of three percent with inflation flation below two percent that means real wage gains so. That's a very good thing for working people but wages should be growing little bit faster if we're truly at full employment and they're up in jared. There is historical evidence that wages can grow faster than they're growing. Now Right. I mean wages were growing faster than then the current pace back in the nineties. Yes they were. But there's a very important asterisk here and that's that back in the nineties. Productivity growth was faster and when productivity he is growing faster employers can dole out wage increases while maintaining their profit margin. So kind of what you're seeing here is really a struggle between in worker. Power and employer power trying to claw back for the workers a bit more share of the growth so jared your first two indicators that that maybe we're not at full employment are that prices aren't growing as fast as they could be. Wages aren't growing as fast as they could be. What is your indicator number? Three indicator number three is less well known the first two but it's labor share of national income so national income is all the compensation all the money in people's paychecks plus all the prophets that Companies Make and so and there's some other cats and dogs in there but basically it's the income that the economy generates and you want to ask yourself what share of that income is going to workers. That's the Labor share of national income and historically at economic peaks that share has stood at sixty six percent. Now even though it's been increasing late which is a good sign and related to the tightening job market. It's at sixty three percent. So that difference between sixty three and sixty six percent can't three. Big percentage points of national income that to me also signifies were not quite at full employment yet. Well let me ask you this question. So we're at three point. Five five percent unemployment right now. Where do you think we need to get for full employment to happen like where would you be happy? Well in a way. It's a little bit of a trick question in because I've just our favorite I've just offered three different indicators that I think allow you to kind of triangulate full employment better than than the unemployment rate. But I've heard people now talking about three and even numbers below that and so I'd be more than interested to see what happens to Oh my three indicators. If the unemployment rate got down to levels that are even lower than it is today but there is a hugely important caveat here all of those indicators decatur inflation wage growth labor share have been down for so long that they need to grow faster than average for a while to make up lost ground and that that means we don't just need to get the full employment we need to get there and stay there for a while for workers to really feel the benefits. Jared Bernstein always a pleasure man my pleasure thank you. Jared sued was originally produced by Dr Rafi on the update was produced by Lena Sons. Geary our interns. Nadia Lewis in our editor is Paddy Hirsch Rush. The indicator is a production of N._P._R.. And again keep in mind. We'll be back next week all new episodes.

Jared Bernstein US NPR Federal Reserve Cardiff Cardiff Garcia American labor force NPR stacey Konami Paddy Hirsch Nadia Lewis editor Stacey Dr Rafi Lena Sons
Jobs Friday: Crunching The Numbers

The Indicator from Planet Money

09:58 min | 1 year ago

Jobs Friday: Crunching The Numbers

"N. P. R. I'm back in August. The Bureau of Labor Statistics the B. L. S. made an announcement that bothered a lot of our listeners. A lot of people emailed I notice about it. Yup and here is what the bureau announced between March of last year and March of this year the US economy created five hundred thousand fewer. You were jobs than it had reported in the monthly jobs numbers it was a big data revision and this was part of a normal process the bureau updates its figures like this every year her but we do understand why the revisions worried some of you for one thing they just showed that the US economy had not been as strong as we all thought it had been but also some people. I just wondered how could the Bureau of Labor statistics have been so off. Yep five hundred thousand sounds like a lot and you know I mean. Take this show for instance on the I ride each month when the bureau reports how many jobs the US economy created in the previous month you know we have a little celebration always jobs Friday. We we celebrate. We have an Air Horn. We roll out for the occasion know what's. No not yet it yet. It's airborne time. It's Friday reason we gotta wait for the sides right now but you're right. It is jobs Friday of course and the Bureau of Labor Statistics. Just S. reported that in the month of September the US economy created a hundred and thirty six thousand jobs. That's Today's indicator but if that number might be revised later. What should we make of it now. I'm Cardiff Garcia and I'm Stacey Vanik Smith Today on the indicator from planet money. We explain how the monthly jobs number is calculated why those numbers have to be revised and what those revisions tell us about the statistics that we used to understand our economy okay. Cardiff Garcia. It's gotTa be the time I'm sorry guest tackled blow. The Air Horn asked promise other people who who is this person who gets oh the airborne. You'RE GONNA find out after the break. This message comes from NPR sponsor. Tiaa committed to the idea yeah that while most things in life run out from clean shirts in the morning to a favorite dessert at night lifetime income in retirement shouldn't learn more at Tiaa a dot org slash never run out. What's your name. Who are you Ben Castleman. I'm an economics reporter for the New York Times and that is a local. Oh publication where our basic couple blocks over in midtown Manhattan of some note of yeah all right and every month you report on the monthly the jobs numbers. Ben Is my Christmas comes but twelve times a year Cardiff. Do I get to blow the Air Horn. Go for it. There you go. That's the stuff benzes. The jobs report is probably the single most useful look at how the economy is doing every month and that is because the jobs report doesn't just tell us how many jobs the economy created but it also has lots of other things in it like how much workers are getting paid the unemployment unemployment rate and how people in different age groups are doing when it comes to getting jobs we get tons and tons of indicators all month long with this kind of the one that gives us the best sort of fullest picture of how people are doing the economy but then also adds that people should be careful about how they interpret the numbers in the report about how confident they should be in those numbers numbers so to understand why it's important to know just how the jobs report is actually created so we will start with this right now. They're almost one hundred and fifty the two million people employed in the US. I take it that when the Bureau of Labor Statistics tries to put together its monthly jobs report. It does not count every single one of those people. It does not okay. That would be hard. Yeah where's to do this so the monthly jobs report that we all get excited about is based on two. Oh separate surveys the service to surveys the first. One is a survey of sixty thousand households. The government basically calls the people at home and ask them questions like so. Were you working last month. Re Looking for work. How many hours did you work and other questions and that survey is used to calculate the unemployment rate but that survey the household surveys not the one. We're talking about on this episode today. We're discussing the second survey in the jobs report. which is the huge survey of businesses they survey one hundred hundred and forty two thousand businesses and business right that can be a corporation so that's six hundred eighty nine thousand worksites sites okay because some businesses have more than one works there? Were a couple of starbucks is more than one. I've heard I walked by the more than one we all walked walked by more than starbucks to get where we are and the government's data collectors ask these businesses questions like so how many people were on your payroll in. September and what is this survey the survey of businesses that the Bureau of Labor Statistics uses to report how many people are working on the payroll of businesses in the US and are the basic idea here here is at the Bureau of Labor Statistics can extrapolate from the answers in the survey too then estimate how many people are working in the whole country but it is just an estimate estimate the country's too big for the government to survey every single business every single month. I mean there are millions of businesses throughout the United States so when the bureau reports that the economy created one hundred thirty six thousand jobs last month that is just the difference between how many people were working August and how many people were working in September and one hundred thirty six thousand that sounds like a pretty precise number but you should not actually interpret it that way because one hundred thirty six thousand new jobs that is a really tiny amount in economy. Almost one hundred and fifty two million people are now employed so you can get really really close in the number of people employed. Loyd in any one month but if you missed by just a little that's going to have a huge skew in the change between one month and the next so you can see why hey the bureau of Labor statistics would want to know if it's estimates are indeed a little off and why if there is better data that becomes available later data that gives is a more accurate picture of the economy than the estimates from those surveys the bureau would want to revise the jobs numbers with that data and that is exactly what it does and that better data comes from the unemployment offices of individual states because businesses legally have to report information about their employees to the unemployment offices of the estate where they're based our employers report our employment to various different agencies including our state unemployment offices right the stadium appoint office knows how many people work for a company knows when their layoffs knows when they're hires they get what's pretty close to a total count of the number of people who are employed in the economy and we can add up all those state numbers and we can get a much more accurate number then that survey from from the B. L. S. every month the promise to wait. It takes a while to add up all that new data. It's not available monthly unlike the jobs report but the data there from state unemployment offices is with the Bureau of Labor Statistics uses to make these annual revisions to its earlier jobs numbers. They're called the benchmark revisions and it was those revisions the bothered our listeners so much and what those revisions showed was that in the year through March the economy created five hundred thousand fewer jobs than the bureau had previously estimated. This revision was bigger than usual and what it signals is it. The economy was not quite as strong for most of last year as we thought it was based on the monthly jobs numbers now. There's a couple of lessons here just because the jobs numbers from the monthly jobs report get revised does not mean you should ignore them. They're still really really good thinking about it this way. A revision of five hundred thousand jobs sounds big but it's still only represents about zero point. Three percent of the total number of people employed still the revisions are a good reminder that you you can't trust indicators UNSUBSCRIBE I well. I mean maybe not exactly that but that if you're looking at any one indicator you have to consider the bigger context you should try to combine that indicator with other indicators to get a broader more holistic look at how the economy is doing and. Ben Says there's another lesson here too which is that you should always look at the trend within each piston not just a one month snapshot and so we should be looking at the last three months at the last six months for some trends. We ought to be looking over five years and saying let's look at at what the longer run trend is but if we're trying to figure out are we heading into a recession right. Now is the trade war damaging the economy. We don't have the luxury of of waiting three years or five years for the quote unquote right answer. We've gotTA use the best data that we have available to us now and know that there's some uncertainty certainty. They're really talking book here but this episode two. It's like look at all the indicators and by the way there's a podcast that looks at a different indicator every single day and you can entrust them you will you can trust us. You can trust trust with Palladino right right interest any single one any single show you you can trust the individual show only if you listen to all the other shows feel like. I'm a sophomore in college right now. Today's episode was produced by Lena Sun scary fact checked by Nadia Lewis. Our editor is Paddy Hirsch and the indicator is a production of N._P._R.

Bureau of Labor Statistics United States Bureau of Labor Ben Castleman starbucks Cardiff Garcia Air Horn N. P. R. Air Horn NPR Tiaa Manhattan New York Times Horn Paddy Hirsch Nadia Lewis Palladino reporter
Underrated Trends Of The 2010s

The Indicator from Planet Money

09:57 min | 1 year ago

Underrated Trends Of The 2010s

"N. P. R. and Everyone Carson Stacey here as the indicator from planet money goes careening into the holiday season. Yes yes it feels like. The holidays are careening at us. Thank you feel like that. was well chosen. Yeah no that's that's a really good word The twenty tens were. Let's just say a busy decade for the US global economies. Yeah action packed absolutely Both of them the US and global economies emerging from the brutal financial crisis and recession. That finished the last decade Europe was in chaos back when it looked like some countries might stop using the euro. There were debt ceiling crises. He's here at home. Big Fluctuations in the prices of oil and food plus recessions deep ones in emerging markets like Brazil Russia and the UK voted to Brexit exit from the European Union. More recently trade wars and all that is just if you limit yourself to economics which thankfully we do actually. They tried to limit ourselves economic. Yes and those events entrance got a lot of headlines as they were happening and so we started wondering what are some of the economic trends ends that really mattered but did not get headlines. Like which trends are still underrated and by underrated. We don't mean that these trends were good and people didn't appreciate them but rather that the importance of the Trans has been underrated. One of those trends in fact is actually pretty treacherous. It is so we have identified what we think are the three most underrated the economic trends in the US economy and we are now going to present them in reverse order here. We go number. Three people have become more cautious about borrowing growing and spending money to explain this when we need to go back in time a bit lasted eight. In the middle of the two. Thousands Americans were borrowing and spending like crazy they were especially taking out a lot of mortgage debt and they were also borrowing against their homes using home equity lines of credit but then the housing bubble burst and it led to a brutal financial crisis and recession that recession ended in the middle of two thousand nine just before the end of the decade and ever since people have been saving a lot more of the money they make to to be precise they are now saving seven point eight percent of their income after taxes and that is more than twice as much as they were saving before the recession. Plus if you look at the overall amount of debt that. US households have so at mortgages car loans credit card debt student loans well as a share of the economy. This debt has actually fallen by a lot this decade this has been led by an especially big fall in mortgage debt as a share of the economy. Which is by far the biggest source of overall household debt and this newfound caution of the US households has lasted for the entire decade and it is probably had a couple of effects on the US economy that we have to admit that this next bid is a little bit speculative so one possible effect is it? Households are less likely to run into the kinds of problems paying off their debt. That could tank the economy. which is what happened last time before the last recession there are definitely some areas to keep an eye on still like student loan debt but overall this caution could mean that the economy is more resilient to downturn than than it was before the financial crisis of two thousand eight and the other effect is that the cautious behavior of US households has probably made the economy grow more slowly throughout the decade aide? Then if they'd been borrowing spending more money all along so there has been a trade off moving on now to the second most underrated trend of the decade. And this is a sad one heartbreaking. Even it's about life expectancy which is how long people expect live when they are born life expectancy in the US have been climbing for decades since at least the nineteen fifties when it was around sixty nine point point nine years but stopped going in two thousand ten and stayed flat for a few years and since two thousand fourteen. It's actually been falling from seventy eight point nine. In Years to seventy eight point six years that is according to a big new study from the Journal of the American Medical Association that might sound like a small decrease but still it is significant that it was falling at all because it means that the kind of progress that many of us had taken for granted has stopped and it is only stopped in the US not in other countries with advanced economies. The explanation has to do with what scholars refer to as deaths of despair. These are rising deaths from things like suicide drug drug overdoses and medical conditions caused by chronic alcohol and tobacco use and you might be wondering why we are including this any list of economic trends of the decade which is a fair question. A economists in health researchers do not always agree on the extent to which the problem of falling life expectancy is driven by economic conditions versus other things like cultural troll or psychological factors or problems with the healthcare system but it does seem very likely that economics plays at least some meaningful role here for example people without college degrees. These are more likely to die from these deaths of despair than people with degrees and that's possibly because they have less access to affordable healthcare or. Maybe because these deaths tend into effect people who are more vulnerable to changing economic conditions like a changing labour market. These deaths are also more concentrated in rural areas and places that have lost a lot of manufacturing factory jobs so there is evidence that this is partly a problem of income inequality and geographic inequality again scholars are still debating this but the dramatic reversal of this trend trend. The trend of people living longer as time goes on as the economy matures was such a big deal that we needed to include it so card if this just leaves us with one more trend the single most underrated trend of the last decade. But first we're GONNA take a quick break and when we come back we will reveal what is support for NPR and the following message. Come from capital one where you can open a savings account in about five minutes and earn five five times the national average. This is banking reimagined. What's in your wallet? Capital one in a member. FDIC support also comes from state farm arm. Why do you need state farm renter's insurance because it helps protect the stuff? Landlords don't like your furniture that gets drenched by a broken pipe state farm pinchers insurance find the agents or get a quote at State Farm Dot Com. Okay Cardiff Yup. Here we are number one. The most underrated trend of the past past decade ready. I'm ready all right. Well you know. I hope our listeners in our listeners. Ready exactly our top underrated trend brand of the decade is the spooky consistency of US economic growth. So the economy has been following a weirdly steady path all decade-long along but that consistency it sounds like a pretty positive thing but it is both a good and a bad thing. That's right it's good. Obviously because the economy has at least continued. Can you growing the entire decade rather than stumbling back into a recession but the consistency is bad because the pace of that growth has been very very slow. And that's especially especially when you consider how devastating the last recession was and so a lot of people a lot of workers and people who want to work have only just recently started benefiting from the economy's recovery even though it is more than a decade old and here's some indicators demonstrate both sides of the story the US economy has now been growing for one hundred twenty six straight straight months including this month. which makes it the longest economic expansion ever but on the other hand throughout the expansion? The economy's only been growing at an annual pace of about two point three percent. That is the slowest pace of growth for any expansion. Going all the way back to the nineteen forties. Now take a look at the unemployment rate. The two thousand ten's will we'll be the first full decade in which the unemployment rate has fallen every single year. That's going all the way back to win. Records were first kept in the late nineteen forties and this sounds awesome right right. I mean falling unemployment means more people getting jobs. This is all good. It should be awesome but hold the celebrations because the decline in the unemployment rate has been super gradual Joel. Not until eight years into the economic recovery to the unemployment rate fall back to where it was before the recession. This means that there were a lot of people who could not find work after the recession. Who have only recently found good consistent work and there are other signs of labor market health? It did not get back to where they were until just this year. This is a horribly horribly longtime to wait and you can look at a bunch of charts showing these and other trends. They all kind of look like straight lines and we'll post the charts at NPR dot org slash money if you WANNA see more but the overall impression they give is one of constant but very slow improvement and this is harmed low income workers the most at the same time they see. I got to say. Hey you know when you think about all that stuff that happened in the past decade the stuff that we listed when we started the episode yeah it is kind of amazing that the US economy just kept going right on through it. It's like the tortoise and the hare like slow and steady. Yeah except like. It's bad that it was so slow. Yeah but it also could have been worse. It's sort of like a big Mac. Is I think the way to describe the past decade but like more like a mess. Give me like a map of the next. I'm kind of hoping that that the upcoming decade can kinda like reverse these things we're like the. US economy grows at really fast awesome pays and it helps workers and society's most vulnerable and everything is calm everywhere else Like for math too. Yeah Yeah exactly and also economics journalists like you and I could use a decade of you know good good news. We might lose our jobs but I would. I think it's worth it. It would be worth it. This episode of the indicator is produced by Rafi on our intern. Is Nadia Lewis. Our editor is Paddy Hirsch and the indicator is a production of N._p._R..

US Europe NPR State Farm Dot Com N. P. R. FDIC Paddy Hirsch European Union Carson Stacey UK Brazil Russia Nadia Lewis Rafi Cardiff Journal of the American Medica Brexit
Are The Humanities Underrated? (And Other Questions)

The Indicator from Planet Money

09:03 min | 1 year ago

Are The Humanities Underrated? (And Other Questions)

"N. P. R. and everyone indicator from planet money. I'm Cardiff Garcia today. On the show we are going to play a game of overrated underrated with George Mason economist Tyler Cowen equality in Chile is quite high and the government doesn't do much about it at least when you measure state sector spending as a share of the subjective narratives but I'd say we still don't know okay next up majoring in let's say literature or another one of the humane great support for this podcast comes from the show last week narratives overrated underrated. I would say underrated so culture matters a great deal if you're born in the United States there's a natural or underrated economic trends as the causes of domestic conflicts overrated underrated economic trends are over. Hello Cardiff you're ready to play a game of overrated underrated. I'm ready for the game okay excellent here we go let me start with this in the last few weeks we've seen raided underrated or correctly rated by society most of the things we list are about economics but sometimes we bring in other stuff as well and Tyler Cowen actually and people perceive the system is unfair so I opt for the subjective element is underrated object of economic conditions as overrated although a political troubles and a bunch of countries that have much lower absolute pay so I think that gets us back to it being about the perceptions do I feel this is fair and heritage and our cultural frameworks do you think there's narratives also drive a lot of the business cycle. I think some business cycles are determined determining economic behaviors in other words the stories that we tell each other and that we tell ourselves and which is the subject of a new book by economist Robert Schiller who had on easy now is that technically economic factor yes median income and Chile has gone up about fifty percent over the last decade it's that there are rising expectations Chellaney economy I mean don't you think that's still a pretty big part of what's going on there well keep in mind. Sheila has the highest real wages in Latin America by some amount and you're not seeing comparable unity's overrated underrated as a sort of determinant of how successful you are going to be in your professional life after college I think it's and by bad monetary policy some are determined by oil prices occasionally being too high and there's a there's a bunch we can't explain it all and maybe those latter ones just once in your paycheck okay next up and I guess related to that last one do you think narratives play a big role in protests in chief Ecuador and Lebanon those protests appear to have been triggered by economic events in so overrated overrated and underrated at the same time so I see undergraduates choosing those majors and then not doing any work and getting out of college and they end up working as bartenders or Uber driver that is how we as Americans talk and think so we develop more world dominant world-beating firms than a lot of say smaller countries would and that is because of our be longer lasting than learning the thing that's immediately a practical what do you think about that story in general Peter Thiel was a philosophy major and he claimed lately practical like engineering or science versus the humanities which are thought to be subjects that teach you how to think and therefore inclination to think that you can be the best in the world it's something if you're going to have ambition we even call it the world series in baseball but of course it's not the world series official intelligence as something that will transform the economy radically in the future artificial intelligence isn't a single thing pens on person then at the usual story here is one of tension between learning how to actually do something in other words majoring in something that is raided it's really about the perceptions of those trends so if you look at Chile would they were gonNA do was raise the price of a subway ride by three cents and a lot of people went editor in good reader then you're in a strong position to have a leadership role and business someday and then it's underrated so it depends yes I did that helped him see the value that facebook would create any invested early in it as a venture capitalist and of course earned a great deal from that investment so it depends on John S. and James L. Knight Foundation helping NPR advanced journalistic excellence in the digital age that account welcome back to the show man bruce that's the overrated side of it on the other hand if you actually learn the humanities and figure out how to synthesize concepts and how to speak well and how to write well and how on what you do with it but using the humanities fruitfully I think is still underrated at the margin overrated underrated art okay tyler to close out the show can you tell us who you think is the most underrated economists of all time the most underrated economists it's just a a term that people are journalists make up you know it's a series of very different capabilities so google is artificial intelligence yes that's changed just our lives a lot but the notion that robots will take over all jobs or the driverless cars will be ready soon those are overrated but I would say the claim is mostly ill defined all time probably is Adam Smith really he's very highly rated but people do not grasp the full subtleties of his work how well it holds up how deep the his three it is how good a philosopher he was how interdisciplinary thinker he was an on most major issues and economics he was correct for seventeen seventy six that is pretty awesome Adam Smith Yeah and I mean do you think part of the reason he might be underrated now is that so much of his work has already kind of it was truly innovative but I think also there are innovations and Smith that people still haven't picked up so wealth of nations is a very long book hardly anyone reads it you've entered into the way that people think about economics the way we all accept some things and reject other things in economics but when he did into this game and kind of stole it from with permission and since it had been so long since we've played with them we thought we'd invite him onto the show to do it one more time that is coming up right after the I would have to say Karl Marx who influenced nation such as the Soviet Union Eastern Europe Communist China and most of what he said was wrong missed his reputation is quite in tatters but I'd say he's still overrated and it seems like some of it's making a comeback bonus overrated underrated and I think that's why it's still underrated people think they know it and really they don't what about the most overrated economist and you're welcome to limit yourself to dead indicator is a production of NPR so capitalism does not have to destroy itself paradise of the Workers Proletariat is not gonNa rule society very well so mark's wasn't economy the NBA The National Basketball Association the NBA is still quite underrated to me it's the most fun sport analytics apply to it very well you can follow it economists if you don't want to insult of your colleagues right now well you know as a die-hard economist. I'm not sure there are many economists who are overrated but I suppose so a game about different styles across nations it's a game about searching for talent it's a game about how people learn to cooperate together it's a game about discovering strategies such as more three point shots or changing how you play zone defense it's about innovation it's about now relations between the United States and China it's on the Internet you can watch only parts of games with five players on a team on accord at the same time you can actually see and understand who is doing what it's Acre Qasem onto race relations in the United States so there's so much going on in NBA basketball to me. It is by far the most interesting major sport. Thanks so much thank you. This episode of the indicator was produced by Lena Sons Kyrie edited by Paddy Hirsch. Our intern is Nadia Lewis on a frequent guest on the show for those of you haven't heard these episodes before overrated versus underrated is when we start listing things and ask our guest to tell us that those things are over.

Tyler Cowen United States Chile Cardiff Garcia N. P. R. Cardiff George Mason intern Paddy Hirsch Robert Schiller Kyrie Nadia Lewis Sheila Latin America NBA Acre Qasem China fifty percent
Niche Products In Our Grocery Stores

The Indicator from Planet Money

09:44 min | 1 year ago

Niche Products In Our Grocery Stores

"N. P. R.. Let's take a moment of silence for milk. It is a tough time for the dairy industry. Poor one out for the dairy industry but don't put too much out. That's their problem. This is for Mutairi Industry. Dean foods the largest mill company in the United States just filed for bankruptcy dean foods makes Tuscan land-o-lakes friendly's ice cream mm-hmm these are a conic. Brands and dean foods is huge. It has nine hundred thirty thousand cows sixteen thousand human employees fifty the eight manufacturing facilities in twenty nine states. So how did this happen. How did it ended up bankrupt? We didn't have to look too far for the answer. Actually we didn't even have to leave of the office. What kind of milk do you drink? Oh complicated question. All kind of hugged I drink. I drink two percent drink almond milk. I go between vitamin item. Indeed and two percent milk. If I'm buying it myself. I buy soy milk because it's not that expensive if I'm buying coffee I like won't pay extra for ultimate look. I don't drink drink milk but yogurt and feeling a bit sad for milk now although I myself also don't really drink milk but this is not a story about the decline line of the dairy industry instead. It's a story about the explosion of varieties of products a new study from the University of Chicago's booth. School of business says that between between two thousand four and two thousand sixteen. The number of niche products varieties of the grocery store have grown by about seventy percent. And if you stand in front of the potato chip section you can see it. There are so many choices. One brand kettle has thirty one varieties. I know because I counted. But why weren't they. Hey there before what took so long. I'm Sally Herships and I'm Cardiff Garcia. Welcome to the indicator from planet. Money Consumers have always wanted in appreciate it more choice more variety more products but until recently companies could produce all that variety in a way that was cost effective on today's show. We're we're GONNA take a look at how innovations in technology and manufacturing made available those rosemary flavored potato chips that Sally love so much or I guess the savvy flavored almonds that I love and we're also going to take a look at how the growing popularity these niche products has affected even the size of grocery stores themselves selves. But not in the way you might think support for this podcast and the following message come from Google from Connecticut to California from Mississippi to Minnesota millions of American businesses are using Google tools tools to grow online learn more at Google dot com slash. Grow support also comes from. Tiaa committed to the idea that while most things in life run out from clean shirts in the morning to a favorite dessert at night. Lifetime income in retirement shouldn't learn more at Tiaa dot org slash. Never run out. So how did we get from a grocery store where there were just. A few kinds of potato. Chips may be sour cream and onion or barbecue today or take Gobert a spokesperson from. You'll play toby that the company makes one hundred different kinds one hundred. John Stanton teaches food marketing at Saint Joseph's university. He also wrote a book about niche products. And he says the answer is simple. Four letters it's Today's industry is we say. ABC always be collecting. Data is that did you make that up or is that a thing I made that off. We all know this. As consumers every move is tracked online. And how you even have to be careful of what you Google because you'll be haunted by ads for months even for things you've already bought. John says all of this digital tracking of consumers helps food producers. I figure out exactly what we want. The media has gotten more targeted. The products have gotten more targeted and the consumers have gotten more used to the fact that they can get exactly what they want like less milk from cows and more milk from plants and all of this is coming from increasingly granular granular data. It's gotten really powerful. Brittany teaches economics at booth. He's one of the authors of the new study looking at niche products. He says even that study itself would not have been possible a couple of decades ago because they wouldn't have had the data incredibly rich micro data data sets where you can study. You know literally what items uh-huh are placed in the shopping cart of tens of thousands of households and process that data. So Brennan says we now know that. Buying these products is a powerful trend. And it's happening across demographics a sweeping and enormous way Joel. vavra teaches economics at boost. He Co authored. The study with Brent. You can focus on just rich households and you see within rich households a growing importance of niche consumption. You can look at just poor households and see the same increase increase in niche consumption for poor households. You can do this for college. Non College Black wait so more and more consumers are getting what they want but expanding product line so that they include all these varieties represents a huge shift for companies and there are two big obstacles that they had to overcome. Here's John Stanton again. Can you know the desire to have certain kinds of of food may have always been there but companies didn't produce produce it because it was too expensive to make a smaller quantity and frankly if they did how would they tell people That the product product exists and not waste their money and advertised. Everybody John Brings up a couple of important questions. I House a company supposed to handle manufacturing actioning multiple flavors and varieties. I mean think about it. Let's say you're a potato chip manufacturer. Had He makes sure that none of them was savvy spice gets into the Korean barbecue chips or the Maple Bacon ships so think about all the machines and equipment that need to be cleaned before you switch flavors. John says the answer. There is new technology. A lot of the innovations Computerized manufacturing systems and tech is responsible. Not just for tracking consumers data. It's also responsible for making it possible to quickly clean. Clean the equipment and is switch over to a new flavor to produce chips. We want what might have taken. You know. Day to change over from Just plain in salt chips to a flavor chip now they can do in minutes. We reached out to a bunch of brands to find out how long it takes them to switch between one flavor and another and to ask them about their newest tech. A number didn't respond so delicious. A company which makes dairy free food and beverages declined to comment spokespeople for both. You'll play and kettle chips. Were helpful but neither discuss details about their manufacturing processes. That information is often considered a treat secrets. Yeah but what we do know is is it. In addition to needing updated technology brands also needed to update their advertising and promotion strategies. It's hard to sell one product. Let alone all these different varieties. Friday's niche products flavors. Whatever you WANNA call them you only have so many marketing dollars and with all this variety? Those dollars are spread more thinly. Yo play okay. The Yogurt Company says it. TV continues to be useful in reaching a mass market but both Yo play an kettle the potato chip company say that in addition to advertising on TV they also promote via social media then they're shipping and distribution to the grocery store. John says there may be more varieties but that doesn't mean stores are getting Baker Acre or that there's more room on store shelves. According to the Food Marketing Institute Professional Association which Represents Grocery Stores Stores are experimenting with smaller spaces. ACIS less square footage. But John says this is where once again new technology in the form of consumer data swoops in to save the day manufacturers know. I know what consumers want they know what to ship where so zoom out of the grocery store for a minute and think a little bit more abstractly about what we're saying here this stuff we put it in our shopping carts how different all those items are could be saying something interesting about us. Here's Brent Co author of the study again. There are a lot of areas has of modern life lot of walks of modern life in which we're increasingly segmenting in separating from the common experience whether it's polarizing in the kind kind of news that we read or the places that we visit or live And I do find it simply interesting. that increasingly even our grocery carts look increasingly different from each other. What I even recognize you? Buy Your Grocery Cart Salad totally the potato. That's the giveaway. Today's episode indicated was produced by Jared Marcel. Our fact checkers Nadia Lewis. Our Editors Patty hearst indicator is a production of NPR. Yeah

John Stanton Google dean foods Brent Co Sally Herships Mutairi Industry United States N. P. R University of Chicago Patty hearst Food Marketing Institute Profe Tiaa School of business Gobert Jared Marcel toby Nadia Lewis ABC
Peak Misery And The Happiness Curve

The Indicator from Planet Money

09:41 min | 1 year ago

Peak Misery And The Happiness Curve

"N P R happiness. It can feel like a difficult thing to quantify and also kind of elusive moments. Like what will make a person happy. Is it a great job job. Is it a family is it money is it. I don't know Yoga. Yeah I've been some Yoga. Classes is definitely not yoga but still doesn't help answer our questions. So where do we turn for an answer to how to quantify and measure. Happiness economists Horror of course. That's where you go to learn about happiness right so this economist David blanchflower. He is a new study out built on some old work of his where he finds a strong correlation between age and happiness and he released a study recently. That finds that people report. We're being the most unhappy. They reached their peak misery in their mid to late forties. Yeah apparently there's something called the happiness curve so you before you reach this certain age and you're mids it's late forties. You're getting progressively more unhappy. You hit the age and then you get happier after that. This is the indicator from planet. Money I'm Stacey Vanik Smith I'm Greg Rusedski and Greg. You are the author of the Planet Money Newsletter. Right please subscribe. Please subscribe to some desperate. No absolutely not and I read it and I was like this is very bleak and disturbing and would also make an amazing indicator because there's this very particular age that supposedly was lead peak misery. It's like the nater of Nihilism. The bottom of the barrel. The worst of the worst the moment at which darkness closes in and after which apparently releases this is. Greg give it to us. Forty seven point two forty seven point two years old. You heard it here. First peak misery peak misery talk about the dismal science and today in the show we talked to the economist David blanchflower about the happiness curve. Forty seven point two and what it's like to be on the other side of it support for this. NPR podcast and the following message come from IINO. The capital one assistant the catches things that might look wrong with your credit card. Send you an alert and helps you fix them another way. They're watching out for your money when you're not what's in your wallet. Seek seek capital one dot com for details support also comes from Google from Connecticut to California from Mississippi to Minnesota millions of American and businesses are using Google tools to grow online learn more at Google dot com slash. Grow okay. Why don't we start with your name? And what you you David. blanchflower professor of economics at Dartmouth College and there was a period there. Were you served on the Bank of England. Yes in two thousand six. Six Golden Brown called me up and said Don. I wanted you to go to the Bank of England I said Oh okay And I want you to come to the really seriously. Ah So so. Monetary policy clearly is one of your specialties. How did you get into the sort of world of happiness and and in midlife crises? So what does the Central Bank you care about Central Bank as Aboud interest rates inflation unemployment growth. But they're into people don't care about that they care about how it impacts their wellbeing so I started to think about ultimately What impacts impacts their wellbeing so I actually have a paper? Brian Look at Tommy. Inflation and unemployment impact people's happiness so in a sense those things are intermediate goods. What we really do care about a people's happiness so I go to it and then I started to realize the patterns in the data while guests here high unemployment high I am happiness is absolutely right and so what I found was one of the big results from this is a one percentage point increase in unemployment has a big effect on people's happiness? So that's some of the stuff that I've been doing like really basic question is I mean obviously I know how we measure unemployment but how how did you go about measuring wellbeing. Like how do you measure happiness. Feels like that would have been a challenge at the start of this research absolutely So it turns out that there are many many many many many surveys around the world that actually ask people directly. How happy are you so sometimes they say in literally how happy I you on a scale of one to ten? How satisfied with your life? I you so these schools. Well the first thing. Is that the patterns in these data. When you ask this you pretty much get the same results? Every time most people are pretty happy very few people very unhappy and the same fluid ounces occur on it but I think what what you you would say. Why does this matter when it turns out? This is currently with things so happy people heal faster they live longer healthier so you you are are in the world of central banking. You get interested in happiness and well-being And then in two thousand seven you you release this. The sort of paper a had a huge impact on a lot of people. So can you kind of sort of set the scene. Two thousand seven. What was that paper? I started to work with number colleagues leagues on trying to think about these patterns. In happiness data and three things stood out the first one we just talked about that unemployment impacts it impacts happiness being married impacts it but one of the things we saw very easily so in the data was that happiness is high. When you're a young is high when you're old but this trough in the middle so this this you shake so this is what drove it? I'm particularly interested in deepening case. Talk about deaths of despair and particularly we seem a crisis in America suicides especially in drug poisoning deaths amongst the prime age in particular not prime age less educated folk. And there's that issue around the world so that's so that was really kind of the starting point I've done this study of one hundred thirty the two countries and what I find when average all together in advanced countries The the the the deer. If you like the low point of this happiness it is forty seven and when you do it for developing countries that got nine hundred five developing countries that do before very similar about forty eight point six so around forty eight That seems to be right. And what's interesting over the last couple of weeks. I've been talking a lot about lots of people. Call me and tweet it to me and and so on and said wow that really fits my life. So you've you've talked about this a little bit but I'd love to get like really specific. So what is it that that is causing. I do think I mean like what is it about I guess it was at forty seven point to you What is it what is going on that? That's making people unhappy at that age. Well I think if you look back. I'm a professor so I've lots of young people I teach these young folks And then they left home when they come through the university and they suddenly realize there's more than one way to cook an egg but all of that is pretty dumb tough especially these days where student loans and having to try and buy a house. What are you going to do with all of that stuff? This is really hard but I mean in the sense. What's interesting about it is this phenomena phenomenon appears to be true everywhere? It's not unique to Germany Japan the US and Canada African countries. You see it in Latin America seating Thailand highland so I think it's something that's the people the people are experiencing and then eventually I think eventually I think what happens is people get real. I mean some of the work have written said when you get to meet fifty you your aspiration start to become real when I was talking to you. You're in the Florida mangroves and yes and you write fishing right and that day you caught a fish right the was it again. It was a it was a twenty eight inch twenty pound redfish toward and and you so you sent me this picture. It's a picture of just for listeners. Out There WanNA picture You're just beaming. You still have your security. I have to say this professor blanchflower so We publish this article Ray and it goes on the web and twitter being witter. I had somebody are- tweet at me. And they said this. How are we supposed to trust any of this switch? Flower guys work when he blatantly lies about fishing that Royd ride nowhere near twenty pounds eight to ten pounds so any respond here. I mean I mean the question. It doesn't really rely the size of the faith. which is what I said relies on the fact that I looked awfully happy? You happy. You're on the you're on the upward swing of your happiness curve. We're on yes I've come to see my action sir. My son having a wedding party. Today's Louisiana but your children bring you joy. The grandkids life life improves. This episode of the indicator was produced by Nadia Lewis fact checked by Britney Cronin edited did by Paddy Hirsch and the indicator is a production of N._p._R..

David blanchflower Greg Rusedski Google Bank of England professor NPR Dartmouth College Brian Look Royd Stacey Vanik Smith Golden Brown professor of economics Louisiana IINO David. America Paddy Hirsch Don Nadia Lewis
Housing: It's About More Than Money

The Indicator from Planet Money

09:43 min | 1 year ago

Housing: It's About More Than Money

"N. P. R. and this is indicated from planet money. I'm Cardiff Garcia how much money we spend on housing on rent or on a mortgage or on repairs and renovation away and driving back and forth to get to work and you think that the primary reason for this is that the cost of housing is just very expensive in especially in the this message comes from NPR sponsor American Express say yes the payment flexibility and card choices including ones with acting the amount of time that people spend commuting to work sure well if you think about when people are choosing where to live they usually have the sure and we know that they're always going to be individual people who have a preference safer living in a rural low density area and they're going to choose of how much it costs but the cost of housing doesn't just affect us only through how much it takes out of our wallets it also affects other choices we make choices the expert and a fellow at the Metropolitan Policy Program at Brookings Net conversation is coming up right after the break a big cities he's big metro areas where there's all this employment there's all these jobs concentrated in one place and so living near there tends to be really expensive long commutes that's not time that they're being productive at work it's not time there's been with family and friends and if we care about the environmental impacts we also worry about lots of people living is how much space we want when we choose a house or an apartment and so that's what today's shows about the housing market as understood through other dimensions yeah no annual fee don't do business without it rates and fees apply learn more at American Express Dot com slash no annual fee jenny big impact on the quality of our lives for example one of those choices is how far away to live from work in other words how long to commute to work and another one guardless of how expensive housing is or what the commuting costs are but what we see pretty consistently is that there are more people commuting very long distances in the expensive metro most expensive housing markets places like New York and San Francisco in Washington DC average commutes are a little bit higher but also that there are more people who are doing these very besides just the cost and then what these issues tell us about the housing market overall and we're going to discuss all of these themes with Dr Jenny shirts she is a housing unusually on maybe a couple of different buses making some transfers yeah Jenny I started with commuting because it's not just about how much time we lose getting to and from work patience for people when choosing their housing but we also know is that if you want to be really close to say the major employment center in whatever metro area you live in does and that's in large part because they just can't afford to live closer or in order to live closer they would have to make some of these other trade offs like living in a studio apartment with minutes but that that commuting time that average commuting time also varies across different geographic location so what we know about that we know that in the we've also learned that long commutes are really detrimental to peoples happiness and even our health right absolutely I mean this is the one dimension where nobody says I really wish that I spent areas what is the commuting situation there and how does it relate to the housing market so rural areas are a little bit harder to measure because you don't tend to have kind of a concentrate wanna live in midtown Manhattan you're gonNA spend a lot of money to rent an apartment or to buy a condo there so it's going to be much cheaper if you move farther away out into the suburbs wartime commuting so there are people who might say I really want to have a bigger house or bigger yard or I want to live in a neighborhood with the very best school systems nobody ever says because they wind up living in cheaper apartments in the central city but if you're commuting to a job say in a mall or an office park in the suburbs you're relying read off the suburbs excerpts we see a lot of this though and in in most cases now there are big concentrations of jobs both downtown forth to work and this is actually one of the fundamental parts of urban economics land values get cheaper and housing gets cheaper the farther away you myr moved from jobcentres but there's one of jobs in one place so for instance in a community that mostly has agricultural jobs people aren't all going to the same location and so there's usually not as much pressure to make that the direct trade off that households are making in a paper that you wrote earlier this year you noted that the average commuting time for Americans is about twenty seven yeah that's really interesting and I'm wondering if this is also primarily an urban problem or problem for those big urban centers were jobs are heavily a family with kids which is a trade off that most families probably aren't GonNa make and what about in the non urban parts of the country in either suburban or the more rural of the excerpts a suburb that's a little bit farther out from the center do you can save money on your end but then you're going to be spending certainly more of your time and probably more of your money getting back in I really want to have a longer commute so when we see people with long commutes we know that they're being pushed into that because of other kinds of dimensions okay and now let's turn to space what are we thirty years ago bought a four better five bedroom house had kids the kids have moved on the older person is still living in that house and has extra space but what we're seeing now overall price levels in the metro area that really produce high levels of crowding you've described some pretty stark geographic differences. I mean is it fair to characterize the US House in places like San Francisco we see a lot of five person households in a two bedroom apartment and usually that winds up being parents a couple of kids and then an adult into little space and that sort of the most intense affordability pressure then you have these sort of older industrial metros most people aren't overspending but there's a lot the US Department of Housing and Urban Development says that a family or a household that has more than two persons per bedroom is officially crowded and so for instance isn't traded and maybe this is not as big problem for other parts of the country yeah this is definitely an urban problem it's a big expensive city problem so even so one way to think about this is even expensive. Metros you've got a lot of one and two person households were living larger units so somebody who bought a house grant families to live in smaller spaces and share space with with multiple generations of the family but it's a combination of the family composition and then the one of the first trade offs is how close can I be to work so that I don't have to spend a lot of time every day commuting and whether you're driving to work or taking the metro this is one of the most central space we have a lot of land we have a lot of housing we actually have a lot of extra bedrooms in this country but we have sort of a misallocation of space across households is that younger families particularly families with kids inexpensive places can't afford to consume as much space as probably they would like and so we see higher rates of crowded let's welcome to the podcast could be cards okay so I want to start with commuting what do we know about the housing market and how it is and everything else is that an accurate depiction I actually group The geographies into three different buckets so you have the really high cost own and their concentrations of jobs in the suburbs and so sometimes what we actually see that low income people who take public transportation how some of the longest commutes and time Z.. Market has really to housing markets these urban centers that have a ton of jobs concentrated in them where a lot of people want to live maybe can't afford to nations that's obviously a big decision that affects all of us or nearly all of us and so when Stacey and I cover the housing market on the indicator it's usually from the standpoint relatives say grandma or an aunt or cousin who's sleeping on the couch in the living room so that's how they're able to cope with high housing costs is by shrinking in the amount of space they consume aces lake say Chicago which are not cheap but where real estate is a little bit more affordable don't have that much of a crowding problem you really see crowding intensely in the most expensive the housing market in the US and the amount of space that people have in their homes so in a in a general sense we are not crowded the US has a lot of it was produced by Lena Sons Gerry fact check by Nadia Lewis our editors Patty Hirsch indicator is a production of NPR so more people have to commute fairly long distances and there really aren't options for instance to live without a car danny shuts thanks so much for being on the show thank you this episode of the indicator consuming really old poor quality housing and then you have kind of the Sunbelt Metros the Atlanta's and the Houston's and Phoenix were housing is not that expensive out of gets California most of the East Coast in the northeast where housing is very expensive. You have both these long commutes people are spending a large share of their income many of them are doc and most of the housing is actually newer in fairly good shape but that's where you wind up having a lot of these very long commutes just because they have kept things affordable by spreading out and places of the world and you also see a lot more of it in places with alert Sheriff Latinos so some of this may be kind of a willingness of some families especially.

US Department of Housing and U US US House Cardiff Garcia N. P. R. San Francisco California Chicago NPR Stacey East Coast danny Phoenix Gerry Patty Hirsch Atlanta Nadia Lewis Houston thirty years
Fun Facts Fridays

The Indicator from Planet Money

09:31 min | 1 year ago

Fun Facts Fridays

"N. P. R.. Hello everyone this indicator from planet money. I'm Cardiff Garcia appeared states advantage Smith. Hello Stacy yes. Today's show is going to. I'd be named fun facts. Friday okay. Chazan alliterative delightful. Yes or other fun fact or it's going to be called Stacy's not impressed listeners. To be like over it it depends on your reaction to the three facts. I'm going to throw you okay. Okay so I'm thinking of doing this recurring segment where I just throw some awesome. Fax It you okay. And then you either confirm or deny their fascinating and today's three facts are all about things getting better. I like a silver lining very much good for a Friday to. We're GONNA share those right after the break support for NPR in the following message. Come from mail chimp. So you're ready to make that side-hustle your main hustle now. What start with the all in one marketing platform from mail chimp? That's what it has all the tools you need to give your new business. The strongest start with the right marketing marketing at mail. CHIMP DOT com support also comes from national car rental. Who wants you to know that with a membership our complimentary Emerald Club you can skip? Skip the counselor and choose any car in the aisle at participating national locations you can even select an upgrade without paying extra learn more at national car our dot com slash. NPR Stacey you ready for fact number one. Yes okay we got this from the economist Jed Cocoa of indeed. And here's what he did. He built this model that tried to figure out the growth in earnings for people who likely voted for Hillary Clinton in two two thousand sixteen and then compared them to the earnings growth of people. Who'd likely voted for Donald Trump in two thousand sixteen okay so he used the ones like demographic combinations like racial and ethnic background where you live all that stuff to determine the likely voter behavior? It's like salary wise investments in everything. Just how much you get paid for your your job okay. Weekly basis paycheck. Exactly here is fact number one ready for this okay. People who likely voted for Donald Trump. I've been twenty sixteen in the past year. Their weekly earnings have grown by about two point. Nine percent okay okay people who likely voted for Hillary Louis Clinton you know how much their earnings have gone up in the past year. No five point nine percent twice as fast. That's interesting why so. This is all a bit speculative effective but I had a little tweet discussion with Jed. There's a few possibilities. One is that manufacturing has really suffered this year right the regions that that have a lot of manufacturing activity so that not just people who work in manufacturing but also people who work in industries in those places that have a lot of manufacturing activity might might also have suffered. That's a possibility. And the sort of difference between goods making sectors and services sectors might also account for some of the distinction right goods making sectors could have been hit by the trade war. That's exactly right. Sort of the irony of this is that the trade war might be one of the things it's keeping down the earnings growth of people people who likely voted for Donald Trump. I think that's really interesting. Yes off to a great start. I love it. I'm super interested. Okay number two is one of both of our favorite indicators okay. It's the prime age employment to population ratio. Yet right okay. Yeah take all. The people in their prime working. Age is so that's between the ages of twenty five and fifty four right so people in that age group. How many of those people have job? That's the Prime Age employment to population appellation ratio. The fact is this last month. It's at eighty point three percent and that is the first month in which this this ratio has gotten back to where it was before the recession started. Oh to go in that ratio has only you just now arrived. Wow that a slow. That's a slow recovery. It's bad it's a really slow recovery and I think it goes along because like it's it feels like the economy's been doing well for a long time. Yeah for a few years. At least I think this is has to do with. How awful and severe that recession was you know like the economy economy was in such a horrible place? I mean you and I remember this but like I don't know younger people people in like their twenties or whatever like they might not know just how awful it was was but it was terrible. It was awful. Yeah exactly A bit of a subject here by the way came across in a Bloomberg article by the writer Justin in Fox in recent years. There's been a lot of progress in that exact ratio for women all across that age spectrum so from from twenty five to fifty four women have been getting jobs right to pay at a at a pretty fast pace in fact for them. Eighty s yet for them that employment to population elation ratio for the prime ages is higher than it was before the recession started. I UH-HUH FOR MEN. They are still a little bit below their their peak from before. The recession started. Well women tend to be a little cheaper to hire because they get paid less so it could be that you know. Yeah these are getting some deals in overall terms. There's still a gap between men and women. Men still have those jobs than women. Yes yes so but I just thought thought it note that that's kind of an interesting little subplot that's interesting right to add a two. I'm impressed this last one's a little bit tough. I gotTa tell you this. This might be the thing that stinks it. Okay okay. Are you ready for this. Yeah two weeks ago the yield curve uninvited. It's back to a normal looking yield curve the weights. Wait wait wait okay so that would seem to be good news. Because an inverted yield curve has been linked to moments of recession. Yes right like it has a very very very good track record of this right exactly right so listeners. To our earlier episodes we'll know that for the last six decades. Okay seven out of the seven past. Recessions sessions were preceded by an inverted yield curve an inverted yield curve means short-term interest rates on government bonds are higher than long term interest rates on government bonds and typically means that economic growth is going to slow and tip into recession. Okay here's the interesting thing. The yield curve is now uninvited which does mean that. The outlook is better for the economy. Now but didn't you tell me the other day that ever like before recession start. The yield curve does unimpressed. I did the recession con so this is not good news. Well it might be though. I know. Here's the thing. So for the last three recessions. It is true that the a yield curve uninvited before the recession started anyways. But thinking about it this way when the yield curve on invert it does mean that. The outlook has gotten better in part because policymakers have taken steps to alleviate the damage from the oncoming recession. And so the way to think about this is policy. See makers will respond sometimes to the inverted yield curve and they'll try to do things to stimulate the economy but sometimes things they do arrive too late and so you get the recession anyways. The Federal Reserve has been lowering interest rates this year and so the question is did they get there in time. Have they acted unleash. The economy fast enough to avoid the recession. That might have arrived in the absence. Right like did they feel the cold coming on. took a ton of ECHINACEA vitamin ADAMANCY and got a good night's sleep and they're fine. That is that's the question really right and we don't know we won't find out until another year or so. I'll be honest. Yeah I am actually increasingly optimistic. Really that this might might be the time that finally the yield curve Stops acting as a recession predictor. Why what makes you think that in part because there was a lot less dismissive nece about the yield curve? This time I. I think there's a chance that the Federal Reserve now recognizes that the economy was in a dangerous place it has acted to stimulate the economy and it might just be enough to to get us through this time. I'm hoping the little canary in a coal mine and like the powers that be paid attention and maybe it saved us from a recession. I mean we're hoping that's that's the case right. Of course. Yeah so So what do you think Fun Fact Friday or Stacy's not impressed well. The last thing that could qualify defies is fun. I think we're GONNA have to make this thing. No I really like it because all I have to do is gauge my level of being impressed. Which is actually you know as a New Yorker something that I I like to do anyway? Today's episode of the indicator was produced by Jared Marcel. Our fact checkers Nadia Lewis. Our Editors Patty Hirsch and the indicator is a production of of N._p._R.

Donald Trump Stacy Hillary Louis Clinton Jed Cocoa Federal Reserve NPR Chazan N. P. R Cardiff Garcia Emerald Club Jared Marcel Nadia Lewis Patty Hirsch Smith Bloomberg N._p._R writer
The Cost Of Climate Change

The Indicator from Planet Money

09:51 min | 1 year ago

The Cost Of Climate Change

"N. P. R. Very expensive a Bloomberg cost upwards of twenty thousand dollars a year per person which is nuts characterize that as a sound investment mation in real time and then sorta manipulate that information so that you can play that make charts and graphs and all kinds of other things yeah yeah this is things like stock prices going up and down very meaningful to them as very valuable but that is also why it was so we're when the rainforest action network bought a Bloomberg terminal they decided that they would pony up the money for a one of these Bloomberg boxes and that's expensive right expensive I mean look every brokerage house in the and so you know Bloomberg Terminals Cardiff Yeah I know Bloomberg terminals I used to have access to one back in the old days and I'd love to have access to them again unlike wheat crop prices and like all kinds of things that people used to make trade my mouth is watering right now and and this like speedy knowledge is old has one but they became the first Ngo I think with one bill mckibben is climate activist and author and he says the rainforest the world of finance they're kind of like a computer that is connected to a special financial internet is that fair yeah I think that's a fair way to characterize it they give you a way to get financial and in but I have a feeling NPR's not going to spring twenty thousand dollars they cost straight and get computers that weren't manufactured in nineteen eighty seven I but yes they loom very in New York Bureau but fine we'll talk about what on earth you would use this thing for a minute but you know the people who use them generally are bankers and traders this information is and they were getting people and investors angry enough to complain it was kind of like a roadshow of shame bill claims it's been working the New York City pension us America these shows were like rallies where they highlighted how much local investment funds like university endowments pension funds were investing in fossil fuels Oh online learn more at google dot com slash grow bill mckibben is the founder of three fifty dot org a climate activist group it's focused on decree facing the global use of fossil fuels and bill says his group really liked the economic approach that the Rainforest Action Network taken so there group started following the money to looking at which big investment funds like pension funds and endowments were investing in fossil fuels like coal and oil companies do roadshow around the country we don't like you support also comes from Google from Connecticut to California from Mississippi to Minnesota millions of American businesses are using Google tools to grow I there were people they're demanding that we divest and and I listened to them eventually looked into what they were saying and understood they were right and we uh without the pressure it probably wouldn't happen bill says the trillion dollar Norwegian sovereign wealth fund money at a fossil fuel investments as well as the University of California endowment and pension by lending and oil companies want to borrow the money why should they not lend it true enough look we're in put every during the apartheid era there was enormous pressure on banks to stop lending the South African the South African government and its subsidiaries and there's some the biggest wealthiest companies on earth if your bank that's really attractive still bill says there is a precedent for pressuring banks on ethical grounds a bunch of banks did eventually took a lot of work to push them there but eventually they did and that that along with stock divestment was one of the things fund but bill ads that really move the needle they want to get to the banks fossil fuel companies need a lot of money for equipment digging drilling and exploration ientist now is calling an emergency may be the most dire emergency that our species has ever faced so people are going to have to make some changes in businesses and as the comptroller of New York City said the other night at a meeting he said you know every place I went for years Har in the aisle at participating national locations you can even select an upgrade without paying extra learn more at national car dot com slash NPR. Do if you're planning on taking a company we did but these were very public we did I think we did twenty eight shows in thirty nights all across usual for many people those changes are really hard bill admits this is a long shot banks do billions of dollars worth of business with fossil fuel companies every year homes these things come largely from fossil fuels it helps to underpin the global economy which is why everyone freaks out when gas prices go up people suffered activists are doing with the rainforest action network did their following the money dorms rising sea levels dying crops these all cost money and sodas drilling for oil digging for coal cutting down rainforests so increasingly and that money often comes in the form of financing in loans from banks and so- bill's idea was to pressure the banks and maybe you can get them to stop loaning money to fossil fuel company the global economy in all kinds of ways thousands of jobs global trade travel getting food to people who need food it could kick off a terrible economic crisis oh the environment and the economy deforestation climate change these are big political fights right now but these issues are also about economics because bigs they were kind of running the numbers backwards the league table they were publishing each year showed who was doing the most damage this worked the rainforest action network picked out a bill counters that not taking money out of fossil fuels fast enough also could have dire economic consequences he points to a recent study from the intergovernmental panel on climate change would cost about fifty four trillion dollars to put that number in context that's more than twice the value of the entire US economy and about ten percent of all the yes most of these banks are public they have a fiduciary duty and they are lending money because it's part of their business you know it's their job to make money and one of the big ways they make money that would be a sea-change the other banks would quickly follow Stock Market Valuations would change dramatically flows of money is that people like Nelson Mandela credited with helping South Africans liberate themselves in that great struggle but again this is not just an ethical issue on planet Earth Right now it's a lot and many estimates say temperatures could rise by that much in about thirty years so what the heck that's Today's indicator fifty four support for NPR comes from national car rental who wants you to know that with a membership in our complimentary Emerald Club you can skip the counter and choose any city group so the rainforest action network ran a campaign showing celebrities cutting up their city cards and eventually city grew came around it set up an organization with would stop heading for coal and gas and oil and head much more directly into sun and wind it would be as big as you have to pay more money and if a ton of money vanishes from the fossil fuel industry too fast and before there's something that could replace it on a comparable scale it could totally devastate it is the most destructive for the Amazon rainforest it's all wear the company's doing those projects were getting the money to do those projects and a lot of it was coming from loans given by it's also about economics and here's where things get complicated see our economy runs on fossil fuels our cars our companies are overseas trade the heat in our all of the money whenever it deal alone whatever it gets made everybody goes on the the word goes out on the Bloomberg Vox in it's a big celebration or trillion dollars and a lot of that estimated cost comes from things like crops dying due to changing weather or coastal flooding cleaning up the damage and then fortifying the city tried to put a price on climate change itself and it calculated that for a one point five Celsius increase in the temperature at about two point seven degrees Fahrenheit by the way speaking of beating money twenty thousand dollars for a Bloomberg terminal still think it might be worth it might be worth okay okay what would you look up on it and drought so heat related stress illness what kind of an impact cannot have if banks withhold their funding. Oh Hell I mean AC change as it's possible to imagine and really the only one that can come at that kind of speed bill says money is kind of a ham fisted way to effect change can't have all the caveats and compromise that climate treaty or a new lock at have but he says for making something changed really fast and really dramatically. It's hard other banks that would limit lending projects that would damage the rain forest. This is the indicator from planet money. I'm Stacey Mac Smith Cardiff Garcia today beat money deserted indicator was produced by Lena Sons Gary Fact Check by Nadia Lewis our editors Paddy Hirsch in indicator is a production of NPR action network but a Bloomberg terminal so that when any company made a deal that would in some way affect the rainforest the rainforest action network would know immediately and could then now look what what look on say so yields.

Bloomberg N. P. NPR Stacey Mac Smith Paddy Hirsch Nadia Lewis twenty thousand dollars fifty four trillion dollars seven degrees Fahrenheit trillion dollars trillion dollar thirty years ten percent
Grocery Store Wars

The Indicator from Planet Money

09:41 min | 1 year ago

Grocery Store Wars

"N. P. R. and there is a war going on in the grocery store and we are not talking about shopping cart in front of someone else's to get to the shortest checkout lied lied. That's not a war technically because you always win that well. Maybe you win. But what I'm talking about. Cardiff is a fight between stores not customers the grocery the industry is huge sales in the US in two thousand seventeen were six hundred seventy four billion dollars but the margins are razor thin so retailers. Taylor's have to do whatever they can to get your business and one of the ways they're trying to do that is by offering something called curbside pickup. Yeah if you haven't used curbside pick up before that's when you order your groceries either online or by the phone and then you go to the store to pick them up and more and more stores are offering this service. Some of the country's biggest chains for example Publix Kroger and others and they all charge a different amount for the service Walmart for example offers it for free at a lot of their locations. Yeah Walmart even did this. Big Push launched a TV commercial during the Golden Globes promote the service and the ad uses all these famous cars like the batmobile and kit from nightrider to highlight the magic moment of the Walmart Rosary pickup experience breath giving away. What demographic targeting there do the kids know? Oh what kids from Knight Rider is anymore point. I didn't even question this when I watched I think embarrassingly says a lot There are about twenty three three billion dollars of orders. Groceries pleased online each year by old people like me that is according to research and that is our indicator for today twenty when he three billion and right now that twenty three billion is evenly split between curbside pickup and delivery they are neck and neck but grocery stores would so much rather that their customers curbside pickup for so many reasons. I'm Sally Herships. I'm Garcia welcome to the indicator from planet money on today's show the battle of curbside pickup. We're GONNA tell you why stores are fighting so hard to get their customers to their stores. Just not in their stores. They in the parking. The people will bring you the groceries. Okay we'll also tell you why customers love curbside pickup and we answer the following questions. Why wouldn't customers you just get their groceries delivered instead? And why don't they want to go into the damn store. I mean there in the parking lot already get out support for this. podcast comes from the John S. and James L. Knight Foundation helping NPR advanced journalistic excellence in the digital. It'll age okay. This war between grocery stores is being fought all over the country in big cities. Stores are desperately trying to stay ahead by offering offering you delivery but there's another battlefront. The smaller cities the suburbs places with a lot of sprawl and parking lots and rural areas. Get out there here. In this fight looks different. That is where curbside pickup is increasingly the weapon of choice. So that's where we are headed to the battlefront to the grocery store. Parking working lot ready. We're in Arlington Virginia. At a Harris Teeter. This is where Jenny. Rothschild is about to pick up her groceries. She works fulltime as a public book. Librarian she also has three kids. Two of whom are under the age of five. If it's been a long day think they're hungry but we need to get the food so we can eat it. There's no food at home. There's already and boy out here. He has a clipboard and he asks Jenny for her name name. Her family uses curbside pickup about once a month. The first time I ever used this was because the kids were sick. And you don't WanNa bring kids into a grocery store so the guy appears ears and he puts the groceries and Jenny's trunk. He has a credit card radar. Some of my car. I'm GonNa pay thank you. I am going to sign on the phone. And that's it. She just has to sign her receipt and leave beautiful finger signature. Thank you so much great. This is so convenient and easy easy. We are almost okay and we're going to go home and we're GonNa make ourselves that Pizza Pizza. Oh my God who doesn't want pizza. Everyone wants uh-huh Pizza. Jenny loves curbside pickup. It saves time. It gets the pizza. She doesn't have to try to haul her kids into the store when everyone is tired and hungry and cranky. It's super convenient but retailers. Also love it for so many reasons. One of the most important is because delivering groceries is expensive even if if it seems like it's not like if you're a customer who gets free delivery with Amazon prime basically I would say if it's not expensive for the shopper. Somebody's putting the bill Jaren Waldman. He's the CEO of r-acton ready. That's a company that builds part of the technology that goes into the APPS which let customers place their orders online to do curbside pickup. And Jared says think about all the costs that go into delivery. There's the cost of hiring a human being to walk down the aisles. Push a cart. Pick out the groceries that you order it online then take them outside and load them into a truck and then the driving there's gas and tolls insurance. Add it all up and it's expensive so delivery doesn't always make sense economic sense in a lot of places places. Yeah so I mean the economics delivery for for the retailers who are providing an look less and less good as you get into more sprawling. Suburban Areas Areas The economics. Do Work Better. In denser urban areas areas where there are a lot of customers close together generally speaking the economics of delivery work better where there's relatively utterly more density or you know the draw points closer together And there's no traffic but even though the economics work better in denser urban areas this that doesn't mean that the economics always work as well as they're supposed to work for example in urban areas. There's a lot more. Traffic and more traffic means melted butter and limp celery and there are a lot of other problems with delivery as well for example customers. Have to wait at home often during delivery window which delivery person might not hit so. That's tough if you're like our Shopper Jenny. Who's got a full-time job and three kids? And there's another problem with delivery. Jaren Jaren says this one is big one of the things that people don't like about grocery delivery in particular is that There tends to be people get their orders or is wrong but if a store employee forgets to put the diapers in your bag and you're in the parking lot of a store doing curbside pickup. You can check your order order and if something is missing or wrong you can just run into the store and get it. We did a call out on twitter and heard from so many listeners. Thank you thank you as always yes talk about the reasons. You Love Curbside Pickup Jack. E wrote that he has a toddler and pregnant wife at home and so he is happy to pay five dollars to buy back one hour of his. It's time to spend parenting or housekeeping yet and Ryan Hempel says. He likes curbside pickup because he ends up spending less money because he doesn't make impulse purchases regis's the way he would. When he's walking down the aisles Kendra McPherson wrote in to say that she used to use delivery but now she's switched to curbside pickup mostly because she's worried? What about exploitation of labor practices? So you wrote about how you liked being able to keep track of your spending while not holding up the line at the store. That is my nightmare to be the person holding up the line or to be behind the person holding up the sea. Now that you pointed out both but curbside pickup can have its problems to Jaren says. The economics for retailers. Haven't been totally figured out yet. A lot of stores charge just four or five dollars for pickup. But just like with delivery they still. We'll have to pay a human employees to walk down the aisle and Philip Cart so curbside pickup is cheaper than delivery but it is still an added cost and while curbside pickup Yup can save consumers time. Those consumers can be demanding. They don't like to wait. Rockets and ready found a really interesting magic number. Yeah well the the number that we discovered that was really interesting. was that if if you're waiting two minutes or less for that order to come out you are more than four times as likely it come back and place another order with that retailer than if you're waiting ten minutes or more. Yeah think of all that you can do with ten minutes mean by the end of ten minutes as you know. Your Gum has no flavor. Jenny says she only had to wait. Three or four minutes. Are you going to go grocery shopping. Next I'm Cardiff. I get delivery of if if we live in. We live in a dense urban area. Like it's nice. It's convenient. They actually normally do hit the the delivery window so I'm happy with it. I would do curbside pickup but sadly it is not available here. Today's episode of the indicator was produced by Jared Marcel. Our fact checkers Nadia Lewis our editors Paddy Hirsch and the indicator is a production of NPR. Dr Bernard.

Jenny Jaren Jaren Walmart Cardiff Jared Marcel US Publix Kroger Big Push Jaren Waldman Arlington Virginia Taylor N. P. R. Harris Teeter Golden Globes Sally Herships nightrider Amazon twitter
How Does The Economy Influence Voters?

The Indicator from Planet Money

06:58 min | 1 year ago

How Does The Economy Influence Voters?

"N. P. R. so there's this kind of conventional wisdom when it comes to elections and the economy this is according to amber which Hausky she is a political scientist just two studies the relationship between voters and the economy. Good Times keep people in office bad times. CAST them out in other words. It's it's the economy stupid but amber says that relationship has been changing some really surprising ways. Also the parts of the economy that matter to voters has been evolving to. This is the indicator from planet. Money I'm Stacey Manic Smith Today on the show voting and the economy political scientists and economists have been obsessing over over this relationship to try to see what influence the economy might have on the twenty twenty election and today the results are in kind of support for this. podcast comes from the John S. and James L. Knight Foundation helping NPR advanced journalistic excellence in the digital age. What influences voters the economy is? One of the biggest factors says amber which Hausky she teaches political science at Marquette University and studies the relationship between the economy and how how people vote still says amber the economy can look really different depending on your perspective so Democrats and Republicans they have different views of economic economic reality levels of unemployment or the inflation rate. Or how big. The budget deficit is so for example. Democrats will say the unemployment rate is higher when a Republican occupies the Oval Office and vice versa. Oh really so. People's actual like their feelings about how the economy's doing will change depending on. If if the party they tend to vote for his an office. Exactly just like looking at everything through politically colored glasses. Yeah Amber says in fact her research finds lions. Those glasses have been getting stronger. Over the last decade there is some evidence that a the effects of the Communists influence on voters behaviors and judgments weakening as political party staying polarize. Why is that is it? Be Yeah why is that well well partisanship functions like any other social identity. And so we have a real need to tell a story that benefits our side or that casts aspersions to the other side so we call this kind of partisan cheerleading or expressive responding. The result MBA's the whole twenty twenty. Election will likely hinge on a small group of voters so if Republicans and Democrats are both looking at the economy through their partisan colored glasses The question is what about those voters who don't strongly identify defy with either of the two parties of swing voter every journalist of the country's always trying to track down that you got it. So how do people feel about the economy and power. They GonNa vote. Mark Zandy is chief economist at Moody's analytics. His group just did a big study on how people I feel about the economy. What's important to them and how they're planning to vote next year? And what did you find. Well if president trump trump trump's approval rating year for now is about the same as today if the economy is performing about The same a year from now as it is today and if turnout is typical typical meaning on average the kind of turnout. We've gotten for the past ten elections President trump wins He'll win when On Electoral College basis and he wins across all the various models that We put together so it's a pretty clear. Victory still says mark that could change for one thing even though the economy is growing right now we do seem to be at a kind of turning point. I think it's struggling. I mean growth has slowed sharply absolutely. I mean you're ago hard to remember a year ago. Economy was growing three percent easily. Creating two hundred twenty five thousand jobs on average per month here we are a year later. The economy can barely keep up with two percent growth. which is kind of a key threshold for unemployment Job Growth is now down about one fifty K.. You know after accounting for all the vagaries use of the data. So that's a that's a big comedown in you know. Once if growth slows any bit further just a little bit unemployment will start to rise and once unemployment starts to rise that is the beginning of the end of an expansion. Also mark says voters are not looking at the entire economy there are a few key indicators that they use to assess how things are doing jobs matter. Unemployment is key house. Prices madder gasoline prices but a little less so interestingly the stock market matters a lot not so. It's not surprising for presents. Got It right when he focuses on the stock market. Why don't you think the stock market so important I think it matters watt to the key baby boom generation? The boomers are hanging out in the stock market. Too much late. A greater degree than their previous generations did at the same point in their life cycle. Michael they see a Lotta Green feel pretty good That trump if they see a lot of red they get pretty nervous pretty fast. Because that's their nest egg evaporating in front of them and they'll take check it out on trump's so I think the stock market is really really important probably more important than ever has been historically a in a presidential election. Also marked says voters tend to be pretty the short sighted so they will probably be looking at how the economy has been doing in just a few months right before the election. Also regional economic situations will will likely be enormously important. Marx's models showed the election hinging on just a few key counties in Wisconsin Michigan and Pennsylvania all all boils down to a few counties. You know it's like Luzern County in Pennsylvania. It's Westmoreland County in Pennsylvania it's Chester County in Pennsylvania. These these are places where you have a big enough voter base. That if they swing we get enough. Turn out one way or the other can swing the entire state and you know go to. The electoral college system is very surprising. What what can happen markses the way? People are feeling about the economy in those three states in just ninety days as before the election will probably decide the entire thing. Today's episode of the indicator was produced by Jared Marcel. Back checked by Nadia Lewis. Our editor is is Patty Hirsch and the indicator is a production of N._p._R..

amber Mark Zandy Hausky Pennsylvania trump trump Stacey Manic Smith President MBA N. P. R. Oval Office scientist NPR Marquette University Jared Marcel
Finance Fridays With Mary, Volume 6: Nuns & Guns

The Indicator from Planet Money

09:56 min | 2 years ago

Finance Fridays With Mary, Volume 6: Nuns & Guns

"N. P. R. and everyone indicator from planet money. I'm Cardiff Garcia and today is the last installment of Finance Fridays with Mary in which my friend Barron's reporter Mary childs has been coming in to explain the world of finance. All of us married the reason. It's your last for awhile your last finance Friday with Mary. You're you're joining planet money next week. That's correct. This has been a lot of fun though I gotTa say so total still do these from time to time in the future yeah so for your semi Valedictory Aladic Diary Finance Friday with Mary would have you got force so I have a story about nuns. These nuns cared about stemming the tide of gun violence and they realize hi. It's that gun control legislation wasn't going to pass anytime soon so they decided to get practical and they turned to the market the market that's right or carrying the the nuns brought stock to a gun could save literally okay fair enough and all that is coming up. I'm intrigued right after the break support for this episode of the indicator and the following message come from capital one Ken Dolan and his team built no the intelligent assistant who proactively alerts customers to fraud and other account activity we know people are just trying to live their lives and we try to empower E-e-e-e-no to only interrupt them from their life when absolutely necessary just like you would want a human assistant to do stay tuned after the episode to learn how can and his team at capital one programmed to proactively help customers manage their finances okay so mary this story of nuns who are trying to get their way on gun control. Where does it start. It starts with a group called the interfaith center on corporate responsibility. It is yeah. You showed me their website earlier mary. It's like this coalition of some three hundred groups and it includes members who are like just traditional financial institutions but it also has these faith-based groups and that's where the nuns come in yes mary. What is the story about? ICR that you wanNA tell us so back in two thousand twelve there was a mass mass shooting at Sandy Hook Elementary School in Newtown Connecticut and Twenty Six people died twenty of whom were children and when politicians failed to do really anything anything in response to that ICCPR felt like they had to do something about it so I spoke with Mr Judy Byron. She is the director of a regional group within ICCPR and I remember Sandy Hook and thinking. You know if we don't do something now as a country we never will. I mean these are little kids and we know that you you know there was a movement that we basically did nothing. Here's where the story takes a turn into our world finance. Normally investors who consider themselves socially responsible like these nuns would not by what are called sin stocks shares of companies that do bad stuff like make guns are cigarettes or whatever on the other hand these is not also realized that being shareholder of these companies means corporate management should have to listen to them because they're the owners yeah. I mean you would think that being a shareholder is at least supposed to give you access to the managers right. You can attend shareholder meetings and speak you can request a meeting and you might even get one so since relying on politicians nations didn't really work. Iccpr decided to turn to the markets because it markets at least have these rules and lovers that actually can work so in the fall of twenty sixteen. They started buying lying shares. They bought shares in two of the major gun makers. Sturm Ruger and American outdoor brands not a huge number of shares but some okay so these nuns the ICR Dr the coalition of Religious Groups they've started putting their money where their principles are so to speak and then one so the next summer this we're now into twenty seventeen. They privately wrote the company's trying to kind of engage them in conversation notice a little time goes by and in January of last year they quietly begin to file oh shareholder resolutions which are basically cordial corporate requests from shareholders for management to please consider something so the nuns wanted basically three things I for these gun companies simply to report on their efforts to make their product safer second for the gun companies also to prepare reports on the reputational and financial risks from from their products and third for them to monitor violent events like mass shootings but not much came of these resolutions okay and then came Parkland to park of course this was is the very tragic mass shooting from early last year that I think a lot of people remember that's right February fourteenth two thousand eighteen shooter killed seventeen students and faculty and injured seventeen nineteen more at Marjory stoneman Douglas High School in Parkland Florida and that catalyze this huge wave of outrage right over gun violence and gun control but once again a lot of if people were disappointed by the political response disappointed that no new laws were passed here sister judy again we just can't let the kids do the heavy lifting in our society we we really need to step up and be with them and also show leadership so the nuns and ICR decided to act more forcefully so I they joined other activists in criticizing the banks that lend money to the gun companies but second remember those shareholder resolutions that they'd quietly gently sent to the companies companies asking them to report on how they were making gun safer in the company's kind of blew him off this time. ICCPR went public with those resolutions and put them into a shareholder vote and the shareholder resolutions passed with huge support okay so I mean in that case. It kind of sounds like they kind of yeah. They did get their reports. in the reports the companies defend themselves by saying that the problem isn't the people who buy their products. It's criminals doing bad things but the truth is the reports themselves solve our kind of toothless. They don't really compel the companies to change anything that they actually do. They're just a sign that they've complied with what shareholders asked but it's something. ICR did show that they could get something from the gun companies. Yeah it sounds from the way you're describing that this is a kind of symbolic victory. I mean these reports as you described them are toothless but you still have a situation where this group of nuns and these other religious groups did compel companies to do something right and they compelled them to do something using the markets rather than other forms of of persuasion so what's happening now so for the nuns it seems like some of the momentum has dissipated this past. Tuesday the annual shareholder meeting for American outdoor brands. ICCO had another resolution up for a vote vote it was asking the company to adopt a human rights policy in line with the UN's guiding principles but that vote did fail so our UCR still add. They're hoping that the more more noise they make the more reputational pressure they put on the companies will have some impact on the shares on the company's trajectory and maybe someday that will lead to a bigger change but sister. Judy says they're in it for the long haul we started with the issue of apartheid in South Africa and you know that was in nineteen seventy one and finally it was in nineteen ninety four when there were free elections so this issue of gun violence. We hope it's not that long but you know we're not going to go away away because we really believe that they have a critical role in this in solving this very the story's interesting because I think that when a lot of folks folks try to influence the way a company does business they think of maybe boycotting the product and showing they're not interested. This was totally different. These nuns actually bought shares in the company. They actually decided that by owning a part of the company that that was the approach that they would take instead yeah and and it's kind of in concert with this broader movement. I think this becomes more effective in in that broader context of people saying now that corporations have a bigger responsibility. It's not just to generate profits. It's also responsibility to the society in which they operate Mary Tiles. Thanks so much. Thank you this episode. The indicator was produced by Darius roffe on it was edited by Paddy Hirsch in fact check by Nadia. Lewis indicator is a production of NPR and the following message comes from our sponsor capital one. I'm Ken Dolan. I'm VP OF CONVERSATIONAL AI products at capital one and I lead the team building. iino was an AI that is focused on financial matters. We've taught E-e-e-e-no to do lots of things on behalf half of customers and then he knew brings the important things to you you know shows up the push notifications text messages emails on our website in our mobile APP wherever our customers interact and get help with their money so the way we train E-e-e-e-no to understand what customers are saying involves humans. We wanted to make sure that we didn't train to understand the world as one person would through only their background and experiences. We've brought in lots of folks with many diverse backgrounds to broaden. He knows understanding of the different ways that people will ask questions and communicate with you know we also realized that we need need to create a little bit of a personality when we were thinking about developing the character and the name and other personal characteristics might provide we thought about all the unconscious biopsies that those things might evoke and so at capital one we have a very diverse and inclusive culture and we thought a gender neutral name was a nice outward expression of that is to meet any no the capital one assistant go to capital one dot com slash iino.

ICR ICCPR Mr Judy Byron Mary Ken Dolan Mary childs N. P. R. Cardiff Garcia Parkland Barron reporter Mary Tiles Marjory stoneman Douglas High coalition of Religious Groups fraud Sturm Ruger Sandy Hook Sandy Hook Elementary School NPR