20 Episode results for "paddy Hirsch"
The American Dream And The Children Of Immigrants
"N. P. R. and everyone this indicator for planet money I'm Cardiff Garcia historically immigrants to the United States face a lot of professional barriers I once they arrive here a language barrier lack of contacts restrictions on where they can work and more and on the whole poor immigrants to the US typically have not caught up to the professional success of the people born here which sounds like it contradicts the American dream but what if we brought in the concept of the American dream to include the children of immigrants imigrants well then you get a different story a group of economic historians has just released a big new study of past cohorts of immigrants and their kids and it found that the children of immigrants into the past have actually shown more economic mobility they've climbed higher up the income ladder than the children of poor American born parents and it also found that the children more recent immigrants are assimilating into the economy just as well as those immigrants the past so today on the show we're going to speak with Dr Leah boost on one of the authors of this new working paper who reveals what its findings tell us about the American economy today that is coming up right after the break this message comes from NPR sponsor capital one Margaret Mayor leads the technology teams building. Iino the intelligent assistant from capital one. The goal is to answer customer questions to help customers we created Enos language model based on actual conversations Sion's our customers had stay tuned after the episode to learn more about how Margaret and her teams are training E-e-e-e-no to understand customers banking questions in all their variations percents doctor Labou Stan thanks so much for being on the podcast thank you for having me so in this new working paper you in your co-authors I studied three different cohorts of immigrants and their children and you studied how well they did in terms of their incomes over their lifetimes why don't you start by telling US talk about the three cohorts you studied our first cohort are immigrants who are already living in the US in eighteen eighty and our second cohort were immigrants who are living in the US in nineteen ten those groups are pretty different from each other actually immigrants that were in the US eighteen eighty were primarily from northern and western Europe so the UK Germany Ireland and so on by nineteen ten there was a much wider set of immigrant sending ending countries including countries from southern and Eastern Europe like Italy and Russia and Poland and then our third cohort are the immigrants that were more familiar with today today and those are immigrants from all over the world but especially from Mexico from Central America and from Asia Okay and what did you find even even though immigrants themselves are pretty slow in increasing their earnings their children are doing remarkably well so we focused on comparing the children of immigrants grants to the children of American born parents people who are in the lower middle class into the working poor and we're looking at households that during the parent your generation are earning around the same amount and then asked how are the kids doing thirty years later and all of the kids were on average doing a better than their their parents but the children of immigrant parents were doing notably better than the children the American parents yet that's fascinating were you surprised surprised by any of these findings by the way we were surprised by our findings in two different ways I we were surprised at how similar the success of with children of immigrants were between past and present and what we found was that immigrants today in the children of Immigrants Today are doing just as well as immigrants in the past at achieving social mobility and moving up the economic ladder and then the other thing that was surprising as we were able to break down down our data by the country of origin of the parents we thought well maybe there are some countries that are driving driving our results in are responsible for the fact that we're seeing such successful mobility it turns out that the mobility patterns are present they are for art immigrants from almost every sending country in the world yeah that's interesting too because it at least suggests that the countries of origin the places were immigrants came from don't really matter that much for how well their kids similarly right exactly if you look at historical politicians politicians and commentators they would point to the southern and Eastern European groups that were new at the time and say these immigrants are not as successful as immigrants from the past and and we should start to restrict immigration as a result and what we found is that that was not true that southern Eastern European kids from those backgrounds were just as successful full if not more successful at achieving social mobility and then the same thing is true for today we were able to look at forty seven different sending countries the Caribbean Ian Central America Africa Europe various parts of Asia and we found that with only three exceptions the children whose parents parents hailed from all of those forty seven countries where cheating more social mobility than the children of American born yet in your paper also includes a kind of who'd you've done section where you and your co author is trying to figure out just why the children of those earlier poor immigrants those immigrants from eighteen eighty and nineteen ten just why why they're children had more social mobility than the kids with American parents and a big part of the answer was place and specifically that the places within the US that the immigrants moved to were also the places with strong labor markets with a lot of opportunity jobs whereas the American born parents were not always willing to move to those places can you kind of just take us through that so there are certain states and then within state certain cities and towns that seem to be associated associated with higher social mobility for children are question was if we were to take an emigrant and an American born household located in exactly the same place may be right down the street with their children look different and the answer we came up with was no so all of the differences that we find in the paper between the children immigrants and the children of the American born can be traced back to where immigrant families choose to locate and a lot of that actually in the past was really a north-south Arthur south divide the country at the time was fifteen percent foreign born but the US south was around two percent foreign born so very few immigrants grants chose to go to the US south at the time and south was a place with low social mobility opportunities for kids so because immigrants avoided the south and even outside of the south were selecting areas that had opportunities for upward mobility for their kids that was the way that emigrants were able to help their kids move up the ladder yeah that is so intriguing because there is a modern conversation going on about the importance of place and what that means for jobs availability for how much money people make and opportunities for their kids and there's suggests that place is in fact a very powerful determinant for how successful people are and how successful their children are exactly exactly and it puts more of a role on place than it does on the sort of ineffable immigrants work ethic or immigrant culture so you will often hear about immigrants doing well because they try harder or because they care more about education or that they have a family based culture that supportive supportive we don't want to take away from those possibilities for the present because that's not something we were able to look at but at least for the past it seems like geography perfect is far more important than something intangible about being an immigrant yeah in terms of the modern conversation the idea is that as the economy evolves that a lot of jobs might be created in cities or certain urban centers and that if people are willing to move to those places that's that's were they'll have a lot of economic mobility but that Americans people who were born here understandably might have very close ties to where they're from to the places places where the jobs are being created or don't pay as well and so there's GonNa be some friction there that people might not move in immigrants don't have those ties ties to a US place by definition they're coming from another country it sort of goes to show the importance of place in that regard and it also kind of informs the current debate debate even though the data from the past well one thing that's special about immigrants as a people is that they have revealed themselves as willing to leave home and that's already eh quite a big step as you said I mean it's already taking risks and striking out on your own and so that might be the feature that allow immigrants grants to succeed don thanks so much for being on the show thank you. This episode of the indicator was produced by Jared Marcel. Our intern is not Louis our editors Paddy Hirsch indicator is production of NPR the following message comes from our sponsor capital one either my name is Margaret Maher I lead the technology teams that build are intelligent assistant the goal for is to answer customer questions to help customers so for me people really underestimate the power of understanding it's one thing to look at the words right and say oh I know exactly what that means but you know that meaning because a lot of experience that you've had so one of the things we've had had to do is train e-e-e-e-no a ton in order for it to get context and understanding in the banking domain in banking you know it's all very specific Pacific so when you're asking about your account information we just want to understand those meanings in terms of providing great customer service people can ask a lot of different questions in people will always surprise us they'll ask different things in different ways and we're really looking to make sure that has a broad understanding of different ways customers can ask questions so as much as hostile were accurate in returning the answer to the question the customer wants to meet Iino the intelligent assistant from capital one go capital one dot com slash iino.
Ready Your Wallet For Thanksgiving Dinner
"N. P. R. and John Newton. You are the chief economist of the American Farm Bureau Federation. Welcome back to the show. Thanks for having me second year in a row. Yeah I yeah no and John First of all. What does the American Farm Bureau Federation do exactly? We're the largest general farm organization in the United States. We have six million members farmers armor you represent farmers we represent farmers every state in America and Puerto Rico. Farm Bureau members. Okay and you're here with us today to talk about the cost of changing in cost Thanksgiving dinner but first of all man. I got a bone to pick with you all right. We started getting into an argument last year that we kind of left hanging. I was saying the Pumpkin Pie. Is the best Thanksgiving dinner dessert. And you were starting to make an argument for pecan Pie so my question for you is how can you be so wrong. Whoa of changed my views really the best desserts now? Macaroni and cheese. Yeah that's dessert. That's sweet it puts me right to bed. Yeah Fair enough to each their own anyways so John The reason we've got you back on the show. Is that the American Farm Bureau Federation every year ear. Does this kind of informal survey of all the ingredients that go into a Thanksgiving dinner for ten. And you calculate the cost and you look at how the cost of Thanksgiving giving dinner has changed over time so after the break John. You're gonNA tell our listeners. Exactly what the cost of Thanksgiving dinner is and Dan how it's been evolving this message comes from. NPR sponsor sponsor state farm. Why do you need state farm renter's insurance because it helps protected this stuff? Landlords don't like your furniture that gets drenched by broken pipe state state farm renter's insurance find agents or get a quote at State Farm Dot Com John Newton. Let's talk about this survey that you and the American Farm Farm Bureau Federation do every year. Okay first of all. How's IT conducted? Well we have volunteer shoppers around the country that go there local grocery stores and survey and evaluate. I wish the price of all the ingredients that you need for that classic Thanksgiving meal so they're checking prices of Turkey pumpkin mix milk whipping cream etc.. And we've been doing this for thirty four years. Yeah and and you send like what two three hundred volunteers out into different stores. All throughout the country right. Yeah all throughout the country. Think this here we are thirty. Eight states represented we had over two hundred and fifty volunteer shoppers from around the country. Go their local grocery store. See how much Thanksgiving causes here. And they're looking. I'm for the biggest bargain like the cheapest ingredient they can find. We don't ask them to do that. We ask them to make sure that they're looking at the prices that are not on promotion not on sale because you know as we get closer to Thanksgiving a lot of these prices of these items do change and we're not trying to see what the promotional prices we're trying to evaluate. What the real cost of this dinner is going to okay so I take it that a big Turkey is one of the ingredients in the survey? What are some of the other ingredients will Turkey's about forty percent of the cost of a Thanksgiving dinner? Thank most folks realize that some of the other stuff obviously You know for a family like yours. That prefers Pumpkin Pie. We've got we've got that on the menu we've got sweet. Potatoes stuffing whipping cream. Zeke Pula whipped cream on your pumpkin pie. CRANBERRIES peas green beans. Dinner Rolls All the fixings that you need for that good. I'm salivating already like right. This second I can't wait one week away. Yeah Ah Okay so sum it all up so you do this survey everybody goes out to see what the cost of these items is. And you tally it all up so dinner for Thanksgiving for ten people. How how much does it cost? It came in this year at forty eight dollars and ninety one cents. I was up one penny from last year and the price of the Turkey came in a dollar thirty pounds down about four percent. So a sixteen birds GonNa cost you twenty dollars and eighty cents this year again. That's below what we saw last year. Okay and I should know now that I think a lot of people are going to be surprised is it. It's only forty eight dollars and ninety one cents for a dinner for ten but again we're talking about shopping and all the different states we're not talking about the whole foods in Manhattan where it would be a lot more expensive than that. That's exactly right. I believe the you know the Turkeys in Manhattan probably come with Valet parking fancy like that. This is a national the average and and we have again. Thirty eight states represented a volunteer shoppers around the country. So this is a pretty good representation of what this meal costs across country okay and so basically the cost of the meal did not change from last year. I mean one cent more expensive basically the same price and we've seen food price. Inflation has been relatively flat that for a number of years. You know farmers receive about eight cents dollar but foreign prices been low really since two thousand fourteen. That's led to some stability in this price of the Thanksgiving giving dinner. Yeah and I gotTa Tell You I was looking at past surveys. That you've done. It looks like the cost of Thanksgiving dinner when you adjust for inflation has been pretty much the same for about three decades it stayed within a range of roughly forty seven to fifty four dollars. There hasn't been a tremendous amount on of fluctuations but of course in that time the amount of money that households earn has gone up and so this share of overall family incomes. It's gone to Thanksgiving Wchs giving dinner. has been kinda falling gently over the last few decades. In fact Americans are the leader in the percentage of their budget that they spend on food they spend less than six percent percent of their disposable income on food. You compare that to Nigeria where they spent over fifty percent of their income on food. We're we're very lucky in the United States. Yeah Okay so let's talk about individual items from Thanksgiving Dinner Looks like the cost of stuffing Pumpkin Pie. Mix and Turkey. Key does all went down right and one of the things to know about the Turkey You know the wholesale price of Turkey's actually GONNA this year but but but many retailers are gonNA use the Turkey to try drive foot traffic in the store so I think that's probably why we saw it actually go down in our survey in Turkey. You pressure probably going to get cheaper. As we approach the holiday some of the other items the the stuffing the you know you. You see those prices fluctuate throughout the year. The big item you know we added Ham and fifty percent people. Ham on Thanksgiving and ham prices actually went up Sixty three cents for a four pound ham this year in terms of the Turkey. You mentioned that some retailers were keeping the cost low to drive foot traffic. I mean do you think that the reason Turkey prices haven't gone up more even though the wholesale price has has gone up is that there's more competition between grocery stores not in DC. It's still three dollars a pound for Turkey near near my house but yeah I think that's. That's the case. Swimming Competition To get consumers into your stores across the country is very real and I think you know during the holiday season. It's so important to get consumers in the store again. Some some items did have their prices increase. For example dinner rolls sweet potatoes and milk. What's going on? There will only on the milk side. You know we've seen gene milk. Prices paid to farmers have gone up this year and and whole milk prices have followed that. So they're up compared to last year by about eighteen cents a gallon for gallon of whole milk Sweet potatoes we've seen supplies sweet potatoes Titan across the country a little bit this year. So that's GONNA lead to a thirty six cent increase in the price of three pounds for for sweet potatoes and really. That's the supply and demand dynamics of these agricultural markets workum John Newton chief economist. The American Farm Bureau Federation. Thanks for being on the show. Thank you this. Episode indicator was produced by Lena Sons. Gary fact check by Nadia Lewis. Our Editors Paddy Hirsch an indicator is a production of NPR. I want to resolve this pumpkin. Pie versus pecan Pie. Yeah let's resolve it. All right squabble. I don't want this to be hanging again for next year. All right. There's some sympathisers for you all right. We we did an additional survey and in one of the items Car of that people do add to their cell to celebrate the Thanksgiving meal. That's not included pecan. Pie is on the list that comes in a number five Importantly that's behind macaroni and cheese. which is number one? So in addition to the menu items that we we asked them about What are some other items that you typically serve on Thanksgiving in so number? One was macaroni. Number five was the pecan Pie. Okay but that's still way behind Pumpkin pie right It no Pumpkin pies traditional. It's the king thank you. I just wanted to say that just once.
The Economy Inside Your Head
"I looked up indicates or for you on the way here, which is always appreciate it. When our guests come up with an indicator for us that American adults are now spending eleven hours at the consuming media and media is the ultimate embassy real good at something that really, please, please within your hands. You make is triggered by something site, but really all of the benefit that you get all the enjoyment. You get as insights your minds that was a Communist League Caldwell these been working on developing a branch of economics known as cognitive economics, which she defines as the economics of what happens inside your head. So for example, think of all the different stimuli that might be competing for your attention in a given moment. Like, let's say you're at home and the television is on. But also your kid is asking for help doing homework, but also you had a plan to get some work done in your quiet den. Or maybe you're feeling sluggish and you want to exercise while how does your brain end up choosing? Which of these stimuli will. End up getting your attention, your concentration, your mental energy Lee wants to develop models to answer questions like this using research, not just from 'economics, but from psychology, and neuroscience and other disciplines and then to better understand how the decision making process inside our brains has consequences in the real world outside our brains. I'm Dan the indicator from planet money my conversation with Lee Caldwell about cognitive economics. Support for this podcast and the following message come from zoom when you can't be there in person zoom zoom is used by millions to connect face to face one easy platform for all your communication needs. Visit zoom online to set up your free account today. Meet happy with zoom. Support also comes from. Hello monday. A new podcast from Lincoln's aditorial team about the changing nature of work and how to get the most from Monday and your career find Hello Monday on apple podcasts or wherever you listen to podcasts. Trying to sort of connect cognitive economics to more traditional definition of economics. Which is the study of how people make choices in a world. Usually that means the physical world of scarce resources, and it seems like within cognitive economics. A lot of this has to do with attention, which is really scarce. Exactly. There are couple of other resources like energy. And concentration and focus. But attention is really the key. The key thing here we instead of seeing in a traditional economic environment you've certain amount of money and you want to optimize it by buying the best combination of products. You have a certain amount of time and attention in your minds and you want to optimize by spending on the things are most enjoyable to you the things that give you the the most reward, but like isn't part of behavioral economics explaining how so often I fall into a trap of not optimizing for those things, right? In other words, that you know, I'll be led to distraction or I will run out of energy, or I'll just be, you know, kind of lazy for a little while and watching TV, and so those other things won't be optimizing for anything that I really prize. I have just been led there either by circumstances sometimes deliberately or by like the flaws in my own head. You know, what I mean when we talk about optimization would we really mean, they're so up to my. Nation happens at a given moment. The you don't really you can't really Altemus across your whole life or even cross a whole day and say I'm gonna plant out every moment of the day to give myself the maximum return. What you do as you optimize right now. So right now, there may be something on your screen. There may be something in your pocket. Maybe something in your mind that you can think about and those small number of alternative stimuli will one of them will pull your attention more than the others. And so you're you're doing a very short term local to my station, and if you're lucky, and if you set up your life in the right way, or if you train yourself in the right way than the things that draw your attention moment to moment will be consistent with the things that you would want to spend your time on long-term. But sometimes they're not that that seems like another analogy we can draw to like the economy in the physical world, which is when we talk about competition, we usually talk about companies competing. With each other or entrepreneurs competing with each other to come up with product in our minds, it's different stimuli competing for those scarce resources of tension, and energy and concentration and all that's going on in our heads. We don't conscious of it. But it ends up directing a lot of where those resources and up going. Yeah. Yeah. I think that where the the research in cognitive economics meek goal as in the same way. As in the physically Konomi, we have developed understanding of win that competition between companies or competition between people has positive effects for the whole economy. And I think we will develop these kind of theories and cognitive economics as well to understand. What are the conditions? We should set for themselves to make sure that the moment by moment. Competition of stimulus ends up making us happy in the long run shirt. There's another concept that I keep thinking about which is delayed gratification that. It seems like that would play some kind of a prominent role in understanding cognitive 'economics and sort of how we manage short-term has long-term goals. If by definition in a given moment or focused on a short term goal. So how do we align? The short term and the long term when the long term goal doesn't have appealing short-term stimuli. You know what I mean? Yeah. Greek question because this was actually part of my inspiration for getting into cognitive economics or getting into the psychology behind. It was understanding exactly that trade off. How are we capable of acting on behalf of future self when our future self, well doesn't exist? You yourself control me and tell me put away some money for my retirement or don't eat donuts because you'll regret later and. The mechanism through which happens is essentially some mental simulation. So I am able to simulate in my mind. Now, what my future self might feel like and by doing that, I can gain an EMMY or I can gain a version of the reward that my future self will experience of my future self will be happy than I will be happy. No by being able to imagine the future self and this actually maps across to empathy with other people as well. So if I imagine you're feeling imagine how my family members feeling they're happy than I will be happy to. So we have a way through this through mental simulation of both delaying our own gratification. But also cooperating with other people in society. Okay. Now that we have some understanding of cognitive economics is when it tries to do what do you think or some of the potential applications to our lives? What do we? Would you investigating within the realm of cognitive economics that you think could have an impact like what are some examples? So like a lot of economics. You have applications that are for the individual and applications that are for companies and businesses companies and businesses can use. This research for to inform their advertising, if you are one of those companies that wants to influence someone's preferences and influence how they won't spend their time. They in designing your marketing designing the user interface for your products to maximize how you capture people's attention as as important application. Conversely as an individual you might wanna fight against them. So by understanding, how your attention shapes and understanding how you can train yourself to focus your attention onto the areas that are most valuable to you not most valuable to Facebook or HBO, then you you may end up better off on your terms. So there's there's developing tools for individuals. There's -veloping marketing strategies for businesses, and then even out the public policy and the governmental level there's been lots of talk in the last decade or so about things like gross national happiness. The idea that governments might not just want off to mice the GDP levels in economy, but my actually want to and legitimately trying to help people to be happier. Their populations to to be to have greater well-being. And so I think that will be an important area in the future. There are there are valid political questions about do we want our governor. Getting involved in those questions, but fundamentally governments do try to me because happy just usually trying to through economic growth, and and other kind of the tea real policy levers, so it's inevitable that they're going to try to do it through psychologically was to. This episode of the indicator was produced by Dr is Ravi on an edited by paddy Hirsch, our interns will Rueben and the indicator is a production of NPR.
Is Everything Awesome In The Economy?
"Hey, one it is Stacey and Cardiff the Oxford English. Dictionary defines word do monger as chiefly appreciative a person who predicts disaster or misfortune case anyone's curious about how we spend our time here. Of course, the more informal urban dictionary has a different definition. It defines do monger as quote, possibly the most annoying kinds of people that one can think of oh do mongers they're already mongering doom. And now, they're annoying on a very extreme scale. A Beasley do mongers. You know, they're people who are always portending terrible things seen the worst and everything. Everything's going down the tubes. Things are getting worse. You know, the apocalypse it's on its way. We don't want to be that. No. We don't wanna be annoying. We don't want to be du mongers. At least. Has a strong do monger section. It hard not to be an do monger. Especially in the first three months of this year. When some important indicators about the us economy really were disappointing especially those indicators about people's jobs about how much money they spend. And also about how the economy and the rest of the world was doing, and you know, communists, were not really saying that we were gonna go into recession or anything like that. But you know, the chances of going into a recession or things starting to slow down did seem to be climbing. But but in the last month economic indicators have improved they've have quite improved to the point where we can say that everything, you know, is awesome. Like in the LEGO song in the Legos on. You can always play the song. But I think we can say that everything is not not awesome, right? Very rely overly optimistic, but we're also mixed me nervous today on the indicator from planet money. We are going to share three trends that are making us feel not not awesome about the economy so far this year. And you know, so that you cannot accuse us of being do mongers earliest you can't accuse me into another story. Open to the accusation. Everything is cool. This message comes from NPR sponsors snowflake. The only data warehouse built for the cloud unlock. Deep data insights with the instantly scalable, cloud built data warehouse. Start your journey towards data driven decision. Making at snowflake dot com slash NPR. Support also comes from NPR sponsor linked in jobs when it's time to hire for your small business. You wanna find the right person for the job Lincoln jobs can help learn more at Lincoln dot com slash indicator. Terms and conditions apply. Okay. Three feel good issue indicators to lighten the mood. Yeah. There we go. There we go. There's the Cardiff gercy. I know exactly I up initial jobless claims unemployed workers are of course, eligible for unemployment insurance benefits, and when unemployed worker I files for those benefits. It's called an initial jobless claims the Labor Department keeps track of how many initial claims are made from week to week. And in a strong economy, you'd expect the number of initial jobless claims to be falling because a lot of jobs are available than fewer people should be filing for unemployment benefits. But in the last few months of twenty eighteen up until February of this year, the number of initial jobless claims had actually been going up, and we were concerned because when jobless claims are going up, it means that there are some parts of the labor market where people are struggling to find jobs. So they're filing for unemployment, but that is not happening anymore. No, it isn't not anymore. Initial jobless claims have been plummeting since February. Everything is not not awesome. Oh, that's going to be. According to the most recent update there have been two hundred and one thousand two hundred and fifty initial jobless claims per week in roughly the past month that is the lowest level in almost fifty years, and it is also today's first planet money, indicator and most importantly, it's a sign the labor market is still in very good shape. Okay. Reason number two that the economy's not not awesome. Our next feel good ish. Indicator of the one point six percent retail sales were one point six percent higher in March than they were in February. And that was a strong number stronger than analysts had even expected and retail sales. Are basically what they sound like, you know, it's things that we buy from stores or online or at dealerships like cars and furniture and clothes and all that kind of thing. Interestingly enough also includes bar tabs. Yes. Cardiff interesting that you point this out. True, though, retail sales numbers also include what people spend at bars and restaurants under category called food services and drinking places snappy little name bars, and you know, in a growing economy retail sales should also be growing from month to month and from year to year because as the economy grows, people get jobs and make more money, and so they can buy more stuff more retail goods. But from last July all the way up until February of this year, retail sales were basically flat, and it really still is not clear what was going on. Because during most of those months wages were still growing at an increasing pace. People were getting bigger raises at work. They just were not spending more on retail goods. And the worry was that if that trend had continued or even if it had gotten worse if people had started spending even less money than it could hurt the economy 'cause remember if people are not spending money that eventually companies will make less stuff to sell which in turn means it companies don't need as many workers. And they might even start laying off those workers, but things changed in March when retail sales finally started growing again, and even though we have only one month of growth that we are looking at right now at least, you know, the stopped the trend of flat retail sales, and it could be a sign that maybe just maybe Americans are ready to go shopping, again, not not awesome by ever heard would make things even more not not exactly losing track of the double negative. Finally, here's the third indicator that suggests things aren't quite as bad as people had feared earlier this year. Three point three percent. That is how much the global economy is expected to grow this year. According to the latest estimates from the International Monetary Fund. Now that is a slower pace of growth than last year. But we were still relieved because given just how much the global economy was slowing at the end of last year, the estimates for this year could have been even worse than they ended up being instead the IMF economists now say that they actually expect the global economy to improve in the second half of the year and into next year. And the reason is that policymakers in a lot of different countries like the central banks and the politicians have been responding to the global slowdown by taking steps to keep their economy stimulated. And this matters global economic growth does matter for the US economy when the rest of the world has a strong economy. It means that people abroad will buy more products made by American companies. And those American companies can then better afford to keep hiring American workers to make those products. So there it is three indicators that the us economy is in less danger of falling into a recession than people thought just a couple of months ago. She likes to say three not not awesome indicators, and in fact in the past couple of months, economists and other forecasters have raised their estimates for how fast the US economy is now growing, and we should say Cardiff is a nod to you know, all the me. Host. There are still a few parts of the economy. The do not look, so great some not awesome parts of the economy. And maybe the best example here is the housing market, which has been sluggish for more than a year now. But guess what you found out just yesterday that in March people bought new houses at the fastest pace of any month since November of two thousand seventeen not not awesome. So there you go card if not not awesome yet, again, even I was breathing a sigh of relief on that number. So yeah, it's true. That just because the odds of recession of gone down does not mean that everything's awesome. But it also does mean in a nod to my co host that everything is not catastrophic either. And that folks is that as optimistic as I and round here. It's economics optimism is just not. This episode was produced by are very optimistic producer could stand the guy Ardo and edited by paddy Hirsch, our fact, checker is will Ruben and the indicator is a production of. Everything is. Also, just attack something on here. Quick footnote for the wonky types out there, just so we don't get emailed about this. Because I know you're firing up your laptops, right now. Okay. For the initial not not. The initial jobless claims we're using the four week moving average. And even though it's true that initial weekly claims are at their lowest point in about fifty years. It is also the case that the requirements to qualify for employment insurance benefits have changed. So the comparison across all fifty those years is not perfect. If you want more from the planet money universe. You should subscribe to our newsletter. It's fun. It's free. It goes in your Email every week to subscribe, you can go to NPR dot org slash planet money newsletter. One word that's NPR dot org slash planet money newsletter.
Oil Storage Wars
"N. P. R.. Has Been on a wild ride in the last few months. West Texas crude start off the year costing about sixty dollars a barrel, then corona virus head, and the oil industry got hammered yet people were not driving or flying, and so demand for gas was way down by April. The price of oil had dropped to fifteen dollars a barrel, and then in late April something crazy happened. We begin with an historic collapsed in energy prices, oil falling below zero dollars a barrel for the first time. LA- hit an all-time low on Monday plunged into negative territory. The price settled at get this negative. Thirty seven dollars per barrel negative thirty seven dollars a barrel. It's kind of mind blowing. How can something be worth negative money? Especially something that we use every day that makes our cars and airplanes go. That makes plastic bottles and fleece jackets and air conditioners refrigerators. How could that be worth nothing? The reason was storage. This is indicated from planet money. I'm Cardiff Garcia. And I'm Stacey van man today on the show, the oil storage boom as demand for oil fell demand for oil storage has gone crazy and right now it's having a huge domino effect on the industry. Planet? Money, talk it's economics but relatable. What was it originally planet money to Talk Radio for your is? Short. That's the best one. As Cova nineteen re tactic on the US economy. Nobody wanted to buy oil oil companies had pumped all of this oil out of the ground, and they couldn't sell it. They had all this extra oil on their hands and oil as a hazardous substance. You have to take care of it and store it properly once you've pumped it out of the ground in April nobody could sell oil and everybody needed to store it. David bomb is an oil analyst with Cowan an investment bank. It's not something that you can just keep sitting around like in someone's backyard. Companies, they were looking out and basically saying hey, in the month. I'm not sure that I'm GonNa have placed the put this. And I think there was just a fear that we would run out of storage space. Oil is normally stored in these giant tanks tanks that hold more than half a million barrels of oil each, but all those tanks they started filling up, and so the people who owned the tanks started raising their prices prices to store oil doubled, tripled wind up by six hundred percent in some cases, so for one day of oil storage, instead of paying one hundred fifty thousand dollars a day, which is usually what it costs to store. Oil Oil companies were paying practically a million dollars per tank per day to store. Their oil would be like. If all of a sudden, your Internet, though is like seven hundred dollars a month, and you're like wait like that was just something I thought was gonna stay like seventy dollars a month now seven hundred. At the same time profit through drying up and debt collectors were knocking an oil companies literally could not afford to have oil. They could not afford to store it, but they couldn't sell it either, so they started getting creative. Some companies like has bought enormous oil tankers, and filled them to the brim with oil and push them out to see other companies just went bankrupt. They couldn't their oil and they couldn't. Couldn't afford to store it, but of course this was an opportunity to. If you could store oil, you could make a lot of money and people did start seeing opportunities, people like Sean Lovely President of well-water Solutions Rentals, or headquartered actually of Evansville Wyoming right in the middle of Wyoming. Shawn's company builds big storage tanks for water. You know. Have you seen those above ground swimming pools, just I mean. Take that out and make it two hundred foot, and and then make the sidewalls twelve feet. That's that's what it is. Sean the price of oil storage, going crazy and thought wait. We could start oil in our water tanks, and we can charge a lot for that. Sean realized he could make forty thousand dollars a month storing oil in one of his tanks, and still be really competitive pricewise, so he plays a couple of ads online thought to get a few calls boy, it was it was crazy there at the beginning him Outta, calls and thanks. It was absolutely bonkers just. Just, getting flooded with calls, and we had some people saying. We want one hundred tanks like Dang. All kinds of companies jumped into the oil storage business companies that normally store wine laundry detergent shampoo. They were all jumping into oil storage, and this is how the free market is supposed to work right when there's big demand for something, the price of that thing goes up and when the price gets really high, people get excited and think hey I should get into that business, and so before you know it, the supply increases and eventually there's not a shortage anymore, so the price goes down. Yup Supply and demand economics went one yup, and in fact, oil analyst David Dukla bound thinks that is going to happen here. The oil storage boom, not long for this world. I don't know what kind of jeans you wear, but whatever your jeans company is like making facemasks like they're probably stopping do that now. You know okay, so it like this sort of Jerry rigged. Oil Storage is like the face masks of the oil industry. Yeah! The ones that like a barbecue at your house. No, Hey, you should, you should let people store oil. You know like Oh. Yeah, that's all about that. Divas as soon as the economy gets going again and demand for oil goes up, companies will not want to store their oil. They will want to sell it and make money off of it, so demand for storage will go down, and the price of storage will go down. In fact, we're already seeing that. A cities across the US started to reopen oil prices started rising again and demand for storage started to flag Sean lovelace of well-water. Solutions, he noticed. Where we were getting probably. Three four or five big calls a day. I mean like because I mean. We might get one a week now. so yeah, it's It's died down quite a bit with the oil prices hopping back up and that could continue in a big way. There's even been speculation that oil prices could spike as countries reopen, and the demand for oil goes back up. Because with so many oil wells switched off and so many oil companies going out of business, there might end up being less oil. Oil available than there usually is so if oil demand does come roaring back, there could be a shortage of oil available, and that would end up pushing the oil price backup still David Dekel bound. The oil analyst does not see that happening anytime soon. He does not think the US economy or the global economy will bounce back. He thinks it will probably be more of a shuttle. If you've seen the airlines commenting that likes they think. Air travel is going to get back to normal two thousand, twenty five. That's five years now, and even when the economy does recover David does not think oil will ever be the powerhouse industry that it used to be. Because for example there's the rise of alternative energy and also more fuel-efficient vehicles and move away from plastic and so far this week. Oil prices have been edging down on news that Corona. Virus cases are rising in the US, and if that keeps happening, it could just mean that the US economy will be growing really slowly for awhile, which could further mean oil prices? Themselves will also stay low for a long time, and that might mean that companies could need more storage soon. And, if that's the case, Sean lovelace water solutions will be ready until then. He says he's just going to focus on his regular business on storing water in his big above ground tanks, they actually store a lot of water sixty thousand gallons, which is about the size of six backyard swimming pools. Yeah, no, we can. Now we could have a big party with some big freshwater tank somewhere if we wanted to big big pools. Pool Parties John's. Yeah. Be there. Bring your mask. Bring bring your jugs. If you want to get into this oil storage, business yourself, you know. By the way don't do that in all serious that. Don't don't do that. This episode of the indicator was produced by Camille. Peterson and Brittany. Cronin the indicator is edited by Paddy Hirsch and is a production of NPR. Whenever you face a choice. It helps to think like an economist and this week on planet. Lenny summer school will start off our course. Economics with ink workout for your brain how to decide what's something truly costs? Planet money from NPR.
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
"N. P. R.. Everyone Stacey in Cardiff here is indicated from planet money and today's episode is garbage guarded. Wait No, hang on a second. That's not where. You have to there. You're supposed to pretend like you don't know it's garbage. Misread conclusions. Yeah, no, it says here. This episode is actually about garbage partly, so it's a key phrase there about garbage. Yes, it is and part of the reason for that is that one of our wonderful listeners asked us about garbage? That is right. It is time for another episode where we answer your questions. Yeah, and let's get right to it. Here is the garbage question from Listener Michaela in West Virginia, I have a trashy question. Now that we're all staying at home working from home, eating at home more. How is this affecting the distribution of waste and how our waste management companies handling it I? Love this question. Michaela! I've actually been thinking about this a lot, because not only are a lot more people at home throughout the day, but also a lot of restaurants and bars are still closed, so people are eating at home a lot more as well, and all of that means that people are now throwing out a lot more trash at home in their residential neighborhoods. Yeah, and just how much more trash is being thrown out of homes because of krona virus kind of depends on where you live but to. To Take Philadelphia's and example, the volume of residential trash during March April of this year was about twenty five percent higher than it was. During March and April of last year and estimates for other parts of the country have varied, they range from five percent higher all the way to forty percent higher, but whatever the case it's a lot trash from households is usually collected either by local sanitation departments, or by privately run waste management companies, and those guys are just in demand like crazy right now. They're really overwhelmed even to the point where other services like recycling pickup and street cleaning have been cut back in some places, because there is just so much trash pickup from homes. Yeah in the trend goes in exactly the opposite direction for trash that gets collected from commercial buildings from offices that is way down and these waste management companies that handle commercial trash are struggling just like other parts of the economy demand for their services has fallen because so many of their customers have closed their doors. Some of these waste management companies have even furloughed workers, and they are running fewer routes, but Cardiff I have a question about our garbage question, which is this yet? WHAT ABOUT OVERALL GARBAGE? If you combine the waste from residential homes and businesses is our overall trash upper down. I would assume. Assume that it would be down because so many businesses are closed But what is the verdict on over? Always? Yeah, that's definitely possible. I gotta be honest. I looked all over the place for a nationwide estimate of just overall trash accumulation trash volumes since corona virus started I could not find. One might not exist just yet, but if any of our listeners have seen such an estimate, then by all means feel free to send it to us at indicator at NPR dot org, and there is a little side note on our garbage story by the way a workers who collect trash there about one. Twenty thousand of them throughout the country, they are not just categorized as essential workers workers who have kept doing their jobs throughout the pandemic. This is also really dangerous work, so we wanted to give them a little shoutout. Little Shoutout, yeah! According to the Bureau of Labor Statistics, the share of people who die on the job while collecting trash or recyclable material is the fifth highest share of any occupation in the country and the most common reason for this vehicle accidents, but the work itself is also physically taxing workers potentially. Potentially expose themselves to chemicals and toxins every single day, and now of course krona virus has added a new element of danger to trash collection. Because the trash they're picking up could have been handled by someone who has covid nineteen, so a lot of the workers have to take these extra precautions like wearing an extra pair of gloves or having their trucks disinfected things like that and thanks for that question Michaela, we really appreciate it, and after a quick break station, I will take two more listener questions about different topics. Support for NPR and the following message come from Zen desk, making customer support software designed for speed and agility, now offering a six month complimentary remote support bundle that comes with everything you need to stay connected with your customers. Go Zen desk dot com slash indicator. Okay next listener question comes from rob in Brooklyn New York on Social Media I've been seen a great push. Encouraging people to support black businesses I found out that there's an index fund that is specifically composed of minority owned businesses. How does a fund of minority owned businesses work? Most importantly could investing in a fund like this actually be a way to support black companies. Thanks for that rob and yeah, there are two parts to this question one is. How does this fund work and then second? Is it a good way to invest in black owned businesses, so we'll take those questions in order so I. The fund that Rob is referring to is called the impact shares nwpp minority empowerment fund, but we'll just refer to it here as the fund. That's the only fund we're talking about the fund and here's how the fund works. The Fund says that it will invest in companies that have quote, strong, racial and ethnic diversity policies in place and quote. But, of course I, it has to identify those companies, so the fund worked with the N. W. C. P.. The civil rights organization to come up with a list of criteria that could be used to judge whether a company has a good diversity policy in place in those criteria can include things like the quality of companies, anti-discrimination policies or its efforts to diversify its own workforce, its employees and there are ten criteria in all, and if a company scores high enough on these criteria, then it gets placed into an index. The fund does. Is it invest a little money in all the companies that make it into? Into the index and it this by purchasing shares of those companies in stock market, which means that if you invest in the fund itself, which is what rob is asking about. You're buying shares of fund that itself own shares of a bunch of other companies. It's kind of like a sampler platter of stocks, and as for which companies to fund is invested in. They are mostly big companies big enough to trade on the stock market, so for example the companies that the fund has the most money invested in our Amazon, Microsoft and Apple, but rob about investing directly in black owned businesses, and that is just. Different, from what this actually does, which is to put money into companies that meet certain criteria for policies on racial and ethnic diversity? Yeah, that's right, and so basically we looked around and there just seems to be no shortcut that we could find for investing directly in black owned businesses, most of which are not these huge companies that trade on the Stock Exchange so you have to. To try to find those businesses and weigh the risks of investing in them about the possible rewards, just like other investments but all that said there are some very useful lists online directories that can help discover black owned businesses. These are on sites like a block Wall Street DOT COM and we'll post them. Other links in today's show notes at NPR DOT Org. Slash money. Our final question comes from Kathy in Florida. The unemployment rate doesn't measure how much the GIG economy contracts is their way to measure that so cathy. The short answer is no. We do not know exactly how much the GIG economy has either grown or contracted because of corona virus mainly because the GIG economy, itself is really hard to measure yet. Most people think of Gig work as uber drivers or someone who delivers you groceries that you ordered on Insta- card. Card, the APP or the handyman that you found on task. Grab it big GIG. Work can actually be any kind of work that people do that is not done as part of formal employment for business. It can be someone who makes homemade baskets and sells them. Online is a hobby or can be graphic designers who freelance by making web pages as their main job, though we should note that only about one out of five people who do Gig work in. In the US, do it as their main source of income, but the point is that some of the GIG economy could be seeing more demand like food delivery drivers while other parts are seeing less demand, just because overall economic activity has fallen so much. Here is what we do know now roughly fourteen million gig workers are claiming unemployment insurance benefits because their work has been affected by corona virus in some way in fact more than two out of every five. Five people who are now claiming unemployment benefits are gig workers. Now that so many other people have lost their jobs non gig workers, a lot of these newly unemployed workers are themselves trying to Gig work to make a little money, and this means that people who were doing gig work before the pandemic started now have more competition, so he might not get paid as much as they were getting paid before. A lot of gay workers just really are struggling. Thank you Michaela and Cathy for your questions, and of course. If you have a question for us, we would love to hear it. You can email us a voice memo that is indicator at NPR. Dot Org and we might address it in a future episode. This episode of the indicator was produced by Camille, Peterson fact checked by Britney Cronin. The indicator is edited by Paddy Hirsch and is a production of NPR.
"N. P. R.. Hey everyone. It is Cardiff and Stacey, and this is the indicator from planet money today on the show GDP GDP stands for gross domestic product and it's basically a sum total of all of the goods and services that the US economy produces. It's often considered to be the measure of economic growth. Yep. GDP includes all the cars, an air conditioners in shoes and haircuts Uber Rides, and fish tacos and pedicures that the country is producing and buying. And so atypical GDP growth number is like two percent a year or maybe a really great year three percent. It's like soccer scores they never it never gets very. Stay pretty low and that's because the US economy is enormous. So even when a lot of things change the GDP needle doesn't budge very much at least it didn't used to. That's right. The GDP numbers came out today and for the months of April May and June that's the second quarter. The US economy grew at an annualized rate of negative thirty two point nine percent that is today's indicator negative thirty, two, point nine percent and I have to see if I saw this number I was like our economy shrank by thirty three percents I mean that is a third of our entire economy, right? I mean that can only happen a few times. It was really scary. So I called up Justin Wolfer as he is a professor of economics and public policy at the University of Michigan. And I was like wait a minute is the US economy like one third smaller? Did we just lose a third of the economy and so did we lose their economy? In. Okay. Okay. It turns out the way that Americans report the GDP. is a little more confusing than you might realize. What actually happened is in the second quarter, we produced nine and a half percent less than we did in the first quarter. You might think we should report that as a decline in GDP of nine and a half percent. Yes. What we do instead is we say if we continued to plummet at that right for an entire year. At the end of the year, how much lower would GDP? That's what thirty two point nine percents. it says if the economy kept declining at a right of nine and a half sin quarter after quarter after quarter after quarter four quarters later, a level of output would be good. Two point nine percent lists now that's unrealistic. This was the worst quarter. Probably. In American history. So. Yeah. Let's say you do not try to extrapolate for the whole year. Then what you're looking at is that in April May and June the economy shrank by about nine and a half percent from the first three months of the year, which is way better than an economy that shrink at thirty, two point nine percent. But. That number still makes April May and June. The worst three months in the history of the US economy. That's right but just in also is quick to add this GDP report is not like the other ones. Explain why right after a quick break? Support for this podcast and the following message come from Barracuda Khuda total email protection according to the FBI last year cybercrimes cost three point five, billion dollars get the free e book thirteen email threat types to know about right now at Barracuda dot com slash NPR. In April May and June, the US economy shrank by nine and a half percent it is the biggest drop on record. Dan swonk is chief economist at Grant Thornton. In Chicago, she says it when she saw the numbers this morning, she was not surprised. She had been making calculations for weeks and she kinda just knew this was coming but still these numbers really hit her hard. I've. I've literally felt my stomach churn numbers have come out and felt like I was punched in the Gut. Here is why Diane's is when she sees a number like negative nine, point five percent, GDP growth. She's a really see a number. She sees all the things and all of the people behind that number millions of people losing their jobs, their homes businesses, and you can't delineate the economic pain that we've seen every single number every single. Person that applies for unemployment insurance has a story and they have a life a life. Threatening, of being destroyed not just by the threat of a virus, but but I, also by the economic devastation caused and we know that economic devastation hurts people's health as well mental and physical health. So this is a humanitarian crisis the likes of which no one in recent memory has has any experience with. And this is an especially hard moment to see numbers like this. Dan says because right now a lot. The economic aid in stimulus that Congress had given the economy back in March is expiring. For instance, the extra six, hundred dollars a week that Congress added to unemployment benefits is expiring and that means millions of people will see their incomes drop in half overnight. Also, the moratorium on some evictions lifting, which means millions of people could lose their homes all at once, and that's what's so worrisome especially as we're on the precipice of everything from expanded unemployment benefits expiring to moratoriums convictions expiring, we could be talking about Food Insecurity and homelessness that are more akin to the Great Depression than any time in our history. But there is one big difference between the current crisis. In the Great Depression a difference it makes measuring this moment really hard. That's covid nineteen. Yes. The economic shutdowns across the country have meant that a lot of businesses were forced to close forced to lay people off but a lot of that could be temporary. Hopefully most of those restaurants, hotels, bars, hair salons, clothing stores. Will Open back up Rehire people and start selling stuff again when they do, GDP will go up probably shoot up because a lot of it will happen all at once really quickly. So Justin Wolfer says the real question he is asking looking at that negative nine and a half percent is how much of it is permanent and how much of it is directly pandemic in just Doesn't. It's temporary. We Ha- we Yes. It's temporary. It's a temporary downswing. The question is do we bounce all the way back to where we were halfway back? More lists and that has massive implications for how the subsequent. Playoff. For now, Justin says our economy is in this kind of suspended animation. And to really understand what covid nineteen has done to the US economy, we will have to wait until restaurants in hair salons and bars and offices reopened. In, the virus is under control and we can all start to get back to business. This episode the indicator was produced by Camille Peterson fact checked by Cronin the indicator is edited by Paddy Hirsch and as a production of NPR. Until, recently, admit Hong says he didn't speak out against racism because he was scared. Listen now on the codes which podcast from NPR.
Why Do Diamonds Cost More Than Water?
"N. P. R.. It is Friday. You know that means time for another one of our summer Friday economics lessons indicator summer school means yes. In this episode, we look at an economic paradox and speaking of webster definitely been a lot of paradox ish things happening lately like say home sales are setting records even though unemployment is the highest, it's been since the great. Depression that's paradox issues and the let's get started on the stock market. But maybe the very first economic paradox ever tackled in an economic way was by Adam Smith. One of the fathers of the field it is called the diamond water paradox. This is the indicator from planet money. I'm Stacey Vanik Smith I'm. CNN The show the diamond water paradox. This episode first aired in July of two thousand eighteen. What's like a diamond? Though Cardiff I liked things you're going their economics lesson in this story is forever. You went there I went there. Yeah. I did not apologizing. This message comes from NPR sponsor Microsoft the world has changed and Microsoft teams is there to help us stay connected teams is the safe and secure way to chat, meet, call and collaborate to learn more visit Microsoft? Dot. com slash teams. I. Am from the West I'm from Idaho and in the West, we are obsessed with water and a group with this kind of innate defensiveness around water. Somehow. I. Always had this feeling that Californian's like evil Californians were coming after our water I think the Both I and our listeners are delighted to discover this kind of emotional water-based insecurity on your part, and the reason for this is agriculture is really big idaho i. mean the potatoes and many other things A. and most of the water for those crops comes from aquifers and rivers and streams. It does not come from rain and so during droughts, some farmers would have their watershed off in the middle of growing season and they would lose their crop. So water is a big deal. It's very emotional. And that is probably why I've always been fascinated by the fundamental question economics called the diamond water paradox, and in fact, this paradox is one of the first economic conundrum. There was ever formally articulated by Adam Smith founder of economics into better understand it. We called up Lynn you. Hello, I'm Linda you. Honest at the author of what would the great in do? How twelve brilliant minds would solve today's biggest problems. And one of the brilliant minds is in Fact Adam Smith. Yes. Deep probably on, you might say the father of economics. Adam Smith you might recall believed in the power of the market the so called invisible hand that guides our economic interactions, every single day, and he thought that the free market was really good at placing the right value on things. The right price on things the for Smith there were a couple of thorns in the side of this elegant theory and one of them was the diamond water paradox. Okay. The diamond water paradox. Here it is. We need water to survive. We absolutely do not need diamonds to survive. So why is it? The diamonds are so expensive water. So cheap why do we value diamonds so much more than we seem to value water, which we literally cannot live without and yet diamonds are price more highly important thing that prices and vow you don't quite a and this is a real conundrum because when Adam Smith put forward his theory about how we should leave it to the market is on the basis that the market can efficiently price based on supply and based on what we demand and implicitly within that, it's also reflection of the value. and I. Really struggled with this, the first good old fashioned supply. There's water literally falling out of the sky gushing down from mountain peaks just sitting in big open lakes, and then there's diamonds which do not fall out of the sky there unfortunately deep underground or gently how Terrible. Surrounded by rock so hard to get too hard to get out of the ground and that especially applies back in the seventeen hundreds when Adam Smith was writing pink away on fifth began to view it is that diamonds are more scarce than water and could explain some of the paradox but not all of it Linda says, scarcity does not quite solve the diamond water paradox because water is not always abundant. The minute you start to realize that actually in some places of the world at water is scarce then the supply that begins look more like diamond. So then you would expect a higher price butts is Linda. Usually don't really get higher price and even if the price of water does go up, it does not typically get into diamond price territory witnesses that another solution, Adam, Smith and other communists have considered. Was it maybe the value of diamonds versus water had to do with the amount of labor involved in getting them like maybe we value things based on how hard it is how much work we have to do to produce them. But that wasn't really quite they're either that one also wasn't watertight. Watertight sorry guarded just looking at Labor wouldn't explain the Diamond Water Paradox because yes don can be hard to mine but water can sometimes be hard to get his. Well, if you live in for instance, a Desert Linda says Adam Smith died in seventeen ninety never having truly cracked the diamond water paradox and for one hundred years economists were wrestling with this question but the paradox it wasn't really fully explained until the neo-classicist emerge. So I'm talking specifically about Alfred Marshall Alfred. Marshall famous economist He. was at Cambridge and he was very much in the school of Adam. Smith in the tradition of Adam Smith and the way that Marshall cracked the diamond water paradox was by recognizing that the way we value things is not totally fixed. It's not the absolute price with the absolute level of utility that matters. It's the marginal utility. The idea is that when you said a price for something like a diamond or barrel of oil or a gallon of water, you don't just price it according to how. Much, you value it writ large how much you value its very existence because in that case, water would trump diamonds every single time I mean you literally needed to stay alive instead, the value of something is dictated at least in part by the extent to which you want that thing where you need that thing in a given moment. Exactly. So Okay Cardiff up say that I have all the water I own all the water and you need water. So the first gallon of water the value. For that is going to be really high. I mean you need it to survive. You would probably pay me anything I asked to get that I count of water the second gallon also very valuable. You could use it to brush her teeth or wash your dishes, all kinds of uses. But what about the Twentieth Gallon or the Fiftieth Gallon I mean how much would you pay me for those? It's more than you can use, and now it's just taking up space in your apartment and you know. Maybe, apartment that is that becomes a problem by the Fiftieth Gallon. In fact, you might not want that water at all anymore, it is not valuable to you, but so you won't pay me anything for it at all its value for you has now dropped to nothing right because like I started by using it for the thing that I vitally needed it for to stay alive to hydrate. Right then I started using it for some things that were luxuries I guess like taking a shower brushing, my teeth whatever. And beyond that I start to get a diminishing amount of information -ment from the added Gallon of water. So yeah. That first. Gallon. GonNa pay you all the money the last gallon. I might pay you anything and just pass it up exactly. But now imagine that I am selling diamonds. That is a different story. Yes. So you can imagine you get one diamond Maybe you get another dime in pair of diamond earrings. If you get another few diamonds, maybe make a bracelet all of a sudden Cardiff's all bloomed out. And showered. So the first time I get awesome the twentieth Diamond Still Awesome the, fiftieth diamond still actually kind of awesome The value of diamonds has less of a relationship to how many diamonds I've already got. So I'd probably pay close to the same amount for the fiftieth diamond is I. would for the first impart because I would expect those diamonds to hold their value in that might be why bought them in the first place? So we can say that the marginal value of diamonds, the extra value get another diamond is higher than the marginal value of water exactly more diamonds more value more is more more water not necessarily more value more is relative diamond water paradox solved. It is funny. The way we value things it it is. It is confusing. It's good to know that also Adam Smith struggled with this. Well he when economists struggle with something, they call it. Can't be. Not Confused they're struggling with the paradox. This is the nature of what it means to be in. This episode of the indicator was produced by Nick Fountain. Our editor is Paddy Hirsch and the indicator is production of NPR.
The Great Potato Giveaway
"N. P. R. Ryan Cranny runs cranny farms in Oakley. I'd how it's a little town in southern Idaho about eight hundred people. We've been here in. This valley are farm on the same land for one hundred and thirteen years. Read their office window. You can look out and see the mountains on both sides and big old wide open. Fields Ryan grows russet potatoes. Those are the really big brown potatoes with the skin. If you've had French fries. I'm sure you've probably had our our potatoes before. A lot of our stuff is up in McDonalds and burger king. Wendy's Red Robbins Ryan says. Potatoes are great crop. The prices steadied. Demand is basically always growing. Because you know French fries up until the covert thing then. All that change rand had all of these potatoes he had just harvested and nobody to buy them so. Brian decided to give them all away. Maybe two million potatoes million potatoes crazy. This is the indicator from planet money. I'm Stacey Mannix Smith Today on the show the Great Potato giveaway why Ryan cranny gave away two million potatoes. Because a giveaway doesn't seem to make that much sense right now not when supermarkets are running out of everything and millions of Americans are struggling just to get enough to eat still right now. Farmers like Ryan all over the country are pouring out milk plowing their lettuce back into the soil. Trashing their potatoes and eggs. So what's going on as it turns out the food industry is kind of the victim of its own success support for NPR in the following message. Come from capital one with the capital one quicksilver card with quicksilver you earn unlimited one point. Five percent cashback on every purchase everywhere. What's in your Wallet Support for? Npr comes from Newman's own foundation working to nourish the common good by donating all profits from Newman's own food products to charitable organizations that seek to make the world a better place. More information is available at Newman's own foundation dot Org Ryan. Cranny has been in the potato business. All his life is potatoes. Go all over the world. He grows around a billion potatoes a year. A billion potatoes at about ninety percent of them. Go to restaurants Ryan's two million potatoes. The ones he gave away were set to sell around seventy five thousand dollars but you know. Suddenly no one wanted to buy them and those potatoes that he paid to plant and grow and harvest were going to earn him nothing. I felt panicked. I felt extremely nervous. You know several days where I didn't sleep. Well I just super anxious I take it very seriously when you know something is going to throw them or family in our haired is and as Ryan was grappling with these huge questions. There was this more immediate question he needed to answer. Which is what to do. With all of these potatoes they were already harvested. They were going to go bad so he and his team just dumped them on the ground in this giant pile. It was huge. Nearly two stories high and Ryan just stared at this huge pile of potatoes that he could not sell. I looked at him for a couple hours and I kept thinking to myself. What what can I do it? These we could get some good out there and I couldn't think of anything financially that would be beneficial that no way to sell them other than maybe cattle feed which is just peanuts and so it does seem to me. Why don't I try to give him away and let people come gather them up? I knew that the potatoes somewhat been hard to find in the grocery store and so all different giveaway Ryan took a photo of the great potato pile and posted it on his facebook page with the note that read free potatoes. We started dumping potatoes today as we have no home for them because of this Kobe. Nineteen disaster if you'd like if you bags come on by an Oakley Idaho. It's kind of the middle of Nowhere Ryan figured you know. A few of his friends. Few locals might show up and took off like wildfire about three hours later. We had a steady stream of traffic cars. Were lined up to the potato pile. People are filling up their truck beds and car trunks and crates and bags ranch. A lot of the people were volunteers. Getting carpools of potatoes for food banks shelters or elderly homes. Thousands of people showed up from as far away as Kansas Nevada. Somebody called from Ohio. Which is I mean. It's like twenty four hour drive and the Times. We counted over thirty cars at a time that we're there. Here's the thing people need food right now. Unemployment is likely near twenty percent. Millions of people have lost their jobs. Food banks are flooded with requests also. Supermarket shelves are empty. People are paying really high prices for things and at the same time farmers are trashing their crops so what is going on Daniel. Sumner is an agricultural economist. At the University of California Davis. He says the problem boils down to two things. How streamline and specialized things Daniels is the food chain in the? Us has gotten incredibly efficient. In recent years. Growers grow exactly what a certain restaurant or certain company needs. They grew food for that company. They package it for that company. They ship it right to that company. Farmer will be linked directly to the restaurant customers and grow for that restaurant in San Francisco or New York City or a somebody growing exactly the kind of lettuce. Mcdonald's needs for their hamburgers. That's been great system fast cost-efficient less waste fresher food for everyone still. Daniel says because the food growing industry has gotten so specialized when the system gets disrupted. There's not much flexibility. It's hard for growers who grow for a fancy restaurant or a giant fast food chain to pivot to selling in a supermarket. They're so specialized. They can't adapt right away. So you end up. In this weird paradoxical situation it causes consumer prices to go up and shortages appear to consumers and at the same time the demand for the farm product goes down. This is exactly what's happened to Ryan cranny with his potatoes so ran. Normally ships is potatoes to restaurants in fifty pound boxes or two thousand pound bags. Now he's trying to get his potatoes to supermarkets but he cannot find a way to pack them. We aren't set up to pack small bags at a very fast rate while we have one little antique bagging machine that we shipped to the grocery stores of well. Now we're trying to shove every potato. We have into this little antique machine. When people that I will let you know what you said you know the big boxes to the grocery which we had some big box grocery but then the consumers kind of kick back against it because there was too much even a big family like mine. We're at five children even even us. We couldn't get through fifty pounds of details before they go bad. Some farmers are trying to sell fifty pound boxes of potatoes on Amazon for around one hundred and fifty dollars a box but mostly the potatoes are just rotting in fields. Or if they're new they're just grown they're sitting in storage. We have six million dollars and potatoes. That are in storage right now. Ryan is grown all of those potatoes for specific buyers. There presold still. He's worried that those places will not be able to pay for the potatoes. They ordered all those months ago and you'll have hundreds of millions of potatoes just rotting and no income. He says the potatoes will keep until about August and if they go bad he says his farm will be in. A pretty dire situation is going to be scared a few months. Still in the midst of all the scariness Ryan says the potato giveaway has been this incredibly rewarding bright spot. He's people have so grateful and he's felt so great. No in the district are going to shelters and food banks and helping some people who are in the greatest need. I had a conversation with a man of out the potato pile last week. And you know he'd come up and he was teary-eyed and Kinda tried a little bit. Yeah he just saying that you know this is. Oh this is so wonderful. Wish people would give you know like you are and I'm like what do you mean like I am like you're doing the same thing you're you're giving just the same. This is such an amazing experience that whatever we donated it was it was more than worth no question. This episode of the indicator was produced by Camille Peterson. Fact checked by Cronin. The indicator is edited by Paddy Hirsch and his production of NPR.
Stacey vs Cardiff: The Fed Cut Throwdown!
"You're listening to N._P._R.. <music> hey everyone is stacey in Cardiff and this is indicated from planet money tomorrow on Wednesday the Federal Reserve the Fed only get excited I talked about it's very endearing. I love it when they do stuff in the Fed. Tomorrow is very likely to lower interest rates by at least one quarter of a percentage point fed ED share Jerome Powell and other members of the Fed have been signaling clearly that these lower rates are on the way and this moment is a big deal so the goal of lower interest rates is to give the economy a little help a little boost that is the point of lower interest rates they make it cheaper for people and companies to borrow money to take out loans and then they spend that money and all that spending helps the economy but this decision by the Fed is controversial because right now the US economy seems to be doing fine and the Fed helping the economy if it does not need help does bring some risks with it so in this episode Stacey Ni- are GonNa rhetorically throw it down. Yes we're GONNA argue you are about whether or not it actually is a good idea for the Fed to lower interest rates. Now we brought a boxing bell. We've got an announcer right now. I'm doing like mental jumping jacks to warm up yet. It's about to be <hes> skater. This message comes from N._P._R.. Sponsor K._p._M._G.. Revolutionize your enterprise with A._I.. K._p._M._G. can help you harness the power of A._I.. To unlock its potential and deliver growth more at read dot K._p._M._g.. M._G. Dot U._S. Slash N._p._R.. Support also comes from Microsoft snow. Leopards are very difficult to find researchers use use Microsoft to analyze thousands of remote camera images in minutes so they can find and study them more efficiently more at Microsoft dot com mm slash Ed should make that cut the Fed should lower interest rates and help the economy stacy is going to be arguing. The Fed should stay strong the Fed to leave interest rates exactly exactly where they are round one the maestro of the markets the Queen of commodities the ECON- dumb Stacey Vanik Smith and in this Khanna the yield curve and Verda bond market beserk alone without a wonkery call. Let's start this way Cardiff. Garcia the Fed needs to stay strong wrong and not cut interest rates because interest rates are exactly where they need to be right now and you know how I know this. I know this because the U._S. economy is doing just fine it. We just started its eleventh straight year without recession and more importantly it is creating plenty of jobs about one hundred and seventy thousand jobs every month which is a really healthy number for an economy that has been growing for so long. I hope you've got stronger punches than that stacy because I say the Fed needs to cut because even if the economy's growing at a decent pace now that growth is slowing down it was growing faster and creating more jobs last year plus there are storm clouds was on the horizon just like fed shared Jerome Powell said there were the trade wars are going to become a problem investment by U._S.. Businesses actually fell in the second quarter Sir because these businesses are worried about the impact of trade wars and because economic growth in the rest of the world is slowing down to other countries won't be able to buy as much stuff you've made in the U._S._A.. Are you wearing yourself out jumping at your own shadow. I'm winning. You're not winning on to Carter Garcia. You are ignoring the elephant in the room and that is the elephant in the room that is showing us that the U._S. economy is looking great and that is the centerpiece of the U._S.. Economy thank you very much consumer consumer spending. It is two thirds of the U._S.. Economy the biggest part of the giant chunk of the global economy. The rest of the economy always follows consumer spending thanks so the Fed does not need to help consumers with Ending might start to slow down because people don't keep making more money they might not keep spending more money are around three. I think you're you're forgetting something. Cardiff and that is that lowering interest rates is the way that the Federal Reserve fights a recession. The economy is not in recession and right now in case you had not noticed if you lower interest rates well. The economy is already growing. It is like wasting your main weapon. You will not have it when you need it. It's like shooting all of the arrows out during target practice and then having none left for the actual battle. It is like drinking five cups of coffee when you got nine hours of sleep. Why are you drinking all this coffee card because Stacey van Smith Yeah that is already worried that economic growth is weaker in future sure unless it cuts interest rates and slower economic growth would bring the economy closer to a recession anyways. Isn't it better for the Fed to us that firepower now and avoid the recession in the first place why risk it things are starting to heat up around four speaking of risk. You are ignoring another big risk. which is that lower? Interest rates can lead people and companies to borrow too much money and that just because lower interest rates make it cheaper to borrow money. You are more likely to charge that flat screen TVs your credit card. If the annual rate is really low but we all know what happens when people and companies borrow too much money member it happened ten years ago they can't pay it back and when that happens it hurts the financial system and the rest of the economy it can cause financial crises so the Fed should not encourage this behavior which is exactly what would happen if a lowered interest rates yeah. It's true that lower interest rates work by encouraging more borrowing but there is nothing wrong with borrowing money. There's only something wrong with irresponsibly borrowing too much money and making sure that doesn't happen. Weapon is a job for financial regulation. Not For Monetary Policy Monetary Policy which quick aside is just a fancy way of referring to the what the Fed does with interest rates. Monetary policy has to use the tools at its disposal to manage the economy in accordance with its main goals. Those goals are make sure that people people who want a job can get a job and to keep inflation stable. The stability of the financial system. I'm sorry is only a secondary goal yeah who cares about the stability. Billy the financial system okay excuse me for carrying more about workers and he's got are on the ropes this time round five stacey. There is another reason that the Fed should boost the economy only in the last couple of years have gained in the labor market really started going to workers in low wage industries. He's that's because his unemployment goes down. Companies have to offer more money and better working conditions to attract workers as we gotta keep the boom going so the society's most Volna real people can keep gaining more power and more pay. That's the definition of a tight labor market and we are not there yet so the Fed has gotta lower interest rates. Can you get us there. You know what really hurts the most vulnerable workers in this country inflation if the labor market keeps getting tighter and tighter there is a huge risk of inflation because you know it's great that companies are offering better deals to their workers and paying the more but if companies raised their wages too fast they will also start raising the price of the goods they itself fast to offset the higher wages they have to pay and then workers will ask for even more pay so that they can afford the more expensive stuff which leads to more inflation and that can devastate everyone in the economy especially the most vulnerable people and the Fed can lose control and we might be close to that point which is why the Fed should not lower interest interest rates. I am just not worried about inflation right now. So the Fed has a two percent annual inflation target. That's prices going up by two percent each year and it's thought to be a healthy healthy amount of inflation not so high the Fed loses control and not so low that the economy's weaker than it needs to be and for most of the past decade inflation has been below the feds target so if it goes up above the target for a while that's fine. It's just payback. The Fed has learned that the labor market can get stronger than it thought before we get to that inflationary point the relationship between unemployment and inflation has changed. Maybe maybe not economists will be debating this for a while. The Federal Reserve will make its call all one way or the other tomorrow but for now our debate is over listeners. You should send us an e. Mail tells you think one <hes> that is indicator at N._p._R.. Dot Org and let us know what you think. The Fed should do also this episode was produced by Rachel Tone edited by Paddy Hirsch fact check by
Spotify's Long, Winding Road To India
"Do. Are made medicine. Good zoo. Bob love and a beautiful so beautiful. This is the lovely voice of Indian singer RG sing. And Spotify said he was their most requested artists in the first week that they launched in India last month, this is the indicator from planet money. I'm Stacey Vanik Smith, and I'm Pamela Boyko this expansion into India. It's key for Spotify. Right. It's this alluring big market one point three billion people, and they're spending more and more time on their smartphones. So many tech companies Stacey they wanna get in there. Well, yeah. Because the Swedish company Spotify, it's become the world's most popular music streaming service. I mean, I have it. I think you haven't. I haven't wants to keep growing it needs to expand to new places at their first investor day a year ago, the CEO Daniel Eck made this big announcement. We're working launching in some of the biggest markets in the world places like India, Russia and most of Africa the trouble Stacy is that launching an. Ndia? It's not that easy. The market is really complicated to enter from the outside. Spotify had a long hard fight ahead on today's indicator Spotify in India, we take the experience of this one company and use it as a way to figure out why it's so difficult to break into India. This message comes from NPR sponsor gained bridge. Gained bridge offers a new Witty's designed for the digital age simplify products with guaranteed returns that you can buy direct. Learn more at gain bridge dot life slash NPR. Game bridge is not available in all states. Support also comes from Hello Monday. A new podcast from Lincoln's aditorial team about the changing nature of work and how to get the most from Monday and your career find Hello Monday on apple podcasts or wherever you listen to podcasts. Stacey I wanted to learn more about why? Spotify would be so interested in launching in India, and why it was such a struggle. I called up this man nickel power. He's an Indian digital rights activist and the founder of a tech website called media NAMA. He said the amount of data used on India's largest cell phone provider is eight to ten times what it was just a year ago. They does really really cheap in speeds of a bitter and improving. Vittal nicely forty market now. But there has been this problem just like everywhere else. Indians do not wanna pay for online content a bunch of music download sites failed in the past. And there is still just a huge amount of piracy in the last. Couple of years subscription streaming services are starting to grow enough to catch the attention of a big company like Spotify, but not just Spotify. Lots of companies wanna make money off India's growing population of internet users. That's a big challenge. Competition is intense local music streaming apps are leading the market like Ghana GO Saban. And then they're also these familiar international names in their Google play, apple music, and Amazon we counted and before Spotify there were already at least ten music streaming services in India, plus Powell says of to deal with another competitor. When you might not always think of of goes, the largest music service in India is actually you to most people prefer to stream videos and listen to the music. In India because it's completely free. And you know, what it turns out? That's not just India ah music industry. Reporting twenty seventeen estimated one point three billion people around the world are using YouTube to listen to music, but I'm getting off topic here in an interesting way, though. But yes back to India so Spotify entered the market on the later side and in order to try to go up against this pretty heavy competition. They needed to come in prepared Indian customers were expecting this big international famous app with this great reputation to really deliver to the best selections of songs and the best playlists in India. That means both big Bollywood hits and western pop music. The industry is pretty fragmented. I you've got these big international labels like Sony and Warner Music group, then they're all these Indian labels Uduas that specialize in Bollywood and lots of little ones that specialize in a specific region or language. This is a country with twenty two official languages that is a lot of official languages so many. Spotify needed to make new deals with indie. Labels and expand their deals with international wants to include India. That's where the real trouble started, the company spent months and months negotiating with all of these different labels. Meanwhile, the CEO kept getting asked winter you launching an India on his earnings calls and then finally boom big progress. Spotify announces that it has made a deal with this huge local label called t series to stream its music and just to give you an idea of the size of t-series. It's YouTube channel has the most subscribers of any YouTube channel in the world. Now reports start coming out that Spotify in India's gonna launch this teaser is deal on January thirty first, but that day comes and goes and music fans in India, or like what gives turns out Spotify and Warner Music group. Just can't agree on a deal. The two sides end up in this messy court battle that in fact is still going on when Spotify finally launches at the end of February. It does. So without songs from artists that belong to Warner Music publishing division Indian customers on Twitter start complaining their favourite songs by Shirin Cardi B Led Zeppelin. They aren't available. So you can see how difficult it was to launch in this market customers that are hesitant to pay stiff competition and legal problems. Plus Spotify has to adapt its product to suit India. They Beasley have to go local. So Spotify makes a bunch of substantial changes to try to make the Indian market work for them stuff. They aren't doing anywhere else. They changed price payment methods and languages. India is the only place where the free ad-supported version of the smartphone app. Lets you play every song on demand in other countries that something you have to pay for like this country like this country, slightly cheated. Also to get Indian users. Spotify set a price for its premium service that is really cheap under two dollars a month type cheap that is less than it costs in Peru or Vietnam and a lot less than it costs here where it's nine ninety nine month. Still at two dollars a month. Spotify's price is in line with what market rivals are charging in India like Google play an apple music. So Spotify has done a couple of things to accommodate that. I there is the cheaper price and also users do not have to pay for a whole month. They can sign up to prepay for premium just one day at a time. I want that deal here I want that deal here too. And in fact, the prepaid plans don't even require a credit card. You can use India's popular mobile payment system, pay TM, which is like pay pal except in India. And you know, what it's not just money stuff. Spotify makes much of other changes the app ads playlists and recommendations for music Indian languages like Hindi job and Tanel. Maybe not all the official twenty two languages of the country. But it's. Art, along with a lot of ways to listen to Bollywood one thing. Spotify hasn't changed? The language of the app itself is only available in English in India. The interface is not available in the other Indian languages palaces that has got to change if they want to grow their customers long-term in India, most of the people who are coming online and India have they don't doing this. I think it big time before these users get into two services like Spotify. But you can't address that market without being available in their language. Spotify came out of the gate. Well, the company says it's signed up a million users in less than a week. But really that is just the starting line. So what it really comes down to the tough part of a strategy like this with low prices and more emphasis on the free product is it's really relying on volume. Spotify will need a massive number of customers to make their business India success. They'll also need the right mix of Indian music and western music. So remember from the beginning RG sing was the number. One artists downloaded on Spotify. Number two that first week was oriented 'Grande. So India's not that different from other markets. Thank you next. And thanks to Salman warrants at tech Liga's who broke down some of the legal issues in India for me. This week's indicator was produced by consensus Ardo our intern. In fact, checker is editor is paddy Hirsch, and the indicator is a production of NPR. Welcome to the twenty percent of do you see Jesus in the burnt toast do realize that literally there's a bucket of conduct by the exit wise is happening happy. Happy. We cannot just say stop. I want to get off invisible. Season five no, easy answers. Just the right questions.
Wyatt Cenac On School Funding... And Thor
"Everyone. It's Cardiff today, the indicator something a little different. We've got the comedian Wyatt snack on the show he visited our studios because he's now promoting season two of his TV show called problem areas, which is on HBO in which looks at social issues in the US now on the show why it spends a lot of time interviewing people, but in his monologues. He also drops a fair amount of economic data points and other ideas from the social sciences. But of course, why it is also a comedian. So his monologues are a mix of social commentary and jokes delivered in his own cultivating style the truth is that teachers salaries have been stagnant. For decades. The average teachers savings is just three confiscated game boys, and a pack of stickers someone left behind over some break. So on the indicator today, why tonight tells us what he's learned about the economy since he started hosting problem areas his approach hosting the show, and he shares his best interviewing Tim. This message comes from NPR sponsor gained bridge. Gained bridge offers a new Witty's designed for the digital age. Simplified products with guaranteed returns that you can buy direct. Learn more at gain bridge dot life slash NPR. Game bridge is not available in all states. Support also comes from fund rise the future of real estate investing access private market real estate projects from high rises in DC to multifamily apartments in LA. Get your first three months of fees waived at fund arise dot com slash indicator. Let me start with this. You've done a few episodes that look at economics in the economy. You bring in a lot of economic data. As my first question is is there something about how the economy works? That is surprised you that you've learned in the process of making problem areas. I guess if there's anything that's surprising. It's both an over reliance and in under reliance on economic models to look at whether we should fund certain policies or do certain things when you look at sometimes the way that money gets spent I think there's some moments where the say, okay, well, historically, if we put money into schools and into something like education, we see net benefits as far as crime reduction or job growth things. Like that. Where it's like, okay. It seems pretty clear that these numbers play out time and time again, but will ignore those numbers. And so there's an under reliance in that way. But then it feels like there are these over Reliance's on economics as far as where this capitalist society that are focuses on profit profit profit profit at all costs and we use. Those cold numbers to kind of take humanity out of things. And so I think if anything surprises me, it's just how kind of fast and loose. We play with our allegiance to these numbers. Sometimes DC that as one of the goals of your show to marry those two things that you've got these numbers, you're not afraid to use numbers in your show, especially at the top of the show, and then the more human side, which is when you sort of get out into the field yourself with your team. And you interview people, you know, so often the national conversation around an issue is one that gets distilled into these talking points, and when you actually go to a city, and you see the human cost of it. All it changes it at least to me because it's very easy to say. Well, okay, you know, New York City spends X amount of dollars per student. Why Stuyvesant high school liar their students all doing well, academically and the school in the Bronx? They're students are Strug. Alling are we spending the same amount of money per student? And once you dig into the weeds, it's like, well, no, this it's actually different, you know, at this school in a lower income neighbourhood, we may be spending more money on school safety agents than on actual like stem training and things like that. And so what is that doing for that education when money's going to that? But you don't have the resources to sort of fill out the library or do any of those other things as a place like Stuyvesant just should know for our listeners is also a public school. Yes, why the kind of inequality between public schools here is kind of. I mean, we're not talking about like, well, one is just all like, you know, private school. So you would expect all the rich parents spend their money on it. And might be better school. We're talking to public schools. Yes. With dramatically different outcomes for their students. Right. And when you start getting into a definition of what is. Adequate if these two things are in the same public school system, what then becomes adequate when you can have an elite high school exist, and you can have one that has a crumbling infrastructure. A high turnover of teachers most of the students on free and reduced lunch lack of stem, training and other resources. How're those two things falling under the definition of adequate? It's hard to have those conversations in the those things when you're just sort of outside looking from that thirty thousand foot view that I get by being part of the national conversation. Qesku question about how you approach the craft of putting the show together as we've just discussed with a lot of Weiner. As we've just discussed. There's a lot of very heavy topics that you cover season one policing season, two -cation a lot of struggle and sadness in some of the episodes. But you obviously come from a background in comedy. And I'm wondering how you strike the balance between those two things between the fact that you're covering these sort of heavy social issues, but you also have responsibility to make it comedic to make it funny to be entertaining. I mean, I think in the sort of core of my understanding of comedy, that's always been the sort of delicate dance that happens. I think whether you're looking at what a show like mine is doing or even looking at the daily show or last week tonight or Patriot Act Jordan Clapper's gotta show. Kamau bell has a show. Samantha b has full frontal. I don't know that what we're doing. Is that new I think if you go back, and you look. That political cartoons of newspapers from the eighteen hundreds. There was taking comedy and using it as a way to get people to engage in big political conversations oftentimes about some of the same things that we're talking about. Now, I think you look at that. I think you look at stand up comedians. Whether it's Lenny, Bruce, or Richard Pryor, or digress or Joan rivers. There's always an element of it. That is taking something that we're talking about whether it's women's issues, whether it's raise whether it's politics and you're bringing those to a stage trying to wrap them in humor. But at the same time trying to get people to engage with them. And so that's always that balance that I think has been there in comedy. I gotta say the this style of your show seems a little different from some of the shows you just mentioned and even from some of the from the styles from this earlier comedians. Less acerbic, and in particular in your interview style, I guess it's because you're interviewing like normal people rather than somebody who would be the natural like target of a joke. Your jokes tend to be either self deprecating or not about the person certainly that you're interviewing and there is even especially in the teachers episode the kind of element of sweetness to it. Right. There's a lot of listening, and I'm wondering if that was a conscious decision on your part in terms of the style of the show to make it a little bit different from some of those other ones in my mind. I feel like I'm making a late night show. I've just chosen a different way to do it. I honestly think about it a little bit like like Conan when I got to go on Conan. I think one of the things I appreciated most was Conan is such a great interviewer. I think there was something in his approach as well as IRA glasses approach that I I was kind of like, oh, they treat their. Guests as people who are someone that they're proud to talk to and someone that they're excited to talk to. And so to me it was like, okay, I'm not talking to someone who's promoting and avenge his movie, but I'm talking to someone who is proud of the work. They're doing and. Okay. Yeah. This isn't I'm not talking to Thor. But could I talk to this person with the same kind of approach that I would if I was talking for treat everybody like Thor seems like a pretty good pretty good fruits interviewing. Yeah. And so that's that's the that's the way I've gone treat. Everybody like Thor. Yeah. Give me sell me. Your avengers endgame of in a form. Yeah. Why it's an act of being on the indicator around. No, thanks can tell you. We were super proud to have you on the indicator, and like, Chris Hemsworth, or buddy or longtime listener be a first time tweet her. This episode of the indicator was produced by Dr Raphael on and edited by paddy Hirsch, our intern will Ruben and the indicator is production of NPR.
The Gender Gap Series: Tampons - That Bloody Sales Tax
"You're listening to n._p._r. Everybody we are back with another episode in our series the gender gap this week. We're taking another look at some of our favorite stories about women and the economy in the last three episodes. We have explored how much women earn work and invest relative to men but today we take a look at how much women pay for stuff relative demand so stacey yeah in spanish. We have this phrase. It's maybe on under is it will give you a guy mess in english is i got a bissett from and that is the one that comes every month which is really creepy wait. Is this like a visit from your aunt. Flo excepts in spanish aunt. Flo is a man yes he yeah what would you do. Would i is or why we did that. Somebody is pissed at andrea exactly exactly but anyway so <hes> flow in an fellow was looking visit for mant flow your period period there is no reason for us has to be squeamish right. I mean literally more than half the planet deals with it for like forty years of their lives and of course you know to deal with our very natural friend andreas. We need equipment right. You gotta have tampons and pads and menstrual cups or other things to get through. The day and tampons are lot. It's like ten bucks twelve bucks for a box of twenty and here's the thing these products are subject to sales tax which might not sound like a big thing. You know we pay for other things as well but many products similar to tampons or health related items have a medical tax exception things like dandruff shampoo <music> aspirin foot powder and condoms and so you know understandably a lot of people say that's not fair if you're going to give condoms and aspirin and prouder tax exemption tampon should have tax exemption to this is the indicator from planet money. I'm stacey vanek. Smith and i'm going to do today on the show ending the tampons tampons acce. How much does it cost women and what is the cost to end. This message comes from n._p._r. Sponsor fundraise innovating the way people can invest in real estate. They'd fundraise 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 serie fees waived support also comes from google domains google domains helps make your business idea a reality with the tools and partners for building your your website like a pro and premium security features included for free make it happen at domains dot google slash n._p._r. Sales tax wchs most people in this country pay sales tax on most of the things they buy. It's a big source of state revenue has been ever since the great depression and each state of course chooses what it sales tax tax will be and some of the products that will have sales tax. Some items like food or water that are seen as necessary to survival are not subject to this tax prescription. Listen and nonprescription drugs are also exempt medicines like aspirin dayquil or viagra also medical equipment and supplies which can be things like chapstick chapstick or goss- chapstick is tax exempt yep. That's interesting <hes> but you know constanza what does not fall into the medical supply category in many the states most states tampons tampons also pads and cups in all of the menstrual hygiene products and this is where the term tampon tax exp began. This is a matter of personal health and also puck health really i and yet because it's a women's health issue. It is instantly politicized. That's always salesman back. In two thousand sixteen. She filed a lawsuit. In new york to eliminate the sales tax on metro products zoe salesman and her team argued these products aren't necessary for women and they should be tax exempt then the r- medical supplies which are defined as supplies using the cure mitigation treatment or prevention of illnesses says or disease again that's really broad and one example the department of tax gave was things like bandages gauze and dressings and so those right alright adams that are used to staunch the flow of blood from the human body and tampons and pads as well as cops and panty liners those are used to staunch the flow of blood from the uterus so again clearly these items have to fit within that definition zoe made her case and the new york legislature took notice and in fact passed a bill back in two two thousand sixteen to exempt feminine products in new york from sales tax so that extra cost here in new york and stands up. We do not pay it anymore. Yeah but many other women in other states do pay it and study published this year by the american college of obstetricians and gynecologists found that two out of three low income women in the u._s. couldn't afford metro products at least once a year and nearly half of them struggle to buy both food and metro hygiene products over over the last year where you really are budgeting down to the dollar every month. That makes a big difference. Those women also tend to buy these products in smaller sizes and smaller packages and and in places like convenience stores where the prices are usually higher so all of that compounds to really make a really direct impact on their budget in fact. There's the second omic research that the tax break on tampons really benefits low income people. That's based on consumer data. After new jersey's tampon tax was repealed back in two thousand in five research showed that by eliminating the tax in made products cheaper and more accessible to lower income women but some people say the tampon on tax needs to stay but in general. I think that the sales tax is really one of the best ways for a state to raise revenue. This is nicole kaeding the vice president of federal projects at the tax foundation a think tank that studies tax policy she says picking and choosing products to be taxed or not tax is problematic for a lot of reasons first of all it can mean less money any for states they won't have enough money to fund public policies or the programs they want to fund and it can also mean that states have to increase other types of taxes to get that funding back so if the sales sales tax applies to fewer products the sales tax on the products that are left goes up nicole things an easy way to fix this issue is having a sales tax on everything no exemptions which by the way that can lower the overall tax rate for every product including tampons so when you start moving into these this world of exemptions sections you start adding complexity because you have to define what is and is not a qualified good under the exemption you know in my view a state would be much better off to have a broad sales tax that applies to all final consumption you avoid these sorts of picking between different product classes <hes> it would make for a much more efficient sales tax back in two thousand sixteen california governor. Jerry brown vetoed a bill the plan to eliminate the state's tampon tax. He argued that by not taxing metro. Products california lose up to twenty million dollars in annual taxes. X.'s and the governor has a point here new york where we eliminated the tax on minstrel products. We're losing about fourteen million dollars year in las tax revenue of course this isn't just an economic issue. It's a political issue to last year for example nevada voted to make minstrel products tax exempt nicole also expects more states to push for legislation impasse bills that would repeal the tampons access here like michigan georgia and ohio and of course california is looking at the issue yet again. Andrea is coming to town. We have two big developments. California and rhode island passed a budget package that exempts tampons john's administration products from state sales tax. It's worth pointing out that these tax exemptions could be changed in future budgets but for now the women in california and rhode island will get a little tax break on their tampons and i have a fun little update for us. Well okay member. How could i forget race well. It's definitely the weirdest euphemism out there for your menstruation. Hey there's actually over five thousand different ones all over the world wow so if if you have a really weird or funny one oh yes send them along then them along <hes> instagram us or send us an email. We would love to read them. Today's update was produced by rachel cohn. Our original episode was produced by me and our editor is paddy hirsch. Our current internist emily lang and the indicator is a production of n._p._r.
The First Milestone In The History of Economics
"N P R mm-hmm do you ever wonder we're economics. Came from yes or is that just us might just be also probably yes so the first ever work of economics that we know of was an ancient Greek poem from the Eighth Century BC it was called works and days by the poet. Hess Yod and and it wasn't anything like the more famous ancient Greek poems from that time like the Iliad or Odyssey poems about war and conquest Trojan horses and revenge. And seafaring thing. Yeah Hennessy. It's works in days was a different kind of poem. Here's how Stephen Matama. Historian of economic thought. Duke University describes it. It's not an epic tale. The you know there's no adventure there's no you know lovely young maiden waiting at the other end of the journey. It's just has. She had lecturing his brother. Tell him to quit being such a jerk nagging. Lovely young maiden isn't waiting at the end of my journey. It's the worst. So here's what was going on. Has Kids brother. Percy's was like the original slacker. The two brothers had inherited this biggest state from their parents but proceeds had blown his half of the wealth and was coming after US S. yet half bribing local Greek officials to give him more of it. Just had responded by doing what any of us would do lawyered up. No he invoked the mears's ears use and then wrote a long poem about the virtues of hard work as my second shaming Percy's and those corrupt local officials. That's right a Greek Greek poet telling his brother to stop being so lazy. freeloader is the first ever milestone in the history of economics the very first place where the kind of analytical reasoning reasoning used in economics is found. Stephen says what he's trying to do in part at least is explained to his brother. Y work work rather than a life of idleness is the appropriate way to live in the world. That we've been left in Stephen Just wrote a new book called the economics. gimmicks book from xenophon Decrypt Currency Two hundred fifty milestones in the history of economics. And the first of those milestones is has the odds works and days and the ideas that has got presents in his poem representing obviously primitive form of economics. But those ideas are still recognizable as concepts that are fundamental to economics today this message from NPR sponsored show Bonnie out may taste taste just like milk. It's creamy frothy and great with coffee and cookies but without the dairy because it's not milk it's almost milk new Shabani Viney owed support also comes from you know the capital one assistant that catches things that might look wrong with your credit card. Send you an alert and helps you fix them another way. They're are watching out for your money when you're not what's in your wallet. SEE CAPITAL ONE DOT COM for details ladies and gentlemen a passage. From God's poem works in days formerly the tribes of men on earth lived remote from ills without harsh toils and the grievous sicknesses insist that are deadly to me. Yeah one of the stories that Halcion tells in works and days is about why hard work is needed. If men want to build up their wealth yes he was referring just to men and not a super progressive eight century so give him a pass but there was a former time according to this mythology when food and other things were abundant and the earth provided all that men could want but then prometheus a titan tricked Zeus King of the Gods and stole the use of fire from the gods so that men could use it. Zeus rights had responded angrily by sending to Earth Earth a terrible affliction to set against the fire. Shall you've been affliction which will all delight as they embrace their own own. Misfortune and his fortune was a woman. That's how I said he wasn't a super woke writer specifically a woman named Pandora who's jar or box unleashed terrible things upon all mortals. She opened it. One of those hardships. Was that for people to get what they wanted. They would have to work for it. Food for instance. Seattle rights was now concealed by the Gods so people would have to toil in the fields. If they wanted something to eat in other words the gods had introduced scarcity to the world and scarcity is the first team we're going to discuss from the poem. Stephen Magma EH author of Economics Book says that the Economics Definition of scarcity though is different from the way that normal people use it when they mean a shortage of something that might run out when the economist talks about scarcity. What he's really talking about is is available? Resources are limited relative to humid watts. Scarcity is economics is one. Oh one the idea that the world has finite resources so we have to make choices about how to use those resources like land is a resource so if you use land to ride forces or I don't know throw keg parties whatever your also choosing not to use as farmland and crops won't grow in here has yet is using the concept of scarcity versity unleashed by Pandora's jar to lecture. His brother Percy's on why hardwork is a moral virtue after Percy's had blown his half of the family money and perseus squandered. A whole bunch of that now has hit saying you gotta work. Not only that you should have been working before. We don't look kindly as a society. Heidi on people who just want to consume. You need to earn your way. He's arguing and if you don't you're not going to be well. Viewed by the people around you which brings us to the second economic theme and has the odds poem shame namely the role of shame in a market economy. Stevens says this kind of societal disapproval can help economy work better. If it creates social norms of fairness and trust and Pepsi writes about the importance of property rights the idea that if if you earn something yourself you get to keep it for yourself or you know you can also voluntarily trade it for something else. Without property rights. People might not work as hard because then the stuff they make could be taken from them. This was an early iteration of the idea that the law and also a sense of shame can reinforce good social norms and respect respect for property rights and this is good for a whole economy. That's true of countries to this very day. Stevens says Percy's has his brother is trying to cheat Hess. You've you've his own share of the inheritance right. He's not respecting Hess. She's property rights and so there's that sort of personal lesson to tell with the much broader more general implications which brings us to the third big economic theme in works in days the role of envy in the economy. Has He writes that when you look at the wealth of others and see that they have worked hard for that wealth then it might lead you to work hard to attain that same wealth has he had refers to this form of envy as strife and says it is good for mortals. But Stephen says economists know that strife by different name when he uses the word strife the economist reads the word competition. And there's good competition and there's destructive competition and what he's emphasizing here of course is is the good competition right so for Halcion the Vatian to work hard or at least part of it is. It's a keeping up with the Joneses effect right that I want half what that person has and so I'm going to work hard so I can be like her for keeping up with like. I Dunno Demosthenes Affect Jones of back. Then uh-huh Percy's was envious of Hessy's wealth and Hessy was trying to convince Percy's of a better alternative a more ethical alternative to satisfying satisfying his envy then to seize se. It's half of the wealth work hard build the wealth yourself and the Gods will bless you and this is an underlying theme in works and days as the peaceful competition is better than destructive seizing or conquest. This can apply to countries as much as it applies to feuding brothers from ancient. Greece has said writes quote vote. Violence is bad for a lowly man. Not even a man of worth can carry it easily. And it's an economically sound lesson but Stephen ads that economic growth. It can take a long time and a lot of work whereas theft and conquest or always tempting. 'cause they're easier you just take somebody take it and so there's something kind of sad about the fact that he had wrote all this back in the eighth century BC his conquest imperialism. Seizing unearned wealth. These were still the norm until at least a couple of hundred years ago and they are still with us now in some places. Oh yeah it took a very long time to learn that lesson And One can question if it's ever really really been fully learned or if it's just circumstances have you know sort of tamp down. The urge for conquest or modern weaponry has done so halcion. Sei economic analysis with all its references to the muses and the Gods was you know it was primitive because he was manifest time but in understanding the importance of stability ability and peace for economic prosperity. A lot of ways I think he was ahead of our time. This episode of the indicator was produced by Darius Rafi on our editor is Paddy Hirsch. Our intern in fact checker Brittany Cronin and the indicator is a production of N._p._R..
A Conversation With Janet Yellen
"N.. P. R.. Everyone Cardiff and Stacey here this is the indicator from planet money to the on the show we are speaking with Janet, Yellen who was the chair of the Federal Reserve Kfi the Fed from two thousand, fourteen to two, thousand, eighteen she was the first woman to ever hold the job and you know both Republicans and Democrats have said in many forum that they thought she was great at it in the Economics World Janet Yellen is you know about as big as it gets she's kind of a big deal she's kind of been. and today along with economist Jared Bernstein another old friend of the show. She has an op-ed in the New York Times arguing that with the economy really needs now is a boost from fiscal policy. This is money that goes directly to people and businesses from the US government like back in March when the government passed a bill that among other things expanded unemployment benefits by six hundred dollars a week but those benefits and other provisions of that bill have now expired and after the break Janet Yellen explains why if the government does not pass another bill to keep supporting the US economy, she thinks economic growth might soon come to a stop. This message comes from. NPR sponsor Microsoft. The world has changed and Microsoft teams is there to help us stay connected teams is the safe and secure way to chat meet call and collaborate to learn more visit Microsoft Dot com slash teams support also comes from fundraisers. Fund rise makes it easy for anyone to invest in high quality real estate by building your portfolio with their more than one billion dollars in assets get started at rise dot com slash indicator to have your first ninety days of advisory fees waived. Janet Yellen former chair of the Fed. Thanks so much for joining US my pleasure. Thanks for inviting me. So in this new op ed you write that if there is no new fiscal aid or stimulus bill than the US economy will and I'm quoting here likely downshift from its current slow rebound in growth to no growth at all unquote. That's a frightening prospect. Why is that? Well, what I'm very concerned about now is that unemployment insurance payments, the extra six hundred dollars that have been going out that came to an end at the end of July, and that was supporting a great deal of spending that was creating jobs in the economy. Those x-cris six, hundred dollars a week payments were supporting something like fifteen or sixteen billion dollars a week to unemployed workers and the ended now, and they're spending with supporting jobs throughout the economy. So this loss fiscal support is what I'm tremendously afraid is going to lead to retrenchment in the economy or a complete petering out of growth. And do you think that any new bill should effectively? That earlier bill from the end of March that included those expanded unemployment benefits included checks to a number of individuals or do you think that there should be some new provisions in any new bill? Well, I definitely think that the additional unemployment insurance benefits are tremendously important on top of that food assistance through the snap program food stamps is extremely important as well. So I'm very focused on trying to get more money into the pockets of the people who need it the most and will spend the most creating jobs in the economy. I'd also mention federal aid to state and local governments State and local governments face tremendous budget deficits going forward because their tax revenues have been decimated by the pandemic and these are entities that have to balance their budgets and when they faced that kind of shortfall in revenues with they're doing and planning more of is spending cuts and layoffs, and that's going to add to the economy's woes and create more employment throughout the economy. So I would very much like to see aid to state and local governments part of a new bill that Congress agrees to. and. You know when when the cares act was passed back in late March by historical standards it was quite a large bill in the trillions of dollars and yet here we are at the end of the summer with the potential of the recovery slowing down already. So what's a good way to think about how much is the right amount of new fiscal stimulus in aid for the economy so that we can judge whether it's too little just the right amount or or even too much. We need enough spending in the economy to support jobs so that there's enough demand for the goods and services that the economy is capable. Of producing I, don't have a number to give you. But estimates that I've seen. Suggest that something on the order of it trillion dollars would be too little to keep the economy just going where it is or growing in recovering slowly. Let me shift gears to ask a question about the Fed now. Yes. Sure. Yeah. There have been some critiques about a couple of the Fed's emergency lending facilities to in particular one is the facility that's meant to get more lending to small and mid sized businesses and the other facility. You mentioned a second ago state and local governments. There's another emergency lending facility that's. Also meant to get more funding for state and local governments, those facilities haven't been used a lot and it seems to be because the logistics of setting them up are tricky. That's done in collaboration between the Fed and treasury, and because the terms might be too owners too stringent. How big of a problem do you think that is and how should it be fixed? So, it is absolutely true that this requires agreement between the Fed and the Treasury these are joint programs You should not assume that AH program isn't working because it's not paying out a lot of money or being used heavily a lot of the programs. The Fed setup are essentially backstops that assure private lenders that markets won't be subject to dysfunction and they'll continue to work and that's provided them the assurance that they need to land in. So we've seen for example that many borrowing rates in mid March began to spike the credit was drying up from the private sector to borrowers. But when the Fed put these programs into place they weren't much. Generally, been true for most of the programs private. Began to pick up so the FID programs will working even though they didn't do a lot of business. You know one thing chair Powell often says that we have to keep in mind is the Fed can lend, but not spend and some some entities. This is true of some state and local governments also some businesses this pandemic is causing such losses to them that they really need subsidies to. Survive and it's important to have loans available but loans have to be repaid in the future, and in some cases what we need or grants I that the bill that's eventually passed by Congress, will also have more support for small businesses that are in a position of, yes. They need access to loans, but they very much need subsidies also in order to in order to be able to survive this. Yeah and then finally. How have you and your family been writing out the time of the pandemic as everybody okays it'd be safe. We'll thanks for asking. We are being extremely careful where it home and I consider US among the lucky people who were able to do our jobs from our homes. We're all working very hard, staying safe and being very careful not to expose ourselves and have you found ways to have fun or is economic analysis is so much fun that that's how you're We enjoy one another's company and You know Kiffin we're eating at home all the time cooking is nice and relaxing hoppy, and we're trying to treat ourselves to some good things to eat. That's great. Jenny. Thank you so much for joining us today been. Thank you for having me. This episode of the indicator was produced by Nick Fountain fact checked by Brittany Cronin. Our editor is Paddy Hirsch and the indicator is a production. Of NPR, with civil unrest, the pandemic and the economic crisis you want to know what's happening right when you wake up and that's why there is up I the news you need in about ten minutes from NPR news listen every day.
What Medicare For All Might Mean For Jobs
"This is the indicator from planet money on n. p. R. <music> medicare for all is everywhere. The idea has gone from the fringes of the healthcare conversation to being centerpiece of it in a few short years turn on on any of the democratic presidential debates and you'll hear about it and medicare for all would be a massive overhaul of the healthcare system one that it supporters like because it would give health insurance ernst to everyone and pretty generous insurance at that and that's a big deal in a country where nearly twenty nine million people didn't have health insurance last year but with a massive overhaul the holcombe trade-offs and here's one big one that interested us as some proponents of medicare for all will acknowledge it could cost a lot of jobs during the transition in fact what inspired this whole episode was this opinion piece by elizabeth rosenthal that i saw in the times earlier this year it was called medicare for all could kill two million jobs and that's it's okay that kind of blew my mind. I just wanted to learn more and of course my policy would put people out of work is not the most effective campaign platform form true true especially in the country that slowly clawed its way out of a recession and is scared of another one. I'm darius rafi on and i'm danielle. Nail kurds laban filling in from the n._p._r. Politics podcast today on the indicator we talk about medicare for all and one aspect of it in particular the potential for it to eliminate lots. It's in lots of jobs and we talk about what that says about our healthcare system and just how hard healthcare reform is support for this podcast. The following message come from google from connecticut to california from mississippi minnesota. Millions of american businesses are using google tools to grow online learn more at google dot com slash grow support also comes from wicks dot com with wicks you can build your own robust website and web applications set up up your own databases with service hassle free coating go to wicks dot com. That's w. i. X. dot com slash indicator to get ten percent off. Let's start with a quick refresher. Medicare for all is what democratic presidential candidate bernie sanders calls his single payer health proposal. He is named after the current popular government run health health insurance plan for older americans medicare and while lots of people have co-opted his branding his single payer plan is what we're going to be referring to today when we talk about medicare for all just to be clear and when we say single payer payer is the government so taxpayers <hes> everyone would be covered by government issued health insurance and at least in sanders vision private insurance would be basically obliterated which is a big change. I mean there are lots of private. Insurers think aetna cigna blue cross ross whoever you might have your health insurance through and there are lots of people who work for those companies getting rid of those insurers means you have a bunch of workers who would have to find something else to to do as well as probably a bunch of people in hospital billing offices who would have to find something to do and just how many jobs would be lost while we talked to robert pollen he is a distinguished is professor of economics. At the university of massachusetts amherst. He and some colleagues got together in analyze the potential economic effects of medicare for all here's what they found so if you add up the losses in the health insurance industry and among call the administrative staff at providers. We think we're looking. Ah about one point eight million jobs becoming redundant one point eight million now doesn't not a great political bumper sticker right and i wanna be clear upfront here. Robert likes medicare for all he really does. He consulted with the sanders campaign. This election cycle on it and and robert found that one point eight million jobs could be lost if medicare for all his instituted now. Here's why one of the biggest drivers of high healthcare costs in the u._s. is administrative the street of cost. Things like insurance claims billing payments all that studies have shown that we spend in the u._s. Way way more on these things than other advanced economies. Here's one on staggering statistic by one thousand nine estimate for every ten doctors there at that time nearly seven fulltime workers in billing and insurance so so workers who weren't directly improving people's health the savings that robert talks about would largely be driven by getting rid of that bureaucracy to put this in perspective one one point eight million employees. That's more workers than american payrolls have added over the last nine months so three quarters of a year of all those jobs days gone and this is is where we get at one of the big points apollon study that medicare for all would in his estimation be a good thing and that's because in his estimation it would save money and here's what robert means when he talks about savings. He estimated that everyone in the u._s. Altogether spends a little more than three trillion dollars on healthcare every year by his teams math. Even even with everyone insured and using the healthcare system it would still be ten percent cheaper than that three trillion dollars and it would also be a big shift in how that spending ending takes place so take all the spending right now and make it just the government spending the money well the government via tax payers important point and if you did that there their would-be savings but and this is the important point here there are trade-offs. The biggest single source of savings we have to acknowledge is <hes> layoffs of people whose jobs become redundant so to robert one point eight million lost jobs are not exactly good but they are evidence that the plan will have worked and so knowing knowing that those job losses could happen. He told me that he wants to make sure that a single payer proposal plans for those potential losses. I mean the the principal reason why focused i on this was precisely to make sure that as part of the discussion around medicare for all we included just transition process assist for the people whose jobs become redundant in what robert means when he says adjust transition process that would include job retraining a guaranteed pension and and one years wages for displaced workers and we should add that when we reached out to the sanders campaign for comment they said that medicare for all includes five years of funding to provide assistance to displaced workers workers including things like wage support and retraining and here's where we need to stop for a second because first off let's again stress robert and his colleagues estimate of medicare for all his just one one estimate of the potential savings or costs of this plan. We're talking about it to get it. Just how complicated all of this is which is to say that there are also other estimates of savings studies have found a range of possible effects for medicare for all that maybe it could save americans a bunch of money on healthcare or that it could cost americans. Trillions is more. It is very possible that could happen. It's a really important distinction to make so you know plus or minus a few trillion here or there who's counting right so talk about what happens. If medicare for all doesn't save money which might mean it wouldn't cost a lot of jobs. We called katherine baker dean of the harris school of public policy at the university of chicago. Oh and she's less optimistic about medicare for all than robert was. I haven't seen a medicare for all proposal that seems to promise a lot of savings savings or a lot more efficiency in the healthcare system but she does have concerns about medicare for all for example. She doesn't think it would address wasteful health spending or to put put more plainly that it might not draw a line between healthcare services that are cost effective that improve people's health and services that are really expensive but don't for example so help people live longer and of course there's still the question about efficiency you know it might mean a bloated system. That's as inefficient as it is now or it might mean a kind of shifting no more private insurance workers but a lot more healthcare workers and i want to be clear that saving money is not the goal anymore than keeping the number of jobs jobs in healthcare is the goal the goal is to get as many people as possible. My my goal would be to have as many people as possible covered by health insurance plan. That's delivering healthcare in an efficient way. Obviously the loss of lots of jobs in health care would be painful for a lot of workers. That's clearly not the great thing at all but for baker. It's also not great to have a healthcare system. That's expensive and not helping us get healthier if we could employ a lot fewer people people in the healthcare sector without harming health at all that would be a good thing those people could then go work in other sectors and generate other things that improve people's quality polity of life or standard of living to me dr is this isn't just about whether medicare for all is good or not all of this to me is a perfect window into the impossibly difficult job bob of trying to improve the healthcare system and what improving it even means whether it's saving money what it means for jobs whether people are getting healthier not an all of that is such a balancing act bullets zoom out here and be realistic for a second for medicare for all to pass. You'd need democrats to keep the house win the white house win really big in the senate and also for enough of those democratic lawmakers to actually come together and agree on medicare for all plan listen. I refused to make political predictions so i'll say that that's a lot of pieces to fall into place meaning. We might have a lot more time to debate all this. This episode of the indicator was edited by paddy hirsch produced by emily lang and fact check by rachel cohn. I also want to thank larry levitt at the kaiser family foundation who also helped us out in this episode. The indicator is a production of n._p._r. Uh-huh.
The Cost Of Student Debt
"This is the indicator from planet money. I'm Stacey Vanek Smith. Oh school days the books, the binders the new pens the crippling debt taken on almost without a thought student at is. In fact, one of the biggest economic issues for our country, and for a lot of people personally, this is according to Jill slash jer, certified financial planner CBS business analyst and author of the new book, the dumb, things smart people do with their money. There's one and a half trillion dollars of outstanding student loan debt right now that is like I can't even probably just ADP. Yeah. And so by the way, trillion here's a little thing to think about whenever you hear the number trillion just think twelve t twelve twelve zero after that one trillion trillion one and twelve zero that's a lot of money. That's a lot of money. A lot of frigging money today on the show student debt when you should take it on how much you should take on. And what to do if you have not saved enough to send your kid to the school? They. You want to attend? Support for this podcast and the following message. Come from Amazon web services, helping millions of builders from startups to enterprises governments transform their industries with secure AI, ready cloud services. Learn more at AWS how dot com slash podcast. Support. Also comes from NPR sponsor Lincoln jobs when it's time to hire for your small business. You want to find the right person for the job Lincoln jobs can help learn more at Lincoln dot com slash indicator. Terms and conditions apply. Student at is the thing that has come up even to extremes that people say like, you shouldn't go to college at all. Or if you go you should major in like one of three things or something in order to be able to make enough money to justify having spent four years in this way. I feel like student at is probably student at an home debt or probably the two questions that you must steal. Absolutely student loan debt is this. Very pernicious problem that I see I'm not going to sell the education crisis in the United States. But here's the problem that I see on the ground level. And that is parents are now recognizing the kids even though if they don't really need a college degree because a lot of the jobs are getting probably don't require a college degree in joint on my competent knowledge every day. And as do I with my international relations and English. So that's not the case in the employment landscape because employers do want a college degree, you can see jobs that used to be filled by high school graduates and other like, well, I don't care I might as well get someone with a college degree if I could I should. So now college degree is very important. And we know there's a ton of research that shows that people who have college degrees make more money over their careers than those who don't. So there's that number that kind of proves it. And so parents say I must make sure my kids are educated. In the end. It is true. The kids are really borrowing the lion share of the money. However, the fastest growing segment of student loan borrowers are people over the age of sixty. Okay. Now look at the face. Let me just do this this theater of the mind listeners. Stacey took a step back took a breath raised her eyebrows. And said Digital's VS may on that. Did she make that up? Well, I know you would it make something up. So I'm trying to think is this like a continuing education thing or people going to call an airy school. I have the answer. It is a little bit of that. Okay. But mostly that parents and grandparents are co-signing their loans for their kids because borrowing rules changed and you have to you can only get so much in your name as a young person. And then you have to have someone who cosigns or gets a plus low. Now, this makes a lot of sense. Yeah. Because what we're seeing is that parents are going into debt to put their kids through school. So we have sort of these weird dual problems one is that kids themselves requiring that debt, and we have a millennial generation that Nayef. You'll like I can't go find a better job because I like this one is fine. It's okay. And I can pay my student loans. And so we are seeing this generation that's very uncertain financially. They're stuck in jobs that are okay in some respects. But maybe they could they might have chosen different paths. If they weren't saddled with that debt, and the whole point I feel like often of going of getting an education is to feel like you are creating opportunity and freedom for yourself. And it's also people are thinking if I get the degree it'll equate to more money, and it may not be the case, you really have to be careful from the parents point of view, not only is it that your burden going into your sixties. But I hear from a lot of parents who say, well, I dipped into my 4._0._1._K to pay for my kids education. Right borrowed from my retirement account through my municipality to do this. I pulled back because it was helping my kid out with education suite, isn't it? And now, I'm so sad. Literally, get short of your actually have your hand on your idea. I because I I hear about these so often. So when my friend calls me up and says. My kid is going to XYZ college up in Vermont. And I said, wait a minute. That's a private school. How are you going to afford that? And she's like, but she really wants to go out of state, right? That's not the answer. The answer is your kidneys to get educated. You have only so much money to put towards that education. So the state school would have been fine, and you could have actually shouldered that burden. So if you go from that premise, then how do we solve this problem? Okay. We say we agree. Most people should go get a college degree. But most people shouldn't go into debt up to their eyeballs to attain the degree. What do we have to do as a family? We gotta talk. The talk is not the day after the college acceptances come in you then say to your kid. Oh, Stacey Honey. Sorry. You can't go Ryan afford. And you can't do that. I'm short of breath. That's a terrible thing to have to save your kids terrible. But you know, what is reasonable is that when? The kids in ninth grade to say, we totally love the idea you're going to go to college is his fantastic. And here's here's what we think we believe that we can support this as a contribution to college. That's it. Now, if you're really smart as a family, we are going to approach this and say, if you can get into a really awesome awesome. Awesome school. Hopefully that school has a big endowment and you'll get money. But if you can't just so, you know, here is what we can do to help you this is it does that feel like putting too much on a really young person. Yes, unfortunately, I'm sorry to say it's like saying, Honey, you gotta put a condom on when you have sex feels like a lot to say somebody, and you know, what I mean still recovering from that. Right. There. How are we talking about a conduct? What happened because we have to have harder conversations, and I point out in the book, and especially in this chapter a lot of the people that I talked to people who've them sells went to college, and whose parents could afford it, and they feel so bad about themselves that they cannot extend that same opportunity to their kids that weighs on them. Like crazy. We're kind of back to a period where the families taking care of everybody. Right. We're all in his scatter. If you screw up your own retirement. It's gonna fall on your kids. Anyway. Oh, that's interesting. And so would I think is the responsible way to discuss it is to really be clear. We hope we can help you out later. This is what we can afford. Now that I'm convinced that a college degree is worth it. If that means two years of community college and transferring to state school, that's fine. But if you're telling me that you're borrowing tens of thousands of dollars. And you're not going to get the privilege of saying I went to a pre MIR named school you may be shooting yourself in the foot. And so if you are a great Kotor, consumer computer scientist or you really you're going into a science field. And you think that that's going to give you a ninety thousand dollars a year starting salary, then sure you can get eight thousand dollars of student loan debt. But if you're an English equivalent to the first year of salaries, so go an art history. Major and I hope that could become DOE sent and I would making twenty eight thousand dollars a year best best case scenario than limit your borrowing. And if you are really considering a graduate degree, I cannot emphasize enough I've talked to a lot of people in graduate schools who say people are not being thoughtful about whether or not that degree is necessary. Just be careful. That's why it's nine care. Fata. It's not just always going to be a good now. Again, this is just be thoughtful. And look at where you stand. What am I going to gain? This episode of the indicator was produced by Constanza Gardo. Our editor is paddy Hirsch, our fact checker intern is willa Ruben and the indicator is a production of NPR. There's a subculture of people fascinated by prime members, you know, seven eleven thirteen seventeen. Nineteen wrongs go on. There is no fun. Biggest problem number and the hunt for the latest monster prime number can take years you end up with a twenty four million digit long numbers ideas and the power and beauty of math on the Ted radio hour from NPR.
China Trade Deal: A Truce Awakens?
"N. P. R. and everyone it's Cardiff in Stacey. This is indicated from planet money and it is only Thursday or already Thursday depending on how you we I guess. Yeah Yeah I mean my only Thursday because it has been a pretty big economic week it really has namely trailer truce trade war. True say at ten times it's fast. It's happening baby later. Treat orders meaning the US and China have both signed a trade agreement or at least what is being called phase one of a trade agreement. Many of the details of the agreement are not yet public but US Trade Representative Robert Lighthizer announced. The deal had quote real teeth and it included included new agreements about intellectual property where China will agree to respect and honor the copyrights trademarks and patents of US companies. Some of the tariffs that have been put in place as against Chinese goods will be lowered and China will buy more. US stuff a lot more. US stuff actually more than two hundred billion dollars worth of soybeans. We airplanes natural gas and pork over the next two years. If it follows through today on the show tree deal truce what we know about the new deal the US assigned with China and what it could mean for the US economy support for NPR and the following message come from from navigator say goodbye to meetings that waste time and too low to meetings. Your team will love navigator Pairs beautiful agendas with automations for the busy work most leaders. I don't have time for try for free at navigator. Dot Com support also comes from fund rise innovating the way people can invest in Real Estate Fund arise 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 the US trade deal with. China should mean that China will buy a lot more. US stuff over the next couple of years to talk about what this means for the US economy. We have Mary very lovely with us. She is a professor of economics at Syracuse University. Mary thank you for joining us. Oh you're welcome so there was a big trade deal signed. Yes I guess it's phase one of a big deal was phase. One of what we hope will be a big deal right so just to refresh. This came out of a an investigation. The trump administration undertook under. US law looking at Chinese practices related to intellectual the property and its treatment of trade secrets. cyber theft there was a whole bunch of things related to basically technology. Transfer technology analogy theft. Yeah what is the deal say about intellectual property with what changes I guess. China agree to make well. China will respect it. It has a provision four civil and criminal procedures if there are allegations You know those already existed. The question is how were they carried out out and one of the problems that American companies have faced is that sometimes at the provincial level. You know they're appealing to provincial courts when his actually provincial central government that owns the entity that they're claiming is stealing their intellectual property so one can see that. There's a little bit of a conflict of interest there. So you know they have been making changes and these are spelled out in some detail in the agreement and in the end if these types of of disputes can't be settled it would end up on the desk of the US trade representative and could result in the imposition of tariffs the other side. Say in this case the Chinese would be the able to quit the deal though and has this sort of self Death switch on it. Oh like this message. Will self destruct. Yeah I mean yeah so it would go. It could go all the way up. US as well. We're putting on Taras in the Chinese could say we're out if you don't mind just explaining kind of some of the details of the deal. It seemed pretty. I was surprised when yeah I read it like China's going to be buying a lot of. US stuff yes yes we. We've known all along that this was sort of the price that president trump wanted to extract for trade eight piece was a lot of purchases and There in four different areas which are very broad agriculture of course We know that the American farmers have really suffered Through the trade war so agricultural goods manufactured goods including aircraft energy products and services and energy energy products is like Mostly liquefied natural gas. Mostly not yes liquefied natural gas and services what a services well financial services so it could be a business services could be insurance it could be banking and other types of financial services and this is like I mean. This is a lot of a lot of purchases I mean it's an increase of two hundred billion dollars over two years China's GonNa buy two hundred billion more dollars worth of US stuff right over two years than it had before. I mean the sounds like an enormous amount. It's an increase of more than a third. Yeah we have to realize that. US exports to. China are less than that this year. Alone so third to fifty percent percent increase now. The Chinese side are in their statements about the agreement have qualified in say it's dependent on market conditions. So you know I I think China has to guard itself against the view that it's just you know basically being held hostage in its writing an open check but these these targets are pretty aggressive We don't know if the US can supply that much. Oh like there's concern that farmers won't be able to grow that much. Food Manufacturers won't be able to make that much furniture senator. Yes I mean. We're already our economies at a very low unemployment rate We're GONNA go full steam ahead but you know we're the workers going to come from. Where's the supply GONNA income from but China ironically enough has been insisting that these be done on market conditions and I think that China is trying to signal that they're trying to uphold hold their WTO obligations which is to treat? All you know all suppliers equally and so they're saying we're GONNA look at the quality we're going to look at the price we want. American agricultural cultural products to be competitively priced. So I think we have to see how this plays out now. They have two years. That's a long time this is not being codified in. US law so. I think that you know we're wondering how. How is this happening? And whether it will outlive president trump's administration so what does this mean for the US economy. What are some of the impacts the steel will have or looks like it might have? Yeah I mean we've heard a lot yesterday about how this is fantastic. I think you know the first thing is it is good for the US economy and it's good for the world economy. Now what is what do I mean by that One basic reason. We're we're in a truce is there's an end to this escalation of tariffs we were over. Yeah now how you can say. Well the economy's been doing well. Aren't we in the longest you know expansion and that is all true but we probably would have you know. Half a percentage percentage point of growth so three percents that a two point five percent if it wasn't for the drag that this is causing on on business investment in particular. Why did they decide to you? Like lock in certain purchases instead of just rolling back the tariffs. I mean. The answer is politics. The President's program here is done a lot of damage and I think politically weekly. It has Had A toll so the purchases are necessary. They're like a big gift right. Did you harm but here look. I've come back and I've got these great purchases for you you're going to be overflowing in orders Sore sorta this gigantic present that they can tie up with a bow. I think that's why rolling. Back the tariffs this is a president who has called himself. Tariff manny loves tariffs trump call themselves tariff man. Yes he's a man he likes tariffs. It's something. I think he understands and he feels is. It's it's a bit like a blunt instrument it's a bit of a back to the head but the question that we have to ask yourself his you know did it. Work was at the right way A lot of people are are underwhelmed by the deal and the you know the ministration noses which is why they're talking about face is to phase three phase four as ones like the big headline and then maybe the ABC little one little two little three will be the details. Yes I think. We heard the word historic used about one hundred times yesterday. I think history is not going to judge it particularly kindly though I mean. Is this this deal like a win for four the US is a win. For the trump administration. I think it depends on how you define win if you win is short term purchases. Then we're going to see some I don't think anyone who has observed the relationship over the past twenty years with think that that was really a legitimate legitimate goal given the cost of the US economy. Mary lovely thank you so much for talking with us. Oh you're welcome enjoyed it very much and I guess we'll we'll talk again for face to ABC. Let me know. This episode of the indicator was produced by Lena. Sense Gerry are. Intern is not a Louis. Our editor is Paddy Hirsch and the indicator is a production of NPR uh-huh.
Your Brain On Retail Trading
"N. P., R.. Everyone? Card? Your this is indicated from planet money. Buying and selling stocks on the smartphone. App Robin Hood has become incredibly popular this year especially since the covert pandemic started and there are a few possible reasons why I of everybody's home and has lots of spare time that's got to be part of it maybe. Also, of course, you know, maybe people had a little extra money to invest because so many restaurants and shops were closed also, maybe people sense an opportunity to buy stocks cheap when the stock market collapsed in the first month of the pandemic, whatever the reason Robin Hood announced recently that the amount of money, it makes people trading on its APP doubled in the second quarter of the year two, one, hundred, eighty, million dollars. It's a lot of traits. In the hood is also become kind of famous for the clever ways that it entices people to use. It's apt to and sell stocks. So Digital Confetti or some other animation might fall across the screen when you first deposit money into the APP, we are simple. Take away from that hard to get us in here. Yeah. And Robert also offers free stocks to people who sign up for a trial run into people who convince others to sign up. James. mccomb is twenty five lives in Long Island. New York he is a big robinhood user and there are several things he likes about Robin, Hood's design and how simple and seamless it is to keep track of what's happening for any company. He is interested in it's a great APP for easy information almost like a news feed but for stocks plus the Robin Hood. Shows a ranking the most popular stocks that other robinhood traders have been buying which. You know my convince new traders to join the party James. HIMSELF INVESTED MONEY IN UBER stock partly because it was number one on Robin Hoods popularity ranking I can kind of get a little bit of a sense of confidence like okay. People believe in this company because it's literally number one on the list currently James is what is known as a retail trader, which is basically anyone who buys and sells stocks for their own personal account not a professional investor who manages other people's money. In this year, it is retail traders like James who've really thrown themselves into the stock. Market. Because the US stock market has gone up in recent months, even hitting a new record high last week a lot of these retail traders have made quite a bit of money lately but other, maybe some reasons to worry that. So many retail traders have started buying and selling stocks using APPs like Robin Hood I would say two parts worried one part. Happy. This is Colin camerer. He's a behavioral economist at Caltech and he has studied the ways that people invest in the stock market collinses. One good thing about Robin Hood is it by making it so? Easy to start buying stocks. It might get people invested in the stock market who otherwise might never have bothered at all, and this can also help people learn more about how specific companies operate into to better understand how the economy works. Especially these days the digital age when it's so easy to find useful information. You know there's a lot of stuff under the hood, the economy, and it'd be good if people knew more about that and they may learn some by just buying selling shares of a particular stock and learning about what boards of directors do. You know how companies actually operate conn said, he was only one part happy and two parts worried about Robin Hoods popularity with retail traders. So here's why he's worried if there is one conclusion that the research about financial markets keeps arriving at again and again it's the individual traders who actively try to pick specific stocks buying stocks. They think we'll go up selling the stocks I think we'll go down are very likely to underperform the overall stock market and this does not just apply to retail traders it also applies. To professional money managers over the last five years eighty, two percent of mutual funds that tried to pick stocks underperformed the overall stock market, which means that most people are just better off investing in what they call an index fund that just tracks the performance at the stock market goes up and down with it over time and Collins says, retail traders are also vulnerable to psychological by sees lead them to make bad decisions when they invest especially, if they don't understand the risks that they're taking if you're buying somebody's selling. And you have to be confident that you're buying from someone who knows less than you about the future of the. So one of the elements in in retail trading is overconfidence. Everybody thinks they're above average also confetti. And? Just. Sucks right in. plus people fall victim to what's known as the disposition effect which makes people sell stocks that have gone up a little too soon missing out on making even more money people have a tendency to sell toxin went up and we think it's because there's a special kind of. Realization utility from actually locking gain and clicking and like seeing in your bank account. From your portfolio numbers on the screen into your bank account or something like would. So people so winners too soon and similarly they tend to hang onto losers typically in a kind of blind faith that it's GonNa Bounce back making these kinds of trading mistakes something that happens when people are actively and frequently buying and selling stocks, and of course, the ROBINHOOD APP is designed to get people to do just that and Robin Hood's business model actually depends on it. On this after a quick break. Support for NPR and the following message come from you studio you studio. So distributes corporate audio and video content to employees use use studio to manage your company's public or private podcast tring remotely share meetings and town halls and improved employee communication. Start Your Free Thirty Day trial at the letter you studio dot Com. Okay. So here is how Robin Hood makes money. Let's see I have ten shares of like John Jews. And I, want to sell them I would place an order in the Robin Hood App Robin Hood would then send that order to another company company called a market maker that market maker would buy those ten shares of Jamba juice stock that I'm selling and then it would try to sell those shares to someone else for more money than they paid me and then it would keep the difference. Yeah. The marketmakers kind. Of like a bookie tries to match people who were buying with people who are selling, it keeps the difference and in exchange for the privilege of receiving those orders, the market maker pays robinhood Afi and the more orders it receives the more it pays to Robin. Hood. So you can see why Robin Hood has a big financial incentive to get people to buy and sell stocks frequently and why it's designed it's apt. To encourage that outcome confetti at all, even though that is probably not the best strategy for people to make money over time, and this is why Behavioral Economists Colin Camera says that people should not have more than about ten percent of their overall money devoted to picking stocks on Robin Hood and other APPs like it gets a bit like gambling. So casinos know that there are people who have a problem with pathological gambling. And Every Casino Las Vegas and you sit and have a free drink or you sit at the bar we'll have a matchbook that says hover problem gambling called his hotline. But they're not really in the business of keeping people from losing money during the opposite business that's mentioned all of the lights and sirens and sound effects and free drinks. Real real life confetti realize confetti. That's that's true. James. mccomb are Robin Hood Her from Long Island says that he totally gets this when he first started trading on Robin Hood for years ago he lost eighty percent of the money that he had invested in just a few months over the past year though he says, he is almost made all of it back now he is just down three percent but still loss. Yes. Small loss and he says he's cool with that. But you know what? Over the same for years the overall stock market actually went up more than sixty percent. So he would have made more money if he had just invested in an index fund. Yeah, a lot more money, and in fact, James Actually says that he is much more careful with the money that he puts towards retirement. He invested that money in safer diversified funds I haven't ever withdrawal any money from Robin Hood. So I don't actually know what the end goal for that money is. It's just something that I keep in there and I. You know, maybe it'll end up being a bonus semi-retirement but I I just don't I, don't see it as that. So I'm not like relying on that for my future. I know exactly what the goal of that money is. What's that? It's Confetti. I can get. Buying. Hardy dying a little moment of joy. Robin. Hood spokesperson sentenced to comment saying Robin Hood is invested in resources to help customers learn about the markets and make informed decisions and that the APP is designed for customers to learn to invest responsible. This episode of the indicator was produced by Jamila huxtable and Nick Fountain it was fact checked by Brittany Cronin indicator is edited by Paddy Hirsch and production of NPR. Guy Rise NPR's how I built this how a simple splash of colour accidentally launched Sandy Chila which into a forty year career as a designer entrepreneur and creator of the now famous Chile place placement subscriber listen now.