Interview Only w/ Jared Bernstein - Why The Biden Economy Felt Bad & Why Trump’s Is Even WORSE - The Chuck ToddCast

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
It's sponsorship time. But you know what, it's really great
when you get a sponsor that you already use.

Speaker 2 (00:05):
And guess what.

Speaker 1 (00:06):
Quint's is something that in the Todd household we already
go to. Why do we go to Quint's Because it's
a place you go where you can get some really
nice clothes without the really expensive prices. And one of
the things I've been going through is I've transitioned from
being mister cot and tie guy to wanting a little
more casual but to look nice doing it. Is I've
become mister quarter zip guy.

Speaker 2 (00:27):
Well guess what.

Speaker 1 (00:28):
Guess he's got amazing amounts of quarter zips. It is Quints.
I have gotten quite a few already from there. The
stuff's really nice. They have Mongolian cashmere sweaters for fifty dollars.
I just know, hey, cashmere, that's pretty good. You don't
normally get that for fifty bucks or less. Italian wool
coats that look and feel like designer the stuff. I'll

(00:49):
be honest, right, you look at it online, you think, okay,
is this really as nice as it looks? Well, when
I got it, I was like, oh, this is real quality.
So yeah, I'm going to end up making sure I
take it to my dry cleaner so I don't screw
it up when I clean it. But I've been quite impressed.
In Hey, it's holiday season. It is impossible to shop
for us middle aged men. I know this well. Tell
your kids, tell your spouses, tell your partners.

Speaker 2 (01:11):
Try Quints.

Speaker 1 (01:12):
Or if you're trying to figure out what to get
your adult child, what to get your mom or dad,
I'm telling you you're going to find something that is
going to be comfortable for them on Quints. So get
your wardrobe sorted and your gift list handled with Quints.

Speaker 2 (01:26):
Don't wait.

Speaker 1 (01:27):
Go to quins dot com slash chuck for free shipping
on your order and three hundred and sixty five day
returns now available in Canada as well. That's qui nce
dot com, slash chuck, free shipping and three hundred and
sixty five day returns quints dot com slash chuck. Use
that code so joining me now is the former share

(01:54):
of the Council of Economic Advisors during the Biden presidency
has been is part of the Obama presidency. It was
sort of, uh, correct me if I'm wrong, Jared, but
you were vice president Biden's economic advisor during a period
of time in the Obama presidency.

Speaker 3 (02:11):
Right, exactly, right, Yeah.

Speaker 1 (02:13):
And you were in I mean it's sort of like
you've been in this world and but you were.

Speaker 2 (02:18):
Were you always more in Biden's world?

Speaker 3 (02:21):
Yeah? More so. I mean I was Biden's chief economist
when he was Vice president and basically moved over to
that role when he was president. I started as a
member of the Council of Economic Advisors, and then I
became chair a couple of years.

Speaker 1 (02:33):
In what was your Did you do anything in the
Clinton presidency?

Speaker 3 (02:37):
Yes, I did. I worked in the Labor department in
the Chief Economist's office.

Speaker 1 (02:42):
Okay, so you've been on this sort of this in
this role of of moving up the governmental ladders, if
you will.

Speaker 2 (02:52):
For Frank, I think if you.

Speaker 3 (02:53):
Made a list of Democrat economists in the DC area,
I would be yeah, right, leybe.

Speaker 1 (03:01):
That's one hundred th'ts are You're very funny? And which
economist are you? Are you on the one hand or
are you on the other hand?

Speaker 3 (03:09):
I am? I am. I try not to be that
that economist. I'll tell you what kind of economist I am.

Speaker 4 (03:16):
In that sense, the the most economists are problematic for
politicians because they explain to them why why they can't
do what they want to do.

Speaker 2 (03:30):
Right the economists can't.

Speaker 3 (03:32):
Yeah, yeah, the economist says, sir, I understand where you're
coming from, ma'am. I understand, but you can't do that
for these reasons. So I'm not that kind of economist.
I try to figure out, if not, you know, the optimal,
let's look at third, second, third, fourth, best ways to
get where we want to go.

Speaker 1 (03:52):
So it's sort of like you've got a north star,
how can you get Maybe this isn't the best way
to do it via economic policy, but you really want
to do it, Well, here's the least damaging way to
do it?

Speaker 2 (04:02):
Is that? Do you sometimes see your job exactly?

Speaker 3 (04:05):
So you know, let's be concrete. You want to raise
the minimum wage, right, So there is a level to
which you could raise the minimum wage that would be
hugely problematic, and there's a level to which you could
raise it that would help low wage workers a lot
more than it would hurt them. So let's go to
the second level, not the first one.

Speaker 1 (04:24):
That's totally totally makes sense. Well, let's just start with
the near term and then we're going to go. I
was intrigued. I obviously read your substack. I'm a subscriber.
I follow been reading what you've been writing lately, and
it is this You noted that it seems like the

(04:45):
Trump White House is stumbling into the same problem you
guys had in the Biden White House, where you want
to focus on the positive data, but the feeling and
perception of the economy is not what the data shows.
And I guess what would you be doing if you
were in the Trump White House now asked to defend
this economy.

Speaker 3 (05:07):
Well, first of all, I wouldn't be lying. And I
actually think that's really kind of foundational. I mean, the
way we used to talk about this when we were
in the White House, we would say, correctly, we just
got a great GDP report. We just got a great
jobs report, you know, two hundred thousand jobs, three percent growth.
That would be part one. Part two would be, but

(05:29):
we know you're still hurting and prices are too high.
Part three would be We're going to do everything we
can to help on that. Maybe a three part message
is way too complicated. Maybe all people cared about was
that part two, they're hurting their prices are too high, right,
But we didn't tell them your prices aren't too high,
and that things are affordable, and that affordability is a

(05:51):
democratic con job, which is what Trump said yesterday. So
we tried to meet people where they were. I don't
think particular successfully, and I do think we talked past them,
but we never gas lit them. And I would argue
that that's what these folks are doing. B They're making
affordability a lot worse with all all the tariffs, and

(06:12):
of course we weren't doing that.

Speaker 1 (06:15):
So, you know, one of my theories as to why
you guys and why the former president struggled to talk
about the economy and understand, and I'm curious what you
think of this thesis is that, particularly Joe Biden, he
spent a majority of his professional career in politics believing
that for the American public, the barometer for a healthy

(06:38):
economy was the unemployment rate, right, And frankly, he you know,
it had been forty years since inflation was had bitten
us as a country, had bitten us as political leaders. Yes,
he was certainly was there at the early you know,
in his first term in the US Senate during inflation,

(06:59):
during that whole period of inflation, but that in some
ways when you're and I hate to say that that
you know, but we're all human beings, you're creatures of
habit right, For the longest time, it is what the
public saw is the unemployment. Right Is that fair to
say that that maybe there was just that there was

(07:20):
that Biden and maybe the wider world of Biden. And
I'm curious you're whether you've thought you might have fallen
into this trap, whether you were focused too much on that,
on on the good news, on unemployment, and not fully
appreciating the inflation situation.

Speaker 3 (07:35):
Well, I there's a lot in there, so let's unpack it. So,
first of all, on President Biden, I think you're spot on.
I think he came up in terms of an economic
world where if the job market is strong and you're
at full employment, that is the most important thing you
can do for working class people because if the job

(07:59):
market is tight, they have bargaining cloud, bargaining power that
they wouldn't otherwise have, and they can Thereby, Unions are
obviously important to him too, but you know, unions are
a relatively small share of our workforce. If you get
the unemployment rate down, you know, below four percent and
you hold it there, that's going to be fantastic for workers.
And that was absolutely the world he came up in.

(08:22):
And I believe he thought that if we have the jobs,
that if we have the tailwind of a strong job
market behind us, you know, economically, we should generally be
pretty fine, and especially if growth is strong as well.
Of course, we hadn't seen all that thinking evolved over
a period when the average inflation rate was you know,

(08:42):
between one and two percent, and so when the pandemic
came and you had the collision of constrained supply chains
and strong demand partly juiced by fiscal policy, I will
admit that led to an inflation we hadn't seen in
forty years. And yeah, sure, I mean I think it's
kind of acceptable, not acceptables the wrong way. I think

(09:04):
it's intellectually understandable that, you know, a forty you might
not be quite have a forty year problem in your
worldview relative to one that has been you know, really
foundational fundamental to your to your understanding through most of
your career.

Speaker 1 (09:25):
Take me through your conver back when you were in
the administration about the inflation issue. I mean, you know,
we heard that phrase transitory a lot early on in
the first part.

Speaker 4 (09:36):
And.

Speaker 1 (09:38):
You know, as as it's sort of my own armchair,
you know, economists, I would say, I'm not a lawyer,
I'm not an economists, but I've had to play one
on TV for a long time, right or certainly I've
got to be just smart enough about it to ask
the right questions, I hope, and I understood what you
guys are trying to communicate, which is, hey, look, this
is a unique this is this inflation issue. Isn't all

(09:59):
just because we've handed out too much money. This inflation issue.
We've kinked a hose, and all of a sudden we
unkinked the hose, and here comes to supplies and it's
just doing all sorts of haywire things, and it's like
a bouncing ball. It's eventually going to stop being hugely bouncing,
and eventually it's going to get there. But it was

(10:22):
pretty stubborn, and it's still been pretty stubborn. And I
guess I'm curious everything you guys applied to it. Did
you think the inflation rate would be better than it
is today, better than it was even before Tariff Liberation Day?
I mean, I totally accept the premise that once he
put tariffs into the economy, we no longer can talk

(10:42):
about the Biden economy. It is his economy. But pre tariff,
that inflation rate was still stubbornly high. How long did
you assume, discounting the tariff situation, that we were going
to have this stubborn high inflation rate? Because I think
about the seventies, Jared, and it's like, man, tariffs destroy
three presidencies. I could argue, right, Nixon is you know,

(11:03):
he survives Watergate. If it's a better economy. Ford wins
if it's a better economy. Carter wins re election if
it's a better economy. And you mean inflation, you said, Terraff, Yeah, No,
I meant inflation. Yeah, inflation. What I'm trying to get
at is, you know, sort of disc I don't want
to I know, the minute he put all these tariffs
on there, it sort of it sort of could screw

(11:23):
with forecasting. But three April first there of this year,
it was still stubbornly high. How long do you think
it's going to take to get that inflation rate down?
And again, this is assuming we had a normal tariff policy.

Speaker 3 (11:41):
Without tariff policy, I think inflation by the end of
this year, which we're now at the end of this year,
would instead of being I think the last scene the
core inflationary measures that the FED looks at, we're closer
to three than to two. I think they'd be a
lot closer to two than to I think you'd be
looking at inflation. I think the core was last seen

(12:03):
at two seven. I think it would be around two
two two two.

Speaker 2 (12:07):
This was a half percentage point that the teriffs about it.

Speaker 3 (12:10):
I know, I've seen point seven, I've seen point five.
I think point five is is a good conservative estimate.
So frankly, I actually think that inflation was behaving in
a way that made sense to me. Starting in twenty
twenty three. It was coming down. I mean, just if
you look at the graphic of year over year inflation,
it goes up a mountain, and that you know, that

(12:30):
was a traumatic mountain for us. Let me tell you,
I vividly remember the night. You know, we get the
data a day before it comes out. I remember the
night when we got the inflation report. It was June
of twenty two and it was nine percent, and you know,
we lost our you know what, But the other side
of the mountain it came down just just as just
as quickly. And really what you said earlier is completely accurate,

(12:54):
which is that it was the collision of a supply
shortfall and very strong demand, particularly for manufactured goods. I mean,
we were tracing numbers that showed that the consumer spending
share of manufacturing was higher than it had ever been,
And of course people weren't interacting with services. They couldn't,
so they wanted to build out the new home office

(13:17):
and get exercise equipment. At the same time, all that
stuff was jammed. And at the same time they had
both excess savings so they were flush, and a lot
of fiscal support so they were flush. So by twenty
twenty two, I would argue that I had a very
good understanding of where inflation was. I thought it was
transitory in the sense of long transitory. You know, it

(13:39):
wasn't going to come down as quickly as we wanted
it to, but I knew it was going to come down.
And one reason for that, which is very distinctly different
than the nineteen seventies, is that this mysterious calculation called
inflation expectations were well anchored in the nineteen seventies, key
setters of prices and wages didn't believe inflation was going
to go back down, whereas in the COVID inflation they did.

(14:03):
Everybody saw that this was a shock. The FED was
still in charge, inflation expectations were still well anchored, so
I knew we'd get back down to target. At least
I thought we would before the tariffs came on.

Speaker 2 (14:14):
Well, that brings me to.

Speaker 1 (14:16):
Now, and it's in this decision of the FED. And
you actually framed it pretty well in one of your substecs,
which is, you know, the FED has a dual mandate,
and it's in contradiction. Right, we have a stubborn inflation rate,
but we now have a weakening jobs market.

Speaker 2 (14:32):
What should be the focus of the Fed?

Speaker 3 (14:35):
Well, when I wrote that piece about four days ago,
I said, I said, I think it's fifty two forty
eight inflation. That is the FED, I argued, very close call,
but that at their meeting in December ninth and tenth,
I'm a little more worried about how sticky and high
inflation is, in no small part because I'm looking at

(14:56):
services inflation, which is sticky and high about a point
above where you'd like it to be, and that's not
really directly connected to the tariffs. And you know a
number of people are like, well, aren't you worried about
the job market and the fact that the unemployment rate
has climbed. It's a point above where it was in
April of twenty three. It's four point four percent. It

(15:17):
was three point four percent in April of twenty three.
People say, well, four point four isn't that high. Well,
it's pretty high, but it used to be three point four.
So you know, this morning we learned that the ADP,
the payroll processing you know that according to them, payroll
employment had a negative handle in November. It fell by

(15:39):
forty thousand. So now I'm really at a coin flip.
But you know, I think probably i'd want to sit
at that table and hear what people said. I think
I probably am a little more worried about sticky inflation
than the average person right now.

Speaker 1 (15:57):
It's interesting because you have, I mean, what is your
understanding of why we have a job market that is
potentially going negative?

Speaker 2 (16:07):
I mean, is it?

Speaker 1 (16:08):
I mean, what it appears to me is you have
a lot of big companies who are trying to figure
out what kind of efficiencies AI is going to bring.
And right now they're not filling heads. They're not cutting jobs,
but they're not filling heads until they figure out how
many heads can they avoid having to fill? How good
is this AI transition? Am I sort of summarized.

Speaker 3 (16:32):
Again, I think you're spat on and I'm going to
tell you something that I think is really worrisome that
I haven't had enough of a chance to talk about.
So I'll get into that in a second, which is
related to what you just said. Look, this job market
is often described as low higher low fire, which is
what you just said. We have a very low hiring rate.

(16:52):
It's very difficult for people coming into the job market
to get work. We're seeing unemployment rates.

Speaker 1 (16:57):
I get a graduating senior in college. Trust me, she's
already stressed. She's keep telling her you got another six
months relaxed, Yeah, pretty stretched out.

Speaker 3 (17:07):
Yeah, yeah, you should tell her that the you know,
the unemployment rate for college graduates is still you know,
a lot lower than for non college gradual although for
the newly minted ones it is it is too high
for exactly the reasons we're saying. We haven't seen big
layoffs yet, and you can't have a recession without layoffs.
So I think that the uncertainty around both the tariffs,

(17:29):
the impact of AI, and also deportations are all one
reason we're stuck in a low, higher, low fire labor market.
It is the case that when you have fewer people
coming into the job market because of diminished immigration, you
actually don't need as many jobs to keep the unemployment
rate from going up. That's called the break even rate.

(17:51):
And when I was in the White House, the break
even rate was, you know, one hundred and fifty thousand.
Now it's half of that because the immigration impacts and
aging boomers are reducing labor supply, but we still have
labor demand weaker than labor supply, and that's why unemployment
has been going up. Now on the AI point, here's

(18:12):
the thing I wanted to say, because of exactly what
you just said, employers are trying to figure out how
many people they can reduce, what kind of their headcount
they can reduce because of the work that AI can do,
which they're confused about, and they haven't really been able
to figure it out. The worst thing that could happen
right now would be a recession with a lot of layoffs.

(18:35):
And the reason is is that when we've seen this
is an historical observation, when we've seen technology displacing workers
technology is that it's most disemploying when you're in a downturn,
because employers lay off a big chunk of their workforce,

(18:57):
and the question becomes how few can and I hire
back right right right right now. They're stuck with what
they've got and they don't want to lay a bunch
of people off because they just don't know where it's going.
But man, if the demand falls out from this situation
and they're in a situation where they lay off twenty
five percent of other workforce, they're going to be thinking
I might only be able to I might just be

(19:19):
able to bring back five percent, you know, just a
few of those workers and get ahead.

Speaker 1 (19:23):
Of Having good life insurance is incredibly important. I know
from personal experience. I was sixteen when my father passed away.
We didn't have any money. He didn't leave us in
the best shape. My mother, single mother, now widow, myself
sixteen trying to figure out how am I going to
pay for college? And lo and behold, my dad had

(19:44):
one life insurance policy that we found. It wasn't a lot,
but it was important at the time, and it's why
I was able to go to college. Little did he
know how important that would be in that moment.

Speaker 2 (19:57):
Well, guess what.

Speaker 1 (19:58):
That's why I am here to tell you about Ethos Life.
They can provide you with peace of mind knowing your
family is protected even if the worst comes to pass.
Ethos is an online platform that makes getting life insurance
fast and easy, all designed to protect your family's future
in minutes, not months. There's no complicated process, and it's
one hundred percent online. There's no medical exam require you

(20:22):
just answer a few health questions online. You can get
a quote in as little as ten minutes, and you
can get same day coverage without ever leaving your home.
You can get up to three million dollars in coverage,
and some policies start as low as two dollars a
day that would be billed monthly. As of March twenty
twenty five, Business Insider named Ethos the number one no
medical exam instant life insurance provider. So protect your family

(20:46):
with life insurance from Ethos.

Speaker 2 (20:48):
Get your free.

Speaker 1 (20:48):
Quote at ethos dot com. Slash Chuck So again that's
ethos dot com slash chuck. Application times may vary, and
the rates themselves may vary as well. Life insurance is
something you should really think about, especially if you've got
a growing family. Look, I'm pretty convinced that twenty twenty eight.

(21:11):
I don't think we're it's going to be. I think
we're going to see it percolate in twenty twenty six.
But I think twenty twenty eight as a campaign conversation,
as a narrative, is sort of what voters fear of
AI displacement is going.

Speaker 2 (21:25):
To be a.

Speaker 1 (21:28):
Is going to be a demand on candidates to have
a plan. Look, we can debate whether this is going
to happen.

Speaker 2 (21:36):
The next three years or we're still ten years away
from this.

Speaker 1 (21:39):
And I devour every bit of forecasting data I can
find on this, And you know, you have these different
AI you know, sort of doom the doom and gloom
folks AIS. You know, I sort of I'm pro human race,
meaning I think we are not going to allow ourselves

(21:59):
to be replaced by robots like we're going to We're
a pretty impressive species. We survive a lot. You know,
We're not going to let robots displace us. But the
fear of this, I think is going. So look, you
probably already are talking to potential presidential candidates, people wanting

(22:20):
to just get your advice of you know, what's a
feasible way? I mean, what did we do wrong during
the transition to all these free trade agreements in the
in the late eighties and early nineties with and all
of them included promises of money for job retraining and
all of this.

Speaker 2 (22:39):
It didn't really work.

Speaker 3 (22:40):
I can answer this question for you. It's a great question.

Speaker 2 (22:43):
Is that where AI is going?

Speaker 1 (22:44):
I mean, I assume you know, I've already heard Mark
Kelly went out there and said recently, I guess we
ought to have a fund where these AI companies ought
to ought to you know, be taxed. Maybe you tax
the data centers and there's a special tax of the
data centers that just goes to job displacement issues. But
what does this policy look like? What do you think

(23:06):
is feasible here?

Speaker 3 (23:08):
So I have an answer to question. I have an
answer to this question. First of all, let me say
the following, which you would know better than me. But
I'll bet I'm right about this. If you talk to
the average economists. I spend two months of the year
now at Stanford. So if you're out, if you're in
Silicon Valley, if you talk to a lot of people

(23:29):
in the Beltway about AI, they're a lot more excited
than the average voter is. So that's one assertion, Jared.

Speaker 1 (23:36):
It's remarkable. I find it remark we as a country,
we are the most negative about AI collectively then other
First world countries. I've watched this. It's fascinating how negative
we are about it. So what I think it's because
social media destroyed us, and I think people fear the

(23:57):
same geniuses that brought us social media are being allowed
to run amuck on AI.

Speaker 2 (24:02):
Good luck.

Speaker 3 (24:03):
By the way, you're speaking to someone who just finished
watching the Netflix show Adolescents last night, So oh my god,
talk about social media and its distortions. But but I'm
with you, So we are on you know, we are.
We are shoulder to shoulder on this. And one of
the things I tell people is members who are thinking

(24:25):
of working on the figuring out, trying to figure out
how to run on this is precisely that that don't
think everybody out there thinks AI is as cool as
you do. They're threatened by it. And you just mentioned
two things. You mentioned the lack of preparation for people
who were hurt by expanded globalization in the nineties when

(24:47):
China and the two thousands, when China, you know, at
Bill Clinton's beets, China joins the WTO and we get
our thoughts kicked and no one was ready for that.
And then the ignoring of the impact of social media
to two incredibly portentious existential examples of politicians failing to

(25:10):
create guardrails to protect people from a massive shock. And
so you know, won't be tied us if we make
that mistake again.

Speaker 2 (25:22):
Now, I think, Jared, we already have.

Speaker 1 (25:26):
I'm sorry, I look at it this hands off, you know,
I you know, we were, well, what you imagine can
you imagine if we had outsourced the Manhattan Project?

Speaker 3 (25:40):
Yeah?

Speaker 2 (25:40):
But what this crazy?

Speaker 3 (25:43):
What do you said yourself a minute ago, correctly that
we do not yet know the extent to which AI
is going to displace people in the workforce. What you
do in that situation is you hope for the best
and you plan for the worst. Now, what we didn't
do in the globalization era when globalization was taking off,

(26:03):
we hoped for the best, and we didn't plan for
the worst. And in fact, we did the thing that
economists always do. Here's here's a curse word that economists
use all the time. Transition. They'll be a transition.

Speaker 1 (26:17):
Well, transitions to it a lot of work there. Transition means, mister,
people are going to lose their entire livelihood.

Speaker 3 (26:24):
But they'll be a transition every period. But we'll be fine.
So when you hear an economist Blase talk about transition,
run for the hill. So so you don't so what
we need here in my So here's the policy that
I'm trying to get people interested in. It may sound
a little radical, but I don't think it is a
job's guarantee, a federal jobs guarantee if you are displaced

(26:49):
from your job because of AI. There's actually a lot
of stuff that needs to get done in this country,
and I can't do a lot of it. There's building infrastructure,
there's human care, there's helping in the healthcare sector. There
is a lot of work that needs to be done.
Many of these sectors are underfunded, in part because so
much is going into AI and data centers. We need

(27:12):
to have a job guarantee program wherein if you're displaced
to AI, we can quickly get you back up and
running with remunerative, dignity inducing employment. So it's easier said
than done. But we've had programs like that in the past.
We've just never really implemented them.

Speaker 2 (27:33):
It was just gonna well. I mean that was the
New Deal.

Speaker 3 (27:37):
No exactly, that was the New Deal, and that actually
worked out well. Now, we tried something in the eighties
called SITA that was a much scaleback version of that.
And you know, if you go to the Center. I'm
also a policy fellow at the Center for American Progress.
You know, numerous years ago they were talking about a
jobs guarantee and have documents about how to do it.
So it's not something no one's ever thought about before,

(27:58):
and I'd like to dust that policy often get people
thinking about it.

Speaker 1 (28:02):
Would you do a jobs guarantee before you would do
universal basic income?

Speaker 3 (28:07):
Yes? I think universal basic income pales beside a job
guarantee because people don't just want income. They want to
be productive, they want to work, they want to contribute.

Speaker 2 (28:17):
They want community.

Speaker 1 (28:18):
I mean, in some ways work is another community. And
I think one of the things we agree consistently and
constantly crave is community. I want to tackle something else
that you spend.

Speaker 3 (28:31):
By the way, just aside, I think we're getting way
too much of our community online.

Speaker 1 (28:36):
Of course, well you know it gets it's something. You know,
it's funny to go back to the social media metaphor
that I was using about AI. You know, we don't
agree collectively on a lot of things in America these days,
but there is one issue that is united left and right.
It hasn't mattered if it was a very red state

(28:57):
legislature or a very blue state legislature. They have all
instituted the cell phone bandoned schools in some form or
another right. And you know, the libertarians have been convinced. Right,
those that are worried about, you know, single moms and
single parents having access to everybody's realizing, hey, this has
been terrible, and we don't often. So that tells me

(29:22):
something here that in some ways the public is wiser
about this than they usually are. I always say the
electric the voters, you know, voters have that voters are
telling you something. Listen to them. Just because you don't
like the outcome, They're telling you something. Listen to what
they're saying.

Speaker 2 (29:37):
Of course, so they it is.

Speaker 1 (29:42):
It makes me think that actually getting tough on tech
and putting guardrails on AI, I think is going to
be a necessity for any successful candidate for office in
twenty eight. And I don't think it's I don't think
it is. This is something that's just a d side
thing or an our side thing. I think this the

(30:04):
fact that you have this collective concern about what phones
and social media has done to our kids means we
realize these technological changes have huge impacts on our lives.
And I don't think we fully you know, we as
you said we in this case, we're so excited about

(30:25):
what's happening that we're you know, and I guess this
is exactly what life was like in the nineteen teens,
in the nineteen twenty.

Speaker 3 (30:34):
Yeah. I think all of that's correct. I mean, I
think there's another side of the issue that you have
to think about if you're advising politicians or you're thinking
about twenty six or twenty eight, which is that if
you talk to the companies themselves, even if you're saying, hey,
and you mentioned Mark Kelly before, I'm in Virginia. At

(30:54):
this point, thirty nine percent of the energy in Virginia
is that's being produced. The electricity is being used by
data centers.

Speaker 1 (31:02):
Oh, and don't think that they're not going to get demonized.

Speaker 2 (31:05):
Yes on cost issues. Yeah.

Speaker 3 (31:07):
So you know the thing is you go to the
AI companies, you go to the data centers, and you
tell them you're gonna have to pair back. You're going
to have to have guardrails. You're gonna have to uh
compensate the innocent bystanders who electricity bills are getting whacked
by you. And some of them are going to say
to you, fine, I'll go to Saudi Arabia. And you
know that's the political challenge that I was dealing with

(31:28):
in the White House. You know, we were we were
thinking about these issues, and you know, these companies were
threatening us with you know, with exits. Frankly, I'll take
that threat because of what you're describing is so important
to put those guardrails in place.

Speaker 2 (31:45):
Well, I'm let's see.

Speaker 1 (31:47):
I mean, I keep you know, I keep thinking there
is a left right coalition here that does want to
to to put some guardrails on tech right. When you
get people like Lena Khan and Steve Bannon both concerned
about this concentration of power, but it hasn't translated. I
mean this, this is just such an effectless Congress, and
frankly it hasn't mattered the last ten years. Congress has

(32:10):
been hesitant to get into the regulatory Well, they do oversight,
but they won't do the regulatory change.

Speaker 3 (32:18):
I mean, crypto is a good analogy. I mean, I
think crypto is largely an accident going out to happen
in terms of systemic risk to the economy. But what
did the crypto bros do? They lobbied up faster than
any industry I've ever seen. So you know, these data
centers are the mag seven. I just looked this up.
The market capitalization of the mag seven is twenty two

(32:40):
trillion dollars, So you know they have all the resources
they need to purchase all the all the deregulation they want.

Speaker 1 (32:51):
If you strip out the Magnificent Seven, it's the rest
of our is the rest of the publicly traded companies.
I mean, I've seen some analysis that say, you know what,
we're no companies. Companies aren't doing that well, so I
got it. But the Big seven is propping everything up.

Speaker 3 (33:10):
So I've got a great it's funny you should ask
that because I recently backed out a number that I
thought was really really compelling answer to that question, unless
it's too obscure, So I'll test it on you and
see if it works. Now this is a few days old,
but I'm sure it doesn't matter. If you look at
the year over year increase in the S and P

(33:30):
five hundred, it's eleven percent. If you then that's that
that's weighted, meaning that you waited by market capitalization. So
that's how the S and P is measured.

Speaker 1 (33:41):
Every day the biggest cap companies. I mean, you know,
I have this thesis that the reason we've seen crypto
prices plummet is that, you know, the crypto folks realize
that this is probably not a real asset, they hurry
up and sell it and then buy the magnificent seven.

Speaker 3 (34:00):
Right, So the magnificent seven get a huge weight. I mean,
they're not all public like AI is obviously still a
private company. But all I'm saying is that that eleven
percent increase in the S and P is a weighted
measure weighted by market capitalization. You can also look at
an unweighted measure of the S and P. That's up
point eight percent over the last year, eleven percent weighted

(34:24):
point eight unweighted. We have an S and P seven
and an S and P four ninety three, and the
SNB four ninety three is pretty flat.

Speaker 2 (34:34):
Well that tells you it's flat or actually negative.

Speaker 3 (34:37):
Yeah, I mean I think I think it's uh, I
think it's flat. I mean I've looked at the I've
actually looked at the four ninety three or whatever it is,
because again, not every one of the seven is sling.
But yeah, it's flat. It's pretty flat.

Speaker 1 (34:52):
Let me get into a couple other issues. That one
that you wrote about in talks about healthcare, and look,
this is such the weirdest issue because it's it's not
a private sector. You know, it's not a private enterprise.
It's a huge part of the economy, but it's super regulated.

(35:15):
But at the same time, it's this sort of public
private and it's a mess, right, And you know, I
look at yeah, I look at I'll just take my
little observation, which actually is going to be through the
prism of college football. But the University of Miami is
able to spend a lot more money on football now

(35:36):
because they're making so much money and They're not alone.

Speaker 2 (35:40):
This is a lot of universities.

Speaker 1 (35:42):
A lot of universities are funding some of their high
priced outlays, whether it's sports, building, new buildings, et cetera,
because they have health systems that are nonprofits, Jared, who
are making money hand over fist. Because it's a nonprofit,
you got to immediately take whatever profits you make and
put it back into the institution. In this case, it's

(36:04):
in university athletics, the Longhorns USC Miami.

Speaker 2 (36:07):
There's quite a few that have done this.

Speaker 1 (36:09):
But what it tells me is if we have a
system and our healthcare system, and if they just take
hospitals where there's more money to be made being a
nonprofit hospital system than it is to be a for
profit hospital system, what are we doing here? Like something
seems off? This is this is a Jerry rigged economy.

(36:29):
This isn't a real free market exactly right.

Speaker 3 (36:34):
I mean the way I always say it, I mean,
your your analogy is really interesting. It's it's fairly complex.
Here's a simple way to say, I think a similar thing.
If I show up to the supermarket hungry, they don't
have to feed me. If I show up to the
hospital sick, they have to treat me. That takes it
out of the market right away. And every single other

(36:56):
advanced economy has figured it out that this that trying
to make this a a for profit or a kind
of weirdly structured nonprofit sector of the type you just described,
is going to mean an economy that spends you know,
eighteen percent of its GDP on healthcare. That's US versus

(37:21):
ten or eleven percent, which is the average for every
other advanced economy. And you might say, well, surely they
have worst outcomes than we do, given that they're spending
eight percent nine percent of GDP less they do not.
They have as good, if not better outcomes than we do.
What they don't have is, you know, five miles from
where I live, massive houses on the Potomac that are

(37:43):
owned by you know, lobbyists for big pharma. So, by
dint of making this an inelastically demanded good, if you
need healthcare, you need it. It's not shoppable. You can't
get in the hospital, you can't go in the ambulance
and say, wait a second, I'm going to call a
cheaper ambulance. You know, it's not shoppable. It's inelastically demanded.
Uh and uh, the prices are completely non transparent. You

(38:06):
never really know what you're paying for anything, and you know,
expect people not to have their hands in the healthcare
cookie jar, which of course they do. So there is
a ton of work to be done there. You know,
I myself, along with Neil Mahoney, just wrote a piece
on how to make health you know, ideas that would
make healthcare a lot more affordable. They're out there. We've

(38:26):
seen other other countries do them. We should do them.

Speaker 1 (38:29):
Too, because, look, I have empathy for those members of
Congress are going, why are we subsidizing insurance companies?

Speaker 2 (38:35):
Right? So I have empathy for that.

Speaker 1 (38:36):
At the same time, you know, look, we don't want
to We don't have time to transition, and these folks
need affordable health care. So it's it's one of those
where you're like, boy, this sub what are we doing this?
You know, why don't we reform the insurance industry, Why
don't we reform hospital payment systems? Why don't we reform

(38:57):
you know, before we figure out what the right right
structure is to guarantee healthcare access for the public. And
it feels as if, you know, because we can't do
the one we're almost stuck just trying to well, let's
limit the damage to the average American, but we are

(39:19):
only handing more money to a couple of big industries.

Speaker 3 (39:23):
You're so right. I mean, I'll push back a little
bit on some of the things you said, but broadly speaking,
you're exactly right. And you know, I actually I think
like you. When Republicans were saying during the shutdown debate
about you know, giving you know, tens of billions of
dollars to in these premium tax credits to people so
that they could buy, so that their premiums in the

(39:45):
Affordable Character exchanges don't double. Republics, well, that's just throwing
good money after bad and I don't disagree with that. However,
if you don't do it, those premiums are going to double. No.

Speaker 1 (39:57):
Right, Like it feels like we're being we're all being
held hostile by the insurance companies.

Speaker 3 (40:01):
Okay, So here's what I want to push back a
little bit. Okay, it's not you know, the Affordable Care
Act did more to control health care spending than your
wrap a second ago would have you think. Now, if
it solved the problem, we wouldn't be having this conversation.
Far from solve the problem. But it did institute a

(40:23):
number of things that led, especially Medicare costs to grow
considerably more slowly, which actually has helped us in the
fiscal front. Some of those things, and almost all of
those had to do with controlling costs. The problem is
that there are, relative to all these other economies that
spend half of what we do on healthcare as a

(40:45):
share of the economy, we have very few cost controls.
The ones that we do have actually work. Giving Medicare
the ability to negotiate for lower drug prices. That's worked,
But there's fifteen drugs on that formulary, and you need
to have hundreds restricting what the insurance restricting the profitability
of insurance companies if they're not using enough of their

(41:08):
of their profits to pay out that That was a
cap that was put in on Obamacare. You know, that's
been helpful as well. So that's the way forward, and
it means a huge political fight, but that's the fight
we have to have.

Speaker 1 (41:22):
Do you hate hangovers, We'll say goodbye to hangovers. Out
of office gives you the social buzz without the next
day regret.

Speaker 2 (41:28):
They're best selling.

Speaker 1 (41:29):
Out of office gummies were designed to provide a mild,
relaxing buzz, boost your mood and enhance creativity and relaxation.
With five different strengths, you can tailor the dose to
fit your vibe. From a gentle one point five milligram
micro doose to their newest fifteen milligram gummy for a
more elevated experience. Their THHC beverages and gummies are a modern,

(41:49):
mindful alternative to a glass of wine or a cocktail.
And I'll tell you this, I've given up booze. I
don't like the hangovers. I prefer the gummy experience. Soul
is a wellness that believes feeling good should be fun
and easy. Soul specializes in delicious hemp derived THHC and
CBD products, all designed to boost your mood and simply
help you unwind. So if you struggle to switch off

(42:11):
at night, Sol also has a variety of products specifically
designed to just simply help you get a better night's sleep,
including their top selling sleepy gummies. It's a fan favorite
for deep, restorative sleep, So bring on the good vibes
and treat yourself to Soul today. Right now, Soul is
offering my audience thirty percent off your entire order. So
go to get sold dot Com use the promo code toodcast.

(42:34):
Don't forget that code. That's get sold dot Com promo
code toodcast for thirty percent off. So I get, Look,

(42:57):
I get the fight part and all this, But you know,
let let's say you get a fresh administration in a
fresh Congress. What's the simplest thing we could do first
as a as a as a federal government to you know,
chip away at this.

Speaker 3 (43:14):
Yeah, So the simplest thing is Medicare for More. If
you were talking to Bernie Sanders, it would be Medicare
for all, you know, but you're talking to me, and
so it's Medicare for More. And what that means is
is lowering the age of Medicare.

Speaker 2 (43:29):
I've heard fifty. You would you go down to fifty?
Has been the number I've always seen.

Speaker 3 (43:34):
Yeah, And so you know, because it's you might hear
people talking about a public option that's really very similar
to what I'm talking about. And this is the idea
that whether you're in your workplace looking at what you
can choose, or you're going into the Obamacare exchanges, you
can you know if you're if you're of a certain age,
you can choose Medicare, which is, you know, a less

(43:55):
expensive form of care because of the kinds of cost
controls I mentioned earlier. And you know someone who's on
it now it works well.

Speaker 2 (44:03):
Right meyess this why you know it's interesting.

Speaker 1 (44:07):
Did did you expect when the Affordable Care Act happened
and the idea was there was there was a hope
that you'd have more insurance companies come into the marketplace.
Did you think we would have the big you know,
the progressives us AA, GEICO. I don't think they really
did get into the marketplace. Did you assume more would

(44:28):
have jumped into this?

Speaker 3 (44:31):
I did, and I do think that competition has been
somewhat insufficient, uh in that space.

Speaker 1 (44:41):
You know, every day is a United Healthcare buying up
another company.

Speaker 3 (44:45):
Exactly. There's vertical, there's vertical integration, there's horizontal vertical meaning
up and you know, up and down through the hospital systems,
and then there's far off. So so there's there's that
kind of integration, particularly in some of our larger cities,
is putting upward pressure on costs. And in the piece
that Neil Mahoney and I just wrote, we went after

(45:06):
that we said we have to we have to block that.
You know, you have a lot of investors supporting that
kind of integration. But on the insurance point, remember when
we did the ACA, we made a political because I
was in the Obama administration, that we made a political
calculation that we were going to go you know, through
the insurance companies, not around them. We were going to

(45:27):
adapt them as allies. No.

Speaker 1 (45:29):
I mean, that was the mistake that Clinton the Clinton's made, right,
which was trying to go after the insurance companies. And
Thelman Leewe wasn't Thelman Louis, Hary and Louise, sorry them
and Louise was the movie. Harry and Louise became the
faces of the opposition, you know, and that it I
mean I understood the you're right, you guys made it
political toa hey, we're going to have Harry and Louise

(45:49):
on our side, which they if I remember they actually
re up the ad and work correct.

Speaker 3 (45:54):
Well they they We never would have legislated that if
we had. I think if we had gone with the
you know, trying to crowd them out, and you know,
I think that's why Medicare for More is going to
be a tough sell because they recognize that that kind
of competition, they don't want to compete with the government.
They recognize that Medicare can provide less expensive health care

(46:15):
for people, and you know, they kind of are resigned
to assigning that to seniors. But if you take that
down to fifty, they're going to fight you tooth and
nail for those mansion reasons I said before. But we
still have to go there.

Speaker 1 (46:29):
Well, it seems especially if we're living longer. I mean,
it just I guess that's got to be the fear.
I mean, that would be the argument against bringing the
age down. Medicare is only going to get more stressed
because people are going to be living longer and on
Medicare longer.

Speaker 3 (46:49):
Well, not necessarily because we're not getting into the policy weeds.
So it's not that this is going to be free
for people. I mean, Medicare is not free for anybody.
Now you're still you know, part and all that. No,
they would have to pay an actuarily fair premium. Right
if you're on Medicare. It's not free. It's not like Medicaid,
which is you know, kind of free healthcare, but that

(47:12):
premium is going to be considerably lower than what you're
paying to the private sector.

Speaker 1 (47:16):
Yeah, future of work, not just AI, but the length
of the work week. Ye, there's been chatter about this
for multiple generations, right, and what the what the work
week is going to be? You're starting to see I
think Bernie Sanders is advocating a thirty two hour work week,

(47:40):
but it really all goes back to what's full time.
And because what full time, what the definition of full
time is then of course triggers whether you get benefits
or not. And so that's why this is I think
an important issue. Where are you on that issue and
is that something that you think is coming.

Speaker 3 (48:03):
Well, first of all, the way Senator Sanders talks about
it is he wants people to work eight hours less
per week but not take a cut and pay. And
that strikes me as you know, unrealistic. I don't see
how that works. I think that leads to lots of
unintended consequences that would be detrimental to to workers. If

(48:28):
you wanted to have a for the option of a
four hour week, a four day week, and you know,
people could still be considered working full time and get
those same sorts of benefits. You know, that's the conversation
worth having. But you know, output would go down and
so we you know, we'd have less we'd have less
growth presumably, and that's kind of a trade off. It's

(48:50):
interesting because for economists a lot of time, social welfare
well being is too easily analogized to GDP. But if
I told you we can have less GDP but we
can work less hard, you might say Europe, and.

Speaker 1 (49:04):
You know that is what somebody would say, Europe. Look
at them and you might say, that's right. And we
we we we drove right past them in our GDP
over the way we drove right past.

Speaker 3 (49:14):
Them a GDP. But when it comes to if you
actually look at measures of happiness, you know they actually
kick our butts in a lot of ways, especially around
this issue of work. So the problem I have with
the conversation is when it sounds like there's no trade off.
If you accept that there's a growth trade off, but
maybe you improve social welfare, fine, I'd be willing to,
you know, entertain that idea. It's not something I think

(49:36):
about a lot though these days, and it's not even
really on my list of policy ideas. Why because affordability
is such a huge issue right now, and I think
it's been for a while and it's going to be
going forward, and if you're working one day less, you're
going to make less and life is going to be
you know, presumably even less affordable. So I think that
that's a real challenge right now.

Speaker 1 (49:57):
No, in fact, I think the more like I think
the near term future of work, certainly for my kids,
is I assume and frankly that I look at the
situation I've put together for myself, it's probably similar to
what you've put together. Is you don't have one job,
you have four or five jobs, and that that is

(50:17):
going there is going to be a larger and larger
segment of the population that is going to have multiple
income streams. How does what does federal how does federal
policy have to change to support uh an economy that's
going to have more essentially more people in the I

(50:38):
don't like to use gig work because I think people
immediately assume, oh, uber driver. I don't think that's going
to you know, you know, it could be just all
sorts of things, could be part of the service economy,
of professional economy, et cetera.

Speaker 3 (50:48):
Yeah, I think in two major ways. One we've actually
talked about, which is healthcare. Of course, most working age
people get their healthcare not just for them, but for
their family through the employer. So if we move to
a situation where you're not as connected to one employer
such that you have employer sponsored insurance, we're going to

(51:10):
need a system like Medicare for more. The Obamacare exchanges,
by the way, were invented to help solve that problem,
but they're you know, they're kind of clue g and
they're kind of expensive, and you and I already talked
about that. So we have to make sure that you know,
we we have a very uniquely weird and kind of
dumb system in this country where we we have most

(51:32):
working age people getting their healthcare through work. You know,
that's a huge burden on companies that would rather make
cars and not provide health insurance. So breaking that asunder.
You know, it has historical roots that we can get into.
After World War Two when there were wage freezes in place.
You have to figure out a way to give people
more benefits, but that would be a great place to start.

(51:53):
And secondly, labor standards, the umbrella of labor standards, you know,
wage protections, unemployment, insurance, time pay. That's all connected to
traditional work at traditional schedules. So you'd want that umbrella
to be reshaped to protect people who didn't necessarily have
traditional work arrangements.

Speaker 2 (52:12):
Well, you're right.

Speaker 1 (52:13):
I remember that was one of the art pro one
of the arguments that the Obama administration was using to
sell the Affordable Care Act, that hey, portability, you don't
have to you know, you can, you can work part
time at a company without worrying that. You know, you
don't feel like you can leave. You know that sort
of thing. You're not stuck in a job, right job
because of healthcare. At the same time, I do worry

(52:37):
about companies offering a lot of contract work, which is
code for I ain't giving you any benefits.

Speaker 3 (52:43):
Absolutely, and you know that's another reason why healthcare form
is so vital. And again those a lot of those
folks are getting healthcare on the exchanges right now, and
you know, it's better than it's better than not being covered,
but they don't love it.

Speaker 1 (52:58):
Let me ask you about two truck policies and what
you make of them. And in the if you were
part of the next administration, would you try to scrap
it or enhance it.

Speaker 2 (53:12):
One is no tax on tips.

Speaker 1 (53:14):
I was amused the other day by an article that
I R S agents have to figure out is this
pornography or not pornography? I mean I just sort of like, oh, wow, well,
you know, all of a sudden, a whole bunch of
sixteen year old boys might volunteer to work at the
I R S or intern Sorry.

Speaker 3 (53:31):
Yeah, no, I think that's really about Do you want
to say the second one again?

Speaker 4 (53:37):
Well?

Speaker 1 (53:37):
The second The second one is that is the these
new essentially baby bonds that you know, they're calling them
Trump accounts. But the but the Michael Dell, you know
that who just actually added to to sort of expand
the pool. I want to get into that a minute,
but let's start with no tax on tips, because you know,
my joke has been I'd like to be paid all
in tips, now, please exactly.

Speaker 3 (53:58):
So, the first thing we worried about, literally thirty seconds
after somebody told me about that, I said, you're gonna
have a lot of you know, stockbrokers who are saying,
you know, I earn a dollar a year and the
rest is tempts. Now, they did try to structure the
policy to block that, and that just adds a level

(54:20):
of complexity that is really the antithesis of smart tax policy.
The minute you have eighty occupations that are okay and
a bunch that aren't, you can imagine what's going to
go on in tax court.

Speaker 1 (54:33):
And what's a good thing you're getting rid of IRS
agents because you know.

Speaker 3 (54:37):
Yeah, right. So the first problem is is that it's
easy to game, and I suspect that their guardrails are insufficient.
The second problem is that there are a lot of
low wage workers who get tips and don't pay any
federal income tax, so this doesn't help them at all.

(54:59):
You know, most low wage workers simply don't have a
federal tax liability, so it means nothing to them. And
then you know, uh, the third problem is, you know,
we actually have a very significant revenue problem in this country,
and so tax cuts are one reason why we are

(55:21):
looking at a really unsustainable fiscal path. So I think
it's complex, I think it's poorly targeted, and I think
it's a waste.

Speaker 1 (55:28):
But it was like I was just going to say,
the problem you have is it sort of strikes me
as what she said, like, look, well we had to
work through the insurance companies even though we didn't want to.

Speaker 2 (55:40):
This feels like a.

Speaker 1 (55:41):
Policy that that that nobody's going to be wanting to
be the member of Congress that says no, no, no,
no no, let's bring taxing.

Speaker 2 (55:48):
Let's put tips back into income taxable income.

Speaker 3 (55:51):
Yeah, you're probably right, and so you know the minute
you open it's so much easier to grant a tax
cut than to take it back. Obviously. I mean, I
think if we start seeing a lot of fraud, which
I predictably will, at least we might be in a
market where we can put up more guardrails.

Speaker 1 (56:10):
Let's talk about the Trump baby bonds or you know,
the the the birth and I guess this is their
way of encouraging trying to encourage uh more families, let's
be you know which. And you guys were fighting for
the child the childcare text credit. Yeah, I sort of

(56:31):
believe that. Frankly, I think you guys should have died
on that hill. And I don't know why you didn't politically.

Speaker 3 (56:38):
But in terms of what do you mean like.

Speaker 2 (56:40):
Fight, never have given it up on it.

Speaker 1 (56:42):
I mean, I think that was that was something worth
losing an election, you know, taking it to the ballot box.
I just you know, never never giving up on it.
I understand why. You know, you thought, well, we have
a bigger deal to make here, and it's possible to
do this, and you certainly look that's the old legislator
in Joe Biden.

Speaker 2 (57:01):
I get it.

Speaker 1 (57:02):
But the childcare tax credit, that was that was, it
mattered to people, it has bipartisan interest, like it just
felt like I felt like a political It felt like
a policy hill worth dying on because there's going to
be something for this, right it. You know, right now
it's baby bonds. I don't think this quite cuts it.

(57:23):
Although I can imagine now people will say, hey, you
can use that money for childcare.

Speaker 3 (57:27):
Well you can't use it so you can't use it for.

Speaker 2 (57:30):
A team yet, but you know it's coming.

Speaker 4 (57:32):
You can't.

Speaker 3 (57:32):
Yeah, maybe, But so on your childcare tax credit point,
you know, we didn't have the votes on the Democratic
Caucus mansion with against it. So and I think Cinema
is too, so you know, we didn't have the votes.
But I take you know, I take your point. It
was real. I think that many of us were a
little surprised by how little the public seemed to fight

(57:54):
for it. You know, a lot of times when you
get what I said a minute ago, when you provide
people with a benefit like that, a lot of times
taking it away is is.

Speaker 1 (58:02):
Been let me let me positive theory on that there. Sure,
the Cholpcare tax credit came just when the government was
shoveling out other money too. Yeah, so people, and I
don't know if they fully appreciated what was it.

Speaker 3 (58:14):
Probably became viewed as like another pandemic era of things.

Speaker 2 (58:18):
So you're COVID thing.

Speaker 3 (58:19):
Yeah, So look, I think giving one thousand dollars of
seed money for what really is like an IRA account
is a fine thing to do. I think the problem
is that it's not at all targeted and that it
will exacerbate intergenerational inequality. You're allowed to contribute, your family

(58:43):
members are allowed to contribute five thousand dollars a year
tax free to these to these funds. I think it's
tax free. Obviously, the seed money you don't pay taxes
on until you take it out. You can't touch it
for eighteen years, and so who's going to be able
to make those contributions Not low income people, high income people.
So it's going to exacerbate inequality over the long run.

(59:07):
And I think that's problematic. I would have targeted in
a different way, so that instead of giving money to
savers who are going to save anyway, which you know,
my kids are, your kids, probably are targeted to families
that don't have the resources to make that saving and
add to it over time so that it can build.

Speaker 4 (59:27):
Uh.

Speaker 1 (59:28):
Well, it's interesting to me. What the what the what
the Dells did? They concentrated the donation by zip code.

Speaker 3 (59:36):
Yeah, so that is a much more targeted approach, and
you know, I think a better one. I don't know
that we can kind of you know, philanthropy to get
us where we need to go on this.

Speaker 1 (59:44):
But well, and I'm curious of that. I find this
to be really I'm gonna I can't. I'm really uncomfortable
with the idea of government spending becoming a charitable gift.
And I don't know how else to put it. I'm
not I don't really. I can't sit here and say, well, jeezus,
it's bad what the Dells are doing, or it was bad?

(01:00:07):
What Who was it was Ito who threw the money
to pay the pay the military or to help contribute. Yeah,
I think it was one of the Melons, one of
the Melons did that, and you're like, well, I appreciate
your patriotism, right, Like, I think that's great, But is

(01:00:27):
that a habit the government should get into that? Hey,
well maybe they need a chair, they need a foundation
to raise money for.

Speaker 3 (01:00:34):
So I mean, this is why we have a progressive
income tax. So you can say, boy, cross my fingers.
I hope there's some really generous patriots out there who
will provide us help where we need it, like fund
the military. Or you can say we're going to progressively
tax people. If this economy delivered you billions hundreds of

(01:00:55):
billions trillions, we're gonna, you know, definitely take some of
that back and we're going to use it for things
that the electric decides are uh, you know, the electric
decides through they're elected officials, is what we want to
spend money on. And you know that's how democracy works.
So I don't like the idea of leaving it to
the kindness of strange of stranger trillionaires to make up

(01:01:19):
the difference. I think that's why we have taxes.

Speaker 1 (01:01:22):
Is if you're understanding that Dell's are going to get it,
is this tax free? Their charitable donation.

Speaker 3 (01:01:28):
Is charitable deduction. Yeah, so this is it's a deduction
that you deducted at your your time.

Speaker 1 (01:01:34):
Fact, so how much I mean, so that means you
and I are subsidizing this charitable giving already.

Speaker 3 (01:01:39):
Correct, that's a great point. I mean, uh, and you
know I don't. Yeah, it's a lot of savings there
for them. And look, you know a lot of people
have come after the charitable deduction as a way to
raise more revenue, and it never really seems to get anywhere.
You know, maybe for good reason. I mean, and it's

(01:02:00):
a lot of but.

Speaker 1 (01:02:01):
I thought Obama lowered it. Then he lowered the rate
from down to I thought he lowered how much. You
definitely remember trying to do so, okay, and it never happened.
I didn't think we got there, but I could be misrememory.

Speaker 2 (01:02:14):
For some reason.

Speaker 1 (01:02:15):
I thought it went down from you know, twenty went
to twenty you know, twenty eight set of three.

Speaker 2 (01:02:19):
Whenever we used to.

Speaker 3 (01:02:20):
Have revenue meetings, which we had all the time because
we're desperately nure, somebody would say can we move that,
and you know, the next meeting higher up would come
the answer, no, we can't.

Speaker 2 (01:02:31):
No, you can't. That's funny, let me get you out
of here.

Speaker 1 (01:02:33):
On the Chobcare tax credit, what would it take to
make it permanent? And how would you pay for it?

Speaker 3 (01:02:39):
It's not it's not cheap. I think, yeah, I think
if you're talking ten years, you're in the I think
in the seven eight hundred billion range. I I know
these numbers. When I'm working on that stuff.

Speaker 2 (01:02:55):
I'm not gonna We're not gonna hold it you.

Speaker 3 (01:02:57):
I think that's the range. And when we obviously when
we did it, it was deficit financed. And I don't
know if you've seen any of my work on this,
but I am a pretty much a lifetime fiscal dove
who's lately become a bit hawkish.

Speaker 1 (01:03:17):
Do you feel like you're like, Okay, now you've everybody
is at you know, I've my entire adult life has
you know, the sky's been falling when it comes to
the death. The guy's been falling. And it's people I trust,
not just ideologues. Right, this guy's been falling. And somehow
it turns out the Paul Kirkman's of the world and
the you know those the fiscal doves like yourself, Well, no,

(01:03:39):
our debt to GDP ratio can be higher, and we
can do this, and we can do that, but you
think we might be at the breaking point.

Speaker 3 (01:03:47):
I think I don't think we're at the breaking point,
but I think we're at a level of BUN sustainability
that is dangerously tempting a breaking point. And it's not
even clear what a breaking point is. We have a
sovereign currency that we print, so you know, it's not
like we're going to have a list trust moment because
our debt markets are so large and so liquid, and

(01:04:08):
we have the dominant global currency and all that, and
the dollar. But the reason I flipped, and I've written
extensively about this, including a New York Times bed that
had a graphic in it that kind of explains this,
is because interest rates are higher now. And I think
the thing that people missed although all those years where
they had their hair on fire, is they just didn't

(01:04:28):
recognize them. It's kind of right in front of you,
how the real interest rate was so low, even negative
in some cases, that we could HANDI le service our
debt without breaking a sweat. But now the interest rate
is higher, and my priors are that it's going to
stay up. You don't know that's an impossible variable to forecast.
But this is again a hope for the best plan
for the worst moment. So I wouldn't support a full

(01:04:51):
out ten year expenditure six seven hundred billion for an
extended child tax credit without a pay for. But those
pay fors are readily available if you're willing to raise taxes,
especially at the higher end. And in fact, in our
budgets we did that. So you can actually go back
and read how we financed a permanent extension of the

(01:05:14):
childcare tax. And it may not have been quite as
generous as what we had in the in the pandemic recession,
but it was it was plenty generous.

Speaker 1 (01:05:22):
Is there any worry as an economist that that in
some ways that in the same way that the insurance companies,
because they know as government subsidy is coming, they kind
of frankly mess with the prices so they're able to,
you know, make sure they get some profit and they
know people are going to have a certain amount of money.
Do you worry that that happens to the to the

(01:05:44):
that basically child childcare becomes an industry if you will.

Speaker 3 (01:05:51):
Not so much with childcare. I just think that the
this is all get slightly technical. For a second, childcare
has it's a very high supply elasticity, meaning that if
people want it and they have the resources to get it,
you start seeing childcare centers pop up. So the responsiveness

(01:06:13):
of childcare production to demand is quite strong. And you know,
so that flexible elasticity there is helpful such that if
we were able to provide people the subsidies they need,
and when we have in the past, we've seen this.
I don't think you see, you know, particularly even medium
term pressures on costs.

Speaker 1 (01:06:35):
Do you end up I'm going to get you out
of here, but do you end up imagining that instead
of a childcare tax credit, it becomes a what I
would call a home care tax credit, because maybe you're
taken care of an elderly parent.

Speaker 3 (01:06:47):
Well, that's certainly something Biden was interested in. You know,
I tend to like the idea of not even a
childcare tax credit, but a child tax credit. If you're
raising kids, your life is you've done this the peh
if you're if you're raising kids, even if you've got
a decent income, your life is a lot more expensive.
Childcare can cost, you know, twenty five hundred dollars a

(01:07:09):
month easily in an area like this.

Speaker 1 (01:07:11):
So you'd be in favor of a tax code that
essentially played favorites with four parents with kids at home.

Speaker 3 (01:07:18):
Yeah, and some of those parents probably are in a
Sandwich generation and if they want to use it for
childcare or elder care, they could. But you know, I
think a generous child tax credit that was targeted by
the Way, which also helps keep the price down. I
don't think we need to give it to you know,
millionaires and billionaires.

Speaker 1 (01:07:34):
Jared, I'm going to let you go. Where can people
find your work? I know you've got a substack. Tell
them where you're also, I think you're involved in a
couple of things, so pitch away.

Speaker 3 (01:07:41):
Yeah. So I write. I write basically in three different places.
Stanford Institute for Economic Policy Research, seeper You can see
my work up there. In the Center for American Progress.
We've recently put a housing report on housing affordability. You
can find that up there. It's called Build, Baby Build.
But then almost you know, every couple days I write
something on my substack, which is called Jared substack, and

(01:08:04):
it's easy to find. So that's where you can read
my stuff.

Speaker 2 (01:08:08):
Excellent It's great to catch up. I miss a.

Speaker 1 (01:08:10):
You know, we're it's uh, we joked to we used
to occasionally be in the same pickup basketball game. But yeah, yeah,
I think that's behind both of us. My friend, yeah,
father time. Father time has scared us away on that.
That and you know, fear of middle aged injuries at
this point. Good to catch up, Jared, appreciate it.

Speaker 3 (01:08:30):
To take care.

Speaker 1 (01:08:32):
There's a reason results matter more than promises, just like
there's a reason Morgan and Morgan is America's largest injury
law firm. For the last thirty five years, they've recovered
twenty five billion dollars for more than half a million clients.
It includes cases where insurance companies offered next to nothing,
just hoping to get away with paying as little as possible.
Morgan and Morgan fought back ended up winning millions. In fact,

(01:08:55):
in Pennsylvania, one client was awarded twenty six million dollars,
which was a stat baggering forty times the amount that
the insurance company originally offered. That original offer six hundred
and fifty thousand dollars twenty six million, six hundred and fifty
thousand dollars, so with more than one thousand lawyers across
the country. They know how to deliver for everyday people.
If you're injured, you need a lawyer, You need somebody

(01:09:16):
to get your back. Check out forthpeople dot com, Slash podcast,
or dial pound law, pound five two nine law on
your cell phone. And remember all law firms are not
the same, so check out Morgan and Morgan. Their fee
is free unless they win.

All Episodes

Interview Only w/ Jared Bernstein - Why The Biden Economy Felt Bad & Why Trump’s Is Even WORSE

Episode Transcript

Popular Podcasts

Las Culturistas with Matt Rogers and Bowen Yang

Crime Junkie

The Brothers Ortiz

.css-15opob5{left:0;position:absolute;top:0.8rem;} All Episodes

.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Interview Only w/ Jared Bernstein - Why The Biden Economy Felt Bad & Why Trump’s Is Even WORSE