October 13, 2023 • 35 mins
This week, we discuss child care affordability and legislation. We also examine the causes of natural disasters, a dysfunctional housing market, and biking to work. We're joined by Bloomberg Opinion's Sarah Green Carmichael, Conor Sen, Lara Williams, and Justin Fox. Amy Morris hosts.
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Speaker 1 (00:01):
You're listening to the Bloomberg Opinion podcast counts Saturdays at
one and seven pm Eastern on Bloomberg dot Com, the
iHeartRadio app and the Bloomberg Business App, or listen on
demand wherever you get your podcasts.
Speaker 2 (00:16):
Welcome to Bloomberg Opinion I Amy Morris. This week, we
are starting to see a glimmer of hope in a
housing market that some describe as dysfunctional. Which natural disasters
are acts of God and which are something else? And
do you bike to work? Gods? Are you? Probably don't.
Millions of dollars have already been spent in setting up
the infrastructure in cities across the country. So why hasn't
(00:39):
biking to work caught on? But we begin with childcare
pandemic era childcare subsidies have expired, impacting about three million children.
California Congressman Rocanna and South Carolina Congresswoman Nancy Mace told
CBS has faced the nation that they've created a bipartisan
congressional Affordable Childcare Costs. Congressman Conna eighty six.
Speaker 3 (01:02):
Percent of Americans believe that we need more support for
affordable child care.
Speaker 2 (01:06):
And Congressman Nancy May says rolling back government regulations.
Speaker 3 (01:10):
Might help some places, say you have to have a
four year college degree.
Speaker 2 (01:13):
Well, that certainly makes it harder to find childcare workers.
The increases in cost because of it, and we're seeing
less of a drop off a cliff than a slow,
protracted slide that's bound to extend this pain. Let's talk
about this now. Bloomberg Opinion editor Sarah Agreeing Carmichael joins us. Sarah,
always a pleasure. Want to thank you for taking the
time with us. Before the pandemic, families managed to have childcare.
(01:38):
How is it different now.
Speaker 4 (01:40):
Before the pandemic, childcare was also in trouble, right, Okay,
America's childcare problem is long standing. I think what changed
during COVID was a couple of things. One, you started
to see some daycare centers closed. New regulations, for example,
came in mandating, you know, distancing between children. That was
(02:01):
really hard on some centers. At the same time, as
you saw wages and other sectors start to go up,
it became tougher to keep and retain childcare workers, who
are typically very low paid.
Speaker 2 (02:14):
And what you.
Speaker 4 (02:14):
Started to see was this snowballing effect where the childcare sector,
you know, centers were closing, they were losing staff, they
didn't have the staff stay open, and then of course,
every time you would have a COVID outbreak in a
daycare center, the center would have to close. And so
to stabilize the situation, the federal government came in and
started offering subsidies to try to stabilize the sector. Those
(02:38):
subsidies expired on September thirtieth, and so I think as
of October first, it's not like suddenly you see millions
of children losing their spots. I think what's going to
happen is over the next several months daycare centers some
will close, some will lose staff, some will curtail their hours.
Families will sort of try to figure out, Okay, can
(03:01):
we make this work, can we pay a little bit more.
Can we figure out another way to take care of
our kid during you know, maybe parts of the day
that we couldn't get full time care, maybe we could
work part time. Like they'll start to slowly dial back
and figure it out. But the result is that I
think a year from now we might be in a
very different place.
Speaker 2 (03:21):
So then does Congress Woolman may have a point that
perhaps there are too many regulations. I mean, you listed
a few, but those were specifically pandemic related. I'm just
wondering if maybe she has a point building off of that.
Speaker 4 (03:34):
You know, I think that the point that she raised
in the clip we heard that you know a place
that might require a four year college degree, that you know,
for a job that's incredibly low paid, that's just not realistic.
I think that. On the other hand, you know, we've
just seen in New York terrible story about a one
(03:56):
year old boy dying of fence and al poisoning. That
daycare center had just passed a surprise state inspection. So
I think we want to be careful as we look
at these regulations and not blame regulation in general. We
need regulation to keep our kids safe. That's like literally
a parent's number one job, and it's literally the most
important job of a daycare center keep the kids physically
(04:19):
and emotionally safe. So we need to figure out a
way to do that well. I do think maybe loosening
some other regulations on a case by case basis where
they just don't make a ton of sense.
Speaker 2 (04:30):
You also mentioned the low pay, which is standard unfortunately
at daycare centers. But if you do require a four
year degree and you pay such low wages. I believe
the Senator of the Congressman was also talking about how
they can't compete with Chick fil A, they can't compete
with Starbucks because those folks get paid more. So is
(04:55):
there are some happy medium that can be struck between
the low pay and the strict regulations. Could we increase
the pay and perhaps require an associate's degree something like that.
Speaker 4 (05:08):
I mean, and frankly, I don't really see why you
need an advanced degree here at all. You know, you
are talking about a job that requires, especially for really
little babies, things like loving the child, feeding them, changing
their diapers, playing with them, you know, and that's really
(05:30):
important work. I don't see that it requires sitting in
a classroom and having a credential. But at the other hand,
it does require some kind of control so that parents
know that they're leaving our kids in good hands. I
think that, you know, one of the challenges here is
that even though the pay is very, very low for
(05:51):
the people who work at daycare centers, parents are paying
astronomical amounts. I think the average cost for an annual
tuition for childer is about fourteen thousand dollars. Well, I
was surprised to learn that, because we pay thousands of
dollars more than that in Massachusetts, and you know, personally,
I pay about twenty two thousand dollars a year for
my toddler, and that was by far the cheapest option
(06:14):
that we found. And so somehow the market here just
seems broken to me. You have parents paying astronomical amounts
of money, you have workers who somehow aren't earning enough
to live. To me, that's sort of something that you know,
highlights why in other countries often there is a role
for the government to play in subsidizing the care because
we are talking here about something that is essential to
(06:36):
building a competitive workforce. You cannot work unless you have
somewhere safe to leave your kid during a day while
you're at work. And at the same time, you know,
just leaving it to the free market doesn't seem to
have worked.
Speaker 2 (06:47):
Okay, let's talk about it.
Speaker 3 (06:48):
Then.
Speaker 2 (06:49):
What role could the government play? What role could employers play?
Speaker 4 (06:54):
Actually, I do think there's a ton here for employers
to do, and in the United States is probably more
realistic to expect some private sector help than to expect
some kind of federally subsidized program like they have in France,
where it's like the kids are eating bree and cheese
and foie gras or whatever. Kidding, but no, I think
(07:15):
in the US, I think, you know, we often see
employers coming in with things that that we've decided the
government isn't going to provide. So something like fifty nine
percent of employers already provide flexible spending accounts for dependent care.
That's not terribly helpful because that's capped at five thousand dollars.
(07:37):
As we've just said, you know, the average cost of
care it could be three times that, so that's not great.
Only six percent of employers provide some sort of on
site or near site daycare. Often that is subsidized. It's
not always, but very often it's hard to just even
give your kid a spot, you know. I know when
(07:57):
I was looking for care, I put us on the
waitlist for mind to I don't when I was fourteen
weeks pregnant. We did not get a full time spot
till she was over a year old.
Speaker 3 (08:05):
Wow.
Speaker 4 (08:05):
So if an employer could even just say like, hey,
we have a daycare center. Yeah, it costs a lot
of money, but it's right next to the office, like
that would actually help a ton of parents. And I
know Patagonia is an example of a company that has
started providing on site childcare. They're working parents who use
the care center. They show up five days a week
in the office. So if you are a CEO who
wants to return to office like you could do worse
(08:27):
than opening a daycare center near your office. So I
definitely think there's a role here for employers to play.
Speaker 2 (08:33):
And we are talking with Bloomberg Opinion editor Sarah Green
Carmichael about childcare after the pandemic era subsidies. And during
that time though, when those subsidies were in place, there
was progress, right the remote flexible work and daycare in
school openings, allowing for the highest ever workforce participation by
women with children. Why is it important to maintain that momentum.
Speaker 4 (08:57):
You know, it's an incredible rebound because in the early
day so the pandemic, women with children went home more
than any other group, you know, they dropped out of
the workforce. But actually since schools and daycares reopened, they've
had the steepest rebound of any group. It's not rocket science.
What it takes to get mothers back into the workforce,
flexible work, and affordable daycare. So why is that so important?
(09:20):
That is so vital because families these days need to incomes.
It's just math. If you look at low income families,
they are disproportionately likely to be a single earner family,
and the economy needs those workers. You know, it's been
very hard to hire. It's been a tight labor market
for years. Employers keep waiting for it to get easier,
but it's not getting easier. We need people who like
(09:44):
can work to be working. That's a really important part
of the economy. So I think all around. You know,
this is not rocket science. The ingredients here are simple.
It does take some investment, but I think the rewards
really pay off, not only for families but for the
broader economy.
Speaker 2 (09:59):
Before we to go, we talked a bit about the
history of the daycare dilemma, the pre pandemic, during the pandemic,
post pandemic. This is not a new problem. Why is
it so hard.
Speaker 4 (10:12):
It's hard because a couple of reasons, but it's I
think it comes down to fundamental assumptions that we have
in the United States that basically a mother's place is
at home with her kids, and if that's our underlying assumption,
we're just not going to invest in setting up the
care infrastructure we need to send moms to work. And
in countries that have solved this problem, they've just really
(10:35):
recognized that those workers, that mothers who work are an
important part of the economy and important part of their
national competitiveness, and they've invested in it.
Speaker 2 (10:43):
Sarah Green Carmichael is a Bloomberg Opinion editor, coming up
a look at the housing market. Dysfunctional and hard to predict,
but now maybe a glimmer of hope. You're listening to
Bloomberg Opinion.
Speaker 1 (11:04):
You're listening to the Bloomberg Opinion podcast count US Saturdays
at one and seven pm Eastern, on Bloomberg dot Com,
the iHeartRadio app, and the Bloomberg Business App, or listen
on demand wherever you get your podcasts.
Speaker 2 (11:19):
You're listening to Bloomberg Opinion. I'm Amy Morris. Home prices
are once again on the rise following a brief decline,
but we're also witnessing more evidence of a shift in
the balance of power in the housing market. Let's get
more from Bloomberg Opinion columnist Connor sen founder of Peachtree
Creek Investments, Connor always a pleasure. What balance of power
(11:41):
in the housing market are we talking about?
Speaker 5 (11:43):
So, in a weird way, the balance like sellers have
had the upper hand in the housing market this year
just because there have been so few homes for sale,
because when mortgage rate spike last year, people rush to
sell their homes and then they stopped, and so new
list things have been way down this year. Inventory has
been under record low, and so even though buyerfordability has
been terrible, there have been so few homes for sale
(12:05):
that sellers sort of have gotten rising prices in a
lot of cases, even though buyers are like this as crazy,
things are too expensive house as possible. But what we've
been seeing over the past month or two is that
listings are now rising, sort of at an unseasonal time
of the year. You would think by now that listenings
would be declining heading into the end of the year,
but they're still rising. And so that to me is
(12:27):
a sign that sellers have lost their patients and they're
slowly starting to list their homes even in a sort
of more challenging environment.
Speaker 2 (12:35):
Now you've mentioned the rise in inventory, that would be
unusual for this time of year.
Speaker 5 (12:39):
Right, right, And so last year at this time of
the year, you may recall that mortgage rates were spiking,
and yet over the sort of from end of August
until late September, weekly inventory of homes for sale only
rose by about two thousand. Yet over the past four
weeks listings have prisen by twenty five thousand, and so
again I think that people people definitely want to hold
on to their low more, but life happens. That's divorce, divorces, kids,
(13:04):
and people have held out from not selling for a
year and a half and some of these sellers are
getting a little antsy and are trying to sell their homes.
Speaker 2 (13:10):
So are housing prices then bound to soar?
Speaker 5 (13:13):
So they've been rising over the past nine months really
just because of this lack of inventory, and so buyers
have had to compete with each other for the very
few number of homes for sale. I think this rise
in inventories will actually put I don't know about downward
pressure on home prices, but sort of stop whatever rise
in home prices we've had. And the thing that makes
me optimistic is I think we'll get more transactions because
(13:34):
one of the reasons we've had so few home sales
this year has just been due to this lack of inventory,
and so if we just get more homes on the market,
we'll get more sales.
Speaker 2 (13:42):
You had anticipated the resale inventory would be turning in
the fall, and now you're seeing what can support that theory.
What other flags are you watching for as you look ahead?
Speaker 5 (13:56):
Well, I was sort of looking forward a couple months
ago just because listings new weekly listings were down about
twenty percent year every year, and that just wasn't sustainable,
just because you can't keep dropping twenty percent year every year.
And the real shock last year was in kind of
Q three, Q four, and so I thought as we
got closer to those dates that the the year every
year numbers would turn. And also just as a homeowner,
(14:16):
I mean, even if you want to hold on to
your low mortgage rate, you are paying down some principle
every year, every month, and sort of that low mortgage
benefits to slowly decay. And then, like I said, people
life happens. And then also about seven million homes have
sold since mortgage rates per sent five percent last spring,
so you do have a growing cohort of people who
aren't locked in with a low mortgage rate, and they're
(14:39):
more likely to list their homes and move opportunistically.
Speaker 2 (14:42):
Is there sort of a lagging response? Then? Are people
listing their homes and moving so that they can make
some money off of selling their home, even though that
money might not be there now the listings may wind
up being lower than they expect.
Speaker 5 (14:56):
Yeah, that's part of it. I think also a lot
of reasons why you didn't have listings is because people
couldn't afford to move. Because a lot of people who
are selling a home are also buying another home, and
so if I can't afford to buy something else, I'm
not going to list mine, and you kind of create
this standoff on the marketplace. But I just think that's
starting to weaken a little bit. And part of it
might just be some people just have to have more space,
(15:19):
or their kid is entering kindergarten, they have to go
into a certain school district, and you just can't hold
out forever, at least not everybody can. And so I
think you're seeing that sort of desire to stay where
you are. We can on the margin, And we are talking.
Speaker 2 (15:32):
With Bloomberg Opinion columnist Connor sent about what the housing
market is likely shaping up to look like in the
coming year. How different is it going to look.
Speaker 5 (15:41):
Connor So sort of I think conventional wisdom has shifted
to this ye of, well, we're not going to have
any listings because everybody has their three percent mortgage rate,
and so numerically, I don't know how much of a
change it might be, but it's sort of if you
have ten or twenty percent more listings next year than
you did this year, I think, sort of relative to expectations,
that could surprise people. And in markets where I also
(16:04):
think this regionally is going to be more of an
issue in sort of faster growing, more dynamic markets, just
because that's where the volatility has been in the housing
market over the past five years. So I think this
is going to be more of a Phoenix, Nashville, Charlotte
thing than a Philadelphia in New York thing, just because
home prices went up a lot. More people moved here
during the pandemic. Maybe they didn't move into their forever home,
(16:24):
but they just wanted to get out of the Northeast.
And these are people who, you know, maybe life, they're
having more kids, they're in family formation phases, so they're
the ones more likely to be looking to move than
somewhere in the Northeast who's been in their home for
twenty years. Again, it's only been a couple months in
the data, so we'll have to see a little bit
longer to see what regional trends emerged. But my hunch
(16:45):
is that this inventory situation has a more prominent thing
and faster growing parts of the country than in the Northeast.
Speaker 2 (16:51):
And do you also have a hunch about how long
this new look is going to last for the housing market.
Speaker 5 (16:56):
I think actually the twenty twenty three will turn out
to be a kind of for low for resale homes,
for inventory for listings. I think this is like the megabottom,
And the question is just how long it's going to
take for inventory to rise closer to levels like we
had pride to the pandemic. We're kind of down fifty
percent or so, so it could take a while. But
I think this is the worst it's ever going to
(17:17):
be if you have been looking for a home to
buy and you've been frustrated, and so hopefully that comes
with increased affordability. We'll have to see about that, but
in terms of lack of inventory, lack of transactions. I
think the worst is behind us.
Speaker 2 (17:28):
What about those who want to sell their homes? What
has sellers more motivated?
Speaker 4 (17:31):
Now?
Speaker 5 (17:32):
If I was looking to sell, and it's sort of
like I think I was going to have to do
it over the next couple of years, I would probably
get on with it. Because if we're seeing this in
the data in September, I wonder if there are people
who you know this is obviously you have to be
looking at the data every week to even see this
in the data. They might be thinking, Okay, mortgage rates
are seven and a half. I need to sell, but
I'm not going to do it now. I'll wait until
February March, because you wait until the spring, and I
(17:54):
think there could be I don't know, but there could
be a real glut of listings in the spring as
people I'll try to get through the winter and then
make it to the spring, so I might try to
opportun to notistically sell now if I have that kind
of flexibility to be a potential rush and that rush
might not materialize, but that would be the risk to me.
Speaker 2 (18:11):
Do you foresee more volatility in the housing market? I mean, gosh,
what we're experiencing in the housing market. Now, would you
qualify this as volatility? I'm just wondering when things are
going to start to calm down.
Speaker 5 (18:24):
Yeah, it's volatility. It's sort of I guess it's sort
of if you have somewhat more listings. Is there what
a marginal increase in listings lead to fairly significant lower prices? That,
to me is the big question. How motivated are these sellers?
And if prices are stable or follow a couple percent,
I think people are fine with that. If all of
a sudden you see a big shift in pricing, then
(18:46):
maybe sellers say, Okay, I'm not willing to accept this.
I will hold off. But I think if pricing can
be stable, you can get a pretty meaningful increase in
inventories and transactions as people just get comfortable with where
the market is and they say, this is a life
of end I have to make, I have to sell,
I have to buy, and let's just try to get
a fair transactors.
Speaker 1 (19:04):
And to move on.
Speaker 2 (19:05):
And this is all things being equal. Are there any
X factors that could interfere with this? I'm thinking anything
from politics to the weather.
Speaker 5 (19:12):
Sure. I mean, obviously there's been a lot of valatility
in mortgage rates. And so if maybe if mortgage rates
went to eight eight and a half, that becomes a
new threshold where people say, Okay, I really can't afford
to do this, this is crazy, I'm going to pull
back once again. Or if we get some sort of
meaningful downturn in the economy where all of a sudden,
the labor market weekends and then that becomes a factor
for people. So those would be the two things that
I would consist that that would make me shift my thinking.
(19:34):
If mortgage rates went up another fifty one hundred basis points,
and if the unemployment rates started spiking to four and
a half percent, then that could shift things. But other
than that, I think we will see a pickup in
inventory and transactions in the first half of next year,
and that's really a good news for the economy because
what we have now is not healthy at all. Perversely,
the FED sort of backing off has led mortgage rates
to rise, but hopefully we're at the end of that adjustment.
Speaker 2 (19:57):
Connorson is a Bloomberg Opinion columnist and founder of Peachtree
Creek Investments. Now coming up, what exactly is an act
of God anyway, and should we reconsider that phrase when
it comes to certain natural disasters. We're going to talk
about that. Just ahead. Don't forget. We are available as
a podcast on Apple, Spotify, or your favorite podcast platform.
(20:21):
This is Bloomberg Opinion.
Speaker 1 (20:30):
You're listening to the Bloomberg Opinion podcast. Catch us Saturdays
at one and seven pm Eastern on Bloomberg dot Com,
the iHeartRadio app, and the Bloomberg Business App, or listen
on demand wherever you get your podcasts.
Speaker 2 (20:45):
This is Bloomberg Opinion. I'm Amy Morris. Torrential rain in
the Mediterranean, monster hurricanes, wildfires, extreme heat, and extreme cold.
We often consider these natural disasters construed as acts of God.
But are they This summer, officials with NASA and NOAH
held a press conference in Washington, d C. To discuss
(21:05):
how climate data showed July as the hottest month for
Earth on record. NASA Administrator Bill Nelson warned, quote, Mother
Nature is sending us a message.
Speaker 6 (21:16):
Just look around you and you'll see what's happened. We
have record flooding and Vermont. We have record heat in
Phoenix and in Miami. We have major parts of the
country that have been blanketed by wildfire smoke.
Speaker 2 (21:39):
It's NASA Administrator Bill Nelson. We want to take a
closer look at this now with Lara Williams, a Bloomberg
opinion columnist who covers climate change. It's always a pleasure, Laura,
thank you so much for taking the time with us.
In your column on the Bloomberg Terminal, you literally itemize
some of the largest natural disasters that we've seen in
just the past few months, and then you make the
(22:00):
argument that these aren't necessarily natural disasters or acts of God.
Speaker 7 (22:04):
How so, so yes, well, there's two things at play here.
So the first is, you know, these weather conditions, and
we have rapid attribution studies that can tell us just
how influential climate change has been in the intensity and
(22:25):
the frequency of these events. And more often than not,
they find that, you know, humans burning fossil fuels has
made these extreme events more likely. So, for example, the
horrendous you know, rains and down collapses in Libya was
made fifty times more intense and up to no fifty
(22:48):
times more likely sorry than fossil fuel by fossil fuel
missions with as much as fifty percent more rain. So
that's the first part that's why it's not natural. The
second part is that you know, these disasters only happen
when hazards collide with pre existing vulnerabilities. Libya is war torn,
(23:10):
is thereout these two clashing governments and experts had been
warning that the dam, these two dams were you know,
they needed maintenance, they would own to collapse. That wasn't done.
Climate change happens that created these weather events, but then
that exists in vulnerability just led to the you know,
(23:32):
horrendous disaster.
Speaker 2 (23:34):
I saw that quote in your column, and I want
to talk about that just a little bit. It's worth
noting disasters happen when hazards collide with vulnerability, as you said,
so that vulnerability is frequently then something that is man made,
like the dam not being properly maintained.
Speaker 7 (23:54):
Yeah, exactly, so it should be you know, a lack
of adaptation from governments, lack of trying of you know,
maintenance and infrastructure upkeep in Germany, you remember the twenty
twenty one horrendous floods that happened there that you know,
the rain was extreme, but also you've got to take
into consideration land use decisions, you know by the government,
(24:18):
there'd been a lot of you know, natural wetlands that
had then been covered over with slitch concrete, which meant
the water had nowhere to go, and so that's a
vulnerability as well.
Speaker 2 (24:27):
There are those who are going to say that this
is all speculation and extrapolation and that there's no real
way to know if humans are the problem or not.
Speaker 7 (24:36):
How do you respond to that, Well, I would just
point them towards you know, scientific consensus. We know that
burning fossil fuels is leading to the warm end of
the planet. And then these you know, really smart rapid
attribution studies use very complex models and they can tell
(24:57):
us exactly the influence of climate change which we as
human laws, is having on these weather events.
Speaker 2 (25:03):
You've mentioned examples in Libya, in Germany, all over the globe. Really,
are there any particular segments of the globe that are
more at risk than others?
Speaker 7 (25:15):
Yeah, of course, so we know that you know, countries
in what people call the global seuth these kind of
emerging and developing countries them or at risk. They are
bearing the brunt of extreme weather. But also they're more
vulnerable just because they haven't had the same levels of investment,
they don't have the same levels of infrastructure that you know,
people in the global North have. When you look at
(25:38):
something like Madagascar, so they've you know, had this big
famine for years of drought. Actually it wasn't kind of
driven by climate change. It was driven more by the
fact that loads of people are in poverty, so they
just don't have the same resilience that places and you
know people in richer countries do.
Speaker 2 (25:56):
Now in your column, you argue that at of God,
that terminology really needs to be retired. Why why can't
we just keep that in there?
Speaker 7 (26:07):
Well, I think it takes away the kind of human agency.
You know, it kind of lets us think you can
let government's debt away with not doing enough to protect
their citizens. And I think that's really really important that
we focus a lot more on adaptation.
Speaker 2 (26:27):
Sort of a way of calling them out exactly. And
we are talking with Bloomberg Opinion columnist Laura Williams about
exactly what an act of God really is. Are there
any circumstances at this point where an act of God
natural disaster would apply in that lingo or are we
past that? Have we done so much damage and are
(26:47):
we continuing to do so much damage? That act of
God is not as much of a factor.
Speaker 7 (26:51):
That's a really good question. I would say that, you know,
scientists are doing these rapid whether attribution cities. They occasionally
do find that climate isn't the main driver of that,
and so in those cases maybe active rods does apply.
But also if there is a disaster, there's likely to
(27:12):
be pre existent in vulnerability is due to human actions
on the ground, So potentially not do.
Speaker 2 (27:18):
Those vulnerabilities also include where a country might be located,
or the poverty level within that country, the economic part
of that country, is that part of one of the
factors that you would consider.
Speaker 7 (27:32):
Yeah, definitely, definitely, the economic situation is going to play
a huge role because you know, if people don't have
if people are living in poverty, they don't have you know,
houses that are as resilient to extreme weather. They might
not have air conditioning if you're thinking about extreme heat,
they won't have money to buy food or you know,
(27:53):
find water. So economic definitely, and as we know that,
you know, countries in the low Wi South tend to
be in a more economically fragile economic situation.
Speaker 2 (28:06):
Let's say let's take it another step further. Some of
the risks that we might see with these disasters we
all know about things like food shortages, are there other
risks that may come into play that we should be
on the lookout.
Speaker 7 (28:18):
For for sure? So you know, in India they've had
some cyclones and there I think we need to be
kind of really prognessant of societal structures. There was evidence
where you know, cast based discrimination prevented some people entering
the evacuation shelters, which meant, you know, while some members
of society were tap safe and disaster was prevented happening
(28:41):
to them, other you know, other groups were not astep safe.
And I think that's really important to think about kind
of society and that goes to the like cast levels
and gender and all kind of those kind of you know,
sections of society. I think we need to be we
need to remember that.
Speaker 2 (28:58):
Where do we go from here? What happens now?
Speaker 7 (29:01):
Well, I think, you know, we don't talk about these
vulnerabilities more and you know, stop thinking of these things.
There's things that couldn't be prevented, because quite often they
can be prevented, and it's you know, some of it
might be hard, that some of it's quite easy. We
need to talk about that and try and think about,
you know, in what ways like effect a faction could
(29:24):
be taken. Adaptation funding globally is still a fraction of
the money that goes towards emissions reduction, and I think
hopefully that's changing because for a long time, adaptation was
kinds of a dirty word. People didn't want to be
seen as taking the pressure off reducing emissions. But it
is becoming a more critical issue as you know, we
(29:44):
see climate change actually affecting people in real time, so
I think talking about it, I know that it's going
to be a big voters at top twenty eight, so
we'll see what happens out of that.
Speaker 2 (29:56):
Do you think there is going to be any traction
when it comes to eliminating the phrase act of God
when they talk about things like the cause of these
natural disasters or maybe even eliminating the natural in the disaster.
Speaker 7 (30:10):
Yeah, I mean that would be interesting. It's such a
cloak real term, and it's used a lot in kind
of insurance, so I wonder if insurers would be well
hesitant ever move in that acts of God land bridge
from their policies.
Speaker 2 (30:24):
Lara Williams is a Bloomberg Opinion columnist who covers climate change.
You're listening to Bloomberg Opinion. I'm Amy Morris, and we've
seen tremendous investments in bicycle infrastructure in the past few years,
urban bike sharing, e bikes, places to secure your personal
bike in parking garages and while you're at work. So
why isn't biking to work catching on? Let's talk about
(30:48):
that with Bloomberg Opinion columnists Justin Fox and Justin I
kind of can see why it might not catch on
in a place like d C, where if you live
outside of the district, that's the sob you're taking your
life in your own hands if you try to bike
into work from way out in the suburbs. Is that
the problem people being in the suburbs or having that
(31:08):
commute in front of them.
Speaker 3 (31:10):
Yeah, and definitely there was this weird little period in
about a decade ago when all the growth was in
cities and there wasn't much new housing being built anywhere,
and so that's when bike commuting peaked was twenty fourteen.
This is according to the annual American Community Survey that
(31:31):
the Census Bureau does, sort of this mini census they
do every year, and after that, things sort of got
back to a little bit normal. The millennials who are
riding their bikes to work started making more money in
a few of them bought cars. I mean, that's one issue.
I do think another issue, and I have gotten more
(31:53):
email response from this column than anything else I've written.
This Yer hadn't gotten that many rears, but every single
biker bike commuter who read it wrote in with their
thoughts about what it was. And you know, one thing
a lot of people say is just drivers have gotten
more reckless over the past decade, especially over the course
of the pandemic. But there's definitely you look at traffic
accidents and other measures, and also the cars. The vehicles
(32:17):
keep getting bigger. So that's one concern a lot of
people have. But another really obvious one is just that
sort of target demographic of the kind of people who
would bike to work are also the kind of people
who like to work from home. So because it's kind
of funny, you think work from home would be most
like concentrated in distant suburbs. But this is something else
(32:38):
I wrote about recently, based also on the American Community Survey,
if you look for the places where there's the highest
percentage of people last year who were still mostly working
from home. It was in neighborhoods of Oakland, Seattle, Portland, DC,
and to some extent suburbs, but pretty clear like Arlington.
Speaker 2 (32:58):
Does sound like then, from what you said that the
pandemic may have had a chilling effect on commuter biking,
not just because we're all working from home, but because
we all evidently forgot how to drive properly. We got
a little bit more reckless behind the wheel. Is that
part of it, Yeah.
Speaker 3 (33:13):
Although it is kind of funny. So I was basing
this on the Census bureau be at Bloomberg. Now also
this week have a story from a private survey and
the headline is US bike trips of Swords since twenty nineteen.
So it is this sort of it's this mix of
a lot of people bought bikes over the course of pandemic,
and they may be, you know, mostly for exercise, but
(33:35):
some people are probably running errands for them and such.
But just the mix of that with who is in
fact going to the office.
Speaker 2 (33:42):
But I do think there is a difference between biking
for exercise, biking for recreation, and biking to get to work.
Once you use it as a form of transportation, it
seems to take on a different air.
Speaker 3 (33:53):
Yeah, and some places it's more appropriate than others because
of the weather and other things. It's a pretty spotty.
Even in a city that's done a lot of work,
like New York, it's pretty spotty.
Speaker 2 (34:04):
From the data that you've looked at. You think it's
going to catch on at some point or is just
too much, too many obstacles.
Speaker 3 (34:10):
I mean, I think in some cities it makes a
whole lot of sense. There's the biking capital of America
is Davis, California, which is a college town outside Sacramento,
and they have like close to Dutch level bike commuting there.
I would imagine we're still in a long, slow rise
in it. But it's just that what's been done so
(34:31):
far to make it practical it is not that much.
I mean when you compare it to any place where
biking is much more well established, like the Netherlands.
Speaker 2 (34:42):
All right, Bloomberg Opinion columnist Justin Fox, always a pleasure,
Thank you for your time, Thanks for having me. That
does it for this week's Bloomberg Opinion. We are produced
by Eric Mullo, and you can find all of these
columns in the Bloomberg Terminal, and we're available as a
podcast on Apple, Spotify, or your favorite podcast platform. Stay
with us to day's top stories and global business headlines.
(35:02):
Just ahead, I mean, Morris, this is Bloomberg.
You're listening to the Bloomberg Opinion podcast counts Saturdays at
one and seven pm Eastern on Bloomberg dot Com, the
iHeartRadio app and the Bloomberg Business App, or listen on
demand wherever you get your podcasts.
Speaker 2 (00:16):
Welcome to Bloomberg Opinion I Amy Morris. This week, we
are starting to see a glimmer of hope in a
housing market that some describe as dysfunctional. Which natural disasters
are acts of God and which are something else? And
do you bike to work? Gods? Are you? Probably don't.
Millions of dollars have already been spent in setting up
the infrastructure in cities across the country. So why hasn't
(00:39):
biking to work caught on? But we begin with childcare
pandemic era childcare subsidies have expired, impacting about three million children.
California Congressman Rocanna and South Carolina Congresswoman Nancy Mace told
CBS has faced the nation that they've created a bipartisan
congressional Affordable Childcare Costs. Congressman Conna eighty six.
Speaker 3 (01:02):
Percent of Americans believe that we need more support for
affordable child care.
Speaker 2 (01:06):
And Congressman Nancy May says rolling back government regulations.
Speaker 3 (01:10):
Might help some places, say you have to have a
four year college degree.
Speaker 2 (01:13):
Well, that certainly makes it harder to find childcare workers.
The increases in cost because of it, and we're seeing
less of a drop off a cliff than a slow,
protracted slide that's bound to extend this pain. Let's talk
about this now. Bloomberg Opinion editor Sarah Agreeing Carmichael joins us. Sarah,
always a pleasure. Want to thank you for taking the
time with us. Before the pandemic, families managed to have childcare.
(01:38):
How is it different now.
Speaker 4 (01:40):
Before the pandemic, childcare was also in trouble, right, Okay,
America's childcare problem is long standing. I think what changed
during COVID was a couple of things. One, you started
to see some daycare centers closed. New regulations, for example,
came in mandating, you know, distancing between children. That was
(02:01):
really hard on some centers. At the same time, as
you saw wages and other sectors start to go up,
it became tougher to keep and retain childcare workers, who
are typically very low paid.
Speaker 2 (02:14):
And what you.
Speaker 4 (02:14):
Started to see was this snowballing effect where the childcare sector,
you know, centers were closing, they were losing staff, they
didn't have the staff stay open, and then of course,
every time you would have a COVID outbreak in a
daycare center, the center would have to close. And so
to stabilize the situation, the federal government came in and
started offering subsidies to try to stabilize the sector. Those
(02:38):
subsidies expired on September thirtieth, and so I think as
of October first, it's not like suddenly you see millions
of children losing their spots. I think what's going to
happen is over the next several months daycare centers some
will close, some will lose staff, some will curtail their hours.
Families will sort of try to figure out, Okay, can
(03:01):
we make this work, can we pay a little bit more.
Can we figure out another way to take care of
our kid during you know, maybe parts of the day
that we couldn't get full time care, maybe we could
work part time. Like they'll start to slowly dial back
and figure it out. But the result is that I
think a year from now we might be in a
very different place.
Speaker 2 (03:21):
So then does Congress Woolman may have a point that
perhaps there are too many regulations. I mean, you listed
a few, but those were specifically pandemic related. I'm just
wondering if maybe she has a point building off of that.
Speaker 4 (03:34):
You know, I think that the point that she raised
in the clip we heard that you know a place
that might require a four year college degree, that you know,
for a job that's incredibly low paid, that's just not realistic.
I think that. On the other hand, you know, we've
just seen in New York terrible story about a one
(03:56):
year old boy dying of fence and al poisoning. That
daycare center had just passed a surprise state inspection. So
I think we want to be careful as we look
at these regulations and not blame regulation in general. We
need regulation to keep our kids safe. That's like literally
a parent's number one job, and it's literally the most
important job of a daycare center keep the kids physically
(04:19):
and emotionally safe. So we need to figure out a
way to do that well. I do think maybe loosening
some other regulations on a case by case basis where
they just don't make a ton of sense.
Speaker 2 (04:30):
You also mentioned the low pay, which is standard unfortunately
at daycare centers. But if you do require a four
year degree and you pay such low wages. I believe
the Senator of the Congressman was also talking about how
they can't compete with Chick fil A, they can't compete
with Starbucks because those folks get paid more. So is
(04:55):
there are some happy medium that can be struck between
the low pay and the strict regulations. Could we increase
the pay and perhaps require an associate's degree something like that.
Speaker 4 (05:08):
I mean, and frankly, I don't really see why you
need an advanced degree here at all. You know, you
are talking about a job that requires, especially for really
little babies, things like loving the child, feeding them, changing
their diapers, playing with them, you know, and that's really
(05:30):
important work. I don't see that it requires sitting in
a classroom and having a credential. But at the other hand,
it does require some kind of control so that parents
know that they're leaving our kids in good hands. I
think that, you know, one of the challenges here is
that even though the pay is very, very low for
(05:51):
the people who work at daycare centers, parents are paying
astronomical amounts. I think the average cost for an annual
tuition for childer is about fourteen thousand dollars. Well, I
was surprised to learn that, because we pay thousands of
dollars more than that in Massachusetts, and you know, personally,
I pay about twenty two thousand dollars a year for
my toddler, and that was by far the cheapest option
(06:14):
that we found. And so somehow the market here just
seems broken to me. You have parents paying astronomical amounts
of money, you have workers who somehow aren't earning enough
to live. To me, that's sort of something that you know,
highlights why in other countries often there is a role
for the government to play in subsidizing the care because
we are talking here about something that is essential to
(06:36):
building a competitive workforce. You cannot work unless you have
somewhere safe to leave your kid during a day while
you're at work. And at the same time, you know,
just leaving it to the free market doesn't seem to
have worked.
Speaker 2 (06:47):
Okay, let's talk about it.
Speaker 3 (06:48):
Then.
Speaker 2 (06:49):
What role could the government play? What role could employers play?
Speaker 4 (06:54):
Actually, I do think there's a ton here for employers
to do, and in the United States is probably more
realistic to expect some private sector help than to expect
some kind of federally subsidized program like they have in France,
where it's like the kids are eating bree and cheese
and foie gras or whatever. Kidding, but no, I think
(07:15):
in the US, I think, you know, we often see
employers coming in with things that that we've decided the
government isn't going to provide. So something like fifty nine
percent of employers already provide flexible spending accounts for dependent care.
That's not terribly helpful because that's capped at five thousand dollars.
(07:37):
As we've just said, you know, the average cost of
care it could be three times that, so that's not great.
Only six percent of employers provide some sort of on
site or near site daycare. Often that is subsidized. It's
not always, but very often it's hard to just even
give your kid a spot, you know. I know when
(07:57):
I was looking for care, I put us on the
waitlist for mind to I don't when I was fourteen
weeks pregnant. We did not get a full time spot
till she was over a year old.
Speaker 3 (08:05):
Wow.
Speaker 4 (08:05):
So if an employer could even just say like, hey,
we have a daycare center. Yeah, it costs a lot
of money, but it's right next to the office, like
that would actually help a ton of parents. And I
know Patagonia is an example of a company that has
started providing on site childcare. They're working parents who use
the care center. They show up five days a week
in the office. So if you are a CEO who
wants to return to office like you could do worse
(08:27):
than opening a daycare center near your office. So I
definitely think there's a role here for employers to play.
Speaker 2 (08:33):
And we are talking with Bloomberg Opinion editor Sarah Green
Carmichael about childcare after the pandemic era subsidies. And during
that time though, when those subsidies were in place, there
was progress, right the remote flexible work and daycare in
school openings, allowing for the highest ever workforce participation by
women with children. Why is it important to maintain that momentum.
Speaker 4 (08:57):
You know, it's an incredible rebound because in the early
day so the pandemic, women with children went home more
than any other group, you know, they dropped out of
the workforce. But actually since schools and daycares reopened, they've
had the steepest rebound of any group. It's not rocket science.
What it takes to get mothers back into the workforce,
flexible work, and affordable daycare. So why is that so important?
(09:20):
That is so vital because families these days need to incomes.
It's just math. If you look at low income families,
they are disproportionately likely to be a single earner family,
and the economy needs those workers. You know, it's been
very hard to hire. It's been a tight labor market
for years. Employers keep waiting for it to get easier,
but it's not getting easier. We need people who like
(09:44):
can work to be working. That's a really important part
of the economy. So I think all around. You know,
this is not rocket science. The ingredients here are simple.
It does take some investment, but I think the rewards
really pay off, not only for families but for the
broader economy.
Speaker 2 (09:59):
Before we to go, we talked a bit about the
history of the daycare dilemma, the pre pandemic, during the pandemic,
post pandemic. This is not a new problem. Why is
it so hard.
Speaker 4 (10:12):
It's hard because a couple of reasons, but it's I
think it comes down to fundamental assumptions that we have
in the United States that basically a mother's place is
at home with her kids, and if that's our underlying assumption,
we're just not going to invest in setting up the
care infrastructure we need to send moms to work. And
in countries that have solved this problem, they've just really
(10:35):
recognized that those workers, that mothers who work are an
important part of the economy and important part of their
national competitiveness, and they've invested in it.
Speaker 2 (10:43):
Sarah Green Carmichael is a Bloomberg Opinion editor, coming up
a look at the housing market. Dysfunctional and hard to predict,
but now maybe a glimmer of hope. You're listening to
Bloomberg Opinion.
Speaker 1 (11:04):
You're listening to the Bloomberg Opinion podcast count US Saturdays
at one and seven pm Eastern, on Bloomberg dot Com,
the iHeartRadio app, and the Bloomberg Business App, or listen
on demand wherever you get your podcasts.
Speaker 2 (11:19):
You're listening to Bloomberg Opinion. I'm Amy Morris. Home prices
are once again on the rise following a brief decline,
but we're also witnessing more evidence of a shift in
the balance of power in the housing market. Let's get
more from Bloomberg Opinion columnist Connor sen founder of Peachtree
Creek Investments, Connor always a pleasure. What balance of power
(11:41):
in the housing market are we talking about?
Speaker 5 (11:43):
So, in a weird way, the balance like sellers have
had the upper hand in the housing market this year
just because there have been so few homes for sale,
because when mortgage rate spike last year, people rush to
sell their homes and then they stopped, and so new
list things have been way down this year. Inventory has
been under record low, and so even though buyerfordability has
been terrible, there have been so few homes for sale
(12:05):
that sellers sort of have gotten rising prices in a
lot of cases, even though buyers are like this as crazy,
things are too expensive house as possible. But what we've
been seeing over the past month or two is that
listings are now rising, sort of at an unseasonal time
of the year. You would think by now that listenings
would be declining heading into the end of the year,
but they're still rising. And so that to me is
(12:27):
a sign that sellers have lost their patients and they're
slowly starting to list their homes even in a sort
of more challenging environment.
Speaker 2 (12:35):
Now you've mentioned the rise in inventory, that would be
unusual for this time of year.
Speaker 5 (12:39):
Right, right, And so last year at this time of
the year, you may recall that mortgage rates were spiking,
and yet over the sort of from end of August
until late September, weekly inventory of homes for sale only
rose by about two thousand. Yet over the past four
weeks listings have prisen by twenty five thousand, and so
again I think that people people definitely want to hold
on to their low more, but life happens. That's divorce, divorces, kids,
(13:04):
and people have held out from not selling for a
year and a half and some of these sellers are
getting a little antsy and are trying to sell their homes.
Speaker 2 (13:10):
So are housing prices then bound to soar?
Speaker 5 (13:13):
So they've been rising over the past nine months really
just because of this lack of inventory, and so buyers
have had to compete with each other for the very
few number of homes for sale. I think this rise
in inventories will actually put I don't know about downward
pressure on home prices, but sort of stop whatever rise
in home prices we've had. And the thing that makes
me optimistic is I think we'll get more transactions because
(13:34):
one of the reasons we've had so few home sales
this year has just been due to this lack of inventory,
and so if we just get more homes on the market,
we'll get more sales.
Speaker 2 (13:42):
You had anticipated the resale inventory would be turning in
the fall, and now you're seeing what can support that theory.
What other flags are you watching for as you look ahead?
Speaker 5 (13:56):
Well, I was sort of looking forward a couple months
ago just because listings new weekly listings were down about
twenty percent year every year, and that just wasn't sustainable,
just because you can't keep dropping twenty percent year every year.
And the real shock last year was in kind of
Q three, Q four, and so I thought as we
got closer to those dates that the the year every
year numbers would turn. And also just as a homeowner,
(14:16):
I mean, even if you want to hold on to
your low mortgage rate, you are paying down some principle
every year, every month, and sort of that low mortgage
benefits to slowly decay. And then, like I said, people
life happens. And then also about seven million homes have
sold since mortgage rates per sent five percent last spring,
so you do have a growing cohort of people who
aren't locked in with a low mortgage rate, and they're
(14:39):
more likely to list their homes and move opportunistically.
Speaker 2 (14:42):
Is there sort of a lagging response? Then? Are people
listing their homes and moving so that they can make
some money off of selling their home, even though that
money might not be there now the listings may wind
up being lower than they expect.
Speaker 5 (14:56):
Yeah, that's part of it. I think also a lot
of reasons why you didn't have listings is because people
couldn't afford to move. Because a lot of people who
are selling a home are also buying another home, and
so if I can't afford to buy something else, I'm
not going to list mine, and you kind of create
this standoff on the marketplace. But I just think that's
starting to weaken a little bit. And part of it
might just be some people just have to have more space,
(15:19):
or their kid is entering kindergarten, they have to go
into a certain school district, and you just can't hold
out forever, at least not everybody can. And so I
think you're seeing that sort of desire to stay where
you are. We can on the margin, And we are talking.
Speaker 2 (15:32):
With Bloomberg Opinion columnist Connor sent about what the housing
market is likely shaping up to look like in the
coming year. How different is it going to look.
Speaker 5 (15:41):
Connor So sort of I think conventional wisdom has shifted
to this ye of, well, we're not going to have
any listings because everybody has their three percent mortgage rate,
and so numerically, I don't know how much of a
change it might be, but it's sort of if you
have ten or twenty percent more listings next year than
you did this year, I think, sort of relative to expectations,
that could surprise people. And in markets where I also
(16:04):
think this regionally is going to be more of an
issue in sort of faster growing, more dynamic markets, just
because that's where the volatility has been in the housing
market over the past five years. So I think this
is going to be more of a Phoenix, Nashville, Charlotte
thing than a Philadelphia in New York thing, just because
home prices went up a lot. More people moved here
during the pandemic. Maybe they didn't move into their forever home,
(16:24):
but they just wanted to get out of the Northeast.
And these are people who, you know, maybe life, they're
having more kids, they're in family formation phases, so they're
the ones more likely to be looking to move than
somewhere in the Northeast who's been in their home for
twenty years. Again, it's only been a couple months in
the data, so we'll have to see a little bit
longer to see what regional trends emerged. But my hunch
(16:45):
is that this inventory situation has a more prominent thing
and faster growing parts of the country than in the Northeast.
Speaker 2 (16:51):
And do you also have a hunch about how long
this new look is going to last for the housing market.
Speaker 5 (16:56):
I think actually the twenty twenty three will turn out
to be a kind of for low for resale homes,
for inventory for listings. I think this is like the megabottom,
And the question is just how long it's going to
take for inventory to rise closer to levels like we
had pride to the pandemic. We're kind of down fifty
percent or so, so it could take a while. But
I think this is the worst it's ever going to
(17:17):
be if you have been looking for a home to
buy and you've been frustrated, and so hopefully that comes
with increased affordability. We'll have to see about that, but
in terms of lack of inventory, lack of transactions. I
think the worst is behind us.
Speaker 2 (17:28):
What about those who want to sell their homes? What
has sellers more motivated?
Speaker 4 (17:31):
Now?
Speaker 5 (17:32):
If I was looking to sell, and it's sort of
like I think I was going to have to do
it over the next couple of years, I would probably
get on with it. Because if we're seeing this in
the data in September, I wonder if there are people
who you know this is obviously you have to be
looking at the data every week to even see this
in the data. They might be thinking, Okay, mortgage rates
are seven and a half. I need to sell, but
I'm not going to do it now. I'll wait until
February March, because you wait until the spring, and I
(17:54):
think there could be I don't know, but there could
be a real glut of listings in the spring as
people I'll try to get through the winter and then
make it to the spring, so I might try to
opportun to notistically sell now if I have that kind
of flexibility to be a potential rush and that rush
might not materialize, but that would be the risk to me.
Speaker 2 (18:11):
Do you foresee more volatility in the housing market? I mean, gosh,
what we're experiencing in the housing market. Now, would you
qualify this as volatility? I'm just wondering when things are
going to start to calm down.
Speaker 5 (18:24):
Yeah, it's volatility. It's sort of I guess it's sort
of if you have somewhat more listings. Is there what
a marginal increase in listings lead to fairly significant lower prices? That,
to me is the big question. How motivated are these sellers?
And if prices are stable or follow a couple percent,
I think people are fine with that. If all of
a sudden you see a big shift in pricing, then
(18:46):
maybe sellers say, Okay, I'm not willing to accept this.
I will hold off. But I think if pricing can
be stable, you can get a pretty meaningful increase in
inventories and transactions as people just get comfortable with where
the market is and they say, this is a life
of end I have to make, I have to sell,
I have to buy, and let's just try to get
a fair transactors.
Speaker 1 (19:04):
And to move on.
Speaker 2 (19:05):
And this is all things being equal. Are there any
X factors that could interfere with this? I'm thinking anything
from politics to the weather.
Speaker 5 (19:12):
Sure. I mean, obviously there's been a lot of valatility
in mortgage rates. And so if maybe if mortgage rates
went to eight eight and a half, that becomes a
new threshold where people say, Okay, I really can't afford
to do this, this is crazy, I'm going to pull
back once again. Or if we get some sort of
meaningful downturn in the economy where all of a sudden,
the labor market weekends and then that becomes a factor
for people. So those would be the two things that
I would consist that that would make me shift my thinking.
(19:34):
If mortgage rates went up another fifty one hundred basis points,
and if the unemployment rates started spiking to four and
a half percent, then that could shift things. But other
than that, I think we will see a pickup in
inventory and transactions in the first half of next year,
and that's really a good news for the economy because
what we have now is not healthy at all. Perversely,
the FED sort of backing off has led mortgage rates
to rise, but hopefully we're at the end of that adjustment.
Speaker 2 (19:57):
Connorson is a Bloomberg Opinion columnist and founder of Peachtree
Creek Investments. Now coming up, what exactly is an act
of God anyway, and should we reconsider that phrase when
it comes to certain natural disasters. We're going to talk
about that. Just ahead. Don't forget. We are available as
a podcast on Apple, Spotify, or your favorite podcast platform.
(20:21):
This is Bloomberg Opinion.
Speaker 1 (20:30):
You're listening to the Bloomberg Opinion podcast. Catch us Saturdays
at one and seven pm Eastern on Bloomberg dot Com,
the iHeartRadio app, and the Bloomberg Business App, or listen
on demand wherever you get your podcasts.
Speaker 2 (20:45):
This is Bloomberg Opinion. I'm Amy Morris. Torrential rain in
the Mediterranean, monster hurricanes, wildfires, extreme heat, and extreme cold.
We often consider these natural disasters construed as acts of God.
But are they This summer, officials with NASA and NOAH
held a press conference in Washington, d C. To discuss
(21:05):
how climate data showed July as the hottest month for
Earth on record. NASA Administrator Bill Nelson warned, quote, Mother
Nature is sending us a message.
Speaker 6 (21:16):
Just look around you and you'll see what's happened. We
have record flooding and Vermont. We have record heat in
Phoenix and in Miami. We have major parts of the
country that have been blanketed by wildfire smoke.
Speaker 2 (21:39):
It's NASA Administrator Bill Nelson. We want to take a
closer look at this now with Lara Williams, a Bloomberg
opinion columnist who covers climate change. It's always a pleasure, Laura,
thank you so much for taking the time with us.
In your column on the Bloomberg Terminal, you literally itemize
some of the largest natural disasters that we've seen in
just the past few months, and then you make the
(22:00):
argument that these aren't necessarily natural disasters or acts of God.
Speaker 7 (22:04):
How so, so yes, well, there's two things at play here.
So the first is, you know, these weather conditions, and
we have rapid attribution studies that can tell us just
how influential climate change has been in the intensity and
(22:25):
the frequency of these events. And more often than not,
they find that, you know, humans burning fossil fuels has
made these extreme events more likely. So, for example, the
horrendous you know, rains and down collapses in Libya was
made fifty times more intense and up to no fifty
(22:48):
times more likely sorry than fossil fuel by fossil fuel
missions with as much as fifty percent more rain. So
that's the first part that's why it's not natural. The
second part is that you know, these disasters only happen
when hazards collide with pre existing vulnerabilities. Libya is war torn,
(23:10):
is thereout these two clashing governments and experts had been
warning that the dam, these two dams were you know,
they needed maintenance, they would own to collapse. That wasn't done.
Climate change happens that created these weather events, but then
that exists in vulnerability just led to the you know,
(23:32):
horrendous disaster.
Speaker 2 (23:34):
I saw that quote in your column, and I want
to talk about that just a little bit. It's worth
noting disasters happen when hazards collide with vulnerability, as you said,
so that vulnerability is frequently then something that is man made,
like the dam not being properly maintained.
Speaker 7 (23:54):
Yeah, exactly, so it should be you know, a lack
of adaptation from governments, lack of trying of you know,
maintenance and infrastructure upkeep in Germany, you remember the twenty
twenty one horrendous floods that happened there that you know,
the rain was extreme, but also you've got to take
into consideration land use decisions, you know by the government,
(24:18):
there'd been a lot of you know, natural wetlands that
had then been covered over with slitch concrete, which meant
the water had nowhere to go, and so that's a
vulnerability as well.
Speaker 2 (24:27):
There are those who are going to say that this
is all speculation and extrapolation and that there's no real
way to know if humans are the problem or not.
Speaker 7 (24:36):
How do you respond to that, Well, I would just
point them towards you know, scientific consensus. We know that
burning fossil fuels is leading to the warm end of
the planet. And then these you know, really smart rapid
attribution studies use very complex models and they can tell
(24:57):
us exactly the influence of climate change which we as
human laws, is having on these weather events.
Speaker 2 (25:03):
You've mentioned examples in Libya, in Germany, all over the globe. Really,
are there any particular segments of the globe that are
more at risk than others?
Speaker 7 (25:15):
Yeah, of course, so we know that you know, countries
in what people call the global seuth these kind of
emerging and developing countries them or at risk. They are
bearing the brunt of extreme weather. But also they're more
vulnerable just because they haven't had the same levels of investment,
they don't have the same levels of infrastructure that you know,
people in the global North have. When you look at
(25:38):
something like Madagascar, so they've you know, had this big
famine for years of drought. Actually it wasn't kind of
driven by climate change. It was driven more by the
fact that loads of people are in poverty, so they
just don't have the same resilience that places and you
know people in richer countries do.
Speaker 2 (25:56):
Now in your column, you argue that at of God,
that terminology really needs to be retired. Why why can't
we just keep that in there?
Speaker 7 (26:07):
Well, I think it takes away the kind of human agency.
You know, it kind of lets us think you can
let government's debt away with not doing enough to protect
their citizens. And I think that's really really important that
we focus a lot more on adaptation.
Speaker 2 (26:27):
Sort of a way of calling them out exactly. And
we are talking with Bloomberg Opinion columnist Laura Williams about
exactly what an act of God really is. Are there
any circumstances at this point where an act of God
natural disaster would apply in that lingo or are we
past that? Have we done so much damage and are
(26:47):
we continuing to do so much damage? That act of
God is not as much of a factor.
Speaker 7 (26:51):
That's a really good question. I would say that, you know,
scientists are doing these rapid whether attribution cities. They occasionally
do find that climate isn't the main driver of that,
and so in those cases maybe active rods does apply.
But also if there is a disaster, there's likely to
(27:12):
be pre existent in vulnerability is due to human actions
on the ground, So potentially not do.
Speaker 2 (27:18):
Those vulnerabilities also include where a country might be located,
or the poverty level within that country, the economic part
of that country, is that part of one of the
factors that you would consider.
Speaker 7 (27:32):
Yeah, definitely, definitely, the economic situation is going to play
a huge role because you know, if people don't have
if people are living in poverty, they don't have you know,
houses that are as resilient to extreme weather. They might
not have air conditioning if you're thinking about extreme heat,
they won't have money to buy food or you know,
(27:53):
find water. So economic definitely, and as we know that,
you know, countries in the low Wi South tend to
be in a more economically fragile economic situation.
Speaker 2 (28:06):
Let's say let's take it another step further. Some of
the risks that we might see with these disasters we
all know about things like food shortages, are there other
risks that may come into play that we should be
on the lookout.
Speaker 7 (28:18):
For for sure? So you know, in India they've had
some cyclones and there I think we need to be
kind of really prognessant of societal structures. There was evidence
where you know, cast based discrimination prevented some people entering
the evacuation shelters, which meant, you know, while some members
of society were tap safe and disaster was prevented happening
(28:41):
to them, other you know, other groups were not astep safe.
And I think that's really important to think about kind
of society and that goes to the like cast levels
and gender and all kind of those kind of you know,
sections of society. I think we need to be we
need to remember that.
Speaker 2 (28:58):
Where do we go from here? What happens now?
Speaker 7 (29:01):
Well, I think, you know, we don't talk about these
vulnerabilities more and you know, stop thinking of these things.
There's things that couldn't be prevented, because quite often they
can be prevented, and it's you know, some of it
might be hard, that some of it's quite easy. We
need to talk about that and try and think about,
you know, in what ways like effect a faction could
(29:24):
be taken. Adaptation funding globally is still a fraction of
the money that goes towards emissions reduction, and I think
hopefully that's changing because for a long time, adaptation was
kinds of a dirty word. People didn't want to be
seen as taking the pressure off reducing emissions. But it
is becoming a more critical issue as you know, we
(29:44):
see climate change actually affecting people in real time, so
I think talking about it, I know that it's going
to be a big voters at top twenty eight, so
we'll see what happens out of that.
Speaker 2 (29:56):
Do you think there is going to be any traction
when it comes to eliminating the phrase act of God
when they talk about things like the cause of these
natural disasters or maybe even eliminating the natural in the disaster.
Speaker 7 (30:10):
Yeah, I mean that would be interesting. It's such a
cloak real term, and it's used a lot in kind
of insurance, so I wonder if insurers would be well
hesitant ever move in that acts of God land bridge
from their policies.
Speaker 2 (30:24):
Lara Williams is a Bloomberg Opinion columnist who covers climate change.
You're listening to Bloomberg Opinion. I'm Amy Morris, and we've
seen tremendous investments in bicycle infrastructure in the past few years,
urban bike sharing, e bikes, places to secure your personal
bike in parking garages and while you're at work. So
why isn't biking to work catching on? Let's talk about
(30:48):
that with Bloomberg Opinion columnists Justin Fox and Justin I
kind of can see why it might not catch on
in a place like d C, where if you live
outside of the district, that's the sob you're taking your
life in your own hands if you try to bike
into work from way out in the suburbs. Is that
the problem people being in the suburbs or having that
(31:08):
commute in front of them.
Speaker 3 (31:10):
Yeah, and definitely there was this weird little period in
about a decade ago when all the growth was in
cities and there wasn't much new housing being built anywhere,
and so that's when bike commuting peaked was twenty fourteen.
This is according to the annual American Community Survey that
(31:31):
the Census Bureau does, sort of this mini census they
do every year, and after that, things sort of got
back to a little bit normal. The millennials who are
riding their bikes to work started making more money in
a few of them bought cars. I mean, that's one issue.
I do think another issue, and I have gotten more
(31:53):
email response from this column than anything else I've written.
This Yer hadn't gotten that many rears, but every single
biker bike commuter who read it wrote in with their
thoughts about what it was. And you know, one thing
a lot of people say is just drivers have gotten
more reckless over the past decade, especially over the course
of the pandemic. But there's definitely you look at traffic
accidents and other measures, and also the cars. The vehicles
(32:17):
keep getting bigger. So that's one concern a lot of
people have. But another really obvious one is just that
sort of target demographic of the kind of people who
would bike to work are also the kind of people
who like to work from home. So because it's kind
of funny, you think work from home would be most
like concentrated in distant suburbs. But this is something else
(32:38):
I wrote about recently, based also on the American Community Survey,
if you look for the places where there's the highest
percentage of people last year who were still mostly working
from home. It was in neighborhoods of Oakland, Seattle, Portland, DC,
and to some extent suburbs, but pretty clear like Arlington.
Speaker 2 (32:58):
Does sound like then, from what you said that the
pandemic may have had a chilling effect on commuter biking,
not just because we're all working from home, but because
we all evidently forgot how to drive properly. We got
a little bit more reckless behind the wheel. Is that
part of it, Yeah.
Speaker 3 (33:13):
Although it is kind of funny. So I was basing
this on the Census bureau be at Bloomberg. Now also
this week have a story from a private survey and
the headline is US bike trips of Swords since twenty nineteen.
So it is this sort of it's this mix of
a lot of people bought bikes over the course of pandemic,
and they may be, you know, mostly for exercise, but
(33:35):
some people are probably running errands for them and such.
But just the mix of that with who is in
fact going to the office.
Speaker 2 (33:42):
But I do think there is a difference between biking
for exercise, biking for recreation, and biking to get to work.
Once you use it as a form of transportation, it
seems to take on a different air.
Speaker 3 (33:53):
Yeah, and some places it's more appropriate than others because
of the weather and other things. It's a pretty spotty.
Even in a city that's done a lot of work,
like New York, it's pretty spotty.
Speaker 2 (34:04):
From the data that you've looked at. You think it's
going to catch on at some point or is just
too much, too many obstacles.
Speaker 3 (34:10):
I mean, I think in some cities it makes a
whole lot of sense. There's the biking capital of America
is Davis, California, which is a college town outside Sacramento,
and they have like close to Dutch level bike commuting there.
I would imagine we're still in a long, slow rise
in it. But it's just that what's been done so
(34:31):
far to make it practical it is not that much.
I mean when you compare it to any place where
biking is much more well established, like the Netherlands.
Speaker 2 (34:42):
All right, Bloomberg Opinion columnist Justin Fox, always a pleasure,
Thank you for your time, Thanks for having me. That
does it for this week's Bloomberg Opinion. We are produced
by Eric Mullo, and you can find all of these
columns in the Bloomberg Terminal, and we're available as a
podcast on Apple, Spotify, or your favorite podcast platform. Stay
with us to day's top stories and global business headlines.
(35:02):
Just ahead, I mean, Morris, this is Bloomberg.
Host
Vonnie Quinn
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