September 16, 2020 • 57 mins
Early on during the pandemic there was a popular refrain: "We're all in this together." Sadly, time has shown that to be a fiction. The recession ended for the haves months ago. Meanwhile, it's gotten harder and harder for many of us to kumbaya our way through it all. Join us as we talk with our go-to economists Shuaib Hassan and Chinesom Ejiasa about the wealth gap—what it looks like today, how we got here and what it means for us going forward. It may be economics, but we promise you it's not boring!
*Regarding the Gini in the title:
The Gini coefficient, sometimes called the Gini Index or Gini ratio, is a statistical measure of distribution intended to represent the income or wealth distribution of a nation. It was developed by Italian statistician Corrado Gini in 1912, and today is the most commonly used measurement of wealth or income inequality.
https://en.wikipedia.org/wiki/Gini_coefficient
Info and background links for today's show:
Shuaib Hassan:
https://www.linkedin.com/in/shuaib-hassan-mba-7119363/
Chinesom Ejiasa:
https://www.linkedin.com/in/chinesom-ejiasa-9277468/
Interesting info on the Wealth Gap:
https://www.pewresearch.org/fact-tank/2020/02/07/6-facts-about-economic-inequality-in-the-u-s/
Byron Rumford and the California Fair Housing Act:
https://en.wikipedia.org/wiki/William_Byron_Rumford
The Sustainable Development Goals:
https://sdgs.un.org/goals
Redlining's legacy:
https://www.forbes.com/sites/brendarichardson/2020/06/11/redlinings-legacy-of-inequality-low-homeownership-rates-less-equity-for-black-households/#3697636d2a7c
We're No. 28! And dropping!
https://www.nytimes.com/2020/09/09/opinion/united-states-social-progress.html
Connect with us on our Instagram feed:
https://www.instagram.com/anewnormalpodcast
The theme music is Fragilistic by Ketsa
licensed under CC BY NC ND 4.0
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Kelley Lynch (00:03):
You know, before I moved here, I was thinking what
would be really cool would be tohave to have one of those
friends who's kind of like Lucyand Ethel.
Ethel is always going over toLucy's house.
Lucy's always going over toEthel's house and they can
always sit in each other'shouses and they do all these
things together.
(00:24):
And I thought to myself, God,wouldn't it be so cool to have a
friend like that?
We've been talking so much aboutold sitcoms.
Um, but it's funny that that'swhat happened
Cindy Sealls (00:38):
Of all the things you wanted for the new place
where you live.
Kelley Lynch (00:44):
I know that.
So, I mean, maybe that tells mesomething, I don't know.
I don't know.
Cindy Sealls (00:50):
I don't know what that says about you, but I just,
every time you say that it justmakes me laugh and it's amazing,
but it's also pretty freakingamazing that had it not been for
some legislation, that personwould have not been me because
I'm African American.
(01:10):
And as you know, the propertieswhere we live there was actually
written into the covenant of theproperties that black people
could not live here.
Kelley Lynch (01:22):
These were built when, 1948 right?
Cindy Sealls (01:25):
Yeah.
After the war.
So this was part of the wholerebuilding America after the
war.
Kelley Lynch (01:31):
And these were houses for the GIs, right?
Cindy Sealls (01:34):
GIS.
Yup.
And so they have very lowinterest loans, which were not
available to black people.
Number one.
And even if they were, theyweren't able to buy these houses
in this neighborhood.
Kelley Lynch (01:47):
Man.
Amazing.
Because now there's like fivewhite people in this
neighborhood and well, actuallyvery few African Americans and
well loads of people from everycountry in the world.
Amazing little United nationsneighborhoods.
Cindy Sealls (02:02):
Thanks to the fair housing act of 1968.
Kelley Lynch (02:06):
Yeah.
So we wouldn't have beenfriends.
We would have never met.
Cindy Sealls (02:07):
Right, right.
Because I wasn't allowed, well,maybe we would have met because
you would have come here to seeyour white neighbor friend.
And I would have been the maidin the house.
I've been calling you MissKelley.
Hello, ms.
Kelley.
Kelley Lynch (02:23):
Ooh.
Cindy Sealls (02:24):
You know, I told you I have the original deed to
the property here and it says itright on the piece of paper.
I should pull it up and justread it to you.
So this is the Rolling Park LandCompany, inc.
Their bylaws o r laws for theseproperties that they purchased
(02:48):
this land.
And then things that were to bebuilt o n t o the land.
It says no person of any raceother than the Caucasian race
shall use or occupy any buildingor any lot, except that this
covenant shall not preventoccupancy by domestic servants
(03:08):
of a different race domiciledwith an owner or tenant.
So the only way, I mean, itmeans that the only way a person
of any race other than theCaucasian race could live in,
just live, like not even youcouldn't even rent basically, is
(03:31):
what they're saying.
The only way you could do it isif you lived with a white
family.
Kelley Lynch (03:37):
As a servant, r ight?
Cindy Sealls (03:39):
No person of any race other than the Caucasian
race shall use or occupy anybuilding or any lot, except that
this covenant shall not preventoccupancy by domestic servants
of a different race domiciledwith an owner or tenant.
Kelley Lynch (03:59):
Basically you could only live here as a
servant, as a servant.
And that was until when 1968.
Cindy Sealls (04:07):
That's really incredible.
Isn't it?
It's pretty incredible.
And this remember they wrotethis in 1948, after the war,
after hundreds of thousands ofblack people had gone and fought
for the country, this is whatthey come back to.
Kelley Lynch (04:25):
Wow.
So how does that make you feel?
Cindy Sealls (04:31):
I feel like I'm kind of proud that my relative,
Byron Rumford, was one of thepeople to change the law
basically because he wrotelegislation in California in
1963 called the California FairHousing Act that although it was
(04:58):
a very contentious thing,finally was upheld by the
California Supreme court toprevent people from
discriminating against folksbased on ethnicity, religion,
marital status, and disabilityor gender.
Like we think that all thisstuff happened hundreds of years
(05:20):
ago.
Right?
And this thing was written in1948.
So what do I do if I want to buya house, I got to buy one in the
red area.
Wow.
Where the schools are bad, wherethe neighborhood it's not great.
(05:41):
I can't buy a house in your niceneighborhood with the nice
school in the nice yard.
Kelley Lynch (05:47):
Well, our neighborhoods, not necessarily
that neighborhood now, anyway.
Cindy Sealls (05:51):
Yesit is, Hey, we still have a neighborhood that's
sought after.
As you know, it's becominggentrified.
Kelley Lynch (05:59):
Oh my God.
Cindy Sealls (06:00):
As we know, but you know what?
I'm not leaving.
Even though white people aremoving in, I'm not leaving.
I don't care what those realtorssay about what's going to happen
to the neighborhood.
(06:27):
Hi, I'm Cindy.
Kelley Lynch (06:29):
And I'm Kelly.
Welcome to a new normal apodcast about how we're adapting
to life during the pandemic andwhere we go from here.
Our guests today are ourfavorite economists, Shuaib
Hassan, and Chinesom Ejiasa.
And today we're talking aboutthe wealth gap.
Early on during the pandemic,there was a phrase that you
(06:55):
heard a lot that went somethinglike we're all in this together.
And I think that gave people alot of comfort, but increasingly
I think we can see it's afiction that makes us feel good,
but it's not true.
At a time that has beendescribed as the worst economic
downturn, since the greatdepression, we're also seeing
(07:17):
the stock market reaching alltime highs.
We wanted to talk to Shuaib andChin about what's going on, how
we got here and what it meansfor us as a country going
forward.
Welcome to the show.
Shuaib Hassan (07:32):
Thank you, Kelly.
It's to be back.
Chinesom Ejiasa (07:34):
It's great to be here with a guy who I've
known since high school.
So thanks for having me on.
Thanks for letting me crash yourset.
Kelley Lynch (07:40):
So speaking of coming back, Shuaib, everybody
loved your show.
In fact, my uncle decided thathe was going to vote for you for
president.
I had tell him that probably thebirth certificate, wasn't going
to work out on this case.
Shuaib Hassan (07:54):
I'll use Chinesom's birth certificate.
It's okay.
Chinesom Ejiasa (07:57):
You're you're better off using Kelley's.
Kelley Lynch (08:01):
But Chin, you were born in the U S right?
Chinesom Ejiasa (08:04):
It doesn't matter.
So was Obama.
Shuaib Hassan (08:09):
So Shuaib, you want to tell us, I know you said
people were talking to you aboutwhat you said last time on the
show.
Maybe let's start there.
What were people talking to youabout?
People wanted to know differentthings.
What was it?
There was a lot of questionsaround whether this is another
event that's going to negativelyimpact the wealth inequality in
(08:30):
the US.
So just a lot of questions ofcuriosity of what's going to
happen next.
Kelley Lynch (08:36):
So what's going to happen next?
Shuaib Hassan (08:38):
Well, it's anybody's guess right now.
As we all know, the stimuluspackage ended and there hasn't
been a new one.
They are continuing to discuss,fight, whatever it is, and we'll
see if they can make anyprogress.
So it really depends on whatthey agree on, what they
(08:58):
compromise on, and what'sactually in the stimulus
package.
So it's kind of unknown rightnow, but I know there's a lot of
very scared people.
The FHA did extend themoratorium for evictions and
foreclosures to December 31st.
So that is taken care of atleast.
But like we talked about there'sconsequences to that.
The landlords still have to paytheir obligations.
(09:21):
Plus at some point, theserenters will have to pay back
their arrears.
So all you're doing is addingdebt to the people's plate.
So, you know, if the economycomes back, say first quarter of
next year, when we have avaccine and things like that,
they're going to be behind whateight, nine months of rent.
(09:42):
And these are people that are onthe margins of the economy
anyway.
How are they going to surviveand continue to make payments
that are past due?
I just don't see how it'spossible.
I would love to actually hearChin's opinion on this because
he's more on the finance side ofthings.
Chinesom Ejiasa (10:01):
Until the money is forgiven somebody, or some
bodies are going to be on thehook for that money.
After the financial crash of2007, there were a lot more
renters in America than therewere actual homeowners.
Unless money is forgiven eitherthere'll be a rash of commercial
bankruptcies, or there will be arash of residential bankruptcies
(10:25):
or both.
Cindy Sealls (10:27):
I just, I guess I was surprised about the renters
having to pay their arrears.
Shuaib Hassan (10:34):
It's again, it's deferred.
It's not even deferred really.
It's going to be added to thedebt obligation.
All the protection they haveright now is that they cannot
get evicted.
They signed the lease.
They're still responsible forthat.
Once the evictions or moratoriumare lifted, they might get
(10:54):
evicted and they will still owethe past amounts due.
Kelley Lynch (10:57):
Oh my God.
Shuaib Hassan (10:57):
That's the worst case scenario, right?
And so again, this is not freemoney to homeowners or renters
or individuals or families.
All the protection is doing isallowing them to be past due and
not be evicted.
Cindy Sealls (11:13):
So as financial guys, how do you see that?
I mean, because to me thatsounds like a disaster.
I mean, even more so I thinkthan homeowners who can wrap
their payments at the end oftheir loan.
I mean, how are these people whohaven't had a job in four or
(11:33):
five months going to suddenly beable to pay?
You know, if you're talkingabout like an apartment here,
the cheapest you can get is$1,200 a month.
I mean, how are they going to beable to pay that and what
happens?
So they'll get kicked out ifthey can't pay it, of course.
And then they're not going to beable to get another apartment
(11:56):
cause who's going to rent anapartment if they owe all these
arrears.
Shuaib Hassan (12:00):
Exactly.
So, you know, their creditscores will get hurt, get hit,
but they will also have theaccount in collections and so
they'll be hounded by collectioncalls.
They'll be hounded by...
You know, usually these kinds ofdebts are not going to be
discharged unless they file forbankruptcy.
That's what Chin was talkingabout.
(12:20):
Either we're going to see a waveof bankruptcies to wipe off this
debt from the renters.
That doesn't discharge the debtfrom the landlords.
They're still making paymentsand have to make payments.
And if they can't make paymentseither, then they will have to
file for bankruptcy as well.
But it's not going to be justwiped away without any
consequences.
(12:42):
And even if there's some kind oflaw passed that helps these
renters with some kind ofsubsidy or something like that,
they're still going to have tofigure out how to pay back the
prior past due amounts.
And that's the real danger.
And again, these people are onthe margins of the economic
(13:05):
scale.
They wouldn't where they areright now, if they were more
affluent and they had savingsand t hey h ad three, six months
of emergency funds, things likethat.
They don't, they can't possiblydo that with the wages they're
making.
So in my opinion, this is notgoing to end well for the
landlords or the tenants.
Cindy Sealls (13:39):
I don't understand if everyone's saying we're in
such a bad position.
Why is the stock market settingrecords?
Shuaib Hassan (13:47):
The reason for that is that this is a recession
of the have nots, not therecession of the haves.
The other reason is the amountof money that the Fed pumped
into the system money is givento hedge funds companies and so
on.
They need to put that money towork somewhere.
Holding cash is not an option.
The bond market is not very goodright now as an investment.
(14:09):
So what that money is going intois the stock market and gold and
precious metals.
If you follow gold and silverand the stock market, they're
all at record highs.
Not only that you do see a lotof retail investors that have
extra money because of thestimulus.
They do have extra money intheir pockets because they are
no longer spending 500, 700,$800on gas to commute to their work.
(14:33):
So there's a lot of excess moneyleft.
What's interesting is thatduring this recession
unemployment is up to 10 millionplus it was a 20 million, 25
million point, but personalincomes have actually been
rising.
And the personal income has beenrising because those that were
unemployed got basically areplacement of their salary or
(14:54):
even more because of thestimulus package.
And those people that areemployed, they're finding ways
to save money.
Then they're going out less toeat.
They're going out less forentertainment.
They're not spending money ongas.
And so people have moredisposable income than they did
before.
And that money is getting pushedinto the stock market.
Cindy Sealls (15:12):
So, where did the businesses get their money from?
Is that from those PPP?
Shuaib Hassan (15:19):
So It's not only just the PVP loans, but in a
situation like this, where theeconomy gets a big hit, one of
the ways that the governmenttries to stimulate the economy
back is to basicallymanipulating the amount of money
that's in the system.
The idea during a recession isyou flood the economy with money
(15:40):
and that money goes towardsinvestments.
New companies get started,companies invest in new
technologies and thatconsequently translates into
employment and the economy getsgoing back again.
So that's where it's come fromis the Fed, that puts so much
money into the system, not onlyjust to help out some of the
people, some of the airlines andcruises that needed that money
for the PPP program, but it wasalso a way for them to try to
(16:03):
stimulate the economy andstimulate the growth.
Chin, I don't know if you canexplain any better than that.
Chinesom Ejiasa (16:11):
Basically, if you've been living on$10,000 a
year and then somebody ends upgiving you$70,000, it's
essentially, now you're awashwith cash.
And so you can save it or youcan just put it to work and just
sort of invest in all sorts ofthings.
And so now people are justflushed with cash and so they're
trying to find different ways toput it in.
So multiply yourself timeshundreds of thousands of people
(16:34):
and give them five times moremoney than they maybe had
before.
And everyone's trying to puttheir money in a finite number
of opportunities.
And so once they sort of passthat first tier of opportunities
and they go to the second tier,third tier, because there's so
much money and people have toput their money somewhere.
They don't want to put it intheir pocket.
They're just going to put itsomewhere that they think will
(16:54):
give them a return.
Shuaib Hassan (16:56):
I know a lot of people that were unemployed and,
or getting employment benefitsand extended unemployment
benefits, and they were actuallymaking more money than they were
previously at their jobs.
I don't want to paint everyonewith a broad brush, but they've
been putting money in the stockmarket rather than paying their
bills.
They can pay their rent with theunemployment benefits they're
(17:19):
getting.
The stock market has been such acraze and as Chin is talking
about this bubble that everyonewants to get in.
And so there's a lot of peoplethat are like, Hey, I'll worry
about the past due amountslater, but I can't miss the
stock market right now.
That's one thing.
The second thing is that thestimulus package that we got in
terms of the money given topretty much everyone, whether
(17:42):
you're employed or unemployed,that was a misuse of money from
a federal perspective, becausethere was a lot of employed
people that got money that theydidn't need.
And that's an extra$1,200 likeChin said, and all of a sudden
they're like, okay, well, whatam I going to do with this?
I guess I'm going to go buyTesla's talk because it's going
up 20% every week.
So, it's those kinds of peoplethat are kind of driving this
(18:03):
market.
Cindy Sealls (18:05):
Isn't that a good thing to put money into the
market?
I mean, isn't that what theywant?
Shuaib Hassan (18:10):
Yes, it is.
But you know, 87% of the stocksare owned by 10% of the highest
wage earners.
And it's not a good thing from aperspective of society, because
all it's really doing isincreasing the wealth gap.
Not only the stock market, buthousing prices are records right
now and there's a high demand,low supply.
(18:30):
The rates are low, but guesswhat?
40% of the African Americanpopulation are homeowners versus
65, 70% of whites.
So it's great that our homeprices are going up, but who's
benefiting from it?
It's great that the stockmarket's going up, but who's
benefiting?
And what is it doing to thewealth gap?
Cindy Sealls (18:54):
Why do they tout the stock market is sort of the
gauge of how our economy isdoing?
Cause it makes it look like tome, like I'm thinking, well, the
stock market's going up.
I mean, we must not be in such abad position that they say, but
now you're saying to me, allthese renters are basically
(19:17):
going to be kicked out of theirhousing.
Shuaib Hassan (19:22):
I think smart finance and economic people
understand that stock marketreally is not representing the
economy right now.
The only person that's reallypushing that agenda is Trump.
And that's obviously for thereelection purposes.
Chinesom Ejiasa (19:34):
But he's now having to reckon with this
disconnect between what we sortof colloquially dubbed wall
street and main street.
There's a glaring disconnect nowthat people can sort of point to
whereas before it wasn't asglaring.
So we weren't focusing on it asmuch.
Shuaib Hassan (19:53):
Right.
But you still won't highlightthat right.
During the convention speeches,he talked about the stock
market, but he never talkedabout 10 million unemployed.
So his focus was so going to bepushing the stock market as a
measure of the economy.
For sure.
Cindy Sealls (20:08):
Shuaib, you said 87% of the stocks are owned by
how many
Shuaib Hassan (20:15):
By the top 10% wagers.
Kelley Lynch (20:17):
Wow.
What does that mean for averagepeople?
I mean, what does that actuallymean in our lives?
Shuaib Hassan (20:23):
Well, you know, again, it's the idea of the
wealth gap and why the wealthgap continues to increase.
What it means is that the wealthgap increases for the top 10%
that already pretty well off.
Kelley Lynch (20:38):
And so if I'm an average person, which I am, why
should I care about that?
Shuaib Hassan (20:45):
Why would you care?
Because I think from a societyperspective it's creating
problems overall.
And I think a lot of thisfrustration that you see in the
streets is because of thiswealth gap, because they do see
main street suffering, but theysee wall street at record
levels.
In my opinion, It's beyond justthe killings that have been
(21:06):
happening.
This whole movement's not justabout one thing.
It's about equality.
It's about diversity andinclusion in the workplace and
society in general and thequality overall, and that is
directly related to this wealthgap.
Cindy Sealls (21:43):
There seems to be this group of people over here
who is, who are reallyaccumulating wealth.
And then the masses who thinkwe're accumulating wealth.
But I guess we're really not,you know.
I don't know the numbers of howmany people are in the stock
market because of theirretirement fund, because I've
(22:06):
heard on the radio as I'mlistening, I listen to C-SPAN a
lot.
So, you know, these are usually,you know, folks who would not be
considered the 1% or even the5%.
And they seem to be saying, I'mdoing okay.
And I was doing well before thereally, really well before the
pandemic.
And that's why I'm supportingTrump.
(22:29):
But what it sounds like to me isthat maybe we're just think
we're doing well and we're notbecause we look at this, you
know, they tell us every daythat the stock market is going
up.
So we think that means we'redoing well,
Chinesom Ejiasa (22:45):
But what you just raised Cindy around you
thought that you were doing welluntil you realized when you
looked up and you started tolook at other people.
I think that is one of thecomponents of the way in which
we think of capitalism.
And maybe we can dub for this,for this particular conversation
as American capitalism, becausethere is not one single
(23:07):
definition of what capitalismis.
It takes its form based on theculture and the context within
which it's sort ofoperationalized.
So America has its own versionof capitalism.
Certain African countries willhave their own version.
Indonesia will have its ownversion.
They'll look very much similarin many respects and then
they'll have theiridiosyncrasies in other
respects.
(23:27):
So when investing there's thisnotion called alpha.
If you invest in an opportunityand that opportunity generates
10% return for you.
On an absolute basis, you'vedone pretty well.
Ten percent is a pretty goodreturn.
If you looked up and saw thatsomebody made an investment and
(23:49):
got a 15% return, you would thenstart to say man, my 10% is not
looking so great becausesomebody got 15% But it's that
notion that as soon as we startto look at what other people are
doing, that starts to dictateour definition of what success
looks like, our definition ofwhat stability looks like.
(24:09):
It's that notion, I think, thatbreeds how we've taken on our
form of capitalism, or at leastthat's one of the components of
our notion of capitalism.
We look to see what other peopleare doing to define our success.
And in the context ofcapitalism, I think that's,
what's gotten us into trouble.
Shuaib and I started our careersin the mortgage backed security
(24:30):
space.
So this is the industry thatultimately brought down the
global economy in 2007, 2008.
When I first started right outof undergrad, I was really
impressed actually by thefinancial tool of mortgage
backed securities.
In its purest form, mortgagebacked securities were meant to
(24:53):
create further opportunity forthose who wanted to buy a home.
And we can get into a debate asto whether or not having people
believe that buying a home is anAmerican dream.
Let's for the sake of thisconversation, assume that that's
a good notion that everyoneshould have their own home and
own their own home.
So under that umbrella is wheremortgage backed securities, like
(25:13):
I thought and still think, lessso, but still sufficiently so,
was a really novel concept.
It was essentially liquefyingthe market.
It was creating more free flowof capital, such that you,
myself, Shuaib could actuallybuy our homes.
That's one side of the coin ofwhere I think capitalism is a
beautiful thing and what itactually does for
(25:35):
operationalizing economiesmarkets.
It creates broader opportunity,broader access for people.
Where it got messy and I thinkwhere capitalism gets messy more
broadly speaking is when westart to feed greed into the
system.
And greed was reflected in manyaspects during the global
(25:55):
financial crisis, butspecifically within the MBS
industry.
Greed on the lending side.
Greed on the residential side.
Greed on the securitizationside.
And that's what really turnedover the entire system.
It wasn't necessarily the principle of MBS mortgage-backed
securities.
(26:15):
It was the way in which we ashumans took that novel tool and
greedified it up basically, andjust sort of amplified it and
multiplied it and revved it upto a point that it just sort of
brought down the system.
That greed is, in my opinion, atleast what disrupted the system.
And I think if you looked atother components of failures
(26:39):
within the capitalistic systemthat we live in, the unrelenting
component that you'll find o rvariable that you'll find within
any of those issues is greed.
That as soon as we operationalized greed, it will no
doubt at some point w reck thefinancial tool that was at least
on its face quite a productivetool.
Kelley Lynch (27:00):
So greed is not good.
Gordon Gecko said it was good.
You're saying it's not good?
Chinesom Ejiasa (27:04):
Yes, and so to connect the two together, the
greed and the way in which welook at other people to justify,
or to at least to referencecheck how we're doing.
Greed, I think can exist withoutour ability to look at somebody
else and say, how are they doingif we were just in our own
vacuum?
I don't think there would bemaybe as much greed don't quote
(27:26):
me on this because I'm still inmy own head, sort of trying to
understand this for my own self,but I don't think that greed
would be as successful were itleft in a vacuum unto itself.
But as soon as we have theopportunity to look at somebody
else, greed has much more of anefficacy.
So those two things—that's how Iwas trying to bring those two
(27:47):
things together.
The point that Cindy made aboutman, I was doing, I thought I
was doing well.
And then I looked up and Istarted to see I'm not doing so
well.
Cindy could take that now newbelief that she's got and become
more filled with greed, filledwith avarice and say, now I need
to do better.
I need to, I don't know, buy asecond home because I know that
(28:07):
my friend down the street as asecond home, so I want to buy a
second home.
And not only do I want to buy asecond home, but I want to make
sure that that second homegenerates a better return than
my friend down the street.
Cindy may not take it to thatextreme, but even just buying a
second home stems some somethingthat is probably a consequence
of her seeing other people havesecond homes and thinking that's
(28:29):
something that I should be doingin order to consider myself
successful.
And then if you just continuethat process and multiply that
process, then you have a reallysort of greedy system.
Kelley Lynch (28:40):
Listening to the first night of the RNC the other
night, they were saying theAmerican dream can be yours.
Kind of.
I kept feeling like, you know,if the price is right, don't let
anybody tell you, you cannothave what you want.
You can have everything youwant.
To me that seems to feed rightinto kind of what you're saying.
Chinesom Ejiasa (29:04):
You have now looked up and somebody has told
you that what you, effectively,what you currently have is not
successful enough.
That that is not the Americandream.
The house that you have, itmight've been the American dream
back in the 1950s.
It's no longer the Americandream because the bar has been
raised.
And so the American dream, Idon't know what the American
dream is now, but it is not justhaving your own house.
(29:26):
It is now maybe having a secondhouse.
It is now being in the stockmarket and generating good
returns.
It is now, I don't know.
I don't think there's one singledefinition for what the American
dream is.
All I'm saying is that there isthis notion out there that what
you currently have, if you wereto just operate within a vacuum
of yourself and you define whatsuccess is for you and from
(29:49):
birth, you were never influencedby anybody else defining what
success is for you, you wouldlikely have a different
perspective of your successtoday than what we currently
have with these sort of notionstossed into our thinking around
what the American dream is.
And it's not just the Americandream that's happening outside
of the U S but we now, we're nowchasing this elusive reference
(30:13):
point that is causing us to sortof make decisions maybe that we
otherwise wouldn't have and itfeeds the system.
Kelley Lynch (30:21):
So in a way, does that go back into what I was
saying about the unrest?
Chinesom Ejiasa (30:25):
I think the unrest stems from a lot of
historical policies that havebeen insidiously and overtly
implemented to createinequality.
I think it gets amplified bythis notion now that we have
around what success is.
But if you took out that notionof success, you would still have
(30:47):
inequalities as a consequence ofthese historical policies and
practices that we as the UnitedStates of America have
implemented.
So you would still haveinequality, but maybe it would
be less amplified because wewouldn't have this notion of the
American dream and more and moreand more.
Shuaib Hassan (31:05):
I saw that the first time of the convention too
, and what the administrationwas basically saying was
directly targeting theirsupporters.
And in my opinion, this is myopinion.
They were basically saying, Hey,you can have the American dream,
which has a capitalist dream.
You can have two houses, threehouses, you can have three cars,
(31:26):
you can have all the things youwant, but that was basically I
think, directly targeting theirsupporters and also targeting
what basically the othermovement is, which is a kind of
socialist movement of wantingsomewhat equality and equal
distribution of wealth.
So I think that phrase wasbasically saying to his
(31:46):
supporters saying, you can haveeverything that you want.
You don't have to share with therest of society.
(32:13):
For me, like I said earlier, Ithink the wealth gap is a huge
problem here.
It is causing a lot of the civilunrest and people are really
realizing now how much gap thereis between the have nots and the
haves.
And so, you know, I don't thinkthat we can get to an agreement
(32:34):
on what's important to us and soon until that gets resolved
because people do get resentful.
People are resentful thatthey're unemployed, that they,
their families haven't had anyupward mobility yet.
You know, we see on TV thatpeople are buying$8 million
vacation homes in the Hamptonsand things like that.
(32:54):
Um, so for me, honestly, it'sthe wealth inequality that needs
to be solved.
And to kind of understand that,you know, you have to kind of
figure out how do we get hereand understand the history of
why the wealth gap is where itis understanding wealth creation
is a, it's been something thatI've studied for a long time.
I was a financial advisor for awhile.
(33:15):
The best way to create wealth isthrough ownership of assets,
whether it's stocks or whetherit's real estate.
But the biggest factor in wealthcreation is time.
In wealth creation, there's aconcept called compounding.
And what that basically means isthat you know, say you invest in
the stock market, you put ahundred dollars in there and
(33:38):
your return is 7% every year.
Well, the first year you get areturn.
And so now it's worth$107.
The next year you make a 7% on107 and so on and so on and so
on.
So if you look at the history ofthe wealth gap particularly in
the African American communityand the white community,
obviously Americans whiteAmericans had a 200 year plus
(34:00):
head start.
They were allowed to createwealth in the 246 years that
black people.
I mean, obviously at that time,unfortunately, black people were
a sign of their wealth, but thatto me has been the biggest
reason for this gap in thewealth creation.
They were allowed to own land,real estate, things like that
(34:22):
while the black populationweren't.
Then you kind of go up to afterthe great depression, one of the
ways to get out of thedepression was the new deal,
which allowed people to reallyeasy access to homeownership,
and you saw a huge boom in homeownership after that.
And that was part of the way wegot out of the great depression
(34:42):
at that time, in 1934, it waswhen the FHA was created.
The FHA was the main enginebehind the home ownership, a
push by the government.
And what FHA did at the time wasthey decided that they're going
to look at which areas theyshould invest in, in terms of
(35:02):
real estate loans versus whichareas they shouldn't.
And they actually went aroundthe country and they had maps
where they would categorizevarious neighborhoods as either
low risk, high risk, medium riskor whatever.
And they would put them in zonesof ABC and D.
And the highest risk were the Dareas, they actually marked them
(35:24):
in red.
And they said, these are thehighest risk areas for us to
invest in so we don't want tomake residential loans to people
living in this areas.
And guess what area were those?
Those were African Americancommunities.
And so now you're looking, youknow, they only hit dad at 240
plus years start.
Then they finally get a chanceto have some kind of home
(35:44):
ownership, and they're notallowed access to bank loans to
buy real estate.
The Fair Housing Act wasn'tcreated until 1968.
And that was created becausepeople finally realized like,
okay, this is not an equitabledistribution of access to
mortgage capital.
And even then you have massive,massive abuse of the system
(36:07):
towards African Americancommunities.
The African American is twice aslikely to get a higher interest
rate on their loan, despitehaving the same credit as a
white borrower.
There still are banks that willnot lend in certain
neighborhoods because of, Imean, it's still redlining to an
effect.
(36:28):
And, you know, as we talkedabout too, the stock market is
own majority 87% of it is ownedby the top 10% of wage earners.
And that obviously excludesAfrican American community too.
The other biggest creation ofwealth is generational wealth,
right?
Wealth gets transferred fromgeneration to generation to
(36:48):
generation.
So again, the white populationhas a huge start from all
aspects of wealth creation.
I mean, let's be pretty honest.
This whole problem has beencreated because of a racist
history of the United States.
That's what it is.
And so we have to solve thatproblem.
We have to figure out how to getAfrican American communities to
(37:12):
be homeowners.
How to get them equal access tomortgage capital.
How to get them equal access tothe borrowing rates that others
have.
We have to find a way how to getthem involved in the stock
market.
As Cindy said, it's not bad atall that the Market's going up.
I just wish more people, moreaverage people were
participating in the Market.
Chinesom Ejiasa (37:31):
This is kind of coming full circle in terms of
when we first started to talkabout income inequality.
And I talked about Cindy sort ofstaying in her lane and
realizing that she herself, atleast by her own definition was
doing fine.
Why are we trying to createwealth to begin with?
What's the objective of creatingwealth?
(37:51):
For what purpose?
Kelley Lynch (37:54):
Please elaborate on your thoughts.
I mean, that is a question,Cindy and I talk about a lot.
Cindy Sealls (38:01):
All the time,
Chinesom Ejiasa (38:02):
But honestly, that's the legit question is
why, why we just entered if wejust asked ourselves the
question why.
Why am I trying to createwealth?
For what purpose?
So I can buy another home?
That would be great.
L ike I would love to havemultiple homes in certain
places.
Is that really the ultimateobjective?
And I think if we start to askourselves more intimately, more
(38:22):
introspectively, the why arounda lot of these things, we would
at least individually come to arealization of what's important
to us.
Kelley Lynch (38:43):
After this pandemic and after the response
to this pandemic, can you see away towards building back
better?
Shuaib Hassan (38:53):
Before we focus on how to develop the future,
we, as a society have to figureout what kind of government we
want to and what role governmentshould play.
Chinesom Ejiasa (39:02):
I think before that, we have to decide, which
is going to be our biggestchallenge in the States, we have
to decide what we want ascitizens.
We have to get on the same pagefirst, before we decide what
sort of government we want.
What is most important to us asa citizen, and hopefully sort of
have overlap on those things andthen decide what should be
(39:23):
influenced by government andwhat can be influenced.
Shuaib Hassan (39:26):
How the government c ould support that
vision.
Yeah, I agree.
Kelley Lynch (39:30):
But we're pretty divided.
And these are the exactquestions that are dividing us.
Shuaib Hassan (39:36):
Honestly, it was just, I just see this division.
That's just so bad that it justgets worse and worse and worse.
And social media makes it worse.
Our leaders make it worse andsome it's an epidemic that
there's no vaccine for.
And I don't know how we're goingto solve that until we solve
that.
(39:56):
Nothing else matters.
Kelley Lynch (39:59):
So how would you do it?
I mean, I know you guys areeconomists, but you know, how
would you do it?
Chinesom Ejiasa (40:08):
So Kelly you're in the international development
space.
If we looked at the way that wetry to encourage emerging
economies, developing nations tocomport themselves as it
concerns their economicdevelopment, as it concerns
their broader development.
(40:29):
I'm generalizing, but we've gotthese very clear notions of what
they need to do there todevelop.
And it's wrapped now into thesustainable development goals
and effectively those goals areessentially the cornerstone,
fundamental components of whatany strong society should have
to consider themselves developed
Kelley Lynch (40:49):
While you and I are familiar with these from our
everyday work, a lot of peoplemight not be familiar with them.
So the sustainable developmentgoals are a collection of global
goals that are designed to be ablueprint, to achieve a better
and more sustainable future foreveryone.
They were set in 2015 by theUnited Nations, and there are 17
(41:13):
goals.
I won't say all of them, butthey include ending poverty,
ending hunger, good health andwellbeing, quality education,
gender equality, clean water,and sanitation affordable and
clean energy, decent work andeconomic growth, reducing
(41:36):
inequality and climate changeamong many others.
I'll put a link to them in theshow notes.
Chinesom Ejiasa (41:46):
So if we took a page out of our own authorship
and said, let's look at thoseSDGs and where do we stand with
respect to each of those?
The SDGs are around educationaround health care around
housing, I think even aroundworkforce.
And if we looked at that and wesaid, fundamentally, what is
(42:06):
important to us and how are weperforming on those goals?
And then maybe even take it astep further and say, what do we
believe should be equitabledistribution for a given
society?
Much like we sort of tried toeducate and sort of illustrate
to developing countries,developing economies, we should
also start to try to take ourown medicine.
(42:26):
What is most important to us?
Is it education?
Is it healthcare?
Great if it is, and we considerthose things fundamentally
important to us, then maybe nowwe have a notion of what we want
our government to focus on.
And then the rest can be managedby the private sector.
We've now given our requirementsto the government.
(42:48):
We can now elect our government,having now been on the same page
as a citizenry, and then thegovernment goes forth.
And then the work can be done interms of how we go about
structuring economic policy,fiscal policy, around making
sure that everyone has access towhatever it ends up being.
(43:09):
I think our struggle right nowis we're not on the same page.
Cindy Sealls (43:28):
Does this give people like you all an
opportunity to step back andsay, we love capitalism, but is
there a different, can we thinkof a new economic system that
works a bit better foreverybody?
Shuaib Hassan (43:47):
Capitalism in its purest form was created to kind
of encourage just competitionand over going to be winners and
losers.
So to me, that's not a shockbecause I understand that that's
kind of the reason for thesystem.
Now, the whole idea of whetherthat still works today or that
(44:07):
that's viable as it is adifferent question.
I don't think it is personally.
I think it does need to change.
And I think there are systems inthe world that we can look at,
but that's a discussion ofeveryone's mindset and
philosophy.
We all have to agree that wewant to move towards that
spectrum.
And that can be done where youcan have relatively a free
(44:28):
market.
Um, but you can also have thesocial security that some of
these other countries have.
I don't think there's a doubtthat it can happen and there's a
model for it, but we're drivingcar on the highway right now and
trying to change the tire.
And that's not easy to do so.
(44:51):
iIt was great talking to youguys.
Wow.
Some really interesting stuff.
Yeah, no I I'm.
I'm gonna, I'm gonna say youguys should think about talking
together, coming up with thiseconomic system, putting it
online, writing your book.
Everybody else writes a book.
Why not?
(45:13):
That's the funny thing isactually Chin's views and my
views would blend together forthe perfect system.
I'll make sure he's not awide-eyed Marxist and he can
make sure I'm not a dirtycapitalist.
A hundred percent.
We'll meet somewhere in themiddle.
Kelley Lynch (45:25):
Well guys, thank you so much.
Thanks Kelly.
Thanks Cindy.
This is was a really goodconversation.
Hi guys.
How you doing?
Hey there.
(45:46):
Hello.
Nice to see you after a coupleof weeks.
So what do you guys think aboutthe pandemic?
The wealth gap prospects for anew normal.
Obaidul Fattah Tanvir (45:57):
What this pandemic has done is forced us
to see things the way the thingsare.
Cindy Sealls (46:06):
As you know, Kelley here in America, it is
definitely the haves and thehave nots.
We know people personally whosekids are now in school in the
pods because they have money,right?
And the other kids are homebecause their schools didn't
open and maybe they have a goodinternet connection.
(46:27):
Maybe they don't.
Maybe they have a parent thatcan stay there with them and
help them do their lessonsonline.
I mean, cause as you guys weretalking, I was thinking, Oh,
here the pandemic put aspotlight on the inequalities in
our country because Tanveerhere.
Most of the people catching thevirus, who aren't out there
(46:50):
doing stupid stuff, are thepeople who have to go to work,
who cannot work from home.
They work in the serviceindustry.
And now they're in this positionbecause a lot of them are
renting because of the 2008crisis, they're not, they don't
have a home they're renting.
(47:11):
And unlike the homeowners likeShuaib was saying, who will be
able to wrap their payments atthe end of their loan.
When this is over thoseapartment dwellers not only will
be out.
They have to pay back all thatmoney.
They didn't pay.
So it is going to be interestingTo say the least in America to
(47:32):
see what happens to our economicsystem on January 1st, when all
those millions and millions ofapartment people who, if they
lost their job, guess what?
They don't even have healthcareanymore because that's tied to
your job.
The people who are well off,like me being one of them.
I mean, well often in that Istill have my job, which is of
(47:54):
course tied to my healthinsurance.
I have a house, so I'm not goingto have to go out on the street
even if I can't pay my mortgage,we're fine.
But there are millions andmillions of people who are on
the precipice of disaster,economic, health wise because
where are they going to go?
If they get kicked out of theirapartment, where are they going
(48:14):
to go?
Nobody's going to rent them anapartment.
And it's not like you haveshelter winter, right.
When COVID is supposed to comeback because everybody's now
inside.
Well it's well, we still have35,000 cases a day.
But yeah, I mean, for us, it isreally shone a spotlight on who
(48:36):
is doing well and who is not.
Obaidul Fattah Tanvir (48:39):
For our culture, it is preached that
your life is predestined.
So no matter what you do, you,things will happen to you that
were written in your fate.
The whole idea of American dreamwas like, you create your own
(49:00):
destiny and the way things arehappening now, nobody wants to
take you as a role modelanymore.
Kelley Lynch (49:09):
You know, that reminds me of this article I
read in the New York times, theother day.
It's called we're number 28.
Let me pull it up on my phone.
Okay.
So the United States ranksnumber one in the world in
quality of universities, butnumber 91 in access to quality
(49:29):
basic education, the US leadsthe world in medical technology,
yet we are number 97 in accessto quality healthcare.
The social progress index findsthat Americans have health
statistics similar to those inChile, Jordan, and Albania.
While kids in the United Statesget an education roughly on par
(49:50):
with what children get inUzbekistan and Mongolia.
So.
Cindy Sealls (49:58):
What?
Read that again, is thatserious?
Kelley Lynch (50:01):
The social progress index finds that
Americans have health statisticssimilar to those of people in
Chile, Jordan and Albania, whilekids in the United States get an
education roughly on par withwhat children get in Uzbekistan
and Mongolia.
Cindy Sealls (50:21):
I mean, that just seems I know we're bad.
Look, look at me, look at my,look at my, my American
arrogance.
Wait a minute, now.
That can't be true.
We're America, but there we go.
Now, if you know, if I'mthinking that the rest of the
Americans would say on hearingthat.
(50:43):
Kelley that's fake news.
Kelley Lynch (50:44):
It is a social progress index.
Um, let's see inspired byresearch of Nobel winning
economists collects 50 metricsof wellbeing, nutrition, safety,
freedom, the environment, healtheducation, and more to measure
(51:07):
quality of life.
Cindy Sealls (51:07):
Okay, tell me where the article came from?
Where did it come from?
Where is it?
Where was it printed?
Kelley Lynch (51:15):
It was printed in the New York Times.
Cindy Sealls (51:17):
See, fake news.
They're jealous.
Everybody's jealous of us.
Kelley Lynch (51:22):
The New York times?
Cindy Sealls (51:23):
We're number one.
We're number one.
USA USA
Kelley Lynch (51:27):
I'm afraid, Norway is actually.
Cindy Sealls (51:30):
Norway,?
There are 10 people in Norway.
Of course everybody's happy.
Kelley Lynch (51:35):
And as my uncle said, he going back to last
week, he said, uh, yeah, wait Ihave to pull this up.
Cause this was really great whathe said about it.
So when I sent it to him, hesaid, yeah, well, Norway, small
boat, lots of people who like tosit down, although he did say he
(51:58):
would move to New Zealand.
Obaidul Fattah Tanvir (52:01):
Actually the problem is as soon as we get
that kind of information, weresist it because it does not
fit with our version of thevision.
Cindy Sealls (52:16):
I like the way you said, I thought you were going
to say facts, but that that's abetter word vision.
That's why people don't want torecognize facts because it
doesn't fit their vision.
It's not that there arealternative facts as Kelly Anne
(52:38):
Conway would say it'salternative vision because
vision, it can be anything.
I mean, it doesn't matter, butyeah, that doesn't, it doesn't
fit our vision of ourselves.
Which, which is that we'renumber one in everything.
I don't, I don't even care whatyou bring up.
We're we're still number one.
And if we're not number one, nowwe'll be number one, tomorrow.
(53:01):
I read that in a democracy inAmerica, by the Tocqueville
written in the 1830s, that hewas quite astounded that
everyone he ran into, not onlywanted to tell him how great
America was, but wanted him toadmit how great America was.
So this goes back a long way.
Shuaib Hassan (53:24):
So it has become a habit.
You know, we are number one.
Again, you know, I heard thisTed talk, you know, fake it till
you make it.
Cindy Sealls (53:38):
And we're good fakers, good fakers.
We have fake news.
We have fake facts.
We faked the moon landing.
Did you know that?
Kelley Lynch (53:51):
Oh my God, that's awesome.
I've been feeling for a longtime like we need to add
(54:12):
something to these podcasts.
It's not really enough to justpoint at a problem.
I think we need to offer atleast some potential solutions.
So today I called Chinesom and Iasked him to leave us with one
question that he thought wouldhelp us take things forward.
Chinesom Ejiasa (54:35):
I think we need to ask ourselves the why.
Why is wealth such aninteresting proposition for us?
I genuinely think that that'sone of the pieces that will, if
really sort of earnestly satwith, we'll start a really
healthy conversation around thiswhole wealth and inequality
issue.
Because if you start to answerthe question of why, why do I
(54:57):
need wealth?
Whatever wealth is for someone,if it's 2 million, if it's 5
million, if it's a hundredmillion.
You start probing that question.
I think it starts to resolvesome of those, those issues
because a lot of this wholewealth creation is stemming from
this American dream that is sortof rev'd our culture.
(55:17):
And the notion of what isAmerica is around the American
dream, which is largely thematerialistic dream of being
able to own a home, maybe twohomes, maybe a car, maybe having
lavish vacations, whatever.
And I'm not passing judgment onany of those things.
What I am trying to say is thatif we have a conversation about
the why, and we start todeconstruct this notion around
(55:40):
the American dream and whatwealth is or success is for us,
then there will be some peoplewho will want that American
dream and that's kosher and cooland fine.
But at least for some, it willallow them to disassociate
themselves from this treadmillthat they're on to attain this
American because because theywill come to realize that it's
(56:03):
not for them.
That's I think one piece of it,
Kelley Lynch (56:07):
I think that's a really great thing to leave
people with.
That's awesome.
Thank you.
So that's it.
We hope that you liked the showand that you'll consider sharing
it with your friends,subscribing writing a review and
(56:30):
following us on Instagram at anew normal podcast next week,
I'll be working again, but we'relooking forward to being back
with you the following week whenwe have an awesome guest
Baratunde Thurston.
Baratunde is a writer, speakercomedian who has his own podcast
(56:50):
called how to citizen withbaritone day.
Cindy Sealls (56:53):
Yeah, I think we can say that he is definitely
our first legit famous person.
Although when I first met him,he wasn't famous use a high
school student, but now he's,uh, doing things all over the
place.
Ted talks, books, podcasts,writing for different shows.
(57:16):
He's uh, he has had a lot ofexperience in the social media
comedy, social commentary space.
So I think everybody will enjoyit.
Kelley Lynch (57:29):
See you then.
You know, before I moved here, I was thinking what
would be really cool would be tohave to have one of those
friends who's kind of like Lucyand Ethel.
Ethel is always going over toLucy's house.
Lucy's always going over toEthel's house and they can
always sit in each other'shouses and they do all these
things together.
(00:24):
And I thought to myself, God,wouldn't it be so cool to have a
friend like that?
We've been talking so much aboutold sitcoms.
Um, but it's funny that that'swhat happened
Cindy Sealls (00:38):
Of all the things you wanted for the new place
where you live.
Kelley Lynch (00:44):
I know that.
So, I mean, maybe that tells mesomething, I don't know.
I don't know.
Cindy Sealls (00:50):
I don't know what that says about you, but I just,
every time you say that it justmakes me laugh and it's amazing,
but it's also pretty freakingamazing that had it not been for
some legislation, that personwould have not been me because
I'm African American.
(01:10):
And as you know, the propertieswhere we live there was actually
written into the covenant of theproperties that black people
could not live here.
Kelley Lynch (01:22):
These were built when, 1948 right?
Cindy Sealls (01:25):
Yeah.
After the war.
So this was part of the wholerebuilding America after the
war.
Kelley Lynch (01:31):
And these were houses for the GIs, right?
Cindy Sealls (01:34):
GIS.
Yup.
And so they have very lowinterest loans, which were not
available to black people.
Number one.
And even if they were, theyweren't able to buy these houses
in this neighborhood.
Kelley Lynch (01:47):
Man.
Amazing.
Because now there's like fivewhite people in this
neighborhood and well, actuallyvery few African Americans and
well loads of people from everycountry in the world.
Amazing little United nationsneighborhoods.
Cindy Sealls (02:02):
Thanks to the fair housing act of 1968.
Kelley Lynch (02:06):
Yeah.
So we wouldn't have beenfriends.
We would have never met.
Cindy Sealls (02:07):
Right, right.
Because I wasn't allowed, well,maybe we would have met because
you would have come here to seeyour white neighbor friend.
And I would have been the maidin the house.
I've been calling you MissKelley.
Hello, ms.
Kelley.
Kelley Lynch (02:23):
Ooh.
Cindy Sealls (02:24):
You know, I told you I have the original deed to
the property here and it says itright on the piece of paper.
I should pull it up and justread it to you.
So this is the Rolling Park LandCompany, inc.
Their bylaws o r laws for theseproperties that they purchased
(02:48):
this land.
And then things that were to bebuilt o n t o the land.
It says no person of any raceother than the Caucasian race
shall use or occupy any buildingor any lot, except that this
covenant shall not preventoccupancy by domestic servants
(03:08):
of a different race domiciledwith an owner or tenant.
So the only way, I mean, itmeans that the only way a person
of any race other than theCaucasian race could live in,
just live, like not even youcouldn't even rent basically, is
(03:31):
what they're saying.
The only way you could do it isif you lived with a white
family.
Kelley Lynch (03:37):
As a servant, r ight?
Cindy Sealls (03:39):
No person of any race other than the Caucasian
race shall use or occupy anybuilding or any lot, except that
this covenant shall not preventoccupancy by domestic servants
of a different race domiciledwith an owner or tenant.
Kelley Lynch (03:59):
Basically you could only live here as a
servant, as a servant.
And that was until when 1968.
Cindy Sealls (04:07):
That's really incredible.
Isn't it?
It's pretty incredible.
And this remember they wrotethis in 1948, after the war,
after hundreds of thousands ofblack people had gone and fought
for the country, this is whatthey come back to.
Kelley Lynch (04:25):
Wow.
So how does that make you feel?
Cindy Sealls (04:31):
I feel like I'm kind of proud that my relative,
Byron Rumford, was one of thepeople to change the law
basically because he wrotelegislation in California in
1963 called the California FairHousing Act that although it was
(04:58):
a very contentious thing,finally was upheld by the
California Supreme court toprevent people from
discriminating against folksbased on ethnicity, religion,
marital status, and disabilityor gender.
Like we think that all thisstuff happened hundreds of years
(05:20):
ago.
Right?
And this thing was written in1948.
So what do I do if I want to buya house, I got to buy one in the
red area.
Wow.
Where the schools are bad, wherethe neighborhood it's not great.
(05:41):
I can't buy a house in your niceneighborhood with the nice
school in the nice yard.
Kelley Lynch (05:47):
Well, our neighborhoods, not necessarily
that neighborhood now, anyway.
Cindy Sealls (05:51):
Yesit is, Hey, we still have a neighborhood that's
sought after.
As you know, it's becominggentrified.
Kelley Lynch (05:59):
Oh my God.
Cindy Sealls (06:00):
As we know, but you know what?
I'm not leaving.
Even though white people aremoving in, I'm not leaving.
I don't care what those realtorssay about what's going to happen
to the neighborhood.
(06:27):
Hi, I'm Cindy.
Kelley Lynch (06:29):
And I'm Kelly.
Welcome to a new normal apodcast about how we're adapting
to life during the pandemic andwhere we go from here.
Our guests today are ourfavorite economists, Shuaib
Hassan, and Chinesom Ejiasa.
And today we're talking aboutthe wealth gap.
Early on during the pandemic,there was a phrase that you
(06:55):
heard a lot that went somethinglike we're all in this together.
And I think that gave people alot of comfort, but increasingly
I think we can see it's afiction that makes us feel good,
but it's not true.
At a time that has beendescribed as the worst economic
downturn, since the greatdepression, we're also seeing
(07:17):
the stock market reaching alltime highs.
We wanted to talk to Shuaib andChin about what's going on, how
we got here and what it meansfor us as a country going
forward.
Welcome to the show.
Shuaib Hassan (07:32):
Thank you, Kelly.
It's to be back.
Chinesom Ejiasa (07:34):
It's great to be here with a guy who I've
known since high school.
So thanks for having me on.
Thanks for letting me crash yourset.
Kelley Lynch (07:40):
So speaking of coming back, Shuaib, everybody
loved your show.
In fact, my uncle decided thathe was going to vote for you for
president.
I had tell him that probably thebirth certificate, wasn't going
to work out on this case.
Shuaib Hassan (07:54):
I'll use Chinesom's birth certificate.
It's okay.
Chinesom Ejiasa (07:57):
You're you're better off using Kelley's.
Kelley Lynch (08:01):
But Chin, you were born in the U S right?
Chinesom Ejiasa (08:04):
It doesn't matter.
So was Obama.
Shuaib Hassan (08:09):
So Shuaib, you want to tell us, I know you said
people were talking to you aboutwhat you said last time on the
show.
Maybe let's start there.
What were people talking to youabout?
People wanted to know differentthings.
What was it?
There was a lot of questionsaround whether this is another
event that's going to negativelyimpact the wealth inequality in
(08:30):
the US.
So just a lot of questions ofcuriosity of what's going to
happen next.
Kelley Lynch (08:36):
So what's going to happen next?
Shuaib Hassan (08:38):
Well, it's anybody's guess right now.
As we all know, the stimuluspackage ended and there hasn't
been a new one.
They are continuing to discuss,fight, whatever it is, and we'll
see if they can make anyprogress.
So it really depends on whatthey agree on, what they
(08:58):
compromise on, and what'sactually in the stimulus
package.
So it's kind of unknown rightnow, but I know there's a lot of
very scared people.
The FHA did extend themoratorium for evictions and
foreclosures to December 31st.
So that is taken care of atleast.
But like we talked about there'sconsequences to that.
The landlords still have to paytheir obligations.
(09:21):
Plus at some point, theserenters will have to pay back
their arrears.
So all you're doing is addingdebt to the people's plate.
So, you know, if the economycomes back, say first quarter of
next year, when we have avaccine and things like that,
they're going to be behind whateight, nine months of rent.
(09:42):
And these are people that are onthe margins of the economy
anyway.
How are they going to surviveand continue to make payments
that are past due?
I just don't see how it'spossible.
I would love to actually hearChin's opinion on this because
he's more on the finance side ofthings.
Chinesom Ejiasa (10:01):
Until the money is forgiven somebody, or some
bodies are going to be on thehook for that money.
After the financial crash of2007, there were a lot more
renters in America than therewere actual homeowners.
Unless money is forgiven eitherthere'll be a rash of commercial
bankruptcies, or there will be arash of residential bankruptcies
(10:25):
or both.
Cindy Sealls (10:27):
I just, I guess I was surprised about the renters
having to pay their arrears.
Shuaib Hassan (10:34):
It's again, it's deferred.
It's not even deferred really.
It's going to be added to thedebt obligation.
All the protection they haveright now is that they cannot
get evicted.
They signed the lease.
They're still responsible forthat.
Once the evictions or moratoriumare lifted, they might get
(10:54):
evicted and they will still owethe past amounts due.
Kelley Lynch (10:57):
Oh my God.
Shuaib Hassan (10:57):
That's the worst case scenario, right?
And so again, this is not freemoney to homeowners or renters
or individuals or families.
All the protection is doing isallowing them to be past due and
not be evicted.
Cindy Sealls (11:13):
So as financial guys, how do you see that?
I mean, because to me thatsounds like a disaster.
I mean, even more so I thinkthan homeowners who can wrap
their payments at the end oftheir loan.
I mean, how are these people whohaven't had a job in four or
(11:33):
five months going to suddenly beable to pay?
You know, if you're talkingabout like an apartment here,
the cheapest you can get is$1,200 a month.
I mean, how are they going to beable to pay that and what
happens?
So they'll get kicked out ifthey can't pay it, of course.
And then they're not going to beable to get another apartment
(11:56):
cause who's going to rent anapartment if they owe all these
arrears.
Shuaib Hassan (12:00):
Exactly.
So, you know, their creditscores will get hurt, get hit,
but they will also have theaccount in collections and so
they'll be hounded by collectioncalls.
They'll be hounded by...
You know, usually these kinds ofdebts are not going to be
discharged unless they file forbankruptcy.
That's what Chin was talkingabout.
(12:20):
Either we're going to see a waveof bankruptcies to wipe off this
debt from the renters.
That doesn't discharge the debtfrom the landlords.
They're still making paymentsand have to make payments.
And if they can't make paymentseither, then they will have to
file for bankruptcy as well.
But it's not going to be justwiped away without any
consequences.
(12:42):
And even if there's some kind oflaw passed that helps these
renters with some kind ofsubsidy or something like that,
they're still going to have tofigure out how to pay back the
prior past due amounts.
And that's the real danger.
And again, these people are onthe margins of the economic
(13:05):
scale.
They wouldn't where they areright now, if they were more
affluent and they had savingsand t hey h ad three, six months
of emergency funds, things likethat.
They don't, they can't possiblydo that with the wages they're
making.
So in my opinion, this is notgoing to end well for the
landlords or the tenants.
Cindy Sealls (13:39):
I don't understand if everyone's saying we're in
such a bad position.
Why is the stock market settingrecords?
Shuaib Hassan (13:47):
The reason for that is that this is a recession
of the have nots, not therecession of the haves.
The other reason is the amountof money that the Fed pumped
into the system money is givento hedge funds companies and so
on.
They need to put that money towork somewhere.
Holding cash is not an option.
The bond market is not very goodright now as an investment.
(14:09):
So what that money is going intois the stock market and gold and
precious metals.
If you follow gold and silverand the stock market, they're
all at record highs.
Not only that you do see a lotof retail investors that have
extra money because of thestimulus.
They do have extra money intheir pockets because they are
no longer spending 500, 700,$800on gas to commute to their work.
(14:33):
So there's a lot of excess moneyleft.
What's interesting is thatduring this recession
unemployment is up to 10 millionplus it was a 20 million, 25
million point, but personalincomes have actually been
rising.
And the personal income has beenrising because those that were
unemployed got basically areplacement of their salary or
(14:54):
even more because of thestimulus package.
And those people that areemployed, they're finding ways
to save money.
Then they're going out less toeat.
They're going out less forentertainment.
They're not spending money ongas.
And so people have moredisposable income than they did
before.
And that money is getting pushedinto the stock market.
Cindy Sealls (15:12):
So, where did the businesses get their money from?
Is that from those PPP?
Shuaib Hassan (15:19):
So It's not only just the PVP loans, but in a
situation like this, where theeconomy gets a big hit, one of
the ways that the governmenttries to stimulate the economy
back is to basicallymanipulating the amount of money
that's in the system.
The idea during a recession isyou flood the economy with money
(15:40):
and that money goes towardsinvestments.
New companies get started,companies invest in new
technologies and thatconsequently translates into
employment and the economy getsgoing back again.
So that's where it's come fromis the Fed, that puts so much
money into the system, not onlyjust to help out some of the
people, some of the airlines andcruises that needed that money
for the PPP program, but it wasalso a way for them to try to
(16:03):
stimulate the economy andstimulate the growth.
Chin, I don't know if you canexplain any better than that.
Chinesom Ejiasa (16:11):
Basically, if you've been living on$10,000 a
year and then somebody ends upgiving you$70,000, it's
essentially, now you're awashwith cash.
And so you can save it or youcan just put it to work and just
sort of invest in all sorts ofthings.
And so now people are justflushed with cash and so they're
trying to find different ways toput it in.
So multiply yourself timeshundreds of thousands of people
(16:34):
and give them five times moremoney than they maybe had
before.
And everyone's trying to puttheir money in a finite number
of opportunities.
And so once they sort of passthat first tier of opportunities
and they go to the second tier,third tier, because there's so
much money and people have toput their money somewhere.
They don't want to put it intheir pocket.
They're just going to put itsomewhere that they think will
(16:54):
give them a return.
Shuaib Hassan (16:56):
I know a lot of people that were unemployed and,
or getting employment benefitsand extended unemployment
benefits, and they were actuallymaking more money than they were
previously at their jobs.
I don't want to paint everyonewith a broad brush, but they've
been putting money in the stockmarket rather than paying their
bills.
They can pay their rent with theunemployment benefits they're
(17:19):
getting.
The stock market has been such acraze and as Chin is talking
about this bubble that everyonewants to get in.
And so there's a lot of peoplethat are like, Hey, I'll worry
about the past due amountslater, but I can't miss the
stock market right now.
That's one thing.
The second thing is that thestimulus package that we got in
terms of the money given topretty much everyone, whether
(17:42):
you're employed or unemployed,that was a misuse of money from
a federal perspective, becausethere was a lot of employed
people that got money that theydidn't need.
And that's an extra$1,200 likeChin said, and all of a sudden
they're like, okay, well, whatam I going to do with this?
I guess I'm going to go buyTesla's talk because it's going
up 20% every week.
So, it's those kinds of peoplethat are kind of driving this
(18:03):
market.
Cindy Sealls (18:05):
Isn't that a good thing to put money into the
market?
I mean, isn't that what theywant?
Shuaib Hassan (18:10):
Yes, it is.
But you know, 87% of the stocksare owned by 10% of the highest
wage earners.
And it's not a good thing from aperspective of society, because
all it's really doing isincreasing the wealth gap.
Not only the stock market, buthousing prices are records right
now and there's a high demand,low supply.
(18:30):
The rates are low, but guesswhat?
40% of the African Americanpopulation are homeowners versus
65, 70% of whites.
So it's great that our homeprices are going up, but who's
benefiting from it?
It's great that the stockmarket's going up, but who's
benefiting?
And what is it doing to thewealth gap?
Cindy Sealls (18:54):
Why do they tout the stock market is sort of the
gauge of how our economy isdoing?
Cause it makes it look like tome, like I'm thinking, well, the
stock market's going up.
I mean, we must not be in such abad position that they say, but
now you're saying to me, allthese renters are basically
(19:17):
going to be kicked out of theirhousing.
Shuaib Hassan (19:22):
I think smart finance and economic people
understand that stock marketreally is not representing the
economy right now.
The only person that's reallypushing that agenda is Trump.
And that's obviously for thereelection purposes.
Chinesom Ejiasa (19:34):
But he's now having to reckon with this
disconnect between what we sortof colloquially dubbed wall
street and main street.
There's a glaring disconnect nowthat people can sort of point to
whereas before it wasn't asglaring.
So we weren't focusing on it asmuch.
Shuaib Hassan (19:53):
Right.
But you still won't highlightthat right.
During the convention speeches,he talked about the stock
market, but he never talkedabout 10 million unemployed.
So his focus was so going to bepushing the stock market as a
measure of the economy.
For sure.
Cindy Sealls (20:08):
Shuaib, you said 87% of the stocks are owned by
how many
Shuaib Hassan (20:15):
By the top 10% wagers.
Kelley Lynch (20:17):
Wow.
What does that mean for averagepeople?
I mean, what does that actuallymean in our lives?
Shuaib Hassan (20:23):
Well, you know, again, it's the idea of the
wealth gap and why the wealthgap continues to increase.
What it means is that the wealthgap increases for the top 10%
that already pretty well off.
Kelley Lynch (20:38):
And so if I'm an average person, which I am, why
should I care about that?
Shuaib Hassan (20:45):
Why would you care?
Because I think from a societyperspective it's creating
problems overall.
And I think a lot of thisfrustration that you see in the
streets is because of thiswealth gap, because they do see
main street suffering, but theysee wall street at record
levels.
In my opinion, It's beyond justthe killings that have been
(21:06):
happening.
This whole movement's not justabout one thing.
It's about equality.
It's about diversity andinclusion in the workplace and
society in general and thequality overall, and that is
directly related to this wealthgap.
Cindy Sealls (21:43):
There seems to be this group of people over here
who is, who are reallyaccumulating wealth.
And then the masses who thinkwe're accumulating wealth.
But I guess we're really not,you know.
I don't know the numbers of howmany people are in the stock
market because of theirretirement fund, because I've
(22:06):
heard on the radio as I'mlistening, I listen to C-SPAN a
lot.
So, you know, these are usually,you know, folks who would not be
considered the 1% or even the5%.
And they seem to be saying, I'mdoing okay.
And I was doing well before thereally, really well before the
pandemic.
And that's why I'm supportingTrump.
(22:29):
But what it sounds like to me isthat maybe we're just think
we're doing well and we're notbecause we look at this, you
know, they tell us every daythat the stock market is going
up.
So we think that means we'redoing well,
Chinesom Ejiasa (22:45):
But what you just raised Cindy around you
thought that you were doing welluntil you realized when you
looked up and you started tolook at other people.
I think that is one of thecomponents of the way in which
we think of capitalism.
And maybe we can dub for this,for this particular conversation
as American capitalism, becausethere is not one single
(23:07):
definition of what capitalismis.
It takes its form based on theculture and the context within
which it's sort ofoperationalized.
So America has its own versionof capitalism.
Certain African countries willhave their own version.
Indonesia will have its ownversion.
They'll look very much similarin many respects and then
they'll have theiridiosyncrasies in other
respects.
(23:27):
So when investing there's thisnotion called alpha.
If you invest in an opportunityand that opportunity generates
10% return for you.
On an absolute basis, you'vedone pretty well.
Ten percent is a pretty goodreturn.
If you looked up and saw thatsomebody made an investment and
(23:49):
got a 15% return, you would thenstart to say man, my 10% is not
looking so great becausesomebody got 15% But it's that
notion that as soon as we startto look at what other people are
doing, that starts to dictateour definition of what success
looks like, our definition ofwhat stability looks like.
(24:09):
It's that notion, I think, thatbreeds how we've taken on our
form of capitalism, or at leastthat's one of the components of
our notion of capitalism.
We look to see what other peopleare doing to define our success.
And in the context ofcapitalism, I think that's,
what's gotten us into trouble.
Shuaib and I started our careersin the mortgage backed security
(24:30):
space.
So this is the industry thatultimately brought down the
global economy in 2007, 2008.
When I first started right outof undergrad, I was really
impressed actually by thefinancial tool of mortgage
backed securities.
In its purest form, mortgagebacked securities were meant to
(24:53):
create further opportunity forthose who wanted to buy a home.
And we can get into a debate asto whether or not having people
believe that buying a home is anAmerican dream.
Let's for the sake of thisconversation, assume that that's
a good notion that everyoneshould have their own home and
own their own home.
So under that umbrella is wheremortgage backed securities, like
(25:13):
I thought and still think, lessso, but still sufficiently so,
was a really novel concept.
It was essentially liquefyingthe market.
It was creating more free flowof capital, such that you,
myself, Shuaib could actuallybuy our homes.
That's one side of the coin ofwhere I think capitalism is a
beautiful thing and what itactually does for
(25:35):
operationalizing economiesmarkets.
It creates broader opportunity,broader access for people.
Where it got messy and I thinkwhere capitalism gets messy more
broadly speaking is when westart to feed greed into the
system.
And greed was reflected in manyaspects during the global
(25:55):
financial crisis, butspecifically within the MBS
industry.
Greed on the lending side.
Greed on the residential side.
Greed on the securitizationside.
And that's what really turnedover the entire system.
It wasn't necessarily the principle of MBS mortgage-backed
securities.
(26:15):
It was the way in which we ashumans took that novel tool and
greedified it up basically, andjust sort of amplified it and
multiplied it and revved it upto a point that it just sort of
brought down the system.
That greed is, in my opinion, atleast what disrupted the system.
And I think if you looked atother components of failures
(26:39):
within the capitalistic systemthat we live in, the unrelenting
component that you'll find o rvariable that you'll find within
any of those issues is greed.
That as soon as we operationalized greed, it will no
doubt at some point w reck thefinancial tool that was at least
on its face quite a productivetool.
Kelley Lynch (27:00):
So greed is not good.
Gordon Gecko said it was good.
You're saying it's not good?
Chinesom Ejiasa (27:04):
Yes, and so to connect the two together, the
greed and the way in which welook at other people to justify,
or to at least to referencecheck how we're doing.
Greed, I think can exist withoutour ability to look at somebody
else and say, how are they doingif we were just in our own
vacuum?
I don't think there would bemaybe as much greed don't quote
(27:26):
me on this because I'm still inmy own head, sort of trying to
understand this for my own self,but I don't think that greed
would be as successful were itleft in a vacuum unto itself.
But as soon as we have theopportunity to look at somebody
else, greed has much more of anefficacy.
So those two things—that's how Iwas trying to bring those two
(27:47):
things together.
The point that Cindy made aboutman, I was doing, I thought I
was doing well.
And then I looked up and Istarted to see I'm not doing so
well.
Cindy could take that now newbelief that she's got and become
more filled with greed, filledwith avarice and say, now I need
to do better.
I need to, I don't know, buy asecond home because I know that
(28:07):
my friend down the street as asecond home, so I want to buy a
second home.
And not only do I want to buy asecond home, but I want to make
sure that that second homegenerates a better return than
my friend down the street.
Cindy may not take it to thatextreme, but even just buying a
second home stems some somethingthat is probably a consequence
of her seeing other people havesecond homes and thinking that's
(28:29):
something that I should be doingin order to consider myself
successful.
And then if you just continuethat process and multiply that
process, then you have a reallysort of greedy system.
Kelley Lynch (28:40):
Listening to the first night of the RNC the other
night, they were saying theAmerican dream can be yours.
Kind of.
I kept feeling like, you know,if the price is right, don't let
anybody tell you, you cannothave what you want.
You can have everything youwant.
To me that seems to feed rightinto kind of what you're saying.
Chinesom Ejiasa (29:04):
You have now looked up and somebody has told
you that what you, effectively,what you currently have is not
successful enough.
That that is not the Americandream.
The house that you have, itmight've been the American dream
back in the 1950s.
It's no longer the Americandream because the bar has been
raised.
And so the American dream, Idon't know what the American
dream is now, but it is not justhaving your own house.
(29:26):
It is now maybe having a secondhouse.
It is now being in the stockmarket and generating good
returns.
It is now, I don't know.
I don't think there's one singledefinition for what the American
dream is.
All I'm saying is that there isthis notion out there that what
you currently have, if you wereto just operate within a vacuum
of yourself and you define whatsuccess is for you and from
(29:49):
birth, you were never influencedby anybody else defining what
success is for you, you wouldlikely have a different
perspective of your successtoday than what we currently
have with these sort of notionstossed into our thinking around
what the American dream is.
And it's not just the Americandream that's happening outside
of the U S but we now, we're nowchasing this elusive reference
(30:13):
point that is causing us to sortof make decisions maybe that we
otherwise wouldn't have and itfeeds the system.
Kelley Lynch (30:21):
So in a way, does that go back into what I was
saying about the unrest?
Chinesom Ejiasa (30:25):
I think the unrest stems from a lot of
historical policies that havebeen insidiously and overtly
implemented to createinequality.
I think it gets amplified bythis notion now that we have
around what success is.
But if you took out that notionof success, you would still have
(30:47):
inequalities as a consequence ofthese historical policies and
practices that we as the UnitedStates of America have
implemented.
So you would still haveinequality, but maybe it would
be less amplified because wewouldn't have this notion of the
American dream and more and moreand more.
Shuaib Hassan (31:05):
I saw that the first time of the convention too
, and what the administrationwas basically saying was
directly targeting theirsupporters.
And in my opinion, this is myopinion.
They were basically saying, Hey,you can have the American dream,
which has a capitalist dream.
You can have two houses, threehouses, you can have three cars,
(31:26):
you can have all the things youwant, but that was basically I
think, directly targeting theirsupporters and also targeting
what basically the othermovement is, which is a kind of
socialist movement of wantingsomewhat equality and equal
distribution of wealth.
So I think that phrase wasbasically saying to his
(31:46):
supporters saying, you can haveeverything that you want.
You don't have to share with therest of society.
(32:13):
For me, like I said earlier, Ithink the wealth gap is a huge
problem here.
It is causing a lot of the civilunrest and people are really
realizing now how much gap thereis between the have nots and the
haves.
And so, you know, I don't thinkthat we can get to an agreement
(32:34):
on what's important to us and soon until that gets resolved
because people do get resentful.
People are resentful thatthey're unemployed, that they,
their families haven't had anyupward mobility yet.
You know, we see on TV thatpeople are buying$8 million
vacation homes in the Hamptonsand things like that.
(32:54):
Um, so for me, honestly, it'sthe wealth inequality that needs
to be solved.
And to kind of understand that,you know, you have to kind of
figure out how do we get hereand understand the history of
why the wealth gap is where itis understanding wealth creation
is a, it's been something thatI've studied for a long time.
I was a financial advisor for awhile.
(33:15):
The best way to create wealth isthrough ownership of assets,
whether it's stocks or whetherit's real estate.
But the biggest factor in wealthcreation is time.
In wealth creation, there's aconcept called compounding.
And what that basically means isthat you know, say you invest in
the stock market, you put ahundred dollars in there and
(33:38):
your return is 7% every year.
Well, the first year you get areturn.
And so now it's worth$107.
The next year you make a 7% on107 and so on and so on and so
on.
So if you look at the history ofthe wealth gap particularly in
the African American communityand the white community,
obviously Americans whiteAmericans had a 200 year plus
(34:00):
head start.
They were allowed to createwealth in the 246 years that
black people.
I mean, obviously at that time,unfortunately, black people were
a sign of their wealth, but thatto me has been the biggest
reason for this gap in thewealth creation.
They were allowed to own land,real estate, things like that
(34:22):
while the black populationweren't.
Then you kind of go up to afterthe great depression, one of the
ways to get out of thedepression was the new deal,
which allowed people to reallyeasy access to homeownership,
and you saw a huge boom in homeownership after that.
And that was part of the way wegot out of the great depression
(34:42):
at that time, in 1934, it waswhen the FHA was created.
The FHA was the main enginebehind the home ownership, a
push by the government.
And what FHA did at the time wasthey decided that they're going
to look at which areas theyshould invest in, in terms of
(35:02):
real estate loans versus whichareas they shouldn't.
And they actually went aroundthe country and they had maps
where they would categorizevarious neighborhoods as either
low risk, high risk, medium riskor whatever.
And they would put them in zonesof ABC and D.
And the highest risk were the Dareas, they actually marked them
(35:24):
in red.
And they said, these are thehighest risk areas for us to
invest in so we don't want tomake residential loans to people
living in this areas.
And guess what area were those?
Those were African Americancommunities.
And so now you're looking, youknow, they only hit dad at 240
plus years start.
Then they finally get a chanceto have some kind of home
(35:44):
ownership, and they're notallowed access to bank loans to
buy real estate.
The Fair Housing Act wasn'tcreated until 1968.
And that was created becausepeople finally realized like,
okay, this is not an equitabledistribution of access to
mortgage capital.
And even then you have massive,massive abuse of the system
(36:07):
towards African Americancommunities.
The African American is twice aslikely to get a higher interest
rate on their loan, despitehaving the same credit as a
white borrower.
There still are banks that willnot lend in certain
neighborhoods because of, Imean, it's still redlining to an
effect.
(36:28):
And, you know, as we talkedabout too, the stock market is
own majority 87% of it is ownedby the top 10% of wage earners.
And that obviously excludesAfrican American community too.
The other biggest creation ofwealth is generational wealth,
right?
Wealth gets transferred fromgeneration to generation to
(36:48):
generation.
So again, the white populationhas a huge start from all
aspects of wealth creation.
I mean, let's be pretty honest.
This whole problem has beencreated because of a racist
history of the United States.
That's what it is.
And so we have to solve thatproblem.
We have to figure out how to getAfrican American communities to
(37:12):
be homeowners.
How to get them equal access tomortgage capital.
How to get them equal access tothe borrowing rates that others
have.
We have to find a way how to getthem involved in the stock
market.
As Cindy said, it's not bad atall that the Market's going up.
I just wish more people, moreaverage people were
participating in the Market.
Chinesom Ejiasa (37:31):
This is kind of coming full circle in terms of
when we first started to talkabout income inequality.
And I talked about Cindy sort ofstaying in her lane and
realizing that she herself, atleast by her own definition was
doing fine.
Why are we trying to createwealth to begin with?
What's the objective of creatingwealth?
(37:51):
For what purpose?
Kelley Lynch (37:54):
Please elaborate on your thoughts.
I mean, that is a question,Cindy and I talk about a lot.
Cindy Sealls (38:01):
All the time,
Chinesom Ejiasa (38:02):
But honestly, that's the legit question is
why, why we just entered if wejust asked ourselves the
question why.
Why am I trying to createwealth?
For what purpose?
So I can buy another home?
That would be great.
L ike I would love to havemultiple homes in certain
places.
Is that really the ultimateobjective?
And I think if we start to askourselves more intimately, more
(38:22):
introspectively, the why arounda lot of these things, we would
at least individually come to arealization of what's important
to us.
Kelley Lynch (38:43):
After this pandemic and after the response
to this pandemic, can you see away towards building back
better?
Shuaib Hassan (38:53):
Before we focus on how to develop the future,
we, as a society have to figureout what kind of government we
want to and what role governmentshould play.
Chinesom Ejiasa (39:02):
I think before that, we have to decide, which
is going to be our biggestchallenge in the States, we have
to decide what we want ascitizens.
We have to get on the same pagefirst, before we decide what
sort of government we want.
What is most important to us asa citizen, and hopefully sort of
have overlap on those things andthen decide what should be
(39:23):
influenced by government andwhat can be influenced.
Shuaib Hassan (39:26):
How the government c ould support that
vision.
Yeah, I agree.
Kelley Lynch (39:30):
But we're pretty divided.
And these are the exactquestions that are dividing us.
Shuaib Hassan (39:36):
Honestly, it was just, I just see this division.
That's just so bad that it justgets worse and worse and worse.
And social media makes it worse.
Our leaders make it worse andsome it's an epidemic that
there's no vaccine for.
And I don't know how we're goingto solve that until we solve
that.
(39:56):
Nothing else matters.
Kelley Lynch (39:59):
So how would you do it?
I mean, I know you guys areeconomists, but you know, how
would you do it?
Chinesom Ejiasa (40:08):
So Kelly you're in the international development
space.
If we looked at the way that wetry to encourage emerging
economies, developing nations tocomport themselves as it
concerns their economicdevelopment, as it concerns
their broader development.
(40:29):
I'm generalizing, but we've gotthese very clear notions of what
they need to do there todevelop.
And it's wrapped now into thesustainable development goals
and effectively those goals areessentially the cornerstone,
fundamental components of whatany strong society should have
to consider themselves developed
Kelley Lynch (40:49):
While you and I are familiar with these from our
everyday work, a lot of peoplemight not be familiar with them.
So the sustainable developmentgoals are a collection of global
goals that are designed to be ablueprint, to achieve a better
and more sustainable future foreveryone.
They were set in 2015 by theUnited Nations, and there are 17
(41:13):
goals.
I won't say all of them, butthey include ending poverty,
ending hunger, good health andwellbeing, quality education,
gender equality, clean water,and sanitation affordable and
clean energy, decent work andeconomic growth, reducing
(41:36):
inequality and climate changeamong many others.
I'll put a link to them in theshow notes.
Chinesom Ejiasa (41:46):
So if we took a page out of our own authorship
and said, let's look at thoseSDGs and where do we stand with
respect to each of those?
The SDGs are around educationaround health care around
housing, I think even aroundworkforce.
And if we looked at that and wesaid, fundamentally, what is
(42:06):
important to us and how are weperforming on those goals?
And then maybe even take it astep further and say, what do we
believe should be equitabledistribution for a given
society?
Much like we sort of tried toeducate and sort of illustrate
to developing countries,developing economies, we should
also start to try to take ourown medicine.
(42:26):
What is most important to us?
Is it education?
Is it healthcare?
Great if it is, and we considerthose things fundamentally
important to us, then maybe nowwe have a notion of what we want
our government to focus on.
And then the rest can be managedby the private sector.
We've now given our requirementsto the government.
(42:48):
We can now elect our government,having now been on the same page
as a citizenry, and then thegovernment goes forth.
And then the work can be done interms of how we go about
structuring economic policy,fiscal policy, around making
sure that everyone has access towhatever it ends up being.
(43:09):
I think our struggle right nowis we're not on the same page.
Cindy Sealls (43:28):
Does this give people like you all an
opportunity to step back andsay, we love capitalism, but is
there a different, can we thinkof a new economic system that
works a bit better foreverybody?
Shuaib Hassan (43:47):
Capitalism in its purest form was created to kind
of encourage just competitionand over going to be winners and
losers.
So to me, that's not a shockbecause I understand that that's
kind of the reason for thesystem.
Now, the whole idea of whetherthat still works today or that
(44:07):
that's viable as it is adifferent question.
I don't think it is personally.
I think it does need to change.
And I think there are systems inthe world that we can look at,
but that's a discussion ofeveryone's mindset and
philosophy.
We all have to agree that wewant to move towards that
spectrum.
And that can be done where youcan have relatively a free
(44:28):
market.
Um, but you can also have thesocial security that some of
these other countries have.
I don't think there's a doubtthat it can happen and there's a
model for it, but we're drivingcar on the highway right now and
trying to change the tire.
And that's not easy to do so.
(44:51):
iIt was great talking to youguys.
Wow.
Some really interesting stuff.
Yeah, no I I'm.
I'm gonna, I'm gonna say youguys should think about talking
together, coming up with thiseconomic system, putting it
online, writing your book.
Everybody else writes a book.
Why not?
(45:13):
That's the funny thing isactually Chin's views and my
views would blend together forthe perfect system.
I'll make sure he's not awide-eyed Marxist and he can
make sure I'm not a dirtycapitalist.
A hundred percent.
We'll meet somewhere in themiddle.
Kelley Lynch (45:25):
Well guys, thank you so much.
Thanks Kelly.
Thanks Cindy.
This is was a really goodconversation.
Hi guys.
How you doing?
Hey there.
(45:46):
Hello.
Nice to see you after a coupleof weeks.
So what do you guys think aboutthe pandemic?
The wealth gap prospects for anew normal.
Obaidul Fattah Tanvir (45:57):
What this pandemic has done is forced us
to see things the way the thingsare.
Cindy Sealls (46:06):
As you know, Kelley here in America, it is
definitely the haves and thehave nots.
We know people personally whosekids are now in school in the
pods because they have money,right?
And the other kids are homebecause their schools didn't
open and maybe they have a goodinternet connection.
(46:27):
Maybe they don't.
Maybe they have a parent thatcan stay there with them and
help them do their lessonsonline.
I mean, cause as you guys weretalking, I was thinking, Oh,
here the pandemic put aspotlight on the inequalities in
our country because Tanveerhere.
Most of the people catching thevirus, who aren't out there
(46:50):
doing stupid stuff, are thepeople who have to go to work,
who cannot work from home.
They work in the serviceindustry.
And now they're in this positionbecause a lot of them are
renting because of the 2008crisis, they're not, they don't
have a home they're renting.
(47:11):
And unlike the homeowners likeShuaib was saying, who will be
able to wrap their payments atthe end of their loan.
When this is over thoseapartment dwellers not only will
be out.
They have to pay back all thatmoney.
They didn't pay.
So it is going to be interestingTo say the least in America to
(47:32):
see what happens to our economicsystem on January 1st, when all
those millions and millions ofapartment people who, if they
lost their job, guess what?
They don't even have healthcareanymore because that's tied to
your job.
The people who are well off,like me being one of them.
I mean, well often in that Istill have my job, which is of
(47:54):
course tied to my healthinsurance.
I have a house, so I'm not goingto have to go out on the street
even if I can't pay my mortgage,we're fine.
But there are millions andmillions of people who are on
the precipice of disaster,economic, health wise because
where are they going to go?
If they get kicked out of theirapartment, where are they going
(48:14):
to go?
Nobody's going to rent them anapartment.
And it's not like you haveshelter winter, right.
When COVID is supposed to comeback because everybody's now
inside.
Well it's well, we still have35,000 cases a day.
But yeah, I mean, for us, it isreally shone a spotlight on who
(48:36):
is doing well and who is not.
Obaidul Fattah Tanvir (48:39):
For our culture, it is preached that
your life is predestined.
So no matter what you do, you,things will happen to you that
were written in your fate.
The whole idea of American dreamwas like, you create your own
(49:00):
destiny and the way things arehappening now, nobody wants to
take you as a role modelanymore.
Kelley Lynch (49:09):
You know, that reminds me of this article I
read in the New York times, theother day.
It's called we're number 28.
Let me pull it up on my phone.
Okay.
So the United States ranksnumber one in the world in
quality of universities, butnumber 91 in access to quality
(49:29):
basic education, the US leadsthe world in medical technology,
yet we are number 97 in accessto quality healthcare.
The social progress index findsthat Americans have health
statistics similar to those inChile, Jordan, and Albania.
While kids in the United Statesget an education roughly on par
(49:50):
with what children get inUzbekistan and Mongolia.
So.
Cindy Sealls (49:58):
What?
Read that again, is thatserious?
Kelley Lynch (50:01):
The social progress index finds that
Americans have health statisticssimilar to those of people in
Chile, Jordan and Albania, whilekids in the United States get an
education roughly on par withwhat children get in Uzbekistan
and Mongolia.
Cindy Sealls (50:21):
I mean, that just seems I know we're bad.
Look, look at me, look at my,look at my, my American
arrogance.
Wait a minute, now.
That can't be true.
We're America, but there we go.
Now, if you know, if I'mthinking that the rest of the
Americans would say on hearingthat.
(50:43):
Kelley that's fake news.
Kelley Lynch (50:44):
It is a social progress index.
Um, let's see inspired byresearch of Nobel winning
economists collects 50 metricsof wellbeing, nutrition, safety,
freedom, the environment, healtheducation, and more to measure
(51:07):
quality of life.
Cindy Sealls (51:07):
Okay, tell me where the article came from?
Where did it come from?
Where is it?
Where was it printed?
Kelley Lynch (51:15):
It was printed in the New York Times.
Cindy Sealls (51:17):
See, fake news.
They're jealous.
Everybody's jealous of us.
Kelley Lynch (51:22):
The New York times?
Cindy Sealls (51:23):
We're number one.
We're number one.
USA USA
Kelley Lynch (51:27):
I'm afraid, Norway is actually.
Cindy Sealls (51:30):
Norway,?
There are 10 people in Norway.
Of course everybody's happy.
Kelley Lynch (51:35):
And as my uncle said, he going back to last
week, he said, uh, yeah, wait Ihave to pull this up.
Cause this was really great whathe said about it.
So when I sent it to him, hesaid, yeah, well, Norway, small
boat, lots of people who like tosit down, although he did say he
(51:58):
would move to New Zealand.
Obaidul Fattah Tanvir (52:01):
Actually the problem is as soon as we get
that kind of information, weresist it because it does not
fit with our version of thevision.
Cindy Sealls (52:16):
I like the way you said, I thought you were going
to say facts, but that that's abetter word vision.
That's why people don't want torecognize facts because it
doesn't fit their vision.
It's not that there arealternative facts as Kelly Anne
(52:38):
Conway would say it'salternative vision because
vision, it can be anything.
I mean, it doesn't matter, butyeah, that doesn't, it doesn't
fit our vision of ourselves.
Which, which is that we'renumber one in everything.
I don't, I don't even care whatyou bring up.
We're we're still number one.
And if we're not number one, nowwe'll be number one, tomorrow.
(53:01):
I read that in a democracy inAmerica, by the Tocqueville
written in the 1830s, that hewas quite astounded that
everyone he ran into, not onlywanted to tell him how great
America was, but wanted him toadmit how great America was.
So this goes back a long way.
Shuaib Hassan (53:24):
So it has become a habit.
You know, we are number one.
Again, you know, I heard thisTed talk, you know, fake it till
you make it.
Cindy Sealls (53:38):
And we're good fakers, good fakers.
We have fake news.
We have fake facts.
We faked the moon landing.
Did you know that?
Kelley Lynch (53:51):
Oh my God, that's awesome.
I've been feeling for a longtime like we need to add
(54:12):
something to these podcasts.
It's not really enough to justpoint at a problem.
I think we need to offer atleast some potential solutions.
So today I called Chinesom and Iasked him to leave us with one
question that he thought wouldhelp us take things forward.
Chinesom Ejiasa (54:35):
I think we need to ask ourselves the why.
Why is wealth such aninteresting proposition for us?
I genuinely think that that'sone of the pieces that will, if
really sort of earnestly satwith, we'll start a really
healthy conversation around thiswhole wealth and inequality
issue.
Because if you start to answerthe question of why, why do I
(54:57):
need wealth?
Whatever wealth is for someone,if it's 2 million, if it's 5
million, if it's a hundredmillion.
You start probing that question.
I think it starts to resolvesome of those, those issues
because a lot of this wholewealth creation is stemming from
this American dream that is sortof rev'd our culture.
(55:17):
And the notion of what isAmerica is around the American
dream, which is largely thematerialistic dream of being
able to own a home, maybe twohomes, maybe a car, maybe having
lavish vacations, whatever.
And I'm not passing judgment onany of those things.
What I am trying to say is thatif we have a conversation about
the why, and we start todeconstruct this notion around
(55:40):
the American dream and whatwealth is or success is for us,
then there will be some peoplewho will want that American
dream and that's kosher and cooland fine.
But at least for some, it willallow them to disassociate
themselves from this treadmillthat they're on to attain this
American because because theywill come to realize that it's
(56:03):
not for them.
That's I think one piece of it,
Kelley Lynch (56:07):
I think that's a really great thing to leave
people with.
That's awesome.
Thank you.
So that's it.
We hope that you liked the showand that you'll consider sharing
it with your friends,subscribing writing a review and
(56:30):
following us on Instagram at anew normal podcast next week,
I'll be working again, but we'relooking forward to being back
with you the following week whenwe have an awesome guest
Baratunde Thurston.
Baratunde is a writer, speakercomedian who has his own podcast
(56:50):
called how to citizen withbaritone day.
Cindy Sealls (56:53):
Yeah, I think we can say that he is definitely
our first legit famous person.
Although when I first met him,he wasn't famous use a high
school student, but now he's,uh, doing things all over the
place.
Ted talks, books, podcasts,writing for different shows.
(57:16):
He's uh, he has had a lot ofexperience in the social media
comedy, social commentary space.
So I think everybody will enjoyit.
Kelley Lynch (57:29):
See you then.
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