0:06

Welcome to Talking Feds, a roundtable

0:09

that brings together prominent former federal

0:11

officials and special guests for a dynamic

0:13

discussion of the most important political

0:16

and legal topics of the day.

0:18

I'm Harry Litman. This week

0:21

is our semi-annual deep

0:23

dive into the economic landscape

0:26

with a group of experts and commentators

0:29

that is truly non-parallel.

0:31

The episode comes at a very timely

0:34

crossroads. The nation just received

0:37

overall remarkably strong

0:39

economic news, outstripping

0:41

all the predictions of a year ago of where

0:44

we would be at this juncture.

0:46

But that news comes with a large

0:48

asterisk.

0:49

The American people appear to be wholly

0:52

unaware of it. In maddeningly

0:54

large numbers, they see their personal situations

0:57

as pretty fine, but when it comes

0:59

to the state of the nation, they

1:01

believe that not all is well. That

1:04

contrast has critical

1:07

implications for the coming presidential

1:10

election.

1:11

Also last week, the Federal Reserve

1:13

decided to keep interest rates locked

1:16

in place, raising the critical

1:18

question, are we doing enough to

1:20

keep a tight leash on inflation?

1:22

And as always, there are innumerable

1:25

other variables on the economic landscape.

1:28

With student loan repayments starting

1:30

up again, Treasury yields on

1:32

the rise, trillions in federal

1:34

debt, two ongoing wars that could

1:37

expand, and the potential resurgence

1:39

of Donald Trump to the corridors

1:41

of power, our economic future

1:44

remains cloudy, even

1:46

as our economic present is worth

1:48

writing home about. Lucky

1:50

for us, we have the returning Talking

1:53

Feds All-Star Economic Squad

1:55

here to examine this potpourri

1:57

of economic issues and concerns.

2:00

And they are Dean Baker,

2:03

a senior economist at the Center for

2:05

Economic and Policy Research, a

2:07

think tank that produces economic research

2:10

on US national affairs that

2:12

he co-founded in 1999. Dean

2:14

has authored several economic

2:17

books, including Rigged, How

2:19

Globalization and the Rules of the Modern

2:21

Economy Were Structured to Make the Rich

2:24

Richer. He blogs at Beat

2:26

the Press. Welcome back, Dean

2:29

Baker. Thanks for having me on. Paul

2:31

Krugman, a New York Times opinion

2:33

columnist where he's been writing about economics

2:36

since the year 2000. He is a

2:38

distinguished professor in the Graduate Center

2:40

of Economics at the City University

2:43

of New York and Professor Emeritus

2:45

at the Princeton School of Public and International

2:48

Affairs, where we overlap

2:50

for like a week and a half. In 2008,

2:54

Paul won the Nobel Prize

2:56

in Economic Sciences for his contributions

2:59

to new trade theory and new economic

3:01

geography. He has authored

3:04

or edited, this is breathtaking, 27 books

3:07

and more than 200 papers in professional

3:09

journals. Thanks, as always, for joining Paul

3:11

Krugman. Are there? And

3:14

Stephanie Rule, a senior business

3:16

analyst at NBC News and to

3:18

my mind, the sharpest economics

3:21

analyst on all of cable TV. She's

3:23

the host of the 11th hour

3:25

on MSNBC, which airs weekdays

3:28

at 11 p.m. She previously

3:30

was managing editor and anchor for Bloomberg

3:33

Television and editor-at-large for Bloomberg

3:35

News. And before that, she spent 14

3:38

years in the finance industry. She

3:40

is active in women's leadership development,

3:43

co-cheering women on

3:45

Wall Street. A pleasure, as always,

3:47

to welcome you back to Talking Feds. Thanks for

3:49

being here, Stephanie Rule. Thanks

3:51

for having me. Great to see you guys.

3:53

Thanks to everyone for this repeat

3:56

semiannual episode.

3:58

So, look, let's begin at the. top line

4:00

of economic news, the US

4:02

economy expanded at

4:05

a barnstorming annual rate of 4.9%

4:08

in the third quarter at the same

4:10

time as inflation remained stable

4:14

near the Fed's 2% target.

4:17

Just how remarkable are

4:19

those benchmarks? Just in

4:21

the abstract, how sensational

4:23

a performance for the economy is that?

4:26

I'd say it's incredible. These

4:29

are sorts of numbers. If anyone had said this

4:31

a year and a half

4:35

ago that we'd have this sort of growth, we'd

4:37

have 3.8% unemployment, we'll get another

4:39

number tomorrow, my guess down.

4:42

Inflation to my view, pretty

4:44

much under control. People have said you're just

4:47

being crazy optimist.

4:49

A new number this morning, 4.7% productivity growth for

4:51

the third quarter.

4:54

These are hugely radix that don't go to town

4:56

with that, but that's an incredible number. We're

4:59

just seeing a lot of really great news

5:01

that I would have been

5:02

embarrassed to say these things a year and a half

5:04

ago because people just thought it was crazy. Dr. Pompa

5:07

Yeah,

5:07

I mean, a year ago, Bloomberg said

5:09

there was a 100% likelihood of a recession

5:14

by now, by October. Here

5:16

we are, no recession. How did we

5:19

pull it off? 100% of what it used to be. Dr.

5:21

Pompa But here's the problem. Dr.

5:25

Pompa Uh oh. You're going to dump on it before we've

5:27

even registered it. Dr. Pompa

5:28

No, I'm not going to dump on anything

5:30

about the economy because in a vacuum,

5:33

it's extraordinary. When you think

5:35

about where we came from and what

5:38

most economists predicted, again, tremendous

5:41

win. Here's the unfortunate

5:43

disconnect. Talk to people about

5:45

how they feel about the economy. And

5:48

this is something I have a lot of sympathy to the

5:50

administration on. How

5:52

do you convince people? How

5:54

do you tell people, don't you remember it

5:56

was going to be much worse than this? Don't

5:59

you remember? Inflation was worse a year

6:01

and a half ago. All those things are true. But

6:03

the fact of the matter is inflation

6:06

has slowed, but the price

6:08

of things, the price of the everyday goods

6:11

you're buying for the most part, isn't

6:13

going down. And so people

6:15

out there, lots of people, don't

6:17

feel good about the economy. When you go

6:19

outside tomorrow and you get a bagel,

6:22

when you go to book a flight,

6:24

when you go to book a hotel, life is still really

6:26

expensive. Unfortunately,

6:29

people aren't thinking in the holistic

6:32

sense. They're thinking in the immediate and

6:34

they're just saying like, damn, my life costs a lot.

6:37

That's an unfortunate thing that the administration

6:40

has to solve for because, I mean, look

6:42

at what a great moment this is for labor. Look

6:44

at the auto workers potentially getting

6:46

the steel done. Like this is maybe the

6:48

best moment we've seen for labor

6:50

in decades. Yet you

6:53

talk to the average person out there and

6:55

they're not feeling as good about the

6:57

economy as the data is.

6:59

I think you may be giving people a little bit too much

7:01

credit. There's a fair bit of evidence that

7:04

it is true that prices are high,

7:07

but wages are way up also. We're

7:09

no longer in a state where real wages have

7:11

been doing badly. And there's quite a lot

7:13

of evidence that people are feeling

7:16

pretty good

7:17

about their personal situation. This

7:19

is not just the abstract

7:22

numbers like GDP look good. People

7:24

are asked to assess how are you doing financially

7:27

are pretty favorable. People are spending

7:30

discretionary spending is high.

7:32

The flights are full. Midtown

7:35

Manhattan is annoyingly full of tourists.

7:38

So there's this one. There's a very strong

7:40

aspect of I'm okay,

7:42

but things are lousy.

7:44

And that's a really, really hard thing to solve.

7:47

And here's the thing, though. People

7:49

are out there spending.

7:51

But while they're spending, they're complaining about

7:54

the prices. Right. One of the things that will get

7:56

prices to go down is if people

7:58

say, I'm not paying. $20 for

8:01

that burger, but instead we're

8:03

still going to that restaurant. The restaurant's

8:05

full. We're paying that price for the burger

8:07

and that restaurant's not going to lower their price. So why

8:10

should they? But people have that yucky sentiment

8:12

of I can't believe how much dinner just cost.

8:15

You know in terms of how people think first,

8:17

you know what we the data hard data just

8:19

say, you know This stuff that the statistical

8:21

agencies give us one of the things

8:23

that really got me because obviously we're all struggling

8:26

with the same thing We're inflation is down, but

8:28

people are still complaining this and

8:30

that but I saw the survey and I'm sorry

8:32

I can't remember exactly what the source was.

8:34

Those are credible sources. I'm not repeating

8:36

something I got from the dinosaur And

8:39

they asked some question like is

8:41

unemployment low or high again?

8:43

It was though that's not exactly moving right and

8:47

half the people said unemployment is very

8:49

hot No, I saw that same survey 60

8:52

roughly half the population thinks that unemployment

8:55

is near a 50-year high

8:56

Why do they think that? Well gets

8:58

me this is something they could

9:01

know and we have data obviously

9:03

they have jobs Well, people are quitting

9:05

their jobs They

9:07

put their jobs their friends quit their jobs their

9:09

roads They wouldn't be doing that

9:12

if they thought it was hard to get jobs This

9:14

is what just gets me because you know prices

9:16

I don't know my grocery store can do anything But

9:19

if people are quitting their jobs with

9:21

the expectation, they'll get another job and they're getting

9:23

the other job They must know that

9:26

it's not hard to get a job

9:28

Yesterday someone who I know who's

9:30

always wants to be just a negative

9:32

Nancy about the economy someone without an economic

9:35

experience Sent me this article

9:37

that we work that we work is filing

9:39

for bankruptcy like can you believe it? And

9:41

I said yeah people are working

9:44

from home in droves and

9:46

businesses have adapted We don't need we work

9:48

anymore Like not only was it founded

9:51

on a hill of nonsense beans by a lunatic

9:53

founder put that aside We don't need

9:55

the business model anymore because people

9:57

many people are collectively working from home people

10:00

will hang on to data or

10:03

the soundbiters that has no reflection

10:05

on reality. There

10:07

are two theories here.

10:09

One of them is that people's inflation horizon

10:11

is a lot longer than anything that

10:13

economists look at. That people think about

10:16

prices relative to what they were three or

10:18

four years ago. So we looked at inflation

10:20

measures over three

10:22

months or a year and say inflation is way down,

10:25

but they say, well, prices are really

10:27

high compared with four years ago. And so

10:29

I feel bad. That's one story.

10:32

The other story is that there's all this narrative

10:34

that people have about that's

10:37

coming from social media, partisan

10:40

media, just the my

10:42

own employer seems to be incapable of writing

10:44

a favorable headline about the economy without

10:46

a buck at the end that says

10:48

something negative. Those aren't mutually exclusive.

10:51

But I think there is really a significant

10:53

narrative thing. And I don't know about

10:55

you guys, but I get correspondence. I get

10:58

I'm the king of hate mail, but I get lots of correspondence. And

11:01

it's actually striking how many of the letters

11:03

are you, Ivy Power

11:06

or whatever you you have you looked

11:08

at the price of eggs lately. And

11:11

yeah, I have looked at the price of eggs. It happens

11:14

to be one of those things where the price really has

11:16

come down a lot. But

11:18

not simply a slowing rate of inflation, but an

11:20

actual sharp price decline. But

11:22

that's not the narrative.

11:24

I saw that study of very

11:26

high percentage of people just believe that

11:28

unemployment, which is near 50

11:31

year low, is actually near 50 year

11:33

high. And it's

11:35

got a political dimension as

11:37

well, which is bizarre. So self-identified

11:40

Republicans are much more likely

11:43

to believe that than others. And

11:45

again, going back to Stephanie's

11:47

point, that's not withstanding that

11:49

they would largely say they're doing a lot of work. They're doing

11:51

okay. They're doing okay. But

11:54

their perception of how the economy is doing

11:56

overall is very

11:58

sour in a. distorted, I would

12:01

say even false way, but breaking

12:03

down around political

12:06

lines. So it feels like this narrative that

12:08

we've been talking about forever in Trump land.

12:10

I think that could have to

12:12

do with, and maybe I'm wrong. And

12:14

I'd love to know what these two gentlemen think.

12:18

The idea, the brand, that

12:20

Republicans are better for the economy,

12:22

which isn't even true, but

12:25

is widely believed by lots of people. There

12:28

are loads of formerly

12:31

traditional Republicans who are

12:33

desperately relying on that narrative

12:36

to be true for lots of apolitical

12:38

voters who don't pay attention to particular

12:41

things. But there are powerful Republicans

12:43

that desperately need people to believe this.

12:45

Like, listen, all lawmakers

12:48

are bad news. They're all self-serving, but it's Republican.

12:51

None of them do anything that are good. No lawmaker's

12:53

going to help you, but it's Republicans that are good for

12:55

the economy. So I actually think that

12:58

there are Republicans who more than any

13:00

other narrative around policy are desperate

13:03

to keep this narrative live, that Democrats

13:05

just spend way too much and they're lousy for the

13:07

economy, and it's the Republicans who are fiscally

13:10

responsible. And they need this narrative

13:12

to be true to all of those voters

13:14

out there who aren't paying attention to lots of

13:16

noise, because besides that... And you think it's

13:18

working. I do. I do. I think it's not

13:21

as much as they like it to be working, but I think it's really

13:25

important to them.

13:26

I think it has worked. And, you know, again, there's

13:28

a lot of polling data that showed us maybe one of the ones

13:30

that was really striking to me was that...

13:32

And again, I'm sorry, I can't remember the exact numbers here, but most

13:35

people thought that Obama raised

13:37

the budget deficit.

13:38

Of course, the budget deficit fell hugely

13:40

under Obama,

13:40

which, you know, that sort of led me to believe,

13:42

okay, at least from a political standpoint, there's no reason

13:45

to worry about the deficit because they're going to think the Democrats

13:47

have made it bigger anyhow. So that

13:49

really is seriously

13:51

entrenched. And again, I don't think the

13:53

deficit is a big deal, but obviously a lot

13:55

of people do. And you couldn't really ask

13:58

someone to do more than Obama did.

13:59

in terms of getting it down. And he got zero credit

14:02

for it. This is just very deeply ingrained.

14:04

But yeah, again, more generally, when has the economy

14:06

done well? Love did really well in the

14:08

1990s. Who was sitting there? Bill Clinton. We

14:11

had the years of Bush where his

14:13

first four years in office was the first

14:15

time since the Great Depression. We had no net

14:17

job gain, four years in office. And

14:19

then of course, the next four years, we had a loss.

14:21

And when did the financial crisis hit when he was

14:24

walking out?

14:24

Yeah, yeah. So, but

14:26

somehow the Democrats can't handle

14:29

the economy. The Republicans are the ones that

14:31

know what to do.

14:32

I have absolutely no idea whether by the time

14:34

next November rolls around, perceptions

14:37

will have caught up. But the fact remains

14:39

that we're experiencing kind of an economic

14:42

miracle. That we've had one

14:44

quarter's growth. There are bounce

14:46

quarters all the time. That happens. But

14:49

what we've seen, which is inflation

14:53

just falling off a cliff with no

14:55

price in higher unemployment,

14:58

no price in terms of slower growth. That's

15:00

not just incredibly good news. It should really

15:02

change our narrative about

15:05

what we think that the last few years were all about.

15:07

It doesn't look like the stories that a lot of people

15:09

were telling. Even to some extent

15:11

that I partially bought into work, we're right.

15:14

It's a very different story.

15:16

I mean, you wrote, Paul, the war on inflation

15:18

is over. We won

15:21

at very little cost. So I think it's

15:23

a paired headline here. It's doing

15:25

from great to miraculous. And people

15:27

think it's from lousy to abysmal.

15:30

That's an amazing conjunction. But

15:32

as you say, not to ignore the very first

15:34

part. And I just wanted, Stephanie, you point

15:37

out that things that people are buying with the exception

15:40

of eggs themselves seems expensive.

15:42

But this is more comprehensive

15:44

than that. So you would think if Biden

15:46

would get credit anywhere, it would

15:49

be in terms of

15:51

infrastructure and bringing

15:53

manufacturing jobs back to America.

15:55

Even there, he's a little lower than 50%.

15:59

It feels as if. Maybe it's part

16:01

of a broader flaw with polling now

16:03

in general, but there's just a

16:05

kind of sourness in

16:08

the electorate that you wonder

16:10

whether you have to sort of disregard

16:12

the standard metrics of

16:15

polling as gauges of what

16:17

people are really going to do politically.

16:19

Well, I think something that is unfortunate

16:21

and must be frustrating for the administration

16:23

is that infrastructure takes a

16:25

while, right? I remember Mike Bloomberg said

16:27

it a long time ago, though lots

16:29

of lawmakers should vote

16:32

to pass infrastructure legislation. They

16:34

don't because by the time shovels

16:36

are in the ground and real jobs are created and

16:38

the bridges are done, that person's out

16:40

of office and the next person is

16:43

sitting in office. So one of the problems

16:45

is that people can look at it as a soundbite. Well,

16:47

they've spent all this money, but what has it done? And

16:50

we're not seeing it yet. And

16:52

you hope for the president that you start

16:54

to see more of that action within the next 12, 18 months.

16:57

I mean, you're not going to see huge developments,

16:59

but some. Well,

17:00

I just want to, I mean, I wanted to put it in context

17:03

because in the bulk of my commentating

17:06

life, when I'm a guest with Stephanie

17:09

talking about the real stakes

17:12

of the sort of false narrative

17:14

that Trump and supporters are propounding,

17:16

let's just think about it for economics. Let's

17:19

say that Trump actually wins.

17:22

What would that basically mean for

17:24

U.S. economic policy? I think we have a sense

17:26

of what Biden's economic

17:29

thumbprint is now. Do

17:31

we have a sense of what Trump's economic

17:34

thumbprint, if anything, would

17:37

be?

17:38

Look at what the GOP just proposed

17:40

to tie to Israel funding.

17:42

Maybe one of the most ridiculous proposals

17:45

I've seen that the new proposal is

17:48

for us to give this money to Israel, we're

17:50

going to take money from the IRS.

17:53

And specifically, the place where

17:55

they want to take it from the IRS is

17:57

money that is designated going

18:00

after the wealthiest tax

18:02

evaders. So the commissioner of the IRS

18:05

came out yesterday, it was basically like, are you

18:07

bleeping kidding me? This will

18:09

be a loss for us. This will cost the American

18:11

people money. So what will Trump's economic policies

18:14

be? Remember the corporate tax cut.

18:16

The tax cut was so big, it

18:18

was bigger than most CEOs

18:20

asked for. Do you remember back then, Jamie

18:23

Dimon from Jamie Morgan was like, oh my gosh, we

18:25

didn't even ask for a cut this big. So

18:28

most likely we're gonna see him go through

18:30

extraordinary measures to cut

18:32

taxes and make things easier for the super

18:34

wealthy. And maybe the biggest fear is, if

18:37

Trump ends up being Putin friendly

18:39

and doesn't do all the extraordinary things that Biden

18:42

has done to keep NATO together

18:44

and cohesive. If Putin advances

18:47

and we're not supporting Ukraine, it

18:50

will cost us so

18:52

much more money and resources

18:55

than what we're doing now.

18:57

I was just gonna say, the one proposal Trump's

18:59

put on the table, he wants a 10% tariff

19:01

on all imports. So I don't

19:04

know whether it's a 10% additional tariff. I

19:06

don't know if he knows, or that

19:08

everything will be taxed at least 10%. That would

19:10

be less drastic because we already do

19:13

a tariffs in a number of things, certainly against China.

19:15

But that's a huge tax on middle income

19:17

people. So he's gonna have a huge tax

19:20

increase on middle income people and lower income

19:22

too, I should say. And then I'll set it with

19:24

tax cuts for corporations

19:27

I don't know.

19:28

That's like the most classic Trump thing ever

19:30

that he'll say to Trump rally, is everyone's

19:32

going, yeah, let's get that.

19:35

Let's just make it all in the USA, ignoring

19:38

everything everyone's wearing and everything that they bought.

19:41

Like it's just absurd. It's totally disconnected

19:43

from reality.

19:44

Let me pivot because of what you

19:46

brought up, Stephanie. New York Times

19:48

has a big piece about the

19:51

economic effects that we're now

19:53

dealing unusually with two

19:55

major regional wars, each

19:58

of which has the potential for... breaking

20:00

wider. So the New York Times has,

20:03

you know, a pretty alarmist headline

20:06

about the fragile world

20:08

economy and the way

20:10

the Middle East war could threaten it. How

20:13

big a concern should

20:15

the two wars be again in

20:17

economic terms? What would be the impact

20:20

of the global instability, even if it worsens

20:23

on the domestic economic

20:25

landscape? I mean,

20:27

the Israel-Gassa thing is

20:30

absolutely horrifying. It's

20:32

at many levels. I cannot

20:35

convince myself that the economic stakes

20:37

of that one are all that large.

20:40

It's unlikely to provoke anything like

20:43

the 73 Arab oil embargo. And

20:46

even if it did, the world is a lot less

20:48

dependent on Middle Eastern oil than it was then.

20:50

So that one doesn't worry me so much. The

20:54

Russia-Ukraine thing,

20:55

the economic consequences have mostly

20:58

already happened, cut off of natural gas

21:00

supply to Europe,

21:02

in which they've weathered. It was ugly,

21:04

but they have done amazingly well

21:06

in the end of coping with it. Food

21:08

prices, one of the reasons that most grocery

21:10

prices are up is that we're having

21:13

a brutal war in one of the world's

21:15

great bread baskets. And so

21:18

those are the ones, the war that isn't

21:20

happening is the one that terrifies me, which

21:22

is Taiwan.

21:24

If that one happens, then we're talking about

21:26

an absolutely strategic center. Many

21:29

of the world's semiconductors, which are

21:31

in turn crucial to everything, that

21:34

one would be a nightmare. But this seems

21:37

like kind of a late date to be worrying about the

21:39

economic impact of the wars we currently

21:41

have. Yeah, I think we're inclined to agree with

21:43

that. Wheat prices are actually lower

21:45

than they were before the invasion. So it's kind

21:47

of striking that ever much more we might be paying

21:50

for our bread. It's not because we're paying a lot for the wheat.

21:52

And obviously Israel-Gaza, I mean, you

21:55

can't look at that. I think it's an absolutely horrible

21:57

situation. But the economic impact,

22:00

Again, we could all envision scenarios,

22:03

Paul, you're suggesting that, well, you're suggesting

22:05

it won't happen, but obviously, if Mideast Oil

22:07

did get pulled offline, that would have a substantial

22:10

impact, less than embargo in 1973, 1974, but

22:12

yeah, it would still have an impact.

22:15

But my best guess, not based on any

22:17

sort of expertise, is we won't see that.

22:19

The thing that is worth remembering is

22:22

that so far,

22:23

the US, we're spending money, but

22:26

the US economy is huge relative

22:29

to the economies of any of the combatants

22:31

here. It's not really all that much

22:33

money. And by the way, one of those things,

22:35

talking about people not getting credit, in financial

22:38

terms, the Europeans have actually

22:40

stepped up to the plate. They're actually supplying

22:43

more money to Ukraine than we are. So

22:46

the weapons are mostly coming from loss. And there's

22:49

a whole other issue there about production

22:51

of military hardware. But this is a case

22:53

where this is just

22:56

lots and lots of things to worry about there. But I

22:58

was a little surprised to see people, maybe

23:01

I guess it's an inevitable headline, but that's not

23:03

the top of my list here.

23:05

What are we going to do? A war is going on.

23:07

In my opinion, this isn't discretionary spending.

23:10

Like, this is what we need to

23:12

do. I don't think it's something to debate about.

23:14

It is also important. This is one of the things that

23:17

have perrained on endlessly, pretty much

23:19

empty to the wind. But

23:21

if you put this in some context, again,

23:24

I don't know where we stand and how much money we've given

23:26

to Ukraine, somewhere around 60, 70, 80 billion. But

23:29

isn't it well under 1% of GDP

23:31

or something? It's way under. It's

23:34

about 2.3% of the percent of GDP. So

23:37

again, people should totally argue on

23:39

the merits. So I don't mean to say, oh,

23:41

don't argue about the merits. I mean, I

23:43

think we should know. But that's

23:44

going to suck. No one cares. But it's

23:47

important to understand the idea that somehow

23:49

we aren't doing something here. We don't have

23:51

health care. We don't have child care because

23:54

we gave that debt is absurd. So

23:57

we should argue for health care, argue for child care,

23:59

whatever we're going to do. to Ukraine really is

24:01

a side of it.

24:02

This is a general lesson that you guys in fact have

24:04

imparted to me in previous discussions. It's

24:07

just a propensity, I think, for people

24:09

to take any story that's big

24:11

and translate into economic terms

24:14

that might in fact make no sense

24:16

against the sort of behemoth of the US

24:18

economy. That's the kind of Dean Baker

24:20

special. Don't trust any newspaper article that

24:22

doesn't give you the denominator. Yeah, yeah, yeah.

24:25

Exactly. No one else hears that though.

24:27

Yeah. Actually, so this is a total audible,

24:30

but I'd like to take two minutes anyway, because

24:32

we've talked about the horrific

24:34

consequences of the Gaza war. And

24:37

I wonder if you have an

24:39

opinion here. One thing you do here is that for Israel, 330,000

24:44

people in the prime of their life being caught up

24:47

as reservists and a possible

24:49

extended war, not to mention

24:52

all the costs of the actual fighting,

24:54

is really a danger of a serious drag

24:57

on what's been a robust economy. Can

24:59

I just take a quick departure from

25:01

the US shores to ask if you think

25:03

that that's a serious problem here?

25:06

Well, I mean, when you think about 330,000 people basically

25:11

walking away from their jobs and

25:13

going to be enlisted, I mean, on

25:15

one hand, it's just this extraordinary

25:18

show of force in terms of patriotism,

25:21

but it is going to have a crippling effect

25:24

on their economy. I mean, even like their schools

25:26

in the last week, they're trying to figure this

25:28

out, like, how are we going to patchwork this together?

25:30

But Israel is a very small country,

25:33

and to have a huge portion of the population

25:35

now temporarily or indefinitely

25:38

out of the workforce, you're going to have an impact.

25:40

It's World War Two type mobilization. And,

25:42

you know, they sustain that very

25:44

substantial period that they are taking a huge

25:47

economic hit from that. I actually was doing

25:49

a little bit of homework on this. And, you know,

25:52

we talk about Israel and its robust economy.

25:54

Obviously, for the region, they

25:56

do very well, but there's a little bit of a legend

25:59

about Israel.

25:59

Israel has this very,

26:02

very vibrant tech sector,

26:04

startup nation. We talk about Israel

26:06

as having this incredible tech boom,

26:09

but the broader economy has not done as

26:11

well as people imagine. You

26:13

got these stories that say, a fair bit,

26:16

given that we're the startup nation, why is

26:18

our productivity growth so disappointing? Why

26:20

can't young couples buy a home? Well, there's

26:22

that too. That's

26:25

been true as long as I've been going there. It's

26:27

just in general, Israel has

26:29

had all through this tech boom, they've

26:31

had under 2% annual productivity

26:34

growth,

26:35

which is not spectacular for a country

26:37

that is. Why is that? It's complicated,

26:40

but I guess it's basically saying the economy

26:42

is a lot more than just the tech sector.

26:45

What's interesting is that's not even taking

26:47

into account. One of the things we don't talk about

26:50

very much is that the ultra-religious

26:53

in Israel are not

26:55

in the workforce. They're an economic

26:58

drag. I've also heard, Stephanie, I don't know if it's

27:00

true, but it's such a small country that a certain

27:02

element of corruption and imbalance,

27:05

just a very oligarchy that

27:07

handles all the IT industry and

27:09

that itself in a small country can lead

27:12

to real distortions that are

27:14

a drag on growth. I don't know if it's

27:16

true, but it's one of the theories you hear bandied about.

27:19

Certain societies have enormous

27:22

ability to mobilize

27:24

and be resilient. Again, we talk about World War II

27:27

level mobilization. We did

27:29

that. All of the combatants

27:31

in World War II managed to spend 40%, 50% of

27:33

GDP on the military year after

27:37

year. Presumably, they will survive,

27:40

at least in terms of the economic impact, but it is going to be

27:42

very serious.

27:43

Shifting back to the

27:45

domestic sector and a generalized

27:48

question about these factors

27:51

that we're just talking about that people proffer

27:54

as having a big economic impact,

27:56

but maybe ignorantly or not really understanding.

28:00

preparing for this episode, I was

28:02

really struck with the sort of potpourri

28:05

factors that people out there are pointing to

28:07

as trouble on the horizon. And

28:09

I just wanted to put them out there on a list

28:12

and ask if any of them, you know, has

28:14

purchased with you or you think which on the list

28:16

is not like the others, if any.

28:18

The student loan repayments, the

28:20

possible government shutdown, the

28:23

concern with the workforce shortage

28:26

as a result of the aging of baby

28:28

boomers, soaring bond

28:30

yields, the UAW

28:33

strike now resolved, that the

28:35

Barbie film and Taylor Swift

28:37

no longer pumping up the economy

28:41

and driving American prosperity.

28:43

Anything worth paying close

28:46

attention to there. I don't mean to be

28:48

too dismissive, but it strikes me as a list

28:51

not prepared by people of economic sophistication.

28:54

I wonder what people of economic sophistication

28:56

make of the items

28:58

on it.

28:59

Let me take the student loan debt repayments

29:01

so I could easily dismiss this. I've been

29:03

seeing these stories like, oh my God, people are

29:05

going to have to be determined to pay student loans because

29:07

they can't. The New York Fed, I

29:09

was very happy to see this. They did a little study looking

29:11

at consumers expectations, only regular

29:14

surveys, and they asked people are going to have to start

29:16

repaying their loans. How's that going to affect

29:18

your your stomach? And it turned out

29:20

almost zero. The number of people, first off,

29:22

it's overestimated because a lot of people were paying

29:25

their private loans that have been in, they never had

29:27

much one. But the other thing is that you have

29:29

a wide range of programs and Biden

29:32

doesn't get credit for this. He made the

29:34

income driven repayment plan much

29:36

more generous. So, you know, how

29:38

many times I spoke to you on Twitter,

29:41

someone says, oh, I work at Starbucks, and I

29:43

can't afford it. Well, you shouldn't have to pay

29:45

anything. It really is a very generous program.

29:48

So long and short, the New York Fed put

29:50

the hits at consumption at less than

29:52

one tenth of one percent GDP. And

29:55

that looks to me right again, we don't

29:57

know the exact number, but it's it's that is

29:59

not.

29:59

one we have to worry about.

30:01

I agree with that and I think it gets overplayed.

30:04

Like whether or not we should have

30:06

student debt forgiveness is a debate

30:08

that you can put over here in this category

30:10

for another time. But this notion

30:12

that like it's going to be crippling to the economy

30:15

when people have to start paying back their student loans,

30:18

I don't know why that would be. Before

30:20

COVID they were paying their student loans. Unemployment

30:23

is where it is exceptionally low.

30:25

Wages are up. Why would we think

30:28

that repaying student loans was going to

30:30

just have this tremendous blow?

30:32

Like I don't even understand the math behind it.

30:34

Yeah and of course we can pass

30:36

a special act of congress to force

30:38

Taylor Swift to keep touring.

30:42

Do you think we need a law for that? I don't

30:44

know. I didn't think she

30:46

could get any higher. Let me be clear.

30:48

I don't think she's ever going to stop touring. I just

30:50

went to her movie

30:51

and all the movie is is the

30:54

concert

30:54

but you're sitting in a movie theater. There's

30:56

not even like behind the scenes scenes.

30:59

There's not like behind the stage. What's happening?

31:02

There's no there's not even a dialogue. Yeah and

31:04

your point. You spend all of a day to go to the

31:06

concert and now you just go to

31:08

the theater

31:10

and they hustle you into buying the Taylor

31:12

Swift commemorative jumbo

31:14

popcorn and jumbo drink. It's like

31:16

the most brilliant hustle ever. She's

31:19

not stopping touring. She's brilliant.

31:21

Sad to say we really do need a denominator

31:23

here. We need a bigger denominator despite

31:26

the incredible size and success

31:29

and I wish her all the best. It's really just

31:31

not a big deal. Even

31:33

Taylor. Even Taylor

31:35

Swift. The one that's in there that worries me

31:38

but it's a complicated worries because I

31:40

basically don't think I understand it is the

31:42

bond yields. Bond yields are extremely

31:45

high. I

31:46

don't at least think that I fully understand

31:48

why and they

31:51

so far haven't dented the economy

31:53

and there's one story

31:55

is that we just discovered

31:58

that our star is a little bit different. lot

32:00

higher than we thought it was and so interest

32:02

rates are gonna stay high permanently but the economy

32:04

will cope. The other is that

32:07

something is gonna break and

32:10

that we're just looking at lags and

32:13

I had absolutely no idea which of those is

32:15

the right story and so the bond yields

32:17

does make me nervous because this is we're

32:19

in so many uncharted territories that I don't

32:21

know where you know but but this is again uncharted

32:24

territory. I don't mean to understand it but I think it's already

32:26

as I am you know affecting people's

32:29

portfolios. Yeah I was

32:31

gonna pick that one on your list too as the

32:33

one that bothers me and I think there are concrete

32:36

things again. Could I ask you Dean lay out

32:38

what we're talking about. Yeah so we saw

32:40

this huge jump in long-term rates

32:43

first and foremost long-term bonds. It's

32:45

been around 36, 37, someone you know they obviously

32:47

jump around day to day and they

32:49

just jumped up to about 5% they peaked at 5%

32:52

it was a two weeks ago

32:54

they're down a little bit I think we're a little over

32:57

4.6 now you know we've got some good news but

33:00

anyhow that is a big jump

33:02

and to mind you it has

33:04

had an impact. Now again I'm probably

33:06

with Paul and Stephanie and the well-spent for herself

33:09

but I thought rates would have much more impact

33:11

on the economy. They've passed it you know obviously

33:13

good growth, low unemployment, nothing to complain

33:15

about but on the other hand there are

33:17

concrete effects here so the housing market

33:20

we're still seeing construction news starts

33:22

are down but we're still seeing very good construction

33:25

long story there but that was the supply

33:27

chain problems but existing

33:29

home sales are down almost 40% and

33:32

people talk about this as a locked-in effect you

33:34

have all these people that have

33:37

a 3% mortgage they might like to move but

33:39

if they move somewhere they know they're gonna get a seven

33:41

or even we had long trades I think they had 8% last

33:44

week so that's a real

33:46

disincentive to move and that's

33:49

not something we need for the macro

33:51

economy but this is a head exchange

33:53

with someone what are things that aren't measured in GDP

33:55

well I'd like to live over there but I'm

33:57

living over here well that's not measured in GDP but

34:00

I'm not living where I want to. So I'm in

34:02

a broad city or I have a big house,

34:04

I have a small, whatever it might be. So that's

34:07

a real negative, a real unfortunate part. The

34:10

other aspect, I do think we are

34:12

seeing some of the classic kind of crowding

34:14

out of investment, not so much that's hurting

34:16

the economy in the short term, but there's stories,

34:19

again, some might have good data on this, that

34:22

you have like innovative firms

34:24

can't get capital. So, you know,

34:26

the venture capital, that's really

34:28

dwindled. And also I just

34:30

saw it again, how much has had to do with interest

34:32

rates? I can't say that the Danish firm

34:34

that's a world leader in building offshore

34:37

windows, they just canceled two big projects.

34:40

Now there are lots of things there, but interest rates

34:42

were a factor. So I worry

34:44

that we are going to see a price and there is also

34:46

an issue of financial fragility, you know, more

34:48

of the Silicon Valley bank type thing.

34:51

I'm not predicting that, but obviously when you have

34:53

a lot of people, a lot of banks where they've made

34:56

commitments, they're holding long term debt that's lost 10,

34:58

15% of its value, probably

35:00

there are other institutions that are, we'll just

35:03

say vulnerable. Again, will they collapse? Will

35:05

that be a big thing? I guess no, but it

35:08

is something that is worth worrying about.

35:10

But Dean, don't you find frustrating like

35:12

this housing argument that yes,

35:15

it is given where rates are, there's tons

35:17

of people that want to buy a home, it's too expensive

35:19

to do so, but go back

35:21

in time a year ago, everybody was screaming

35:24

and yelling that they couldn't buy a home

35:26

because prices were through the roof and every house

35:28

was getting bid up because rates were so

35:31

low, right? And you have private equity

35:33

firms buying up swaps of home because

35:35

rates were so low. So it's kind of like the

35:38

media is so determined to

35:40

write stair mongering stories that

35:43

it was like, no, it's like, oh my gosh, you

35:45

want to sell your home and there's just no buyers

35:47

out there because nobody can afford these rates. And

35:50

six months ago, it was you want to buy

35:52

a home and you can't do it because rates

35:55

are so low, everybody's bidding them up. So it's like,

35:57

which one do you want?

35:59

And, you know, the New York Times and the exact

36:02

opposite got really pissed at them and they were

36:04

trying to send what they were saying to them. So, in some survey

36:06

I go by, we've gathered from the Census Bureau,

36:08

which I tend to trust. There was actually a big

36:11

increase in homeownership among young people

36:14

from 2019 to 2022, also for blacks, also for Hispanics, people with income below the

36:16

median. All

36:22

that's right in the census data. Now, that's since

36:24

gone a little bit the other way in the last couple

36:26

quarters, last two or three quarters. But

36:29

we actually had a good story in the housing market. So I don't

36:31

want to exaggerate this, but still, you do

36:33

have a lot of people that would be

36:35

looking to move. And, you know, again, so just,

36:37

you know, for saying, what am I worried about? Well,

36:39

I'd love to see the mortgage rate fall back from,

36:42

you know, whatever, 7.5% or wherever

36:44

we are today to something like 5.5%. I

36:46

mean, it's not going to get back to three. And

36:48

I want the economic environment where it would get

36:50

back to three because that would probably mean we're in another

36:52

recession. But if you could knock that

36:54

down, say a point and have two points, I think that'd be

36:56

a great thing. Probably worth

36:58

saying, and this is not so much bores

37:01

me about the economy as that if

37:03

you ask, why did rates go up so much? We

37:05

don't have very good stories about that. And

37:08

the Fed has a model of the term premium,

37:10

which is supposedly the part that

37:12

it's not expectations

37:14

about future Fed policy, but

37:16

is in fact some kind of, you know, risk

37:18

something rather. And their model

37:20

says that most of the rise is

37:22

a rise in the term premium. But

37:24

I have actually spent a couple

37:27

of totally unproductive hours reading

37:30

through that model,

37:31

and I don't understand a damn thing. And

37:33

so I think at some level, we don't know

37:36

what the hell is going on here. I think that's

37:38

the third time this episode that Paul

37:40

Krugman has said he doesn't understand it. And if

37:42

he doesn't understand it, there's no hope

37:44

for the rest of us.

37:54

And now a word from our sponsor, the

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39:02

All right, it is now time for

39:04

a spirited debate, brought

39:06

to you by our sponsor, Total Wine

39:09

and More. Each episode,

39:11

you'll be hearing an expert talk

39:13

about the pros and cons of a particular

39:16

issue in the world of wine, spirit,

39:19

and beverages.

39:20

Thank you, Harry. In today's spirited

39:22

debate, we pop into the beer aisle for

39:24

a closer look at the two main types of

39:27

beers, ales versus lagers.

39:29

And to help separate lagers from ales, it

39:32

first comes down to one thing,

39:33

fermentation. That's the process

39:36

where the yeast does its magic to give the beer

39:38

its alcohol content and carbonation.

39:41

Now, ales are fermented with top-fermenting

39:43

yeast at warm temperatures, somewhere

39:45

between 60 and 70 degrees

39:47

Fahrenheit, whereas lagers are fermented

39:50

with bottom-fermenting yeast at

39:52

colder temperatures, between 35 and 50 degrees

39:54

Fahrenheit. Because

39:57

of their warm fermentations, ales

39:59

can generally ferment and age in

40:01

a relatively short period of time, three

40:04

to five weeks. Loggers can take

40:06

longer, up to six to eight

40:08

weeks. The difference in temperatures

40:10

and time means this. The quicker

40:13

fermentation in ales, including

40:15

stouts, hessivisins, pale

40:17

ales, and IPAs creates a

40:19

fruitier, spicier flavor that's

40:21

crisp and refreshing. At Total

40:23

Wine and More, we have over 1,100 ales, so you can

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explore all you want. Loggers,

40:29

including helis, illsners, have a

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smoother, richer, more mellow and

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robust flavor than ales, thanks to

40:36

their longer fermentation time. We

40:38

can thank the Bavarian brewers from the Middle

40:40

Ages for discovering the benefits

40:42

of longer fermentation after storing

40:44

their brews in ice caves during the

40:46

winter. In fact, lager

40:49

in German means to store, which

40:52

adds up since lager beer was brewed,

40:54

covered, and stored with ice harvested

40:56

from nearby lakes. At Total

40:59

Wine and More, we have an ice cave of our own filled

41:01

with a huge selection of ills and loggers

41:03

from around the world. Just remember the next

41:06

time you enjoy one, give a little cheers

41:08

to fermentation.

41:09

Thanks to our friends at Total Wine

41:12

and More for today's A Spirited

41:14

Debate. I like to spend,

41:17

in each of these episodes, to spend a little time

41:19

focusing on longer term factors

41:21

for the economy, but more broadly

41:24

American society, and

41:26

I want to talk about AI because

41:29

you're part of a burgeoning debate about

41:32

what will be the impact of artificial

41:34

intelligence on the economic

41:37

landscape. I just wanted to canvas

41:39

different views here. Do you see

41:42

it as contributing

41:45

to overall wealth generation,

41:48

or since it'll lead to a reduction

41:51

in available jobs, will

41:53

it not? I know we're in a little

41:55

bit of a murky, very

41:58

hard to see future. But

42:00

I wonder if you're bullish or bearish

42:03

on the impact for

42:06

the kitchen table economy of

42:08

the burgeoning AI.

42:11

I've always been a skeptic of all the techno

42:13

optimists. Boy,

42:16

if that's not a term, it should be. Can we trade? I

42:19

assume it is. I don't think it's my credit

42:21

card. But anyhow, I just see

42:24

AI as being qualitatively different.

42:26

You can have all these innovations

42:29

in ways things are done that just totally

42:32

transform them. I

42:34

was writing a paper and I had to put in a reference

42:37

section. So I just got to check GPT and say,

42:39

hey, give me references for whatever it was.

42:41

Bingo, two seconds. Obviously, I had to edit

42:43

it. But not that would take any down. I went

42:46

to have done it myself. But it was pretty

42:48

nice just to have it done for you like that. But

42:50

that's just the beginning. You think of things like you

42:53

can do diagnosis. And I've seen some studies

42:55

of this that you feed in some

42:57

blood pressure, the various things. And

43:00

you already have AI that could do

43:02

that better than your average doctor. So

43:04

what I really like about it is there's tremendous

43:07

potential in terms of efficiencies.

43:10

But also, this is not kept

43:12

in any way skills bias

43:14

that I think if anything, AI is likely

43:17

to have a bigger impact on the

43:19

most skilled professions, doctors,

43:21

lawyers, other very skilled,

43:24

highly paid professions, which I think is great because

43:26

it's equalizing rather than what

43:28

we think of as automation where we have robots

43:31

instead of people on an assembly line, where it's getting

43:33

rid of what used to be high paying jobs.

43:35

And now they're low paying jobs, so they don't exist at

43:37

all. So I'm a big optimist on it.

43:39

I'm actually going to join in that. The dis

43:42

on what we're calling AI is that

43:44

it's not really intelligent, that it's actually

43:46

just souped up autocorrect.

43:49

But a lot of human jobs are

43:51

just souped up autocorrect. A lot of what people

43:54

do is they and those 10,

43:56

in many cases, they are well paid education

43:59

and jobs and so we

44:02

got productivity growth and it is

44:04

again it's anti I kind of hate the

44:06

skill bias thing because I actually think that the

44:09

that a lot of the plumbers in

44:11

some ways have a lot of skills I sure don't

44:13

have but it is anti certainly

44:16

the sort of credentialized higher

44:18

education skills biased

44:21

and that's good I doubt that it's going to lead

44:24

to mass unemployment that that's it has never

44:26

happened before from technological progress and

44:28

it is going to coupled

44:30

with other things that are happening type

44:32

labor market what looks like possibly

44:35

a union revival we're probably heading

44:37

for a somewhat more equal society so

44:39

eventually robot Arnold Schwarzenegger

44:42

comes and kills all of us but outside from that it's

44:44

it's looking pretty good

44:46

you've suggested in particular Paul that

44:48

the technology boost may eliminate

44:50

concerns about public debt levels

44:53

can you explain what you mean there

44:55

so yeah we just did an event actually we have the

44:57

GC where I teach and

45:00

despite much cautioning of speakers

45:02

to try and actually speak in English one

45:04

of the big items on the slides was are

45:07

greater than G death sustainability

45:09

depends a lot on the comparison between

45:11

interest rates and the economy's

45:13

growth rate and interest rates

45:15

are up and you start to say are we starting

45:17

to get worried about death sustainability but

45:20

there's at least hints you know that

45:22

the mentioned productivity numbers which

45:24

are very noisy but there are hints

45:27

that we're actually seeing a productivity boom

45:29

which means a faster growth in the economy

45:32

which means that actually maybe that

45:34

won't be that hard to deal with we have never

45:37

paid off massive debt we never

45:39

paid off the debt from World War two we just grew out of it

45:41

and the chances that we can grow out of whatever

45:44

or at least that we don't have to be worried don't have gone

45:47

up because I think estimates of potential

45:49

economic growth over the next

45:51

ten years are probably substantially

45:54

too low right now and we if

45:56

we can even just have something like we had a

45:58

kind of IT led productivity

46:01

boom between 95 and 2005. I

46:04

don't see any reason why we can't be having something like

46:06

that again.

46:07

So I would agree with everything

46:09

they said. My big concern is

46:11

lack of regulation around it and

46:14

the people developing it. Just last week

46:16

at a conference here in New York, I interviewed sort

46:18

of one of the most preeminent voices, strategists

46:21

in the world of AI.

46:24

I was so gutted by

46:26

how disconnected

46:28

he was from reality

46:31

and just sort of like the impact on people

46:33

and lack of human connection and what that does.

46:36

My worry is that we've got no regulation

46:39

and even when Congress holds

46:41

hearings and brings people in to come talk about

46:44

it, they bring in one tiny voice from the

46:46

world of academia and everyone else is

46:48

a massive business stakeholder in

46:50

the world of AI. So my AI concerns

46:53

are around how things are programmed

46:56

and what the goals are, but as far

46:58

as like the technology and what it could do to

47:00

democratize education, healthcare,

47:03

so many things, I'm thrilled about it.

47:05

So

47:07

he

47:07

just came out this week with executive

47:10

orders on regulating AI. Now, I've never

47:12

read through it. I've read all the people write about it. They're

47:14

serious. I'll just say that. Are they

47:17

perfect? I'm sure not. But

47:19

he's out there putting something on the

47:21

table, which was to my view, a really

47:23

great thing. A

47:24

hundred percent. If you think back, it

47:26

was really when I think back to sort of the Obama

47:28

administration, all of those

47:31

social media giants, it's

47:33

as though the White House front door was

47:35

open and Sheryl Sandberg and Mark

47:37

Zuckerberg could cartwheel in. Right. Those

47:40

are the days when we were like, what is Cheryl going to be, Treasury

47:42

Secretary, President

47:45

or God? The worship of that

47:47

industry with no one in power,

47:49

having any concerns of the impact

47:52

of those companies. I absolutely agree.

47:54

I think it was really, though I don't know the details on

47:56

it yet, the fact that Washington at least

47:58

is appearing to take AI.

47:59

AI much more seriously

48:02

than we have at all around social

48:04

media is encouraging.

48:05

All right. Teeny little note on the auto

48:08

correct most jobs. It's already the

48:10

case even the primitive AI can

48:12

score the 75th percentile

48:15

on the bar exam.

48:17

Let's close with your thoughts about a topic. I

48:20

think all three of you, but certainly Dean and Paul have made

48:22

a signature concern of your career, namely

48:25

inequality completely separate from how

48:28

the economy as a whole is doing the disparate results

48:30

for rich and poor and especially

48:33

for very rich and very poor and especially,

48:35

especially for very, very rich. How

48:38

are we doing as a country in

48:40

the last several years?

48:42

Where do you see that part

48:45

of economic policy

48:47

and just life going in the United States?

48:50

Well, we've made great progress in the last few

48:52

years. Again, this is a problem that we've had for the

48:54

last half century. So you don't get rid of half a

48:56

century of problems in three years, but

48:59

things are going very much in the right direction

49:01

for now. So the law and employment's had

49:04

this tremendous effect in boosting

49:06

wages at the bottom. Great work from René

49:08

Dubé, David Otter, and I'm sorry,

49:11

I can't remember the first name of the person

49:13

who grew, the third author, I'm sorry,

49:15

on that, but they definitely benefited

49:18

from the type labor market. And then

49:20

this revitalization of the union movement.

49:22

It's just, we saw the UAW

49:24

did great pay increases. Apparently Toyota's

49:27

looking out of maximum exactly, but they

49:29

have to pay their workers more. They're now

49:31

trying to organize Tesla. Good luck with that. Seriously, good

49:33

luck with that. That will be a hard, hard effort. And

49:36

of course, we have the UPS strike and

49:38

no strike and settlement. Great, you know,

49:40

you have to go and strike out a great settlement. So

49:42

a lot of things going in the right direction. We

49:44

have a long, long, long way to go, but this

49:47

has just been great to see. Yeah, and just

49:49

to say something about one of the

49:51

lessons I learned along the line is the

49:54

decline of labor, the decline of unions in

49:56

America was not ordained

49:59

by technology and globalization. It

50:01

had a lot to do with the political environment, particularly

50:05

starting with PACCO and Reagan,

50:07

this political hostility to organized

50:10

labor and labor in general. And

50:12

now, well, we just had, for

50:15

the first time in history, the President

50:17

of the United States joining a picket line.

50:19

That's a pretty powerful signal. And

50:21

then we have this UAW victory.

50:24

Lots of things can happen. The world two

50:26

years from now could be a really terrible place

50:28

in a lot of ways. But right now, there's a

50:30

lot of good news on this front. You

50:32

wrote an op-ed actually in the Times recently

50:34

about how the UAW resolution

50:37

could point the way toward shared prosperity.

50:40

Ms. Rule, last word to you on this.

50:43

Listen, I think we're making progress. I mean, even

50:45

the fact that we're addressing and putting

50:47

actual budget dollars

50:48

behind making affordable child care

50:50

in this country is tremendous. Like,

50:52

I will always say the thing that worries me

50:54

most or that I wish we would address in a more

50:56

impactful way is education in

50:59

this country. If we had stronger

51:02

education, better primary education

51:04

for all Americans, the greatest

51:06

chance of economic mobility, in

51:08

my opinion, is through education,

51:10

which then translates to opportunity. I

51:12

do think we're in a better situation

51:15

than we were even a few years ago. Are

51:17

the super-rich getting even super-richer?

51:20

They are, but that's a global thing. It's

51:23

not domestic. And I think we're doing things to address

51:25

it. I do. Nothing is perfect. And

51:28

people who are absolutists, who demand

51:30

more, I think they should give Joe

51:32

Biden a lot more credit for what he's

51:34

done because those who say,

51:37

I can't believe he hasn't done enough. Like, when

51:39

I hear people, you know, go after him

51:41

that like student debt hasn't been completely absolved,

51:43

like he hasn't stood up to what he promised to do,

51:46

he's done a whole hell of a lot. And

51:48

if what he has done isn't

51:50

enough, what do you think you're going to

51:52

get if you elect a Republican?

51:55

None. Much of the things that you like that

51:57

he's done will go away and worse. And

52:00

so I think we're making progress.

52:04

We are out of time in what's been

52:06

another great and illuminating discussion

52:09

of the economic landscape.

52:11

Thank you very much to Stephanie, Paul

52:14

and Dean. And thank you very much

52:16

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