Dylan Matthews joins Matt and Dara to discuss Covid’s impact on poverty and the road to recovery.
"Joe Biden is taking office amid a poverty crisis" by Dylan Matthews, Vox
Income and poverty in the COVID-19 pandemic by Jeehoon Han, Bruce D. Meyer, and James X. Sullivan
Kamala Harris's plan for $2,000 a month transfers to every man, woman, and child
Plan to have the Fed give people money by making everyone a bank
Who is Manasi Deshpande?
Matt Yglesias (@mattyglesias), Slowboring.com
Dara Lind (@DLind), Immigration Reporter, ProPublica
Dylan Matthews (@dylanmatt), Senior Correspondent, Vox
Jeff Geld, (@jeff_geld), Editor and Producer
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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
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This did four year is a division of fat. You know that
Hello. Welcome through another episode needs on the but podcast network. I met we place. He has used for public as Derriman boxes, OWN Dylan Matthews. We sort of
sitting around in Washington continuing to await news of whether Congress will do anything.
In addition, all on uncovered relief Billy's on the presumption that they don't Dylan rode up a really good story recently about deep poverty situation, that a binding administration is going to be facing come the new year and it's not
It's not a good situation right, it's not right, but also the take away- and this is based on work that our team at Columbia at the center for poverty and social policy dead, is that somewhere between five to twelve million-
where people will be in poverty in January, twenty twenty one than were in January. Twenty twenty and that's coming after a kind of strange year for poverty numbers that we had this man
the expansion of unemployment benefits that started
In April, some people called the Super doll and it was quite
super. It appears to have reduced poverty in April and may even from where it was pretend dynamic, but since that
and the stimulus checks can were often expired. At the end of July, either reverses happen to you
deterioration of living standards.
Where I asked this team of Colombia to project for various unemployment rates. What poverty would look like, and protection for five percent unemployment, which would
a big improvement or about at six point, seven percent unemployment, now thou be a really big improvement to get by January there finding we would have four million more people in poverty, so let us go back over this is, I think I think some of our springtime media coverage was not was not so good in in retrospect right. What would happen in March and April is tons of businesses were shutting down. There were very severe in retrospect
Excessively severe restrictions like furniture stores in my neighborhood were shut down. Tons of people lost their jobs, GDP cratered
I wrote a story about. It was like the largest decline in GDP ever, but at that time, Congress step in with the Cares ACT, which was in fact so generous that most people who lost,
jobs were made hole and some people were made more than hall by the Cares actors
Actually, people at the lower end people who had preview,
sleeping like the working poor now became like the unemployment insurance non poor right I mean is that but the basic paper,
that's the basic picture, yeah. I think we were very used to a situation from the two thousand and eight,
and where there is this big
I'm a calamity and Congress passes a bill that can tackle like a half of it for a light two thirds of it baby,
you're lucky, and this was an unprecedented in my lifetime situation, in which Congress actually did more than seemed strictly necessary, which is good and they weren't just trying to do
stimulus. I think the rationale and the reason a lot of conservative Republicans voted for. It was if you're telling businesses that they kind of have to shut down. You got to pay them for it that you can't just ask them to shut down out of the goodness of their heart. That's one of those unfunded.
Mandates that people like to complain about, and so yeah you had. This the situation where both the benefits for for businesses in terms
PPP loans, the payroll protection program, but
especially unemployment. Benefits were very, very generous, but only for a time well, and also that's different from the two thousand and nine our approach in which
the extended unemployment.
Stability generally we're like trying to prevent with you, I like up mass starvation type situation, but the idea was to stimulate the economy like back into well being sometimes
with you know, Sdr Nostalgia, kind of ideas in terms of business tax cuts, but the idea was like-
money would be used on something and then that something would lead to job creation and in that
job creation but lead the unemployed to having higher incomes versus cares directive like a huge dumptruck him of money at people who have lost their jobs, and so we worked great. But now, like
dumptruck is gone, can actually talk a little bit more directly about kind of that twenty eight economic crisis and and White knew what we've seen
in the years following that, because really as
Who was you know coming into the job market around that time? It was really remarkable to watch how quickly everything fell apart and how slow and then how long
it took for us to have anywhere near a complete understanding of what that had done, like in one of the benefits of looking for white papers, is that you see how much they kind of seven April a kind of take advantage of looking at some of the stuff around twenty away crisis, because it's you know it's a useful discontinuity, but it still. I you know that I am not fully understood and I think that there isn't a good public understanding
just what the long term effects of that crash were so united folks who have read a lot more economics that Ireland? How would you summer as that and what lessons do you think that should have had for how we tackle this?
I'm giving you the master, live thinking about the site. I why here is that's the thing that I think we ve learned,
two thousand and eight and that's most different from this crisis, and that I think it is a difference. I thought a lot about as there is nothing like wrong with like the american works
wars and business, is such that the two thousand nine economy could not have performed the way the two thousand and six the economy dead.
The king got a lot of trouble in two thousand eight for saying that the fundamentals of the economy are sound, which is a damn thing.
Save your presidential candidate running in the midst of a massive economic catastrophe biting had like important bit of truth to it, which is there.
Things are going on and there were some imbalances in the housing sector, which was growing at an unsustainable re. Probably and finance sector is behaving responsibly by it was, it was a shortfall of demand. People panicked people spend in and
We tried to come up with all these things that were wrong with the economy, to explain why we were covering fast enough like there's a skills mismatch, people aren't aren't skilled enough. People are airplane.
Video games too much, but really in retrospect, it was just people panicked. There wasn't enough demand and they just like needed people to get them back on track was really different and strain
about the current recession, is that there really is a reason why economic activity in April could not be what it was in January, which is that that you can't run restaurants or, at the very least you shouldn't run restaurants, though hither future conventionally do, and so there's this dual purpose of relief and stimulus which
Let's get conflated, which is not the worst completion in the world, a lot of the things you want to do or similar, but they are different and I think it
matters for evaluating success. I'm writing a peace that Japan right now.
There's a lot of articles that that suggest you now well, they take half their employment rate down like three percent
but on the other hand they had this big GDP collapse and in two thousand eight. That would be bad. And now I think it's like quite good like gives its Kurds that they paid. They reduce their economic activity by doing fewer things that spread the corona virus and its good that they did that, while preventing people from having for mass humanitarian problems
but all that match I'm in here, you know, I think, the story of the two thousand and nine recession. Still it's getting like written and rewritten energy costing way I thought
Obama's memoir is an important point on this, because
you know, he's now had a number of years in which to think about what he wants to say about this, and he does say very clearly in the memoir that his view is that the two thousand a crash
revealed, unsustainable structural vulnerability is in the economy and that he his mission was to pivot us into some
better direction. No, he sometimes said things like that during his presidency, but he also sometimes that different things, and while he was nowhere near a trumpet, love
of different advisors are all over the map. Like you know, different people had different opinions which just sort of normal
but here we got the president's considered view- was that just throwing money at people would not have been like a correct or adequate response to the situation at which I think helps explain why they didn't,
just throw a ton of money at people I mean there's other stuff. You know the blue dogs, the Republicans Bobbie blah blah blah blah blah, but like he himself did not like. Thank you
to do that and that's why the stimulus bill had money,
to create electronic records in the medical system. It's why it has
the loan program that Republicans dunk dawn as cylinder, but the now guenaud smart, progressive, take it help launch a battery revolution. So that's all good staff and the cares
and have anything like that right, there's gonna be no like ten years later, the legacy of the Cares act kind of stories, but it turns out that just treating the lack of money as the problem is pretty efficacious. I mean like that's. That's like the point of any of these. This Colombia group does a lot of good good work, which would Dylan and Box like the more history, is always that if you give money to low income people every day,
is poverty, a lot, but it tends to arise through these like weird backhanded situations like aids, pandemic, special circumstances, red
they did a thing with me about about a biting housing proposal that I think it's like not going to be couple off, but if it's simple that it will have a drastic impact on poverty,
and that was just not the Obama administration's focus. They believed that to promote a strong economy required a more complicated kind of stories.
You mean, I hope Congress does something, but most of all like. I hope that we take seriously the fact that targeted relief to the most afflicted does a lot and a humanitarian point of view
and that, to some extent like the economy, Conan quote will take care of itself as people get vaccinated. Am you no other things like that right? There was this whole discourse, a late spring of like reopening vehicles.
But like nothing, I don't know like the economy, we didn't go away. What did happen is that businesses is
Stu because they didn't have access to credit, and now we see people lining up food banks because they don't have any money.
But it's like. I don't know when review, how to ass doktor found she or somebody, but like June or August September, whatever,
more people will be on planes. Hotels will be back up to full staff, people be getting their tips like that's fine and the question is like bull between now and then like two people go hungry or people out on the streets. Can people heat their homes this winter.
I think that the that the between now and then does then effect what happens to folks in the post here and in the post tender vaccine world right, like so much
What we ve seen in the ongoing work around the twenty eight crisis is how much longer it took the most deeply impacted sectors of the populace to Lake
cover. Or how do you know how impossible it was for them to recover? I this is seen in kind of envy. You know if you, if you decomposing planet by gender
if you decompose it by re, certainly like black household old wealth, got destroy. Aid to a much
more long terms as its extent than white household wealth didn't so you know there is, and in
it is, I think, a lot of what I've been thinking about is just as some
be. Who you know has spent a lot of time. Looking at thinking about my kind of the long term effects of immigration enforcement, which is something
Lake you're not going to see an obvious
you know, discontinuity, I know- are like a kind of nation wide crisis in the same way. But that can you know that video, as in under appreciated source of childhood Strasse, it's good,
and to be very interesting to see how much we can even going forward figure out what the effect of all of this on
on the families that are lining up food banks are- and there is the question of like what can be done to prevent that from happening, which is where Matt actually think its inner. The irony is that if there were ongoing relief, they're probably would be
ten year, symposium on the impact of the Cares ACT, given what Dylan was talking about at the beginning of the episode. So it kind of does depend very much on what
Congress does now, but it certainly does
see that what we have even in the in the interim, is a kind of great uncertainty which itself appears to be a problem for people who are literally-
Waiting to know whether their going beginning checks in the mail that will help them paid our red yeah. That is something that I I don't have a choice.
My view on, but that I've I've thought a lot more about this time around than last time around
There was a big discourse in two thousand two thousand ten around their business uncertainty or regulatory uncertainty, the argument being that businesses,
felt like there is such a barrage of changes from the abandoned ministries in from the stimulus to two bomber cared about Frank that they can plan for anything and that that was hampering the recovery. I was really sceptical of the time in part
because it was pretty clear what Obama wanted to do and it wasn't clear whether you would succeed, but you
Kennedy, some playing around it and most of the things you wanted to do we're on a dollar.
The stimulus those immediate bets, Obamacare started in twenty fourteen that for years to prepare a lot of Dodd Frank that used in this round,
It's not just business uncertainty. It's like individual and family uncertainty so like, for example,
one of the benefits of really generous unemployment insurance, and this is something as they wrote about over a decade ago- is that they improve matching. So, let's say Box lays the optimum
Please do not take this box. If I have no savings and unlike desperately need to do something I might like to get a job- a king, gos or something to make ends meet, that's not a really good match. I don't care
I don't think I would be good existed for a year, the thriving in person printing, such as the economy. I will actually say, though, that as
as somebody who has lacked, wasn't lack access to a printer for the last several months that, like a contact, free, Kinko's pop up, would probably do pretty
good money problems, my real does exist. It is a division of
and you know that math, so I go to work at Fedex.
I'm not a good employee, I'm not good at customer service, it's not a good use of whatever debatable talents I might have in policy analysis, but
I have a longer term unemployment benefit. I can just in interviews. I can get a job
think tank or another publication or whatever, so that link that's a real bad.
State of having more generous longer term unemployment insurance and when you don't,
if you're going to have more generous
longer term unemployment insurance in your laid off. You don't know if you should should serve keep
or keep trying to match with the place that would make the best use of your talents and that's like a real economic cost. I would say in addition to that specific uncertainty,
We also have right now the sort of goal uncertainty right. We're like it seemed like the philosophy of the Cares ACT were
that unemployment insurance was going to be so generous because the attitude was really going to be like no harm, no foul. We we're shutting off these sectors of the economy, and we just we want you to have your money like we're, not even trying to help. You quote unquote
it is just sort of how it's going then, once we moved into the reopening dialogue, this is like incredible push Paul where a lot of policy makers are saying like no like we want to get that we want to,
but the GDP numbers we want you to go, go get a job and in food service, but then we still have all the public health people running around being like none enough. Don't do that and you have in the in the blue states, especially the light
crazy dissidents of like where a mask while you're walking your dog, but please come to the barn out and it's hard to make policy to pursue incoherent objectives, and still it's like. I just want to get people in need money because
this point, this point we're clearly not containing the virus in any meaningful way, but we are starting to vaccinate people which is good, but hopefully we can avoid Mount malnourished children for the next six months, but you going way back, it would have been better to think more. Like cares had this time limit on it, which was not triggered by any
in particular, it was just a date on the calendar, whereas what know what you would want to say is: have we have a declaration of national emergency around the pandemic, for as long as in is in you,
Could we do the whole thing you may be make the bonus you I little bit smaller to create. You know, fairness with the essential workers
and then you do like tax cut of some kind for the people who you are saying have to work under hazardous conditions, but then you would say the whole thing like it lasts until whatever it last until the CDC says we're back to normal and not just like it. Last till August
and we got converse- work something out cause now, where were riven by like conceptual disagreement as well as partisanship see, I would say that there wasn't conceptual agreement to begin with lake in the feed
We of the Cares ACT wasn't that it was ongoing relief to support a pit adhere to support a shutdown of the economy during a pandemic right. It was based on the kind of public health, slash policy, narrative that if the country took an aggressive, shut down approach at the beginning spent that time establishing
supply chains. Wrapping a ppp provision. Wrapping up like ventilator provision does that's where that emu, logical understanding was at the time and learned enough about the virus, to figure out how we could safely reopen. Then it would be possible to radio
it Cecil exude. Six, we kind of reopening the economy push was to a certain extent and expression of patients,
or you know or abroad, or an understanding did because all of the kind of ramping up, p, p and developing capacity things hadn't happened this spring that it was now a question of. Should we wheat in
Definitely until either the government gets back together on capacity on capacity building or there's a vaccine and both in terms of kind of fur. From the perspective
of what a business owner would be looking at from the perspective of what a politician is going to be saying from a simple human psychology perspective. It's been very difficult to deal with this as its become clear that we're talking about months or
years, and we don't know how long it you know we're going to be in a state of exception. So it does seem to me that you
make an argument. I dont know if this is how it's going to play out, but we are now in a situation much more similar to where we thought we were in March than where we actually were in March right where, yes, there is a period like
during the period of extreme epidemiological to enjoy right now, but there is an end autumn fat.
We don't know exactly when that, and it is because of lake again capacity building a vast
distribution, but it does seem that if you wanted to kind of make the push to people who had been
I'm kind of team reopen team? Let the in over the most important thing you can do is make sure that more businesses dont clothes for the last aromas you say: okay, we promised this is only going to be a thing for
a few more months. This isn't like our long term, running government plot to get everybody on welfare all the time by. We really need to make a big push because there's a light at the end of the tunnel. Let's take a break in, and then I want to. I want to talk about the recovery phase of this a little bit.
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Don't you Know- Durham mentioned Earlier- the sort of incredible wealth impacts of the great recession that impact of black and white households very differently and fundamentally stem from the divergence between the stock market and the housing market right, so that people who own stock witches.
Most rich people, mostly white people, fine, you know not in two thousand and nine, but over the course of the recovery. The stock market came a very strongly, but people who had made
High level averaged mortgage investments, which was a disproportionately african american group, came out really badly from the recession, Newsome, neighbourhood, specific effects and and other things like that, but you can just see two lines on chart going and environment directions. An interesting thing about this pandemic is that even if we have, you know, like increased shoplifting of food and basic baby supplies at another things like that, the typical american households,
has gone up. If you look up how much money do people just have in their bank accounts, it's up, housing values are up. The stock market is also up.
All of these things you'd have the stock market is not the economy. Most stock is owned by a wealthy minority,
people, but a majority of Americans are invested in the stock market
already, the Americans, own palms,
A majority of Americans continue to be a ploy aid turn this pandemic. So it's not to downplay the poverty that Dylan is talking about, but actually to highlight that during the great work
so poverty went up as part of a generalized admiration. I got poorer during the great recession. I was not like the victim.
Of the great recession, but it was a general downward motion and it's not the case now. Right like we have the risk of just forgetting about you, know, people in need, or this incredible political enthusiasm for the give everybody one thousand two hundred dollars thing, which would make,
if everybody had lost ten percent of their income, just giving everybody money, I think, would be a really not just like politically appealing but fair way to address it
but like the typical person has more money than they had a year ago. The give the money to two people who who need it you know is is a much more sort of significant, particularly because I think the economy will really boom the next year because, unlike in the great recession, this a lot of sort of cash on hand. I was concerned at the beginning that it's like first, we would close restaurants because of the virus, and then, when the virus was gone, nobody would eat out because they will be
but like actually most people have been cooking more at home. They like have the money and when people say it like, you can go to your favourites bar like they're. Just gonna go like an end like that's all
good, but it means we really have to take care of people who are poor left behind. This is what you are saying about. The forward. Looking projection still and write like you could have a good recovery and actually still very severe prop exactly anything. Some of that is just the
the nature of this recession, in the nature of it being partly determined by public health outcomes are so. There are a couple interesting sources year, team opportunity and sites at Harvard does this for
real time. Tracker of economic conditions looking at serves zip codes based on income and see something that sort matches what bidens advisors call a c call occasion recover
where basically any reduction in income for people and in the top income group which,
sobering. We for us is like over sixty thousand a year in which is at our doing. Fine and our seem incomes go up a little bit and in the bottom group, below twenty seven thousand a year and wages,
Substantially down, and if you dig into that by sector, it kind of looks like you would expect it to look based on what is shut down Nick Bunker who's
economist. I, like a lot on twitter, was digging into the occupations that that have lost the most jobs. Movies have lost forty percent of their employment, the performing arts in spectator or,
thirty. Seven percent travel agents down thirty, two percent accommodation down thirty percent. It's like that makes sense like it's hard to me,
movies are when the earth Europe at risk of infecting everybody, its
No one wants to go to a hotel. Certainly, no one is calling a travel agent for like an extravagant travel experience, and this is very different from two thousand,
as has been said- and everyone was long before it like housing- was worse off than like Facebook, but
on average, everyone got worse off and I think that
matters for poverty in part, because a lot of the sectors
are doing poorly, employ a lot of what low wage workers there are lots of of maids and wait staff at hotels. Restaurants bars working at restaurants at airports, so if the pain is concentrated in those specific industries, if not just that, everyone gets like a five percent, a hit that our income,
it's a few people get like a massive hit to their income, which is enough to knock them below whatever poverty threshold you're using, and you see that in a few things there's a team
you should cargoes Bruce Mire are Jim saw than it no dame and genuine hung his a chronic honest. Have this tracker of of poverty month to month, and one of the things they ve found is that the relationship between unemployment poverty has changed
and this is something I included my article as a caveat- to urge the Columbia Data which is based on this relationship between poverty and unemployment, but their finding that that in some way,
Poverty went up even when unemployment fell, and that makes sense if the unemployment and these of pain of this recession is heavily concentrated on certain industries, such that a few people and a few industries go out of work and lose so much.
They fall into poverty, I think that that might be what were seen and that certainly
athletes into a case for more targeted relief. I've been
what about basic income over the years, and so I think it's like fun that commonly Harris proposed before she was
and running made. I dont know she's persons anymore, two thousand bucks per month.
Per member of every family. I would
enjoy my wife and I getting four thousand bucks a month. I think that would be a cool social experiment and probably have all kinds benefits. It doesn't seem.
Necessary or like well designed for the specific problem. You really
to bring back the super doll. But then we kind of get into the you know: age, old question of the politics of
the safety net right leg. If what were deal,
with is a lack of political consensus around the need to give any direct.
Leave it all.
The one hand there was so
much money involved in the cares. Act and, like you know we're not even talking about the kind of long term.
Budgetary hit to the federal budget that kid, with this massive dump truck that did not come with any kind of defense cuts or anything like that. But you can make the argument that you can't do the broad or something is the less temporarily sustainable. It is
You could also make the argument that be more narrowly target. Something is the less likely it has to happen at all, because you're just not going to get enough people to get on board, with only the notion that only some of us are hurting, especially this year like it.
Of the pandemic, is so noticeable on those of us who are not suffering great economic harm like we are the ones who are just staying at home all day like it's, it's psychically,
miserable, and yet we are not the protagonists of this of this pandemic, and so to tell people like us
you are not the ones who are really hurting right now is just not a super saleable mess, Emily somebody
every week. Somebody on Twitter is like the only thing the government did. This whole pandemic is give us two hundred dollars, and that reflects
if you neither lost your job nor own, a business that has been hurt by coronavirus. All the government did is give you one thousand two hundred dollars for no reason, but as I go, how much did the government have done? For me, right, like I'm sitting in my bed like this sucks, but I don't know like I'm just in my basement right, one of the pieces,
of the current congressional negotiations that I think is probably not getting as much plays. It should be because of this loophole. How much money are you giving people debate is like there are systems like public transit that really were hurt by
the changes in behaviour of people like us, and so there there isn't. You know there
that argument for like in though we might be the people who weren't suffering the economic harm that that now might
be made actually seem more real effect. In future, what with the things that were able to get back-
and so on my you know, award winning blog and newsletter so boring. I say that you know it in the future. Instead of having Congress spend all this money and taken off his dead, then having the FED by a lot of debt,
the market as quantitative easing and then having a lot of people being weird about it. All the time like you could do direct money creation bright like in some sense the technical details can be different but like in some sense, J Power grids
and everybody two thousand dollars, in which case it doesn't matter. If most people don't spend the money, because unspent created money doesn't cause inflation. This is this is a goofy phrase, helicopter money that people take around that, I think, makes this whole thing seemed loop here than it is, but like Milton Friedman original point about this was that if somebody
around in a helicopter and double the amount of cash lying around and everybody knew that. That's what was happening and everybody got the exact same amount of cash that there would be no economic effect, because
Is it just all the money is worth half as much, and everybody just goes on at that as before. What that has to do with anything, I think, is an interesting question
But the point is like this no problem,
with giving people money they dont need. If it comes out of thin air, they just do you know put in the mouth
right or you can donate it to charity, or you know you can buy expensive headphones if you want, but like there's, no reason to think
There would be a huge inflationary surge if you ve got the extra money, because we know that most people are actually just sitting around like not doing that much stuff, and next year there probably
I'll, be inflation, and not because of any thing like goofy in the monetary system, but because, like America's hotel chains, are not going to triple their capacity because there's like a one off summer when everybody wants to go on vacation. So this
I get a restaurants right like we're. Gonna go from everybody eating our way less than they normally do to weigh more an acre.
Restaurant owner, who has managed not lose his business, is gonna, be gathered, red jacket praises, but like that's, not that's, not a monetary issue. Exactly right I mean that's. Just gonna be sort of pandemic
After, although it's others can be interesting to see how the FED navigates, because
is gonna, be some pressure, I think, to kind of like pull the plug early on on recession, even while unemployment is still ha. I am like that's where it comes back. I think, too, to poverty into the privilege to say that, like as weird stuff happens next year, you gonna want a federal reserve leadership that
gonna stay the course you also get Merkel Batista. You haven't seen a bit about about what the FED could do in its tricky, because with Congress you can do both relief and stimulus. They could do things there. There are designed just to help
people make it through right now and things that are meant to expand business investment get business, is the higher more get the economy more private back on track, and if I can get him only do the second one and one thing: that's that's trick
Right now is that you want to do that, but you don't want to do it in ways that worse in the pandemic. The vaccine simplifies this a lot. I know it's a hot pig that the vaccine
good bye and write. It clarifies what everyone oughta be doing anyway.
Paul right now I may be lake that the fund has to work through these kind of attenuated mechanisms that that then transmit through a series of
Goldberg machines to affect the overall economy, and it's not all,
is clear how that's going to affect different sectors of the economy as they relate to this novel virus that no one knew about a year ago, and so maybe if I-
it was this lever. Suddenly, airlines going back to bars and everything goes to help
and I don't know know that this is how pal is thinking. If, if he told me what he thought day, I would print it, but it seems like a
reasonable worry and you can't just give people money
keep them going. There are. These of
ways that really really bend media
of the Federal Reserve ACT that you could do-
Brad along this economist it at Berkeley friend of the podcast, I suppose,
has a plan where the FED would name every American a bank
affiliated with the Federal Reserve and then we
give them a line of credit and be clear that that is okay if they default on the line of credit.
And as a really convoluted wade, I like give them
when a bit of money but like that has not gonna. Do that and I think the FED does not
Sidra, that its job and considers anything that serve gets close to people in there.
Way is not really its job, and so I think when that
the case than when they view their tools as interest rates and buying more debt, the kind of stock until we have of,
A more conventional recovery situation where you just wanted to get in business is too high
air and do more staff as quickly as possible. But so I took the words
you don't you. You were joking right. I give Japan told you, but he thought every day you you print it
I do think this is a situation where something useful he could do would be to start to actually
a little bit more about when he's thinking like I was looking at the most recent consumer price index report.
And the year on year, like the relative price changes and the economy are wild gas prices are down twenty percent because people are not commuting as much used.
Our sales are up ten percent both because it's gotten cheaper for sort of marginal people. Get
auto lawns because production,
if new cars was disrupted for a couple months. In the spring time, some more people were pushed into it, and also, at least in in our handful of transit. Oriented cities are more people who were
previously car less had decided to invest in in automobiles. Apparel prices are down five percent, at which I assume is mostly because people are in like dressing up to go out right. Everybody's slight fashion is probably on pause, somewhat and clothing. Retailers are a little desperate to try to get you to to buy things easier, to tell knockoffs harder to tell
Austria, zero my spot yeah, exactly of silver Naomi really need tops anyway. Wreck beds up grocery prices have surged, as people are cooking more for themselves, but restaurant prices first cratered- and
our spiking cause. I don't know I gotta actually know why, presumably because they're trying to say open as businesses while operating with a reduced customer bay, rather so increasing for they had, and I guess you see her at a certain point: it's like your marketing to psycho those who took care about pandemic.
So you might as well charge that I may I don't really know of transportation services which I think is mostly plane. Tickets is weighed down, so this is like all gonna change. Again.
Next. The right- and I think I got one of the best things power could say- is like
I am very worried about the large number of jobless people right now. I am very impressed by the benefits of low unemployment that we saw
in twenty nine nineteen, and so not only do I have this average inflation targeting framework, but just personally, I'm gonna look very sceptical on arguments to raise interest rates as long as we're shit is happening in
the relative to me right that if a plausible explanation is this is gonna work itself out, I'm gonna be disposed to wait and see where it like. I think that would be a good signal to business owners as they start thinking about. What's going on in the future. You know the economy is gonna
Chuck and if they have some thought right, like there's a lot of empty star France in my neighborhood right now that used to be restaurants
and, as far as I know like the kitchen like they're, still set up to be restaurants. It should not be that hard to reopen restaurants in them, but it's a risky
opposition and like people to want to lose their shirts after all this, and you want a clear signal to people. That's like, if you have some money, and you have experience only
restaurants- and you know one unemployed, chef and, like you see a big had storefront like just go, do a ride like you know that don't don't worry about it. Like everybody's got me back eating out, I'm gonna get not next week but like when people are vaccinated, Bobby Bubble BAR and you can sort of
give people guidance like that, an end to me. It's actually a little bit. I understand why Biden likes the bill back better Slogan, Buddy
if be, if you take it really seriously, it's economically kind of productive
You are you want to build a back up exactly the way it was before back and then think about making a better right, but the implication that, like the pizza around the corner, for me, it's like no, we gotta come up with something.
Right, like I don't know you know, I just build it back like it would not be
far and away. The easiest thing to do would be to turn the former coffee shop into a coffee shop.
And there's to be a lot of additional unemployment if we of all sit around waiting for the coffee shop to be turned into a carbon capture facility,
or something like that, so so Matt. What you're saying is the fundamentals of the economy here? Well, I don't know I mean it's just well to your point about carbon capture. I think one thing I've heard from kind of the Warren
wing of the party which I think of as as are very supportive of the FED being pro.
But also sort of skeptical and kind of suspicious of the FED's work, as relates to providing credit to big businesses, because they're skeptical businesses
in skeptical of perceived government. Support of big businesses is, how is the board of the FED should be to fossil fuel businesses that are trying to do built back better or build back the same
in their case, and I think there's some arguments about, or should you be extending loans at all to businesses in that sector? Should you be extending loans, a more favorable terms, to green energy companies? I think this is a bit of a moot point, because again
The FED really really does not want itself to be seen as political, its views decisions about like what kind of energy the country should use as decisions Congress and
president, should make and not decisions it should make by that's a case where my
My intuitions are less strong. Then, like the coffee shop example Lake, I dont know what percent unemployment and for how long. I would accept two like shave, a tenth of a percentage point off the temperature increase globally. But if that is in fact a trade off of some kind,
it's less obvious to me, which was you're gonna, but again, maybe a moot point as if that doesn't care. I do think. That's that's relevant.
I'd because, like yes like, I think that if the FED thinks of some politically, if the FED thinks of some tractable
politically sustainable way till I create a new green economy, the short like, maybe they should but they're, not gonna, do that right and I think I'm exists. Go back to my point about Obama, but like just as an economic matter like
Yes, of course, things should be better right, like from the executive applied, but, like you don't want to over complicate the thinking about like job is better than no job open. Business is better than closed business. It's even more clear, then that it works
in two thousand nine that, like it, was something unsustainable about the economy as it existed in January, twenty twenty we be was badly derailed by the virus, but if the virus, it never struck
like a progressive, would still say like what we want clean energy. We want unions, we want all normal things, but it would be a transitional thing not like. We need an epic about of destruction and then we're going to rebuild it from
the actions and just a man is the only get it I mean really like you just walk around everywhere and as terrible is, as has been, and as long as it's lasted has not lasted long enough. That, like are our capital
stock has not crumbled away like the buildings are all still standing. I bet the stove still work like the pots and pans in storage somewhere like weaken. We can get this back, but it will take some doing right like I was coming to an airline person, and I guess you park air plays in the debt
for whatever reason when you mothball them, but I so because they don't corrupt at an egg, so they gonna have to like get pilots.
Certified by having them fly more than you have to move the aeroplanes back to where they're supposed to be getting the whole thing back up to speed like takes a certain amount of time, and if you sit in a way that will you gonna start raising interest rates and slowing the economy at the drop of a hat.
That means that well, if it's really expensive too, like gets a busted. Also fifty seven back in the air, you may be don't bother with words if you say to people like no like were rebuild them back. Just
as quickly as possible. Then everybody knows it's like well, you got to do what it takes right, like just figure it out to get your company back off the ground, even if it wastes some money and like you, I think you do like want to say that that, like we're, the virus get the virus under control and to get the economy going and then
we're going to make things better yeah it's funny. You mentioned the desert, I was. I was thinking about that because one of the things that apparently that he doesn't crisis was supposed to have killed with LAS Vegas. I am that that was that
the where the the housing and was housing crash was biggest and a lot of people thought it was sort of like a bubble, city and
Tunisia, who recently passed away, I think, was
visionary and seen that doesn't have to be true. Las Vegas is a great city and had a lot of potential and a lot of promise and he poured a lot of resources into it and a lot of other.
People poured water resources into it and it is still a great and prosperous.
And so yeah just built, don't write stuff ass. He fell back the same. Ok, let's break in and let's talk about, disability.
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calm, slash, weeds and join the over one million people who have taken charge of their mental health with the help of an experienced better help. Professional our paper today is on the long term effects of childhood s aside, benefits that Manassas Dash Pond Day did, and this is actually very relevant to the great recession conversation. One of the things that happened when everybody had no jobs was they started.
Ambling to come up with some way to have money. One way you can get money in the United States is by qualifying for four, as I benefits after for disability, so you saw an increase in the role of that was clearly. It wasn't like that had been a massive change of rights, health status,
was about economic situation. So then, there was incredible discourse as to whether this meant we had to kick ever buy off ass aside benefits so that they could go get nonexistent jobs. It turned out that you know it S. Eye reform never happened after all of these stories.
It, which is good because then, as the economy got better, the number of disabled people just went down on
and it is absolutely true that that's not a rational way to organize the welfare state, but it's just better for people to money, money that not have money. This study looks at that through a
geller angle, and she looks at some changes to eligibility that happen, that one would people losing benefits and she saw it takes it as a given that losing benefits is bad for you, purse,
Lee, but she looks at the household level what happens to your younger simply if you lose benefits as a kid and she shows that there is
a sustained decrease in your income. If you're older sibling loses disability benefits when you
kid the implication being that it's a hand up, not a hand out or something to do your family right. That, like
You do better in life by growing up in a household that is less economically deprived, even though the programme doesn't like do anything
what am I read? It doesn't give you any skills, it doesn't address any structural barriers to whatever, but just your parents having more money, and I think that much
where money is a meaningfully beneficial to U n
I think a lot of american thinking about the welfare state does not recognise this or acknowledge it. Right did like an act.
It takes us very, am.
Incredibly incentives based view of the world right now
I give everyone just like had quit kickin that pants, like they go, do better
but instead you see the opposite that like if people are coddled a little bit, they end up doing better. Yet that last point about kind of-
a moral issue and of the welfare state is really a white really struck me about this paper, because she doesn't take it as a given that getting as as soon as a child is good for you personally, in the long run, this matter of fact like the whole kind of theoretical quest
and here is, is the benefit to your long term out comfort, because your parents got more money because you're on us aside, you know: how does that compare to any negative effects that being encouraged to seek disability satis might have had on your educational attainment and inner? How that impact sauntering, so by framing the question that way, she's too
in the past, possibility seriously that, like the conservative side on the, as I debate, was right and more generous, as I really does hurt the people it's trying to help, but put it in a way that is both sympathetic and apparently testable and impure.
We tested and goes you know, she's very good at saying, don't press my exact numbers
here. The point is to lay out parameters so that we can get better data later and then we can figure it out, but like parliament-
data says it's just better to give people money, but it's booth frames that have beaten the way you actually can have her a spot and you have productive like okay. What what's the thing we're going to find out? It's going to resolve what looks like a values dispute and provide
pretty clear answer to the empirical underpinning of the of the moral like you just need a kick in the pants like ok, either. You know
and if we want to defend the kick in the pants theory of poverty reduction, because you think it's what ought to be done to someone who has innocent enough to be in poverty or you take the empirical view of well, I thought that a kick in the pants would be more helpful. It turns out that the data on that is ambiguous at best
and therefore, let's figure out some other way so yeah. I love this paper for a number of reasons. One that does not bear on the merits of the paper, but I think is worth noting is that it's the first economics paper I've read about disability insurance by a disabled person.
Despondi uses a wheelchair has been a wheelchair, since she was a teenager, is an accomplished rock climber in a sort of pair of rock climbing league, which I think is awesome and obviously like the paper. It stands or falls on its own
its bites, there's a slogan in the disability rights for all that that you should have nothing about us without us and
having it motivates different questions end and brings different perspectives into the professions. So I think that's great, the other more deeply,
reason I'm really excited about this is this fund has a large group of paper,
about Ssi and Ssdi, it's sister program and they together form is-
nuanced picture picture, how these incentives and sort of human capital effects fit together.
There is one really interesting paper about when getting s eye or being region
it from us, as I does, for parents work supply, so these are parents were not disabled, whoever a kid who thereupon for disability benefits for and when she finds it. The conservatory is like true and then some for it for them, so she vines
the parents you get projected from us. As I pick up so many more work ours that they are made hole that they'd they substitute completely away from us
thy into doing more work. Then I noticed there would be a good thing. It means they have less time to spend as caretaker
but the incentives are like the big story there and
on the same token, gesture as other paper on what happens to the work supply of as the Cyrus appearance when they turn a team, and so that's a big moment for kids who are on our society. Is you
you often get reevaluated and you either keep on Ssi or you get kicked off and are sort of thrown into the workforce and the friends that immediately after kids, who get kicked off replace about a third of their income
there's an incentive story there like. If you are not an unnecessary, you do behave differently. You are more likely to go, get work. Does it make you hold now? Does it provide? Is good
Why for you as us as I now an error,
a piece about there's a couple years.
Go, and I think one thing I tried to get across the is it can both be true that the story about incentives is real,
and that giving people money lowers their work. This is like trivially, true about social security, for old people. My grandfather worked less after he got so security because he is a retired person, but that's not the only parameter recur
about, and we care about magnitude we care about. For balancing these false positives of people who are on
still the insurance, who arguably shouldn't be with the risk of false negatives of people who get kicked off, who shouldn't be kicked off and
It's never obvious where to draw that line, and I think this Bundy's work as a whole suggests to me that, like I'm sure s DNS is, I don't drive outlining exactly ideal way
but it's not as non ideal, as I think some of the discourse around it suggested agree. Alright. Well, thank you so much Dylan for joining us. I also need to take a moment to recognize that this is going to be the last episode produced by Jeffrey Geld, who has been with us here on the weeds for a long time.
He is bandying ship, elevated, ninety into bigger
and better podcasting things except that are always is the best show. So it's not possible Jeff has done great work has brought weeds production to, I would say its highest level ever. We hope to replace them with somebody
excellent one day in the near future, but that is still a little bit tbd.
I saw a merry Christmas and an farewell to Jeff an end to all of you out there listening. The rules will be back
Transcript generated on 2021-05-13.