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Teen births are plummeting — and economists are judging your Christmas gifts


In a very merry Christmas day episode of the Weeds, Ezra and Matt talk to Sarah about how why teen birth rate fell in half since the mid-2000s — and whether MTV's 16 and Pregnant might have anything to do with it. Also in this episode: an economic critique of Christmas presents and a deep dive into Hillary Clinton's pledge not to tax the middle class.

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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
The following podcast contains explicit language. Obviously, lobbyists allow welcome to another set of the weeds boxes: policy, podcast, gonna panoply network, Matthew, Iglesias, joint. As usual by my colleagues as recline answer, Clef unpaid, Are you excited? How is the best way to spend the holidays like on a scale of one to ten yeah? You, because I mean we're we're we're courting a couple days before Christmas, but this episode will be really east on Christmas day itself. It is our Christmas gift. to the nation, though you know- and I think honestly saying time with family is a little overrated and if you can sit back relax enjoy. You know that the fun policy oriented vibes here I disagree. I think that
This is a good whole family activity like other around yeah right, like like the country used to do a round. The fireside addresser exactly you're you're gonna, be bored of talk in your family, like with like thirty to forty five minutes, but you're gonna have to continue spending time with them, and I think what would help make that a more enjoyable experiences, a long discussion of why the team pregnancy rate has dropped. quickly in the United States to feel good story for the holidays that everyone can enjoy. Left right theories span, the spectrum of of ideology. Nobody quite knows: what's going on, it's a mystery, it's I don't think I'm going too far to say this is the cereal of public policy If only we could get to cereal, like numbers with uh sure we can. I get you have teens in your extends for them. They're not just ask them. Why was up but we're. Looking for, like a broader national perspective, women ass air cliff,
That's it there's been. This amazing trend has been going on for about twenty or so years now the teen pregnancy rate or team birth rate, which is of a different pregnancy dramatically, declining its den of forty two percent decline since two thousand southern if you go back to that which is insane Lillian. So if you look like childhood obesity rates version if we could drive down the rate like two or three percent over a decade Rubik's oh Jack, those numbers. You don't see that in anything and putting any binding, I'm tryin or like we ve, been very excited in recent years. It appears to have no ended to the excitement is over, but health care costs have been just increasing a slower rate, the normal rate. That is usually what you get except my goods, but percentage were they give you think of the insurance rate that we pass this massive law to give people insurance? It's really giant we're doing all this pr around it and we Creasy insured rate by a few percentage points, and I was like yes, we're like doing a big thing, but the team birth rate has declined by forty two percent with a deadline.
About what it is you express per one thousand women aged fifteen nineteen. It was in the low fortys and thousand seven and twenty four point two in am twenty fourteen, which we just got CDC data on this past Wednesday and just make one one point on this, because I think it and Jessica framing point this discussion, I think, is often had as a morality play. Discussion raided it's bad to have
university wedlock, because it's bad- and you know you can- you can come down. We want to come down on that, but this is a really big deal from the perspective of poverty. It's a really big building the respect of educational attainment. I mean when you go into poverty numbers and you look at what were correlates with that. It is much easier to declare. It is young teens who have children. They end up going to college much else, often the kitten up at them in their their children and of poverty. Much more so that this is a big deal for a lot of different social outcomes. It's a big deal for the welfare state to be right. If you have kids, it typically team arms there births are covered by medicated. So that's a big spanned. Also, kids, you are born, detain, moms are more likely to become teen arms themselves, their moral authorities, the welfare system, the really big societal cost as well- and it's been this big decline- there are different things going on, but one of the things I find some interesting writing about. This is no one really knows why they can't point to one thing and say: look with Obama, carry pointed that and say you know we
and it mandatory to get insurance, and then more people got in France with Teen I didn't make sex admin, the Tory. We did make like better contraceptives mandatory. We didn't do this big thing and we're still seeing this great public health outcomes. On the one hand, this is so exciting. These kids are gonna, have like a better shot that success is going to be able to have more educational attainment. and you stay in school longer. On the other hand, it's very hard story for a public policy person to digest, because you wanna say look, let's do more of that, but we don't know what that is in some cases. Something else that I think is interesting about the time period of this story. Right when you say it's been down forty two percent, since two thousand seven thousand,
and it is if you go back and it was dropping before that Tunisia, surveys even Peak- was ninety ninety wine right and then dropping semi. I'm just seen this drop in and you have a great charred and opposed to cope about this. But you know there are sickle things you might see of his peered at the economy goes down and then the economy goes obsolete. Usually you know you'd start looking for what changed in the country, but it's very hard to find that kind of external factor either. This has been going down when the economy tanked and it's been going down as economic recovered. You can't look outside like when we talk about crime right chromosome lot, that's also to enlarge the great mystery, but I mean they're things. People look at like these have declined the crack epidemic as being a big external factor in that, whereas here it's just very
hard to find you know anything in or out of public policy. That seems like a big enough shift in the culture too, to push it s in the ninety. Ninety zero, much clearer story, excesses in the wake of the AIDS epidemic. You have like a very visceral reason for kids to be more cautious about having unprotected sex and like sex, I'd researchers. They were really clear story to tell about the ninety nine in and then, like you said, in the mid two thousand, you see fertility rates decline for the entire population, so people start having less babies. You know in two thousand seven one of the interesting things in a twenty fourteen data that just came out this week is that you see a rebound and fertility rates for the overall population for the first time since two thousand seven, the number of american women having babies went up not down, but for teens the judge The decline of keeps happening there was a nine percent decline in teen birth, adjust between two thousand and thirteen and two thousand and fourteen alone. It's insane because they're shaking his head in the studio, just like the little number animals. We almost wonder for counting wrong we're back together
almost immediately so easy to get ready to track, but so it so I mean there must be some theories at other. It's interesting that you'd! Normally, you would expect to see us Grum of efforts to claim credit, which I feel You have not really seen yeah there's like a little bit from like the sex I'd communities. That's like wine, so lay out a few. The fear There is, then, we can link dive into whatever one's we think are interesting, but kind of the structural forces at play. Among today's teens, our teams are having genes, are having less tax than they used to. Oh, if you look at you know the number of teens yours, either sexually active or have had sex before they were thirteen or hookah cultures
Actually, I don't you ever get these data there. Actually pretty good. Two kids are having let's acts by most metrics that we use and has been a decline in the ninety nine days, that kind of parallels declining birth, tinder using better contraception, more contraception, and so there more likely these birth control and when they do there. This is another crazy stat. There has been a seventeen fold increase in the use of long acting reversible. Contraceptive to these are like ideas and implants, which are pretty much. Nearly a hundred percent defective renting births, there's been seventeen fold increase since two thousand five in the number of teens using them, which interesting is that the use of that I mean that's a huge in Greece, but it's still little relatively small, so it could double again in the next one. and there's a lot of forces are pushing that number out. So the numbers you know to put those in context and two thousand five point: four percent of teens fifteen nineteen uses long acting reversible contraceptives and twenty thirteen most recent you're for data up to seven percent
The numbers are small, but the increases your cell rather ILO question about about that. Do we have any idea which teens are making the decision, because something that that I've noticed right is that you know if you follow vocs, for instance right, you would have heard a lot by this point about how much better I you these are than other kinds of contraceptives, but my my hunch is that it and again this is not based on data Summum I'd be very, very curious for for real numbers here. My hunch would be that that trend is happening first among more highly educated people, very stable relationship with a good general care physician. You know you kind of look at the population there, for most pregnancies, nuke of the population that is driving higher adoption of argued ease. They would not be the same population, but maybe I'm wrong. That's a good question, so we generally no more informed women do choose ideas at a higher rate like if you look at I'm gonna college is not sufficient to ninety four themselves, much more than their patients do
But you know one thing that would be a wrinkle to this data. Is you really seen in the past six or so years? especially Colorado, trying to make our duties waymore available to low income women, so Colorado ran the some programme that we later learned, was funded by Warren Buffett where they give thousands of low income young women. I think the cut off was maybe twenty four hour. So three ideas- and they did this through birth control, clinics, Owens, except Medicaid- entitle acts by similar pilot and say, was running and Saint Louis. Around the same time, it might almost be like a little by vacated where you have like high income. People who are you know helping their teens, make decisions about birth control, but then you of these initiatives that are coming more common, where you have low income, women being targeted for this type of birth control, and then you have the expansion of Obama, Karen Twenty ten, which requires insurance companies and Medicaid to cover long acting, reversible contraceptives at no cost and
I think that's going to be like a huge game changer in adoption and that you really see these rates like continue. This, like really fast rise over the next few years, if you'll just have been an increase in advertising and marketing of these kinds of things. So there's you know, there's like more channels of information out there. just like a kind of in medicine and exchanged. It was just think about a year or two ago that a group that represents kind of colleges, knobs attrition. They would now recommend I reasoned implants as the first contraceptive choice for teenagers, which is low controversial at the time, but it kind of expense these are both controls. You don't have to touch for like five years, that you don't there's so much user air and like birth control pills, because you are taking the same kind of day and like if you teenager of your anyone that white yeah condoms of you. No high value
It is, as you know, the failure rate for of her birth control is about nine of a hundred women using birth control in and get broken. Propels in a given year will get pregnant. I think the failure rate for condoms is around eighteen and a hundred and one thing, the failure rate there is discussing its image wrinkle that the fish right. There is about usually Missy's what you say about missing through hell or something like that or not. Sir. I think in the same time is not that the the birth control itself is ineffective. It operates this same. I'm hormones that are being used in Europe are control pills and I in but certain types of ideas. It's just the fact. The ideology distributed on a constant basis, whereas with tells you ve to rely on the individual to kit that continent mark a further study the other day, and it showed that medicine regimes in general that we will have to take on short of an ongoing basis, but about forty percent of patients like actually comply with them.
and so like that sort of, like your your problem will examine this. Can be cluster of and to re? Think if you don't have the money to pay for your birth control, which can be as much of a problem with a bomb, a caravan still comes up in some places, like maybe you're, gonna skip it for a month. There are classed as shoes and access issues that come into play along with just here It felt like I had to do with the new of alma care rules where insurers have to cover birth control. They have to cover the full cost right. Yes, so does that give the insurers and incentive to push people to using larks rather than conventional pills I mean is that cheaper from the insurer side, you get your line. Lark long, acting reversible countries are administered cheaper for them to get you a shot once every five years that there really ash or will work than to buy you pills every month that you may not take that's a good question. Go that's kind of like a front. Versus costs over time lurks are really are a lot more expensive? I know we're just get
I really. I really want to just compliment us on the rapid adoption of this nickname, which I have not heard, we can only really it's everywhere. This is some of us were recently read the Brookings, a high report. Poverty has larks all over it right, and your users they ideas but turns out. Implants are actually with eighteen they're, using instead of the eighties, so yeah there's an interesting heart and I'm the peace I posted today. That is really not the rise of the Indian Ocean notes, whether among teens thrice meant plants will put that in shone out works are much more expensive. I think ideas are like somewhere in the five hundred dollar range. but you know you use them once over five years, if you're, using a copyright idiotic ten years you're really getting like a lot of things. We are back that way, generally pirate over
care, there wasn't really a preference for lark sector very high cost, and the people who wanted to use that meant is much cheaper, felt much cheaper to pay like your ten dollar, co pay and birth control. Pelles. That's a really good question on the medical management and the cow insurance companies think about this, because I am obviously it's much much cheaper to paper birth control than it is We're babies which I understand are pretty expensive as magical as it is well thought out tests, so I dont know kind of what their strategy is. One thing that is a little troubling, though, is there are few reports that showing then turns companies aren't like doing super great, to this mandate. Usually, when you have seen a lark inserted, you ll have to go for a follow up. A point mentioned often charge you for the follow up a point grant, unlike not realise that they will say you can't do that, and we should just say here are listeners know this, but we can talk about a bomb occurs itself. The problem, these other rules and bombing care, but if you live under the poverty line in one of the twenty, some states had not expanded medicate. For instance, you don't have any
as is in doing anything for you right, yes, subversive, but also quite expensive, so you may be able to go to like a title tenant cleanin. I got something very like a lot o my options initiative, but right these rules dont really help people without a bombing, so he's a domino switches. I will member like teen birth, being like a big subject of conversation in the ninety is but more recently, possibly in part, because team birthrate has declined, but I feel it has been a big shift to discussion of like marriage. More generally, that I think there used to be served. The assumption that the single parent population and the team parent population, where, like very very, very heavily we're lapping circles, but now we ve seen an increase in older women who are married. Having children which has similar am indifferent.
Actually you educational attainment, is obviously for twenty five year either in or out of high school. You know one one way or the other, but we ve actually seen over the past. two years. I think the overall referred for single mothers has been going down. So I mean I don't That's like the same phenomenon or like actually the same cohort of women who were like not pregnant when they were seventeen continuing to use more effective contraceptives as they become like twenty two. You would expect that to be a whole lifecycle effect that you're not going to on learn how to use effective Congress. gives, as you enter your twenties right. Yet it's an interesting question. So one of the interesting things in the data is, you can segment out like young, teens and old teens. You can look at eighteen to nineteen year olds and fifteen to seventeen year olds and the decline among fifteen to seventeen year old has been much faster than the Klein among eighteen nineteen year olds, suggesting that
like maybe something about the high school environment. Some people say maybe, like our sex I'd programmes are working, but that there's something different going on in these two segments of the team Population that we're solving we're doing a great job. Solving teen pregnancy from fifteen to seventeen year old jobs and less great, but still pretty good job in order tat. It was a moment infused by that, because it seems to me that when you're looking at pregnancy among fifteen to seventeen year olds for the most part you're looking at it, What right you're looking at something having gone wrong! Eighteenth nineteen year olds I mean were all over educated urban. I had seen a corridor. People get married very late, but you know those are adults. It may be that some of those are our folks who didn't intend to get pregnant dead, but I think these numbers segregate out unmarried eighteenth, nineteen, your
so these are single moms and those demographics. But the thing is fifty one percent of pregnancies in the United States are unintended. According to surveys, I mean of cross the entire population right, so these sort of teens situation is of particular interest. from various public policy reasons, but if you assume that teenagers I've been there sort of like a leading indicator of of later people, if they are developing the skill of avoiding unintended pregnancy, that has implication, for what is likely to happen further on down the line. Land that is very large share. I mean, of both I mean of abortions and also of live births. Are the result of unintended pregnancies, which itself is largely. The result of me use of contraceptives, yeah, that's a good! Yes, you should expect to see this kind of report. I don't even look, data that way and I've seen anything during that I'd- be interested. Any we'd listeners know about that
another kind of cyclical, bigger scale, thing on here is a generational fact: where people born to teen moms are more likely to become teen moms themselves, so you have fewer. You ve had this cohort of teen moms, it's getting smaller and smaller, so the risk factor for becoming a teen mom is something that fewer and fewer people deal with. What about the sex dimension of the story? You talked about the of of everyone that the people who are trying to tell a story that takes a some credit for the trend, is a sex education community, wouldn't what what is their tail? Yes, it's one. I don't find super compelling, but I am very happy if I am very interested in like to be proven wrong, if that's not the case The Obama administration, one thing they did in twenty tat is said world invest in evidence based sex education. Listening to this trend begins prior to that Yes, it is turned begins pyres. That's already like one reason to be a little sceptical
they say that any success they're going to finally give us some studies showing that it works, and when you look at the evidence on sex said most of it isn't a super compelling. I think there are very few if any sex education programmes at shown a decline and in parts which is a hard thing to show, and then there's some who show like a decline in risk. Factors like if you surveyed attains afterwards like whether there currently sexually active or if they ve ever had sex or things like that of their using contraception. but generally the evidence on sex education that I've seen as nine super compelling the politics of this is that the abandoned musician was trying to kill right, as is only sex, but then bizarrely ended up putting a bunch of mind or the absent and throw Bobby care in one of its weird deals
one fact of just put up there that we heard you do things interact. So there are a few evidence based programmes of abstinence that have been studied. That say that they can show like a decline in like when the kids first have sex or if their sexually active, so they can be consistent, there's probably few of them than comprehensive succeed. grams. The evidence is like free, flimsy on one thing, I wonder about. I wrote a long story about this last summer and one of the emails God and people were suggesting like other theories, and one was about the internet like. Is it easier for kids to learn about sex than it was like ten years ago? The flip side of that, as I could So? I don't I'm not attained would also seems like easier to hook up with other teens if you want to using the internet, kind of wonder, of those balance out at all, but that's another thought that the kids are able to educate themselves much better and like much.
or privately than they would have been able to make even ten years ago have numbers. I mean that this story here that the intuitively feels and most write to me is it somehow or another rates of just contraception used correctly going way. I assume is to somebody numbers on that and I would love to know within them. Why? kinds of contraception, so obvious you seen and an increase in larks as of now out today, and I have nothing but I do wonder how much you know we're just looking at increases and birth control more generally,
that data oriented it, certainly my impression that the cultural conversation over sex has become a lot more. I think, open in shame less than it was when I was a kid or even in a ten or fifteen years ago, people talk all time. Bout, hooker culture in, and the things run up at once things about hook up culture, one that things about the normalization of more casual sex in the culture is that it is also brought with it a normalization of contraception and discussions of contraception cause. There is sort of no version of hook, a culture that works without protecting yourself but for the most her protect themselves, particularly- and I say after AIDS for so ready to really think very seriously- about std issues, sudden of his having to that. But I'd I'd be courteous. No at the wrong number son contraception are yet. I think we have the best data. You just see more kid saying they use contraception.
ed before and Ninetys in particular rank as you re AIDS and you had a safe sex push, and there was a big increase by beginning on your views. Your point there just when they got a bit of a given seat in the policy around like. My plan b, for example Russia Plan B. When was it in TWAIN, thirteen was moved over the counter without a prescription for anyone. Fifteen older, So you know that's one way that teens now can access contraceptive. This is not the drop the driver of the trend, like opposition is learning to twitter team bathing. It speaks to the point that you are making that you're. Seeing you know this liberalization of attitudes policy towards birth control, and this is like and other factor team languishing. As he's sorry is new television show. The first seen of the first episode is an extended and pretty funny sequence about. I think it's gonna get plan B right. It's about birth control, thing gonna get plan B is treated as obviously. This is what you would do right.
and I think, as he's insurrectos not show that great shout Rachel loves that masters of None wrestler, Todd's, a real and hey it has shown outside their account at counts. Ok, at its very good I just did actively. I mean I remember to go back to the nineties right like back, then the big cultural fear was over Dan Quail. Attacking Murphy Brown write her televisions, portrayal of a successful professional H. Appropriate single mother, where we are now is really far cry from that aid will an speaking of tonnage, and this brings me to my favorite theory on the team. Bertha lies in this paper. My mom was a Kearny at bookings, Shit yeah resume Marilyn maneuvers emolument fell Bovina Wesley. They argue set the alarm tv show sixteen and pregnant, and teen mom can explain it about a third of the decline in teen pregnancies. You know one research paper, they don't even claim it's the whole story, but I think it's part of it.
but they had an interesting economic study where they looked at noon data on these television shows and the size of the decline in teen pregnancy and found faster declines in the places where this show team is more popular and if you have not watched it, I highly recommend that I've been watched a lot of it when I was writing about this, just to get a sense of what the shut with sir surges of this order reporting task. Like three days later, I rose and lake, but it's So the idea when team on came out there is a limit of outright where people are like. Will this is making it look? So glamour is at your teen mom you get round tv show, but then you actually watch it at least a teen mama terrible, like everybody's boyfriend, leaves, I alone am, are like having an impossible time in school there dropping out of high school, their parents are mad at them, like everyone's always angry licks, whether there is a broad yielding, a teen ma. It's really! honor? But if you look at that Felicia, even the colors used in like the lens
You know it's not made to look at look beautiful. You know it looks very gallo. Gritty hopefully policy application is. We should have publicly funded show reality. Television shows about teen mothers, I doors that I would on reality shows about t mothers in every part, I've seen a steady about, I think, was Brazil. It may be a different latin american country, but it was showing television, was introduced into different villages at different points in time and the tv shows would depict the sort of. relatively small urban, like bourgeois families of like elite telling novella subjects, and they show that rural communities that got television faster had faster declines in family size.
People would sort of lying see this more first world style, more urban style, smaller families. I think one reason they did. This study is that there is a substantial body of work suggesting that these kind of pop culture, modeling effects, really do influence. How people think about these kind of things, which are to go back to Damn quail. I mean I think his particular companies, where I mean I think, was particular analysis of Murphy Brown does not hold a ton of water just in terms of what is happening in that show, but I do think that the general idea he was depicting there that, like what Hollywood shows people about family life impacts, are they think about it? You know turns out to have like a fair amount of of sort of backing to an. I think some people were a little
unfair at the time. In thinking it was just like absurd for politicians to care. For example, you could imagine a universe in which sixty and pregnant was done in a different way. Right. These reality shows are not always that Only ground hit didn't we heard of it could have been the case that MTV produced a cordon quote. Reality show about teen mothers that portrayed as like kind of fun as an item, and the impact of that actually could have been quite malign. You know artistic choices made by the producers like have real consequences, and so, when people heard there can be a show called sixteen and pregnant the idea that you might worry about what the content and that she would be is actually are really. I think to the two point about then call MRS definite off of the team pregnancy discussion, but I do think this is something the conservatives think about more
rigorously and correctly than liberals the ways in which culture representations really matter and really are very putting on think one reason. Pupils don't think about much. Is there so dominant like that the cultural so dominant reflects their cultural preferences. Conservatives, when you really look at their view of how things are going, unlike their view of why America's changing we tend to think about these questions very much in terms of public policy, but I think, partake if you look at what's happening around acceptance of things I gay relationships or even with transparent, is a big political movement right now, a ranch and rights that there, is a very, very, very important role played by cultural products, just in normalizing what people used to, and I don't think the cultures and liberal so much in its treatment of taxes right there on a whole ton of tv shows about migration.
The rich people brown stuff like this. There is a lot in what is a normal american family or what even is an american experience of people should think hard about, and probably around is some of these questions. Of of dem pregnancy there's been the facts and I think a lot of enormous not of other kinds of relationships and lifestyles that housing at some that, as you say, about quell liberals, reject out of hand to quickly. I think because are much more comfortable with where the culture on this question, although I mean I think what is probably a topic for another episode, but I always include an interesting counterpoint to that is the way police procedural rules to deal with criminal justice system in which the cops- ever do not under the cops, never do anything wrong, but you're constantly having this problem of these Ike. Incredibly clever lawyer, Criminals were always prosecution, which is really not the case, but at the in time and questions of sex and family life is absolutely reflects, like sensibility
of people who live in or another one. When we neglect increasing exceptions of abortion and like prototype, you write it Olivia Pope had an abortion on screen, essentially rise up this year of scandal. You don't see that being reflected back in the states. The abortion rate keeps dropping, but that's another one where you see like the culture and television is really changing and a very liberal way just think. Over the past five or so years we should have taught when they for discussion about us. Yet Todd Vanderwiller if well known, facts contracted but, as you said, we do not see a lot of pop culture, treatment of tax, a half and that's where we need the weeds normally we would break for a sponsor if anyone wants to spawn- This week's episode of the weeds is brought to you from the goodness hearts as a Christmas get well what period on the count on jewish so period on the counters had actually reflecting the partake
are cast of this shared values in a jewish, not well equipped to answer to look and stop, the war will follow up, and now I will put it shone. about promising gonna put them. Jonas Democrats our having a primary race of soils are, you sure, While we have read anything about its simonov happening, and I worked last Saturday night to watch Bernie Sanders and Hillary Clinton debate, I did think that they mix it up on one policy issue with like real substance behind it and Hillary Clinton has said in his sort of made an issue out of the idea that she is the only candidate in the ways who will promise to not raise any taxes on any middle class people by even one tiny sent- and this is something that Rock Obama campaign on in two thousand eight, although he didn't actually hold to it, and it's been resources and problem for him here.
The increase in taxes on cigarettes, federal excise tax on cigarettes that people and talk about much, but then, in the course of passing about care, there's a lot of different kinds of fees and and what not, in their the biggest tax increase in Obamacare is attacks, hike, wealthy people. There's that there's a lot of stuff going on in the level of long term. Also, the Cadillac tax happiness who may come rack laundromat will affect lotta people make less than two hundred fifty thousand and, I think, probably becomes bigger. I would imagine over time it must be granted
arms in the Medicare by could believe TAT. While I may know, bomber also had a failed effort at one point to cancel five: twenty nine college savings accounts, which are the very regressive I mean the overwhelming majority of the money that would be involved in that policy involves very wealthy families, but some of it involved middle class families, and there was a huge sort of backlash to it, and so Clinton basically is embracing. The backlash into saying Democrats have a lot of good things go in for us.
Higher taxes on the ridge is popular opposition and gay marriage is popular now and I'm gonna just like pride that out and Bernie Sanders is saying no, that if you look at social security, if you look at Medicare, if you look at had large european welfare states that the way they all work is that you know. Of course, you are trying to tax which people at a higher rate than you are taxing middle class people, but that you need a broad tax base to pay for broad universal social programmes and he's key sort of example. Of this is he points out that there's a bill called the family act that would place a, I think, is a zero point. Three percentage point increase in peril tax in order to fund parental leave and universal parental leave, and it was introduced by Chris Angela brand. It's been co sponsored by, I think, virtually every democratic senator, maybe not some of the most conservative ones, but is it really means stream? Democratic party policy, idea and Clinton seems to be saying she couldn't endorse that, and now
her campaign in her sort of allies and the pair infrastructure are saying, now. You know what we can pay for some other way and I think it is a sort of a profound issue here where Clare, I have no real reason to think that Clinton is wrong on they like narrow political calculation around here, but also that Sanders really seems to me to be correct in terms of what is the viable conceptual framework for an ambitious progressive, nothing there. Two things worth saying here, or at least two things it struck me immediately. One is that Democrats like to make a big deal out of the republican parties, which is its function. The problem parties, but its run by governor question Our kids for tax reform, the Anti Tax pledge, which says that you know Republicans, won't ever increase attacks by even a dollar on anyone at any time for any reason and so really crazily irresponsible pledge for politicians to day
You don't know the situation, I'm sure it's a speech is unbelievably unbelievably responsible. The Democrats have a pledge. that is just marginally less irresponsible. They are not that different their base. I don't remember if making two hundred and fifty thousand wear, that putting the income distribution, I'm pretty sure the top five percent, but I don't know if it stopped at three or whatever, but they're, basically saying that they will not ever increase taxes on people making on anybody, but the top five percent. income distribution- and that is one of very weird thing, but two, in the long run its very inefficient being economically, I mean one one thing that you see and sort of european welfare states. Is it in order to have a fairly significant social welfare state? You need taxes at a broad based.
If you start isn't piling more and more and more and more in the top coupled percentage points of the population, you end up with really inefficient taxes. A lot of tax evasion, it just gonna doesn't work, and so you know, european countries will will pass value added taxes. The tax, a lot of people in some cases attacks are themselves arrests of, even though they paper progressive spending. They believe that our, but should be contributing to this project. For Democrats keep argued they have a project that is really worth something, but but not that many people should contribute to it in a bomb occur. There is tax, is a bunch at times on, people make us into action. Fifty thousand because they're real objective there was Obamacare, not not falling their tax pledge, but it's a bad thing then take contingency run online to the american people. I can see why a damn Canada would stick to this like no tax on the middle class. Extreme, and I would like to consider themselves middle class there's a good CNBC survey of millionaires where they found twenty three percent
People who are in five million dollars or more air consider themselves middle class based hammers and forty nine percent. A little more generously say they are upper Middle EAST you can clearly red five million dollars or more twenty percent of them have got out of any value, analyse sharing now that shit, crazy Asia put that on the site, probably after this what I think tat thing about middle class inflation. Actually it was one of the problems with this pledge that you saw when you had the fiscal cliff couple years ago. Did Democrats internally got bogged down in this like weird argument about? Well, if you making three hundred thousand dollars,
here, but you live like in New York and your truck humorous constituents who are you like Quantico, really read tourism like a kind of being middle class, and it would be one thing to just debate on the merits. We will have a lower budget deficit if we set the threshold of two hundred fifty thousand than we set at four hundred fifty thousand. So that's a plus the minus is that some people have to pay more in taxes and they would rather not, and so we can talk about that that's a public policy question that can be discussing can be compromised on. But when you say my criterion for setting the threshold is that we don't want to raise taxes on quota quote the middle class. Then you get into a conceptual controversy about who is the middle class and as Sarah was saying, that itself is like
grass, and I dont know how you could reasonably get some guys from the sea bio over topic out. What are we gonna do on this question of who is in the middle class good when you think about a lifecycle affects a real, really important. If you tell me ok, this person makes a hundred fifty thousand dollars a year and, like ok, see your picturing something, but if that per and is supporting three kids verses. That person is twenty. Two you're gonna have very different rehash. You know economic, certain situations, unlike whose milk I cannot. I dont, know ways like tax policy is taxpayers. You here is out of you guys know the backstory Halleck two hundred fifty became dick often it is there any It was like a round number even that that maybe I do think, though. This is something where you have a real urban bias happening. I mean you ve talked about this before math, but living in
and living in inserting the Centre Washington DC. That is a luxury good. Is it something you do to some degree, because you have chosen to make a trade off where you wanted? purchased better location at the expense of pay, more money for it, and it's very you're goin. People too should have big that into a baseline when they kind of look at that. I think and say that should be viewed as some sort of in electoral fact of life. We would not allow that for other kinds of consumption. Right of somebody takes a lot of very nice vacations every year by Israel, and I Our senses look, you might say, making a million dollars and I'm rich. But you know if you want to goes visit the nicest capitals in Europe twelve times here unites I really like you can spend anyone's confused because a house is actually financial. Ass is even worse than you spent all your money and vacations because you could sell Perhaps you can go back in time and sell a vacation that you already took
the reason you don't have that much money is that you own this really expensive, townhouse park slope. You could actually fix that people will give you a lot of money for all they could. Get into this would like any factors right. The way you talk about a kids, for example, like you, make the dust and to have not like right off. Children like I think, like children, are wonderful and I don't have one but in a way I think, that's why you trying to do the taxes in terms of like Chin, stroking, well, dues. The fact that I have a baby make me less rich than a single person, but the same income is a sort of imponderable question. Where is, do we want the tax code to mitigate the costs of having a child? That's a good question. We can think about in a coherent way. We can look at the impact on the long term, economic trajectory of the country of middle class people having more or fewer children and decide that, even though its an extra burden on the child
less that, ultimately, we can't have social security unless people are having children. So you know, and we can debate those kind of things where is debating the true reality of the class structure is, but this is thing that I think it's important to be a little tough on, because we even got entrapped in his conceptual framework in this discussion we're talking about. Ok like what makes people really rich, and you know into a sort of the argument. There is well fuck it it's too hard to decide what makes people really read. So we shouldn't do that. Mark Schmidt, who is at the numeric Venetian in rights, a blog call, Polly Archy for boxes of real of a former editor of mind, is really fantastically smart guy and here at this great peace called taxi upper middle class. Please, and he started taking a This idea that taxes should be done to any high wanna call. It should be punishes rage or something that makes him pay for the good fortune, he writes the point of progressive taxi. it isn't a harm, those who have done very well, it's it. Everyone should contribute to shared priorities, determined democratically based on their ability to contribute unity
there is it yeah somebody who makes two hundred fifty thousand five hundred thousand million might be able to contribute more, but if Democrats really believe The two things are pushing like in the family act. For instance, you know you universal pay leave are really valuable. Then I mean summit makes eighty five thousand. I mean I want them to contribute as much and if you re apparel text my point three percent. They won't be contributing as much as someone who makes more if this stuff is worth than some of its worth it for a lot of the country to pay for its. If it's only worth it, if five percent of the country's paying for it, then I think that really chosen should like whether Democrats really believe in these areas at all and also in the long run, what kind of message they're sending about the government of liberals and Democrats like to have this that they really like this line. Government is the word we use for the things we do together, but it your view- is that the only people who pay for all government from this point forward are rich people. I dont think you really Billy
look why don't you see? Theory kind of hit actual policy, like you, said, a kind of a great appears of its easy. Like Obamacare like we didn't like us, we as a country didn't Finanza just with people who were, two hundred and fifty thousand dollars. We didn't say but if you were in less than acts you just get free insurance. We tethered it kind of equal marksmen, saying some kind of reasonable contribution that we thought people could make where we said no one. to pay more than nine percent of their income on health insurance is, but we are going to ask you to be something as we believe this is a priority for the country is kind of how can think the structure of upon the care they are and how this actually pays out legislation. But this is where I think, the democratic resistance and eventual result again, something like the Cadillac tax is telling and problem
One of the issues with that tax is that it does initially and especially in the long run, hit some people who are in the middle class. On the other hand, one of the main reasons that was in there was that, on the one hand, this would raise revenue and raising revenue is good, but on the other hand, the economists believe they would tackle the question of systematic cost control, and so, since people dont like paying taxes, it's it's a bummer. One good thing to do when you're trying to write taxes is to create taxes that have some kind of ancillary benefits, review, tax, carbon dioxide emissions. You get revenue but also address climate change. If you tax, very high value health, ensure
plans. You gain revenue, but you also gain some some cross controlling some less distortion across the economy, but those kinds of tax is almost necessarily waited for training influence social behaviour in a constructive way. You can only levied on two percent of the population. That is not enough. People when we are like raising income taxes for general revenue purposes. We, for I don't wanna go under two hundred, fifty thousand because whatever all the income gains, her are really going to the top right now and we think that should be reflected in changes to the tax code. But it's really, then Don T apply that when we want to do something like put down, attacks on people, smoke, fewer cigarettes or so healthcare plans at arcs and save are pushed down to increasing excise tax of zero excise tax on alcohol. Would save many thousands of lives every year and reduce drunk driving. Insist, reduce domestic abuse, reduce crime, but you, obviously you have to tax the middle class. It doesn't make it
sense and the poor wretch. Yes, I mean everybody loves the benefit. There goes to the middle class and the poor. Why? it's a policy who the belief is that this policy will be generally beneficial, but it has to be generally targeted, or else it would do anything and to your point about programmes. One question about selling, where, if you still say the financing has to be narrowly target, which is not so much. Is it bad to tax rate? but why are you doing the programme at all? If your concern is just rich? People have too much I will tell you that my house, then it's like you should do cash transfer right, but if you want to build a you know a bus flying somewhere, it seems like the idea should be ok. This is actually a good idea we have,
Society will derive benefit from this library. This school, this train station, this aircraft carrier- you know whatever it is, and so then, looking at the financing and strict distributional terms does not have a ton of logic to it in a family leave. I think that it is a really good case for that ran. So it's like one line of thought is that universal paid leave would be good idea and we would all be better off with that leave than with slightly higher pay tax in another view, as it that's a bad idea, if you're gonna finance the leave as a redistributive tax plan than is, why not just redistribute the money it seems like the paid leave is not doing any real work in your policy analysis anyway, you know Clinton is obviously she's. Gonna win the primary. You know she has most people.
On her side in the democratic universe, I mean. I think this is a view that policy operatives really can have, but the Obama administration was not able to make policy. In line with this, it seems questionable to me that Hillary Clinton administration will be able to make policy in line with this, and at some point, like the role of political operatives in a political party, is to help develop political strategies that will make your actual policies viable and just having this run on two separate tracks, where we have like one set of commitments that consultants and pollsters and communications people have decided you have to have, and then you have a policy agenda that does not match. That seems to me to be really kind of unsustainable and the like level of spin that is coming out of the contact of primary campaign is a leading. People do not address this
most serious kind of way and the fact is you have this democratic caucus, which is most of us, are people who are endorsing Hillary Clinton, who support Hillary Clinton, who have absolutely no desire for Bernie Sanders to be their standard bearer, but they all sign onto the family act Emmy. They know right Did they don't really agree with cotton about this and they need to come up with some other, cynical version. Is they really do agree that they should say this publicly then just not abide by it right. I beg of you bet that maybe I did get more cases of one by one to admit that maybe be reopened right, I mean. Maybe that's the plan. I mean almost fills a global individual mandate, a square like you know, Bhamo, but saying he opposed the individual mandate. But if you look at any scheme to get people insurance like this kind of has to be part of it, This is a little less dark here you could do is constructed a family leave programme, those only financed by the rich, but we have this other view of it. That seems a little more,
yeah and what we re when in doubt lie that's the true spirit of Christmas speaking of the Spirit of Christmas, we have academic. Look at Christmas, presents yes for Christmas Gift Exchange the jewel Walled Fogel as a classic paper called the dead weight loss of of Christmas. We all heart warmer for the high seas. We also have on on Vocs com a first person written, I believe, by his children about him and his children about life in a family. That does not believe in and Christmas present. Ok terms, have you read it yet it turns out to be a fraud when you Joe Vaudeville, good, does belief and Chris illiterate. I must go now I understand, but is it not about time out economic? So there's a very short of obvious point. We recognise, which is that if I try to buy Azra two hundred dollars worth of staff and as we're tries to buy me,
two hundred dollars worth of staff, we're going to wind up with slightly less good stuff than if we have each gone and bought whatever. For, as you know, and that's just sort of clear but we're both Vogel did for this paper was he he basically surveyed people about what they had got for Christmas and what monetary value they put on those things and then compared that too, what those things actually caused, and he found it there's a ten to thirty percent discount in terms of light. People say the value of the presence they received was versus what the actual cost of her presence was an lines up with. I think what you might expect from general principles, which was tax, if others did a pretty good job of you know they had lost more in the ten percent range and more distant family members, cousins and aunts and uncles were more like the thirty percent loss, because you know the better. You know somebody the better job you can do of getting them, something that they would actually want. Christmas presents. Our ass
eyes in the big deal, is a forty we're all jewish. We heard this is a big she, as it was eight he wasn't here about ten years ago, but it was about other fundamental analysis. Pie holds true for Hanukkah presents No I've got engineer like eighty years has over all of us to run Anderson. Yes- and I don't know, I think, I'd- we recognise the dead weight of president and has talked about that. There is no, no, I I think, conduct it gets. This right is a forty billion dollars of Christmas presents insulin if you think about a ten to thirty percent, deadweight laws being applied to that. It's it's billions of dollars of waste per year, whereas in how to at least progress for us that the point of Hanukkah is that American Jews did not want their kids to feel about not getting Christmas presents. So adults by presence for children and children. Don't have any money ourselves
really need presents right, there's no good alternative and also for little kids, I mean obviously you're not gonna, give a six year about your gas or go to the hall right. That's why I'm kind of interested in the workplace, and I do Know- was without Hope- very clear from the job was the first person Thirdly, when I was seven by parents gave me seventy two dollars and drove them all for an afternoon go, get something I think buying presents for children, particularly if the guys are going to be doing like makes a ton of sense. Then, once I entered into a mixed marriage and had to find the exciting world- of adult Christmas. It really is bizarre. My wife is like trying to think of what her brother one citizen. She doesn't also like. They both have jobs that point in this mutual exchange, and you know they wonder what, so you know he doesn't even count like this stress costs of this.
He is just like a huge he's, just looking narrowly at the monetary laws, which I mean honestly is trivial compared to the like. Oh, my God is as good as you know In theory, you would cos you the time, but also its like it's almost worse than he thinks, because receiving a really good present can be bad because it puts you ass. I can see you ve really members, which is like a total disaster. So I mean, I think, of anything is underestimated, but problems I think that's right we'll save it in his first person. I think he does lay out any say this out before to glory smart approach to Christmas gifts, which is that the problem is ants and uncles and yet, I think, maybe some degree in its available and sisters or whatever, but but I think he writes is like the best kind of gifts something at the spouses can do for each other. I mean people really know each other. Well, can do this eastern someone something they want to, but it would have
and would value, but it would have felt frivolous to them to buy themselves, have a kind of, because I really don't think you should buy to some degree of socks that, people should this by assuming a similar sent some binding constraint right like again like it's, your child, your child has no money like ok like then you need socks, but don't buy sucks for a child, a toy will eventually somebody needs to buy themselves ass being the point, but but but practical Christmas where I mean at one of the best guess I've ever gone is my wife a number of years ago got me a swede machine, and I really wanted Suv machine which is kind of like a very precise water, Basically, but I just wouldn't have gotten it cuz, it would have felt very frivolous to me and I really enjoyed it and gotten a lot of use out of it for a for now, five or six years. The further you get away from knowing somebody's preferences really really deeply the worse. Your present guess, because now you're actually trying to approximate something they just
might buy themselves cause you don't you dont know this kind of third or fourth layer of stuff they news about the like would but actually do not reflect in their own country. Can habits or the like one of the aunts and uncles. My buys they end up with raise something like everyone knows: you're like I've, met spans of yours. Amidst back, that's a fact. We know about you, I mean the other but soon to make sense in this scheme, are like the gifts. This is new in academic, with gives like show a knowledge of person, ones at that you don't even realize you might want now. I have this thing and there's like a value
on that occasion, way seems seems like a spontaneous gift is much more likely to generate surplus. Then deadweight laws like a present that arrives unexpectedly on September seven, because someone's saw something that they like realized, would be perfect for you and that expresses their affection, for you is delightful in a way that any kind of routine as it I'm an uncle, and I really doorman nephews and but as a strategy to make them love me more. I have time shifted my gift, giving because around your birthdays and Christmas on that out there they live across country. For me, there's just a million presents and just kind of like presents and it's a great day, but it doesn't lead to a tremendous amount of gratitude and positive sociation with the gift. Giver totally focus my present, giving on on when I arrive in town, which is random and has to do with my visit, my family, or what kind of,
have to go to and so that my arrival is associated with a tremendous amount of gift giving made like wife s right, like flowers or like their spontaneously. Thank you, and I myself would like no matter. If ok, I think in the realm of guerrilla issue, we shall have occasion to shout out with flowers are enough used what the hell is going on, but it cutaway vetoed the expression of all this stuff in parliament by yourself. We, like it's nice to flowers around the house and lake by them and like spontaneous times like so I won T go a weeds year term, which is that what figures paper is all about the micro economic phenomenon. Here, what is the value of the gifts verses? What does it cost, but this is all
Economic issue and Christmas, if you look at anything the monthly jobs report, quarterly GDP numbers anything you see for from economic statistics, what gets reported in the press is seasonably adjusted data which they, the cook up at the bureau. Labour statistics and wooded obscures is the fact that Christmas has this gigantic influence on the macro economy. Millions of people lose their jobs every January. If a hundred and thirty thousand fewer people get laid off than you would have expected from history, we will write on vocs. The economy created a hundred thirty thousand new jobs, but actually destroy tons and tons and tons of jobs, because there's this unemployment boom associate with Christmas in a secondary one associate with summer vacation, but the Christmas one is really dramatic. Stores stay open later, there's more airline travel types of its individual hidden from fancy profession.
Types because our work cycles tend to slow down in December. It's really hard to get people tat answer cause, but for us on a mainstream people who work in them services. It is a very, very, very busy time of year on some level that wipes out any kind of particular dead weight loss. It also raises the question to some extent of like: isn't there something we could do to generate a more Christmas like level of economic activity and pace all the time, but having like a second giant, slightly wasteful holiday in June, so there we, we ve written before Andrew broke up and a box has written about the time at the f. The arch would move thanks giving in order to allow more Christmas shopping time, because it was like that important businesses and because of one thinks you who's gonna fall of that year. There would have been less time and thus lost,
economic circles generated B, I mean it's. How think? What you want is a holiday, a sort of like recession only holiday in June of every year, when the economy's, maybe a little bit down and needs a boost, and people need to feel a little bit more cheerful and is a sort of you know, June Judas or something to be alive, serious about it. It makes me wonder senators about the wisdom of reporting the Cecily dusted. Dad I mean there's a reason you do it because you're trying to get a sense of like the big trends and and things like that, but to tell people what the unemployment rate is lower in February than it was in November, when actually its higher. It strikes me as somewhat confusing right and it's just that you should try to address the problem of the large number of people who are unemployed in February and March and April, because we actually get mathematically vanish like oh, that's. It has seasonality right
some aspects of seasonality it seems like we can't do anything about so like home, building in the northeast collapses in the winter, because it ice everywhere and we can't do anything about but we know that most seasonality is not actually about the weather. They have this same late winter recession in Arizona as we have in the northeast, because it's not primarily about the snow, preventing house building. It is primarily about the Christmas retail I mean, if you just right into the government's statistics that, like oh, it doesn't count that people are unemployed because it sprang that seems to me like a little bit of a bummer arenas makes the case for like that, as our client area of spontaneous gift, giving we're really what you wanted
I give you a more gift giving rightly you want more consistent and three possible only if shine like created nationwide secret Santa programme. That is very bye, bye date, and so you know, you're disappears into the big governor. Take over these critics met government a government that is above all is that I've always been waiting for their just depending on your social security number. Your gift. month is January or February, or its may out a more that we want like extra Christmas, I think we all want to. I think we want to do. We want to distribute Christmas there ass. The calendar, I think at all to merely decide depends a little bit on whether you think the the economy at any given moment needs more consumption of more investment was but no one. So I disagree with that. This is a long term growth cook is I'm not that seriously about, but I mean this is. This is like the deep question right is like. If you had an effort to permanently increase the pace of economic activity, would you be just boosting consumption at the expense of investment, which I think is a sort of like a real business Ike
view of it or more Keynesian Violeta Keynes rights it in the general theory that, like the solution to the boom and bust cycle? Isn't that we should be an average all the time is that we should be in the boom. The time. Ninety. Ninety nine was also the unemployment rate, was three percent. Everybody could get jobs. Things were good. and some people disagree with, but also bearing in mind the sending of of that part of evoking does not that his view on the way to being the boom. All the times at the quick management is always consumption. Orient stimulus, no no we're talking about conception or if it gives new, but the view is that, if you aimed for a higher level of consumption, all the time that the investment to fuel consumption would occur instead of having airfares spike in one particular time of year is more people are flying. They would build more airplanes. My sense of the way that our current, conversely, that should be managed. Is it
our times, and you really do one like, but the gas down on stimulus, enticement times when you don't absolute, and I mean yes, I I am sure there is somewhere between where averages now and where our conception of which could be, but it isn't clear to me that at all times you would just have like want to be, leaning that direction like for me right like know, we just did gift giving and that this money, I'm not saving this year and money that will be available for investment. I mean there is, The question is read so Jenin Yellin is gonna. Look at the next month's economic data and she's gonna be deciding what to do, and if she looks at the raw numbers, holy shit, millions of people, but she's not going to do that. She's gonna be handed the seasonal, readjusted series, say: ok, everything's, fine, there's a good case to be made that, like she, should look at the unaddressed series. Like those people are genuinely just like out of work, they could be doing something. It's not just the economy would need to be spending down its reserve. It's like, I think we should consider
eating these seasonal recessions as real recessions that we fight with the normal rosetting about I got eyes, you haven't, got a totally valid point. That's where we gotta from my rivulets Joe now we ve got that pretty pretty easy hasn't goes well done before God, your Wanna say we're we're gonna be off next week for the Christmas New Year's holiday. Thank you, too. You with us has been a very fun part of my year has been b of being part of the wheat. I really enjoyed getting into podcasting so much that I'll be launching a second pon cast in the new year and box dot com general ethic is gonna, be wanting smart progress as time goes on. Feedback has been fantastic. It's been helpful. Its pushed us lot of episodes where I think I've certainly learned a lot. So thank you for listening, thanked for being part of this and making it something we can keep doing your Christmas guess
Describing as no dead weight to us through, it also goes a Christmas gift. Upper waiting on south. Have that a positive way, I'd say exactly merry Christmas happy new year and I will see you in twenty. Seventy, sixty. In fact, pussy you and twenty seven to you we'll see you some time next year.
Transcript generated on 2021-09-15.