Annie Lowrey: The Worst Best Economy

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Speaker 3 Hello and welcome to the Bulwark Podcast. It's Friday, July 5th.
I'm just so pumped to be here with Annie Lowry. She's a staff writer at The Atlantic because we're an Atlantic fan podcast here.

Speaker 3 She's the author of Give People Money, as well as a forthcoming book called The Time Tax. She was formerly an economic policy writer for the New York Times.

Speaker 3 And her husband is a columnist for a niche kind of regional outlet. And shit, I'm trying to get him on the podcast, but sometimes I forget his name.
Hey, Annie, what's happening with you?

Speaker 4 Not too much. I'm here in beautiful and surprisingly warm San Francisco.
I'm happy to be talking here in a calm summer vacation week for our American democracy.

Speaker 3 So calm. It's warm in San Francisco.
I moved from the bay, as you did, to get away from those freezing-ass summers.

Speaker 4 Yeah, it's been typical San Francisco summer, and then today

Speaker 4 it's actually warm. And as you know, nobody has AC here, so it's a little bit sweaty.

Speaker 3 Okay, great. So you're sweating it out just like me here in New Orleans.
All right. Well, look, we had you on initially because we said it's a holiday week.

Speaker 3 Let's talk about, you know, let's talk about fun stuff. Let's talk about culture and the economy and, you know, what's what's happening in our society.

Speaker 3 And, you know, some news has gotten in the way of that, some things, some developments, some apocalyptic democracy developments. And so I am just curious.
We're pre-taping this.

Speaker 3 So who the hell knows between what could happen between the time we tape this and the morning about the machinations of the Democratic Party and whether who calls for Joe Biden to leave or stay or come?

Speaker 3 But just like the biggest picture, I'm just curious your take about kind of the quandary that the Democrats find themselves in with their nominee.

Speaker 4 It's a serious quandary.

Speaker 4 And one thing that's been interesting for me, and I'm sure that you probably had some of these conversations a year ago, 18 months ago, I remember talking with some kind of professional dumbs, right?

Speaker 4 So not Democrats, but folks who work on the Hill and are involved in politics, who are talking about the need for there to perhaps be some option if, you know, some planning if something happened to Joe Biden, who is showing signs of age at this point.

Speaker 4 And there had been talk about moving moving Kamala Harris, who is, as everybody knows, a prosecutor, to a position like AG and making it seem like it wasn't a demotion, but instead, you know, she's a prosecutor and she's going to take over one of the most important organs of law and order here while we're concerned about crime and everything is going on with Donald Trump.

Speaker 4 We're going to move her to AG and, you know, putting somebody somewhat more popular than her, potentially who could take over as president in that slot.

Speaker 4 And this is not to say anything about my personal thoughts about Kamala Harris, but you know, she wasn't, she wasn't the most popular politician.

Speaker 4 And this would have just perhaps set them up a little bit better. And there was a ton of talk about things like this, and then just nobody did anything.

Speaker 4 And all of this has been foreseen by so many folks for so long.

Speaker 4 And so it's a little bit difficult, I think, to see Joe Biden's debate performance as being something right surprising.

Speaker 4 And I think that this really kind of redounds to the planning of the Democratic Party, right? Professional Democrats. All of this had been foreseen.

Speaker 4 We've had survey after survey after survey of voters, both showing that they're not excited about Joe Biden as a candidate and that they were very concerned about his age.

Speaker 4 And you would have all of this talk about, like, oh, well, shouldn't you be more concerned about Donald Trump? Donald Trump isn't that much younger, and none of it mattered, right?

Speaker 4 So now I feel like we're in this position where I really don't know what they're going to do. It's quite chaotic.

Speaker 4 And I think that the modal case here is that he will continue running and the Democrats will lose a winnable election and will drag down their own down down ballot.

Speaker 4 I mean, that's that's what I would imagine would happen. And I'm a terrible prognosticator.
Um, but yeah, that's that's what I see.

Speaker 3 Yeah, losing a winnable election is about the nicest thing you could say about that outcome. Yeah, it's, I love you're fitting right in here at the bulwark with those sort of fantasy politics, Annie.

Speaker 3 I've met though, you know, the people I talked to was, we're going to give her an upgrade, not just an AG, then put her in the Supreme Court. You know, that's a permanent slot.
Sure.

Speaker 3 You know, that's just not a year, right? You've got, you've got the background for that. That always was kind of a fantasy.

Speaker 3 I think I've been warming to the Kamala Andy Bashir, Kamala, Roy Cooper, Kamala Shapiro option. But anyway, we can play fantasy politics another time.
But it's just, it's good to know.

Speaker 3 I'm doing this, these checks in my life, you know, because the Biden people keep being like, it's just you bedwetting podcasters that are worried about this.

Speaker 3 And I've been like, well, I don't think so, actually. So I've been asking strangers on the street what they think and listening to focus groups.

Speaker 4 And you're, I guess, also kind of an elite, but not in the political class you know creative elite would you say that yeah whatever we'll count it it's the atlantic still you and i are not low information voters we're not you cannot tell me with a straight face and i think that this has been part of the problem is it was really self-evident to anybody who just saw joe biden that this wasn't being mediated by the media I'm a big believer that the media shapes political opinions.

Speaker 4 This is absolutely true. And these things take a life of their own.
But in this case, I feel like there's some kind of rate. Like who was gaslighting who here?

Speaker 4 This is very much voters seeing a guy and being able to see reality with their own eyes. I just, I, I really, I really push back on that a little bit.

Speaker 4 And notably, you know, I was taking a look actually at the 2012 calendars. So, you know, Obama was campaigning like a guy who might lose in 2012 against Mitt Romney because he might have lost, right?

Speaker 4 It was not

Speaker 3 a blowout for Obama that election.

Speaker 4 He was in June and July. His schedule was was packed.
He was traveling constantly. He was speaking publicly nearly every day.
He was doing a tremendous amount of press.

Speaker 4 Even Joe Biden back then, as Obama, one of his most important surrogates, was on the road for a lot of it. He was talking to journalists.

Speaker 4 So the notion that they've been running the guy as if he could be running his own campaign, I mean, it's just, it's absurd.

Speaker 4 I think that part of the problem here is that folks who have been engaging in a bit of motivated reasoning in which they haven't wanted to see what's bluntly obvious, blindly obvious, whatever the word is I'm searching for, to voters and also to, you know, political watchers.

Speaker 3 Yeah, that's exactly right. I'm here for criticism of the New York Times.
I'm here for criticism of the bulk, fine, whatever. But this is not it.
No,

Speaker 3 we did a focus group podcast, which people should go check out with this weekend. It was Sarah Longwell post the debate, which I'm on.
And

Speaker 3 she said this, like every focus group she's had her whole life, the normalest people in the world, the most checked out people, they've all said it.

Speaker 3 It's not a New York Times problem. It's reality.
Okay, let's get on to your

Speaker 3 actual writing that you've been doing that inspired this interview. You had two columns.
I want to combine them together. One was called The Worst Best Economy Ever.

Speaker 3 The other one was called Inflation's Your Fault over the past, I don't know, maybe six months. You wrote both of those.

Speaker 3 I'd like to start with the latter because it's one of my favorite topics on here: about how everybody's complaining about the economy.

Speaker 3 But every luxury and middle-class experience is like overwhelmingly packed. Every hotel, every concert, every airport.

Speaker 3 And so, you know, in a lot of ways, people's actions aren't matching their anxiety. So talk about why that is.
What's happening there?

Speaker 4 My basic theory here is one that is probably like a little bit more narrative and not exactly supported by evidence, but I think is supported by common sense, which is that, you know, for most of my adult life and most of the adult lives of a lot of people out there, inflation has been really low in the United States.

Speaker 4 like 2% a year, 3% a year, really since the Reagan years. And that's not to say that a lot of us don't remember those years.
You know, it's just, it hasn't been a problem. It's been really subdued.

Speaker 4 And so we had all of a sudden this really, really sharp experience of inflation and almost all consumer goods.

Speaker 4 And it came after a long period of time in which really expensive, important parts of the consumer basket were growing just a little tiny bit more than the overall pace of inflation over a long period of time that led us to a really bad problem with a cost of living crisis.

Speaker 4 So, you know, housing, healthcare, if you have little kids, the cost of child care had just become really obscene. And then all all of a sudden everything got really expensive.

Speaker 4 And people actually kind of had the financial resources to keep on buying, but they really hated this. They despise it, right?

Speaker 4 And I think that there was this feeling of, oh my gosh, I'm finally making more money and all of it is going right out of my pocketbook again.

Speaker 4 And so I've always been really sympathetic to the idea, like, yeah, this economy is really good.

Speaker 4 And when we look at measures of material hardship or just kind of hard stats, like how many jobs do people have, who wants jobs, who's working, earnings, everything looks really great.

Speaker 4 But I also think that people are not wrong to say, yeah, this is also like, this is really troubling to me and it's, it's really upsetting.

Speaker 4 And that you'd have this kind of long hangover where inflation is at a really normal rate right now, but people are still, I think, kind of caught up on it.

Speaker 4 All this, again, just seems to me to make a lot of sense, even if, you know, you're looking at the numbers.

Speaker 4 And there have been so many commentators who have been like, in real terms, people are doing better. And it's like, yeah, but

Speaker 4 people don't think about their real earnings versus, right? Like they think about the stresses of what they're actually doing when they have to do all this mental math.

Speaker 3 You know, I think you wrote another article about this, and it's something I've been saying.

Speaker 3 I don't have it in front of me, but something about the annoying economy, how it's more annoying than it is bad, because it is annoying, right?

Speaker 3 Like people's behavior isn't changing, but they're just annoyed by it, right? It's like, why, like, why am I spending $180 for this dinner tonight that

Speaker 3 would have cost $120 for my family or whatever. And that grinds people's gears and that is impacting the way they view the economy at large.

Speaker 4 Totally.

Speaker 4 If for 10 years when you went into like Walmart or, you know, wherever you buy your groceries, you walked in and you felt like you didn't really have to look at the prices that closely because the prices stayed mostly the same or they went up like 10 or 20 cents or 30 cents.

Speaker 4 Then if you go through a period of time where every time you go in, you have sticker shock. And every single time you have to be like, okay, am I keeping myself in budget?

Speaker 4 Even if you're spending more, just that experience is really frustrating for people and they really, really don't like it. And I think that that was what a lot of people are experiencing.

Speaker 4 And I also, you know, we have these like good studies showing that when people think about inflation, they're not thinking about it again, like economists are thinking of it, which is like a relative price level change and, you know, an overall consumer basket or whatever.

Speaker 4 They're just like thinking about, do I feel personally like prices are going up? And that was what people were experiencing,

Speaker 4 which is why I think people are really sensitive to the idea of inflation now.

Speaker 4 And again, I'm convinced that the backdrop to all of this was just this generalized problem that we've had with housing costs now with like the cost of car insurance and cars with healthcare.

Speaker 4 So anyway, after I podcasted with Ezra, it was a point that I meant to make in our podcast together about just like people don't, people really notice out-of-pocket health costs, but they don't really notice their premiums as much.

Speaker 4 And I was like, I pay our health care premium out of my salary. What is our health care premium? And it's like $37,000 a year is how much our family pays in healthcare premiums.

Speaker 4 And granted, we live in a very expensive city and we have a low deductible plan because I have a lot of health issues. So like I am a big user of the healthcare system.

Speaker 4 But I was like, that is an astonishing number. That is a totally, totally nutty, nutty number.
And it's not like we have like a crazy Cadillac plan.

Speaker 4 Like it's expensive, but that's not out of the realm of possibility. And it's like, I saw that and I was so mad.
I was mad for like a week.

Speaker 4 And it's like, everybody should be mad about the cost of things.

Speaker 3 The insurance head, you mentioned, you mentioned the car insurance and wrote about that recently, about how the cost of cars is

Speaker 3 another issue that's driving people's anxiety, including used cars, et cetera. But a lot of this is around car insurance, which rates have skyrocketed.

Speaker 3 Like, what did you find when you're writing about that, about why that is and whether there's a government solution to that?

Speaker 4 I'm not sure exactly that there's a government solution. So some of that is just generalized rate of insurance and higher interest rates.

Speaker 4 Some of it seems to be that people got kind of worse at driving during the pandemic.

Speaker 3 Really? You really think that's really it? We think it's the driving ability of people during the pandemic. They just, you just forgot? People forgot?

Speaker 4 I think so. There's like data on like crash rates and stuff.
And I know because I am, I am a really bad, I didn't learn to drive until I was 25 and I love driving, but I'm so terrible at it.

Speaker 4 And like, I've never gotten a speeding ticket, but I have gotten a number of reckless driving charges.

Speaker 3 And I think that it was just like a lot of people on the road got really lead-footed during the pandemic and got really ragey and then kind of didn't I don't think that we totally understand behaviorally what's going on there exactly now notably we don't have a car and I don't drive yeah I'm also a horrible diver so we have that in common I'm glad this is a safe space for us to admit mid- It's not exactly a safe space because I was just telling a story one day on the podcast about how I don't use my blinker and how I got a rental car and they have, it had the automatic lane thing, and I couldn't figure out how to get out of my lane since I never used my blinker.

Speaker 3 I received received so many mom emails telling me that I need to use my blinker and be a safer driver. So I don't know if it's a safe space with listeners.

Speaker 3 It is a safe space with me, but I think I've gotten better since the pandemic. So maybe I'm going the other way just because I go less now.
I just, I'm driving slower.

Speaker 4 The answer for me is to drive less and to probably go to a driving space. And there's something like people's cars are a lot bigger.

Speaker 4 So people are opting for bigger and bigger cars, which cause more damage when you do get into accidents.

Speaker 4 So if we all had those little tiny, like, you know, the little Italian like three-wheel cars, like golf cart type things, right? But we all have these giant, giant, giant trucks.

Speaker 4 And then I think that there's also something about the aging of the population. So you get much more dangerous as a driver as you get older, in part because of just like macular eye issues.

Speaker 4 And this might be why we have so many more accidents at night. So it's this confluence of all of these things.

Speaker 4 And I'm sure we don't know exactly exactly what's going on, but you and I being on the roads apparently isn't helping anything. And it's a huge, it's a huge contributor.

Speaker 3 Everything goes back to Joe Biden in this podcast, I guess, to get off the road, take the car keys away from grandparents. Yes.
And maybe that'll help with the insurance rates. Okay.

Speaker 4 Yeah. And that goes on top of you know, the cost of cars went up a lot.

Speaker 3 So the interest rate side of things though is also part of this. This rate of the car question and the housing question, which you've, which you've written a lot about.

Speaker 3 I enjoyed this, or I did not enjoy it. I was dismayed by one line from one of your recent articles.
It was, um, it will never be a good time to buy a house, maybe 2030.

Speaker 3 And in that article,

Speaker 3 I was waiting to get to the point that lower rates will save us. And you landed, one of the experts you talked to landed on this.

Speaker 3 No, once mortgage rates drop, that will reactivate the housing market, leading to more demand. And with a limited supply, that will only lead to higher prices.

Speaker 3 So, I mean, like, how much are rates a part of everybody's economic anxiety and the feeling of costs rising? And how much is it actually not going to help that much when it when they drop?

Speaker 4 It's a really hard issue. So

Speaker 4 most people right now who have a mortgage have a really low interest rate. So the most common interest rates right now are in the 3% range.

Speaker 4 And most people sell one house and buy another with a mortgage because you have to be quite wealthy to pay for a home in cash, right?

Speaker 4 So right now, if you have a mortgage rate that's like 3.2%

Speaker 4 and you want to to sell your house and go buy a new one for a mortgage rate that's nearly 7%, you're going to have to buy a lot less house. And people don't want to do that.

Speaker 4 That doesn't feel like a great trade to them, especially because if you get a house with a 7% interest rate, you might say, oh, okay,

Speaker 4 I'll be able to refinance at some point. But how confident are you actually that rates are going to come down to make refinancing make sense?

Speaker 4 Refinancing itself is expensive and you don't want to really bet on that, especially not if you have somewhat of a shorter-term mortgage or shorter-term outlook.

Speaker 4 So that means that houses are being kept off of the market. And what's on the market is really, really expensive, both because of price and because of interest rate.

Speaker 4 So when interest rates go down, a lot more people will flood into the market. There'll be more houses, but there'll be even more buyers.
And so prices are going to remain really high.

Speaker 4 And the underlying problem here is that, you know, it used to be, we were talking 10 or 15 years ago, we might say that we have a housing cost problem in like Los Angeles, definitely in San Francisco and the Bay Area, definitely in places like DC.

Speaker 4 It's just really expensive. But in a lot of parts of the country, houses were expensive, but we didn't really have a problem of intense shortages.
Now we have shortages everywhere.

Speaker 4 The estimate of the number of houses that we are short is something like 5 million. We've had more than a decade of depressed residential construction.

Speaker 4 It's currently depressed because interest rates are so low and because home builders normally take out loans in order to finance construction.

Speaker 4 So I think until you have a lot of home building, I don't think that you're really going to see a great housing market and a reduction in these pressures.

Speaker 4 I just don't see where it's going to come from. And this is a nightmare.
And I think that it's just going to push people over time. And we've already seen this.

Speaker 4 for more than a decade, push people to places where there is more building, where they're willing to keep housing prices lower.

Speaker 4 So, you know, cities like Houston are going to win out and cities like Oakland are going to lose.

Speaker 3 and i just don't think that we're going to see housing abundance in our big coastal cities in my lifetime i don't expect that that'll happen yeah the oakland will do a little bit better than berkeley i remember when i was living out in oakland and they at least were building some houses and in berkeley they'd have to have like nine meetings in order to you know take down a gas station because it was a historic site or something or some bird lived on top of the gas station that was just very challenging to build um around there

Speaker 3 Ah,

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Speaker 1 Get ready for Malice, a twisted new drama starring Jack Whitehall, David David DeCovney, and Carice Van Houten.

Speaker 1 Jack Whitehall plays Adam, a charming manny infiltrates the wealthy Tanner family with a hidden motive to destroy them.

Speaker 1 This edge-of-your-seat revenge thriller unravels a deliciously dark mystery in a world full of wealth, secrets, and betrayal. Malice will constantly keep you on your toes.

Speaker 1 Why is Adam after the Tanner family? What lengths will he go to? One thing's for sure, the past never stays buried, So keep your enemies close.

Speaker 1 Watch Malice, all episodes now streaming exclusively on Prime Video.

Speaker 3 I want to get into the housing supply, you know, what can be done next. But I just did have a question for you when I was reading these articles.

Speaker 3 Like that, one of the problems, in addition to the lack of new builds, is that people are sitting on houses, right? Like that there's not a lot of houses on the market.

Speaker 3 That's the part that is a little flummoxing to me, which is like it's just because they don't want to like downsize, I guess what you're saying, but you would think that people that bought their houses in the 90s and early 2000s have made so much money on their house.

Speaker 3 Like, you know, the people that bought them 10, 20 years ago have made so much money. Like, why? Why aren't more of those houses back on the market?

Speaker 3 Like, why isn't that at least alleviating the problem somewhat? Like, what those folks is downsizing into condos or whatever?

Speaker 4 I think it can help on the margin, but I just think, you know, one of my favorite, like horrifying housing stats is that we're building slightly fewer houses now than we were in 1959 when the population was half the size that it is now.

Speaker 4 You can change the math a little bit on the margins. And I do think, yeah, maybe boomers downsizing and starting to move elsewhere.

Speaker 4 You know, we've already seen like a large movement of boomers towards the sun states, sunbelt states will help. But you're just digging yourself out of a really, really big hole.

Speaker 4 And I think that there was some part of me that wanted to have some policy solution that would mean that you'd get a lot of building in like california and new york and i just think at some point i was like oh yeah it's just not going to happen right like the economic geography of our country the future and this has been true for a long time right it's going to be florida it's going to be texas it's going to be states like georgia it's going to be wherever they're letting the building happen um and i think it'll be really interesting to see if like business vibrancy you know like does austin really supplant the bay area at some point i know you know that's certainly not true now, but would it be in the future, 50 years from now?

Speaker 4 Like, I think maybe.

Speaker 3 That's my biggest frustration with my new friend, Gavin, who I met last week, is like, this is the singular crisis of his time. And they're doing some things.

Speaker 3 Like, there's some movement in California, which is good, but... but not nearly enough.
And you noted in an article, why isn't the government doing more about the housing crisis?

Speaker 3 That it wasn't always like this, that between the 1930s to the 1970s, the DC government played an aggressive role in expanding the country's housing stock.

Speaker 3 The government financed the construction of homes for tens of thousands of families. Why isn't that happening more?

Speaker 3 It seems like the answer to this is just so obvious. It's like supply, supply, supply.
And finally, the Biden administration did some stuff this year.

Speaker 3 Like HUD has done some stuff this year, but it's like, it's

Speaker 3 like a lot of it is just subsidizing demand, which doesn't solve the problem. Like, there's the meme of a guy that is going increasingly crazy every time,

Speaker 3 not understanding why subsidizing demand is not helping. Like, why aren't, you know, we reinvigorating that effort from the middle of the last century.

Speaker 4 It's a great question. And I think housing is one of these places where we didn't let markets be markets, right? So in a lot of our highest cost, highest wage urban metros, you just can't build.

Speaker 4 It's really, really, really hard to build. And that's because of this sort of weaponized land use issues and NIMBYism, right?

Speaker 4 You know, if I buy a certain type of car,

Speaker 4 there's no way for me to prevent you, Tim, from also buying the same sort of car, right?

Speaker 4 But if I buy a house in a neighborhood, I have a lot of pathways to prevent you from buying or building a house in my neighborhood. So the politics of it are really, really difficult.

Speaker 4 And it's just one of these cases where we actually, you know, we've hampered the market so much that it's underproducing and we're just living with the higher prices and it's making a lot of us miserable.

Speaker 4 So what role has the federal government had, right? So yeah, between the 30s and the 70s, 70s, we actually did a lot of building of public housing.

Speaker 4 There was then a lot of concern about the quality of that public housing and, you know, whether it was safe and whether it was actually supporting the communities that it was meant to support.

Speaker 4 Since the 70s, it's been really, really, really hard to build new public housing.

Speaker 4 And the federal government has not had a role in forcing states and cities, or not much of a role, in forcing states and cities to allow construction.

Speaker 4 That's not because it's impossible to imagine the federal government doing that.

Speaker 4 So, you know, one example that some folks that I talked to of this sort of gave is something like Race to the Top or something like, you know, there was this tying of certain speed limits in highways to certain federal highway financing money.

Speaker 4 So basically the federal government said, if you set your speed limit at 65 or whatever it was, I'm making up the exact numbers here, you can access these funds. And if you don't, you can't.

Speaker 3 This is making me sound like a Republican again, Annie. You got to come up with something better than this.
This is nanny state federal government stuff.

Speaker 3 Is that the best we can do? But they could.

Speaker 4 Because the problem is like the states and the cities themselves just aren't allowing.

Speaker 4 Again, in some ways, I think that the Republican thing here is to sort of say like builders are desperate to build, but we don't have an environment in which it's possible for them.

Speaker 4 One way in which we could sort of reduce government and simplify things and make it easier for business here, we don't have a harmonized building code.

Speaker 4 So every little state and city has a slightly different building code and it makes it impossible for builders to like, you know, you have to vary exact like requirements and the plumbing and the this and the that depending on where you are.

Speaker 4 Some of that makes sense just because like the dangers of building in coastal Florida are different than, you know, what you might need to build in a place that gets a lot of slow like Alaska.

Speaker 4 But there could be a lot of like harmonizing so we could allow more productivity and construction.

Speaker 4 So I think there's that the big part of the answer here is just letting builders build and making it cheaper for them to build. So it is a quite Republican answer.

Speaker 4 But yeah, the federal government does not play a huge role in the housing market aside from subsidizing mortgages, which it does still quite aggressively.

Speaker 3 I can see at the convention, build, baby, build. You know, it's just a little Sarah Palin throwback.
People really love that.

Speaker 3 The other question I have about

Speaker 3 this housing question is that has been oversecting, at least on the internet lately, with the immigration debate, with the nativists saying that part of the reason for the housing crisis is that we've been allowing too many migrants into the country.

Speaker 3 And with my friends, the neoliberal shills saying that's the stupidest shit I've ever heard.

Speaker 3 Actually, we a lot of times it's undocumented or new immigrants that are doing the building that we need to do. Like where do you kind of fall on that? debate.

Speaker 4 Yeah, when you look at the work that immigrant workers, including undocumented workers, are doing in the United States, it tends to be pretty core to the functioning of our economy.

Speaker 4 So they are overrepresented in construction, absolutely. And that's really skilled and difficult work.
So there's always this, well, why don't they just leave the jobs to Americans?

Speaker 4 And it's like, yeah, roofing is really, really hard. And Americans do do it.
I'm not saying that, but this is like enormously skilled, difficult.

Speaker 4 This is not work that everybody wants to do or knows how to do. It's just, it's tough stuff, right? So they're overrepresented in construction, in agriculture.

Speaker 4 So, you know, picking the almonds and the berries and taking care of the dairy cows and the beef cows. They're really, really overrepresented in that.

Speaker 4 And a lot of the kind of care parts of healthcare, so not so much,

Speaker 4 although there are a lot of documented immigrants in the nursing and doctors workforce, a lot of the folks who are doing kind of home care work and physical assistance work are immigrants, including undocumented immigrants.

Speaker 4 So, you know, helping your grandfather get in and out of bed, that's a lot of immigrants. And then a lot of child care, especially early child care, is done by immigrants.

Speaker 4 These are absolutely essential to the broader functioning of the economy. In some cases, these are pretty low-wage jobs, despite the fact that they take a lot of skill.

Speaker 4 And so, yeah, just from, you know, that straightforward neoliberal perspective, right? Like, these are jobs. Are we going to get a ton of Americans to work in daycare centers for $14 an hour?

Speaker 4 You know, are we going to raise the cost of daycare tremendously by making those jobs much more expensive? That's going to induce even more of a supply problem than there is.

Speaker 4 And, you know, it always goes back to, again, this neoliberal point that immigrants, they pay taxes. They are barred from accessing our safety net and they buy things in our economy, right?

Speaker 4 Like they spend in our economy. So this, this idea, I'd also know that wages are increasing, especially at the bottom end now.
So the notion that immigrants are taking away jobs from Americans, right?

Speaker 4 Like unemployment rate is really low and wages are going up.

Speaker 4 So I feel like this is a moment in which I know that there's a lot of concern about immigration, but I just don't see it primarily through an economic economic lens right now.

Speaker 4 Like, I think that this is much more about cultural concerns and concerns about race.

Speaker 3 Yeah, the question is interesting.

Speaker 3 In certain cities, in certain areas, I do think that there's a real question about housing, but like the answer to it isn't fewer immigrants. It's like, again, it's just more housing, right?

Speaker 3 It's building more. But I do think that there's a little bit of a tightening, you know, particularly in parts of the country where there has been a big influx of migrants.

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Speaker 3 I get a lot of complaints on the Bull of Credit that we never talked about unions because we are former capitalist running dogs here. And, you know, it takes a while to shed your stripes.

Speaker 3 And so I perked up when you wrote about the future of labor because I do think it is an interesting question right now that there is at a time when like labor unions are in decline, in decline,

Speaker 3 the sentiment about unions is on the upswing and they're showing up in some new industries, kind of some silly industries maybe too.

Speaker 3 So I'm just wondering how you kind of look at the whole picture, having talked to union leaders for that piece.

Speaker 4 Yeah, so this was a piece in which I was talking to Mary Kay Henry, who was the head of the SEIU and kind of famed labor leader in American life. And she stepped down.

Speaker 4 So she had come to the head of the organization after the Great Recession, really during that like really miserable immediate aftermath of the Great Recession.

Speaker 4 I think all of us still think of that part of the things as feeling like the recession and union sentiment was very low at that point.

Speaker 4 And since then, we've seen this really remarkable turnaround in sentiment. People are really pro-union.

Speaker 4 And Joe Biden has been a pretty pro-union president, but you haven't seen any kind of significant increase in union density in the United States. And there's a lot of reasons for that.

Speaker 4 The structure of our laws is pretty, it makes it hard for unions to organize in the way that they do in other countries.

Speaker 4 But at the same time, you've seen unions actually really start to advocate for workers that are not members of the union.

Speaker 4 So the clearest way that this happened was through something called the Fight for 15, which was a union-sponsored effort, mostly benefiting non-union fast food workers to get companies in states, cities, and localities to raise their minimum wages.

Speaker 4 This was really, really, really pretty effective. And those workers are still not unionized by and large.

Speaker 4 You've also seen a large union role in the creation of sectoral bargaining type units in the United States.

Speaker 4 Again, there's some legal strictures on these, but things like worker boards that will set wage rates and rules for employees of a given industry in a given area.

Speaker 4 So, again, like a famous example of this is the Fast Food Council in California that's currently working on setting rules for those.

Speaker 4 And so unions have become, you know, advocates for labor outside of labor. I think that there's still this question of whether we'll start to see union density increase.
As you point out, right?

Speaker 4 Like there's a lot more unionization among fancy computer workers like you and me.

Speaker 4 But we haven't seen an increase in union density among lower income workers.

Speaker 3 We're unionizing our blog, you know,

Speaker 3 fair hours for my fingers.

Speaker 4 Yeah, the Atlantic unionized a couple of years ago.

Speaker 4 And we've seen successful, you know, so we saw unionization of auto workers in the South recently under the UAW, I think, which was, which was a huge victory.

Speaker 4 Also, you know, Starbucks workers, Amazon workers. But one thing that I think is really interesting is you talk to the average American and they're like, oh, yeah, like unions are on an upswing.

Speaker 4 And it's just not showing up in the numbers, even though there's been these kind of like individual successes.

Speaker 4 And so, you know, it's, I give labor some credit for getting creative when it was clear that they weren't going to be able to expand their influence influence by just expanding their ranks, which is probably the preferred way of doing it.

Speaker 3 The one thing the Biden administration I don't feel like gets enough credit for, which you mentioned there, is there has been

Speaker 3 upward pressure on wages at the low end, you know, and working class wages and a shrinking of income inequality.

Speaker 3 And it's almost like one of those issues.

Speaker 3 There's like a series of these issues where the left doesn't like to talk about it because they still because they either still want it to be a problem or because because there's some parts of the coalition that aren't happy with a success and the right wasn't doesn't want to give Joe Biden credit for it right so it's like people don't know is that tied at all to these outside union pushes or is it just you know the more pro-worker policy Biden has been doing or is it just kind of part of the post-pandemic reorienting the economy or what's your take on that

Speaker 4 Yeah, I mean, it really started during the Trump administration, right? The labor market got tight enough for long enough that you started to see wage gains at the bottom.

Speaker 4 And you also started to see some of these city and state and in some cases voluntary business minimum wage increases start to take effect. And all of that helped.

Speaker 4 But yeah, it was during the Trump administration that the unemployment rate started to get down towards that 4% level and you'd start to see wages go up.

Speaker 4 Then everything got intensified during the pandemic. So basically what happened was we had huge numbers of workers that went on a temporary furlough, you know, their workplaces temporarily shut down.

Speaker 4 And then when they came back, those workers were essentially able to argue for higher wages because so many places were hiring and were trying to get workers in place.

Speaker 4 And because those workers were sitting on those stimulus checks and all of this cash, we had the big addendum to the unemployment insurance payments, like a $600 a week addendum, which is a huge amount of money, giant amount of money.

Speaker 4 those temporary child tax credit payments. And so it gave workers all this power to sort of say, you know what, I'm not going to take the first and the worst job.

Speaker 4 I'm going to wait and I'm going to find a really good one. And then, you know, we got back to this really low unemployment rate really quickly.

Speaker 4 So aside from the really screwy, immediate pandemic period, we're now looking at like five years in which the unemployment rate has been really low. And that has led to a lot of wage gains.

Speaker 4 And it's been much stronger at the bottom than it has been at the top. So in real terms, wages for the lowest income workers have gone up more than 10%.
So again, adjusted for inflation.

Speaker 4 For the highest wage workers, it's just a little bit more than 1% or 2% now. This is like a great, great, great trend.
And I'm with you.

Speaker 4 Like, I almost kind of think that one of the things is it happened. It was like not a political thing.
I really think that the big political change happened during the Obama administration.

Speaker 4 It was, yeah, both Donald Trump and Joe Biden saw this occur just by the accident of when they were in the office, I think.

Speaker 3 So you had written your book and an article lately about UBI and giving people money. Yeah.
That's also one way into the same problem.

Speaker 3 And I guess in a lot of ways, you know, the stimulus, as you mentioned, I think contributed to some of the wage gains, some of the narrowing of inequality.

Speaker 3 There's also been another side of this, though. My old Republican's got to come out again one more time, which is the deficit has increased substantially during this time as well.

Speaker 3 We've got a report out this month that interest payments on the federal government debt are projected to reach $892 billion in 2024. That's more than the government is projected to spend on defense.

Speaker 3 Have you updated your priors at all and how much money we can give away? Do you have thoughts on the interplay between the debt and

Speaker 3 giving cash to babies and how to balance that?

Speaker 4 Yeah, so this actually, you've stumbled into one of my favorite topics, which is that what we are doing is that we're just spend the last, let's just spend the last bit on this then.

Speaker 3 Let's do it.

Speaker 4 Right. So we've been in this period of time in which interest rates have been really high to cool inflation down, right?

Speaker 4 We have been trying to get inflation under control almost exclusively by using the Fed. What would have been another way in order to get inflation under control? It would have been raising taxes.

Speaker 3 Raising taxes.

Speaker 4 Nobody wants to talk about that, huh? And so we had this long period of time in which during the Obama administration.

Speaker 3 You're like, whatever, Mr. Republican, you're going to try to own me on the debt.
I'm throwing tax hikes right back in your face. Okay.
All right.

Speaker 4 So during the Obama administration, the Fed was doing all that it could, everything it could think of to keep interest rates lower. And they were doing QE.

Speaker 4 And they were saying, like, we need more fiscal policy. You guys should spend more money.
You should have bigger deficits, right?

Speaker 4 And now we have the Fed doing everything they can to pull the economy back. And we're still like pushing on the accelerator because we still have a deficit.
And we won't raise taxes.

Speaker 4 Nobody talks about raising taxes anymore, but there are reasons to raise taxes that don't even necessarily have to do with the deficit, but in this case, they could.

Speaker 4 So that's been, it's just been fascinating to me that in Congress, you've not heard just not once, like, oh, hey,

Speaker 4 one way to tackle this would be for us to work along with the Fed instead of at cross purposes and to raise taxes.

Speaker 3 Speaking about a gerontocracy,

Speaker 3 this might be time to roll Simpson and Bowles back out.

Speaker 3 Are they still alive? Are they still around? Because, yeah, I'm with you. That's fine.

Speaker 3 There's nobody is talking about this.

Speaker 4 They're still very much around and would love to talk about it.

Speaker 4 So when you think about something like a UBI or cash payments, one of the big arguments to do them actually does relate to stuff that happened during the pandemic, which was when it was a real emergency, we made it really easy for people to access benefits.

Speaker 4 So you saw in programs like SNAP and Medicaid, they would lengthen re-enrollment times. They'd say you don't have to come in for an in-person interview.

Speaker 4 Just got it, you know, because it was an emergency, you know, we just sent cash out to people and we had these amazing CTC payments that went to nearly all parents of children under 18 and did some really good, you know, in terms of making sure that those kids had adequate nutrition, making sure that their families weren't subject to eviction and that kind of thing.

Speaker 4 I still think that this is like a really great idea. You could cut spending elsewhere or raise taxes.

Speaker 4 So, one idea with the UBI is always that give it to everybody, but then, you know, for some group of people, maybe people making more than $150,000 a year, you just tax it right back, right?

Speaker 4 So you're net net sort of in a similar place. So I think that you don't want to necessarily think of spending policies without also thinking of tax policies and the deficit.
So I appreciate that.

Speaker 4 The degree to which just nobody talks about raising taxes anymore, especially among Democrats, is really fascinating to me.

Speaker 4 And I'm not the first person to point out they sort of backed themselves into this corner where they've said that they won't raise taxes except on like the sliver of the wealthiest Americans who are already paying fairly ish high tax rates.

Speaker 4 They could certainly pay more, and especially on investment income.

Speaker 4 But if you want to raise money for new big social programs, you're going to have to start looking at more upper middle class and middle class families. And the Democrats just won't do it, right?

Speaker 4 Like they're just not going to do it anymore. They're not going to talk about it.
And I think it's fascinating, right?

Speaker 4 At some point in the next couple of years, we're going to have to deal with the Trump tax cuts again. And my guess is that they will just be extended regardless of who wins this election.

Speaker 3 I agree with that. I'm, you know, you make me start to wiggle a little bit on the middle-class tax cuts, but you could win me over with a tax cut discussion that's that is paired to deficit cutting.

Speaker 3 It is pretty funny, your point, about what people don't talk about.

Speaker 3 It's like inflation is everybody's number one issue, and yet every policy proposal of both the president and the former president is inflationary.

Speaker 3 The former president, especially, like his poll platform is like hyperinflationary. It's like, oh,

Speaker 3 we're worried about inflation, so we're going to relieve your debt. It's like, wait a minute,

Speaker 3 that's the most inflationary thing you could do. You just keep putting cash in people's pockets.
So, anyway, yeah, let's do it. We could join together on some tax hikes and some deficit reduction.

Speaker 3 I feel like it's the moment for it to bring it back, bring back back Simpson Bowles.

Speaker 4 Yeah, I mean, like, I'm not even sure that there's a need for it at the moment. Or, you know, I think that it's still this question as to like, do we need to be tackling this now?

Speaker 4 And what do we think the actual problem is? But I do think the point that you're making, right, creating massive labor shortages.

Speaker 4 in industries in which immigrants are overrepresented, construction, child care, personal care, all of those things that we talked about in agriculture, then also like letting a bunch of crops wither on the vine, reducing housing production, all of these things are going to be inflationary.

Speaker 4 You pair them with really broad-based tariffs, consumer prices are going to go up because tariffs are taxes on consumers, as we all know. Like that's going to be really inflationary.

Speaker 4 I think the problem with Joe Biden's plan a little bit is that like there's things that you can do. on the supply side in the long term, but they tend to be temporarily inflationary.

Speaker 4 So a big building boom is going to be inflationary in and of itself. And they haven't had a lot of great answers on inflation

Speaker 4 other than sort of waiting it out and letting the Fed do its thing. So, it's a hard issue.
It is.

Speaker 3 All right. Any Lowry, I can get my deficit cuts.
You can get your tax hikes. All right, one more, actually, one more question.
Rapid fire. Last one.
Independence Day weekend.

Speaker 3 You come from a family of columnists. Give us a columnist recommendation.
Maybe not your favorite columnist in America. We won't ask you to name that person.
We don't want to offend anybody.

Speaker 3 But do you have a second or a third, a recommendation for listeners who's looking for a new person to read?

Speaker 4 Ooh, I have so many, I have so, oh my gosh, so many. That's actually really, really

Speaker 4 good. My friend Jerusalem Demsas has a new podcast at The Atlantic, and it's really, really wonderful.
And it's very, very dorky, and it's very, very policy intense.

Speaker 4 But I think that the listeners of your podcast would really like it. So go listen to Jerusalem.
She also has, like, she's just such a great and a smart person and a really generous colleague.

Speaker 4 So go listen to it.

Speaker 3 That is a great recommendation. And we should have Jerusalem on later this summer.
Thank you so much, Annie Valerie. Enjoy your Independence Day weekend.
My love to the fam.

Speaker 3 I hope we can do it again soon.

Speaker 4 Okay, sounds good. Thank you.

Speaker 3 Thank you so much to Annie Lowry for a special Friday holiday-ish edition of the Bulwark Podcast. We'll be back Monday with Bill Crystal.
So much happening. Keep an eye on the feet.

Speaker 3 If they're breaking news, I'll be around. Lots happening out there.
Appreciate you all so much for sticking with me this week. We'll see you on Monday.
Peace.

Speaker 3 getting me down.

Speaker 3 We had a close call,

Speaker 3 I didn't even see it then. Another one,

Speaker 3 and I hardly believed it at all.

Speaker 3 And what the dry eyes say

Speaker 3 means shit to me now.

Speaker 3 Plants and animals,

Speaker 3 we're on a winter when it's 80 degrees.

Speaker 3 The end of December, what's going on

Speaker 3 before

Speaker 3 you

Speaker 3 and me

Speaker 3 in the showy in a head

Speaker 3 is going back to the south.

Speaker 3 We're hungry next that I know.

Speaker 3 And running the blender in the lightning store.

Speaker 3 Our disguise is a blessing, I'm sure.

Speaker 3 You know,

Speaker 3 we in a head

Speaker 3 there comes a fork in the road.

Speaker 3 Pants have gotta go.

Speaker 3 We are on an island on the 4th of July.

Speaker 3 It looks like the tide is going home.

Speaker 3 Tidy, I

Speaker 3 might find

Speaker 3 a little way to your heart.

Speaker 3 Now to the general store.

Speaker 3 For nothing's but simply gonna wash my bones

Speaker 3 in the Atlantic shore

Speaker 3 only for

Speaker 3 you

Speaker 3 and me.

Speaker 3 The Bullard Podcast is produced by Katie Cooper with audio engineering and editing by Jason Brown.

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