Latest / The Chuck ToddCast / Interview Only w/ Jared Bernstein - Why The Biden Economy Felt Bad & Why Trump’s Is Even WORSE

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Interview Only w/ Jared Bernstein - Why The Biden Economy Felt Bad & Why Trump’s Is Even WORSE · The Chuck ToddCast

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  Speaker 1: that code so joining me now is the former share
• 1:54
  Speaker 1: of the Council of Economic Advisors during the Biden presidency
• 1:58
  Speaker 1: has been is part of the Obama presidency. It was
• 2:01
  Speaker 1: sort of, uh, correct me if I'm wrong, Jared, but
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  Speaker 1: you were vice president Biden's economic advisor during a period
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  Speaker 1: of time in the Obama presidency.
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  Speaker 3: Right, exactly, right, Yeah.
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  Speaker 1: And you were in I mean it's sort of like
• 2:15
  Speaker 1: you've been in this world and but you were.
• 2:18
  Speaker 2: Were you always more in Biden's world?
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  Speaker 3: Yeah? More so. I mean I was Biden's chief economist
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  Speaker 3: when he was Vice president and basically moved over to
• 2:26
  Speaker 3: that role when he was president. I started as a
• 2:28
  Speaker 3: member of the Council of Economic Advisors, and then I
• 2:31
  Speaker 3: became chair a couple of years.
• 2:33
  Speaker 1: In what was your Did you do anything in the
• 2:36
  Speaker 1: Clinton presidency?
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  Speaker 3: Yes, I did. I worked in the Labor department in
• 2:40
  Speaker 3: the Chief Economist's office.
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  Speaker 1: Okay, so you've been on this sort of this in
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  Speaker 1: this role of of moving up the governmental ladders, if
• 2:51
  Speaker 1: you will.
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  Speaker 2: For Frank, I think if you.
• 2:53
  Speaker 3: Made a list of Democrat economists in the DC area,
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  Speaker 3: I would be yeah, right, leybe.
• 3:01
  Speaker 1: That's one hundred th'ts are You're very funny? And which
• 3:04
  Speaker 1: economist are you? Are you on the one hand or
• 3:06
  Speaker 1: are you on the other hand?
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  Speaker 3: I am? I am. I try not to be that
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  Speaker 3: that economist. I'll tell you what kind of economist I am.
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  Speaker 4: In that sense, the the most economists are problematic for
• 3:24
  Speaker 4: politicians because they explain to them why why they can't
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  Speaker 4: do what they want to do.
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  Speaker 2: Right the economists can't.
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  Speaker 3: Yeah, yeah, the economist says, sir, I understand where you're
• 3:35
  Speaker 3: coming from, ma'am. I understand, but you can't do that
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  Speaker 3: for these reasons. So I'm not that kind of economist.
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  Speaker 3: I try to figure out, if not, you know, the optimal,
• 3:46
  Speaker 3: let's look at third, second, third, fourth, best ways to
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  Speaker 3: get where we want to go.
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  Speaker 1: So it's sort of like you've got a north star,
• 3:55
  Speaker 1: how can you get Maybe this isn't the best way
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  Speaker 1: to do it via economic policy, but you really want
• 3:59
  Speaker 1: to do it, Well, here's the least damaging way to
• 4:02
  Speaker 1: do it?
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  Speaker 2: Is that? Do you sometimes see your job exactly?
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  Speaker 3: So you know, let's be concrete. You want to raise
• 4:07
  Speaker 3: the minimum wage, right, So there is a level to
• 4:11
  Speaker 3: which you could raise the minimum wage that would be
• 4:13
  Speaker 3: hugely problematic, and there's a level to which you could
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  Speaker 3: raise it that would help low wage workers a lot
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  Speaker 3: more than it would hurt them. So let's go to
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  Speaker 3: the second level, not the first one.
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  Speaker 1: That's totally totally makes sense. Well, let's just start with
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  Speaker 1: the near term and then we're going to go. I
• 4:32
  Speaker 1: was intrigued. I obviously read your substack. I'm a subscriber.
• 4:36
  Speaker 1: I follow been reading what you've been writing lately, and
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  Speaker 1: it is this You noted that it seems like the
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  Speaker 1: Trump White House is stumbling into the same problem you
• 4:48
  Speaker 1: guys had in the Biden White House, where you want
• 4:51
  Speaker 1: to focus on the positive data, but the feeling and
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  Speaker 1: perception of the economy is not what the data shows.
• 5:00
  Speaker 1: And I guess what would you be doing if you
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  Speaker 1: were in the Trump White House now asked to defend
• 5:05
  Speaker 1: this economy.
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  Speaker 3: Well, first of all, I wouldn't be lying. And I
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  Speaker 3: actually think that's really kind of foundational. I mean, the
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  Speaker 3: way we used to talk about this when we were
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  Speaker 3: in the White House, we would say, correctly, we just
• 5:20
  Speaker 3: got a great GDP report. We just got a great
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  Speaker 3: jobs report, you know, two hundred thousand jobs, three percent growth.
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  Speaker 3: That would be part one. Part two would be, but
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  Speaker 3: we know you're still hurting and prices are too high.
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  Speaker 3: Part three would be We're going to do everything we
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  Speaker 3: can to help on that. Maybe a three part message
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  Speaker 3: is way too complicated. Maybe all people cared about was
• 5:41
  Speaker 3: that part two, they're hurting their prices are too high, right,
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  Speaker 3: But we didn't tell them your prices aren't too high,
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  Speaker 3: and that things are affordable, and that affordability is a
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  Speaker 3: democratic con job, which is what Trump said yesterday. So
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  Speaker 3: we tried to meet people where they were. I don't
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  Speaker 3: think particular successfully, and I do think we talked past them,
• 6:03
  Speaker 3: but we never gas lit them. And I would argue
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  Speaker 3: that that's what these folks are doing. B They're making
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  Speaker 3: affordability a lot worse with all all the tariffs, and
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  Speaker 3: of course we weren't doing that.
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  Speaker 1: So, you know, one of my theories as to why
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  Speaker 1: you guys and why the former president struggled to talk
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  Speaker 1: about the economy and understand, and I'm curious what you
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  Speaker 1: think of this thesis is that, particularly Joe Biden, he
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  Speaker 1: spent a majority of his professional career in politics believing
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  Speaker 1: that for the American public, the barometer for a healthy
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  Speaker 1: economy was the unemployment rate, right, And frankly, he you know,
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  Speaker 1: it had been forty years since inflation was had bitten
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  Speaker 1: us as a country, had bitten us as political leaders. Yes,
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  Speaker 1: he was certainly was there at the early you know,
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  Speaker 1: in his first term in the US Senate during inflation,
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  Speaker 1: during that whole period of inflation, but that in some
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  Speaker 1: ways when you're and I hate to say that that
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  Speaker 1: you know, but we're all human beings, you're creatures of
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  Speaker 1: habit right, For the longest time, it is what the
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  Speaker 1: public saw is the unemployment. Right Is that fair to
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  Speaker 1: say that that maybe there was just that there was
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  Speaker 1: that Biden and maybe the wider world of Biden. And
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  Speaker 1: I'm curious you're whether you've thought you might have fallen
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  Speaker 1: into this trap, whether you were focused too much on that,
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  Speaker 1: on on the good news, on unemployment, and not fully
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  Speaker 1: appreciating the inflation situation.
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  Speaker 3: Well, I there's a lot in there, so let's unpack it. So,
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  Speaker 3: first of all, on President Biden, I think you're spot on.
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  Speaker 3: I think he came up in terms of an economic
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  Speaker 3: world where if the job market is strong and you're
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  Speaker 3: at full employment, that is the most important thing you
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  Speaker 3: can do for working class people because if the job
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  Speaker 3: market is tight, they have bargaining cloud, bargaining power that
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  Speaker 3: they wouldn't otherwise have, and they can Thereby, Unions are
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  Speaker 3: obviously important to him too, but you know, unions are
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  Speaker 3: a relatively small share of our workforce. If you get
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  Speaker 3: the unemployment rate down, you know, below four percent and
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  Speaker 3: you hold it there, that's going to be fantastic for workers.
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  Speaker 3: And that was absolutely the world he came up in.
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  Speaker 3: And I believe he thought that if we have the jobs,
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  Speaker 3: that if we have the tailwind of a strong job
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  Speaker 3: market behind us, you know, economically, we should generally be
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  Speaker 3: pretty fine, and especially if growth is strong as well.
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  Speaker 3: Of course, we hadn't seen all that thinking evolved over
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  Speaker 3: a period when the average inflation rate was you know,
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  Speaker 3: between one and two percent, and so when the pandemic
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  Speaker 3: came and you had the collision of constrained supply chains
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  Speaker 3: and strong demand partly juiced by fiscal policy, I will
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  Speaker 3: admit that led to an inflation we hadn't seen in
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  Speaker 3: forty years. And yeah, sure, I mean I think it's
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  Speaker 3: kind of acceptable, not acceptables the wrong way. I think
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  Speaker 3: it's intellectually understandable that, you know, a forty you might
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  Speaker 3: not be quite have a forty year problem in your
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  Speaker 3: worldview relative to one that has been you know, really
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  Speaker 3: foundational fundamental to your to your understanding through most of
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  Speaker 3: your career.
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  Speaker 1: Take me through your conver back when you were in
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  Speaker 1: the administration about the inflation issue. I mean, you know,
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  Speaker 1: we heard that phrase transitory a lot early on in
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  Speaker 1: the first part.
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  Speaker 4: And.
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  Speaker 1: You know, as as it's sort of my own armchair,
• 9:42
  Speaker 1: you know, economists, I would say, I'm not a lawyer,
• 9:43
  Speaker 1: I'm not an economists, but I've had to play one
• 9:45
  Speaker 1: on TV for a long time, right or certainly I've
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  Speaker 1: got to be just smart enough about it to ask
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  Speaker 1: the right questions, I hope, and I understood what you
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  Speaker 1: guys are trying to communicate, which is, hey, look, this
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  Speaker 1: is a unique this is this inflation issue. Isn't all
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  Speaker 1: just because we've handed out too much money. This inflation issue.
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  Speaker 1: We've kinked a hose, and all of a sudden we
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  Speaker 1: unkinked the hose, and here comes to supplies and it's
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  Speaker 1: just doing all sorts of haywire things, and it's like
• 10:13
  Speaker 1: a bouncing ball. It's eventually going to stop being hugely bouncing,
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  Speaker 1: and eventually it's going to get there. But it was
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  Speaker 1: pretty stubborn, and it's still been pretty stubborn. And I
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  Speaker 1: guess I'm curious everything you guys applied to it. Did
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  Speaker 1: you think the inflation rate would be better than it
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  Speaker 1: is today, better than it was even before Tariff Liberation Day?
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  Speaker 1: I mean, I totally accept the premise that once he
• 10:39
  Speaker 1: put tariffs into the economy, we no longer can talk
• 10:42
  Speaker 1: about the Biden economy. It is his economy. But pre tariff,
• 10:46
  Speaker 1: that inflation rate was still stubbornly high. How long did
• 10:49
  Speaker 1: you assume, discounting the tariff situation, that we were going
• 10:53
  Speaker 1: to have this stubborn high inflation rate? Because I think
• 10:55
  Speaker 1: about the seventies, Jared, and it's like, man, tariffs destroy
• 11:00
  Speaker 1: three presidencies. I could argue, right, Nixon is you know,
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  Speaker 1: he survives Watergate. If it's a better economy. Ford wins
• 11:06
  Speaker 1: if it's a better economy. Carter wins re election if
• 11:09
  Speaker 1: it's a better economy. And you mean inflation, you said, Terraff, Yeah, No,
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  Speaker 1: I meant inflation. Yeah, inflation. What I'm trying to get
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  Speaker 1: at is, you know, sort of disc I don't want
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  Speaker 1: to I know, the minute he put all these tariffs
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  Speaker 1: on there, it sort of it sort of could screw
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  Speaker 1: with forecasting. But three April first there of this year,
• 11:29
  Speaker 1: it was still stubbornly high. How long do you think
• 11:33
  Speaker 1: it's going to take to get that inflation rate down?
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  Speaker 1: And again, this is assuming we had a normal tariff policy.
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  Speaker 3: Without tariff policy, I think inflation by the end of
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  Speaker 3: this year, which we're now at the end of this year,
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  Speaker 3: would instead of being I think the last scene the
• 11:52
  Speaker 3: core inflationary measures that the FED looks at, we're closer
• 11:56
  Speaker 3: to three than to two. I think they'd be a
• 11:58
  Speaker 3: lot closer to two than to I think you'd be
• 12:01
  Speaker 3: looking at inflation. I think the core was last seen
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  Speaker 3: at two seven. I think it would be around two
• 12:06
  Speaker 3: two two two.
• 12:07
  Speaker 2: This was a half percentage point that the teriffs about it.
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  Speaker 3: I know, I've seen point seven, I've seen point five.
• 12:12
  Speaker 3: I think point five is is a good conservative estimate.
• 12:16
  Speaker 3: So frankly, I actually think that inflation was behaving in
• 12:20
  Speaker 3: a way that made sense to me. Starting in twenty
• 12:23
  Speaker 3: twenty three. It was coming down. I mean, just if
• 12:25
  Speaker 3: you look at the graphic of year over year inflation,
• 12:28
  Speaker 3: it goes up a mountain, and that you know, that
• 12:30
  Speaker 3: was a traumatic mountain for us. Let me tell you,
• 12:33
  Speaker 3: I vividly remember the night. You know, we get the
• 12:36
  Speaker 3: data a day before it comes out. I remember the
• 12:38
  Speaker 3: night when we got the inflation report. It was June
• 12:41
  Speaker 3: of twenty two and it was nine percent, and you know,
• 12:43
  Speaker 3: we lost our you know what, But the other side
• 12:47
  Speaker 3: of the mountain it came down just just as just
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  Speaker 3: as quickly. And really what you said earlier is completely accurate,
• 12:54
  Speaker 3: which is that it was the collision of a supply
• 12:59
  Speaker 3: shortfall and very strong demand, particularly for manufactured goods. I mean,
• 13:03
  Speaker 3: we were tracing numbers that showed that the consumer spending
• 13:07
  Speaker 3: share of manufacturing was higher than it had ever been,
• 13:11
  Speaker 3: And of course people weren't interacting with services. They couldn't,
• 13:14
  Speaker 3: so they wanted to build out the new home office
• 13:17
  Speaker 3: and get exercise equipment. At the same time, all that
• 13:20
  Speaker 3: stuff was jammed. And at the same time they had
• 13:22
  Speaker 3: both excess savings so they were flush, and a lot
• 13:25
  Speaker 3: of fiscal support so they were flush. So by twenty
• 13:29
  Speaker 3: twenty two, I would argue that I had a very
• 13:32
  Speaker 3: good understanding of where inflation was. I thought it was
• 13:35
  Speaker 3: transitory in the sense of long transitory. You know, it
• 13:39
  Speaker 3: wasn't going to come down as quickly as we wanted
• 13:41
  Speaker 3: it to, but I knew it was going to come down.
• 13:43
  Speaker 3: And one reason for that, which is very distinctly different
• 13:45
  Speaker 3: than the nineteen seventies, is that this mysterious calculation called
• 13:50
  Speaker 3: inflation expectations were well anchored in the nineteen seventies, key
• 13:55
  Speaker 3: setters of prices and wages didn't believe inflation was going
• 13:59
  Speaker 3: to go back down, whereas in the COVID inflation they did.
• 14:03
  Speaker 3: Everybody saw that this was a shock. The FED was
• 14:06
  Speaker 3: still in charge, inflation expectations were still well anchored, so
• 14:10
  Speaker 3: I knew we'd get back down to target. At least
• 14:12
  Speaker 3: I thought we would before the tariffs came on.
• 14:14
  Speaker 2: Well, that brings me to.
• 14:16
  Speaker 1: Now, and it's in this decision of the FED. And
• 14:20
  Speaker 1: you actually framed it pretty well in one of your substecs,
• 14:22
  Speaker 1: which is, you know, the FED has a dual mandate,
• 14:25
  Speaker 1: and it's in contradiction. Right, we have a stubborn inflation rate,
• 14:30
  Speaker 1: but we now have a weakening jobs market.
• 14:32
  Speaker 2: What should be the focus of the Fed?
• 14:35
  Speaker 3: Well, when I wrote that piece about four days ago,
• 14:39
  Speaker 3: I said, I said, I think it's fifty two forty
• 14:42
  Speaker 3: eight inflation. That is the FED, I argued, very close call,
• 14:47
  Speaker 3: but that at their meeting in December ninth and tenth,
• 14:50
  Speaker 3: I'm a little more worried about how sticky and high
• 14:53
  Speaker 3: inflation is, in no small part because I'm looking at
• 14:56
  Speaker 3: services inflation, which is sticky and high about a point
• 15:00
  Speaker 3: above where you'd like it to be, and that's not
• 15:02
  Speaker 3: really directly connected to the tariffs. And you know a
• 15:07
  Speaker 3: number of people are like, well, aren't you worried about
• 15:09
  Speaker 3: the job market and the fact that the unemployment rate
• 15:11
  Speaker 3: has climbed. It's a point above where it was in
• 15:14
  Speaker 3: April of twenty three. It's four point four percent. It
• 15:17
  Speaker 3: was three point four percent in April of twenty three.
• 15:20
  Speaker 3: People say, well, four point four isn't that high. Well,
• 15:22
  Speaker 3: it's pretty high, but it used to be three point four.
• 15:25
  Speaker 3: So you know, this morning we learned that the ADP,
• 15:30
  Speaker 3: the payroll processing you know that according to them, payroll
• 15:36
  Speaker 3: employment had a negative handle in November. It fell by
• 15:39
  Speaker 3: forty thousand. So now I'm really at a coin flip.
• 15:43
  Speaker 3: But you know, I think probably i'd want to sit
• 15:46
  Speaker 3: at that table and hear what people said. I think
• 15:50
  Speaker 3: I probably am a little more worried about sticky inflation
• 15:52
  Speaker 3: than the average person right now.
• 15:57
  Speaker 1: It's interesting because you have, I mean, what is your
• 16:00
  Speaker 1: understanding of why we have a job market that is
• 16:05
  Speaker 1: potentially going negative?
• 16:07
  Speaker 2: I mean, is it?
• 16:08
  Speaker 1: I mean, what it appears to me is you have
• 16:11
  Speaker 1: a lot of big companies who are trying to figure
• 16:14
  Speaker 1: out what kind of efficiencies AI is going to bring.
• 16:17
  Speaker 1: And right now they're not filling heads. They're not cutting jobs,
• 16:21
  Speaker 1: but they're not filling heads until they figure out how
• 16:24
  Speaker 1: many heads can they avoid having to fill? How good
• 16:27
  Speaker 1: is this AI transition? Am I sort of summarized.
• 16:32
  Speaker 3: Again, I think you're spat on and I'm going to
• 16:34
  Speaker 3: tell you something that I think is really worrisome that
• 16:37
  Speaker 3: I haven't had enough of a chance to talk about.
• 16:39
  Speaker 3: So I'll get into that in a second, which is
• 16:41
  Speaker 3: related to what you just said. Look, this job market
• 16:45
  Speaker 3: is often described as low higher low fire, which is
• 16:48
  Speaker 3: what you just said. We have a very low hiring rate.
• 16:52
  Speaker 3: It's very difficult for people coming into the job market
• 16:55
  Speaker 3: to get work. We're seeing unemployment rates.
• 16:57
  Speaker 1: I get a graduating senior in college. Trust me, she's
• 17:01
  Speaker 1: already stressed. She's keep telling her you got another six
• 17:04
  Speaker 1: months relaxed, Yeah, pretty stretched out.
• 17:07
  Speaker 3: Yeah, yeah, you should tell her that the you know,
• 17:10
  Speaker 3: the unemployment rate for college graduates is still you know,
• 17:13
  Speaker 3: a lot lower than for non college gradual although for
• 17:15
  Speaker 3: the newly minted ones it is it is too high
• 17:18
  Speaker 3: for exactly the reasons we're saying. We haven't seen big
• 17:21
  Speaker 3: layoffs yet, and you can't have a recession without layoffs.
• 17:25
  Speaker 3: So I think that the uncertainty around both the tariffs,
• 17:29
  Speaker 3: the impact of AI, and also deportations are all one
• 17:33
  Speaker 3: reason we're stuck in a low, higher, low fire labor market.
• 17:39
  Speaker 3: It is the case that when you have fewer people
• 17:41
  Speaker 3: coming into the job market because of diminished immigration, you
• 17:45
  Speaker 3: actually don't need as many jobs to keep the unemployment
• 17:48
  Speaker 3: rate from going up. That's called the break even rate.
• 17:51
  Speaker 3: And when I was in the White House, the break
• 17:52
  Speaker 3: even rate was, you know, one hundred and fifty thousand.
• 17:54
  Speaker 3: Now it's half of that because the immigration impacts and
• 17:59
  Speaker 3: aging boomers are reducing labor supply, but we still have
• 18:05
  Speaker 3: labor demand weaker than labor supply, and that's why unemployment
• 18:09
  Speaker 3: has been going up. Now on the AI point, here's
• 18:12
  Speaker 3: the thing I wanted to say, because of exactly what
• 18:16
  Speaker 3: you just said, employers are trying to figure out how
• 18:19
  Speaker 3: many people they can reduce, what kind of their headcount
• 18:23
  Speaker 3: they can reduce because of the work that AI can do,
• 18:26
  Speaker 3: which they're confused about, and they haven't really been able
• 18:28
  Speaker 3: to figure it out. The worst thing that could happen
• 18:31
  Speaker 3: right now would be a recession with a lot of layoffs.
• 18:35
  Speaker 3: And the reason is is that when we've seen this
• 18:39
  Speaker 3: is an historical observation, when we've seen technology displacing workers
• 18:46
  Speaker 3: technology is that it's most disemploying when you're in a downturn,
• 18:52
  Speaker 3: because employers lay off a big chunk of their workforce,
• 18:57
  Speaker 3: and the question becomes how few can and I hire
• 19:00
  Speaker 3: back right right right right now. They're stuck with what
• 19:04
  Speaker 3: they've got and they don't want to lay a bunch
• 19:05
  Speaker 3: of people off because they just don't know where it's going.
• 19:08
  Speaker 3: But man, if the demand falls out from this situation
• 19:13
  Speaker 3: and they're in a situation where they lay off twenty
• 19:15
  Speaker 3: five percent of other workforce, they're going to be thinking
• 19:17
  Speaker 3: I might only be able to I might just be
• 19:19
  Speaker 3: able to bring back five percent, you know, just a
• 19:21
  Speaker 3: few of those workers and get ahead.
• 19:23
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• 21:01
  Speaker 1: something you should really think about, especially if you've got
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  Speaker 1: a growing family. Look, I'm pretty convinced that twenty twenty eight.
• 21:11
  Speaker 1: I don't think we're it's going to be. I think
• 21:13
  Speaker 1: we're going to see it percolate in twenty twenty six.
• 21:15
  Speaker 1: But I think twenty twenty eight as a campaign conversation,
• 21:19
  Speaker 1: as a narrative, is sort of what voters fear of
• 21:23
  Speaker 1: AI displacement is going.
• 21:25
  Speaker 2: To be a.
• 21:28
  Speaker 1: Is going to be a demand on candidates to have
• 21:31
  Speaker 1: a plan. Look, we can debate whether this is going
• 21:36
  Speaker 1: to happen.
• 21:36
  Speaker 2: The next three years or we're still ten years away
• 21:39
  Speaker 2: from this.
• 21:39
  Speaker 1: And I devour every bit of forecasting data I can
• 21:45
  Speaker 1: find on this, And you know, you have these different
• 21:48
  Speaker 1: AI you know, sort of doom the doom and gloom
• 21:53
  Speaker 1: folks AIS. You know, I sort of I'm pro human race,
• 21:56
  Speaker 1: meaning I think we are not going to allow ourselves
• 21:59
  Speaker 1: to be replaced by robots like we're going to We're
• 22:03
  Speaker 1: a pretty impressive species. We survive a lot. You know,
• 22:07
  Speaker 1: We're not going to let robots displace us. But the
• 22:10
  Speaker 1: fear of this, I think is going. So look, you
• 22:15
  Speaker 1: probably already are talking to potential presidential candidates, people wanting
• 22:20
  Speaker 1: to just get your advice of you know, what's a
• 22:22
  Speaker 1: feasible way? I mean, what did we do wrong during
• 22:26
  Speaker 1: the transition to all these free trade agreements in the
• 22:31
  Speaker 1: in the late eighties and early nineties with and all
• 22:35
  Speaker 1: of them included promises of money for job retraining and
• 22:38
  Speaker 1: all of this.
• 22:39
  Speaker 2: It didn't really work.
• 22:40
  Speaker 3: I can answer this question for you. It's a great question.
• 22:43
  Speaker 2: Is that where AI is going?
• 22:44
  Speaker 1: I mean, I assume you know, I've already heard Mark
• 22:47
  Speaker 1: Kelly went out there and said recently, I guess we
• 22:50
  Speaker 1: ought to have a fund where these AI companies ought
• 22:52
  Speaker 1: to ought to you know, be taxed. Maybe you tax
• 22:55
  Speaker 1: the data centers and there's a special tax of the
• 22:59
  Speaker 1: data centers that just goes to job displacement issues. But
• 23:04
  Speaker 1: what does this policy look like? What do you think
• 23:06
  Speaker 1: is feasible here?
• 23:08
  Speaker 3: So I have an answer to question. I have an
• 23:10
  Speaker 3: answer to this question. First of all, let me say
• 23:13
  Speaker 3: the following, which you would know better than me. But
• 23:15
  Speaker 3: I'll bet I'm right about this. If you talk to
• 23:19
  Speaker 3: the average economists. I spend two months of the year
• 23:23
  Speaker 3: now at Stanford. So if you're out, if you're in
• 23:26
  Speaker 3: Silicon Valley, if you talk to a lot of people
• 23:29
  Speaker 3: in the Beltway about AI, they're a lot more excited
• 23:33
  Speaker 3: than the average voter is. So that's one assertion, Jared.
• 23:36
  Speaker 1: It's remarkable. I find it remark we as a country,
• 23:40
  Speaker 1: we are the most negative about AI collectively then other
• 23:46
  Speaker 1: First world countries. I've watched this. It's fascinating how negative
• 23:50
  Speaker 1: we are about it. So what I think it's because
• 23:53
  Speaker 1: social media destroyed us, and I think people fear the
• 23:57
  Speaker 1: same geniuses that brought us social media are being allowed
• 24:01
  Speaker 1: to run amuck on AI.
• 24:02
  Speaker 2: Good luck.
• 24:03
  Speaker 3: By the way, you're speaking to someone who just finished
• 24:06
  Speaker 3: watching the Netflix show Adolescents last night, So oh my god,
• 24:11
  Speaker 3: talk about social media and its distortions. But but I'm
• 24:16
  Speaker 3: with you, So we are on you know, we are.
• 24:18
  Speaker 3: We are shoulder to shoulder on this. And one of
• 24:21
  Speaker 3: the things I tell people is members who are thinking
• 24:25
  Speaker 3: of working on the figuring out, trying to figure out
• 24:28
  Speaker 3: how to run on this is precisely that that don't
• 24:31
  Speaker 3: think everybody out there thinks AI is as cool as
• 24:34
  Speaker 3: you do. They're threatened by it. And you just mentioned
• 24:37
  Speaker 3: two things. You mentioned the lack of preparation for people
• 24:41
  Speaker 3: who were hurt by expanded globalization in the nineties when
• 24:47
  Speaker 3: China and the two thousands, when China, you know, at
• 24:50
  Speaker 3: Bill Clinton's beets, China joins the WTO and we get
• 24:54
  Speaker 3: our thoughts kicked and no one was ready for that.
• 24:58
  Speaker 3: And then the ignoring of the impact of social media
• 25:01
  Speaker 3: to two incredibly portentious existential examples of politicians failing to
• 25:10
  Speaker 3: create guardrails to protect people from a massive shock. And
• 25:17
  Speaker 3: so you know, won't be tied us if we make
• 25:20
  Speaker 3: that mistake again.
• 25:22
  Speaker 2: Now, I think, Jared, we already have.
• 25:26
  Speaker 1: I'm sorry, I look at it this hands off, you know,
• 25:31
  Speaker 1: I you know, we were, well, what you imagine can
• 25:35
  Speaker 1: you imagine if we had outsourced the Manhattan Project?
• 25:40
  Speaker 3: Yeah?
• 25:40
  Speaker 2: But what this crazy?
• 25:43
  Speaker 3: What do you said yourself a minute ago, correctly that
• 25:46
  Speaker 3: we do not yet know the extent to which AI
• 25:50
  Speaker 3: is going to displace people in the workforce. What you
• 25:53
  Speaker 3: do in that situation is you hope for the best
• 25:56
  Speaker 3: and you plan for the worst. Now, what we didn't
• 25:59
  Speaker 3: do in the globalization era when globalization was taking off,
• 26:03
  Speaker 3: we hoped for the best, and we didn't plan for
• 26:06
  Speaker 3: the worst. And in fact, we did the thing that
• 26:08
  Speaker 3: economists always do. Here's here's a curse word that economists
• 26:13
  Speaker 3: use all the time. Transition. They'll be a transition.
• 26:17
  Speaker 1: Well, transitions to it a lot of work there. Transition means, mister,
• 26:21
  Speaker 1: people are going to lose their entire livelihood.
• 26:24
  Speaker 3: But they'll be a transition every period. But we'll be fine.
• 26:28
  Speaker 3: So when you hear an economist Blase talk about transition,
• 26:32
  Speaker 3: run for the hill. So so you don't so what
• 26:36
  Speaker 3: we need here in my So here's the policy that
• 26:39
  Speaker 3: I'm trying to get people interested in. It may sound
• 26:41
  Speaker 3: a little radical, but I don't think it is a
• 26:44
  Speaker 3: job's guarantee, a federal jobs guarantee if you are displaced
• 26:49
  Speaker 3: from your job because of AI. There's actually a lot
• 26:52
  Speaker 3: of stuff that needs to get done in this country,
• 26:54
  Speaker 3: and I can't do a lot of it. There's building infrastructure,
• 26:58
  Speaker 3: there's human care, there's helping in the healthcare sector. There
• 27:03
  Speaker 3: is a lot of work that needs to be done.
• 27:05
  Speaker 3: Many of these sectors are underfunded, in part because so
• 27:08
  Speaker 3: much is going into AI and data centers. We need
• 27:12
  Speaker 3: to have a job guarantee program wherein if you're displaced
• 27:16
  Speaker 3: to AI, we can quickly get you back up and
• 27:19
  Speaker 3: running with remunerative, dignity inducing employment. So it's easier said
• 27:27
  Speaker 3: than done. But we've had programs like that in the past.
• 27:31
  Speaker 3: We've just never really implemented them.
• 27:33
  Speaker 2: It was just gonna well. I mean that was the
• 27:36
  Speaker 2: New Deal.
• 27:37
  Speaker 3: No exactly, that was the New Deal, and that actually
• 27:40
  Speaker 3: worked out well. Now, we tried something in the eighties
• 27:43
  Speaker 3: called SITA that was a much scaleback version of that.
• 27:46
  Speaker 3: And you know, if you go to the Center. I'm
• 27:47
  Speaker 3: also a policy fellow at the Center for American Progress.
• 27:51
  Speaker 3: You know, numerous years ago they were talking about a
• 27:53
  Speaker 3: jobs guarantee and have documents about how to do it.
• 27:56
  Speaker 3: So it's not something no one's ever thought about before,
• 27:58
  Speaker 3: and I'd like to dust that policy often get people
• 28:01
  Speaker 3: thinking about it.
• 28:02
  Speaker 1: Would you do a jobs guarantee before you would do
• 28:05
  Speaker 1: universal basic income?
• 28:07
  Speaker 3: Yes? I think universal basic income pales beside a job
• 28:11
  Speaker 3: guarantee because people don't just want income. They want to
• 28:14
  Speaker 3: be productive, they want to work, they want to contribute.
• 28:17
  Speaker 2: They want community.
• 28:18
  Speaker 1: I mean, in some ways work is another community. And
• 28:22
  Speaker 1: I think one of the things we agree consistently and
• 28:25
  Speaker 1: constantly crave is community. I want to tackle something else
• 28:30
  Speaker 1: that you spend.
• 28:31
  Speaker 3: By the way, just aside, I think we're getting way
• 28:33
  Speaker 3: too much of our community online.
• 28:36
  Speaker 1: Of course, well you know it gets it's something. You know,
• 28:38
  Speaker 1: it's funny to go back to the social media metaphor
• 28:42
  Speaker 1: that I was using about AI. You know, we don't
• 28:46
  Speaker 1: agree collectively on a lot of things in America these days,
• 28:51
  Speaker 1: but there is one issue that is united left and right.
• 28:55
  Speaker 1: It hasn't mattered if it was a very red state
• 28:57
  Speaker 1: legislature or a very blue state legislature. They have all
• 29:01
  Speaker 1: instituted the cell phone bandoned schools in some form or
• 29:05
  Speaker 1: another right. And you know, the libertarians have been convinced. Right,
• 29:11
  Speaker 1: those that are worried about, you know, single moms and
• 29:13
  Speaker 1: single parents having access to everybody's realizing, hey, this has
• 29:17
  Speaker 1: been terrible, and we don't often. So that tells me
• 29:22
  Speaker 1: something here that in some ways the public is wiser
• 29:26
  Speaker 1: about this than they usually are. I always say the
• 29:28
  Speaker 1: electric the voters, you know, voters have that voters are
• 29:31
  Speaker 1: telling you something. Listen to them. Just because you don't
• 29:34
  Speaker 1: like the outcome, They're telling you something. Listen to what
• 29:36
  Speaker 1: they're saying.
• 29:37
  Speaker 2: Of course, so they it is.
• 29:42
  Speaker 1: It makes me think that actually getting tough on tech
• 29:47
  Speaker 1: and putting guardrails on AI, I think is going to
• 29:51
  Speaker 1: be a necessity for any successful candidate for office in
• 29:55
  Speaker 1: twenty eight. And I don't think it's I don't think
• 29:58
  Speaker 1: it is. This is something that's just a d side
• 30:01
  Speaker 1: thing or an our side thing. I think this the
• 30:04
  Speaker 1: fact that you have this collective concern about what phones
• 30:07
  Speaker 1: and social media has done to our kids means we
• 30:11
  Speaker 1: realize these technological changes have huge impacts on our lives.
• 30:17
  Speaker 1: And I don't think we fully you know, we as
• 30:21
  Speaker 1: you said we in this case, we're so excited about
• 30:25
  Speaker 1: what's happening that we're you know, and I guess this
• 30:29
  Speaker 1: is exactly what life was like in the nineteen teens,
• 30:31
  Speaker 1: in the nineteen twenty.
• 30:34
  Speaker 3: Yeah. I think all of that's correct. I mean, I
• 30:36
  Speaker 3: think there's another side of the issue that you have
• 30:38
  Speaker 3: to think about if you're advising politicians or you're thinking
• 30:41
  Speaker 3: about twenty six or twenty eight, which is that if
• 30:45
  Speaker 3: you talk to the companies themselves, even if you're saying, hey,
• 30:50
  Speaker 3: and you mentioned Mark Kelly before, I'm in Virginia. At
• 30:54
  Speaker 3: this point, thirty nine percent of the energy in Virginia
• 30:58
  Speaker 3: is that's being produced. The electricity is being used by
• 31:01
  Speaker 3: data centers.
• 31:02
  Speaker 1: Oh, and don't think that they're not going to get demonized.
• 31:05
  Speaker 2: Yes on cost issues. Yeah.
• 31:07
  Speaker 3: So you know the thing is you go to the
• 31:09
  Speaker 3: AI companies, you go to the data centers, and you
• 31:12
  Speaker 3: tell them you're gonna have to pair back. You're going
• 31:14
  Speaker 3: to have to have guardrails. You're gonna have to uh
• 31:18
  Speaker 3: compensate the innocent bystanders who electricity bills are getting whacked
• 31:21
  Speaker 3: by you. And some of them are going to say
• 31:23
  Speaker 3: to you, fine, I'll go to Saudi Arabia. And you
• 31:26
  Speaker 3: know that's the political challenge that I was dealing with
• 31:28
  Speaker 3: in the White House. You know, we were we were
• 31:30
  Speaker 3: thinking about these issues, and you know, these companies were
• 31:33
  Speaker 3: threatening us with you know, with exits. Frankly, I'll take
• 31:36
  Speaker 3: that threat because of what you're describing is so important
• 31:40
  Speaker 3: to put those guardrails in place.
• 31:45
  Speaker 2: Well, I'm let's see.
• 31:47
  Speaker 1: I mean, I keep you know, I keep thinking there
• 31:49
  Speaker 1: is a left right coalition here that does want to
• 31:52
  Speaker 1: to to put some guardrails on tech right. When you
• 31:54
  Speaker 1: get people like Lena Khan and Steve Bannon both concerned
• 31:58
  Speaker 1: about this concentration of power, but it hasn't translated. I
• 32:01
  Speaker 1: mean this, this is just such an effectless Congress, and
• 32:07
  Speaker 1: frankly it hasn't mattered the last ten years. Congress has
• 32:10
  Speaker 1: been hesitant to get into the regulatory Well, they do oversight,
• 32:17
  Speaker 1: but they won't do the regulatory change.
• 32:18
  Speaker 3: I mean, crypto is a good analogy. I mean, I
• 32:20
  Speaker 3: think crypto is largely an accident going out to happen
• 32:23
  Speaker 3: in terms of systemic risk to the economy. But what
• 32:27
  Speaker 3: did the crypto bros do? They lobbied up faster than
• 32:30
  Speaker 3: any industry I've ever seen. So you know, these data
• 32:34
  Speaker 3: centers are the mag seven. I just looked this up.
• 32:37
  Speaker 3: The market capitalization of the mag seven is twenty two
• 32:40
  Speaker 3: trillion dollars, So you know they have all the resources
• 32:44
  Speaker 3: they need to purchase all the all the deregulation they want.
• 32:51
  Speaker 1: If you strip out the Magnificent Seven, it's the rest
• 32:54
  Speaker 1: of our is the rest of the publicly traded companies.
• 33:00
  Speaker 1: I mean, I've seen some analysis that say, you know what,
• 33:03
  Speaker 1: we're no companies. Companies aren't doing that well, so I
• 33:07
  Speaker 1: got it. But the Big seven is propping everything up.
• 33:10
  Speaker 3: So I've got a great it's funny you should ask
• 33:12
  Speaker 3: that because I recently backed out a number that I
• 33:14
  Speaker 3: thought was really really compelling answer to that question, unless
• 33:18
  Speaker 3: it's too obscure, So I'll test it on you and
• 33:21
  Speaker 3: see if it works. Now this is a few days old,
• 33:23
  Speaker 3: but I'm sure it doesn't matter. If you look at
• 33:27
  Speaker 3: the year over year increase in the S and P
• 33:30
  Speaker 3: five hundred, it's eleven percent. If you then that's that
• 33:36
  Speaker 3: that's weighted, meaning that you waited by market capitalization. So
• 33:40
  Speaker 3: that's how the S and P is measured.
• 33:41
  Speaker 1: Every day the biggest cap companies. I mean, you know,
• 33:47
  Speaker 1: I have this thesis that the reason we've seen crypto
• 33:50
  Speaker 1: prices plummet is that, you know, the crypto folks realize
• 33:54
  Speaker 1: that this is probably not a real asset, they hurry
• 33:57
  Speaker 1: up and sell it and then buy the magnificent seven.
• 34:00
  Speaker 3: Right, So the magnificent seven get a huge weight. I mean,
• 34:03
  Speaker 3: they're not all public like AI is obviously still a
• 34:05
  Speaker 3: private company. But all I'm saying is that that eleven
• 34:08
  Speaker 3: percent increase in the S and P is a weighted
• 34:11
  Speaker 3: measure weighted by market capitalization. You can also look at
• 34:15
  Speaker 3: an unweighted measure of the S and P. That's up
• 34:19
  Speaker 3: point eight percent over the last year, eleven percent weighted
• 34:24
  Speaker 3: point eight unweighted. We have an S and P seven
• 34:28
  Speaker 3: and an S and P four ninety three, and the
• 34:30
  Speaker 3: SNB four ninety three is pretty flat.
• 34:34
  Speaker 2: Well that tells you it's flat or actually negative.
• 34:37
  Speaker 3: Yeah, I mean I think I think it's uh, I
• 34:40
  Speaker 3: think it's flat. I mean I've looked at the I've
• 34:42
  Speaker 3: actually looked at the four ninety three or whatever it is,
• 34:46
  Speaker 3: because again, not every one of the seven is sling.
• 34:48
  Speaker 3: But yeah, it's flat. It's pretty flat.
• 34:52
  Speaker 1: Let me get into a couple other issues. That one
• 34:56
  Speaker 1: that you wrote about in talks about healthcare, and look,
• 35:02
  Speaker 1: this is such the weirdest issue because it's it's not
• 35:06
  Speaker 1: a private sector. You know, it's not a private enterprise.
• 35:10
  Speaker 1: It's a huge part of the economy, but it's super regulated.
• 35:15
  Speaker 1: But at the same time, it's this sort of public
• 35:17
  Speaker 1: private and it's a mess, right, And you know, I
• 35:21
  Speaker 1: look at yeah, I look at I'll just take my
• 35:24
  Speaker 1: little observation, which actually is going to be through the
• 35:28
  Speaker 1: prism of college football. But the University of Miami is
• 35:32
  Speaker 1: able to spend a lot more money on football now
• 35:36
  Speaker 1: because they're making so much money and They're not alone.
• 35:40
  Speaker 2: This is a lot of universities.
• 35:42
  Speaker 1: A lot of universities are funding some of their high
• 35:44
  Speaker 1: priced outlays, whether it's sports, building, new buildings, et cetera,
• 35:50
  Speaker 1: because they have health systems that are nonprofits, Jared, who
• 35:55
  Speaker 1: are making money hand over fist. Because it's a nonprofit,
• 35:57
  Speaker 1: you got to immediately take whatever profits you make and
• 36:00
  Speaker 1: put it back into the institution. In this case, it's
• 36:04
  Speaker 1: in university athletics, the Longhorns USC Miami.
• 36:07
  Speaker 2: There's quite a few that have done this.
• 36:09
  Speaker 1: But what it tells me is if we have a
• 36:12
  Speaker 1: system and our healthcare system, and if they just take
• 36:14
  Speaker 1: hospitals where there's more money to be made being a
• 36:17
  Speaker 1: nonprofit hospital system than it is to be a for
• 36:21
  Speaker 1: profit hospital system, what are we doing here? Like something
• 36:25
  Speaker 1: seems off? This is this is a Jerry rigged economy.
• 36:29
  Speaker 1: This isn't a real free market exactly right.
• 36:34
  Speaker 3: I mean the way I always say it, I mean,
• 36:36
  Speaker 3: your your analogy is really interesting. It's it's fairly complex.
• 36:40
  Speaker 3: Here's a simple way to say, I think a similar thing.
• 36:44
  Speaker 3: If I show up to the supermarket hungry, they don't
• 36:47
  Speaker 3: have to feed me. If I show up to the
• 36:49
  Speaker 3: hospital sick, they have to treat me. That takes it
• 36:52
  Speaker 3: out of the market right away. And every single other
• 36:56
  Speaker 3: advanced economy has figured it out that this that trying
• 37:00
  Speaker 3: to make this a a for profit or a kind
• 37:03
  Speaker 3: of weirdly structured nonprofit sector of the type you just described,
• 37:10
  Speaker 3: is going to mean an economy that spends you know,
• 37:16
  Speaker 3: eighteen percent of its GDP on healthcare. That's US versus
• 37:21
  Speaker 3: ten or eleven percent, which is the average for every
• 37:23
  Speaker 3: other advanced economy. And you might say, well, surely they
• 37:26
  Speaker 3: have worst outcomes than we do, given that they're spending
• 37:29
  Speaker 3: eight percent nine percent of GDP less they do not.
• 37:32
  Speaker 3: They have as good, if not better outcomes than we do.
• 37:35
  Speaker 3: What they don't have is, you know, five miles from
• 37:38
  Speaker 3: where I live, massive houses on the Potomac that are
• 37:43
  Speaker 3: owned by you know, lobbyists for big pharma. So, by
• 37:46
  Speaker 3: dint of making this an inelastically demanded good, if you
• 37:50
  Speaker 3: need healthcare, you need it. It's not shoppable. You can't
• 37:53
  Speaker 3: get in the hospital, you can't go in the ambulance
• 37:55
  Speaker 3: and say, wait a second, I'm going to call a
• 37:57
  Speaker 3: cheaper ambulance. You know, it's not shoppable. It's inelastically demanded.
• 38:01
  Speaker 3: Uh and uh, the prices are completely non transparent. You
• 38:06
  Speaker 3: never really know what you're paying for anything, and you know,
• 38:10
  Speaker 3: expect people not to have their hands in the healthcare
• 38:12
  Speaker 3: cookie jar, which of course they do. So there is
• 38:16
  Speaker 3: a ton of work to be done there. You know,
• 38:18
  Speaker 3: I myself, along with Neil Mahoney, just wrote a piece
• 38:21
  Speaker 3: on how to make health you know, ideas that would
• 38:23
  Speaker 3: make healthcare a lot more affordable. They're out there. We've
• 38:26
  Speaker 3: seen other other countries do them. We should do them.
• 38:29
  Speaker 1: Too, because, look, I have empathy for those members of
• 38:32
  Speaker 1: Congress are going, why are we subsidizing insurance companies?
• 38:35
  Speaker 2: Right? So I have empathy for that.
• 38:36
  Speaker 1: At the same time, you know, look, we don't want
• 38:40
  Speaker 1: to We don't have time to transition, and these folks
• 38:44
  Speaker 1: need affordable health care. So it's it's one of those
• 38:47
  Speaker 1: where you're like, boy, this sub what are we doing this?
• 38:51
  Speaker 1: You know, why don't we reform the insurance industry, Why
• 38:54
  Speaker 1: don't we reform hospital payment systems? Why don't we reform
• 38:57
  Speaker 1: you know, before we figure out what the right right
• 39:02
  Speaker 1: structure is to guarantee healthcare access for the public. And
• 39:07
  Speaker 1: it feels as if, you know, because we can't do
• 39:10
  Speaker 1: the one we're almost stuck just trying to well, let's
• 39:14
  Speaker 1: limit the damage to the average American, but we are
• 39:19
  Speaker 1: only handing more money to a couple of big industries.
• 39:23
  Speaker 3: You're so right. I mean, I'll push back a little
• 39:25
  Speaker 3: bit on some of the things you said, but broadly speaking,
• 39:27
  Speaker 3: you're exactly right. And you know, I actually I think
• 39:30
  Speaker 3: like you. When Republicans were saying during the shutdown debate
• 39:33
  Speaker 3: about you know, giving you know, tens of billions of
• 39:37
  Speaker 3: dollars to in these premium tax credits to people so
• 39:41
  Speaker 3: that they could buy, so that their premiums in the
• 39:45
  Speaker 3: Affordable Character exchanges don't double. Republics, well, that's just throwing
• 39:50
  Speaker 3: good money after bad and I don't disagree with that. However,
• 39:54
  Speaker 3: if you don't do it, those premiums are going to double. No.
• 39:57
  Speaker 1: Right, Like it feels like we're being we're all being
• 39:59
  Speaker 1: held hostile by the insurance companies.
• 40:01
  Speaker 3: Okay, So here's what I want to push back a
• 40:04
  Speaker 3: little bit. Okay, it's not you know, the Affordable Care
• 40:08
  Speaker 3: Act did more to control health care spending than your
• 40:13
  Speaker 3: wrap a second ago would have you think. Now, if
• 40:17
  Speaker 3: it solved the problem, we wouldn't be having this conversation.
• 40:19
  Speaker 3: Far from solve the problem. But it did institute a
• 40:23
  Speaker 3: number of things that led, especially Medicare costs to grow
• 40:28
  Speaker 3: considerably more slowly, which actually has helped us in the
• 40:31
  Speaker 3: fiscal front. Some of those things, and almost all of
• 40:35
  Speaker 3: those had to do with controlling costs. The problem is
• 40:39
  Speaker 3: that there are, relative to all these other economies that
• 40:42
  Speaker 3: spend half of what we do on healthcare as a
• 40:45
  Speaker 3: share of the economy, we have very few cost controls.
• 40:48
  Speaker 3: The ones that we do have actually work. Giving Medicare
• 40:51
  Speaker 3: the ability to negotiate for lower drug prices. That's worked,
• 40:56
  Speaker 3: But there's fifteen drugs on that formulary, and you need
• 40:58
  Speaker 3: to have hundreds restricting what the insurance restricting the profitability
• 41:04
  Speaker 3: of insurance companies if they're not using enough of their
• 41:08
  Speaker 3: of their profits to pay out that That was a
• 41:10
  Speaker 3: cap that was put in on Obamacare. You know, that's
• 41:13
  Speaker 3: been helpful as well. So that's the way forward, and
• 41:17
  Speaker 3: it means a huge political fight, but that's the fight
• 41:19
  Speaker 3: we have to have.
• 41:22
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• 42:57
  Speaker 1: I get the fight part and all this, But you know,
• 42:59
  Speaker 1: let let's say you get a fresh administration in a
• 43:02
  Speaker 1: fresh Congress. What's the simplest thing we could do first
• 43:09
  Speaker 1: as a as a as a federal government to you know,
• 43:13
  Speaker 1: chip away at this.
• 43:14
  Speaker 3: Yeah, So the simplest thing is Medicare for More. If
• 43:18
  Speaker 3: you were talking to Bernie Sanders, it would be Medicare
• 43:20
  Speaker 3: for all, you know, but you're talking to me, and
• 43:22
  Speaker 3: so it's Medicare for More. And what that means is
• 43:25
  Speaker 3: is lowering the age of Medicare.
• 43:29
  Speaker 2: I've heard fifty. You would you go down to fifty?
• 43:32
  Speaker 2: Has been the number I've always seen.
• 43:34
  Speaker 3: Yeah, And so you know, because it's you might hear
• 43:37
  Speaker 3: people talking about a public option that's really very similar
• 43:40
  Speaker 3: to what I'm talking about. And this is the idea
• 43:43
  Speaker 3: that whether you're in your workplace looking at what you
• 43:45
  Speaker 3: can choose, or you're going into the Obamacare exchanges, you
• 43:49
  Speaker 3: can you know if you're if you're of a certain age,
• 43:52
  Speaker 3: you can choose Medicare, which is, you know, a less
• 43:55
  Speaker 3: expensive form of care because of the kinds of cost
• 43:58
  Speaker 3: controls I mentioned earlier. And you know someone who's on
• 44:01
  Speaker 3: it now it works well.
• 44:03
  Speaker 2: Right meyess this why you know it's interesting.
• 44:07
  Speaker 1: Did did you expect when the Affordable Care Act happened
• 44:11
  Speaker 1: and the idea was there was there was a hope
• 44:13
  Speaker 1: that you'd have more insurance companies come into the marketplace.
• 44:18
  Speaker 1: Did you think we would have the big you know,
• 44:20
  Speaker 1: the progressives us AA, GEICO. I don't think they really
• 44:23
  Speaker 1: did get into the marketplace. Did you assume more would
• 44:28
  Speaker 1: have jumped into this?
• 44:31
  Speaker 3: I did, and I do think that competition has been
• 44:36
  Speaker 3: somewhat insufficient, uh in that space.
• 44:41
  Speaker 1: You know, every day is a United Healthcare buying up
• 44:44
  Speaker 1: another company.
• 44:45
  Speaker 3: Exactly. There's vertical, there's vertical integration, there's horizontal vertical meaning
• 44:51
  Speaker 3: up and you know, up and down through the hospital systems,
• 44:54
  Speaker 3: and then there's far off. So so there's there's that
• 44:59
  Speaker 3: kind of integration, particularly in some of our larger cities,
• 45:01
  Speaker 3: is putting upward pressure on costs. And in the piece
• 45:04
  Speaker 3: that Neil Mahoney and I just wrote, we went after
• 45:06
  Speaker 3: that we said we have to we have to block that.
• 45:08
  Speaker 3: You know, you have a lot of investors supporting that
• 45:12
  Speaker 3: kind of integration. But on the insurance point, remember when
• 45:15
  Speaker 3: we did the ACA, we made a political because I
• 45:18
  Speaker 3: was in the Obama administration, that we made a political
• 45:21
  Speaker 3: calculation that we were going to go you know, through
• 45:25
  Speaker 3: the insurance companies, not around them. We were going to
• 45:27
  Speaker 3: adapt them as allies. No.
• 45:29
  Speaker 1: I mean, that was the mistake that Clinton the Clinton's made, right,
• 45:32
  Speaker 1: which was trying to go after the insurance companies. And
• 45:34
  Speaker 1: Thelman Leewe wasn't Thelman Louis, Hary and Louise, sorry them
• 45:37
  Speaker 1: and Louise was the movie. Harry and Louise became the
• 45:41
  Speaker 1: faces of the opposition, you know, and that it I
• 45:44
  Speaker 1: mean I understood the you're right, you guys made it
• 45:46
  Speaker 1: political toa hey, we're going to have Harry and Louise
• 45:49
  Speaker 1: on our side, which they if I remember they actually
• 45:52
  Speaker 1: re up the ad and work correct.
• 45:54
  Speaker 3: Well they they We never would have legislated that if
• 45:57
  Speaker 3: we had. I think if we had gone with the
• 46:01
  Speaker 3: you know, trying to crowd them out, and you know,
• 46:04
  Speaker 3: I think that's why Medicare for More is going to
• 46:07
  Speaker 3: be a tough sell because they recognize that that kind
• 46:09
  Speaker 3: of competition, they don't want to compete with the government.
• 46:12
  Speaker 3: They recognize that Medicare can provide less expensive health care
• 46:15
  Speaker 3: for people, and you know, they kind of are resigned
• 46:18
  Speaker 3: to assigning that to seniors. But if you take that
• 46:21
  Speaker 3: down to fifty, they're going to fight you tooth and
• 46:23
  Speaker 3: nail for those mansion reasons I said before. But we
• 46:27
  Speaker 3: still have to go there.
• 46:29
  Speaker 1: Well, it seems especially if we're living longer. I mean,
• 46:34
  Speaker 1: it just I guess that's got to be the fear.
• 46:38
  Speaker 1: I mean, that would be the argument against bringing the
• 46:40
  Speaker 1: age down. Medicare is only going to get more stressed
• 46:45
  Speaker 1: because people are going to be living longer and on
• 46:48
  Speaker 1: Medicare longer.
• 46:49
  Speaker 3: Well, not necessarily because we're not getting into the policy weeds.
• 46:53
  Speaker 3: So it's not that this is going to be free
• 46:55
  Speaker 3: for people. I mean, Medicare is not free for anybody.
• 46:58
  Speaker 3: Now you're still you know, part and all that. No,
• 47:01
  Speaker 3: they would have to pay an actuarily fair premium. Right
• 47:06
  Speaker 3: if you're on Medicare. It's not free. It's not like Medicaid,
• 47:09
  Speaker 3: which is you know, kind of free healthcare, but that
• 47:12
  Speaker 3: premium is going to be considerably lower than what you're
• 47:15
  Speaker 3: paying to the private sector.
• 47:16
  Speaker 1: Yeah, future of work, not just AI, but the length
• 47:25
  Speaker 1: of the work week. Ye, there's been chatter about this
• 47:31
  Speaker 1: for multiple generations, right, and what the what the work
• 47:34
  Speaker 1: week is going to be? You're starting to see I
• 47:36
  Speaker 1: think Bernie Sanders is advocating a thirty two hour work week,
• 47:40
  Speaker 1: but it really all goes back to what's full time.
• 47:44
  Speaker 1: And because what full time, what the definition of full
• 47:47
  Speaker 1: time is then of course triggers whether you get benefits
• 47:50
  Speaker 1: or not. And so that's why this is I think
• 47:52
  Speaker 1: an important issue. Where are you on that issue and
• 47:58
  Speaker 1: is that something that you think is coming.
• 48:03
  Speaker 3: Well, first of all, the way Senator Sanders talks about
• 48:07
  Speaker 3: it is he wants people to work eight hours less
• 48:11
  Speaker 3: per week but not take a cut and pay. And
• 48:14
  Speaker 3: that strikes me as you know, unrealistic. I don't see
• 48:18
  Speaker 3: how that works. I think that leads to lots of
• 48:23
  Speaker 3: unintended consequences that would be detrimental to to workers. If
• 48:28
  Speaker 3: you wanted to have a for the option of a
• 48:31
  Speaker 3: four hour week, a four day week, and you know,
• 48:35
  Speaker 3: people could still be considered working full time and get
• 48:38
  Speaker 3: those same sorts of benefits. You know, that's the conversation
• 48:40
  Speaker 3: worth having. But you know, output would go down and
• 48:43
  Speaker 3: so we you know, we'd have less we'd have less
• 48:46
  Speaker 3: growth presumably, and that's kind of a trade off. It's
• 48:50
  Speaker 3: interesting because for economists a lot of time, social welfare
• 48:54
  Speaker 3: well being is too easily analogized to GDP. But if
• 48:58
  Speaker 3: I told you we can have less GDP but we
• 49:00
  Speaker 3: can work less hard, you might say Europe, and.
• 49:04
  Speaker 1: You know that is what somebody would say, Europe. Look
• 49:06
  Speaker 1: at them and you might say, that's right. And we
• 49:09
  Speaker 1: we we we drove right past them in our GDP
• 49:12
  Speaker 1: over the way we drove right past.
• 49:14
  Speaker 3: Them a GDP. But when it comes to if you
• 49:15
  Speaker 3: actually look at measures of happiness, you know they actually
• 49:18
  Speaker 3: kick our butts in a lot of ways, especially around
• 49:21
  Speaker 3: this issue of work. So the problem I have with
• 49:24
  Speaker 3: the conversation is when it sounds like there's no trade off.
• 49:27
  Speaker 3: If you accept that there's a growth trade off, but
• 49:29
  Speaker 3: maybe you improve social welfare, fine, I'd be willing to,
• 49:33
  Speaker 3: you know, entertain that idea. It's not something I think
• 49:36
  Speaker 3: about a lot though these days, and it's not even
• 49:38
  Speaker 3: really on my list of policy ideas. Why because affordability
• 49:43
  Speaker 3: is such a huge issue right now, and I think
• 49:45
  Speaker 3: it's been for a while and it's going to be
• 49:47
  Speaker 3: going forward, and if you're working one day less, you're
• 49:51
  Speaker 3: going to make less and life is going to be
• 49:53
  Speaker 3: you know, presumably even less affordable. So I think that
• 49:56
  Speaker 3: that's a real challenge right now.
• 49:57
  Speaker 1: No, in fact, I think the more like I think
• 50:00
  Speaker 1: the near term future of work, certainly for my kids,
• 50:04
  Speaker 1: is I assume and frankly that I look at the
• 50:08
  Speaker 1: situation I've put together for myself, it's probably similar to
• 50:11
  Speaker 1: what you've put together. Is you don't have one job,
• 50:14
  Speaker 1: you have four or five jobs, and that that is
• 50:17
  Speaker 1: going there is going to be a larger and larger
• 50:19
  Speaker 1: segment of the population that is going to have multiple
• 50:22
  Speaker 1: income streams. How does what does federal how does federal
• 50:27
  Speaker 1: policy have to change to support uh an economy that's
• 50:32
  Speaker 1: going to have more essentially more people in the I
• 50:38
  Speaker 1: don't like to use gig work because I think people
• 50:41
  Speaker 1: immediately assume, oh, uber driver. I don't think that's going
• 50:43
  Speaker 1: to you know, you know, it could be just all
• 50:45
  Speaker 1: sorts of things, could be part of the service economy,
• 50:47
  Speaker 1: of professional economy, et cetera.
• 50:48
  Speaker 3: Yeah, I think in two major ways. One we've actually
• 50:52
  Speaker 3: talked about, which is healthcare. Of course, most working age
• 50:56
  Speaker 3: people get their healthcare not just for them, but for
• 50:59
  Speaker 3: their family through the employer. So if we move to
• 51:02
  Speaker 3: a situation where you're not as connected to one employer
• 51:07
  Speaker 3: such that you have employer sponsored insurance, we're going to
• 51:10
  Speaker 3: need a system like Medicare for more. The Obamacare exchanges,
• 51:14
  Speaker 3: by the way, were invented to help solve that problem,
• 51:17
  Speaker 3: but they're you know, they're kind of clue g and
• 51:19
  Speaker 3: they're kind of expensive, and you and I already talked
• 51:21
  Speaker 3: about that. So we have to make sure that you know,
• 51:24
  Speaker 3: we we have a very uniquely weird and kind of
• 51:28
  Speaker 3: dumb system in this country where we we have most
• 51:32
  Speaker 3: working age people getting their healthcare through work. You know,
• 51:35
  Speaker 3: that's a huge burden on companies that would rather make
• 51:38
  Speaker 3: cars and not provide health insurance. So breaking that asunder.
• 51:43
  Speaker 3: You know, it has historical roots that we can get into.
• 51:46
  Speaker 3: After World War Two when there were wage freezes in place.
• 51:49
  Speaker 3: You have to figure out a way to give people
• 51:50
  Speaker 3: more benefits, but that would be a great place to start.
• 51:53
  Speaker 3: And secondly, labor standards, the umbrella of labor standards, you know,
• 51:57
  Speaker 3: wage protections, unemployment, insurance, time pay. That's all connected to
• 52:03
  Speaker 3: traditional work at traditional schedules. So you'd want that umbrella
• 52:07
  Speaker 3: to be reshaped to protect people who didn't necessarily have
• 52:10
  Speaker 3: traditional work arrangements.
• 52:12
  Speaker 2: Well, you're right.
• 52:13
  Speaker 1: I remember that was one of the art pro one
• 52:15
  Speaker 1: of the arguments that the Obama administration was using to
• 52:18
  Speaker 1: sell the Affordable Care Act, that hey, portability, you don't
• 52:22
  Speaker 1: have to you know, you can, you can work part
• 52:25
  Speaker 1: time at a company without worrying that. You know, you
• 52:27
  Speaker 1: don't feel like you can leave. You know that sort
• 52:29
  Speaker 1: of thing. You're not stuck in a job, right job
• 52:33
  Speaker 1: because of healthcare. At the same time, I do worry
• 52:37
  Speaker 1: about companies offering a lot of contract work, which is
• 52:41
  Speaker 1: code for I ain't giving you any benefits.
• 52:43
  Speaker 3: Absolutely, and you know that's another reason why healthcare form
• 52:48
  Speaker 3: is so vital. And again those a lot of those
• 52:51
  Speaker 3: folks are getting healthcare on the exchanges right now, and
• 52:54
  Speaker 3: you know, it's better than it's better than not being covered,
• 52:57
  Speaker 3: but they don't love it.
• 52:58
  Speaker 1: Let me ask you about two truck policies and what
• 53:02
  Speaker 1: you make of them. And in the if you were
• 53:04
  Speaker 1: part of the next administration, would you try to scrap
• 53:09
  Speaker 1: it or enhance it.
• 53:12
  Speaker 2: One is no tax on tips.
• 53:14
  Speaker 1: I was amused the other day by an article that
• 53:17
  Speaker 1: I R S agents have to figure out is this
• 53:19
  Speaker 1: pornography or not pornography? I mean I just sort of like, oh, wow, well,
• 53:25
  Speaker 1: you know, all of a sudden, a whole bunch of
• 53:27
  Speaker 1: sixteen year old boys might volunteer to work at the
• 53:29
  Speaker 1: I R S or intern Sorry.
• 53:31
  Speaker 3: Yeah, no, I think that's really about Do you want
• 53:35
  Speaker 3: to say the second one again?
• 53:37
  Speaker 4: Well?
• 53:37
  Speaker 1: The second The second one is that is the these
• 53:40
  Speaker 1: new essentially baby bonds that you know, they're calling them
• 53:44
  Speaker 1: Trump accounts. But the but the Michael Dell, you know
• 53:47
  Speaker 1: that who just actually added to to sort of expand
• 53:50
  Speaker 1: the pool. I want to get into that a minute,
• 53:51
  Speaker 1: but let's start with no tax on tips, because you know,
• 53:54
  Speaker 1: my joke has been I'd like to be paid all
• 53:56
  Speaker 1: in tips, now, please exactly.
• 53:58
  Speaker 3: So, the first thing we worried about, literally thirty seconds
• 54:01
  Speaker 3: after somebody told me about that, I said, you're gonna
• 54:04
  Speaker 3: have a lot of you know, stockbrokers who are saying,
• 54:07
  Speaker 3: you know, I earn a dollar a year and the
• 54:10
  Speaker 3: rest is tempts. Now, they did try to structure the
• 54:15
  Speaker 3: policy to block that, and that just adds a level
• 54:20
  Speaker 3: of complexity that is really the antithesis of smart tax policy.
• 54:25
  Speaker 3: The minute you have eighty occupations that are okay and
• 54:28
  Speaker 3: a bunch that aren't, you can imagine what's going to
• 54:31
  Speaker 3: go on in tax court.
• 54:33
  Speaker 1: And what's a good thing you're getting rid of IRS
• 54:36
  Speaker 1: agents because you know.
• 54:37
  Speaker 3: Yeah, right. So the first problem is is that it's
• 54:42
  Speaker 3: easy to game, and I suspect that their guardrails are insufficient.
• 54:46
  Speaker 3: The second problem is that there are a lot of
• 54:49
  Speaker 3: low wage workers who get tips and don't pay any
• 54:54
  Speaker 3: federal income tax, so this doesn't help them at all.
• 54:59
  Speaker 3: You know, most low wage workers simply don't have a
• 55:01
  Speaker 3: federal tax liability, so it means nothing to them. And
• 55:06
  Speaker 3: then you know, uh, the third problem is, you know,
• 55:11
  Speaker 3: we actually have a very significant revenue problem in this country,
• 55:15
  Speaker 3: and so tax cuts are one reason why we are
• 55:21
  Speaker 3: looking at a really unsustainable fiscal path. So I think
• 55:24
  Speaker 3: it's complex, I think it's poorly targeted, and I think
• 55:27
  Speaker 3: it's a waste.
• 55:28
  Speaker 1: But it was like I was just going to say,
• 55:32
  Speaker 1: the problem you have is it sort of strikes me
• 55:35
  Speaker 1: as what she said, like, look, well we had to
• 55:37
  Speaker 1: work through the insurance companies even though we didn't want to.
• 55:40
  Speaker 2: This feels like a.
• 55:41
  Speaker 1: Policy that that that nobody's going to be wanting to
• 55:45
  Speaker 1: be the member of Congress that says no, no, no,
• 55:47
  Speaker 1: no no, let's bring taxing.
• 55:48
  Speaker 2: Let's put tips back into income taxable income.
• 55:51
  Speaker 3: Yeah, you're probably right, and so you know the minute
• 55:54
  Speaker 3: you open it's so much easier to grant a tax
• 55:58
  Speaker 3: cut than to take it back. Obviously. I mean, I
• 56:00
  Speaker 3: think if we start seeing a lot of fraud, which
• 56:04
  Speaker 3: I predictably will, at least we might be in a
• 56:07
  Speaker 3: market where we can put up more guardrails.
• 56:10
  Speaker 1: Let's talk about the Trump baby bonds or you know,
• 56:14
  Speaker 1: the the the birth and I guess this is their
• 56:19
  Speaker 1: way of encouraging trying to encourage uh more families, let's
• 56:25
  Speaker 1: be you know which. And you guys were fighting for
• 56:28
  Speaker 1: the child the childcare text credit. Yeah, I sort of
• 56:31
  Speaker 1: believe that. Frankly, I think you guys should have died
• 56:35
  Speaker 1: on that hill. And I don't know why you didn't politically.
• 56:38
  Speaker 3: But in terms of what do you mean like.
• 56:40
  Speaker 2: Fight, never have given it up on it.
• 56:42
  Speaker 1: I mean, I think that was that was something worth
• 56:44
  Speaker 1: losing an election, you know, taking it to the ballot box.
• 56:48
  Speaker 1: I just you know, never never giving up on it.
• 56:50
  Speaker 1: I understand why. You know, you thought, well, we have
• 56:54
  Speaker 1: a bigger deal to make here, and it's possible to
• 56:56
  Speaker 1: do this, and you certainly look that's the old legislator
• 57:00
  Speaker 1: in Joe Biden.
• 57:01
  Speaker 2: I get it.
• 57:02
  Speaker 1: But the childcare tax credit, that was that was, it
• 57:06
  Speaker 1: mattered to people, it has bipartisan interest, like it just
• 57:10
  Speaker 1: felt like I felt like a political It felt like
• 57:13
  Speaker 1: a policy hill worth dying on because there's going to
• 57:17
  Speaker 1: be something for this, right it. You know, right now
• 57:19
  Speaker 1: it's baby bonds. I don't think this quite cuts it.
• 57:23
  Speaker 1: Although I can imagine now people will say, hey, you
• 57:25
  Speaker 1: can use that money for childcare.
• 57:27
  Speaker 3: Well you can't use it so you can't use it for.
• 57:30
  Speaker 2: A team yet, but you know it's coming.
• 57:32
  Speaker 4: You can't.
• 57:32
  Speaker 3: Yeah, maybe, But so on your childcare tax credit point,
• 57:35
  Speaker 3: you know, we didn't have the votes on the Democratic
• 57:38
  Speaker 3: Caucus mansion with against it. So and I think Cinema
• 57:41
  Speaker 3: is too, so you know, we didn't have the votes.
• 57:44
  Speaker 3: But I take you know, I take your point. It
• 57:45
  Speaker 3: was real. I think that many of us were a
• 57:48
  Speaker 3: little surprised by how little the public seemed to fight
• 57:54
  Speaker 3: for it. You know, a lot of times when you
• 57:56
  Speaker 3: get what I said a minute ago, when you provide
• 57:58
  Speaker 3: people with a benefit like that, a lot of times
• 58:00
  Speaker 3: taking it away is is.
• 58:02
  Speaker 1: Been let me let me positive theory on that there. Sure,
• 58:06
  Speaker 1: the Cholpcare tax credit came just when the government was
• 58:09
  Speaker 1: shoveling out other money too. Yeah, so people, and I
• 58:12
  Speaker 1: don't know if they fully appreciated what was it.
• 58:14
  Speaker 3: Probably became viewed as like another pandemic era of things.
• 58:18
  Speaker 2: So you're COVID thing.
• 58:19
  Speaker 3: Yeah, So look, I think giving one thousand dollars of
• 58:24
  Speaker 3: seed money for what really is like an IRA account
• 58:29
  Speaker 3: is a fine thing to do. I think the problem
• 58:33
  Speaker 3: is that it's not at all targeted and that it
• 58:37
  Speaker 3: will exacerbate intergenerational inequality. You're allowed to contribute, your family
• 58:43
  Speaker 3: members are allowed to contribute five thousand dollars a year
• 58:47
  Speaker 3: tax free to these to these funds. I think it's
• 58:50
  Speaker 3: tax free. Obviously, the seed money you don't pay taxes
• 58:53
  Speaker 3: on until you take it out. You can't touch it
• 58:56
  Speaker 3: for eighteen years, and so who's going to be able
• 58:59
  Speaker 3: to make those contributions Not low income people, high income people.
• 59:03
  Speaker 3: So it's going to exacerbate inequality over the long run.
• 59:07
  Speaker 3: And I think that's problematic. I would have targeted in
• 59:10
  Speaker 3: a different way, so that instead of giving money to
• 59:13
  Speaker 3: savers who are going to save anyway, which you know,
• 59:16
  Speaker 3: my kids are, your kids, probably are targeted to families
• 59:21
  Speaker 3: that don't have the resources to make that saving and
• 59:23
  Speaker 3: add to it over time so that it can build.
• 59:27
  Speaker 4: Uh.
• 59:28
  Speaker 1: Well, it's interesting to me. What the what the what
• 59:31
  Speaker 1: the Dells did? They concentrated the donation by zip code.
• 59:36
  Speaker 3: Yeah, so that is a much more targeted approach, and
• 59:39
  Speaker 3: you know, I think a better one. I don't know
• 59:41
  Speaker 3: that we can kind of you know, philanthropy to get
• 59:43
  Speaker 3: us where we need to go on this.
• 59:44
  Speaker 1: But well, and I'm curious of that. I find this
• 59:47
  Speaker 1: to be really I'm gonna I can't. I'm really uncomfortable
• 59:51
  Speaker 1: with the idea of government spending becoming a charitable gift.
• 59:57
  Speaker 1: And I don't know how else to put it. I'm
• 1:00:00
  Speaker 1: not I don't really. I can't sit here and say, well, jeezus,
• 1:00:03
  Speaker 1: it's bad what the Dells are doing, or it was bad?
• 1:00:07
  Speaker 1: What Who was it was Ito who threw the money
• 1:00:11
  Speaker 1: to pay the pay the military or to help contribute. Yeah,
• 1:00:17
  Speaker 1: I think it was one of the Melons, one of
• 1:00:19
  Speaker 1: the Melons did that, and you're like, well, I appreciate
• 1:00:23
  Speaker 1: your patriotism, right, Like, I think that's great, But is
• 1:00:27
  Speaker 1: that a habit the government should get into that? Hey,
• 1:00:29
  Speaker 1: well maybe they need a chair, they need a foundation
• 1:00:33
  Speaker 1: to raise money for.
• 1:00:34
  Speaker 3: So I mean, this is why we have a progressive
• 1:00:37
  Speaker 3: income tax. So you can say, boy, cross my fingers.
• 1:00:41
  Speaker 3: I hope there's some really generous patriots out there who
• 1:00:44
  Speaker 3: will provide us help where we need it, like fund
• 1:00:46
  Speaker 3: the military. Or you can say we're going to progressively
• 1:00:51
  Speaker 3: tax people. If this economy delivered you billions hundreds of
• 1:00:55
  Speaker 3: billions trillions, we're gonna, you know, definitely take some of
• 1:00:58
  Speaker 3: that back and we're going to use it for things
• 1:01:00
  Speaker 3: that the electric decides are uh, you know, the electric
• 1:01:05
  Speaker 3: decides through they're elected officials, is what we want to
• 1:01:07
  Speaker 3: spend money on. And you know that's how democracy works.
• 1:01:11
  Speaker 3: So I don't like the idea of leaving it to
• 1:01:14
  Speaker 3: the kindness of strange of stranger trillionaires to make up
• 1:01:19
  Speaker 3: the difference. I think that's why we have taxes.
• 1:01:22
  Speaker 1: Is if you're understanding that Dell's are going to get it,
• 1:01:25
  Speaker 1: is this tax free? Their charitable donation.
• 1:01:28
  Speaker 3: Is charitable deduction. Yeah, so this is it's a deduction
• 1:01:32
  Speaker 3: that you deducted at your your time.
• 1:01:34
  Speaker 1: Fact, so how much I mean, so that means you
• 1:01:36
  Speaker 1: and I are subsidizing this charitable giving already.
• 1:01:39
  Speaker 3: Correct, that's a great point. I mean, uh, and you
• 1:01:43
  Speaker 3: know I don't. Yeah, it's a lot of savings there
• 1:01:48
  Speaker 3: for them. And look, you know a lot of people
• 1:01:50
  Speaker 3: have come after the charitable deduction as a way to
• 1:01:53
  Speaker 3: raise more revenue, and it never really seems to get anywhere.
• 1:01:58
  Speaker 3: You know, maybe for good reason. I mean, and it's
• 1:02:00
  Speaker 3: a lot of but.
• 1:02:01
  Speaker 1: I thought Obama lowered it. Then he lowered the rate
• 1:02:04
  Speaker 1: from down to I thought he lowered how much. You
• 1:02:08
  Speaker 1: definitely remember trying to do so, okay, and it never happened.
• 1:02:11
  Speaker 1: I didn't think we got there, but I could be misrememory.
• 1:02:14
  Speaker 2: For some reason.
• 1:02:15
  Speaker 1: I thought it went down from you know, twenty went
• 1:02:17
  Speaker 1: to twenty you know, twenty eight set of three.
• 1:02:19
  Speaker 2: Whenever we used to.
• 1:02:20
  Speaker 3: Have revenue meetings, which we had all the time because
• 1:02:23
  Speaker 3: we're desperately nure, somebody would say can we move that,
• 1:02:27
  Speaker 3: and you know, the next meeting higher up would come
• 1:02:29
  Speaker 3: the answer, no, we can't.
• 1:02:31
  Speaker 2: No, you can't. That's funny, let me get you out
• 1:02:33
  Speaker 2: of here.
• 1:02:33
  Speaker 1: On the Chobcare tax credit, what would it take to
• 1:02:37
  Speaker 1: make it permanent? And how would you pay for it?
• 1:02:39
  Speaker 3: It's not it's not cheap. I think, yeah, I think
• 1:02:45
  Speaker 3: if you're talking ten years, you're in the I think
• 1:02:49
  Speaker 3: in the seven eight hundred billion range. I I know
• 1:02:53
  Speaker 3: these numbers. When I'm working on that stuff.
• 1:02:55
  Speaker 2: I'm not gonna We're not gonna hold it you.
• 1:02:57
  Speaker 3: I think that's the range. And when we obviously when
• 1:03:04
  Speaker 3: we did it, it was deficit financed. And I don't
• 1:03:08
  Speaker 3: know if you've seen any of my work on this,
• 1:03:09
  Speaker 3: but I am a pretty much a lifetime fiscal dove
• 1:03:14
  Speaker 3: who's lately become a bit hawkish.
• 1:03:17
  Speaker 1: Do you feel like you're like, Okay, now you've everybody
• 1:03:19
  Speaker 1: is at you know, I've my entire adult life has
• 1:03:23
  Speaker 1: you know, the sky's been falling when it comes to
• 1:03:25
  Speaker 1: the death. The guy's been falling. And it's people I trust,
• 1:03:28
  Speaker 1: not just ideologues. Right, this guy's been falling. And somehow
• 1:03:32
  Speaker 1: it turns out the Paul Kirkman's of the world and
• 1:03:35
  Speaker 1: the you know those the fiscal doves like yourself, Well, no,
• 1:03:39
  Speaker 1: our debt to GDP ratio can be higher, and we
• 1:03:41
  Speaker 1: can do this, and we can do that, but you
• 1:03:45
  Speaker 1: think we might be at the breaking point.
• 1:03:47
  Speaker 3: I think I don't think we're at the breaking point,
• 1:03:49
  Speaker 3: but I think we're at a level of BUN sustainability
• 1:03:52
  Speaker 3: that is dangerously tempting a breaking point. And it's not
• 1:03:55
  Speaker 3: even clear what a breaking point is. We have a
• 1:03:58
  Speaker 3: sovereign currency that we print, so you know, it's not
• 1:04:01
  Speaker 3: like we're going to have a list trust moment because
• 1:04:05
  Speaker 3: our debt markets are so large and so liquid, and
• 1:04:08
  Speaker 3: we have the dominant global currency and all that, and
• 1:04:11
  Speaker 3: the dollar. But the reason I flipped, and I've written
• 1:04:15
  Speaker 3: extensively about this, including a New York Times bed that
• 1:04:19
  Speaker 3: had a graphic in it that kind of explains this,
• 1:04:21
  Speaker 3: is because interest rates are higher now. And I think
• 1:04:23
  Speaker 3: the thing that people missed although all those years where
• 1:04:26
  Speaker 3: they had their hair on fire, is they just didn't
• 1:04:28
  Speaker 3: recognize them. It's kind of right in front of you,
• 1:04:30
  Speaker 3: how the real interest rate was so low, even negative
• 1:04:33
  Speaker 3: in some cases, that we could HANDI le service our
• 1:04:36
  Speaker 3: debt without breaking a sweat. But now the interest rate
• 1:04:38
  Speaker 3: is higher, and my priors are that it's going to
• 1:04:41
  Speaker 3: stay up. You don't know that's an impossible variable to forecast.
• 1:04:44
  Speaker 3: But this is again a hope for the best plan
• 1:04:47
  Speaker 3: for the worst moment. So I wouldn't support a full
• 1:04:51
  Speaker 3: out ten year expenditure six seven hundred billion for an
• 1:04:54
  Speaker 3: extended child tax credit without a pay for. But those
• 1:04:58
  Speaker 3: pay fors are readily available if you're willing to raise taxes,
• 1:05:03
  Speaker 3: especially at the higher end. And in fact, in our
• 1:05:06
  Speaker 3: budgets we did that. So you can actually go back
• 1:05:09
  Speaker 3: and read how we financed a permanent extension of the
• 1:05:14
  Speaker 3: childcare tax. And it may not have been quite as
• 1:05:16
  Speaker 3: generous as what we had in the in the pandemic recession,
• 1:05:20
  Speaker 3: but it was it was plenty generous.
• 1:05:22
  Speaker 1: Is there any worry as an economist that that in
• 1:05:27
  Speaker 1: some ways that in the same way that the insurance companies,
• 1:05:31
  Speaker 1: because they know as government subsidy is coming, they kind
• 1:05:34
  Speaker 1: of frankly mess with the prices so they're able to,
• 1:05:36
  Speaker 1: you know, make sure they get some profit and they
• 1:05:39
  Speaker 1: know people are going to have a certain amount of money.
• 1:05:41
  Speaker 1: Do you worry that that happens to the to the
• 1:05:44
  Speaker 1: that basically child childcare becomes an industry if you will.
• 1:05:51
  Speaker 3: Not so much with childcare. I just think that the
• 1:05:56
  Speaker 3: this is all get slightly technical. For a second, childcare
• 1:05:59
  Speaker 3: has it's a very high supply elasticity, meaning that if
• 1:06:04
  Speaker 3: people want it and they have the resources to get it,
• 1:06:09
  Speaker 3: you start seeing childcare centers pop up. So the responsiveness
• 1:06:13
  Speaker 3: of childcare production to demand is quite strong. And you know,
• 1:06:20
  Speaker 3: so that flexible elasticity there is helpful such that if
• 1:06:24
  Speaker 3: we were able to provide people the subsidies they need,
• 1:06:27
  Speaker 3: and when we have in the past, we've seen this.
• 1:06:30
  Speaker 3: I don't think you see, you know, particularly even medium
• 1:06:33
  Speaker 3: term pressures on costs.
• 1:06:35
  Speaker 1: Do you end up I'm going to get you out
• 1:06:36
  Speaker 1: of here, but do you end up imagining that instead
• 1:06:39
  Speaker 1: of a childcare tax credit, it becomes a what I
• 1:06:42
  Speaker 1: would call a home care tax credit, because maybe you're
• 1:06:45
  Speaker 1: taken care of an elderly parent.
• 1:06:47
  Speaker 3: Well, that's certainly something Biden was interested in. You know,
• 1:06:50
  Speaker 3: I tend to like the idea of not even a
• 1:06:53
  Speaker 3: childcare tax credit, but a child tax credit. If you're
• 1:06:57
  Speaker 3: raising kids, your life is you've done this the peh
• 1:07:00
  Speaker 3: if you're if you're raising kids, even if you've got
• 1:07:03
  Speaker 3: a decent income, your life is a lot more expensive.
• 1:07:06
  Speaker 3: Childcare can cost, you know, twenty five hundred dollars a
• 1:07:09
  Speaker 3: month easily in an area like this.
• 1:07:11
  Speaker 1: So you'd be in favor of a tax code that
• 1:07:13
  Speaker 1: essentially played favorites with four parents with kids at home.
• 1:07:18
  Speaker 3: Yeah, and some of those parents probably are in a
• 1:07:20
  Speaker 3: Sandwich generation and if they want to use it for
• 1:07:22
  Speaker 3: childcare or elder care, they could. But you know, I
• 1:07:24
  Speaker 3: think a generous child tax credit that was targeted by
• 1:07:27
  Speaker 3: the Way, which also helps keep the price down. I
• 1:07:30
  Speaker 3: don't think we need to give it to you know,
• 1:07:31
  Speaker 3: millionaires and billionaires.
• 1:07:34
  Speaker 1: Jared, I'm going to let you go. Where can people
• 1:07:36
  Speaker 1: find your work? I know you've got a substack. Tell
• 1:07:37
  Speaker 1: them where you're also, I think you're involved in a
• 1:07:40
  Speaker 1: couple of things, so pitch away.
• 1:07:41
  Speaker 3: Yeah. So I write. I write basically in three different places.
• 1:07:46
  Speaker 3: Stanford Institute for Economic Policy Research, seeper You can see
• 1:07:50
  Speaker 3: my work up there. In the Center for American Progress.
• 1:07:53
  Speaker 3: We've recently put a housing report on housing affordability. You
• 1:07:56
  Speaker 3: can find that up there. It's called Build, Baby Build.
• 1:07:58
  Speaker 3: But then almost you know, every couple days I write
• 1:08:01
  Speaker 3: something on my substack, which is called Jared substack, and
• 1:08:04
  Speaker 3: it's easy to find. So that's where you can read
• 1:08:07
  Speaker 3: my stuff.
• 1:08:08
  Speaker 2: Excellent It's great to catch up. I miss a.
• 1:08:10
  Speaker 1: You know, we're it's uh, we joked to we used
• 1:08:13
  Speaker 1: to occasionally be in the same pickup basketball game. But yeah, yeah,
• 1:08:18
  Speaker 1: I think that's behind both of us. My friend, yeah,
• 1:08:20
  Speaker 1: father time. Father time has scared us away on that.
• 1:08:23
  Speaker 1: That and you know, fear of middle aged injuries at
• 1:08:27
  Speaker 1: this point. Good to catch up, Jared, appreciate it.
• 1:08:30
  Speaker 3: To take care.
• 1:08:32
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