The Perils of Being Peak Millenials (w/ Jeanna Smialek)

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I think that one important thing to remember when it feels like things are really bleak out there is there have been a lot of times in history when things have seemed really bleak economically and what tends to happen is something in the economy just totally surprises you. We just have increased six or seven percent since 2000, but the cost of being has increased six to seven percent. There is no world where this midterm is not hugely influenced by where gas prices are. This is Financial T. What's up, Sippers? Welcome back to Financial T. This is a podcast where I, Mrs. Stav Jones, teach you how to build wealth with a side of market drama, money scandals, and of course, financial pop culture. Today we have Gina Smelek and she is a correspondent for The New York Times. She covers foreign policy. She covers economics. I love her work and she is also the author of this really interesting new book. I just finished it. It's called The Invisible Hand of Maria Edgeworth. It comes out October 6th, so it'll be out by the time you guys get this episode and I'm just excited for you to be here to spill the economic tea. Tell us about Maria. I think this is going to be really interesting to my audience, so thank you, Gina, for being on the show. Yeah, thank you for having me. We always start with a few rapid-fire questions. First things first, what was your best purchase of the week? What was your worst purchase of the week and how much did each cost? Oh, that's a good question. I just bought a flight to come back and see my new nephew, who is we're expecting any day now. I'm going to come back to Pittsburgh, which is where I'm from in a few months to meet him, and so that was probably my best purchase of the week. That was a little over $1,000 because I live in Brussels these days and fuel costs are high. It was an economy flight and nevertheless still pretty expensive, but still a good purchase. And I would say my worst purchase of the week is I somehow bought a $7 Americano yesterday, and I, you know, coffee's got an expensive, but I feel like $7 is beyond the pale even for a good coffee and it was not a good coffee. First of all, I hate that it wasn't a good coffee, but also $7, I'm like, girl, we're in Brooklyn, that's normal. Like, okay, maybe it's because I'm coming from Europe, and it's not normal, but also it was just an extremely subpar airport coffee and it just felt it should not have cost this much. Well, okay. I hear you, but I'm also like, welcome to America, sweetie. Like, that is how much they're charging these days. I mean, I've seen a $13 coffee. $13? Yes. My next question for you is, how did you make your first dollar? Oh, I was a babysitter, so like, so many a millennial woman, yeah, I started babysitting when I was 13, I think, which I kind of can't believe they let us do, but I did nevertheless. Yeah. So that would be how I made my first dollar. I love it. Do you remember how much you made? I think I made $5 an hour, which at 13 felt like a lot of money. Yeah. A hundred percent. For many listeners, though, who might not know your work as well as I do, or have listened to you on the daily, you had a viral episode that we're going to talk about in a little, but can you just introduce yourself and give us a little bit about your background? Sure. So I have been at the New York Times for a little bit over seven years before that I was in Bloomberg. I've spent most of my career covering economics, and in particular, the Federal Reserve. So my first book was about the Federal Reserve, and I have recently shifted to covering foreign policy. And so I now live in Brussels, Belgium. I'm the Bureau Chief there for the New York Times. And so I do a lot of trade policy, a lot of sort of internationally econ, and then also a lot of international politics. And so long time, writer on economic issues, now doing it from a slightly different lens. And you know, you first came across my desk as Taylor Swift would say, because you went viral on the daily, the New York Times podcast, for an episode titled It Sucks to Be 33. So can you just briefly cover what you talked about in that episode, because it was so good? Oh, thank you. That's very kind of you. Yeah. So the episode is about the generation that I like to call peak millennial, which is basically the birth group that was born in 1990 and 1991, which is us. Yes. Exactly. This was a very narcissistic topic to study. But basically, we are the biggest Berthier in American history. And as a result, we've had a lot of pressure as we move through the system. We're a huge consumer class, but we also competed a lot for positions at colleges, for entry level jobs, for the housing market, for rental apartments. And so it was sort of a story documenting that competition and talking about what it meant for the broader economy. Yeah. In that episode, you talk about like, oh, when I got married, everyone else was getting married, so it made the cost of getting married higher. Or like, when I wanted to go to school, there were also so many other people who wanted to go to school. So the cost of college went up. Like, it was very interesting, because you sort of just hear the doomsday about the economy, but no one breaks it down from that perspective of like, oh, the supply was less, and the demand is more. So obviously, prices are increasing. Completely. And it's interesting. I think the reason that I've talked to a lot of people about this episode, and I think the reason it hits such a sort of a struck, such a nerve is because so many people were sort of walking around life, thinking like, I'm just such an average person, like, I feel like I do things when everyone else is doing them. Like, I walked around life thinking that for a long time, and then I realized that I knew why I was average, and it's because statistically, there were so many of us, and I thought maybe it'd be useful to put that out there. And then I got that feedback so much, like, oh, this makes so much sense of something that I've felt for a long time, but there are just so many people who are doing the same things at the same time, and in a way that actually exerted some sort of real force on the economy. I made it hard to afford things. Totally. There you go. You're, you're, you're agonimistic. The agonimist, agonimist. And also, I feel like when people say, at my age, my parents had a house, and they had two kids, like, what are they leaving out of that comparison? Yeah. You know, I think one thing that they're leaving out that's really important is, and it's a little passe to say it at this point, but the 2008 recession, you just can't forget it. We came into the labor market, and it was just so incredibly weak, and it's scarred, and it took years to get really better. And so, I think that rough, early entry is something that really haunted millennials for a long time. And I think you're seeing now that they're doing a lot of the same things that their parents did. You know, homeownership is above 55% now. You know, people are steadily moving into homeownership. People are getting married. People are starting to have kids. Because things are taking a lot longer than they previously did, and it's not that this generation is completely out of luck, you know, actually 401k saving recently looks pretty decent. It does mean that things are, you know, taking a longer time than they previously did. Mm-hmm. And we're sort of zigzagging. Like, our parents, I feel like, went through the steps of getting the American dreams. So, 1, 2, 3, 4, and we're a little like, 1, 7, 2, 6, 3, like, you know, we, the kid might come first, and then the career, like, 10 years later, you know, and then you got married. Completely. And I think it's worth noting that there have been additional disruptions, right? You know, we had 2008, then we had 2020, which was a big disruption. Yeah. Then we had the inflation after 2020, which I kind of think deserves to be its own class of economic event. And now we're still living in the sort of aftermath of that inflation. And so I think it's been relevant to this generation. And I think it, to some degree, will also be relevant to generation Z. And it's also so interesting because I feel like we compare ourselves to those around us who are able to afford those milestones earlier themselves, but then we're also comparing ourselves to people who can afford the milestones earlier because their parents are paying for it. That is a really interesting trend that I, when I was covering the housing market heavily, this is something realtorist would bring up to me all the time. And you can see in the data, you can see the, the boomers are helping their millennial kids to buy houses. Yeah. Because you know, realtorists would tell me that it's just heartbreaking because you'll see like a young couple who's about to buy a house and then they'll come and get outbid by a boomer who's buying it for their kid. Oh, gosh. Yeah. And it's a really interesting phenomenon that's really changed the housing market. And particularly in some metros, I think there are some places where this is really, really predominant now. And so like if you're trying to buy and down to how my Emmy these days, and you don't have a parent, like good luck, you know, so I think there, I think it's a really interesting trend. So interesting, but also like if you're can't afford in downtown Miami, I think you're, that's a good thing. Maybe move. Maybe you don't need to live there. You also said in the episode that delayed doesn't necessarily mean derailed. So which delays do you think that people can recover from and which delays do they have these lasting costs they'll never get you know out of yeah so I think the economic literature would tell us that if you start your career at a weekly market that follows you the rest of your life essentially. Wow. Not necessarily for every single individual but large a generation that starts on a week foot is always going to struggle to make up that ground. I think this is actually one place where we've had some good news on the millennial front you know I've started covering this generation in its economic sort of fate. Basically when I was entering the workforce you know so I've been doing this for more than a decade now and I remember back when we were young back when we were new in the labor market there was a lot of concern that we would never have participation rates that looked like those of older people so people wouldn't be working at the same numbers that older generations were and that has really not been true. Millennials are in labor market now and so I think there's some really good news there. If you look at millennial wage earnings they're pretty good they're not bad and if you look at 401k balances they are really trending up still a little bit low I think retirement advisors would mostly tell you that they'd like to see millennials putting a little bit more away but on average they're not disastrous it could be a lot worse and so I think there's actually some reason for hope there. Oh good we love a little hope that's a good thing and do you think that the you know Gen Z is sort of having the same experience as 2008 a little bit because of AI? It's really interesting because you do see really weak entry-level job market it's a confusing time to talk to economists about sort of that entry because there was a phenomenon where the job market was so strong for Gen Z that they weren't going to college and they weren't going into any additional post high school training and that has reversed itself and actually economists were very worried about the fact that they weren't getting any high post high school training and so as the entry-level job market has weakened off of that very hot level and they are going back to schools some economists you talk to will say like this may not be the worst thing in the world and so I think Gen Z's story is going to be a little bit complex because it's been there have been some really sort of counter-railing trends happening at the same time. There's AI on one hand maybe that makes them go back and get some sort of you know even if it's just a certificate in some practical skill that might leave them better off in the long run. Plumbing, you got to get more Gen Z plumbers right? We love to talk about the plumbers. We really do. I thought I'd be my next guest. You got to bless the plumber. You said something on the daily in that episode that I thought was so interesting too about our generation producing quote so many baristas with bachelor degrees. So basically where people who are overeducated are now forced into entry-level job so I'm just curious how you think that's evolved in last 10 to 12 years and if it's worth it to still go to college. Yeah so I think it's a really interesting set of trade-offs and I think I will not give a satisfying answer to the question of is it worth it to go to college because I think it's very much an it depends but I think what we can say sort of concretely what we can see in society is that we had a really really high college attendance rate during our years in the the college pool right immediately after and then that started to fall off actually because the job market got a lot stronger and when we have strong job markets we tend to have fewer people in college. It's trying to back up recently so people are still deciding that going to some sort of post-secondary education is a good idea for them but the mix has changed a little bit. So you're seeing fewer people go to four-year colleges and more people opting for sort of more technical or more practical skills and so I do think the jury's not out on whether people still think a four-year degree makes sense for them but I do think that we have had some real fluctuations and how much people value these over recent years I think partially because you saw a lot of bristas with bachelor degrees yeah there is a strain of thought and economics there are a lot of economists who will tell you that even if you're a brista with a bachelor degree you're probably better off than a brista without a bachelor degree that college education gives you an ability to sort of work your way into different jobs that might not be open to you if you didn't have that degree and so even if you're not using it immediately it may still be useful to you down the line and your overall lifetime earnings as a college graduate are likely to be a lot higher that calculus has changed a little bit in recent years the numbers on it are not as good as they used to be but I do think that that's still an important thing to sort of keep an eye on is like what is your actual lifetime earnings outlook based on your major based on your region based on your sort of age and a lot of that data is actually available on the Bureau Labor Statistics website they make it pretty easily available and so if you're interested in this trade-off like I think it's worth looking up for yourself you know like what your likely outcomes are because those tools are available to you I should have looked at those numbers when I decided to get a degree in film studies I'm sure it would have been dark to be an influencer I also probably should have looked at them before I decided to become a journalist yes you know we we made it we made it worked out you know go okay let's talk about your new book which is about a 19th century novelist who is also an economic theorist and no you didn't make that up that's a real woman her name was Maria Edgeworth I didn't know about her until I read the book and now I am obsessed so can you explain who she was like why do we need to know her because Maria's quite the gal yeah she was a complete baddie she was a baddie she was so interested I know she was like the OG female financial influencer yeah I feel like I spent I spent probably five years researching this book and I for five of them I just every couple of days I was like how does the world not know about this yeah she is so interesting um so she kind of did what you do yeah but she did it sort of in Jane Austen time yeah and so she was really really interested by economics at sort of the dawn of economics so Adams is to set this in a little bit Adam Smith has just written the wealth of nations economics is a brand new field nobody knows anything about it the wealth of nations if anyone's ever read it little tough to read not not your easiest reading and what did the wealth of nations do like to like it was just like this first book about the economy that sort of made everyone realize what the economy was exactly yeah pretty much exactly yeah and so it was this first really sweeping book by Adam Smith then kind of set out the foundations for how we understand the economy today like this is sort of like the birth point like this is when we we talk about modern economics this is where it comes from it starts with the wealth of nations and so it just happened and nobody understands this book and she thought that it would be good if the world did understand this book and so she started putting it in fiction she just rewrote it into fictional stories and her stories were unbelievably popular she was basically out earning Jane Austen by a factor of 10 at one point so crazy Lord Byron who was obviously the world's famous most famous poet was like super jealous because she was the lion of the season like it's impossible to overstate how famous she was and everybody's reading her books and as they're reading her books they're getting the foundational principles of economics in them and so she was really important in popularizing these ideas she also helped to sort of change the ideas you know she was having regular discussions with sort of the original economists she was sort of influencing their ideas from the ground up and this is at a time when women aren't allowed in university classrooms they're not even allowed to go to libraries and so you know she has almost no formal access to the world of academia and yet she had a huge influence on early economics she really was the OG putting spinach in a brownie which is what I always think about with financial education that's how you have to do it where it's like make it juicy for me I use pop culture she's using these novels as a way to teach people why do you think that that works so well I think it worked well partially because it was just so much more approachable you know I think that you you put some economics in like a love story or a lot of her stories where she was very funny and a lot of her stories are satires so you put some economics in a satire and you're kind of making fun of the character as he's learning about economics it just feels a lot easier and a lot more painless to learn these things and so I think it worked really well and I think people didn't always realize that what they were doing was reading economics and so it was you know it was non pretentious it felt natural and the stories were fun they were they were good books but then it's like why wasn't she remembered because like you said like I've like every four years or three years there's another Jane Austen biopic and it's you know we're always talking about Jane Austen the pride and the prejudice of it all we're remaking it into a rom calm and it's like why is Maria just totally erased why do you think that happened so I think part of the reason like ironically is actually literally because she was putting economics in her book um so one of the things that she got remembered for almost immediately is having had sort of dry books like there were sections of these books that were just very pedagogical they were all trying to teach you and they were dry and Jane Austen didn't do that and so I think by comparison she really suffered um literally because she was trying to teach the world economics in her books and other things she had other topics she cared about um but so I think that was part of it I also think the economists did her dirty um so she was very widely known for having been very involved in economics during her lifetime and shortly after her lifetime economics started to really professionalize which means that it moved to universities and they the you know people who were sort of carrying on the field did not want to talk about the fact that there had been a lot of women involved in their early founding of economics because at the time association with women very much made you look not serious the goal is serious you don't want a bunch of ladies hanging around and so I think they really worked pretty hard to denigrate what the women had done um and I go into this at some length in the book, but I think that you know, they kind of cast some shade on these ladies' characters and I think Mariah really suffered, which her name's pronounced Mariah in sort of historical English, but Maria today, Maria really suffered for this. Also, I know in the book you talk a little bit about the French Revolution too, and so how did that impact the racial as well? So the French Revolution is this massive turning point for women because prior to the French Revolution, there had been a lot of really powerful women in the French court. Yeah. They were really intellectual, they were really influential, they had the king's ear, they were extremely important, and so I think it was sort of looked on by the people who came after as part of the reason the French Revolution had happened. And we look back on the French Revolution now with some sort of positive light. In the immediate aftermath, at least among the elites, it was not viewed positively at all. It was very much viewed as something that had gotten way out of hand, it got an extremely bloody, it was extremely dangerous and should be avoided. And so I think that there was this idea that if you let your women be too powerful, you potentially sow the seeds of discord and sort of, you know, social unraveling. And so there was this moment where there was a real effort to put women back into sort of domestic boxes to make sure that women weren't in the field of intellectual exploration, to make sure that they weren't sort of so active in sort of philosophy as they had been during the Revolution years. And I think Maria and her contemporaries really suffered for that. They had to, throughout her life, she spent her entire time basically pretending not to be doing the heavy economic she was doing. I think the other women that she was contemporary to were doing something similar, they were often hiding what they were doing. And I think it made it really easy to forget after the fact that that's what they had been doing because they were so covert because it was so subtle, it was really easy to overlook. And so I think the aftermath of the French Revolution and the backlash against women had a really long tail there. But it's also interesting that even though she was hiding it, she was making so much money. Yeah. Well, I think you were her, like who was reading her books? Like her books were hugely widely read, actually. So it was like the like a smut novel sort of now. Like we think about like how much everyone's reading heated rivalry, everyone was reading Mariah Maria. Kind of, although I will say at the time they were very much viewed as like smart. They were like not in like the look I read behind it. Yeah. Well, because I think I think that there were novels, I say that not to you know, denigrate the smut novels, which everybody thinks are fun. Like I agree, I think they're folks. Okay. You know, but I think that back in that that time, there were books that were seen like that that were sort of, you know, the like, you know, brain candy. Yeah. Of the literary sphere. I don't think hers were quite that. They were, they were seen as like very smart and very clever, but they were also hugely widely read. We know that, you know, the king and the sort of royal family were all reading her, but so were Irish housewives. And so it was a huge array of people reading her. She had a really big audience over here in the United States, actually, in which ended up being relevant later in her life, because she managed to raise money for the Irish potato famine off of her American readers. But she, yeah, so she had a really, really wide readership. And I don't think they were necessarily coming to her for the economics. They were getting the economics to sort of a side dish, which I think was very much her project. I think she wanted to sort of popularize these ideas by hiding them behind good stories. Honestly, I loved her and I loved your book. And so I'm just so glad that you brought, you know, light to this. And yeah, if you guys are looking for a new book, this is it. And the audiobook is amazing too. So I always think it's like a good way to, you know, learn something. It's almost like listening to like a historical podcast or something, but it's just like a really good book. So like I said, I became obsessed with her as you did, while I was reading the book. And like how her mission to educate people on the economy was really written out of history. And it just, I think it hit for me because it made me think about how poor financial education still is for women. And you know, women weren't able to open their own credit cards till 1974. The gender wage gaps will persist. We, you know, leave the workforce and we take all these pauses because we have to take care of the home and our kids and aging parents while and men are also given this traditional financial education while we're just sort of told to script and save and budget and that we can't hold on to a dollar instead of like learning how to invest or negotiate. And so what do you think are the most pervasive sort of financial inequality still affecting women? I mean, I think the one that is just, you know, it's so clear in the data is that there is still a penalty from other hood. When you leave the workforce because you're doing childcare, those are some of the most important years of your working life. And a lot of times you come back, perhaps only part time at first, perhaps in sort of a reduced role. And as a result, you, you are sort of permanently less than you otherwise would have. And I think that is a big inequality and one that we still haven't figured out how to totally, you know, zero out. It has, you know, made some minor progress over time, but it's been extremely stubborn. And so I think that's the biggie and the really giant one here and particularly here in the US. And so funny, because I talk a lot about how much the American dream has changed or, you know, is in many ways dead. And one of the things I think about a lot and you talk about, too, is how, you know, people of our five year generation born in those early 1990s are sort of skipping or delaying kids because those childcare costs are literally like getting a broken bag. Like it's so expensive. But I guess what I'm wondering from an economic perspective, what happens to our world if people just stop having kids to the degree that they were? Like that really affects the economy, too. That's why the government like does incentives for people to bring the birth rate up and things like that. Yeah, this is a real problem economically worldwide at the moment. And we really saw the leading edge of this in Japan because they stopped having kids a generation ago, basically. And so they've a really old and aging population. And it matters a lot economically. It means that you don't have as many people in the workforce. So you don't have as many people earning money. So you don't have as many people spending money. And that is really painful for an economy. It also means that you have fewer people to pay into retirement systems. And so as people retire, there's just sort of no base for them to build on the way that we've set up retirement systems in the most countries, social security, etc. is really not very resilient to a world with much much smaller younger generations. And so I think there are some real economic challenges that you confront when you have this sort of demographic decline. And that's sort of leaving aside the social challenges, which are also really profound. So how do you feel hope like you cover so much? I mean, you cover the economy nonstop. And from a perspective of a absorber of your content and just of information about the economy, it just always feels so dark that it just feels like we're so screwed. There's no chance for us. You know, and I just talked about that a lot in my book in my book too. And future rich person, this idea of learn financial helplessness where you sort of feel like we're on this floating rock. The best years are behind us. So why even try with your finances or your life? Because there's no opportunity anymore. Yeah, I think that one important thing to remember when it feels like things are really bleak out there is there have been a lot of times in history when things have seemed really bleak economically. And what tends to happen is something in the economy just totally surprises you. Wow. And so I think that there's, you know, things feel very bleak right now, but there are some reasons that things could get better or things could change a lot in ways that we can expect. I mean, I think there's a lot of sort of negative rhetoric out there around artificial intelligence right now. But if you want to have a positive spin on artificial intelligence, it could be that it's hitting at a good time because as younger generations are getting smaller, and if you were workers coming into the workforce, potentially this could allow productivity improvements that will allow us to sort of maintain our style of living. And so Japan, for example, super bullish on AI. They're so excited about it. And it's largely because of this idea that potentially it will help with productivity and that'll be good for the all society. And so, you know, there's there's reasons for help. I love that. You're listening to a quick ad. You know what else is quick? Selling your car on Carvana. Just put in your vehicle information and we'll give you an offer. Done. No hassle. No negotiation. No guy from an online listing lowball in you. Which means by the time I'm done explaining this, you could have basically done it. Still haven't started? Hey, better late than never. Sell your car today on Carvana. Pick up fees may apply. Ever feel like healthy eating is harder than it should be? I get it. Nutrition can feel complicated, but it doesn't have to be. On Be Well by Kelly, I simplify the signs of nutrition so you can feel better, balance your blood sugar, and build healthy habits that actually last. Each week, I talked to leading experts, doctors, and researchers about practical ways to nourish your body and make wellness accessible in real life. Listen to Be Well by Kelly, wherever you get your podcasts, new episodes every Wednesday. Before you release this book, you release Limitless, which was a whole book on the Fed. The Fed is really having a moment right now. I mean, they're always sort of having a moment, but as we record this, they just raise interest rates for the first time in three years. They're pretty much guaranteed to do it again before the end of the year. Will you explain what just happened with the Federal Reserve, with these rate hikes? What that means for us? Break it down in your special way because I feel like I talk about rate hikes all the time, but I want to make sure that we all actually understand what that means. Yeah. So it means two things, and I think it's really important to sort of know that this is a two-sided coin. There's the bad, and there's the good side of this coin. If you are a normal person, in the housing market, the bad side of this coin is that mortgage rates are going up. Oh, as of today, they're at a new high. They are at a new high. Yes, they are above 7%. And so mortgage rates, painfully high right now, probably going to be painfully high for a little while here. And so that is obviously very painful. The flip side of that is there's a reason the Fed is doing this, which is to try and get inflation under control and keep it under control. Inflation, as everybody knows, has been high for a while now. It really popped after the recession, and it came back down, but it didn't come all the way back down. And that's just where we see like the cost of living, absolutely go berserk. These are like the 12 dollar eggs and like be so expensive and just like anything that you, I don't know, buy, I don't know why those are the two examples that keep to mind. But I feel like, you know, it's a lot of groceries, but it's just expensive flights. You're saying going home to visit your, you know, sister's baby is going to be so just living doing things that we used to do so regularly is cost so much more. You feel it all through your life. It's really, it really does have a huge impact. It has an impact on how you live as a consumer. Yeah. And it can be really destabilizing. And so that's why the Fed wants to get inflation back down. And the reason that you do these rate hikes and push mortgage rates and other borrowing costs throughout the economy down comfortable levels is to kind of take the heat out of the economy a little bit and hopefully get inflation to slow down. That doesn't mean prices are going to go down, but it does mean that they would stop rising as quickly. Yeah. I mean, let's go into that that prices won't go down because I feel like the moment that a price goes up, it never goes down. Like this whole idea of, oh, inflation, like we're going to raise the rates and things are going to decrease in price. I've never seen it girl. The moment that they feel comfortable charging you that thousand dollars to go to Pittsburgh to visit your new niece or nephew and you say, yes, I'm going to pay it. They're never going to be like, wait, actually now it's six hundred dollars. Sorry, that was a mistake and it was our bad. Yeah, this is historically. Yeah, absolutely true. The new normal prices reset to new normals and they are very hard for various reasons that are nerdy that I will not get into. It is very hard to move prices down. But that does not mean there's no hope. It just means that wages need to rise enough in order to sort of bring you back up to level. So the goal in economy is not necessarily to have no price increases because that would actually be bad for the economy. If you have no price increases, if everything is stagnant, you've just kind of reached a steady state and things are not changing and those economies have lots of problems. What you really want is an economy with a manageable amount of inflation that isn't destabilizing and most importantly, where wages are keeping up with inflation. So as long as you're making 2% more a year, you don't really care if prices are rising a little bit. Yeah. You know, as long as you're making enough to make that difference make sense, the problem recently and the problem over recent years is that it hasn't always been the case for everyone that wage growth has kept up with inflation. When inflation sees high numbers, when you keep getting these big price increases, particularly if you are out of the labor market or if for some reason you're having a couple of down years at work, you can get really left behind very quickly. And so that can be really bad for the economy, very bad for society, very challenging politically. It's hard to have a stable political system in a world like this. And so for all of those reasons, you don't want inflation to be high for a long time. Yeah. I mean, there's something like wages have increased six or seven percent since 2000, but the cost of it has increased six to seven percent. And it also just contributes to this K-shaped economy, which is basically this economic trend where the rich, a K, the people who own assets are getting so much richer because the stock market is doing so great. So whatever they own is just increasing, increasing in value. But then the people who aren't on that bandwagon of owning assets and are simply just trying to make ends meet and put food on the table or getting so left behind. Yeah. If there's no middle class. Yeah. If you're relying on labor and come at a moment of high inflation, you can be really challenging. So how quickly will this rate hike affect regular people? Like, if I go to try and buy a car today, is it going to be more expensive to borrow money? Like, what changes happen and how fast do they happen? So an interesting thing about the way the Fed's rate hikes work these days is that they tend to sort of give a hint of what they're doing ahead of time. And often you'll see rates actually start to adjust before they even have moved them. And so, for example, today we've seen this big jump in mortgage rates has something at least to do with the fact that the Fed is predicting that it's going to raise rates more. And so, you know, so much of what we see in the economy is really looking forward to what the Fed does next. And so the answer here, the simple answer is that the second the Fed sort of utters that they are going to raise rates soon, you start feeling that in your real life. And particularly, that's true of the mortgage market because it reacts really quickly. But you also see in places like car loans, if you do so, any kind of consumer credit, you'll see you'll see a trickle through in those places as well. Is there like one story that you feel like we're not paying enough attention to in the US that you're covering? And you're like, you guys listen up, but this is important because now's your chance. This is your moment. This is a big moment. I would say that I think one thing that we're not paying enough attention to that is really interesting is the way that migration is changing all around the world. And so, like, shout out to the New York Times, I think we've done a good job of covering this as a global issue. But I think that it is sometimes lost in the discussion around the ice rates and sort of the, you know, really seismic changes that are happening in migration here. The big things are happening in migration and a lot of places around the world right now. And there's sometimes taking slightly different models from what is happening here in the US. And so, I think that is an interesting place to look outward and see what other people are doing and see how sort of these similar concerns about migrants are percolating through economies in different ways. And how does that affect people's economies like the like less immigration? How does that affect the economy? So, it's really interesting because so, you know, speaking from a European perspective, that's what I'm closest to at the moment. And I always try to have that perspective as well, just like when you talk to like Italians, for example, very anti-migration, very concerned with not allowing people to come in if they don't have proper documentation. But because they have an aging population, they have accepted that they cannot just shut out migration. And so, they're really trying to encourage legal migration in a very serious way. And I think that you're seeing similar things in Denmark, you're seeing similar things in Germany. And I think that's sort of, you know, how do we let people in in a way that is acceptable to our populations? That conversation is a lot more advanced in Europe than it is here in the US. And I think we don't always realize that it's happening in Europe here in the US. And so, I think that's a really interesting place to look. Okay, interesting. I love that. Yeah. And it also just affects the economy so much because there's a lot of jobs that people don't want to do in America that, you know, immigrants do. And then without immigrants doing that, it becomes a lot more expensive to afford things because the cost of labor is going up so much. Totally. And sometimes jobs that you don't have people trained for, like home health care, it's a great example. That's been a real problem in Europe. They don't have enough of them. And so, this is one of the reasons you can't just shut migrants out. I don't think that conversation's quite as advanced here in the US, even though the problem looks more similar. So interesting. You know, the midterms are coming up and I don't try to alienate any one of my audience by talking that much about politics, but I do think that now it is important to talk about it because money is so political. So, it's the last about like, are you a Republican or a Democrat and more just about like, hey, just want to be clear. Like, this person that you voted for, all those economic policies that he said were going to happen and all the change to your wallet, like, let's just take a step back. Did those come true? And they didn't. Basically, the money is so political. So, how do you think the economy will play into these upcoming elections? Because it feels like you can no longer not talk about that. I think the thing that, you know, I work with the New York Times. I'm on the news side. So, we do not take political stances, etc, etc. I also work there. Emotionally. That important disclaimer stated, I think that there is no world where this midterm is not hugely influenced by where gas prices are. Oh my gosh. Fuel prices in general have been heavily impacted by the conflict in the Middle East. It has become a sort of major thing that is hanging over every election stop, every discussion about the election. Inflation in general is really important to how voters feel and how voters see an economic record. But there's almost nothing that sort of touches the voter psyche as much as energy prices. And I think in this case, it's something that's seen as and, you know, has been very much tied to the foreign policy of this administration. And so, I think that that is a real pain point and something that is likely to have a big influence this election. So, I was just in Los Angeles and my friend who has like a very normal cars, doesn't need premium gas or anything. You used to be able to fill up her car completely, the full tank for $30. And now it's half a tank for $50. So, it's just so nuts. Like the increase in fuel prices has gone up so much. And I feel like people who don't even usually exactly think about the economy are thinking about the economy just through that lens. Because when it hits your wallet, that's when you really feel the burn. Yeah. And I mean, this is one of those things that has been true sort of for time untold. If you are a sitting president and you see a fuel cross spray spike on your watch, you better watch out. And obviously, we're not talking about a White House election this year. It's just a midterm, but it is always very bad news for the party in power when you see a fuel price bike. Yeah. Thank you so much for coming. Thank you for having me. Thank you, and sippers, thank you so much for listening. Please rate, subscribe, and review, and make sure that you share it with a friend. Because I know you've got a friend who's just like wondering, is there hope in the world anymore? What's going on with the economy? Do I need to read this new book about Maria Mariah Edgeworth? Well, this episode has all those answers and more. Thank you. We'll see you next Thursday and per usual, stay rich. How We Made Your Mother Is the How I Met Your Mother Rewatch Podcast with me, Josh Radner, and series co-creator Craig Thomas. Well, our guest today is the great Bob Odin Kirk. 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