Mary in America

Over a decade ago, Eric Zwick got assigned an unusual project at the U.S. Treasury: Find out how much tax businesses were paying. But the data was a mess, so Eric and two friends helped comb through it and, in doing so, got to build a topographic map of business activity and profitability in America. And it suddenly revealed a class of people who had been hard to see before: the “everywhere millionaires,” or the “stealthy wealthy.”  People who built an amazing amount of wealth selling things like cars, $5 electric toothbrushes, and seamless gutters. He tells us about these everywhere millionaires, the policies that helped them get so rich, and how this revelation helped reshape his understanding of the U.S. 

Further Reading/Listening

Owen Zidar & Eric Zwick - The Everywhere Millionaire

Planet Money - My Favorite Tax Loophole

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When novelist Min Jin Lee writes a book, she goes deep. She spends years researching, interviewing relevant people whose experiences and jobs will comprise her characters and plot. In her new book American Hagwon, she threw herself into the intense schooling and education systems, and extracted lessons that are sincerely useful, which she unpacks in this episode, including: a focus on achievement obscures the point of learning; community is how to survive; karma is real, just be patient; and how – unprompted! – it all goes back to bond markets.
 

Further reading/listening:
Min Jin Lee: American Hagwon

Min Jin Lee: Pachinko

Planet Money: Economic fact in literary fiction

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Being a country’s central banker is a technical job. But, just like high school, if you are a popular central banker, it pays off. Aditi Sahasrabuddhe is a political scientist at Brown University, and has researched just how much it pays to be popular. It’s the kind of question that the field of economics largely neglects. Aditi looks at central-bank-likeability through the manifestation of swap lines, currency exchanges made available between two economies. These become especially important in a moment of crisis, and a close connection between central bankers can mean the difference between an economy that sinks and one that swims. 

Further Reading:

Aditi Sahasrabuddhe: Banker’s Trust

Liaquat Ahamed: Lords of Finance

Financial Times: Swap lines are geopolitical infrastructure

Financial Times: A less independent Fed raises risks to a key crisis tool

Financial Times: Will the Fed continue to assume its global responsibilities?

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Emily Oster is not a doctor. She’s an economics professor at Brown University, and for years she’s been applying her economics lens and ability to read studies and analyze data to help decode health research. Her conclusions sometimes produce runaway hits – as in Expecting Better, her book upending the “conventional pregnancy wisdom” – and at other times are wildly unpopular – as with her recommendation to re-open schools while the pandemic was still raging. Emily tells us about the gaps that open up as science progresses, and how people jump into those gaps with theories, political agendas, and grifts. We talk about why we tend to make health and science a political team sport, if we can learn to parse data ourselves, and how to practice living with uncertainty.

Further reading:

Expecting Better, by Emily Oster

Schools Aren’t Super-Spreaders by Emily Oster

The Safety Turducken by Emily Oster

Can America’s Students Recover What They Lost During the Pandemic? by Alec MacGillis

Transformative Experience by L. A. Paul

The Rise of Female Autonomy and the Decline of Fertility: The Role of Mismatch, by Claudia Goldin

Earthing the Human Body Influences Physiologic Processes

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Bonds around the world have been selling off, kind of a lot. And that selloff has sent interest rates on government debt to or near their highest in decades— for US government debt, but also debt from the UK, Germany, France, Japan. What gives? We pulled in one of the people who buys and sells those bonds, Ed Al-Hussainy, at Columbia Threadneedle, which manages a lot of money for other people and institutions. Ed reads the market tea leaves for us about why this is happening, what it means for participants in the US economy, and how much we need to worry. 

Further Reading:

Harper’s: Debt Reckoning, by Mary Childs

WSJ: The Bond Market Issues World Leaders a Failing Grade, by Greg Ip

Goldman Sachs: Why Global Bond Yields Are Expected to Stay Elevated

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Gold was on a tear in August. People, investors, and central banks around the world were buying more and more, in large part because it’s seen as a stable alternative to the dollar, or to any currency. But…why? Why gold? What makes it so special? Friend of the show Jacob Goldstein wrote a book called Money: The True Story of a Made-Up Thing, and he explains the real, physical reasons why we love gold so much, and the long history of our collective obsession.

Further Reading

Money: The True Story of a Made-Up Thing, by Jacob Goldstein

ThePollenNation.com

America Is Having A Fiscal Midlife Crisis

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If you live in the worlds of financial markets and economics, sometimes it can be hard to remember that not all of life can be neatly packaged into data points and lists of pros and cons. And Nobel-Prize-winning-economist and Stanford professor Al Roth is pretty convincing that markets are Good, and that, if you think it through, we *should* allow some kind of market in the trade of *some* human organs. But across the Stanford campus, philosopher Debra Satz says those frameworks are missing things, important things. She wrote a book that suggests that some things simply should not be for sale. That book is called Why Some Things Should Not Be For Sale. We needed remedial help remembering why some things should not be for sale. What things, exactly? And why?

Further Reading

Why Some Things Should Not Be For Sale: The Moral Limits of Markets, by Debra Satz 

Organs, Sex Work, and Drugs: A Nobel Economist on Why Banning Things Can Backfire, Mary in America

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AI is creating unfathomable wealth for a handful of people, upending labor markets, and jacking up electricity bills for the rest of us. But somehow we have to figure out how to still be a society. We’ve done it before – AI is just the latest "General Purpose Technology" we have to adapt to. Many of the vectors we worry about here are even more pronounced abroad – visible inequality, inconsistent water and energy, and large populations of young people facing increasingly dire job prospects. Rohit Lamba, an economist at Cornell, studies AI’s spread around the world and especially in India. He offers a few ways to think about the big questions so this disruption can be less painful than past ones. 

Further Reading:

Breaking the Mold: India’s Untraveled Path to Prosperity, by Rohit Lamba and Raghuram G Rajan 

Barron’s: Why India Is Becoming a Data-Center Hub, Whether Communities Like It or Not

World Bank: AI Offers Lifeline to Developing Economies in an Era of Weak Growth

FT: The AI threat to India’s IT jobs machine

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At the end of July, you may have heard the sound of a hedge fund blowing up. Situational Awareness, a fund focused on the new AI world, had a sudden firesale of its holdings. It seemed like an AI bubble barometer—a way to tell whether the markets have gone too far. Amelia Pollard, investment correspondent at the Financial Times, has been breaking stories on the drama every step of the way. And she says this hedge-fund-implosion was weird and distinct from its hedge-fund-implosion peers and precedents in a few revealing ways. One big example: after it crashed, Situational Awareness didn’t go away. In fact, it’s kind of doing well. Have we learned how to bubble better? Or are we just postponing future pain? 

Representatives for Citadel declined to comment.

This episode was fact checked by Francis Carr. 

Further reading: 

How Leopold Aschenbrenner, the ‘golden child’ of the AI trade, was laid low (gift link)

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Making educational content for kids is fun, but also really hard to do well. Kids are not an ideal audience: they are prone to wandering away, getting distracted, not remembering the plot. Scott Cameron is the head of content & IP strategy at Sesame Workshop, which makes the beloved and long running show Sesame Street. We were curious what makes kid’s content good, what it can achieve, and what Sesame’s history can tell us about how we live today.

Further Watching:

Andrew Garfield and Elmo Explain Grief - Sesame Workshop

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