The Thread

The Cupboards Are Full

The middle-class deal didn't get harder. It got retired.

Matthew walks through the single chart that explains why one generation looks at American life and sees abundance while the next feels structurally crushed. Through Sarah — a composite client whose numbers don't reconcile no matter how disciplined she is — the special report follows the gap between the categories that got cheap (everything in your living room) and the categories that got expensive (everything you actually need to live). And then: what you can actually do with this if your math feels like Sarah's.

Chapters

0:00 — Welcome and intro

0:35 — Sarah's question (why two generations see different economies)

2:30 — The Chart of the Century

5:00 — Sarah's actual numbers

7:45 — The levers are gone

10:00 — Baumol's cost disease (and why it's not the whole story)

11:30 — Four institutional choices that make the U.S. version worse

14:45 — The new discipline: a reframe, not a fix

17:00 — Geography as the biggest lever

18:30 — The harder truth

19:45 — Close

Estimated — will refine after audio QC.

Sources and further reading

Mark Perry, "Chart of the Century" (updated through December 2025), American Enterprise Institute. The chart referenced throughout, tracking BLS Consumer Price Index data for fourteen categories of American spending since 2000.

https://www.aei.org/carpe-diem/chart-of-the-day-or-century-8/

Federal Reserve Bank of Atlanta, Home Ownership Affordability Monitor (HOAM). Monthly index tracking the share of median household income needed to afford the median-priced home.

https://www.atlantafed.org/research-and-data/data/home-ownership-affordability-monitor

William J. Baumol and William G. Bowen, Performing Arts: The Economic Dilemma (1966). The original framing of what later became known as Baumol's cost disease.

Peterson-KFF Health System Tracker, "How does health spending in the U.S. compare to other countries?" The source for the U.S.-versus-comparable-countries healthcare cost comparison.

https://www.healthsystemtracker.org/chart-collection/health-spending-u-s-compare-countries/

KFF, 2025 Employer Health Benefits Survey. The annual benchmark for employer-sponsored health insurance premiums and worker contribution shares.

https://www.kff.org/health-costs/2025-employer-health-benefits-survey/

Harvard Joint Center for Housing Studies, "Five Ways Residential Mobility Has Changed in the Pandemic Era." The source for the post-2020 migration patterns referenced in the geography section.

https://www.jchs.harvard.edu/blog/five-ways-residential-mobility-has-changed-pandemic-era

American Hospital Association, Fact Sheet on Graduate Medical Education residency caps. Background on the 1997 Balanced Budget Act cap and the Resident Physician Shortage Reduction Act of 2025.

https://www.aha.org/medical-educationteaching-hospitals/physician-leaders/medical-education

Read the full piece

The written edition includes all the sources linked inline and the chart embedded directly.

https://matthewgdavis.substack.com

About The Thread

The Thread is a biweekly newsletter and podcast from Matthew Davis, co-founder of Sherwood Financial Partners. It follows the connections between the economic and political stories shaping your financial life — for readers and listeners who want a calm, data-driven lens on a noisy news cycle.

The Thread — Issue #4

Why markets feel fragile when the headline numbers don't

The economy looks competitive on the surface — dozens of car brands, multiple big online retailers, a drugstore on every corner. Underneath, the math doesn't quite work that way. This issue walks through three places where competitive pressure has been quietly disabled: cars, online retail, and pharmacy/primary care. The visible measure is concentration. The variable that actually decides whether a market works for you is whether the dominant firms still have to compete.

CHAPTERS

(Estimated — will refine after audio QC.)

0:00 — Open

0:30 — What I'm pulling at: a friend conversation about TVs and cars

2:00 — Why your TV got cheaper and your car didn't

6:30 — When the lowest price isn't really the lowest (the Amazon emails)

9:30 — When one company is the doctor and the drugstore (CVS Health)

12:30 — The Common Thread

SOURCES AND FURTHER READING

On cars and competition

- Cox Automotive / Kelley Blue Book — December 2025 average transaction price report

https://www.coxautoinc.com/insights/dec-2025-atp-report/

- USTR — Section 301 final tariff modifications (Federal Register, September 2024)

https://www.federalregister.gov/documents/2024/09/18/2024-21217/notice-of-modification-chinas-acts-policies-and-practices-related-to-technology-transfer

- BIS — Connected Vehicles Final Rule (Federal Register, January 2025)

https://www.federalregister.gov/documents/2025/01/16/2025-00592/securing-the-information-and-communications-technology-and-services-supply-chain-connected-vehicles

On the Amazon case

- California Attorney General — release on unsealed Amazon supplier emails

https://oag.ca.gov/news/press-releases/naming-names-attorney-general-bonta-secures-public-access-evidence-amazon-price

- California Attorney General — release on April 16, 2026 summary-judgment denial

https://oag.ca.gov/news/press-releases/attorney-general-bonta-delivers-prime-victory-against-amazon-ongoing-price

- FTC v. Amazon.com, Inc. — federal antitrust case page

https://www.ftc.gov/legal-library/browse/cases-proceedings/1910129-1910130-amazoncom-inc-amazon-ecommerce

On CVS, PBMs, and vertical integration

- CVS Health completes acquisition of Aetna (November 2018)

https://investors.cvshealth.com/news/news-details/2018/CVS-Health-Completes-Acquisition-of-Aetna-Marking-the-Start-of-Transforming-the-Consumer-Health-Experience/default.aspx

- CVS Health completes acquisition of Signify Health (March 2023)

https://www.signifyhealth.com/news/cvs-health-completes-acquisition-of-signify-health

- CVS Health completes acquisition of Oak Street Health (May 2023)

https://www.cvshealth.com/news/company-news/cvs-health-completes-acquisition-of-oak-street-health.html

- FTC — Pharmacy Benefit Managers interim staff report (July 2024)

https://www.ftc.gov/reports/pharmacy-benefit-managers-report

- Patients Before Monopolies Act — bipartisan reintroduction (Warren / Hawley / Harshbarger / Auchincloss, May 2026)

https://auchincloss.house.gov/media/press-releases/release-auchincloss-warren-harshbarger-hawley-reintroduce-bipartisan-legislation-to-rein-in-pharmacy-benefit-managers-pbms-cut-drug-costs

On the bipartisan diagnosis

- Lina Khan — Stone Lecture at Harvard Kennedy School (fall 2025)

https://www.hks.harvard.edu/centers/wiener/publications/lina-khan-stone-lecture

- JD Vance at RemedyFest — Washington Examiner coverage

https://www.washingtonexaminer.com/news/senate/2889190/vance-ftc-lina-khan-doing-good-job-break-with-gop/

- U.S. Senate roll call vote on Khan's FTC confirmation, June 15, 2021

https://www.senate.gov/legislative/LIS/roll_call_votes/vote1171/vote_117_1_00233.htm

Read the full piece, with every source linked inline:

https://matthewgdavis.substack.com

ABOUT THE THREAD

The Thread is a biweekly newsletter and podcast from Matthew Davis, co-founder of Sherwood Financial Partners, a fee-only RIA in California. Each issue follows the connections between the economic and political stories that shape your financial life — calm, non-partisan, data-first.

[Standard Sherwood Financial Partners compliance disclosure inserted here via Substack Template at production time — same wording as the text edition.]

The Thread — Issue #3 | May 4, 2026

Why a shrinking IRS, an unreadable healthcare bill, a six-figure college decision, and a record-low consumer sentiment all point to the same realization: the complexity itself has become the cost.

In this issue:

The IRS is struggling. The enforcement workforce is on track to fall below 30,000 — roughly a third less than its peak just a few years ago. What that means for the $696 billion annual tax gap, voluntary compliance, and the people who play by the rules.

Healthcare's coverage-versus-care gap. Two-thirds of Americans now say healthcare is their top financial worry. ACA marketplace premiums roughly doubled when enhanced subsidies expired. The system has become so layered that having insurance and being able to afford care are increasingly two different things. T

he $70,000 college bet. Saint Michael's College in Vermont charges $70,000 a year and just had a tenured biology professor teaching students to cut back invasive shrubs because the maintenance staff was laid off. An estimated 442 American colleges may be in financial trouble. What families are actually being asked to evaluate.

The mood underneath all of this. The University of Michigan's consumer sentiment index hit 49.8 in April — the lowest reading in the survey's history, dating back to 1952. Why traditional models can't explain it, and what's actually going on.

Sources referenced in this episode:

On the IRS:

Wall Street Journal — https://www.wsj.com/politics/policy/irs-staffing-tax-enforcement-1a18e33f Pew Charitable Trusts — https://www.pew.org/en/research-and-analysis/articles/2026/04/07/despite-billions-at-stake-few-states-study-tax-gaps

Government Accountability Office (via GovExec) — https://www.govexec.com/oversight/2026/03/watchdog-warns-challenges-irs-handles-first-tax-season-after-trump-staffing-cuts/412158/

PBS NewsHour — https://www.pbs.org/newshour/nation/irs-faces-challenges-in-2026-tax-season-due-to-jobs-cuts-and-new-laws

Federal News Network (Nina Olson analysis) — https://federalnewsnetwork.com/management/2026/04/less-people-and-better-results-irs-ceo-says-filing-season-goals-met-after-27-staffing-cut/

On healthcare:

KFF — https://www.kff.org/health-costs/americans-challenges-with-health-care-costs/

Gallup — https://news.gallup.com/poll/702596/one-third-americans-cut-back-cover-healthcare-expenses.aspx NPR — https://www.npr.org/2026/03/21/nx-s1-5735666/expensive-health-insurance-costs-affordability

On college:

Wall Street Journal — https://www.wsj.com/us-news/education/college-tuition-loans-budget-cuts-7d0ea05f

NPR — https://n.pr/428Fp1P

On consumer sentiment:

Bloomberg — https://www.bloomberg.com/news/articles/2026-04-24/us-consumer-sentiment-falls-to-record-low-on-inflation-anxiety

Bureau of Economic Analysis — https://www.bea.gov/

Axios — https://www.axios.com/2026/04/12/inflation-economy-decade-iran-oil

Read the full text version with inline citations at MatthewGDavis.Substack.com.

The full compliance disclosure for this episode is available with the text of this post at MatthewGDavis.Substack.com. This briefing is for informational purposes only and does not constitute investment advice. Always consult with your financial advisor before making investment decisions.

Here's a show notes block you can paste into the Substack audio post body — Substack syndicates it out to the podcast apps, so this is what listeners will see in Apple/Spotify/Overcast descriptions too.

The Line Nobody Moved — A Special Report from The Thread

Why a 1963 formula is still defining who's struggling in America — and what happens when you do the math honestly.

In 1963, an economist named Mollie Orshansky built America's poverty line by taking the cost of a minimally adequate grocery plan and multiplying it by three. Sixty years later, the formula is still in use — adjusted only for inflation — even though food's share of household spending has collapsed from one-third to roughly one-twentieth. In this special report, I pull at that thread: what happens when you honestly apply Orshansky's own method to today's numbers? The answer reframed how I think about the words poverty and enough.

In this episode:

How the poverty line was invented, and why Orshansky designed it as a crisis floor rather than a comfort line

Where household spending actually goes in 2024 — food at 12.9%, housing at 33.4%, transportation at 17% — per the BLS Consumer Expenditure Survey

The recalculated threshold: why applying Orshansky's own logic to today's spending patterns produces a crisis floor somewhere between $80,000 and $140,000 for a family of four

The gap between the official poverty rate (10.6%) and the majority of American households who would fall below an honestly-updated line

What this framework changes about financial planning — emergency funds, the two-income question, and why feeling stretched at six figures isn't a personal failure

The Data Behind This Episode:

Bureau of Labor Statistics, Consumer Expenditure Survey 2024

USDA Economic Research Service, Food Expenditure Series

Social Security Administration, Mollie Orshansky and the history of the poverty line

ASPE, History of the Poverty Thresholds

U.S. Census Bureau, Income in the United States: 2024

U.S. Census Bureau, Supplemental Poverty Measure

Brookings Institution, Why the United States Needs an Improved Measure of Poverty

Child Care Aware of America, 2024 Price & Supply Report

National Education Association, 2025 Educator Pay Report

Federal Reserve, Economic Well-Being of U.S. Households in 2024

Inspired by an analysis from Michael W. Green, Chief Strategist at Simplify Asset Management, who connected these datasets in a markets context. The primary government data, the framework, and the financial planning implications are my own.

Read the full written version of this special report at matthewgdavis.substack.com.

The Thread is a biweekly newsletter written by Matthew Davis, co-founder of Sherwood Financial Partners. If this piece made you think, forward it to someone who might appreciate a calmer way to stay informed.

Why the oil shock, the shipping cost spike, and a $16,000 EV all point to the same thing: what's coming hasn't arrived yet.

In this first issue of The Thread, I pull at the connections running underneath a few stories clients have been asking about — and find that the economic consequences of the Iran conflict haven't fully arrived yet. They're on the water, literally. Understanding the timeline matters more than reacting to today's headlines.

In this issue:

The oil shock that hasn't even started yet — why the real shortage is still building behind the tankers already in transit, and what it means for the Fed's path

Why it costs so much to move things — the collapse of American shipbuilding, and the policy paradox around trying to rebuild it

The $16,000 electric car you can't buy — Canada's deal with China and the affordability question underneath

When judges are afraid to judge — why an independent judiciary matters for market certainty

The common thread: There's a gap between what we see on the surface and what's building underneath.

Sources referenced in this episode:

Dated Brent oil price hits highest level since 2008 — CNBC

March 2026 supply disruption analysis — Dallas Federal Reserve

Economic impact of the 2026 Iran war — Wikipedia

March FOMC rate decision — Federal Reserve

Collapse of U.S. shipbuilding — 60 Minutes / CBS News

Clarksea Index hits record — Splash 247

Canada's Chinese EV deal, explained — CBC

Chinese EVs in Canada: pricing

Threats against federal judges — 60 Minutes / CBS News

Read the full written version of this issue →

The Thread is a biweekly publication following the connections between the stories that shape your financial life. Written by Matthew Davis, co-founder of Sherwood Financial Partners.

If you find this useful, forward it to someone who might appreciate a calmer way to stay informed.

Why $7 Doritos, a broken jobs formula, and a suspicious oil trade all point to the same realization: the old rules don't apply anymore.

In this issue:

What I'm Pulling At (1:00) Why so many of the conversations I'm having with clients right now come back to the same feeling — that the ground shifted, and nobody told them.

The $7 Bag of Doritos (2:45) How PepsiCo lost $50 billion in market value by raising prices too far, too fast — and what "demand destruction" tells us about the broader affordability question.

Why Bad Jobs Reports Might Not Mean What You Think (6:30) The U.S. labor force has effectively stopped growing. Why that changes the math on every monthly jobs print going forward, and what it means for long-term GDP.

Martha Stewart Went to Prison for This (10:00) A $500 million oil futures trade placed 15 minutes before a presidential announcement — and the bipartisan push to do something about it.

The Common Thread (13:00) Every story this issue comes back to the same realization. Seeing that is the first step.

Sources cited in this episode:

Bloomberg on PepsiCo's demand destruction: https://www.bloomberg.com/news/features/2026-04-07/pepsico-cuts-chip-prices-after-7-doritos-hurt-frito-lay-sales

Brookings on 2025-2026 migration and the U.S. labor force: https://www.brookings.edu/articles/macroeconomic-implications-of-immigration-flows-in-2025-and-2026-january-2026-update/

Federal Reserve staff note on labor force growth and breakeven employment: https://www.federalreserve.gov/econres/notes/feds-notes/labor-force-growth-breakeven-employment-and-potential-gdp-growth-20260402.html

PBS News Hour on prediction markets and presidential pardons: https://www.pbs.org/newshour/show/prediction-markets-pardons-spark-questions-over-whos-profiting-from-trumps-presidency

CBS News on the pre-announcement oil futures trade: https://www.cbsnews.com/news/insider-trading-oil-futures-trump-iran-post/

CNBC on Defense Secretary trading allegations: https://www.cnbc.com/2026/03/31/pete-hegseth-defence-investments-iran-war-pentagon.html

Pew Research Center on public trust in government, 1958-2025: https://www.pewresearch.org/politics/2025/12/04/public-trust-in-government-1958-2025/

Read the written version: https://matthewgdavis.substack.com

About The Thread: A biweekly briefing from Matthew Davis, co-founder of Sherwood Financial Partners. Following the connections between the stories that shape your financial life.

Get in touch: Reply to the email edition, or visit matthewgdavis.substack.com.

This episode is for informational purposes only and does not constitute investment advice.