The Riches Of This Land

Audio length: 00:43:15

Felix Salmon and Anna Szymanski are joined by Jim Tankersley of the New York Times to discuss his book The Riches of This Land: The Untold, True Story of America’s Middle Class, TikTok, and the digital future of media.

And in the Plus segment: The economy in the Trump era.


S1: This ad free podcast is part of your Slate plus membership.

S2: Hello and welcome to the riches of this land, Ed. This leaked money or guide to the business and finance news of the week, I’m Felix Salmon of Axios.

S3: I’m here with Anna Shamansky of Breaking News. Hello. And we are also here with Jim Tankersley from The New York Times. Who are you and what is your book?

S4: Jim Tankersley I cover tax and economic policy for The New York Times. My book is called The Riches of this Land The Untold True Story of the American Middle Class.

S3: We have a great episode this week. We are going to talk to Jim about his book. Of course, we’re going to learn all about the middle class and how it got to where it is. We are going to talk about China and whether TikTok is going to be banned or whether the TikTok is going to wind up being merged into LinkedIn, which would be quite a thing. We are going to talk about the digitization, the virtualization of the American economy, whether that’s going to last. And we are also in Slate plus going to talk about Donald Trump and what kind of credit he can claim or blame we can lay at his feet for the state of the economy. All of that coming up on Slate money. So, Jim, you’ve written a whole book about the American middle classes, and it’s a book full of people and a lot of the people in your book, as with a lot of Americans, had generally positive experiences up until a certain date. And then since that day, they have had generally not so positive experiences. So what is the middle class and when did things start going sideways?

S5: Great question. The American middle class is actually sort of a relatively new phenomenon. Is this thing that Americans have in our minds that we’ve always had this vibrant middle class, but really wasn’t true for a decent part of the nation’s history and really the big rise of the middle class, the boom was after World War two starts with the war effort and continues in the decades that end somewhere in the late 70s, early 80s, when millions of Americans get pulled into what we think of perhaps somewhat arrogantly as then the American dream. You know, it’s just really I think about economic security, being able to own a home, being able to own a car, be able to send your kids to school and have a retirement and just some sort of assurance that even if things get bad for a little while, you have enough of a cushion that you’re going to make it. And that period after World War Two, when those decades that followed was the time in America when there really wasn’t growing vibrant middle class. And since then, it has it has not been like that at all.

S3: Has it been shrinking? Has it is it growing but just more slowly than it was previously?

S5: So there is this amazing debate in Washington and around the sort of wonk community about how to measure this. There are people who will tell you that the middle class has been completely obliterated since 1980. There were people who tell you that I don’t know. It’s been doing fine by the numbers that I see. It’s actually been going backwards in the twenty first century. We’ve been people have been falling out of the middle class, millions of people. And it is, you know, along those lines, not been performing anywhere close to the expectations people had, which I think is the non-controversial way to say this. There is no question that the middle class grew and thrived much, much more after World War Two than it has since really the Reagan era and in particular the twenty first century has been brutal. The last great stretch for the American middle class was the Clinton late 90s growth. And since then we’ve had some really disappointing income growth, really disappointing job gains and very little of what we would think of as tight labor markets that helped workers.

S1: One of the things I found really interesting about your book was that you didn’t just focus on white working class workers and especially white male working class workers. You certainly talked about them. But I think one of the really interesting things that you bring up is the idea that the middle class has always involved people of color and women.

S6: Yeah, it is this great myth that Americans, so many white Americans have sold to the rest of the country. Is this idea that we have this Leave It to Beaver middle class. And it is certainly something that political reporters and I include myself in this criticism and talk about it. A lot of the book really overemphasized in Twenty Sixteen, which was the role of white working class Americans. The truth is actually the real economic research shows us is that the reason the middle class grew and thrived in those decades after World War Two was that we opened up the American labor market and the highest skilled, highest talent, highest paid jobs in the country to non-white guys, to women of all races, to men of color who had been held back by overt discrimination, by actual laws from doing those jobs. And in the struggle for civil rights and starting with the necessity of the war effort, women and men of color gained the entry to those occupations. They didn’t get full equality. They still do not have equality of opportunity. But that simple progress of opportunity unleashed what economists call a productivity boom.

S3: This reminds me very much of one of my favorite economics papers by Joe Stiglitz, where he looked at the effects of microfinance and the insofar as microfinance has really had a positive effect in poor countries, it seems to be entirely a function of its ability to bring women into the workforce. And to no one’s surprise, if you bring millions of women into the workforce, then that creates economic activity and that and microfinance their ability to sort of employ themselves in the highly discriminatory environment where people weren’t giving them jobs made a big difference even without creating equality. And this seems to be like a very similar story that you’re telling about America.

S6: Absolutely. And and it’s it’s just sort of so intuitive when you think about it. If you look at if you were like an alien coming to Earth and given nothing but sort of statistics about the economy, saying here is the types of skills that are demanded in the modern economy and the types of people who hold those skills, you would assume the vast majority of of the. Top Americans in top jobs are women, they’re more educated, they have dramatically improved their skill attainment over the last few decades, particularly compared to men who have stagnated. And that’s not the case. Right. So that’s to me, I see that as a huge amount of opportunity. We have policies that hold women back, whether it’s child care policies or or, again, the overt discrimination in boardrooms. But, yeah, empowering women has this opportunity to put more talented people in jobs they should be in where they can contribute more to the economy. And that lifts everybody up.

S1: And I think this is really interesting because it kind of cuts a little bit across the right and left divide, because I think on the kind of populist right right now, you have this idea of immigrants taking jobs, that kind of thing. And then on the left, you sometimes also have this idea that it’s it’s almost like a limited pie. The economy is a limited pie. And while we do need better reallocation of wealth, we all know that it’s also about growing the pie. It’s the idea of getting more people and also using people’s skills in the most productive way possible.

S5: Yeah, I know. And I think, again, that’s that’s both the lesson of history. But also I just think it’s a really intuitive and optimistic way of looking at the economy. Now, if we better allocate the resources in the pie, the pie will grow faster. And what we know is that a faster growing pie at a time of low unemployment is the recipe for big income gains. And so I think that the most sustainable version of that is these productivity gains. And, yeah, you’re right, it’s it’s the first excerpt of this book got a lot of blowback from both of the populist left and the populist right. The populist right wanted to tell me that now immigrants don’t actually lift the economy, which I argue in the book that they clearly do. And the populist left wanting to tell me that, no, this is all just about taking money from billionaires and giving it to workers, and that’ll make everything fine. But I really think there’s something in here. No matter how you view the economy that you could pursue, there’s a path for market oriented policies. There’s a path for government oriented policies to try to correct these productivity failures we have right now.

S3: So I have a question about productivity and looking at it more from maybe the capitalist side of the equation or the employer side of the equation about the labor side of the equation, which is the during the boom that you were talking to, which ended around nineteen eighty employers, would you want to employ people who are becoming more productive and that those people became more productive and that if they had bargaining power thanks to unions, they could reap the fruits of those of that productivity. And what I’m seeing now. For a lot of Americans, but especially for ones without college degrees, is the when employers look at them and say, like, how much money can we can we make from these people? Maybe they can make a bunch of money. But on the other hand, there’s no real need to a lot of the time to pay them more because they can make even more money if they pay someone in Mexico instead or like we’re in a very global world now. And so I guess my question for you about how to bring living wages back into the middle classes or to I guess that would be a tautology, how to bring living wages back into the people who should by rights be part of the middle classes is how did those people compete with. Mexico, Vietnam, China and the rest of the world, this may be a frustrating answer.

S7: It’s certainly been a frustrating answer for some of the people I’ve talked to about it. But I actually I don’t think there’s a very good chance that most of the jobs that have been outsourced are coming back. I’ve covered this long enough. I’ve seen enough politicians promises Donald Trump had promised to repatriate all these jobs from and he’s actually tried a bunch of different levers of trade and tax policy and they haven’t worked. So I don’t when I talk to CEOs, there’s very, very low chance they are actually bringing their supply chains back. So I think we’ve seen this in America before, entire groups of jobs that just dry up and never come back. And usually what happens is they replaced with something that makes better use of those workers over time. When when farming technology made enormous amounts of the agricultural workforce redundant, a lot of those workers moved on to factories where they were more productive. But what hasn’t happened now is those better jobs, better uses of those people haven’t appeared. So my argument is sort of really, again, frustrating because I’m not going to I can’t tell you where it’s going to come from, but I really believe if you empower the people who actually have a view toward solving human problems with capital and want to invest in that in health care and in carbon mitigation, in a bunch of other industries where there are new frontiers of ways that putting people to work can be helpful and productive, I think those will be good jobs. And so I don’t know where they’ll be exactly or where they’ll be located, but I believe they’ll be the sorts of things that could put even the workers. You’re talking about workers without college degrees to use it and in ways that pay more and make better use of their skills, which are essentially not in demand right now in our economy.

S1: One of the things I think is really interesting about the kind of kind of golden age of the American middle class that we think of post-World War Two, was that you had a significant amount of government investment in basic science and it was across the country at kind of universities across the nation. And as a result of that, you then had the private sector kind of jump on that investment from the public sector and create these incredibly dynamic, productive industries that could afford to pay people a lot because they were so productive. Whereas now the government invests very, very little in basic science. And frankly, the private sector is never going to invest in basic science because doesn’t make any sense, you know, but they will and they will jump off of it. So it seems to me that part of this could also be where the government is choosing to invest to kind of stir this productivity.

S3: The other question is the the even if you can afford to pay people a lot, what’s your incentive as an employer to pay people a lot? Because what we’ve seen is this massive explosion in corporate profits that the balance between capital and labor has has really favored capital for the past few decades. And when companies make more money, they go, that’s great. And will dividends to shareholders will spend on share buybacks rather than paying it out in terms of wage hikes. So what’s the incentive? How is profitability going to turn into increased wages? How does that happen?

S5: I think it has to be a mindset shift not and there’s this sort of false choice between sort of profits and labor. I actually think profits would be higher longer term if companies were investing more in their workers. I think that that’s it’s sort of a sustainable resource to invest in kind of an argument. And I don’t think that that’s how a lot of companies see the world. But I do think there are some companies that do that and who have reaped the benefits, I think and we’ve seen it particularly for highest skilled with the most in demand, high skilled workers. Clearly, they are know Google invests a lot of money in its very high skilled engineers. I think that we can get to a point where that is true of a lot of companies with a lot of very highly skilled workers. We just live in a time right now, particularly when that when the labor market has been so loose for so much of the last 20 years, where companies could view workers as eminently replaceable and disposable. And so they didn’t. Why invest in them? Because there’s always going to be somebody else who needs a job, who can work for less. So that’s why I think keeping the labor market tight is so important, because it does generate that sort of bargaining power that allows workers to demand, hey, you need to invest in me. And we’re seeing some of that right now. By the way, in the pandemic, some companies that really want to keep their work from home workers happy are trying to take some steps to keep them engaged and to keep them from jumping ship, even at a time when when obviously there’s enormous unemployment. So I think it’s possible. It’s just not right now very widespread.

S1: I agree with that. I think that on the one hand, when you have really productive industries, they pay their workers more for the simple fact that if they didn’t, they wouldn’t be able to find those workers like and they also, because they are productive and very profitable, they are able to do that. But but, Felix, I do also think you’re right that there’s also a side of this that probably is going to have to revolve around. Government policy or labor mobilization in some way, so that you can start to get more of the gains of the economy to be more widely dispersed, and I think I agree with both of you that by doing that, you probably would actually end up generating larger growth, because part of the reason that you have a lot of companies not investing, even though you have low tax rates, capital is essentially free, but you don’t invest because there’s no demand. So why are you going to build a factory? Why are you why are you going to invest in training if there’s not significant demand, if you can generate that demand by having the people who actually spend money, which are the lower income deciles having more, then you could actually stimulate that demand, which could perhaps create more of a virtuous cycle, right?

S3: Well, if you look at the the stock market, people are desperate to find money losing companies to invest it like it’s never been a better time to be a money losing company, especially if you are based in California. But what’s fascinating to me is that the one type of losing money that the market doesn’t like is like, well, we’re losing money because we’re hiring a bunch of people and that’s going to increase our market share growth over the long term. Like the increase in full time salaried employees is exactly the kind of investment that the market really is dis incentivizing virtually any other form of losing money, even if it’s just spending money on marketing is better.

S5: Right. Although, yeah. And the market seems to have no problem with with increased compensation for executives. So, I mean, there is again, it’s not necessarily paying people that the market doesn’t like. It’s paying your typical worker. There’s a real market bias toward paying your, quote, highest skilled workers in your company. And so, again, I don’t you know, I don’t like to always argue, well, it’s easy to say, well, the market is just clearly wrong. There’s the the incentives that the market is responding to here. And I think one of them is this shift away from the sort of corporate allegiance that is basically complete now. People very I don’t know anybody who thinks they’re going to spend their entire career with one company, like a lot of people thought they did maybe in the 50s or 60s. But, you know, on the flip side, I think that they’re that fraying of that relationship, the sort of mercenary transsexualism between companies and their workers. Does Rob everyone have a chance to build the kind of trust over time where where you really do feel like you’re taking care of and then you really do feel like you go the extra mile for your company right now? Companies can demand that you go the extra mile because if not, they’ll kick you out and replace you. But if if the labor market is tight enough, that’s not something they can get away with.

S3: Let’s talk about the big news of the week, which is the ever worsening relationship between the United States and China. What the hell is going on here? We’re batting TikTok. We’re batting we chat with sanctioning. Carrie Lam, the chief executive of Hong Kong. This is I thought things were bad like a week ago, and suddenly things seem to get a hell of a lot worse.

S1: Yeah. At this stage, it seems like the Trump administration is simply throwing anything at the wall that they possibly can. I think most likely as an election maneuver more than anything else.

S3: So, Jim, you’re that you’re the political savant here. Can you explain to me, because I have to say I am I find this oblivious. How does banning TikTok help anyone politically?

S8: I mean, I would say two things. One, that the president has a core group of advisers who are true, like actual true believer China hawks. Peter Navarro absolutely has been pushing from day one for the president to take much more aggressive measures against all sorts of Chinese companies. And and I think this is a sort of a natural extension of that. But it is also true if you look at their political messaging, that they think making a villain out of China is helpful for them in this election. And I I’m going to go out on a limb here and wager that it is in part because they really see it as a way for them to deflect coronavirus blame. The more that you can message, just as China unleashed this virus on us, China has these Trojan horse companies that are spying on us. China is that is the true enemy. It is a way to try to and then saying Joe Biden is soft on China. I mean, that is a way to I don’t think anybody’s going to vote on like, oh, I’m excited you took away TikTok. That doesn’t seem like although I do think a lot of teenagers might complain to their parents about it, but I think that there is a political narrative that they are helping to build here on top of true actual desires of the president’s advisers to crack down on all sorts of the Chinese economy.

S1: I 100 percent agree. I really think this is far more about that narrative, that kind of covid narrative. And it is actual economics. And that isn’t to say there are legitimate concerns about China, that there are legitimate concerns about Carrie Lam, but I don’t think that this is a well reasoned policy to deal with. Those know, I do think this is more just posturing. However, I do think it will probably have consequences far after hopefully Trump gets out of office. I think that what has been done in the last few years and especially now what has been done in the last six months, I don’t think that is something you quickly fix, even if Biden comes into office.

S3: Definitely not. If TikTok disappears, it doesn’t like spring back on January twenty. First, if if Biden comes into office, but it’s even bigger than that. I wrote a little bit in my newsletter this week about HSBC, which has, you know, it’s the sixth biggest bank in the world and it has just imploded because it’s I mean, it’s in the name Hong Kong and Shanghai Banking Corporation. And there are UK bank. They do most of their business in Hong Kong and China. And the tension there between like, do you support democracy? Do you support the people of Hong Kong or do you support the Chinese Communist Party is irreconcilable and it is tearing that bank apart and destroyed that bank’s profits. And the greater the geopolitical tensions between the US and China, the less money HSBC makes. And I think HSBC is a little bit of a canary here, like when it was Huawei, we didn’t care because they were like this Chinese company and who cares, right? HSBC is is a big UK company. Maybe we don’t care about big UK companies, but I’m thinking about Apple. China is basically Apple’s second biggest market. Apple has is probably the most successful American company in China entirely thanks to the fact that a lot of Chinese people like and use iPhones. If Apple can’t keep WeChat in its app store, then no one in China is going to use an iPhone. It’s as simple as that. You did a mobile phone is WeChat in China. So without WeChat, there’s no Apple in China. And I feel like I mean, it’s obvious to me that no one in the administration has thought this through. If you take one look at the executive orders that jump it out, they are incoherent. It is absolutely impossible to understand what they’re saying. But there is going to be a huge number of unintended consequences, many of which are going to fall on American companies.

S4: Yeah, absolutely. And I think that that the grand hope that American companies have had for four more. A decade now of the Chinese market being there next, the true great growth frontier, that’s something they have to be thinking about and reassessing right now what how tenable that’s going to be just given all of this.

S1: And one of the things I think is interesting, too, that I’ve heard for much of the past six months or even a year, is that in the Chinese government in a lot of ways, despite all of this kind of nonsense, would much rather have Trump in office than Biden, because what Trump is doing is unfocused and it’s unilateral, whereas when you get a Biden administration in, they’re much more likely to work with the rest of the world and they’re much more likely to be able thus to get real change out of China. And the the model that we’ve had in the relationship between China, the way that China’s been able to grow, some of the things that China has been able to do, though, that’s probably done like that. That stage of globalization is probably done regardless of who was elected this fall. And if anything, if you do get a more reasonable administration, that does not mean that all of a sudden we go back to having this nice relationship.

S3: Jim, can I talk to you about The New York Times for a minute, please? You just had a digital milestone. You now are making more money from selling electronics than you are from selling print newspaper ads. This is the De Physicalize version of The New York Times. I mean, when was the last time you went into the actual office?

S8: I haven’t been in in more than five months. And I think it’s been one hundred and forty eight days since I was in the office.

S3: So like offices, a disappearing print, newspapers are disappearing. Revenue is disappearing. I’m just doing great, meanwhile. So my question for you, is this some kind of Cinecitta key for the economy as a whole? Is this what is happening across the economy?

S8: Well, all economics is local, right? So I’m going to just wildly extrapolate from my employer. But I do think that it is I think that we had six hundred sixty nine thousand new digital subscribers last quarter. We are well on our way to the school of 10 million digital subscribers. And I think, you know, was not that long ago that people were criticizing the New York Times strategy of digital subscriptions and saying you couldn’t do it, you couldn’t make that work on the Internet. And and I feel like maybe in the pandemic we have accelerated that shift. Clearly for the times. I think other newspapers and large media outlets are going to be there with us, the Post and the Journal and others. And on the flip side, I don’t think it’s just a media story. I really don’t. I think brick and mortar retail is really struggling right now. And the way that, you know, just in my neighborhood, the way that so many restaurants have just kind of reinvented themselves away from their physical spaces to basically just kitchens where you pick things up, you know, they deliver to you or you pick things up right outside. I think we are seeing a dramatic shift to a virtual economy that we all knew was coming slowly but has really picked up. And I’m not sure we’re fully anticipating or understanding just how many business models have been totally reshuffled under eyes here.

S3: So is this permanent or temporary? Because this is the big question, which I’ve been struggling with for the past couple of months, is like obviously people change their behaviors during quarantine, when there’s a lockdown, when they can’t go into the office, that kind of thing. Obviously, at some point the pandemic will end when the pandemic ends. Do we snap back to the status quo ante or something similar to it? Because we just had this horrible pandemic period and we want nothing to do with it? Or do we suddenly realize that we kind of prefer this new life in some ways and especially in retail? I, I think I’m more in the snapback camp when it comes to shopping, people like that more as a physical activity. And sure, they might do the actual transaction online after having walked around all of the stores and it’s all omnichannel and the stores, the ads for the E store front or whatever, but ultimately, especially when it comes to clothes, people want to be able to walk to stores, touch them, look around. I think that it is maybe more temporary, maybe.

S4: I don’t know. I would I would have agreed with you two months ago. I’m not sure that I agree with you now. Part of it is like, I don’t know, I never want to go back into an electronic store again. I just it’s just easier to order a new computer speaker online now and have it show up at my door two days later. I don’t want to have to, like, get up and fight traffic at the mall or whatever. And I can think of being in the stores. I really like going to I definitely will return to. I really hope RCI does not go all virtual, but even think about things like that are beyond retail.

S8: I think we will see a lot more virtual innovation in the home buying space, like the way that realtors have innovated with being able to stage a home virtually now. So you can put really cool furniture in that doesn’t actually exist, but is just there on on the tour. I think we will see a lot more of that now. I don’t think that’s going to mean there’s nobody goes to an open house anymore, but it may dramatically change the way people buy homes, and I wouldn’t expect that fully steps back.

S1: I agree. I think that, number one, the longer this goes on, obviously, the more it’s going to result in some type of permanent behavioral changes. But I also think what will probably go back to will be a different model. One of the things I found really interesting is, I mean, I’ve been someone who for a long time has been like The New Yorker with the doorman building that has everything delivered like. But that’s that was my reality long before the pandemic. And it was interesting for me then to see my relatives who were not used to ordering groceries or these kind of things all of a sudden start doing and being like, this is great. Like, why would I want to go back to the way things are done before? So I think as some of these models were, you know, moved beyond just kind of the urban centers, I have a hard time believing we’re just. To go back to pre covered world.

S3: So who are the losers here? Presumably it’s commercial real estate.

S4: Yes, yeah, it really feels like it.

S1: Talk to people, commercial real estate and they’ll give you these spiels about, oh, no, people are going to need more space because of social distancing, like no commercial real estate going to struggle.

S4: I think short term, that’s right. And I think there’s also just like a bunch of big incumbent brick and mortars that are there. We’re seeing, you know, have have filed bankruptcy or look, you know, close to it. And they were not doing great before this started.

S8: But I’ll tell you, the other losers here are the smaller business, Broken Borders, who have not been able to adapt, who don’t have the instant ability to go more virtual of like a Target or a Wal-Mart. And I think that they anecdotally, that is one thing I’m also hearing from a lot of places is like, oh, we had a decent size for us neighborhood market share from our hardware store, but we had to close for a few weeks and we haven’t been able to figure out the sort of like, you know, low contact pick up, curbside pickup model and Home Depot is blowing us away. So I worry about that because I think that in more dynamic, more competitive market, in those with more local businesses, it’s better.

S4: But but I think there’s a real chance we’ll lose a lot of those permanently.

S3: One thing we’ve definitely seen in the stock market is not just the S&P 500 outperforming the market as a whole, the broad market, but really just a handful of big digital companies dominating the rally and hitting new highs while the rest of the market is is lagging behind them. And I do definitely worry that this is the winner takes all recession. And at the end of this recession, anyone who is enormous is going to be dead and we are going to wind up in a world of monopolies.

S1: I think that’s certainly certainly possible. I hope that is not the case. But, yes, I think there is definitely a possibility of that. I mean, I would say I think that even though while the economy is really, really, really struggling, you may not have quite the interest in antitrust despite what we saw with all the congressional hearings. I think that once the economy starts recovering, now that you are almost certainly going to have more government involvement in the economy moving forward, I think that that is just a reality. I do wonder if you’re going to have more pushback on some of those companies that are experiencing essentially windfalls right now. If you look historically, it wouldn’t be surprising if we end up getting more government pushback and we end up having changes. And I don’t know if it results in a bunch of smaller, really, really small companies thriving. I obviously I have no way to say whether that’s going to happen or not, but I don’t necessarily think this means that it’s just going to be, you know, Google, Facebook, Microsoft and Amazon and nothing else.

S3: Not even if Microsoft took maybe Microsoft, then all bets are off.

S4: Seems that seems like a world owning conglomerate, right?

S3: That I have to mention my my theory here, which is that Microsoft has really become the dominant enterprise computing company in the world. It’s astonishing to me how Microsoft Office in particular retains 90 percent market share when. Google Docs are so much better, but they just haven’t really made it into Excel.

S1: Excel is so much better.

S3: It’s not easy to use every day word I loathe with a flat rate of a thousand suns. But yeah, but Microsoft also has a bunch of random consumer facing products, which everyone kind of ignores, at least when it comes to the stock market. But they’re really big things. Minecraft is a huge thing. Xbox is a huge thing. And my idea is that the reason they want to buy TikTok is because if you have something as big as TikTok and then you combine it with Minecraft and Xbox and maybe linked in, I’m not sure about that, but a few of these more consumer facing things and then spin that all out into a consumer facing company, then you create a bunch of value that way, even though they probably couldn’t do that kind of a spin out unless there was a big anchor in the form of something like TikTok. This is not going to happen. By the way, this is my fantasy. But this is my my mental model of Microsoft.

S5: I can’t imagine a scarier, more horrifying thing than a LinkedIn TikTok scenario.

S1: Right.

S3: I mean, it’s just I mean, LinkedIn. I just I just like to scroll through LinkedIn, watching, watching thirsty teens. This is the best of both worlds.

S8: Yeah. Oh, wow. Dystopia.

S1: That’s great.

S3: Talking of dystopia, my number this week is sixty eight point two percent, which is the latest homeownership rate from the Census Bureau. It has absolutely skyrocketed in the past couple of months. And there’s lots of talk about why that might be this obviously very low mortgage rates. People, when they aren’t able to go to the office or go shopping and stuff like that, they really value personal home space much more. And so there’s been this big sort of sucking sound of people have been buying up property in the suburbs. Suburbs have much higher homeownership rates than cities do. So every time you buy in the suburbs, it increases the homeownership rate in all of these other similar things. But honestly, I also suspect that that we have some very noisy data here and the Census Bureau isn’t able to count as well during a pandemic as it was before. They they actually had a note in their release about that and that maybe that number might get revised down a bit because they still believe in my heart of hearts that homeownership is on the long term secular decline.

S4: I think that’s I think that’s really possible. I also think I mean, we have seen the surge of home buying. But I also I wonder what how that all interplay with the sort of like potential wave of evictions that we could see and whether those turn into landlords then trying to sell properties and it feeds on itself. And there’s hiring.

S3: I think I think rental properties mostly remain rental properties. But if you are evicted from your Brooklyn apartment and then you wind up going back to Nebraska and buying somewhere, that increases the homeownership rate at the margin.

S1: Although I don’t know if you’re being evicted, if you’re probably then going to go immediately and buy a place.

S3: I’m not sure if the overlapping population is exactly like you could probably buy a place in Nebraska for the price of six months rent. And Breckman depends on where you live.

S1: But yeah. So my number is Satur. My number is two thousand seven hundred and fifty tons. Oh, is that the ammonium. Yes, the ammonium nitrate. I it really is just unbelievable when you start to dig into what actually happened in Beirut and the, the fact that through complete incompetence and really criminal incompetence of the Lebanese government, they have, you know, killed over one hundred people, injured thousands of people that can go like three hundred thousand people are homeless. And I mean, the size of this was like 20 times larger than the largest non-nuclear bomb. And I heard, like, the shockwave was something like 20 or 30 percent of Hiroshima’s shock wave. I mean, just unbelievable. And just through incompetence, I mean, I feel like not only should the Lebanese just be infuriated, I feel like the entire world should just be like, this is horrible.

S3: This is this is like it was not only foreseeable, it was foreseen. No, it’s a steady stream of letters from the ports. People saying, like, we are sitting on a bomb and it’s going to explode unless we get this stuff out of here. And the government was like, yeah, yeah, we should probably do something about that and never did.

S1: And it shouldn’t. In a sense, it’s almost not surprising because you have this is the same government that couldn’t pick up the trash on the street for how long you had trash piling up that has completely destroyed their economy because they turns out you can’t run a Ponzi scheme for that long before it breaks down. It’s just the more I read about it, the more I’m just like, this is the worst thing I’ve ever seen.

S3: So what it like in terms of forseen disasters? The other big one that I’m really worried about right now is the Three Gorges Dam, which, you know, the Chinese government is coming out and saying the Three Gorges Dam is perfectly safe, which is the least reassuring thing you can possibly do. But, yeah, that would make the Beirut blast look like a walk in the park if that collapsed. Jim, what’s your name?

S4: All right. My number is a gratuitous book promo, but it’s always love.

S3: We love this book premise we’re all in.

S4: It’s also an attempt to be just as depressing as as you sow. So my number is eighteen seventy, which is a year. And it happens to be the year that some researchers, including Mary Ann Wannemacher of the University of Tennessee, who was on President Trump’s Council of Economic Advisors. It’s the year they looked back to and in a big longitudinal study of economic mobility for black men. And they were looking at it to see how had it changed over time and is it easier? Has it ever become easier for black men to get ahead of where they’re sort of where they were born, do better than their fathers, then white men? And and the depressing answer is that since 1870, the penalty for being black in America in terms of economic mobility has not changed. It is just as hard today for black men to get ahead as it was. During reconstruction, and that, I think, is one of the more sobering and depressing statements on our economy right now in the midst of this summer of protests and calls for equality, that it is just still incredibly difficult and there is this deep, deep penalty just for blackness in our country.

S3: I want to jump in and say the Business Week had a really good cover package on this, I think it was last week. And there’s this general feeling among sort of my circle at least, that, you know, there’s a lot of systemic racism and there’s a lot of room for improvement. And things are getting better far too slowly for black Americans. But I think what’s not being realized is there are definitely significant parts of the economy where things are getting worse and Wall Street is one of those. And it does really seem as though Wall Street was more welcoming to black Americans 20 years ago. And there were more black Americans in senior positions of Wall Street 20 years ago than there are now. And there has been this backwards movement, and I’m sure Wall Street is not alone in that. But there is this kind of complacency that, well, you know, at least we’re not getting worse. I think we are getting worse in significant parts of the economy.

S4: Yeah, it’s sobering. But again, I mean, the hopeful thing is that means there’s an opportunity. If we could get better, dramatically better, there is just all that talent to be unleashed on the economy. And that I think that would be great for Wall Street, frankly, and it would be great for the rest of the country.

S3: Which I think brings this episode of Sleep Money to a close, Jim Tankersley of The New York Times, thank you so much for joining us.

S2: It’s been great to have you here. It’s been really fun. It has been fun. Thanks to Jessamine Molly for producing. And thanks to all of you guys for keeping the e-mails coming on Slate money at Slate dot com. We will talk to you next week on Slate Money.

S3: So, Jim, let’s talk about Donald Trump and the middle class, has the middle class grown or shrunk under Donald Trump? Let’s say up until February twenty twenty, because that was when the stock market was booming. Let’s put the pandemic to one side for the minute. How was Donald Trump overall, given this massively booming economy for the American middle classes?

S9: So I think it’s right. We should we should separate out the two parts of the Trump economy, the before times and now the before times were OK, pretty good. He basically didn’t for three years. He he he performed like a replacement level president from the last from an expansion era of the last two decades. If you look at the economy that Donald Trump sort of oversaw for the first three years, it grew at about the same rate with about the same income growth as the second term, Obama or second term Bush economy. So, you know, he inherited a good, really good economy with low unemployment. It took way too long to get there. And he didn’t ever have a growth rate that exceeded Obama’s best growth rate in his second term or Bush’s best growth rate in the second term. And in terms of the middle class, we saw income gains and we saw really low unemployment rates. But a lot of that was just a function of where we were in the cycle. When he took over. He made all these big promises, though, about bringing back millions of jobs. And on that, the data are clear. He just he didn’t there’s just not been the surge and restoring not the surge in foreign direct investment. You know, he likes to wave pieces of paper about how much Japan is investing in the United States. But Japanese direct investment growth is lower under Trump than it was under Obama. So, I mean, I think in general, the best thing you can say about him was that he was a pretty good steward of the economy for three years at a time of incredibly low unemployment with an incredibly supportive Fed and incredibly supportive fiscal policy. And then pandemic recession hit. And that all went to hell.

S3: And to be clear, the pandemic recession is to a very large degree, his fault like that. That’s where you don’t just sort of outsource the economy to your treasury secretary. That’s why you need to actually that’s where presidents can make a difference is is when something like a pandemic hits.

S9: Yeah, absolutely. I mean, obviously, it’s hit the entire world and everyone has suffered economically through this. But the Trump administration has been somewhat alone, I think, globally in both terms of how they attempted to minimize the threat from the virus before it hit the United States. His economic advisers were saying, you know, this is this is not a big deal. We don’t think it’s going to hurt us at all. And then the way that they’ve continued to struggle to get the virus under control stands out among Western nations for sure, although it is similar to both scenario in Brazil and in both scenario tag team.

S1: I was just going to say, and I agree with all that. One of the things I think is interesting, though, is that like, you know, normally if you’re trying to say someone’s performance, you’re like, well, you know, if you had to invest, you know, one hundred dollars to make another ten dollars, whether if you had to invest two hundred dollars to make another ten dollars, well, obviously, if you invested less to make the same, that’s better then you had to invest more to make the same. And I think that’s kind of the thing when you look at Trump is that the amount of fiscal stimulus was so much more during his period compared to Obama. And I mean, monetary stimulus, you can probably argue is similar. But but also, again, like rates are so low that you probably arguably did worse.

S4: Yeah, I think we did. My colleagues, Ben Casselman and GNP and I did a fun experiment. We sort of built our own Taylor Rule and then built our own fiscal rule back in maybe a year ago. And we looked back several presidents to sort of see, given where you were in the economic cycle and what you might expect fiscal and monetary policy to be doing, who’s had the most tailwind and Trump’s had the most since Carter, which is, you know, pretty impressive given the amount that that Obama had and the amount that we forget. But Bush had a lot of stimulus from defense spending. So that’s that’s a lot of help with again, that has produced essentially the same results as a second term Obama or a second term Bush.

S3: OK, now now you farcically got COSO had a bunch of economic tailwinds and was also a single term president.

S4: It was. Yeah, it’s very weird, right?

S3: I had no idea that the cut was so well endowed with his.

S4: Well, of course, at the end, of course, at the very, very end of Carter, of course it the monetary tailwinds turned against him, turned into the thing that created that the recession in the year. And Carter is the last US president to stand for re-election in a year in which there was a there was a recession I was looking at of the dead, you know, who the last US president was to win re-election in a year in which he had already experienced a recession when he stood for the vote.

S3: So any point over the four years.

S4: Oh, no, no, no more. So there’s been a recession that year, the year of the election. OK, so like Truman had the November of of forty eight. So we’re not counting that. But there’s been there’s been a recession leading up to the vote that year. Last one to win, FDR, FDR, Teddy Roosevelt, FDR never had a recession. And this is going by the guy in the NBA, by the NBA. We trust NBA in all things. Yes. Right. So the NBA can do the power of Teddy Roosevelt’s charisma. I’m not I’m not triple check this, but the NBA, if he didn’t get credit for it anyway, that would be amazing.

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