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Catherine Rampell: The Economy Is Weird Right Now

September 15, 2022
Notes
Transcript

Too few workers, too much inflation — these are confusing times for our economy. Plus, the myth of a manufacturing comeback, and the slow-moving employment crisis among teachers, cops, and other public servants. Catherine Rampell joins Charlie Sykes.

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This transcript was generated automatically and may contain errors and omissions. Ironically, the transcription service has particular problems with the word “bulwark,” so you may see it mangled as “Bullard,” “Boulart,” or even “bull word.” Enjoy!
  • Speaker 1
    0:00:00

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  • Speaker 1
    0:00:20

    Do it for yourself and for those you love. Learn more at Fulton County b o h dot com and follow hashtag vaccines work to learn about our COVID nineteen vaccination efforts.
  • Speaker 2
    0:00:39

    Welcome to the Bulwark Podcast. I’m Charlie Sykes. It is Thursday and we are joined by Catherine Rampell’s syndicated opinion columnist at the Washington Post where she covers economics public policy, immigration, and politics. Wow. That’s that is quite a that is quite a brief to have to cover all of this.
  • Speaker 2
    0:01:00

    So
  • Speaker 1
    0:01:00

    It’s fun.
  • Speaker 2
    0:01:01

    Well, just in case that you have any free time, you’re also an economic and political commentator for CNN and a special correspondent for the PBS NewsHour. So I appreciate you coming on this week in particular because there’s so many things that that I don’t understand that I’m hoping that you can explain to me.
  • Speaker 1
    0:01:18

    I will do my best. No promises.
  • Speaker 2
    0:01:20

    Let me start off with a softball easy question. Can you explain the economy to me?
  • Speaker 1
    0:01:26

    Oh, I wish I could. You know, the economy is so confusing right now, even to people with PhDs, which I do not have. The economy is very difficult to make sense of because there are so many different metrics that seem to be pointing in opposite directions, you know, the economy good, the economy. It’s not good. We’re gonna have a recession.
  • Speaker 1
    0:01:47

    We’re not gonna have a recession. So you are not alone in being somewhat baffled by what’s going on right now? Well,
  • Speaker 2
    0:01:57

    let’s talk about inflation. We had these horrific numbers earlier this week that caused the stock market to crash, obviously, an expectation of higher interest rates. But give me your take on how serious the problem is and what is causing it. Let’s start with what is causing it, because I think we know how serious it
  • Speaker 1
    0:02:15

    is. So there are a number of factors that have been driving high inflation and there’s some debate about how much to attribute to any one of these factors, but I’ll go through some of them. One obviously is supply chain problems coming out of the pandemic, coming out of the shutdowns early in twenty twenty. There are still lots and lots of disruptions relating to labor shortages relating to lockdowns in China, which you know, have still been going on relating to all kinds of disruptions. You know, companies can’t get key parts that they need.
  • Speaker 1
    0:02:52

    Key input supplies. That makes it harder for them to produce whatever it is they produce. It makes it harder for restaurants that they can’t buy enough workers to do the same number of cedings that they used to, you know, their costs are going up. But for labor, for food, that’s getting passed along consumers. So some of this is like the pains coming out of COVID.
  • Speaker 1
    0:03:17

    We see this not just in the U. S. But around the world. Some of it has to do with policy choices that were made here in the United States that probably made things quite a bit worse. I’m talking about massive fiscal and monetary stimulus, which you can argue that those kinds of measures, whether we’re talking about the American Rescue Plan, for example, that passed under Biden or the several rounds of stimulus that passed under Trump, Those kinds of measures provided a lot of relief to people and had upsides.
  • Speaker 1
    0:03:50

    They may have also contributed to the fact that The job market has recovered a lot more quickly than most people had forecast, but they also meant that consumers had a lot more money to spend. And consumers also had a lot of forced savings resulting from block downs and whatnot besides. So you have the the old expression is too much money chasing too few goods. So you have, you know, in addition to supply chain problems, you also have really, really strong consumer demand, those things interacting with one another or driving up prices. So those are kind of like the main culprits But then you also have things like the war in Ukraine, which is disrupting energy markets, food markets around the world, and that’s driving up prices too.
  • Speaker 1
    0:04:38

    So it’s all of these different kinds of things interacting. And again, there’s some debate about how much blame to put on any one of them, but but they all do seem to be contributing.
  • Speaker 2
    0:04:49

    Talk to me a little bit about also housing prices because this key seems to come up again and again. Soaring prices of rent, sorting prices of homes. I understand a lot of the, you know, fiscal policy, I understand labor shortage, and the commodity prices, what is driving the surge, the bubble in housing prices?
  • Speaker 1
    0:05:09

    So again, it’s a combination of a few different things. Some of it is just like the long term under investment in housing. Basically, after the housing bubble burst more than ten years ago now, there was just not enough housing built, understandably, I guess, in the initial few years, but it turned out to be a big problem. That there wasn’t a lot of new supply coming online, particularly because the millennial generation was aging into prime home buying years. Having kids, moving to the burbs, things like that.
  • Speaker 1
    0:05:42

    And if there isn’t enough housing stock for these new households to buy, that’s going to drive up the price of housing further. And then you had like early in the pandemic. Obviously, this big rush for people deciding that they they needed more space, many of whom were millennials who again were kind of aging into a period of their lives when they would have wanted anyway, but it it may be accelerated some of those decisions. Interest rates were really low. They’re still quite low, by the way, by historical standards, they’re rising, though.
  • Speaker 1
    0:06:13

    And so that made it cheaper to get a mortgage. So you have all of those things colliding. And then on top of that, you have interest rates rising today as I just mentioned, which is intended to get inflation under control by, you know, like, making it a little more expensive to borrow, make you know, basically cooling consumer demand. Like, I was just talking about consumer demand is really hot, but it also has this kind of unintended consequence of making it less attractive for homebuilders to build. Because now gets more expensive to buy a house and they’re worried about losing customers, maybe some homebuyers or breaking contracts.
  • Speaker 1
    0:06:53

    So The remedy that you would normally prescribe to deal with inflation does have this unintended consequence of reducing supply on the margin anyway in the housing market exactly at the time when you want more supply.
  • Speaker 2
    0:07:09

    So you’ve been a close observer of the Federal Reserve. Give me your take on how, Jerome, how and the Fed has handled the last several years of the economy, you know, obviously focusing on interest rates and inflation. Did they get it right? Have they been too slow?
  • Speaker 1
    0:07:26

    Yeah. They were definitely too slow in retrospect, but it’s one of these things where hindsight is kind of twenty twenty. And I think the mistakes that they made early on, a lot of people made, about, for example, how long supply chain issues would persist. And how big of an impact all of that fiscal stimulus would have on consumer spending. So they made a mistake.
  • Speaker 1
    0:07:49

    You know, they thought Jerome Powell said repeatedly that he and his colleagues thought inflation would be transitory. And I’m sure that that particular turn of phrase is now the bane of his existence. You know, it’s it’s a little bit hard for me to be to damning of all of that because I made the same mistake myself. You know, I also did not foresee inflation lasting for as long as it did and I think given the facts available at the time, it wasn’t a crazy set of assumptions to make. But, yes, in retrospect, they should have started raising interest rates a lot sooner.
  • Speaker 1
    0:08:25

    Than they did. They were worried about, you know, how stable the recovery was coming out of the pandemic recession and if they raise interest rates too soon that maybe they would kill job growth for a very long time. We had this huge deficit of jobs that had been lost early on in the pandemic, you know, they wanted to make sure that those were recovered. But the bigger problem as it turns out has been the fact that inflation has been persistently high. And there’s a risk that even when that fiscal stimulus fades and it is fading, even when some of these supply chain issues resolve themselves, if inflation sticks around too long, it sort of becomes entrenched that people expect prices to keep going up and it becomes a self fulfilling prophecy because they’re like, well, I’m a restaurant.
  • Speaker 1
    0:09:15

    I’ve seen all these price increases I guess I should start increasing my prices preemptively. And that’s the that’s the state of the world you really don’t want to be in and that the Fed is very worried about.
  • Speaker 2
    0:09:25

    When will this affect the jobs market? Because, of course, we’ve also had a sizzling a sizzling market. I I use the the the McDonald’s rule of thumb that there are no McDonald’s jobs anymore that appear to pay less than fifteen dollars an hour. I mean, remember when that was kind of a radical proposal to dollars minimum wage. Now it is the norm.
  • Speaker 2
    0:09:45

    On one hand, this is rather extraordinarily attractive for workers that they at the lower rung of economic ladder that now these jobs actually pay pretty well. Everywhere that I look, there still seems to be a labor shortage. So at at what point people are, you know, clamoring for workers and we’ll get to that in in a moment. That is kind of this paradox. Why it is so confusing?
  • Speaker 2
    0:10:08

    Because at a time when we’re worried about recession, you have help wanted signs everywhere. I just don’t remember being in that moment before.
  • Speaker 1
    0:10:17

    Yeah, it’s a really weird set of circumstances to be in right now. The Fed is hoping that they can raise interest rates without putting people out of work. Historically, when we’ve had recessions, like for most of the twentieth century, they were they were often caused by the Fed raising interest rates to try to get inflation under control. They don’t want that to happen. And, you know, a lot of people on the left are telling the feds to stop raising interest rates because they’re worried about destroying the job market, destroying the recovery, causing us in a recession.
  • Speaker 1
    0:10:49

    The Fed is hoping that because there is so much demand for workers right now, like the number of job openings vastly out numbers, the number of of people who are unemployed and looking for work. The Fed is hoping that, like, well, maybe they can just, like, reduce some of the demand for workers but not actually, at least on it, cause people who are currently employed to lose their jobs. You know, it’s hard to know how realistic that outcome is. This is what they refer to as the soft landing if you’ve heard that term. It’s like they want to raise rates interest rates just enough, full demand, not enough to get us into a recession.
  • Speaker 1
    0:11:33

    That’s, you know, that bringing bringing the economy towards a soft landing. Now, I think even if you talk with people who work at the Fed and they’ve, you know, said this congressional hearings and stuff, they’ve said, like, there’s no guarantee that they can achieve that outcome. But that’s what they’re hoping for, that all of those help wanted signs that you see are evidence that there is room for the Fed to raise interest rates without, like, necessarily tossing a lot of people out of work, but it’s really hard to know.
  • Speaker 2
    0:12:05

    President Biden has just signed the, what they call, the Inflation Reduction Act. So, Catherine, will that bill reduce inflation?
  • Speaker 1
    0:12:15

    You know, I think it’s unlikely to have much of an effect either way. Democrats, it’s like brilliant branding. Right? Yeah. They know that Americans are mad about inflation, let’s call this bill that does a lot of other things that Democrats want to do an inflation reduction act and suggests that they are addressing the thing, the the immediate economic problem that Americans are mad about.
  • Speaker 1
    0:12:39

    It doesn’t really. There are some things in the bill that over the long run might reduce pricing pressures. There are some things in the in the legislation that over the long run will increase pricing pressures, but probably it’s a wash more or less, and it kinda depends on, like, when the one set of things that raises prices goes into effect versus the other set of things that potentially you know, pushes prices down, goes into effect. So I don’t think it’s gonna have much of an effect either way. I mean, that’s not to say it doesn’t do other good stuff.
  • Speaker 1
    0:13:09

    I’m very supportive of other parts of the bill, particularly the climate measures. You know, I don’t think they’re perfect. Better things they could have done, but I still think it’s really important that they got it done. I think it’s a little bit misleading to claim that this is primarily about bringing down prices.
  • Speaker 2
    0:13:28

    So, Kevin, what I really like about your stuff is that you often will challenge the conventional wisdom or you will make a point of going point. I that seems very counterintuitive. So I wanna talk about your last two columns, including the myth of a manufacturing comeback and, you know, president Biden has been celebrating the triumph of Made in America, and this has been a narrative that other people have touted that we are seeing a comeback in in manufacturing, including in the rust belt where where, of course, I live. So let’s talk about this. You know, administration officials are touting this manufacturing comeback and they they’ve been talking up these plans for factories that are going to produce semiconductors, electric vehicles, fiber optic, cables, you know.
  • Speaker 2
    0:14:11

    And this is gonna power job growth from the bottom up as as Biden says, and look, this is as you point out, this is this is pretty compelling rhetoric and, you know, as grasping for straws of optimism, I have to admit I’ve kind of bought into some of this narrative but you argue these claims are getting it wrong. Okay? So throw a
  • Speaker 1
    0:14:34

    wet
  • Speaker 2
    0:14:34

    blanket on all of this.
  • Speaker 1
    0:14:36

    I think there are a few minutes here. One is this idea that we don’t make anything in America anymore. You know, I feel like I hear this all the time and and this is why we need to make things in America again, you know, Biden talks a lot about how make it make it in America. It’s not just a slogan like it was in other administrations. It’s true now.
  • Speaker 1
    0:14:54

    This is nonsense. We’ve like always made things in America. We still make things in America. We happen to do it with fewer workers than we used to. It’s a lot more automated.
  • Speaker 1
    0:15:06

    So for example, we produce as much steel, you know, as many tons of steel roughly as we did about thirty years ago. Which
  • Speaker 2
    0:15:12

    I found extraordinary by the way. Yeah.
  • Speaker 1
    0:15:14

    Yeah. People don’t realize this. We
  • Speaker 2
    0:15:17

    produce as much steel as we did three decades ago with half as many workers.
  • Speaker 1
    0:15:21

    Right.
  • Speaker 2
    0:15:22

    That’s remarkable.
  • Speaker 1
    0:15:22

    And and it’s because there have been these massive technological gains, big productivity advances. And so it you know, I think people there there’s like a certain nostalgia for certain kinds of jobs, including steel worker jobs. And if you worked in the steel industry, I understand that, you know, it’s it’s part of your identity. But On the other hand, I mean, this is a natural evolution in economies. Once upon a time, most of the American population probably worked in farming or at least a very large portion of people worked in farming.
  • Speaker 1
    0:15:58

    Then we had mechanization, automation, and we don’t do that anymore. And that’s not a tragedy that there are so few people employed in farming today. I think it’s a triumph. It’s a triumph of human progress that we can feed as many people as we do without requiring as much human toil. To go into it.
  • Speaker 1
    0:16:17

    And it’s sort of the same evolution that’s happened in manufacturing and that we produce as much stuff by value almost as much stuff as we ever have when you adjust for inflation. A lot of the lower value industries have left, you know. We don’t make a lot of textiles here anymore, for example. Those industries have gone, but we do a lot of higher value stuff. Much of it is automated.
  • Speaker 1
    0:16:44

    And I think one lesson of all of this, it’s not that we don’t want that kind of industry here. It’s just that it’s probably not going to employ that many people. That’s been the general factory. We produce a lot of stuff. We just don’t need as many workers doing that stuff.
  • Speaker 1
    0:17:02

    And in fact, we have different kinds of workers who work in factories today than have been the case. I think to some extent when there’s this nostalgia about this era that people think of like in the mid twentieth century when they imagine America was this big manufacturing powerhouse or at the very least a higher share of workers were employed in manufacturing. I think probably what they miss is not so much like the fact that people were employed in in often very dangerous in that breaking work. That wasn’t the good stuff that, you know, the advantage of that era was that there were pretty solid middle class wages. That came with these jobs even if you were a high school grad or high school dropout.
  • Speaker 1
    0:17:49

    That’s, I think, what powers a lot of the nostalgia for that era. And when Biden talks about bringing back manufacturing, think that’s what people picture. Like, oh, we’re gonna employ all these auto workers again and like, you don’t have to go to college, you know, you don’t have to, you don’t have to, like, invest in all of that training and postsecondary education and all that stuff, and you still have access to this middle class life. And in fact, if you look at how the manufacturing labor force has changed, not only has it gotten a lot smaller over time, it’s also gotten a lot more educated, a lot more training. So you know, there aren’t that many jobs attached and the jobs that do exist tend to require a lot more postsecondary schooling than had been the case the past.
  • Speaker 2
    0:18:33

    So why shouldn’t we think though that investing in the jobs of the future, like building electric vehicles? Why wouldn’t that power our jobs boom?
  • Speaker 1
    0:18:40

    Well, I think as I said, a lot of it’s gonna be automated. For example, in electric vehicles, even if we somehow managed to capture, like, the entire EV industry in the US or a large portion of it akin to whatever our market share was. Decades ago for combustion engine cars. It’s still probably going to require fewer people because you know, they’re more robots and there are fewer parts, frankly, to make an EV than to make a conventional car. So it’s just not going to require as much labor.
  • Speaker 1
    0:19:16

    Now you can argue like, okay, maybe it’s not going to have as many jobs as it would have in the past, but it’s we still want at least those jobs here. You know, even if they’re fewer, we still want those jobs. We don’t want them to go abroad. But there are trade offs to that too. In terms of putting a lot of restrictions as is the case, for example, in the Inflation Reduction Act about which vehicles, get tax credits, get these subsidies.
  • Speaker 1
    0:19:46

    There are a lot of restrictions that mandate assembly in the US. And that the materials, that many of the materials have to come from either the United States or the select number of countries that we have free trade agreements with, which it’s like complicated, but the upshot is not only does this rule out sourcing from China, which I think many people would agree we don’t really want to rely on. But it also rules out sourcing from the EU from Japan, from Argentina, which produces a lot of tea mining that’s relevant for batteries. They go into EVs. So one result of putting all of these restrictions in place that are intended to move supply chains for EVs into the US, which may or may not work, is that it basically means that there are fewer cars that Americans can buy for which fewer EVs for which these tax credits will be applicable.
  • Speaker 1
    0:20:46

    And there have been a bunch of analyses suggesting that this is actually going to slow adoption of electric vehicles, particularly for, like, lower and middle income consumers for whom the price really does matter. You know, if you’re a richer customer, you’re trying to get a Tesla, for example, and I know that there’s tons of demand. For those. But if if you’re really trying to accelerate the adoption of electric vehicles, this has costs. Trying to move these supply chains, not only out of China, but like out of all of these allied countries that are supposed to be our friends and our close economic friends of ours, has costs and will ultimately affect our climate goals.
  • Speaker 1
    0:21:28

    So you may decide, okay, it’s worth it for the handful of jobs we’ll get, but I think this is a trade off that should be more explicitly considered when we’re talking about how to structure a lot of these policies, and it gets kind of left out of the conversation. It’s like, oh, manufacture. We want as much manufacturing as possible. Who cares about the trade offs? When there are trade offs?
  • Speaker 2
    0:21:51

    Your other recent column was something that was not even on my radar screen. And I also So I have to admit it’s one of those crises that I I found a little bit surprising given the amount of money that’s been dumped on state and local governments, you you wrote about the slow moving crisis affecting states and cities that may not gonna have real world consequences. So you document what’s happening on the country in Indianapolis, trashes and getting picked up in Jefferson County, Colorado potholes aren’t being filled in Franklin County. Wisconsin school but routes have been canceled. Prisons in Florida are having trouble operating prisons.
  • Speaker 2
    0:22:23

    The National Guard’s been called in, in South Carolina project to connect rural homes to a public sewer system was delayed So I guess there had been the assumption that, you know, with all of the stimulus money that was out, that state and local governments had tons of cash, but there’s a nationwide shortage of public workers here. What is causing this? What’s happening there? Because public workers These are people who have, you know, reasonably good jobs. They’re well paid.
  • Speaker 2
    0:22:49

    They have a lot of job security, lots of benefits. Why is there a shortage of public workers right now?
  • Speaker 1
    0:22:55

    Yeah, it’s kind of a puzzle. Not only did a lot of cash go out from the federal government, of states and localities, specifically to prevent problems like this, you know, to get public services back up and running, and prevent some of what we saw after the great recession. But also states generally have a lot of their own cash. You know, they have budget surpluses on their own because tax revenues have been really strong. Other federal government programs helped keep consumer spending wrong, which supported sales taxes, for example.
  • Speaker 1
    0:23:31

    So it’s not that states don’t have the money. The challenge, there are a few things going on. I mean, one is that the public sector workforce skews older. And as baby boomers are moving into retirement, that’s disproportionately going to affect state and local governments. They’re going to lose workers.
  • Speaker 1
    0:23:49

    But the bigger issue has to do with pay, So a lot of public sector jobs pay less than their private sector counterparts So if you’re like an IT person and you work for your local government, probably you’re gonna be making a lot less than you would for a private company. So that was already the case. But in the current environment where there are labor shortages and strong inflation, all the things we’ve been talking about, private employers have been able to adapt much more quickly. They know workers are demanding higher pay. They’re able to raise pay or at least to some extent they’re able to raise pay.
  • Speaker 1
    0:24:26

    Governments struggle with that, both because there’s a lot of bureaucracy and maybe they’re on a, you know, state might be on a two year budget cycle. So it’s difficult for them to make the changes necessary to pay scales and things like that. There’s also a lot of public opposition to raising the pay of public servants, and this happens sort of in a fishbowl as one person put it to me. When a worker at a private company demands a raise for the most part, that’s not public knowledge. But if you’re talking about the local city manager or, you know, the EMTs or whoever, those negotiations happen in public and so people call up their local TV station and complain and say, why are these public servants, you know, getting more money?
  • Speaker 1
    0:25:08

    So the pay hasn’t kept up. Like I said, there was already kind of a pay gap for a lot of occupations, but the pay gap is widening. Mhmm. And states and localities haven’t quite figured out how to adapt. And then a lot of these ducks have also frankly gotten more unpleasant.
  • Speaker 1
    0:25:22

    Well,
  • Speaker 2
    0:25:22

    yeah, you you mentioned, you know, that that public sector employment is down six hundred and forty seven thousand positions since February twenty twenty. Half of the decline is in education because of teacher shortage. I think we can understand how difficult it has been to be a teacher during the pandemic. And then the rest are like paramedics, sanitation workers, heavy equipment operators, child welfare advocates. So, I mean, part of it has to do with the, I mean, the quality of the work.
  • Speaker 2
    0:25:45

    I mean, it is —
  • Speaker 1
    0:25:45

    Yeah. — gotta
  • Speaker 2
    0:25:46

    be very tough to be a teacher in in the current environment, particularly with all the the back and forth. And
  • Speaker 1
    0:25:51

    it’s not just teachers whose jobs may have gotten more difficult recently, you know, law enforcement. There’s a lot more distrust of law enforcement today than there had been in the past. Some of which may be justified, but it means that it’s harder to recruit, right, to to these kinds of jobs. Election officials, There aren’t that many election officials out there, but their work has come up a lot harder, as you can imagine. Public health.
  • Speaker 1
    0:26:14

    If you work in public health, you might be facing harassment day in and day out, whether we’re talking about, you know, like an epidemiologist who’s deciding on very controversial things like mass mandates or you’re a nurse and you’re administering COVID vaccines, you’re probably facing a lot more difficult interactions with the public. So there are a lot of these kinds of jobs that in addition to pay not keeping up. Have gotten more stressful, more unpleasant, more unpopular, and those things combined are gonna make it very difficult to keep workers from being poached. By the private sector, especially if their skills translate. You know, if you are a nurse at a public hospital, there are very obvious private sector alternatives for you.
  • Speaker 1
    0:27:01

    It’s not true for every job, but there are other kinds of jobs where maybe you end up changing occupations entirely but you can make a lot more money. Like, I visited this wastewater treatment plant in South Carolina. And the utilities director who runs it was saying, like, you know, you work here, you you’re working in food water all day, call it, poopy water. And you’re on call and maybe you have to work holidays and all of that and you can make twenty, twenty five percent more working at an Amazon warehouse. So how do I keep you here rather than there, you know, tell you about like how rewarding public services?
  • Speaker 1
    0:27:42

    I mean, that helps, but it only goes so far.
  • Speaker 2
    0:27:44

    No. The job security is better. The benefit package is usually better. The pensions are usually better. Right.
  • Speaker 1
    0:27:50

    So yes and no. I mean, historically, that was part of the reason why people were willing to take public sector jobs even if they paid less, right, because they had more job security, for example, or they had more limited hours you know, like it was harder to force people to work over time. But the appeal of those kinds of perks may be less compelling today given that, a, there were huge layoffs early in the pandemic, including a public sector workers. So it’s like, well, how convinced am I that I really have that much job security? And, b, these workers are now having to do a lot of forced overtime.
  • Speaker 1
    0:28:24

    So that perk of like, well, you don’t have to work that hard or your hours and more predictable or whatever, also not so convincing these days. I mean, I heard stories of corrections officers who couldn’t leave the jail. At the end of their shift because the next guy didn’t show up, and there are legal requirements, I guess, for, like, how many corrections officers have to be on staff at a given time. So for some people, they might want you over time. But for other people, it messes up with their child care situation, or they want to be able to clock out when they can clock out.
  • Speaker 1
    0:28:54

    That’s why they took job. And obviously, that perk is not as reliable today.
  • Speaker 2
    0:29:02

    So this is completely speculative. Okay? And maybe there’s there’s nothing too, but I wonder whether you’ve you’ve thought about this. We’re talking about economics and and then business decisions and everything, but then also we’re having these these culture wars that are heating up, including the division between, you know, very stark divisions between the states on a variety of issues, whether you’re talking about immigration policy or whether you’re talking about education policies and now abortion rights. Are we going to start to see fallout from these state by state culture wars to the business community, to employment patterns.
  • Speaker 2
    0:29:40

    You know what I’m getting at? I mean, the migration of companies at some point if there is a large company with a diverse workforce in a state that has just passed a really, really strict abortion law, that’s obviously going to have, you know, an effect on their ability to recruit employees. Is it going to affect corporate decisions, job decisions? Will it affect people voting with their feet? Or are these completely different planets?
  • Speaker 1
    0:30:05

    I think it’s a relevant question for these companies to ask. How easy will it be to attract talent in a place where female workers may not have full bodily autonomy. For example. And it’s hard to know how much workers going forward will value those kinds of, I don’t know, Perk is almost trivializing. But, you know, those kinds of aspects of where they live.
  • Speaker 1
    0:30:32

    Like, you go to Texas. It’s a low tax state. Housing, other than Austin, you know, is relatively affordable. There’s a lot of other parts of the country. For example, And that has been a draw in company’s decisions to expand into Texas to open up a new campus in Texas, but if you’re worried about, if your pregnancy goes awry, will you be able to get the medical care you need if you have a kid who’s trans, will you be arrested essentially if you try to get that kid medical care that he or she needs.
  • Speaker 1
    0:31:12

    I think these are serious concerns that companies have. You know, there’s this perception that companies suddenly gotten woke and they’re — Mhmm. — they’re interfering in all of these culture war issues that they should stay out of. I think they wanna stay out of them. Historically, they have state out of them.
  • Speaker 1
    0:31:30

    The only reason why they are speaking up now is because they are worried about their bottom line. It’s not that they have a they suddenly, like, grew up conscience or developed different politics. They’re worried about their ability to attract and retain workers. You know, and we don’t know what how how real of a threat it will be to attracting talent and retaining talent in the years ahead. I think some of that is yet to be played out.
  • Speaker 1
    0:31:57

    There’s some things that these firms are doing today to try to, like, maintain their low tax — Yeah. — relatively deregulated location without losing talent, like saying okay, if you need abortion care, we’ll pay for you to go out of state. You may remember there were a bunch of announcements a few months ago about this. And maybe that’ll be sufficient, like, that’ll let them have their cake needed to. I don’t know.
  • Speaker 1
    0:32:23

    But I have talked with big employers. I’ve talked with, you know, industry groups like the Chamber of Commerce. And this is a thing that companies are worried about, and it’s not because they wanna wait into these culture war issues. It’s because they’re worried about their bottom line. And
  • Speaker 2
    0:32:37

    the culture wars are coming for them too. I mean, this does feel like this will be the next front. I mean, certainly, Rhonda Santos governor of Florida seems to think so. I mean, he’s shown a willingness to actually use government power to retaliate against private companies that have policies that he does not like or that take stands on public issues. So this is a we’re kind of in a new world here where you have Republican politicians who have traditionally been very, very supportive of business, willing to basically bring a pretty hard cuddle down on the heads of businesses that take these political stands or that decide that they’re going to have the policies that that conflict with what the culture warriors and power want.
  • Speaker 2
    0:33:18

    Yes. Again, that’s I’m bringing this up because I I it feels as if the environment is changing very, very rapidly and very radically for a lot of these businesses?
  • Speaker 1
    0:33:28

    Yeah. I think there was actually an opportunity last year for Democrats to achieve a sort of political realignment and make the case that they were a pro business party. Maybe they didn’t wanna cut taxes per se, but there are a lot of other things that are good for their business environment that Democrats stand for like rule of law you know, peaceful transition of power as well as we’re, like, not gonna interfere with the kinds of benefits that you offer your employees, like abortion care, or these, you know, democrats were not going to interfere with firms that wanted to have vaccination mandates, for example, which a lot of Republican politicians wanted to do. There was an opportunity, I think, for Democrats to present themselves as the pro economy, pro business party, something like that, and to make a case for like a different vision. For how they could be good for the business environment.
  • Speaker 1
    0:34:27

    And of course, they blew it. Of course. And did not take my advice when I wrote about this last year. But yeah, it’s it’s a weird world. I mean, you look at the US Chamber of Commerce, for example, you know, historically, they made a lot of endorsements.
  • Speaker 1
    0:34:40

    In congressional elections, mostly to Republicans. And they made a bunch of news last year when they endorsed some Democrats. I mean, still they were more tilted towards Republicans, but it did reveal that, like, Republicans were not as reliable a partner. On business related issues as they had been because there are things like, you know, the desantises of the world using state power to punish perceived political enemies in the private sector or add it in Texas, you know, punishing companies that wanted to have vaccination mandates or mask mandates or what have you. So there was a chance for a political realignment and it didn’t happen, you know, whether that’s good or bad.
  • Speaker 1
    0:35:23

    I don’t know. But it’s a weird world where there’s, like, not really a party that’s in favor of free markets anymore. Well,
  • Speaker 2
    0:35:31

    that’s exactly right. And, you know what I mean, look, it’s it matters more than ever before it feels like, at least in my lifetime, which state you live in or you do business. And in the past, business executives could look at one state versus another and look at the tax trade or the incentives that they will provide or infrastructure, things like that more traditional business oriented decisions now. The universe is much, much more complex. It feels like we’ve gone from basically two dimensional to four dimensional in terms of all of the different factors that you have to take into account when you move from state A to state B?
  • Speaker 1
    0:36:08

    Yes. And it’s also a bunch of moving targets too. Because we don’t know, like, what reproductive rights are gonna look like in some of these states. Or, you know, there’s I mentioned before that there are companies that have said, okay, the way we’re gonna try to keep people comfortable working in, you know, women in particular are comfortable working in Texas or Louisiana or Mississippi or wherever else, you know, there are some of these draconian bands on reproductive care access is that we’ll pay for out of state travel to get that same care and there are now efforts to make that more difficult. You know, I’m not a lawyer.
  • Speaker 1
    0:36:47

    I don’t understand exactly the constitutional implications of all of this, but, you know, maybe it won’t hold up in court. But the states are trying to prevent those workarounds as well. You know, I remember during the Obama era, there was a lot of criticism of Democrats for, I think, the term was policy uncertainty,
  • Speaker 2
    0:37:05

    regulatory uncertainty. I remember this well.
  • Speaker 1
    0:37:08

    Right. And a lot of heads with Obamacare. Yes. But there’s a lot of policy uncertainty right now. For businesses, some of which has to do with what kinds of crazy things states will do, some of which has to do with what the federal government will or will not pursue and, like, you know, it’s weird.
  • Speaker 1
    0:37:29

    I mean, in the given partisan environment, there can be these huge swings in the regulatory landscape from — Mhmm. — from when, like, control of Congress or control of the White House switches hands. Which is another thing that I’ve heard businesses complain about, that it’s like, you know, you wanna do the more regulated thing I don’t like, fine, but just tell me it’s happening. It’s very hard to plan if we don’t know what sets up costs and things like that to count on. Yeah.
  • Speaker 2
    0:37:57

    They they just want some rely ability, some consistency, as opposed to political whiplash. Catherine Rimpel, thank you so much for joining me on the podcast today. I appreciate it very much.
  • Speaker 1
    0:38:08

    My pleasure. Catherine
  • Speaker 2
    0:38:09

    is a syndicated columnist at the Washington Post, also an economic and political commentator for CNN, and a special correspondent for the PBS NewsHour Thank you all for listening to today’s bold work podcast. I’m Charlie Sykes. We’ll be back tomorrow, and we’ll do this all over again.
  • Speaker 1
    0:38:31

    You’re worried about the economy. Inflation is high. Your paycheck doesn’t cover as much as it used to. And we live under the threat of a looming recession. And sure, you’re doing okay, but you could be doing better.
  • Speaker 1
    0:38:41

    The
  • Speaker 2
    0:38:41

    afford anything podcast explains the economy and the market detailing how to make wise choices on the way you spend and invest.
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    0:38:48

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