Wealth & Poverty

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Bill McBride has been making accurate predictions on his blog, Calculated Risk, about the trajectory of the U.S. economy since before the financial crisis.

He's been consistently optimistic for years, but he recently revised his usually sunny outlook.

Today he tells us why.

A Quick History Of Slow Credit Cards

Mar 15, 2018

In the mid-'60s, the airline industry had a problem. The 747, the first real jumbo jet, had just been introduced. There were more passengers at the airport than before. More passengers meant longer lines. And that was especially bad because this was the era when customers paid for their tickets right there at the airport — often by credit card.

On April 14th, 1935, when Franklin Delano Roosevelt signed the Social Security Act, he thought he was giving Americans some safety in retirement. What he may not have realized was that he was also inadvertently inventing a national identification number.

When it started, people didn't mind carrying around their social security number in their wallet, and blurting it out on the air. Now, it's the key to a person's retirement, finances, and identity. And it's valuable enough to steal.

President Trump recently slapped tariffs on steel and aluminium imports from certain countries, but not because those countries don't play fair on trade.

Instead, the Trump administration cited national security concerns. The move has got him what he wants, but it puzzled America's trading partners. If they retaliate with the same tactic, the damage to the global trading system — and to the rules that underpin the system — could be huge.

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Japan has more government debt (outstanding as a percentage of GDP) that Greece did at the height of its financial crisis. To the casual observer, Japan looks as overloaded as a Vegas buffet. And yet the country is somehow able to keep on borrowing at the same low, low rate. Why?

Also, what British (Indian) car does James Bond drive (but only once)?

Your questions, answered.

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Most products in this world are vulnerable to creative destruction: as new products are developed, they make old ones obsolete.

But there are some exceptions to this rule. There are products that persist, resisting change while economic evolution continues on without them.

Like the graphing calculator.

Economic inequality is complicated and emotional. Conservatives have one set of solutions. Liberals have another. Some groups don't think inequality is such a bad thing. Conversations about it often turn into partisan fights.

But today on the show, we follow two thinkers—from opposite sides of the political spectrum—who have joined forces to find out what's causing inequality. They are Brink Lindsey and Steven M. Teles, and they are the authors of a new book called The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality.

75.2 percent. That is the prime age female labor force participation rate, the share of all adult women between the ages of 25 and 54 who are working or looking for work.

In the 70s, 80s, and 90s, the number of women participating in the workforce went up and up and up.But, in 2000, that momentum waned.

Updated at 10:40 a.m. ET

The U.S. added a hefty 313,000 jobs in February — the biggest increase in 1 1/2 years — while wages rose more modestly than the previous month. Meanwhile, the unemployment rate held steady at 4.1 percent, the Bureau of Labor Statistics reported Friday.

The Labor Department also reported strong upward revisions for both December and January. January's figure was revised to 239,000 from 200,000 previously and December was pegged at 175,000, up from 160,000.

Americans are expected to spend $3.6 trillion on physical goods this year. Amazon and WalMart are competing fiercely to see which of them can get a bigger slice of that pie.

Even with the rise of the Internet, almost all retail sales in America still occur in physical stores, so WalMart's massive network of big box outlets gives it an edge.

But Amazon has a secret weapon: Prime.

Note: Today's show originally ran in January of 2016.

A few years back, a famous psychologist published a series of studies that found people could predict the future — not all the time, but more often than if they were guessing by chance alone.

The paper left psychologists with two options.

"Either we have to conclude that ESP is true," says Brian Nosek, a psychologist at the University of Virginia, "or we have to change our beliefs about the right ways to do science."

In one of our favorite recurring segments, we ask our guest to tell us about something they read that changed the way they think about the world.

Cobalt used to be a byproduct of copper mining, used in everyday, boring stuff like tires and magnets.

But that all changed when someone discovered its ability to stabilize the lithium in batteries for electronics like cell phones.

Now it's become one of the most important and sought after metals on the periodic table. Which has implications for big tech firms like Apple.

The quality of American cars got a lot better after the financial crisis. They got lighter, more efficient and more reliable. And the car business boomed.

But now they're getting too expensive. Sticker prices for the SUVs and trucks that Americans love are high enough that manufacturers don't have to sell as many vehicles to make money.

But that's not going to last.

Listeners have questions. Google has answers. Sometimes, though, listeners have questions that Google can't answer. Like: Why is the lighting in hotel rooms so weird? How can a cooked and spiced rotisserie chicken be cheaper than an uncooked chicken? What is a Giffen Good, and why does demand for it go up when its price goes up? And why does it say on a coupon that it's worth 1/100th of a cent?

If you have a question you want us to answer, email us at planetmoney@npr.org. Or better yet, tell us a great story about economics that answered a question you had.

Like all oil well owners, Jason Bruns watches the oil market closely. When crude hits a certain price, he'll either switch a pump on - if prices are rising - or turn it off, if they're not.

Right now oil prices are at a bit of a sweet spot for small producers like Jason. Pumpjacks all over the country are being switched on. Consumers may not like rising oil prices much, but they're a sign the economy is doing better.

Since the late 1990s, inflation — or average prices — has increased by 55.6 percent. But while things like televisions and smartphones have gotten much cheaper in that time, certain other things have gotten much more expensive.

So while some people may be able to afford the latest gadget, certain other things remain out of reach. Today on the show we look at what that tells us about the true cost of living in America in the 21st century.

Stacey Vanek Smith and Cardiff Garcia host the Planet Money spin-off, The Indicator. Each day, they take a number or term in the news, and tell you what it means and why it matters.

Today on Planet Money, we are bringing you three indicators, three numbers that tell us something about the world. We'll tell you what the US really sells to the world, how the conservative tax plan is maybe just what a liberal economist had always hoped for, and how craft beer blew up the hops business.

The Trump Administration is making major changes to trade policy, and that is affecting all kinds of U.S. companies.

Usually we hear about these issues as they relate to big industries like steel and aluminum, or in markets for solar panels or washing machines. Today we look at another industry caught up in the debate over global trade: the rubber band business.

Most people are used to prices that don't change. You go into a store to buy some Quaker Oats, and they're going to cost the same for you as they will for whoever tries to buy them next.

But for a long time, that's not how it worked at all.

In the 1960s, there was a new fad in Germany: cheap, frozen American chicken. German families couldn't get enough of the stuff — it was great for the German consumer, but not so great for the German chicken farmer. So the farmers went to the government, and, lo, a trade war was born.

There's a new Fed chair in town. Jerome - call him Jay - Powell is a former investment banker who has worked in both the Treasury and the Fed.

He has already indicated that when it comes to the philosophy of monetary policy, he tracks pretty closely with his predecessor, Janet Yellen.

But as Karl Smith, Director of Economic Research at the Niskanen Center, discussed with us, Powell has got an entirely different challenge ahead.

Updated at 5:38 p.m. ET

The Federal Reserve remains on track to continue increasing interest rates gradually to keep the economy functioning smoothly, Jerome Powell told Congress on Tuesday in his first testimony as Fed chairman.

With a nod to the new tax-cutting law, Powell noted that "fiscal policy is becoming more stimulative" and he predicted inflation would rise this year and stabilize around the Fed's 2 percent target.

"My personal outlook for the economy has strengthened since December," Powell told the House Financial Services Committee.

Fixing A Forest For Puerto Rico's Recovery

Feb 27, 2018
Bert Johnson / GPB

Luigi Ramirez lets a yellow rope slip through his hands slowly at first. When his fingers open, 200 hundred pounds of concrete sail through the lush tropical canopy. Before Hurricane Maria, he sent tourists whizzing across ravines like this one in Puerto Rico’s El Yunque National Forest. But that business closed.

“Because that company depends on the trees, and all the trees are damaged in the majority of the forest,” Ramirez says.

Now, he’s running a zip line to deliver construction materials.

Today we debut a new segment on the Indicator: the two-minute explainer. Cardiff and Stacey take up the challenge of explaining what's behind an economic event or data point in 120 seconds or less.

On this show: what is productivity, how is it measured, and why is it such an important indicator?

And, why did KFC have to close almost all of its stores in the UK last week?

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