A vibe check on the economy

Make Me Smart June 23, 2022 transcript

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Amy Scott: Oh, I don’t want to do that to Charlton.

Kai Ryssdal: Well, you know, he’s been around, he’s seen some things.

Amy Scott: He finds a way anyway.

Kai Ryssdal: Hey, everybody, I’m Kai Ryssdal. Welcome back to Make Me Smart where we make today make sense.

Amy Scott: And I’m Amy Scott, in today for Kimberly Adams. Thanks for joining us. It is Thursday. And we’re going to talk about some news stories and share some make me smiles and then get out of your hair. So with that, Kai, let’s get to the news.

Kai Ryssdal: Let us get to the news. I’ll go first, just because I think I’m up first in the rundown. So as you pointed out, Amy, before we actually turn the tape deck on, one of my bullet items under news is Jan 6. You know so we’ve talked about the hearings before, Kimberly and I have, and maybe you and I have as well, on this podcast. And look, I think they’ve been doing just a really well-constructed job of laying out the facts and letting the American people see what happened. Today, though, was different. Because for my money, the hearing today, which had three top officials from the Trump-era Justice Department, this is the one that in Watergate parlance was the smoking gun. I think this is the one that took you into the White House, and these guys related conversations they had with the president where the President was talking about using the Department of Justice to cover up or exercise the fraudulent overturning of the election. It hit me today for some reason, that this was a different hearing. So I would encourage everybody to either read up on it or watch it if you can, I’m sure it’s on C-SPAN or YouTube or whatever. Because it was just gripping.

Amy Scott: If you can listen, it’s riveting. And I’ve been reading the recaps because you know, often these are happening at times that I can’t tune in. It’s just not the same as hearing the voices of these people who were there. And yeah, it’s pretty terrifying.

Kai Ryssdal: It’s pretty terrifying. Okay, news item No.2, and this is kind of related to the moment we’re in, specifically about Supreme Court and all the decisions it’s been handing down, and will be handing down in the next number of days, including Dobbs (v. Jackson Women’s Health Organization), which is the abortion decision that was released in draft form a number of weeks, maybe a month or so ago. And I just want to point everybody to a new survey from Gallup, which says that public confidence in the Supreme Court is at a new low in Gallup’s 50 years of asking this question. Specifically 25% of American adults say they have a great deal or quite a lot of confidence in the US Supreme Court, that is down from 36% just a year ago.

Amy Scott: Wow.

Kai Ryssdal: Yeah, so that’s troubling, because there are some really contentious decisions that have come out. And as we know, we try to be a nation of laws around here, and not of people, and that kind of matters. Here’s the interesting thing, though. Even among Republicans, just 40% of people say they have a good deal of confidence in the Supreme Court. So it’s not just people are displeased with the current decisions and the current makeup of the court. It’s reasonably broad-based. And that’s not great. And as long as we’re talking about institutions of this democracy, which we’re talking about in January 6, through the Supreme Court too. And it’s kind of a bummer, but it matters. It matters.

Amy Scott: Well, I decided to stay away from politics today.

Kai Ryssdal: Fair enough. Yeah. Well, it’s lousy because I…

Amy Scott: Mostly for self-preservation.

Kai Ryssdal: I had it on in the TV in my office all day. And so like.

Amy Scott: Oh, no, you got it. I mean, I’ve been tuning in, but for today, I decided to bring – surprise, surprise – some housing news. So you know, I’m often here with your semi-regular housing fix. Today, I thought this was interesting. I mean, we’ve been talking about how there’s going to be a lot of pain in the economy before things get back to anything like normal. And I think an example is housing affordability. The Mortgage Bankers Association said today that housing affordability got worse last month – surprise, surprise – because not only our home price is still really high, but mortgage rates are much higher, close to 6% now for a 30-year fixed. And so what that means for monthly payments is the monthly median mortgage payment for an application last month was $1,897 a month. And that’s up from $1,889 in April. And just this year, payments have increased by more than $500 a month, which is you know, real money. And the MBA, the Mortgage Bankers Association, has this purchase applications payment index, which is basically a measure of monthly payments relative to income. And that index is more than 35% higher compared to this time a year ago. So, yeah, affordability, who thought it could get worse. This is, of course, going to slow down home sales that already has, and that should decrease the pressure on prices. They’ll either rise more slowly or even decline in some markets. And so that’ll be good news when it happens. But for people in the market right now, it’s pretty tough time. And again, this is kind of the necessary pain to get back to a more sustainable, kind of, housing market.

Kai Ryssdal: It’s all about the monthly nut with houses, which I didn’t understand until I bought a house. I was like, oh, yeah, sure. You know, the house costs x amount of dollars, and we’re gonna pay X percent. Yeah, we’ll be fine. You know, whatever. It’s all about monthly nut. And until you’ve actually sat down to figure that out. You can’t really grasp it, but that increase is just not great.

Amy Scott: Yeah, it’s one of those things where the sticker price is kind of mean….

Kai Ryssdal: Right. Right. Right. Right. That’s exactly right. Sorry, on housing, one more thing. I don’t know. I don’t know about your parents. But I remember when my parents bought a house in 1973. They were paying like 9% interest.

Amy Scott: Oh, yeah.

Kai Ryssdal: You know? God, you do that? It’s wild.

Amy Scott: Yeah. But if your house cost $90,000 which is what my parents paid for their first house. I don’t know what the interest rate though is, I’m gonna have to ask. Yeah, but I mean, 6% like, still, historically, not that bad a rate. But compared to what people had been getting, like less than 3%, it’s pretty jaw-dropping. So the other one is just real quick sort of vibe check. I saw a post from a company called Similarweb that I guess is like a digital intelligence platform or something, but they said internet searches of the word recession are up 77% in the past three months. Related searches include “recession definition” up 91%; “what is a recession” up 67%, and “are we in a recession” up 67%. And I think that just kind of tells you a little bit about the American psyche.

Kai Ryssdal: It kind of does. It is definitely the whole vibe thing. It is absolutely the vibe. Recession. For sure people are feeling it. And look, it’s all about gas prices and inflation. That’s the whole thing. The whole thing. Alright, Charlton, do that thing. Right, you go first.

Amy Scott: Okay. So I saw this on Bloomberg today. Airbnb gets a lot of blame for exacerbating the housing shortage. By turning what might be long-term rental properties or homes people can actually buy into short-term vacation rentals. But apparently they’re having supply issues of their own. The company has launched a $10 million fund to build quote, the craziest places on earth. Basically, it’s a competition you can apply with your crazy idea. It’ll be judged by architects and designers, and then they’re going to select 100 People who get $100,000 to build their idea. And I’m just looking through the ideas or the examples that they offer, to get people’s juices flowing. One of them is a giant potato. It’s like a six-ton fake potato that you can stand, out in a field in Idaho. There’s a converted grain silo called the yellow submarine that looks pretty cool. You know, you get $100,000 at today’s prices, I was like, what can you build for that? But some of these were actually pretty affordable to create. But I was looking at this potato which doesn’t have any windows. That’s a hard no for me.

Kai Ryssdal: Yeah oh yeah. No, thank you very much. I’m good with my white picket fence and thank you very much. Yes.

Amy Scott: But also I was thinking, you know, people can complain about Airbnb taking away legitimate housing for people but I don’t think that the potato is really in competition.

Kai Ryssdal: No, probably not.

Amy Scott: For a long-term place to stay. Anyway, I thought that was kind of fun.

Kai Ryssdal: Mine it’s not so much make me smile as a holy-cow-look-at-that. So there’s a series of pictures. I saw it in the New York Times, but they’re pretty much everywhere now. Of this synchronized swimmer – I guess it’s called artistic swimming now I don’t even know what it’s called, but it’s like you know, water ballet. Of this swimmer underwater clearly unconscious just drifting there, down at the bottom of a pool. And her coach, you discover reading the caption, fully clothed, having jumped in reaching out to save her. So this woman, the swimmer herself, had fainted doing her synchronized swimming stuff because apparently they have to hold their water, their nose, their breath rather, underwater for like up to two minutes while they’re doing all this really energetic crazy stuff, like you know, going upside down and raising their legs out of the water up to the waist. I mean, we’ve all seen it on the Olympics and stuff. Crazy. Anyway, this woman fainted underwater. And her coach – who later lambasted lifeguards – her coach jumped in to pull her out. The really amazing part is, this is the second time that this has happened! That this swimmer Anita Alvarez has fainted before, and the coaches pulled her out before! Anyway. It’s all about the pictures. This woman is clearly unconscious, bottom of the pool, and here’s the coach going up to get her. And then the second picture is the coach pushing off the bottom of the pool pulling her up. She’s limp. She’s out. The swimmer is. Wild, wild, wild.

Amy Scott: That is terrifying.

Kai Ryssdal: Isn’t it? I totally agree.

Amy Scott: You’ve given me something new to worry about the pool when I take my children. But I mean, if this is the second time I feel for her, she’s probably thinking can I keep doing this?

Kai Ryssdal: Exactly. And she’s an Olympian right? So you know, she’s world-best in her sport. And yet it gets to her, because holding your breath underwater for two minutes is hard. Yeah, anyway. There you go. Not really make me smile, but holy cow look at this.

Amy Scott: Yeah. And also thank goodness right? Someone was paying attention.

Kai Ryssdal: Totally. Alright, and with that, I do believe we are done. Kimberly and I are back tomorrow Economics On Tap. We’ll do the YouTube livestream. We’ll do the Discord. 6:30 Eastern, 3:30 Pacific. Join us for news, game, drinks, all the usual Friday stuff.

Amy Scott: And please keep sending us your thoughts or questions. Our email is makemesmart@marketplace.org. Or you can leave us a message at 508-U-B-SMART.

Kai Ryssdal: Make Me Smart is produced by Marissa Cabrera. Olivia Zhao is our intern. Today’s episode was engineered by Charlton Thorp. Amy Scott stepped in to help us out, for which we are truly grateful. Ms Scott, thank you!

Amy Scott: Happy to do so. Bridget Bodnar is the senior producer and the Director of On Demand is Donna Tam.

Kai Ryssdal: So everybody’s in person today by the way, we had a little gathering here. A little bizarre having all you people in my office that’s been abandoned for two years. It’s very bizarre. Welcome though. It was nice, but it was weird.